10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2017

OR

¨ 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

CTI INDUSTRIES CORPORATION

(Exact name of Registrant as specified in its charter)

Illinois	36-2848943
(State or other jurisdiction of	(I.R.S. Employer Identification Number)
incorporation or organization)
22160 N. Pepper Road
Lake Barrington, Illinois	60010
(Address of principal executive offices)	(Zip Code)

(847) 382-1000

(Registrant’s telephone number, including area code)

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 þ     No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes þ     No ¨

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

Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company þ
			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 o     No þ

The number of shares outstanding of the Registrant’s common stock as of August 1, 2017 was 3,525,227.

INDEX

Part I – Financial Information
Item No. 1.	Financial Statements
	Condensed Consolidated Balance Sheets at June 30, 2017 (unaudited) and December 31, 2016	1
	Condensed Consolidated Statements of Comprehensive Income (unaudited) for the three months ended June 30, 2017 and June 30, 2016	2
	Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended June 30, 2017 and June 30, 2016	3
	Condensed Consolidated Earnings per Share (unaudited) for the three months ended June 30, 2017 and June 30, 2016	4
	Notes to Condensed Consolidated Financial Statements (unaudited)	5
Item No. 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item No. 3	Quantitative and Qualitative Disclosures Regarding Market Risk	23
Item No. 4	Controls and Procedures	23
Part II – Other Information
Item No. 1	Legal Proceedings	24
Item No. 1A	Risk Factors	24
Item No. 2	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item No. 3	Defaults Upon Senior Securities	24
Item No. 4	Submission of Matters to a Vote of Security Holders	24
Item No. 5	Other Information	24
Item No. 6	Exhibits	24
	Signatures	26
	Exhibit 31.1
	Exhibit 31.2
	Exhibit 32

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

CTI Industries Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

	June 30, 2017			December 31, 2016
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents (VIE $12,000 and $51,000, respectively)	$	456,426		$	563,043
Accounts receivable, (less allowance for doubtful accounts of $152,000 and $137,000, respectively) (VIE $11,000 and $6,000, respectively)		10,020,280			14,838,978
Inventories, net (VIE $583,000 and $719,000, respectively)		18,947,606			18,348,011
Prepaid expenses (VIE $35,000 and $18,000, respectively)		750,586			678,689
Other current assets (VIE $1,000 and $0, respectively)		854,936			530,669
Total current assets		31,029,834			34,959,390
Property, plant and equipment:
Machinery and equipment (VIE $0 and $0, respectively)		26,877,412			26,348,443
Building		3,387,323			3,379,636
Office furniture and equipment (VIE $217,000 and $154,000, respectively)		3,440,515			3,597,158
Intellectual property		752,044			482,088
Land		250,000			250,000
Leasehold improvements		418,073			395,603
Fixtures and equipment at customer locations		3,302,868			3,302,868
Projects under construction		169,274			493,859
		38,597,509			38,249,655
Less : accumulated depreciation and amortization (VIE $33,000 and $29,000, respectively)		(33,478,495	)		(32,938,267	)
Total property, plant and equipment, net		5,119,014			5,311,388
Other assets:
Goodwill (VIE $440,000 and $440,000, respectively)		1,473,176			1,473,176
Net deferred income tax asset		1,868,561			1,696,690
Other assets (due from related party $49,000 and $47,000, respectively)		428,953			473,095
Total other assets		3,770,690			3,642,961
TOTAL ASSETS	$	39,919,538		$	43,913,739
LIABILITIES AND EQUITY
Current liabilities:
Checks written in excess of bank balance	$	1,074,901		$	1,688,675
Trade payables (VIE $10,000 and $92,000, respectively)		4,926,507			5,861,932
Line of credit (VIE $373,000 and $408,000, respectively)		9,545,148			11,263,531
Notes payable - current portion (net discount of $17,000 and $113,000, respectively) (VIE $0 and $0, respectively)		6,659,095			1,709,220
Notes payable officers - current portion		0			180,000
Notes payable affiliates - current portion		9,967			8,141
Capital Lease - current portion		23,714			40,660
Accrued liabilities (VIE $149,000 and $140,000, respectively)		2,551,157			3,127,425
Total current liabilities		24,790,489			23,879,584
Long-term liabilities:
Notes payable - affiliates		213,677			218,858
Notes payable, net of current portion (net discount of $0 and $0, respectively) (VIE $206,000 and $301,000, respectively)		205,978			5,301,491
Notes payable - officers, subordinated		1,465,162			1,416,138
Capital Lease		0			4,690
Deferred gain (non current)		286,858			297,521
Total long-term debt, net of current portion		2,171,675			7,238,698
Warrants Payable		794,072			817,880
Total long-term liabilities		2,965,747			8,056,578
Equity:
CTI Industries Corporation stockholders' equity:
Preferred Stock — no par value, 2,000,000 shares authorized, 0 shares issued and outstanding					-
Common stock - no par value, 5,000,000 shares authorized, 3,568,885 shares issued and 3,525,227 shares outstanding		13,898,494			13,898,494
Paid-in-capital		2,227,880			2,250,235
Accumulated earnings		1,855,668			2,323,326
Accumulated other comprehensive loss		(4,840,509	)		(5,593,878	)
Less: Treasury stock, 43,658 shares		(160,784	)		(160,784	)
Total CTI Industries Corporation stockholders' equity		12,980,749			12,717,393
Noncontrolling interest		(817,447	)		(739,816	)
Total Equity		12,163,302			11,977,577
TOTAL LIABILITIES AND EQUITY	$	39,919,538		$	43,913,739

See accompanying notes to condensed consolidated unaudited financial statements

1 

CTI Industries Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
Net Sales	$	12,811,697		$	14,150,504		$	28,171,335		$	29,355,498
Cost of Sales		9,694,288			10,313,825			21,436,477			21,596,973
Gross profit		3,117,409			3,836,679			6,734,858			7,758,525
Operating expenses:
General and administrative		1,866,615			1,904,874			3,767,871			3,662,224
Selling		1,187,904			1,192,794			1,909,294			2,184,155
Advertising and marketing		537,372			536,631			1,093,781			1,062,709
Gain on sale of assets		(22,401	)		-			(91,701	)		-
Other operating income		(1,416	)		-			(1,416	)		-
Total operating expenses		3,568,074			3,634,299			6,677,829			6,909,088
(Loss) Income from operations		(450,665	)		202,380			57,029			849,437
Other (expense) income:
Interest expense		(359,782	)		(357,192	)		(732,646	)		(715,652	)
Change in fair value of warrants		4,202			(39,214	)		23,808			(226,878	)
Foreign currency loss		(50,428	)		78,161			(80,954	)		67,677
Total other expense, net		(406,008	)		(318,245	)		(789,792	)		(874,853	)
Net income before taxes		(856,673	)		(115,865	)		(732,763	)		(25,416	)
Income tax expense		(263,110	)		4,865			(187,473	)		11,851
Net income		(593,563	)		(120,730	)		(545,290	)		(37,267	)
Less: Net (loss) income attributable to noncontrolling interest		(67,435	)		(37,800	)		(77,632	)		38,900
Net loss attributable to CTI Industries Corporation	$	(526,128	)	$	(82,930	)	$	(467,658	)	$	(76,167	)
Other Comprehensive Income (Loss)
Foreign currency adjustment		442,057			(536,409	)		753,369			(604,011	)
Comprehensive Income (Loss)	$	(84,071	)	$	(619,339	)	$	285,711		$	(680,178	)
Basic loss per common share	$	(0.15	)	$	(0.02	)	$	(0.13	)	$	(0.02	)
Diluted loss per common share	$	(0.14	)	$	(0.02	)	$	(0.12	)	$	(0.02	)
Weighted average number of shares and equivalent shares of common stock outstanding:
Basic		3,616,693			3,363,986			3,616,693			3,363,986
Diluted		3,771,581			3,535,075			3,772,236			3,519,906

