UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to__________

Commission File Number

000-23115

YUNHONG GREEN CTI LTD.

(Exact name of registrant as specified in its charter)

Illinois		36-2848943
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

22160 N. Pepper Road
Barrington, Illinois		60010
(Address of principal executive offices)		(Zip Code)

(847)382-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value per share	YHGJ	The Nasdaq Stock Market LLC
		(The Nasdaq Capital Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock, no par value per share, as of May 19, 2025 was 26,223,626 (excluding treasury shares).

INDEX

PART I – FINANCIAL INFORMATION

Item No. 1.	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets at March 31, 2025 and December 31, 2024	1
	Unaudited Condensed Consolidated Statements of Income (Loss) for the three months ended March 31, 2025 and 2024	2
	Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024	3
	Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2025 and 2024	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item No. 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item No. 3	Quantitative and Qualitative Disclosures Regarding Market Risk	15
Item No. 4	Controls and Procedures	15

PART II – OTHER INFORMATION

Item No. 1	Legal Proceedings	16
Item No. 1A	Risk Factors	16
Item No. 2	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item No. 3	Defaults Upon Senior Securities	16
Item No. 4	Mine Safety Disclosures	16
Item No. 5	Other Information	16
Item No. 6	Exhibits	17
	Signatures	18
	Exhibit 31.1
	Exhibit 31.2
	Exhibit 32

	March 31,			December 31,
	2025			2024
ASSETS
Current assets:
Cash and cash equivalents	$	172,000		$	220,000
Accounts receivable, net		4,631,000			5,403,000
Inventories		8,668,000			8,493,000
Prepaid expenses		349,000			412,000

Total current assets		13,820,000			14,528,000

Property, plant and equipment:
Machinery and equipment		22,246,000			22,246,000
Office furniture and equipment		2,084,000			2,084,000
Intellectual property		783,000			783,000
Leasehold improvements		39,000			39,000
Fixtures and equipment		518,000			518,000
Projects under construction		216,000			196,000
Property, plant and equipment gross		25,886,000			25,866,000
Less: accumulated depreciation and amortization		(21,121,000	)		(20,958,000	)

Total property, plant and equipment, net		4,765,000			4,908,000

Other assets:
Operating lease right-of-use		3,816,000			3,950,000
Prepaid expenses, noncurrent		2,192,000			2,192,000

Total other assets		6,008,000			6,142,000

TOTAL ASSETS	$	24,593,000		$	25,578,000

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade payables	$	1,871,000		$	1,537,000
Line of credit		5,601,000			6,578,000
Notes payable		585,000			606,000
Notes payable related party		344,000			344,000
Notes payable		344,000			344,000
Operating lease liabilities – current portion		538,000			480,000
Advance investor deposit		1,050,000			1,050,000
Accrued liabilities		848,000			810,000

Total current liabilities		10,837,000			11,405,000

Long-term liabilities:
Operating lease liabilities – noncurrent		3,278,000			3,470,000

Total long-term liabilities		3,278,000			3,470,000

TOTAL LIABILITIES	$	14,115,000		$	14,875,000

SHAREHOLDERS’ EQUITY
Series E Preferred Stock — no par value, 130,000 shares authorized, issued and outstanding at March 31, 2025 and December 31, 2024 (liquidation preference of $1,300,000)		892,000			864,000
Series F Preferred Stock — no par value, 70,000 shares authorized, issued and outstanding at March 31, 2025 and December 31, 2024 (liquidation preference of $700,000)		480,000			465,000
Preferred stock, value		480,000			465,000
Common stock - no par value, 2,000,000,000 shares authorized, 26,267,884 and 25,991,845 shares issued and 26,223,626 and 25,947,587 shares outstanding at March 31, 2025 and December 31, 2024, respectively		27,715,000			27,533,000
Additional paid-in-capital		7,824,000			7,858,000
Accumulated deficit		(26,272,000	)		(25,856,000	)
Less: Treasury stock, 44,258 shares, at cost		(161,000	)		(161,000	)

TOTAL SHAREHOLDERS’ EQUITY		10,478,000			10,703,000

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	24,593,000		$	25,578,000

	2025			2024
	For the Three Months Ended March 31,
	2025			2024

Net sales	$	4,802,000		$	4,894,000

Cost of sales		3,936,000			3,999,000

Gross profit		866,000			895,000

Operating expenses:
General and administrative		839,000			1,040,000
Selling		35,000			34,000
Advertising and marketing		170,000			174,000

Total operating expenses		1,044,000			1,248,000

Income / (loss) from operations		(178,000	)		(353,000	)

Other (expense) / income:
Interest expense		(237,000	)		(218,000	)
Other (expense) / income		(1,000	)		(5,000	)

Total other (expense) / income, net		(238,000	)		(223,000	)

Net income / (loss)	$	(416,000	)	$	(576,000	)

