Yunhong Green CTI Ltd. reported its financial results for the three months ended March 31, 2024, revealing a decline in both revenue and profitability compared to the same period in 2023. Net sales decreased to $4,894,000 from $5,051,000, primarily driven by a 16% drop in revenues from foil balloon sales, which accounted for 60% of total sales. This decline was attributed to the timing of orders and shipments, despite an increase in open orders. Conversely, revenues from other product lines, including Balloon Inspired Gifts, rose to $1,670,000 from $1,488,000.

Gross profit also fell to $895,000, down from $1,127,000, resulting in a gross margin of 18% compared to 22% in the prior year. Total operating expenses increased to $1,248,000 from $1,115,000, with notable rises in general and administrative expenses and selling costs. Consequently, the company reported an operating loss of $353,000, a significant decline from an income of $12,000 in Q1 2023. The net loss for the quarter was $576,000, compared to a net income of $396,000 in the same period last year.

On the balance sheet, total assets decreased to $16,746,000 from $17,247,000, with total current assets also declining. Cash and cash equivalents saw a significant drop to $49,000 from $921,000. However, total liabilities decreased from $13,515,000 to $11,468,000, and total shareholders’ equity increased to $5,278,000 from $3,732,000, reflecting a positive shift in the company's financial structure.

Strategically, the company authorized the issuance of 130,000 shares of Series E Convertible Preferred Stock and 70,000 shares of Series F Convertible Preferred Stock, raising gross proceeds of $1.3 million and $0.7 million, respectively. The company also repaid $1 million of a related party note payable during the quarter.

Yunhong Green CTI continues to face challenges, including substantial doubt about its ability to continue as a going concern, prompting management to seek additional capital through equity sales and borrowing. The company has a credit facility available until September 30, 2025, and must maintain a minimum tangible net worth of $4 million, which it has complied with as of the reporting date.