See accompanying notes to condensed consolidated unaudited financial statements

2 

CTI Industries Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

	For the Six Months Ended June 30,
	2017			2016
Cash flows from operating activities:
Net (loss) income	$	(545,290	)	$	(37,267	)
Adjustment to reconcile net income to cash provided by operating activities:
Depreciation and amortization		781,042			784,399
Amortization of debt discount		95,906			82,163
Change in fair value of warrants		(23,808	)		226,878
Stock based compensation		0			23,334
Amortization of deferred gain on sale/leaseback		(53,258	)		0
Provision for losses on accounts receivable		4,117			8,039
Provision for losses on inventories		42,366			(48,935	)
Deferred income taxes		(254,401	)		(106,619	)
Change in assets and liabilities:
Accounts receivable		5,311,938			1,404,314
Inventories		137,620			(1,416,051	)
Prepaid expenses and other assets		(268,403	)		(1,809,612	)
Trade payables		(1,236,877	)		654,759
Accrued liabilities		(788,625	)		(150,018	)
Net cash provided by (used in) operating activities	$	3,202,327		$	(384,616	)
Cash flows from investing activities:
Proceeds from equipment sale-leaseback		0			783,134
Cash used in investment in subsidiary		0			(43,750	)
Purchases of property, plant and equipment		(526,565	)		(433,304	)
Net cash (used in) provided by investing activities	$	(526,565	)	$	306,080
Cash flows from financing activities:
Change in checks written in excess of bank balance		(613,774	)		70,171
Net change in revolving line of credit		(1,780,835	)		883,940
Proceeds from issuance of long-term debt		0			492
Repayment of long-term debt (related parties $0 and $0)		(423,627	)		(557,655	)
Contributions received by Variable Interest Entity		0			288,750
Redemption of Variable Interest Entity members		0			(455,000	)
Net cash (used in) provided by financing activities	$	(2,818,236	)	$	230,698
Effect of exchange rate changes on cash		35,857			(23,525	)
Net decrease in cash and cash equivalents		(106,617	)		128,637
Cash and cash equivalents at beginning of period		563,043			346,404
Cash and cash equivalents at end of period	$	456,426		$	475,041
Supplemental disclosure of cash flow information:
Cash payments for interest		627,586			608,758
Cash payments for taxes		300,000			0
Supplemental Disclosure of non-cash investing and financing activity
Property, Plant & Equipment acquisitions funded by liabilities	$	8,704		$	30,721
Contributed Capital to Clever Container
Stock		0		$	122,500
Debt		0		$	43,750
Accounts Receivable		0		$	183,750

See accompanying notes to condensed consolidated unaudited financial statements

3 

CTI Industries Corporation and Subsidiaries

Condensed Consolidated Earnings per Share (unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
Basic
Average shares outstanding:
Weighted average number of common shares outstanding		3,616,693			3,363,986			3,616,693			3,363,986
Net loss:
Net loss attributable to CTI Industries Corporation	$	(526,128	)	$	(82,930	)	$	(467,658	)	$	(76,167	)
Per share amount	$	(0.15	)	$	(0.02	)	$	(0.13	)	$	(0.02	)
Diluted
Average shares outstanding:
Weighted average number of common shares outstanding		3,616,693			3,363,986			3,616,693			3,363,986
Effect of dilutive shares		154,888			171,089			155,543			155,920
Weighted average number of shares and equivalent shares of common stock outstanding		3,771,581			3,535,075			3,772,236			3,519,906
Net loss:
Net loss attributable to CTI Industries Corporation	$	(526,128	)	$	(82,930	)	$	(467,658	)	$	(76,167	)
Per share amount	$	(0.14	)	$	(0.02	)	$	(0.12	)	$	(0.02	)

See accompanying notes to condensed consolidated unaudited financial statements

4 

CTI Industries Corporation and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 - Basis of Presentation

The accompanying condensed (a) consolidated balance sheet as of December 31, 2016, which has been derived from audited consolidated financial statements, and (b) the unaudited interim condensed consolidated financial statements have been prepared and, in the opinion of management, contain all the adjustments (consisting of those of a normal recurring nature) considered necessary to present fairly the consolidated financial position and the consolidated statements of comprehensive income and consolidated cash flows for the periods presented in conformity with generally accepted accounting principles for interim consolidated financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America. Operating results for the three months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2017. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2016.

Principles of consolidation and nature of operations:

The condensed consolidated financial statements include the accounts of CTI Industries Corporation and its wholly-owned subsidiaries, CTI Balloons Limited and CTI Supply, Inc., its majority-owned subsidiaries, Flexo Universal, S. de R.L. de C.V. and CTI Europe gmbH, as well as the accounts of Venture Leasing S. A. de R. L., Venture Leasing L.L.C and Clever Container Company, L.L.C. (the “Company”). The last three entities have been consolidated as variable interest entities. All significant intercompany transactions and accounts have been eliminated in consolidation. The Company (i) designs, manufactures and distributes balloon products throughout the world, (ii) operates systems for the production, lamination, coating and printing of films used for food packaging and other commercial uses and for conversion of films to flexible packaging containers and other products, and (iii) distributes vacuum sealing products and home organization products in the United States.

Variable Interest Entities (“VIE’s”):

The determination of whether or not to consolidate a variable interest entity under U.S. GAAP requires a significant amount of judgment concerning the degree of control over an entity by its holders of variable interest. To make these judgments, management has conducted an analysis of the relationship of the holders of variable interest to each other, the design of the entity, the expected operations of the entity, which holder of variable interests is most “closely associated” to the entity and which holder of variable interests is the primary beneficiary required to consolidate the entity. Upon the occurrence of certain events, management reviews and reconsiders its previous conclusion regarding the status of an entity as a variable interest entity. There are three entities that have been consolidated as variable interest entities.

5 

Use of estimates:

In preparing condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amount of revenue and expenses during the reporting period in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. The Company’s significant estimates include reserves for doubtful accounts, reserves for the lower of cost or market of inventory, reserves for deferred tax assets and recovery value of goodwill.

Earnings per share:

Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during each period.

Diluted earnings per share is computed by dividing the net income by the weighted average number of shares of common stock and equivalents (stock options and warrants), unless anti-dilutive, during each period.

As of June 30, 2017 and 2016, shares to be issued upon the exercise of options and warrants aggregated 359,817 and 288,048, respectively. The number of anti-dilutive shares (not included in the determination of earnings on a diluted basis) for the three and six months ended June 30, 2017 and 2016 were 153,350 and 0, respectively.

Significant Accounting Policies:

The Company’s significant accounting policies are summarized in Note 2 of the Company’s consolidated financial statements for the year ended December 31, 2016. There were no significant changes to these accounting policies during the three and six months ended June 30, 2017.

Reclassification:

Certain 2016 amounts have been reclassified to conform to the 2017 presentation. (See footnote regarding ASU 2015-17.)

Recent Accounting Pronouncements:

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This guidance amended the existing requirements for disclosing information about an entity’s ability to continue as a going concern, requires management to assess an entity’s ability to continue as a going concern and then to provide related disclosure in certain circumstances. This guidance is effective for annual reporting periods ending after December 2016 and for annual and interim reporting periods thereafter. See Note 2 for management’s assessment of its ability to continue as a going concern.

6 

In 2014, the FASB issued guidance on revenue recognition, which provides for a single five-step model to be applied to all revenue contracts with customers. The guidance also requires additional financial statement disclosures that will enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts. The guidance provides an option to use either a retrospective approach or a cumulative effect adjustment approach to implement the guidance. In 2015, the FASB issued a deferral of the effective date of the guidance to 2018, with early adoption permitted in 2017. In 2016, the FASB issued final amendments clarifying the implementation guidance for principal versus agent considerations, identifying performance obligations and the accounting of intellectual property licenses. In addition, the FASB introduced practical expedients related to disclosures of remaining performance obligations, as well as other amendments to guidance on collectibility, non-cash consideration and the presentation of sales and other similar taxes. We are currently evaluating the impact of this guidance on our financial statements and the timing of adoption, and have not yet selected a transition approach.

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, to eliminate the current requirements to classify deferred income tax assets and liabilities between current and noncurrent. To simplify the presentation of deferred income taxes, the amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. For public business entities, the amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The Company has adopted the standard and the impact to our consolidated financial statements for the period ending June 30, 2017 is a reclassification of $761,000 in deferred tax assets to noncurrent, and a reclassification of $773,000 in deferred tax assets to noncurrent for the period ending December 31, 2016.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), aimed at making leasing activities more transparent and comparable. The new standard requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including today’s operating leases. For public business entities, the standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. When the standard becomes effective, we expect that our property, plant and equipment will increase significantly due to the addition of assets under lease and the lease liabilities will correspondingly increase. There is not expected to be a significant impact on the income statement.

7

On August 26, 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230), a consensus of the FASB’s Emerging Issues Task Force (“ASU 2016-15”). The new guidance amends Accounting Standards Codification No. 230 (“ASC 230”) to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. ASC 230 lacks consistent principles for evaluating the classification of cash payments and receipts in the statement of cash flows. This has led to diversity in practice and, in certain circumstances, financial statement restatements. Therefore, the FASB issued the ASU 2016-15 with the intent of reducing diversity in practice with respect to eight types of cash flows. ASU 2016-15 is effective for annual and interim periods in fiscal years beginning after December 15, 2017, and is effective for the Company for the year ending December 31, 2018. The Company is currently evaluating the impact that the implementation of this standard will have on the Company’s consolidated financial statements.

Note 2 - Liquidity and Going Concern

The Company’s primary sources of liquidity are cash and cash equivalents as well as availability under the Credit Agreement with BMO Harris. The Company has historically used availability under this revolving credit facility to fund operations.

For the six months ended June 30, 2017, the Company generated net cash from operating activities in the amount of $3,202,237, although the Company did incur a loss for the quarter ended June 30, 2017 of $526,000 and for the six months ended June 30, 2017 of $468,000.

Assuming a continuation of the revolving credit under the Credit Agreement, the Company has forecast a profit for the second half of the year, which is expected to generate sufficient cash flow for the Company to meet its current obligations.