Deemed dividends on preferred stock	$	(43,000	)	$	(14,000	)

Net income / (loss) attributable to Yunhong Green CTI Ltd common shareholders	$	(459,000	)	$	(590,000	)

Basic income (loss) per common share	$	(0.02	)	$	(0.03	)

Diluted income (loss) per common share	$	(0.02	)	$	(0.03	)

Weighted average number of shares and equivalent shares of common stock outstanding:
Basic		26,006,576			20,771,937

Diluted		26,006,576			20,771,937

	2025			2024
	For the Three Months Ended March 31,
	2025			2024

Cash flows from operating activities:
Net loss	$	(416,000	)	$	(576,000	)
Adjustments to reconcile net loss to net cash provided by (used in) operating
Depreciation and amortization		163,000			62,000
Equity compensation charge		9,000			122,000
Change in assets and liabilities:
Accounts receivable		772,000			(423,000	)
Inventories		(175,000	)		81,000
Prepaid expenses and other assets		63,000			(62,000	)
Trade payables		334,000			47,000
Accrued liabilities		220,000			(18,000	)

Net cash (used in) provided by operating activities		970,000			(767,000	)

Cash flows from investing activities:
Purchases of property, plant and equipment		(20,000	)		(154,000	)

Net cash (used in) provided by investing activities		(20,000	)		(154,000	)

Cash flows from financing activities:
Receipt for preferred stock issuance		-			500,000
Repayment of note payable, related party		-			(1,000,000	)
Repayment of note payable		(21,000	)		(16,000	)
Net advances (repayments) on revolving line of credit		(977,000	)		565,000

Net cash provided by (used in) financing activities		(998,000	)		49,000

Net increase (decrease) in cash and cash equivalents		(48,000	)		(872,000	)

Cash and cash equivalents at beginning of period		220,000			921,000

Cash and cash equivalents at end of period	$	172,000		$	49,000

Supplemental disclosure of cash flow information and noncash investing and financing activities:
Cash payments for interest	$	237,000		$	218,000
Accretion of dividends on preferred stock		43,000			14,000
Common stock issued in exchange for rent due to Icy Melon		182,000			-
Allocation of proceeds from preferred stock financing to the issuance of warrants for preferred stock		-			814,000
Reclassification of advances upon issuances of preferred stock		-			1,500,000

	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Earnings			Shares			Amount			TOTAL
	Series E Preferred Stock				Series F Preferred Stock				Common Stock				Additional Paid-in			Accumulated (Deficit)			Less Treasury Stock
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Earnings			Shares			Amount			TOTAL

Balance December 31, 2024		130,000	$	864,000		70,000	$	465,000		25,991,845	$	27,533,000	$	7,858,000		$	(25,856,000	)		(44,258	)	$	(161,000	)	$	10,703,000

Series E Accrued Deemed Dividend		-		28,000				-		-		-		(28,000	)		-			-			-			-
Series F Accrued Deemed Dividend		-		-		-		15,000		-		-		(15,000	)		-			-			-			-
Common Stock Issuance for Rent				-		-		-		276,039		182,000		-			-			-			-			182,000
Equity Compensation Charge		-		-		-		-		-		-		9,000			-			-			-			9,000
Net Loss		-		-		-		-		-		-		-			(416,000	)		-			-			(416,000	)

Balance March 31, 2025		130,000	$	892,000		70,000	$	480,000		26,267,884	$	27,715,000	$	7,824,000		$	(26,272,000	)		(44,258	)	$	(161,000	)	$	10,478,000

	Series E Preferred Stock				Series F Preferred Stock				Common Stock				Additional Paid-in			Accumulated (Deficit)			Less Treasury Stock
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Earnings			Shares			Amount			TOTAL

Balance December 31, 2023		-	$	-		-	$	-		20,815,595	$	21,283,000	$	6,967,000		$	(24,357,000	)		(44,258	)	$	(161,000	)	$	3,732,000
Balance		-	$	-		-	$	-		20,815,595	$	21,283,000	$	6,967,000		$	(24,357,000	)		(44,258	)	$	(161,000	)	$	3,732,000

Series E Preferred Stock Issuance		130,000		771,000		-		-		-		-		529,000			-			-			-			1,300,000
Series F Preferred Stock Issuance		-		-		70,000		415,000		-		-		285,000			-			-			-			700,000
Series E Accrued Deemed Dividend		-		9,000				-		-		-		(9,000	)		-			-			-			-
Series F Accrued Deemed Dividend		-		-		-		5,000		-		-		(5,000	)		-			-			-			-
Equity Compensation Charge		-		-		-		-		-		-		122,000			-			-			-			122,000
Net Loss		-		-		-		-		-		-		-			(576,000	)		-			-			(576,000	)
Balance March 31, 2024		130,000	$	780,000		70,000	$	420,000		20,815,595	$	21,283,000	$	7,889,000		$	(24,933,000	)		(44,258	)	$	(161,000	)	$	5,278,000
Balance		130,000	$	780,000		70,000	$	420,000		20,815,595	$	21,283,000	$	7,889,000		$	(24,933,000	)		(44,258	)	$	(161,000	)	$	5,278,000

	-	Historical stock price volatility: The Company used the weekly closing price to calculate historical annual volatility which was a range from 68% - 241%.

