UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to__________

Commission File Number

000-23115

YUNHONG GREEN CTI LTD.

(Exact name of registrant as specified in its charter)

Illinois		36-2848943
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

22160 N. Pepper Road
Barrington, Illinois		60010
(Address of principal executive offices)		(Zip Code)

(847) 382-1000

(Registrant’s telephone number, including area code)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value per share	YHGJ	The Nasdaq Stock Market LLC
		(The Nasdaq Capital Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock, no par value per share, as of August 7, 2026 was 2,609,244 (excluding treasury shares).

INDEX

PART I – FINANCIAL INFORMATION

Item No. 1.	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets at June 30, 2026 and December 31, 2025	1
	Unaudited Condensed Consolidated Statements of Loss for the three and six months ended June 30, 2026 and 2025	2
	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025	3
	Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the three and six months ended June 30, 2026 2025	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item No. 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item No. 3	Quantitative and Qualitative Disclosures Regarding Market Risk	15
Item No. 4	Controls and Procedures	15

PART II – OTHER INFORMATION

Item No. 1	Legal Proceedings	17
Item No. 1A	Risk Factors	17
Item No. 2	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item No. 3	Defaults Upon Senior Securities	17
Item No. 4	Mine Safety Disclosures	17
Item No. 5	Other Information	17
Item No. 6	Exhibits	18
	Signatures	19
	Exhibit 31.1
	Exhibit 31.2
	Exhibit 32

	June 30,			December 31,
	2026			2025
ASSETS
Current assets:
Cash and cash equivalents	$	320,000		$	97,000
Accounts receivable, net		3,295,000			5,955,000
Inventories		7,827,000			8,738,000
Prepaid expenses		351,000			283,000

Total current assets		11,793,000			15,073,000

Property, plant and equipment:
Machinery and equipment		21,993,000			21,993,000
Office furniture and equipment		2,122,000			2,122,000
Intellectual property		783,000			783,000
Leasehold improvements		39,000			39,000
Fixtures and equipment		518,000			518,000
Projects under construction		170,000			140,000
Property, plant and equipment gross		25,625,000			25,595,000
Less: accumulated depreciation and amortization		(21,885,000	)		(21,599,000	)

Total property, plant and equipment, net		3,740,000			3,996,000

Other assets:
Operating lease right-of-use		3,087,000			3,393,000

Total other assets		3,087,000			3,393,000

TOTAL ASSETS	$	18,620,000		$	22,462,000

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade payables	$	1,482,000		$	1,677,000
Line of credit		4,591,000			6,822,000
Notes payable – current portion		443,000			146,000
Notes payable related party		344,000			344,000
Notes payable		344,000			344,000
Operating lease liabilities – current portion		659,000			596,000
Advance investor deposits		225,000			150,000
Accrued liabilities		627,000			950,000

Total current liabilities		8,371,000			10,685,000

Long-term liabilities:
Notes payable – net of current portion		-			348,000
Operating lease liabilities – noncurrent		2,526,000			2,873,000

Total long-term liabilities		2,526,000			3,221,000

TOTAL LIABILITIES	$	10,897,000		$	13,906,000

SHAREHOLDERS’ EQUITY
Series E Preferred Stock — no par value, 130,000 shares authorized, issued and outstanding at June 30, 2026 and December 31, 2025 (liquidation preference of $1,300,000)		1,032,000			976,000
Series F Preferred Stock — no par value, 70,000 shares authorized, issued and outstanding at June 30, 2026 and December 31, 2025 (liquidation preference of $700,000)		555,000			525,000
Preferred stock, value		555,000			525,000
Common stock - no par value, 2,000,000,000 shares authorized, 2,613,670 and 2,601,788 shares issued and 2,609,244 and 2,597,362 shares outstanding at June 30, 2026 and December 31, 2025, respectively		27,891,000			27,891,000
Additional paid-in-capital		7,676,000			7,711,000
Accumulated deficit		(29,270,000	)		(28,386,000	)
Less: Treasury stock, 4,426 shares, at cost		(161,000	)		(161,000	)

TOTAL SHAREHOLDERS’ EQUITY		7,723,000			8,556,000

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	18,620,000		$	22,462,000

	2026			2025
	For the Six Months Ended June 30,
	2026			2025

Cash flows from operating activities:
Net loss	$	(884,000	)	$	(601,000	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		286,000			322,000
Equity compensation expense		51,000			17,000

