YHGJ

Yunhong Green CTI is a $7.9M micro-cap that makes foil balloons (65% of sales), film and novelty products. The top line is the only bright spot: FY2025 revenue grew 9.8% to $19.7M, led by Foil Balloons ($12.8M) and Film Products (+33% to $1.1M). But every other line is deteriorating. Gross margin is a thin 18.2% and flat in dollars ($3.59M), while operating income swung to -$2.05M (down 235% YoY) and net loss widened to -$2.53M (EPS -$1.01). The company has lost money in each of the last five years (FY2021–FY2025), leaving a -$28.4M accumulated deficit that has hollowed out equity to just $8.56M against $13.9M of liabilities (1.63x) and driven ROE to -29.6%. Revenue growth without profit, at negative operating margins, is not a thesis — it is a cash burn.

The balance sheet is the disqualifier. Cash is down to $97K (from ~$220K), against ~$650K annual rent on the Lake Barrington sale-leaseback plus a second Elgin sublease — the company is operating on fumes and is structurally dependent on outside financing. That financing is punitive: the Series E/F convertible preferred carry 8.5% dividends with a liquidation preference senior to common, and accrued preferred dividends have already grown to $315K ($205K + $110K). The attached 55,600 warrants are exercisable at the LOWER of $15.20 or 90% of the 10-day VWAP — a variable, reset-lower ('toxic') structure that dilutes common holders precisely when the stock falls. Common shares already fell 90% to 2.60M, reflecting a reverse split done to chase Nasdaq compliance.