As of June 30, 2017, the Company had total borrowings outstanding under the Credit Agreement including $9,172,000 on the revolving credit loan and $1,664,000 on the mortgage facility. As of June 30, 2017, the Company had cash balances of $456,000.

Also, the Company owes $5 million on its outstanding subordinated loan with BMO Equity, which matures on January 17, 2018.

As of June 30, 2017, we met the debt covenants of the BMO Harris loan and the BMO Equity loan.

The obligations of the Credit Agreement (revolving credit loan and mortgage) were to mature on July 17, 2017 under the terms. By amendment to the Credit Agreement, BMO Harris has agreed to extend the maturity of these obligations to October 18, 2017. BMO Equity consented to this extension in exchange for a fee and for the right to exercise at any time its put of warrants issued under the Note and Warrant Agreement, with payment deferred to the maturity date of the BMO Equity loan.

The extension provides for the retention by the Company of a consultant to advise as to financial planning, forecasting, cost management and financing.

Management’s plans include

(1) Acting to reduce operating expense to achieve a higher level of profitability,

(2) Working with our consultant to reduce operating expenses, negotiate financing terms, identify financing sources,

(3) Contacts and negotiations with our current lenders and with additional financing sources to extend our present loan facilities or to provide alternative sources for one or both of our current lenders, and

(4) Maintaining active contact and a loan process with several potential lenders, as well as our current lenders, and receipt of non-binding proposals for our financing.

Management Assessment

Based upon our historical ability to obtain necessary financing and our current expectations, we believe that we are likely to obtain necessary financing to continue operating as a going concern. However, we do not have firm commitments at this time for alternative financing or loan extensions.

8

Note 3 - Stock-Based Compensation; Changes in Equity

The Company has adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the condensed consolidated financial statements based on their grant-date fair values.

The Company has applied the Black-Scholes model to value stock-based awards and issued warrants related to notes payable. That model incorporates various assumptions in the valuation of stock-based awards relating to the risk-free rate of interest to be applied, the estimated dividend yield and expected volatility of our common stock. The risk-free rate of interest is the related U.S. Treasury yield curve for periods within the expected term of the option at the time of grant. The dividend yield on our common stock is estimated to be 0%, as the Company did not issue dividends during 2017 and 2016. The expected volatility is based on historical volatility of the Company’s common stock.

The Company’s net loss for the three months ended June 30, 2017 and 2016 includes approximately $5,000 and $11,000, respectively, of compensation costs related to share based payments. The Company’s net loss for the six months ended June 30, 2017 and 2016 includes approximately $10,000 and $23,000, respectively, of compensation costs related to share based payments. As of June 30, 2017, there is $16,000 of unrecognized compensation expense related to non-vested stock option grants and stock grants. We expect approximately $5,000 of additional stock-based compensation expense to be recognized over the remainder of 2017, $7,000 to be recognized during 2018, $3,000 to be recognized during 2019 and $1,000 to be recognized during 2020.

9

As of June 30, 2017, the Company had three stock-based compensation plans pursuant to which stock options were, or may be, granted. The Plans provide for the award of options, which may either be incentive stock options (“ISOs”) within the meaning of Section 422A of the Internal Revenue Code of 1986, as amended (the “Code”) or non-qualified options (“NQOs”) which are not subject to special tax treatment under the Code, as well as for stock grants.

On April 10, 2009, the Board of Directors approved for adoption, and on June 5, 2009, the shareholders of the Corporation approved, a 2009 Stock Incentive Plan (“2009 Plan”). The 2009 Plan authorizes the issuance of up to 250,000 shares of stock or options to purchase stock of the

Company (including cancelled shares reissued under the plan.) As of June 30, 2017, options for 250,000 shares had been granted and options for 143,094 shares remain outstanding.

A summary of the Company’s stock option activity and related information is as follows:

	Shares under Option		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Balance at December 31, 2016		143,094	$	5.22		2.9	$	89,494
Granted		-		-		-		-
Cancelled/Expired		-		-		-		-
Exercised		-		-		-		-
Outstanding at June 30, 2017		143,094	$	5.22		1.5	$	65,518
Exercisable at June 30, 2017		113,238	$	5.21		1.0	$	53,748

On July 17, 2012, the Company entered into a Note and Warrant Purchase Agreement with BMO Private Equity (U.S.), Inc. (“BMO Equity”) pursuant to which (i) BMO Equity advanced to the Company the sum of $5 million and (ii) the Company issued to BMO Equity a warrant to purchase up to Four Percent (4%) of the outstanding shares of common stock of the Company on a fully-diluted basis (140,048 shares of common stock of the Company) at the price of One Cent ($0.01) per share. The term of the loan provided for in this Agreement is five and a half years. Interest is payable on the outstanding balance of the loan at the rate of 11.5% per annum. As of June 30, 2017, the Company was in compliance with all of the financial covenants under the Note and Warrant Purchase Agreement.

On July 29, 2016, the Company and certain accredited investors entered into a Securities Purchase Agreement wherein the investors purchased 152,850 shares of common stock of the Company at a price of $6.00 per share. As additional consideration for the purchases of the shares in the offering, each investor received, with each share of common stock purchased, one-half of a warrant, with one warrant entitling the investor to purchase one share of the Company’s common stock at the price of $7.00. The warrants are exercisable between six months and three years from the investment date. As a result of the completion of the sale under the Purchase Agreement, warrants to purchase 76,675 shares of common stock at $7.00 per share were issued.

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In addition to the Purchase Agreement, the Company and each of the investors entered into a Registration Rights Agreement pursuant to which the Company agreed to file a Registration Statement with the SEC to register the common stock sold to the investors.

A summary of the Company’s stock warrant activity and related information is as follows:

	Shares under Warrant		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Balance at December 31, 2016		216,723	$	2.48		4.49	$	817,880
Granted		-		-		-		-
Cancelled		-		-		-		-
Exercised		-		-		-		-
Outstanding at June 30, 2017		216,723	$	2.48		4.00	$	794,072
Exercisable at June 30, 2017		76,675	$	7.00		2.08		-

A summary of the Company’s stock option activity by grant date as of June 30, 2017 is as follows:

	Options Outstanding								Options Vested
Options by Grant Date	Shares		Weighted Avg.		Remain. Life		Intrinsic Val		Shares		Weighted Avg.		Remain. Life		Intrinsic Val
Dec 2005		-		-		-		-		-		-		-		-
Dec 2010		-		-		-		-		-		-		-		-
Jan 2011		-		-		-		-		-		-		-		-
Nov 2012		90,000	$	5.17		0.4	$	45,900		90,000	$	5.17		0.4	$	45,900
Nov 2013		5,000	$	5.75		1.4	$	0		4,000	$	5.75		1.4	$	0
Dec 2015		48,094	$	5.27		3.5	$	19,618		19,238	$	5.27		3.5	$	7,848
TOTAL		143,094	$	5.22		1.5	$	65,518		113,238	$	5.21		1.0	$	53,748

The aggregate intrinsic value in the tables above represents the total pre-tax intrinsic value (the difference between the closing price of the Company’s common stock on the last trading day of the quarter ended June 30, 2017 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all the holders exercised their options on June 30, 2017.

Note 4 - Legal Proceedings

The Company is party to certain claims or actions arising in the normal course of business. The ultimate outcome of these matters is unknown but, in the opinion of management, the resolution of these matters is not expected to have a significant effect on the future financial position or results of operations of the Company.

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Note 5 - Other Comprehensive Income

In the three and six months ended June 30, 2017,the Company incurred other comprehensive income of approximately $442,000 and $753,000, respectively, all from foreign currency translation adjustments.

The following table sets forth the accumulated balance of other comprehensive income and each component.

	Foreign Currency Items			Total Accumulated Other Comprehensive Income
Beginning balance as of January 1, 2017	$	(5,593,878	)	$	(5,593,878	)
Current period change, net of tax		753,369			753,369
Ending Balance as of June 30, 2017		(4,840,509	)		(4,840,509	)

Note 6 - Inventories, Net

	June 30, 2017			December 31, 2016
Raw materials	$	3,516,267		$	3,310,310
Work in process		2,508,025			1,942,600
Finished goods		13,760,317			13,889,328
Allowance for excess quantities		(837,003	)		(794,227	)
Total inventories	$	18,947,606		$	18,348,011

Note 7 - Geographic Segment Data

The Company has determined that it operates primarily in one business segment that designs, manufactures and distributes film and film related products for use in packaging, storage and novelty balloon products. The Company operates in foreign and domestic regions. Information about the Company's operations by geographic area is as follows:

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	Net Sales to Outside Customers				Net Sales to Outside Customers
	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
United States	$	9,478,000	$	11,050,000	$	21,125,000	$	23,135,000
Europe		917,000		618,000		1,864,000		1,166,000
Mexico		1,956,000		1,852,000		3,979,000		3,715,000
United Kingdom		459,000		631,000		1,203,000		1,339,000
	$	12,810,000	$	14,151,000	$	28,171,000	$	29,355,000