Change in assets and liabilities:
Accounts receivable		2,660,000			1,608,000
Inventories		911,000			313,000
Prepaid expenses and other assets		(68,000	)		169,000
Trade payables		(195,000	)		(104,000	)
Operating leases		22,000			40,000
Advance investor deposit		75,000			-
Accrued liabilities		(323,000	)		(50,000	)

Net cash (used in) provided by operating activities		2,535,000			1,714,000

Cash flows from investing activities:
Purchases of property, plant and equipment		(30,000	)		(42,000	)

Net cash (used in) provided by investing activities		(30,000	)		(42,000	)

Cash flows from financing activities:
Repayment of note payable		(51,000	)		(42,000	)
Net repayments on revolving line of credit		(2,231,000	)		(1,832,000	)

Net cash provided by (used in) financing activities		(2,282,000	)		(1,874,000	)

Net increase (decrease) in cash and cash equivalents		223,000			(202,000	)

Cash and cash equivalents at beginning of period		97,000			220,000

Cash and cash equivalents at end of period	$	320,000		$	18,000

Supplemental disclosure of cash flow information and noncash investing and financing activities:
Cash payments for interest	$	467,000		$	465,000
Accretion of dividends on preferred stock		86,000			86,000
Conversion of advance received from investors into common stock		-			1,050,000
Common stock issued in exchange for rent due to Icy Mellon		-			182,000

	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Earnings			Shares			Amount			TOTAL
	Series E Preferred Stock				Series F Preferred Stock				Common Stock				Paid-in			Accumulated (Deficit)			Less Treasury Stock
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Earnings			Shares			Amount			TOTAL

Balance December 31, 2025		130,000	$	976,000		70,000	$	525,000		2,601,788	$	27,891,000	$	7,711,000		$	(28,386,000	)		(4,426	)	$	(161,000	)	$	8,556,000

Series E Accrued Deemed Dividend		-		28,000				-		-		-		(28,000	)		-			-			-			-
Series F Accrued Deemed Dividend		-		-		-		15,000		-		-		(15,000	)		-			-			-			-
Stock Issuance - Vesting Milestone		-		-		-		-		6,917		-		38,000			-			-			-			38,000
Equity Compensation Charge		-		-		-		-		-		-		6,000			-			-			-			6,000
Net Loss		-		-		-		-		-		-		-			(341,000	)		-			-			(341,000	)

Balance March 31, 2026		130,000	$	1,004,000		70,000	$	540,000		2,608,705	$	27,891,000	$	7,712,000		$	(28,727,000	)		(4,426	)	$	(161,000	)	$	8,259,000

Series E Accrued Deemed Dividend		-		28,000				-		-		-		(28,000	)		-			-			-			-
Series F Accrued Deemed Dividend		-		-		-		15,000				-		(15,000	)		-			-			-			-
Stock Issuance - Vesting Milestone		-		-		-		-						-			-			-			-			-
Equity Compensation Charge		-		-		-		-		4,965		-		7,000			-			-			-			7,000
Net Loss		-		-		-		-		-		-		-			(543,000	)		-			-			(543,000	)

Balance June 30, 2026		130,000	$	1,032,000		70,000	$	555,000		2,613,670	$	27,891,000	$	7,676,000		$	(29,270,000	)		(4,426	)	$	(161,000	)	$	7,723,000

	Shares under Option (warrant)		Weighted Average Exercise Price
Balance at December 31, 2025		55,600	$	15.2
Granted		-		-
Cancelled/Expired		-		-
Exercised/Issued		-		-
Outstanding at June 30, 2026		55,600		15.2

Exercisable at June 30, 2026		55,600	$	15.2

2025 Common Stock Warrants			55,600
Shares reserved for warrants as of June 30, 2026			55,600

Security	Preferred Shares Authorized/ Outstanding		Conversion Ratio	Common Shares Reserved
Series E Preferred Stock		130,000	10:1		1,300,000
Series F Preferred Stock		70,000	10:1		700,000
Shares reserved for Preferred Stock as of June 30, 2026					2,000,000

	RSUs, PSUs & RSAs			Weighted Average Grant- Date Fair Value
Outstanding, unvested at December 31, 2025		20,158			3.63
Granted		-			-
Vested		(8,104	)		6.47
Forfeited		-			-
Outstanding, unvested at June 30, 2026		12,054			3.01

	June 30, 2026		December 31, 2025
Raw materials	$	883,000	$	749,000
Work in process		2,489,000		2,569,000
Finished goods		4,455,000		5,420,000
Total inventories	$	7,827,000	$	8,738,000

