# EDGAR Filing Document

**Accession Number:** 0001042187
**File Stem:** 0001493152-23-001785
**Filing Date:** 2023-1
**Character Count:** 16387
**Document Hash:** ad44b0fae71b3b54ed2353db3199a272
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-23-001785.hdr.sgml**: 20230118

**ACCESSION NUMBER**: 0001493152-23-001785

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230112

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230118

**DATE AS OF CHANGE**: 20230118

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Yunhong CTI Ltd.
- **CENTRAL INDEX KEY:** 0001042187
- **STANDARD INDUSTRIAL CLASSIFICATION:** FABRICATED RUBBER PRODUCTS, NEC [3060]
- **IRS NUMBER:** 362848943
- **STATE OF INCORPORATION:** IL
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-23115
- **FILM NUMBER:** 23534513

**BUSINESS ADDRESS:**
- **STREET 1:** 22160 N PEPPER RD
- **CITY:** BARRINGTON
- **STATE:** IL
- **ZIP:** 60010
- **BUSINESS PHONE:** 8473821000

**MAIL ADDRESS:**
- **STREET 1:** 22160 N PEPPER RD
- **CITY:** BARRINGTON
- **STATE:** IL
- **ZIP:** 60010

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CTI INDUSTRIES CORP
- **DATE OF NAME CHANGE:** 19970710

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): January 12, 2023

**YUNHONG CTI LTD.**

(Exact Name Of Registrant As Specified In Its Charter)

Illinois

(State or Other Jurisdiction of Incorporation)

<u>000-23115</u> <u>36-2848943</u> <br> (Commission File Number) (I.R.S. Employer Identification No.)

<u>22160 N. Pepper Road Lake Barrington, Illinois</u> <u>60010</u> <br> (Address of Principal Executive Offices) (Zip Code)

(847) 382-1000

(Registrant's Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (*see* General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, no par value per share | CTIB | The Nasdaq Stock Market LLC<br> (The Nasdaq Capital Market) |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by checkmark 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. ☐

**Item 8.01** **Other Events.**

As previously reported, on May 26, 2022, Yunhong CTI Ltd. ("CTI", the "Company" or "we"), received a written deficiency notice (the "May 2022 Notice") from The Nasdaq Capital Market ("Nasdaq") stating that the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2) (the "Minimum Bid Price Rule") because the Company's common stock had failed to maintain a minimum closing bid price of $1.00 over the prior 30 consecutive business days. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided a period of 180 calendar days, or until November 22, 2022 (the "Compliance Date"), to regain compliance with the Minimum Bid Price Rule. Since that date, the Company actively monitored the closing bid price of its common stock and evaluated available options to regain compliance with the Minimum Bid Price Rule.

As previously reported, on November 23, 2022, the Company received a staff determination letter from Nasdaq stating that the Company had not regained compliance with the Minimum Bid Price Rule by the Compliance Date, and that, because the Company does not comply with the $5,000,000 stockholders equity initial listing requirement for The Nasdaq Capital Market, it was not eligible for a second 180 day compliance period (the "Noncompliance Notice"). The Noncompliance Notice also stated that, unless the Company requests a timely appeal of this determination, the Company's securities would be scheduled for delisting and would be suspended at the opening of business on December 2, 2022.

The Company filed an appeal of Nasdaq's determination with the Nasdaq Hearings Panel, and explored alternatives for regaining compliance with the Minimum Bid Price Rule, including without limitation considering a reverse stock split with respect to the Company's common stock. On January 5, 2023, the Company participated in a hearing with the Nasdaq Hearings Panel, at which it requested that the Company be granted additional time to regain compliance with the Minimum Bid Price Rule, citing, among other factors, the Company's recently improved stock price and willingness to implement measures to regain compliance.

On January 12, 2023, the Nasdaq Hearings Panel issued its decision in a letter, a copy of which is attached hereto as Exhibit 99.2. The decision stated, among other things, that if the closing bid price of the Company's common stock was $1.00 or higher for each consecutive trading session until the close of trading on January 17, 2023, the Panel would find the Company in compliance with the Minimum Bid Price Rule. The foregoing summary of the decision is qualified in its entirety by the text of such decision, attached hereto as Exhibit 99.2.