	Total Assets at
	June 30,		December 31,
	2017		2016
United States	$	27,180,000	$	33,108,000
Europe		2,910,000		2,418,000
Mexico		8,817,000		7,064,000
United Kingdom		1,013,000		1,324,000
	$	39,920,000	$	43,914,000

Note 8 - Concentration of Credit Risk

Concentration of credit risk with respect to trade accounts receivable is generally limited due to the large number of entities comprising the Company's customer base. The Company performs ongoing credit evaluations and provides an allowance for potential credit losses against the portion of accounts receivable which is estimated to be uncollectible. Such losses have historically been within management's expectations. During the three and six months ended June 30, 2017 and 2016, there were two customers whose purchases represented more than 10% of the Company’s consolidated net sales, respectively. Sales to these customers for the three months ended June 30, 2017 and 2016 are as follows:

	Three Months Ended					Three Months Ended
	June 30, 2017					June 30, 2016
Customer	Net Sales		% of Net Sales			Net Sales		% of Net Sales
Customer A	$	3,867,000		30.2	%	$	3,607,000		25.5	%
Customer B	$	1,565,000		12.2	%	$	2,460,000		17.4	%

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	Six Months Ended					Six Months Ended
	June 30, 2017					June 30, 2016
Customer	Net Sales		% of Net Sales			Net Sales		% of Net Sales
Customer A	$	8,294,000		29.4	%	$	8,772,000		29.9	%
Customer B	$	4,174,000		14.8	%	$	4,800,000		16.4	%

As of June 30, 2017, the total amounts owed to the Company by these customers were approximately $2,104,000 or 21.2%, and $1,606,000 or 16.2%, of the Company’s consolidated net accounts receivable, respectively. The amounts owed at June 30, 2016 by these customers were approximately $2,018,000 or 20.2%, and $2,112,000 or 21.2% of the Company’s consolidated net accounts receivable, respectively.

Note 9 - Related Party Transactions

Stephen M. Merrick, President of the Company, is of counsel to the law firm of Vanasco Genelly and Miller PC which provides legal services to the Company. Legal fees paid by the Company to this firm for the three months ended June 30, 2017 and 2016, respectively, were $38,000 and $33,000. Legal fees paid by the Company to this firm for the six months ended June 30, 2017 and 2016, respectively, were $64,000 and $71,000.

Interest payments have been made or accrued to John H. Schwan, Chief Executive Officer of the Company, for loans made to the Company. During the three months ended June 30, 2017 and 2016, these interest accruals totaled $25,000 and $23,000, respectively. During the six months ended June 30, 2017 and 2016, these interest accruals totaled $49,000 and $46,000, respectively.

John H. Schwan, Chief Executive Officer of the Company, through an investment entity, and Stephen M. Merrick, President of the Company, also through an investment entity own, in aggregate, a 50% interest in Clever Container Company L.L.C., an Illinois limited liability company (“Clever Container”). During the three months ended June 30, 2017 and 2016, Clever Container purchased various products from the Company in the amount of $250,000 and $293,000, respectively. During the six months ended June 30, 2017 and 2016, Clever Container purchased various products from the Company in the amount of $454,000 and $478,000, respectively. As of June 30, 2017 and 2016, the balance of accounts receivable from Clever Container to the Company were $831,000 and $397,000, respectively. The Company owns a 28.5% interest in Clever Container.

Note 10 - Derivative Instruments; Fair Value

The following tables represents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value:

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	Amount as of
Description	6/30/2017		Level 1		Level 2		Level 3
Warrant Liability	$	794,000		-	$	794,000		-
	$	794,000		-	$	794,000		-

	Amount as of
Description	12/31/2016		Level 1		Level 2		Level 3
Warrant Liability	$	818,000		-	$	818,000		-
	$	818,000			$	818,000

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This quarterly report includes both historical and “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. We have based these forward-looking statements on our current expectations and projections about future results. Words such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or similar words are intended to identify forward-looking statements, although not all forward-looking statements contain these words. 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 the views and expectations set forth in this quarterly report on Form 10-Q. We disclaim any intent or obligation to update any forward-looking statements after the date of this quarterly report to conform such statements to actual results or to changes in our opinions or expectations.

Overview

We produce film products for novelty, packaging and container applications. These products include foil balloons, latex balloons and related latex toy products, films for packaging and custom product applications, and flexible containers for packaging and consumer storage applications. We produce all of our film products for packaging, container applications and foil balloons at our plant in Lake Barrington, Illinois. We produce all of our latex balloons and latex products at our facility in Guadalajara, Mexico. Substantially all of our film products for packaging and custom product applications are sold to customers in the United States. We market and sell our novelty items and flexible containers for consumer use in the United States, Mexico, Latin America, and Europe. We also market and sell vacuum sealing machines which we purchase from a supplier and we market and sell home organizing and container products.

Results of Operations

Net Sales. For the three months ended June 30, 2017, net sales were $12,812,000 compared to net sales of $14,151,000 for the same period of 2016, a decrease of 9.5%. For the quarters ended June 30, 2017 and 2016, net sales by product category were as follows:

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	Three Months Ended
	June 30, 2017					June 30, 2016
	$		% of			$		% of
Product Category	(000) Omitted		Net Sales			(000) Omitted		Net Sales
Foil Balloons		6,788		53	%		6,350		44	%
Latex Balloons		2,244		18	%		2,263		16	%
Vacuum Sealing Products		1,563		12	%		2,444		17	%
Film Products		699		5	%		1,350		10	%
Other Sales		1,518		12	%		1,744		13	%
Total		12,812		100	%		14,151		100	%

For the six months ended June 30, 2017, net sales were $28,171,000 compared to net sales of $29,355,000 for the same period of 2016, a decrease of 4%. For the six months ended June 30, 2017 and 2016, net sales by product category were as follows:

	Six Months Ended
	June 30, 2017					June 30, 2016
	$		% of			$		% of
Product Category	(000) Omitted		Net Sales			(000) Omitted		Net Sales
Foil Balloons		15,680		57	%		14,362		49	%
Latex Balloons		4,349		15	%		4,308		15	%
Vacuum Sealing Products		3,271		12	%		4,768		16	%
Film Products		1,536		5	%		2,370		8	%
Other Sales		3,335		11	%		3,547		12	%
Total		28,171		100	%		29,355		100	%

Foil Balloons. During the three months ended June 30, 2017, revenues from the sale of foil balloons increased by 6.9% compared to the prior year period from $6,350,000 to $6,788,000. During the six months ended June 30, 2017, revenues from the sale of foil balloons increased by 9.2% compared to the prior year period from $14,362,000 to $15,680,000. During the first half of 2017, foil balloon sales to our largest customer increased to $8,293,000 from $8,287,000 in the first half of 2016. Sales of foil balloons to other customers increased to $7,387,000 from $6,075,000 for the same period last year. These increased sales represent certain new customers but principally increases in sales to significant existing customers in each of the United States, Mexico, the United Kingdom and Europe.

Latex Balloons. During the three months ended June 30, 2017, revenues from the sale of latex balloons decreased by 0.8% compared to the prior year period from $2,263,000 to $2,244,000. During the six months ended June 30, 2017, revenues from the sale of latex balloons increased by 1% compared to the prior year period from $4,308,000 to $4,349,000.

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Vacuum Sealing Products. During the three months ended June 30, 2017, revenues from the sale of pouches and vacuum sealing machines decreased by 36.1% compared to the prior year from $2,444,000 to $1,563,000. During the six months ended June 30, 2017, revenues from the sale of pouches and vacuum sealing machines decreased by 31.4% compared to the prior year from $4,768,000 to $3,271,000. We believe that sales were affected during both the first and second quarters by the selloff of excess inventory of vacuum sealing machines held by a principal customer due to a sales promotion the customer implemented during the fourth quarter of 2016 for which a large quantity of machines were purchased. We believe such excess inventory has now been sold and anticipate increased orders for machines during the third and fourth quarters this year.

Films. During the three months ended June 30, 2017, revenues from the sale of laminated film products decreased by 48.2% compared to the prior year period from $1,350,000 to $699,000. During the six months ended June 30, 2017, revenues from the sale of laminated film products decreased by 35.2% compared to the prior year period from $2,370,000 to $1,536,000. Virtually all of the sales of this product line were to a single long-term customer. This customer has reduced the volume of film product purchased from our Company this year to date but we continue to maintain a long-term relationship with the customer.

Other Revenues. During the three months ended June 30, 2017, revenues from the sale of various other products decreased by 13% to $1,518,000 compared to revenues from other products in the same period in 2016 of $1,744,000. During the six months ended June 30, 2017, revenues from the sale of various other products decreased by 6% to $3,335,000 compared to revenues from other products in the same period in 2016 of $3,547,000. The revenues from the sale of other products during 2017 include (i) sales of a line of “Candy Blossoms” and “Candy Loons” consisting of candy and small inflated balloons sold in small containers, (ii) the sale of accessories and supply items related to balloon products, (iii) sales by Clever Container Company, L.L.C. which engages in the direct sale of container and organizing products through a network of independent distributors and (iv) sales of party goods in Mexico by Flexo Universal.

