LAKE BARRINGTON, IL / ACCESSWIRE / August 10, 2021 / Yunhong CTI Ltd. (NASDAQ:CTIB) ("Yunhong CTI" or the "Company"), a leading manufacturer of custom film products, foil and latex novelty balloons, and flexible packaging products, announced that it has entered into an agreement (the "Agreement") for the redemption of all of its equity interests in Flexo Universal S DE RL DE CV, a Mexican corporation ("Flexo"), in a transaction with Kingman Distributions, S.A. DE C.V, a Mexican corporation (the "Buyer"), that will become the majority owner of Flexo (the "Transaction"). Flexo Universal is currently a subsidiary of the Company and manufactures latex balloons in Guadalajara, Mexico.
"We've significantly evolved our business over the past year and today's announcement reaffirms the positive progress we have achieved in realigning our operations to position the Company for improved performance and growth," said Jana Schwan, Chief Operating Officer of Yunhong CTI. "We believe the company is now at an important inflection point. With this transaction, the reduction in our revolving credit facility, and improving business fundamentals, we head into 2022 on a sounder financial foundation to support our growth objectives."
In connection with the Transaction, the Buyer agreed to pay the Company $500,000, of which $100,000 will be paid at closing and the remainder will be paid in installments over twelve months following closing (the "Installment Obligations"). The Installment Obligations are to be secured by a pledge of the assets of Flexo, as well as by guaranties provided by the Buyer and Pablo Gortazar, an individual with an ownership interest in Flexo, pursuant to a Guaranty and Security Agreement to be entered into among the Company, the Buyer, Flexo and Mr. Gortazar at the closing.
The closing of the Transaction is expected to occur on October 10, 2021. The closing is conditioned on, among other things, (i) the Company being released from all obligations in connection with its guaranty of the real property lease for Flexo's facility, and (ii) the Company repaying its obligations in full to PNC Bank, National Association.
About Yunhong CTI Ltd.
Yunhong CTI is one of the leading manufacturers and marketers of foil balloons and produces laminated and printed films for commercial uses. Yunhong CTI also distributes Candy Blossoms and other gift items and markets its products throughout the United States and in several other countries. For more information about our business, visit our corporate website at www.ctiindustries.com.
Statements made in this release 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. Our future plans anticipate the successful completion of the Transaction as described above. Any failure to do so would have a negative impact on our financial condition. 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 Quarterly Reports on Form 10-Q.
Investor Relations Contact:
SOURCE: Yunhong CTI Ltd.
View source version on accesswire.com: