Highlights

  • Holders of all Series E and Series F Preferred Shares agreed not to convert or exercise warrants during a restricted period.
  • The company extended the related warrants' expiry from 11 March 2027 to 11 March 2029 as consideration.
  • Second-quarter 2026 net sales fell 29% to US$3.9 million as a mass retail customer changed replenishment practices.
  • The board scheduled the 2026 annual Shareholder meeting for 30 December 2026 in Central Time.

Balloon and film maker Yunhong Green CTI Ltd. (NASDAQ:YHGJ) has cleared a path for a proposed public offering of its common stock by locking up conversion rights held by its two preferred shareholders. On 29 September 2026, the Lake Barrington, Illinois-based company signed Conversion Restriction and Waiver Agreements with Wickbur Holdings LLC, which holds all 130,000 Series E convertible preferred shares, and Agile Wisdom International Limited, which holds all 70,000 Series F convertible preferred shares.

Both holders consented to the proposed offering, waived piggyback registration rights for it and agreed not to convert their preferred stock, exercise their warrants or transfer either during a restricted period. No offering size, price or timetable was disclosed.

Terms of the Conversion Restriction Agreements

The restricted period ends 61 days after a holder gives written notice of termination. That notice cannot be given before the later of the offering's final closing or abandonment and the second anniversary of the agreements. The Series F agreement also bars paying Series F dividends in common stock during this period, and both agreements align conversion terms in the original purchase agreements with the certificates of designation.

In return, the company extended the expiry of Warrant No. E-1 and Warrant No. F-1 from 11 March 2027 to 11 March 2029 and waived its right to require warrant exercise during the restricted period.

Softer Second-Quarter Sales and Tight Liquidity

For the second quarter of 2026, net sales fell 29% to US$3.90 million from US$5.46 million, mainly because of shipment timing and lower foil balloon volumes from a mass retail customer that changed its replenishment practices. Gross Profit declined to US$538,000, and the net loss widened to US$543,000 from US$185,000. For the six months to 30 June 2026, net sales slipped 2% to US$10.05 million and the net loss was US$884,000.

Cash stood at US$320,000 at 30 June 2026, while US$4.59 million was drawn on a revolving Credit line with a US$7.0 million maximum. The company's credit facilities mature on 30 April 2027. Management stated there is substantial doubt about the company's ability to continue as a Going Concern and listed a potential registered Equity offering among its plans to raise capital. Two customers accounted for 81% of quarterly sales.

Annual Meeting Date and Seasonal Outlook

On 1 October 2026, the board set the 2026 annual meeting of shareholders for 30 December 2026. Rule 14a-19 notices for alternative director nominees were due by 31 October 2026.

Management expects Supply chain constraints, Inflation and tariffs to continue affecting operations and access to capital. Foil balloon sales are seasonal, with about 40% typically occurring from December through March. Fred H.F. Chak became Chairman in April 2026, and Jana M. Schwan serves as Chief Executive Officer.