Sales to a limited number of customers continue to represent a large percentage of our net sales.

The table below illustrates the impact on sales of our top three and ten customers for the three and six months ended June 30, 2017 and 2016.

	Three Months Ended June 30,						Six Months Ended June 30,
	% of Sales						% of Sales
	2017			2016			2017			2016
Top 3 Customers		47.7	%		52.3	%		49.5	%		54.1	%
Top 10 Customers		65.3	%		69.6	%		65.8	%		68.5	%

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During the three and six months ended June 30, 2017, there were two customers whose purchases represented more than 10% of the Company’s consolidated net sales. Sales to these customers for the three months ended June 30, 2017 were $3,867,000 or 30.2%, and $1,565,000 or 12.2%, of consolidated net sales, respectively. Sales to these customers for the three months ended June 30, 2016 were $3,607,000 or 25.5%, and $2,460,000 or 17.4%, of consolidated net sales, respectively. Sales to these customers for the six months ended June 30, 2017 were $8,294,000 or 29.4%, and $4,174,000 or 14.8%, of consolidated net sales, respectively. Sales to these customers for the six months ended June 30, 2016 were $8,772,000 or 29.9%, and $4,800,000 or 16.4%, of consolidated net sales, respectively. The amounts owed at June 30, 2017 by these customers were $2,104,000 or 21.2%, and $1,606,000 or 16.2%, of the Company’s consolidated net accounts receivable, respectively. As of June 30, 2016, the total amounts owed to the Company by these customers were $2,018,000 or 20.2%, and $2,112,000 or 21.2% of the Company’s consolidated net accounts receivable, respectively.

Cost of Sales. During the three months ended June 30, 2017, the cost of sales represented 75.7% of net sales compared to 72.9% for the three months ended June 30, 2016. During the six months ended June 30, 2017, the cost of sales represented 76.1% of net sales compared to 73.6% for the six months ended June 30, 2016. The increase in cost of sales was the result of changes in the mix of products sold. We did not experience significant changes in the cost of raw materials or direct labor during the period.

General and Administrative. During the three months ended June 30, 2017, general and administrative expenses were $1,867,000 or 14.6% of net sales, compared to $1,905,000 or 13.5% of net sales for the same period in 2016. During the six months ended June 30, 2017, general and administrative expenses were $3,768,000 or 13.4% of net sales, compared to $3,662,000 or 12.5% of net sales for the same period in 2016. We have undertaken a program to reduce administrative and selling costs for the balance of the year and beyond in order to establish better profitability. We are expecting to reduce administration, selling and marketing expenses by an annual rate of at least $1.5 million.

Selling. During the three months ended June 30, 2017, selling expenses were $1,188,000 or 9.3% of net sales, compared to $1,193,000 or 8.4% of net sales for the same period in 2016. During the six months ended June 30, 2017, selling expenses were $1,909,000 or 6.8% of net sales, compared to $2,184,000 or 7.4% of net sales for the same period in 2016.

Advertising and Marketing. During the three months ended June 30, 2017, advertising and marketing expenses were $537,000 or 4.2% of net sales for the period, compared to $537,000 or 3.8% of net sales for the same period of 2016. During the six months ended June 30, 2017, advertising and marketing expenses were $1,094,000 or 3.9% of net sales for the period, compared to $1,063,000 or 3.6% of net sales for the same period of 2016.

Other Income (Expense). During the three months ended June 30, 2017, the Company incurred interest expense of $360,000, compared to interest expense during the same period of 2016 in the amount of $357,000. During the six months ended June 30, 2017, the Company incurred interest expense of $733,000, compared to interest expense during the same period of 2016 in the amount of $716,000. In addition to interest expense, there is a variable charge relating to the change in value of our outstanding warrants issued in connection with our mezzanine loan by reason of change in market price of our common stock. The amount of that change was ($4,000) in the second quarter of 2017, compared to $39,000 in the second quarter of 2016.

For the three months ended June 30, 2017, the Company had a foreign currency transaction loss of $50,000 compared to a foreign currency transaction gain of $78,000 during the same period of 2016. For the six months ended June 30, 2017, the Company had a foreign currency transaction loss of $81,000 compared to a foreign currency transaction gain of $68,000 during the same period of 2016.

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Income Taxes. For the three months ended June 30, 2017, the Company reported a consolidated income tax benefit of $263,000, compared to a consolidated income tax expense of $5,000 for the same period of 2016. For the six months ended June 30, 2017, the Company reported a consolidated income tax benefit of $187,000, compared to a consolidated income tax expense of $12,000 for the same period of 2016. For the six months ended June 30, 2017, this income tax expense was composed of an income tax benefit in the United States, income tax expense in Mexico of Flexo Universal, our Mexican subsidiary, an income tax benefit in the United Kingdom of CTI Balloons Limited, our United Kingdom subsidiary and income tax expense in Europe of CTI Europe gmbH, our Germany subsidiary.

Net Income. For the three months ended June 30, 2017, the Company had net loss of ($526,000) or ($0.15) per share (basic) and ($0.14) per share (diluted,) compared to net loss of ($83,000) for the same period of 2016 or ($0.02) per share (basic and diluted.) For the six months ended June 30, 2017, the Company had net loss of ($468,000) or ($0.13) per share (basic) and ($0.12) per share (diluted,) compared to net loss of ($76,000) for the same period of 2016 or ($0.02) per share (basic and diluted.) For the six months ended June 30, 2017, the Company had income from operations of $57,000 compared to income from operations during the same period in 2016 of $849,000.

Financial Condition, Liquidity and Capital Resources

Cash Flow Items.

Operating Activities. During the six months ended June 30, 2017, net cash provided by operations was $3,202,000, compared to net cash used in operations during the six months ended June 30, 2016 of $385,000.

Significant changes in working capital items during the six months ended June 30, 2017 included:

· A decrease in accounts receivable of $5,312,000 compared to a decrease in accounts receivable of $1,404,000 in the same period of 2016.

· A decrease in inventory of $138,000 compared to an increase in inventory of $1,416,000 in 2016.

· A decrease in trade payables of $1,237,000 compared to an increase in trade payables of $655,000 in 2016.

· A decrease in accrued liabilities of $789,000 compared to a decrease in accrued liabilities of $150,000 in 2016.

Investing Activity. During the six months ended June 30, 2017, cash used in investing activity was $527,000, compared to cash provided by investing activity for the same period of 2016 in the amount of $306,000. Investing activity consisted principally of investment in equipment and equipment maintenance.

Financing Activities. During the six months ended June 30, 2017, cash used in financing activities was $2,818,000 compared to cash provided by financing activities for the same period of 2016 in the amount of $231,000. Financing activity consisted principally of reduction in the balances of revolving and long term debt.

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Liquidity, Capital Resources and Going Concern. The Company’s liquidity is dependent significantly on its bank financing and the Company relies on its revolving line of credit to maintain liquidity. On April 29, 2010, the Company entered into a Credit Agreement with BMO Harris Bank N.A. (“BMO Harris”). Under the Credit Agreement, BMO Harris agreed to provide loans and credits to the Company in the aggregate maximum amount of $14,417,000. The arrangement included:

i. A revolving credit line up to a maximum amount of $9,000,000 based upon a borrowing base of 85% of eligible receivables and 60% of eligible inventory (up to a maximum of $5,000,000);

ii. A mortgage loan in the principal amount of $2,333,350, amortized over 25 years;

iii. A term loan in the principal amount of $583,333 maturing in monthly principal installments of $58,333; and

iv. An equipment loan commitment in the amount of up to $2,500,000 providing for loan advances from time to time until April 29, 2012 based upon 100% of the purchase price of equipment purchased, the loans to be amortized on a five year basis commencing April 29, 2012.

The Credit Agreement included various representations, warranties and covenants of the Company, including various financial covenants.

The Credit Agreement, as amended, provides that the outstanding balance of all loans under the agreement will bear interest with reference to a base rate or, at the option of the Company, with reference to an adjusted LIBOR. At June 30, 2017, the effective rate on the outstanding loan balances was 4.5%.

As of June 30, 2017, the outstanding balances on the loans with BMO Harris were: (i) revolving line of credit, $9,172,000, (ii) mortgage loan, $1,664,000, and (iii) equipment loan, $0.

On July 17, 2012, the Company entered into Amendment Number 3 to the Credit Agreement among the Company and BMO Harris pursuant to which (i) the amount of the loan commitment on the revolver loan of BMO Harris was increased from $9 million to $12 million, (ii) BMO Harris consented to a transaction among the Company and BMO Private Equity (U.S.), Inc. (“BMO Equity”) and (iii) the term of credit and loans to the Company provided in the Credit Agreement and BMO Harris was extended to July 17, 2017. The loans subject to the Credit Agreement mature on July 17, 2017.