	Three Months Ended					Three Months Ended
	June 30, 2026					June 30, 2025
Customer	Net Sales		% of Net Sales			Net Sales		% of Net Sales
Customer A	$	1,805,000		44	%	$	2,153,000		38	%
Customer B	$	1,536,000		37	%	$	2,456,000		44	%

	Six Months Ended					Six Months Ended
	June 30, 2026					June 30, 2025
Customer	Net Sales		% of Net Sales			Net Sales		% of Net Sales
Customer A	$	4,183,000		41	%	$	5,244,000		50	%
Customer B	$	4,504,000		44	%	$	2,979,000		28	%

	2026			2025			2026			2025
	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2026			2025			2026			2025

Net sales	$	3,900,000		$	5,457,000		$	10,054,000		$	10,259,000

Cost of sales		3,362,000			4,479,000			8,502,000			8,415,000

Gross profit		538,000			978,000			1,552,000			1,844,000

Operating expenses:
General and administrative		675,000			754,000			1,598,000			1,593,000
Selling		34,000			37,000			71,000			72,000
Advertising and marketing		149,000			168,000			302,000			338,000

Total operating expenses		858,000			959,000			1,971,000			2,003,000

Income (loss) from operations		(320,000	)		19,000			(419,000	)		(159,000	)

Other (expense) income:
Interest expense		(225,000	)		(227,000	)		(467,000	)		(465,000	)
Other income/(expense)		2,000			23,000			2,000			23,000

Total other expense, net		(223,000	)		(204,000	)		(465,000	)		(442,000	)

Net loss		(543,000	)		(185,000	)		(884,000	)		(601,000	)

Deemed dividends on preferred stock	$	(43,000	)	$	(43,000	)	$	(86,000	)	$	(86,000	)

Net loss attributable to common shareholders	$	(586,000	)	$	(228,000	)	$	(970,000	)	$	(687,000	)

Basic income (loss) per common share	$	(0.22	)	$	(0.09	)	$	(0.37	)	$	(0.26	)
Diluted income (loss) per common share	$	(0.22	)	$	(0.09	)	$	(0.37	)	$	(0.26	)

Weighted average number of shares and equivalent shares of common stock outstanding:
Basic		2,608,638			2,608,082			2,604,856			2,608,082

Diluted		2,608,638			2,608,082			2,604,856			2,608,082


2026	$	527,000
2027		1,083,000
2028		1,119,000
2029		627,000
2030		646,000
Thereafter		217,000
Total Lease Payments		4,219,000
Less: Imputed interest		(1,034,000	)
Total Lease Liabilities	$	3,185,000

	Three Months Ended June 30,
	% of Sales
	2026			2025

Top 3 Customers		87	%		86	%

Top 10 Customers		94	%		94	%

	Six Months Ended June 30,
	% of Sales
	2026			2025

Top 3 Customers		87	%		84	%

Top 10 Customers		94	%		93	%

	●	A decrease in accounts receivable of $2,660,000 compared to a decrease in accounts receivable of $1,608,000 in the same period of 2025.

	●	A decrease in inventory of $911,000 compared to a decrease in inventory of $313,000 in 2025.

	●	A decrease in trade payables of $195,000 compared to a decrease in trade payables of $104,000 in 2025.

	●	An increase in prepaid expenses and other assets of $68,000 compared to a decrease of $169,000 in 2025.

	●	A decrease in accrued liabilities of $323,000 compared with a decrease in accrued liabilities of $50,000 in 2025.

Exhibit Number		Description

31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and rule 15d-14(a) of the Securities Exchange Act, as amended (filed herewith).
31.2*		Certification of Corporate Controller and Principal Financial Officer pursuant to Rule 13a-14(a) and rule 15d-14(a) of the Securities Exchange Act, as amended (filed herewith).
32**		Certification of Chief Executive Officer, Corporate Controller and Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101*		Interactive Data Files, including the following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in inline XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income (Loss), (iii) the Consolidated Statements of Cash Flows, (iv) Consolidated Statements of Shareholders’ Equity, and (v) the Notes to Consolidated Financial Statements.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*		Filed herewith
**		furnished herewith

Date: August 7, 2026	Yunhong Green CTI Ltd.

	By:	/s/ Jana M. Schwan
		Jana M. Schwan
		Chief Executive Officer

	By:	/s/ Sree Kommana
		Sree Kommana
		Corporate Controller and Principal Financial Officer