The closing bid price of the Company's common stock was $1.00 or higher for each consecutive trading session through the close of trading on January 17, 2023, and the Company accordingly expects to receive notice of compliance from the Panel. The Company nonetheless intends to continue to work to help ensure continued compliance with the Minimum Bid Price Rule and all other applicable Nasdaq listing standards.

Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements. Statements made in this report that are not historical facts are "forward-looking" statements (within the meaning of Section 21E of the Securities Exchange Act of 1934) that involve risks and uncertainties and are subject to change at any time. These "forward-looking" statements may include, but are not limited to, statements containing words such as "may," "should," "could," "would," "expect," "plan," "goal," "anticipate," "believe," "estimate," "predict," "potential," "continue," or similar expressions. We have based these forward-looking statements on our current expectations and projections about future results. Although we believe that our opinions and expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements, and our actual results may differ substantially from statements made herein. More information on factors that could affect our business and financial results are included in our public filings made with the Securities and Exchange Commission, including our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q.

**<u>Item 9.01 – Financial Statements and Exhibits</u>**

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| | |
|:---|:---|
| Exhibit No. | Exhibit |
| 99.2<br>| [Determination Letter from Nasdaq, dated January 12, 2023.](ex99-2.htm)<br>|
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

**<u>SIGNATURE</u>**

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.

---

| | | | |
|:---|:---|:---|:---|
| Dated: | January 18, 2023 | **YUNHONG CTI LTD.** | **YUNHONG CTI LTD.** |
|  |  | By: | */s/ Frank Cesario* |
|  |  | Name: | Frank Cesario |
|  |  | Title: | Chief Executive Officer |

---

## Exhibit 99.2

**Exhibit 99.2**

![](ex99-2_001.jpg)

**<u>Sent via electronic delivery</u>**

January 12, 2023

Frank Cesario

CEO

Yunhong CTI Ltd.

22160 North Pepper Road

Barrington, IL 60010

RE: Yunhong CTI Ltd. (Symbol: CTIB)<br>Nasdaq Listing Qualifications Hearings <br> Docket No. NQ 6525C-22

Dear Mr. Cesario:

The Nasdaq Hearings Panel ("Panel") grants the request of Yunhong CTI Ltd. (the "Company") to continue its listing on The Nasdaq Stock Market ("Nasdaq" or the "Exchange"), subject to the conditions discussed in this letter.

***Company Background and Financial Information****.* According to its public disclosures, the Company develops film products for commercial and industrial uses. Its principal line includes novelty products consisting principally of foil and latex balloons and other inflatable toy items, and flexible films for food and other commercial and packaging applications. The Company's Form 10-Q for the fiscal quarter ended September 30, 2022,<sup>1</sup> reported total assets of $16,314,000 and stockholders' equity of $2,815,000. For the period ended September 30, 2022, the Company reported revenue in the amount of $12,478,000 and negative net income from continuing operations of $1,389,000. As of September 30, 2022, the Company reported 16,059,091 shares of common stock outstanding, with approximately 5,479,025 publicly held shares. The closing bid price for the Company's common stock on December 21, 2022, was $1.03 per share; consequently, the market values for the Company's total listed securities and publicly held shares were $16,540,864 and $5,643,396, respectively.

***Procedural History****.* On May 26, 2022, Nasdaq Listing Qualifications staff ("Staff") notified the Company that it no longer complied with the minimum bid price requirement under Listing Rule 5550(a)(2). In accordance with Listing Rule 5810(c)(3)(A), the Company was provided 180 calendar days, or until November 22, 2022, to regain compliance with Listing Rule 5550(a)(2). On November 23, 2022, Staff notified the Company that it had determined to delist the Company as it did not comply with the requirements for continued listing on the Exchange. On November 30, 2022, the Company requested a hearing, which was held on January 5, 2023.

***Listing Standards at Issue.*** The Company is in violation of the bid price requirement of Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule").

***Factual Background.***

The Panel considered the entire record, which is incorporated by reference into this decision. Relevant documents include the Company's submissions, the memorandum prepared by Staff, and the Company's public filings.