On July 17, 2012, the Company entered into a Note and Warrant Purchase Agreement with BMO Equity pursuant to which (i) BMO Equity advanced to the Company the sum of $5 million and (ii) the Company issued to BMO Equity a warrant to purchase up to Four Percent (4%) of the outstanding shares of common stock of the Company on a fully-diluted basis (140,048 shares of common stock of the Company) at the price of One Cent ($0.01) per share. Interest is payable on the outstanding balance of the loan at the rate of 11.5% per annum. The loan matures on January 17, 2018.

The Note and Warrant Purchase Agreement included provisions for:

(i)          a closing fee of $100,000

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(ii)         payment of the principal amount in five and a half years with optional prepayment subject to certain prepayment premiums;

(iii)        security for the note obligations in all assets of the Company junior to the security interest of BMO Harris;

(iv)        various representations and warranties and covenants of the Company;

(v)         financial covenants including an applicable senior leverage ratio, fixed charge coverage ratio and tangible net worth amount.

On July 29, 2016, the Company and certain accredited investors entered into a Securities Purchase Agreement in which the investors purchased 152,850 shares of common stock at the price of $6.00 per share. As additional consideration for the purchase of shares in the Company, each investor received one-half of a warrant, with one warrant entitling the investor to purchase one share of common stock at the price of $7.00 per share. The warrants are exercisable between six months and three years from the investment date. In addition to the Purchase Agreement, the Company and the investors entered into a Registration Rights Agreement under which the Company agreed to file a Registration Statement with the SEC on or before August 29, 2016 to register the common stock purchased by the investors.

The issuance of shares in this placement resulted in gross proceeds to the Company of $917,000, and after commissions and fees, net proceeds to the Company of approximately $638,328. The Company used these proceeds for general working capital purposes.

At June 30, 2017, the Company had cash balances of $456,000 compared to cash balances of $475,000 for the same period of 2016, and there was ($109,000) available to advance on the Company’s revolving line of credit.

Also at June 30, 2017, the Company had a working capital balance of $6,239,000 compared to a working capital balance of $11,080,000 on December 31, 2016.

Further, as of June 30, 2017, the Company was in compliance with all of the financial covenants under the Credit Agreement and the Note and Warrant Purchase Agreement.

The Credit Agreement with BMO Harris, and all loans under that agreement, including the revolving loan and the mortgage loan matured on July 17, 2017. Pursuant to an amendment to the Credit Agreement, the maturity of these loans was extended to October 18, 2017. In consideration of its consent to this extension, BMO Equity became entitled to exercise the put of its warrants to the Company.

Further, the loan of $5 million in principal amount to the Company from BMO Equity matures on January 17, 2018.

We are actively engaged in negotiating and efforts to address the maturities of our loans with BMO Harris and BMO Equity. Those actions include:

(1) Actions to reduce our operating expenses in an effort to achieve a higher level of profitability,

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(2) Engagement of a consultant to advise in our efforts to reduce operating expenses, negotiate financing terms, identify financing sources and improve operating performance,

(3) Contacts and negotiations with our current lenders and with additional sources of loans and capital to extend our present loan facilities or to provide alternative sources for one or both of our current lenders, and

(4) We have received non-binding proposals from two potential financing sources to provide the needed re-financing we require and have engaged in a diligence process with several potential lenders. However, we have not received a firm commitment for financing.

Seasonality

In the foil balloon product line, sales have historically been seasonal with approximately 40% occurring in the period from December through March of the succeeding year and 24% being generated in the period July through October in recent years. Vacuum sealing product sales are also seasonal; approximately 60% of sales in this product line occur in the period from July through December.

Critical Accounting Policies

Please see pages 25-28 of our Annual Report on Form 10-K for the year ended December 31, 2016 for a description of policies that are critical to our business operations and the understanding of our results of operations. The impact and any associated risks related to these policies on our business operations is discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations where such policies affect our reported and expected financial results. No material changes to such information have occurred during the three months ended June 30, 2017.

Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk

Not applicable.

Item 4. Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, we conducted an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2017, the end of the period covered by this report. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2017, to ensure that the information required to be disclosed by us in the reports that we file or submit under Security Exchange Act of 1934, as amended, (a) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (b) is accumulated and communicated to our management, including officers, as appropriate, to allow for timely decisions regarding required disclosure. There were no material changes in our internal control over financial reporting during the three months ended June 30, 2017 that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

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Part II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is party to certain claims or actions arising in the normal course of business. The ultimate outcome of these matters is unknown but, in the opinion of management, the resolution of these matters is not expected to have a significant effect on the future financial position or results of operations of the Company.

Item 1A. Risk Factors

Not applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 5. Other Information

The Certifications of the Chief Executive Officer and the Chief Financial Officer of the Company Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are attached as Exhibits to this Report on Form 10-Q.

Item 6. Exhibits

The following are being filed as exhibits to this report:

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Exhibit Number	Description
3.1	Restated Articles of Incorporation (Incorporated by reference to Exhibit A to Registrant’s Schedule 14A Definitive Proxy Statement filed April 29, 2015).
3.2	Amended and Restated By-Laws of CTI Industries Corporation (Incorporated by reference to Exhibit 3.2, contained in Registrant’s Form 8-K filed on March 17, 2017).
10.1	Amendment No. 10 to Credit Agreement between BMO Harris Bank, N.A., BMO Private Equity (U.S.) Inc. and the Company dated July 28, 2017.
10.2	Consent and Acknowledgment among BMO Harris Bank, N.A. and the Company dated July 28, 2017.
10.3	Amendment No. 5 to Note and Warrant Purchase Agreement between BMO Private Equity (U.S.), Inc. and the Company dated July 28, 2017.
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 Chief 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 and Chief 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, 2017, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to Consolidated Financial Statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: August 14, 2017		CTI INDUSTRIES CORPORATION
	By:	/s/ John H. Schwan
		John H. Schwan
		Chief Executive Officer
	By:	/s/ Stephen M. Merrick
		Stephen M. Merrick
		President
	By:	/s/ Timothy S. Patterson
		Timothy S. Patterson
		Chief Financial Officer
		Senior Vice President Finance

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Exhibit Index

Exhibit Number	Description
3.1	Restated Articles of Incorporation (Incorporated by reference to Exhibit A to Registrant’s Schedule 14A Definitive Proxy Statement filed April 29, 2015.)
3.2	Amended and Restated By-Laws of CTI Industries Corporation (Incorporated by reference to Exhibit 3.2, contained in Registrant’s Form 8-K filed on March 17, 2017)
10.1	Amendment No. 10 to Credit Agreement between BMO Harris Bank, N.A., BMO Private Equity (U.S.) Inc. and the Company dated July 28, 2017.
10.2	Consent and Acknowledgment among BMO Harris Bank, N.A. and the Company dated July 28, 2017.
10.3	Amendment No. 5 to Note and Warrant Purchase Agreement between BMO Private Equity (U.S.), Inc. and the Company dated July 28, 2017.
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 Chief 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 and Chief 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, 2017, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to Consolidated Financial Statements.

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EX-10.1

EXHIBIT 10.1

Amendment No. 10
to Credit Agreement

This Amendment No. 10 to Credit Agreement is dated as of July 28, 2017, but effective as of July 18, 2017, and is between CTI Industries Corporation, an Illinois corporation (the “Borrower”); CTI Supply, Inc., an Illinois corporation f/k/a CTI Helium, Inc., and a Wholly-Owned Subsidiary of the Borrower, in its capacity as a guarantor (the “Subsidiary Guarantor”); and BMO Harris Bank N.A., a national banking association, successor to Harris N.A. (the “Bank”).

The Borrower and the Bank entered into a Credit Agreement dated as of April 29, 2010 (as amended, modified, or supplemented before the effective date of this agreement, the “Credit Agreement”), under which the Bank has extended certain credit facilities to the Borrower.

In connection with the Credit Agreement, the Subsidiary Guarantor entered into a Guaranty dated as of April 29, 2010 (the “Subsidiary Guaranty”), under which, among other things, the Subsidiary Guarantor guarantees the prompt and complete payment and performance of the Obligations.

The parties now desire to amend the Credit Agreement in certain respects.

The parties therefore agree as follows:

1.          Definitions. Defined terms used but not defined in this agreement are as defined in the Credit Agreement.

2.          Amendments to Credit Agreement. (a) The definition of “Mortgage Loan Final Maturity Date” in section 5.1 of the Credit Agreement is hereby amended to read in its entirety as follows:

“ “Mortgage Loan Final Maturity Date” means October 18, 2017, or such earlier date on which the Mortgage Loan is declared to be or becomes due pursuant to Section 9.2 or 9.3 hereof.”

(b)          The definition of “Revolving Credit Termination Date” in section 5.1 of the Credit Agreement is hereby amended to read in its entirety as follows:

“ “Revolving Credit Termination Date” means October 18, 2017, or such earlier date on which the Revolving Credit Commitment is terminated in whole pursuant to Section 3.4, 9.2, or 9.3 hereof.”