	-	Risk-free interest rate: The Company used the U.S. Treasury yield curve in effect at the time of grant for securities with maturities matching the expected term of the warrants. As of Q1 2025, the applicable yield was approximately 4.37%, based on the 10-year Treasury rate.

	-	Expected life: The expected life of the warrants represents the period of time warrants were expected to be outstanding. The Company used an expected life of 5 years.

	-	Dividend yield: The estimate for dividend yield is 0%, as the Company did not issue dividends during 2020 through 2025 and does not expect to do so in the foreseeable future.

	-	Estimated forfeitures: When estimating forfeitures, the Company considers historical terminations as well as anticipated retirements.

	Shares under Option (warrant)		Weighted Average Exercise Price
Balance at December 31, 2024		556,000	$	1.52
Granted		-		-
Cancelled/Expired		-		-
Exercised/Issued		-		-
Outstanding at March 31, 2025		556,000		1.52

Exercisable at March 31, 2025		556,000	$	1.52

2024 Warrants			556,000
Shares reserved as of March 31, 2025			556,000

	RSUs, PSUs & RSAs			Weighted Average Grant-Date Fair Value
Outstanding, unvested at December 31, 2024		242,750			0.64
Granted		-
Vested		(10,500	)		0.77
Forfeited		-
Outstanding, unvested at March 31, 2025		232,250			0.64

	March 31, 2025		December 31, 2024
Raw materials	$	1,092,000	$	862,000
Work in process		2,596,000		2,444,000
Finished goods		4,980,000		5,187,000
Total inventories	$	8,668,000	$	8,493,000

	Three Months Ended					Three Months Ended
	March 31, 2025					March 31, 2024
Customer	Net Sales		% of Net Sales			Net Sales		% of Net Sales
Customer A	$	3,091,000		64	%	$	2,226,000		46	%
Customer B	$	523,000		11	%	$	1,710,000		35	%

	Three Months Ended
	March 31, 2025					March 31, 2024
Product Category	$ (000) Omitted		% of Net Sales			$ (000) Omitted		% of Net Sales			Variance			% change

Foil Balloons	$	4,234		88	%	$	2,919		60	%	$	1,315			45	%

Film Products		427		9	%		305		6	%		122			40	%

Other		141		3	%		1,670		34	%		(1,529	)		-92	%

Total	$	4,802		100	%	$	4,894		100	%	$	(92	)		-2	%

	Three Months Ended March 31,
	% of Sales
	2025			2024

Top 3 Customers		81	%		86	%

Top 10 Customers		93	%		93	%

	●	A decrease in accounts receivable of $772,000 compared to an increase in accounts receivable of $423,000 in the same period of 2024.

	●	An increase in inventory of $175,000 compared to a decrease in inventory of $81,000 in 2024.

	●	An increase in trade payables of $334,000 compared to an increase in trade payables of $47,000 in 2024.

	●	A decrease in prepaid expenses and other assets of $63,000 compared to an increase of $62,000 in 2024.

	●	An increase in accrued liabilities of $220,000 compared to a decrease in accrued liabilities of $18,000 in 2024.

	●	We lacked a sufficient number of accounting professionals with the necessary knowledge, experience and training to adequately account for significant, unusual transactions that have resulted in misapplications of GAAP, particularly with regard to equity financing arrangements and the timing of recognition of certain non-cash charges. Additionally, we have not implemented processes to consistently review for appropriate labor and overhead absorption to inventory and make timely adjustments to standard costs

	●	We are overly dependent upon certain personnel, including our Chief Executive Officer, to provide financial reporting oversight within an environment that is highly manual in nature.

Exhibit Number		Description

31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and rule 15d-14(a) of the Securities Exchange Act, as amended (filed herewith).
31.2*		Certification of Corporate Controller and Principal Financial Officer pursuant to Rule 13a-14(a) and rule 15d-14(a) of the Securities Exchange Act, as amended (filed herewith).
32**		Certification of Chief Executive Officer, Corporate Controller and Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101*		Interactive Data Files, including the following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, formatted in inline XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to Consolidated Financial Statements.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*		Filed herewith
**		furnished herewith

Date: May 19, 2025	Yunhong Green CTI Ltd.

	By:	/s/ Jana M. Schwan
		Jana M. Schwan
		Chief Executive Officer

	By:	/s/ Sree Kommana
		Sree Kommana
		Corporate Controller and Principal Financial Officer

SEC Form 10-Q filed by Yunhong Green CTI Ltd.