The Company was represented by its CEO and outside counsel. The CEO began the hearing by advising the Panel that the Company was committed to resolving the bid price issue and maintaining its Nasdaq listing. Accordingly, it had already obtained approval from the Board of Directors to complete a reverse split. The Company had yet to obtain shareholder approval for the reverse split, but the CEO was confident that would not prove to be challenging as a large percentage of the Company's shareholders are insiders. The Company anticipates the entire process of obtaining shareholder approval and implementing the reverse split taking approximately 90 days.

Both the Company and the Panel noted that the closing bid price for the Company's shares had exceeded $1 for the previous thirteen consecutive trading sessions. In response to inquiries from the Panel, the Company's CEO acknowledged that while willing to proceed with a reverse split, the Company would prefer to avoid that outcome if possible. To that end, the Company would refrain from completing the reverse split if the Panel were to find the Company in compliance. The CEO also acknowledged that the Company had recently ended its relationship with its auditing firm and as a result, the recently filed financial audits would have to be reviewed by their new independent auditor once one was retained. Accordingly, that most recent financial audit does not in fact meet SEC requirements.

***Panel Analysis and Conclusions.*** Based on the information presented, the Panel will find the Company in compliance with the bid price rule if the Company's closing bid price remains above $1 for twenty consecutive sessions. The Company has advised the Panel that it is committed to maintaining its Exchange listing and as a result has committed to completing the reverse split if necessary. While it was working towards this goal however, the closing bid price increased organically above the $1 mark. Since it has remained above that value for more than 10 consecutive trading sessions, the Panel could find the Company in compliance. However, in light of the Company's history of bid price compliance issues, the Panel will require the bid price to remain above $1 for twenty consecutive sessions before it will find the Company in compliance. The Panel derives this authority from Listing Rule 5815(c)(4).

Likewise, while the Panel anticipates the Company regaining compliance in the near future, it has reservations as to its ability to maintain compliance on a long-term basis. This is due to the history of bid price deficiencies noted above as well as the current challenges around retaining a new independent auditing firm. To that end, the Panel will consider imposing a Panel Monitor, pursuant to Listing Rule 5815(d)(4)(A), once the Panel finds the Company in compliance per the twenty-day condition described above.

**Accordingly, if the Company maintains a closing bid price at or above $1 for each consecutive trading session until the close of trading on January 17, 2023, the Panel will find the Company in compliance with Listing Rule 5550(a)(2).**

**The Panel advises the Company that during the exception period the Company must provide prompt notification of any significant events that may affect its compliance with Nasdaq initial listing requirements. This includes, but is not limited to, any event that may call into question the Company's ability to meet the terms of the exception granted.**

In addition, any compliance document will be subject to review by the Panel, which may, in its discretion, request additional information before determining that the Company has complied with the terms of the exception. The Company should assess its disclosure obligations with respect to the materiality of the Panel's decision and determine what public disclosures of the decision and its terms are appropriate.

The Company may request that the Nasdaq Listing and Hearing Review Council review this decision. A written request for review must be received within 15 days from the date of this decision and should be sent by e-mail to the Office of Appeals and Review at <u>appeals@nasdaq.com</u>. Pursuant to Nasdaq Listing Rule 5820(a), the Company must submit a fee of $10,000.00 to The Nasdaq Stock Market LLC to cover the cost of the review. Instructions for submitting the fee are on the enclosed *Appeals Payment Form*. Please include evidence of this payment with the e-mailed request for review by attaching a PDF copy of the wire instructions or check.

The Company should be aware that the Nasdaq Listing and Hearing Review Council may, on its own motion, determine to review any Panel decision within 45 calendar days after issuance of the written decision. If the Listing Council determines to review this decision, it may affirm, modify, reverse, dismiss or remand the decision to the Panel. The Company will be immediately notified in the event the Listing Council determines that this matter will be called for review.

Should you have any questions, please do not hesitate to contact me at (202) 912-3058.

Sincerely,

*/s/ Aravind Menon*

Aravind Menon

Hearings Advisor

Nasdaq Office of General Counsel