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(c)          The definition of “Total Funded Debt” in section 5.1 of the Credit Agreement is hereby amended to read in its entirety as follows:

“ “Total Funded Debt” means, at any time the same is to be determined, the aggregate of all Indebtedness for Borrowed Money of the Borrower and its Subsidiaries, on a consolidated basis, at such time, plus all Indebtedness for Borrowed Money of any other person or entity which is directly or indirectly guaranteed by the Borrower or any of its Subsidiaries or which the Borrower or any of its Subsidiaries has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which the Borrower or any of its Subsidiaries has otherwise assured a creditor against loss. For purposes of this Agreement, (a) “Total Funded Debt” includes (i) the 2016 CTI–Merrick Debt and the 2016 CTI–Schwan Debt, and (ii) subject to clause (b)(iii) below, the BMO Mezzanine Debt, but (b) “Total Funded Debt” does not include (i) any Excluded VIE Debt, (ii) the Subordinated Debt owing to John H. Schwan and Stephen M. Merrick described in Section 8.7(f), or (iii) the BMO Mezzanine Debt, if any, evidenced by the BMO Mezzanine Warrant Conversion Note.”

(d)          Section 5.1 of the Credit Agreement is hereby further amended by inserting each of the following new definitions in the appropriate alphabetical order:

“         “2017 Extension Period” means the period from and including the Amendment No. 10 Effective Date through and including the later of the Mortgage Loan Final Maturity Date and the Revolving Credit Termination Date.

“Amendment No. 10” means an Amendment No. 10 to Credit Agreement dated as of July 28, 2017, but effective as of July 18, 2017, between the Borrower, CTI Helium, and the Bank.

“Amendment No. 10 Consent and Acknowledgment” means the consent and acknowledgment described in clause (1)(C) of Section 6 of Amendment No. 10 (which consent and acknowledgment is the “Side Letter” under and as defined in the BMO Mezzanine NWPA, as in effect on the Amendment No. 10 Effective Date).

“Amendment No. 10 Effective Date” means July 18, 2017, which is the effective date of Amendment No. 10.

“BMO Mezzanine Warrant” means the “Warrant” (as defined in the BMO Mezzanine NWPA, as in effect on the Amendment No. 10 Effective Date).

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“BMO Mezzanine Warrant Conversion Note” means a promissory note issued to BMO Private Equity by the Borrower in connection with a conversion after the Amendment No. 10 Effective Date of the BMO Mezzanine Warrant effected in accordance with (and as more particularly described in) the Amendment No. 10 Consent and Acknowledgment and the Warrant, as deemed modified by the Amendment No. 10 Consent and Acknowledgment.”

(e)          Clause (e) of section 8.7 of the Credit Agreement is hereby amended to read in its entirety as follows:

“              (e)          (i) the BMO Mezzanine Debt (other than the BMO Mezzanine Debt, if any, evidenced by the BMO Mezzanine Warrant Conversion Note), in an aggregate principal amount not to exceed $5,000,000 as of the Third Amendment Date, as reduced by permitted payments thereon, and provided that such BMO Mezzanine Debt shall be Subordinated Debt; and (ii) the BMO Mezzanine Debt, if any, evidenced by the BMO Mezzanine Warrant Conversion Note, in an aggregate principal amount not to exceed the original principal amount of the BMO Mezzanine Warrant Conversion Note as of the date that the BMO Mezzanine Warrant Conversion Note is issued, as reduced by permitted payments thereon, and provided that such BMO Mezzanine Debt shall be Subordinated Debt;”

(f)          Section 8.24 of the Credit Agreement is hereby amended to read in its entirety as follows:

“Section 8.24         2017 Extension Period; Engagement of Financial Consultant.

(a)          The Borrower shall engage, for the duration of the 2017 Extension Period (or any shorter period approved in writing by the Bank), at the Borrower’s expense, an independent consultant of recognized standing selected by the Borrower and reasonably acceptable to the Bank (the “Financial Consultant”) to provide business financial planning and other advisory services to the Borrower and its Subsidiaries.

(b)          Without limitation, duplication, or derogation of Section 8.5 hereof, during the 2017 Extension Period the Borrower shall, and shall cause each Subsidiary to, furnish to the Bank and its duly authorized representatives such information respecting the business and financial condition of the Borrower and its Subsidiaries as the Bank may reasonably request; and without any request, shall furnish to the Bank:

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(i)          as soon as available, and in any event no later than July 20, 2017 (or any later date approved in writing by the Bank), an engagement letter, in form and substance (including scope of work) reasonably satisfactory to the Bank, with respect to the engagement by the Borrower of the Financial Consultant, duly executed by the Borrower and the Financial Consultant;

(ii)         as soon as available, and in any event no later than July 31, 2017 (or any later date approved in writing by the Bank), a report, in reasonable detail and in form reasonably satisfactory to the Bank, either prepared by the Financial Consultant or prepared by the Borrower and verified by the Financial Consultant, and in any event certified to by the Borrower’s chief financial officer or such other officer acceptable to the Bank, showing analyses of the following with respect to the Borrower and its Subsidiaries: (A) revenue and profitability by customer and product line; (B) expense-reduction and margin-improvement initiatives; and (C) working-capital improvements;

(iii)        as soon as available, and in any event no later than July 31, 2017 (or any later date approved in writing by the Bank), and thereafter as soon as available and in any event by the first Business Day of each week (unless otherwise approved in writing by the Bank), a 13-week cash flow forecast, in reasonable detail and in form reasonably satisfactory to the Bank, showing projected cash receipts and cash disbursements (including referencing line item sources and uses of cash) of the Borrower and its Subsidiaries over the immediately succeeding 13-week period, together with a reconciliation of actual cash receipts and cash disbursements of the Borrower and its Subsidiaries from the prior week against the then-current forecast of the Borrowers and its Subsidiaries (and showing any deviations on a cumulative basis and providing a written explanation of the variances), either prepared by the Financial Consultant or prepared by the Borrower and verified by the Financial Consultants, and in any event certified to by the Borrower’s chief financial officer or such other officer acceptable to the Bank;

(iv)        as soon as available, and in any event by the first Business Day of each week (or any later date approved in writing by the Bank), an accounts receivable and accounts payable aging, prepared by the Borrower and certified to by its chief financial officer or such other officer acceptable to the Bank;

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(v)         as soon as available, and in any event no later than August 15, 2017 (or any later date approved in writing by the Bank), a copy of the Borrower’s strategic plan to address before the end of the 2017 Extension Period the pending maturities of the Loans and the BMO Mezzanine Debt, such strategic plan to be in reasonable detail prepared by the Borrower and in form reasonably satisfactory to the Bank;

(vi)        as soon as available, and in any event no later than August 31, 2017 (or any later date approved in writing by the Bank), evidence, in form and substance satisfactory to the Bank, of the Borrower’s having taken action satisfactory to the Bank to implement and effect the strategic plan described in clause (v) above; and

(vii)       as soon as available, and in any event no later than September 15, 2017 (or any later date approved in writing by the Bank), a collateral checklist, a perfection certificate, and updated schedules to this Agreement, each in reasonable detail and in form and substance reasonably satisfactory to the Bank.

(c)          The Borrower shall cause the management of the Borrower and its Subsidiaries to meet with the Financial Consultant and the Bank, in person or by telephone, at such reasonable times and reasonable intervals as the Borrower may determine, but at least once per week by telephone during the 2017 Extension Period (or less frequently as approved in writing by the Bank).”

(g)          Exhibit E to the Credit Agreement is hereby amended to read in its entirety as set forth in Exhibit E to this agreement.

3.          Fee. As consideration for the amendments to the Credit Agreement to be effected by this agreement, the Borrower shall pay to the Bank a fee in the amount of $7,500, which fee is fully earned upon the execution of this agreement by the Bank, due and payable upon the execution and delivery of this agreement by the Borrower to the Bank, and nonrefundable once paid.

4.          Reaffirmation of Subsidiary Guaranty. The Subsidiary Guarantor hereby expressly does each of the following:

(1)         consents to the execution by the Borrower and the Bank of this agreement;

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(2)         acknowledges that the “Indebtedness” (as defined in the Subsidiary Guaranty) includes all of the “Obligations” under and as defined in the Credit Agreement, as amended from time to time (including as amended by this agreement);

(3)         acknowledges that the Subsidiary Guarantor does not have any set-off, defense, or counterclaim to the payment or performance of any of the obligations of the Borrower under the Credit Agreement or the Subsidiary Guarantor under the Subsidiary Guaranty;

(4)         reaffirms, assumes, and binds itself in all respects to all of the obligations, liabilities, duties, covenants, terms, and conditions contained in the Subsidiary Guaranty;

(5)         agrees that all such obligations and liabilities under the Subsidiary Guaranty continue in full force and that the execution and delivery of this agreement to, and its acceptance by, the Bank will not in any manner whatsoever do any of the following:

(A)         impair or affect the liability of the Subsidiary Guarantor to the Bank under the Subsidiary Guaranty;

(B)         prejudice, waive, or be construed to impair, affect, prejudice, or waive the rights and abilities of the Bank at law, in equity, or by statute against the Subsidiary Guarantor pursuant to the Subsidiary Guaranty; or

(C)         release or discharge, or be construed to release or discharge, any of the obligations and liabilities owing to the Bank by the Subsidiary Guarantor under the Subsidiary Guaranty; and

(6)         represents and warrants that each of the representations and warranties made by the Subsidiary Guarantor in any of the documents executed in connection with the Loans remain true and correct as of the date of this agreement.

5.          Representations and Warranties. To induce the Bank to enter into this agreement, the Borrower hereby represents to the Bank as follows:

(1)         that the Borrower is duly authorized to execute and deliver this agreement and is and will continue to be duly authorized to borrow monies under the Credit Agreement, as amended by this agreement, and to perform its obligations under the Credit Agreement, as amended by this agreement;

(2)         that the execution and delivery of this agreement and the performance by the Borrower of its obligations under the Credit Agreement, as amended by this agreement, do not and will not conflict with any provision of law or of the articles of organization or operating agreement of the Borrower or of any agreement binding upon the Borrower;

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(3)         that the Credit Agreement, as amended by this agreement, is a legal, valid, and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as enforceability might be limited by bankruptcy, insolvency, or other similar laws of general application affecting the enforcement of creditors’ rights or by general principles of equity limiting the availability of equitable remedies;

(4)         that the representation and warranties set forth in section 6 of the Credit Agreement, as amended by this agreement, are true and correct with the same effect as if those representations and warranties had been made on the date hereof, except that all references to the financial statements mean the financial statements most recently delivered to the Bank and except for changes specifically permitted under the Credit Agreement, as amended by this agreement;

(5)         that the Borrower has complied with and is in compliance with all of the covenants set forth in the Credit Agreement, as amended by this agreement, including the covenants stated in section 8 of the Credit Agreement; and

(6)         that as of the date of this agreement no Default and no Event of Default under section 10 of the Credit Agreement, as amended by this agreement, has occurred or is continuing.

6.          Conditions. The effectiveness of this agreement is subject to satisfaction of the following conditions:

(1)         that the Bank has received the following:

(A)         a copy of this agreement, duly executed by the parties;

(B)         a copy of an amendment to the BMO Mezzanine NWPA and each of the other documents required to be delivered in accordance with that amendment, each in form and substance satisfactory to the Bank and duly executed by all applicable Persons;

(C)         a consent and acknowledgment (including under the subordination and intercreditor agreement in respect of the BMO Mezzanine Debt), in form and substance satisfactory to the Bank, duly executed by all applicable Persons; and

(D)         all other documents, certificates, resolutions, and opinions of counsel as the Bank requests;

(2)         that the Borrower has paid, and the Bank has received, the fee described in section 3; and

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(3)         that all legal matters incident to the execution and delivery of this agreement are satisfactory to the Bank and its counsel.

7.          General. (a) This agreement and the rights and duties of the parties hereto are governed by, and are to be construed in accordance with, the internal laws of State of Illinois without regard to principles of conflicts of laws. Wherever possible each provision of the Credit Agreement and this agreement is to be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Credit Agreement and this agreement is prohibited by or invalid under any such law, that provision will be deemed ineffective to the extent of that prohibition or invalidity, without invalidating the remainder of that provision or the remaining provisions of the Credit Agreement and this agreement.

(b)          This agreement is a Loan Document.

(c)          This agreement binds each party and their respective successors and assigns, and this agreement inures to the benefit of each party and the successors and assigns of the Bank.

(d)          Except as specifically modified or amended by the terms of this agreement, the terms and provisions of the Credit Agreement, the Subsidiary Guaranty, and the other Loan Documents are incorporated by reference herein and in all respects continue in full force and effect. The Borrower, by execution of this agreement, hereby reaffirms, assumes, and binds itself to all of the obligations, duties, rights, covenants, terms, and conditions contained in the Credit Agreement and the other Loan Documents to which it is a party.

(e)          Each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” or words of like import, and each reference to the Credit Agreement in any and all instruments or documents delivered in connection therewith, are deemed to refer to the Credit Agreement, as amended by this agreement.

(f)          The Borrower shall pay all costs and expenses in connection with the preparation of this agreement and other related loan documents, including, without limitation, reasonable attorneys’ fees and time charges of attorneys who are employees of the Bank or any affiliate or parent of the Bank. The Borrower shall pay any and all stamp and other taxes, UCC search fees, filing fees, and other costs and expenses in connection with the execution and delivery of this agreement and the other instruments and documents to be delivered hereunder, and agrees to save the Bank harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such costs and expenses.

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(g)          The Borrower hereby waives and releases any and all current existing claims, counterclaims, defenses, or set-offs of every kind and nature which it has or might have against the Bank arising out of, pursuant to, or pertaining in any way to the Credit Agreement, any and all documents and instruments in connection with or relating to the foregoing, or this agreement. The Borrower hereby further covenants and agrees not to sue the Bank or assert any claims, defenses, demands, actions, or liabilities against the Bank arising out of, pursuant to, or pertaining in any way to the Credit Agreement, any and all documents and instruments in connection with or relating to the foregoing, or this agreement.

(h)          The parties may sign this agreement in several counterparts, each of which will be deemed an original but all of which together will constitute one instrument. Receipt of an executed signature page to this agreement by facsimile or other electronic transmission will constitute effective delivery of that executed signature page. Electronic records of executed Loan Documents (including this agreement) maintained by the Bank will be deemed to be originals.

[Signature pages follow]

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The parties are signing this Amendment No. 10 to Credit Agreement effective as of the effective date stated in the introductory clause.

CTI Industries Corporation
By:	/s/ John H. Schwan
Name:	John H. Schwan
Title:	Chairman/CEO
CTI Supply, Inc. (f/k/a CTI Helium, Inc.)
By:	/s/ John H. Schwan
Name:	John H. Schwan
Title:	Vice President
BMO Harris BANK N.A.
By:	/s/ Lauren M. Buysse
Name:	Lauren M. Buysse
Title:	Vice President

Signature page to Amendment No. 10 to Credit Agreement

ExhibitE

Applicable Rate

Level		Senior Leverage Ratio	LIBOR Margin			Base Rate Margin			Commitment Fee			Letter of Credit Fee
	I	Greater than or equal to 3.00 to 1.00		3.50	%		1.00	%		0.25	%		2.50	%
	II	Less than 3.00 to 1.00 but greater than 2.00 to 1.00		3.25	%		0.75	%		0.25	%		2.25	%
	III	Less than or equal to 2.00 to 1.00		3.00	%		0.50	%		0.25	%		2.00	%

EX-10.2

Exhibit 10.2

Consent and Acknowledgment

This Consent and Acknowledgment is dated as of July 28, 2017, but effective as of July 18, 2017, and is between BMO Harris Bank N.A., a national banking association, successor to Harris N.A. (as further defined in the Intercreditor Agreement, the “Senior Lender”), BMO Private Equity (U.S.), Inc., a Delaware corporation (as further defined in the Intercreditor Agreement, the “Subordinate Creditor”), and CTI Industries Corporation, an Illinois corporation (the “Borrower”)

The Senior Lender and the Subordinate Creditor entered into, and the Borrower consented to, a Subordination and Intercreditor Agreement dated as of July 17, 2012 (as amended, modified, or supplemented before the date of this agreement, the “Intercreditor Agreement”).

The Senior Lender and the Borrower now desire to amend the Credit Agreement in certain respects pursuant to an amendment in the form attached to this agreement as Exhibit A (that amendment, the “Senior Amendment”). The Subordinate Creditor and the Borrower desire to amend the Purchase Agreement pursuant to an amendment in the form attached to this agreement as Exhibit B (that amendment, the “Subordinate Amendment”).

The Subordinate Creditor and the Borrower now desire to agree to certain terms with respect to the exercise by the Subordinated Creditor and other Warrant Holders of their put rights under the Subordinated Warrant Agreement, as further described in this agreement.

The parties desire to provide certain consents and acknowledgments (including, without limitation, under the Intercreditor Agreement) in connection with the Senior Amendment and the transactions contemplated thereby, the Subordinate Amendment and the transactions contemplated thereby, and in connection with certain deemed modifications to terms of the Subordinate Creditor’s Documents.

The parties therefore agree as follows:

1.            Definitions.

(a)          Defined terms used but not defined in this agreement are as defined in the Intercreditor Agreement.

(b)          For purposes of this agreement, the following definitions apply:

“Put Notice” is as defined in the Subordinated Warrant Agreement.

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“Put Rights” means the Warrants-related put rights of the Subordinate Creditor and the other Warrant Holders under section 14(a) of the Subordinated Warrant Agreement.

“Redemption Price” is as defined in the Subordinated Warrant Agreement and is not deemed modified by this agreement.

“Subordinated Warrant Agreement” means a Warrant Agreement dated July 17, 2012, between the Borrower and BMO Private Equity, as deemed modified pursuant to this agreement and as further amended, restated, supplemented, or otherwise modified in accordance with the Intercreditor Agreement.

“Subordinated Maturity Date” means the “Maturity Date” as defined in the Purchase Agreement, as in effect on the date of this agreement (after giving effect to the Subordinate Amendment) or as amended, restated, supplemented, or otherwise modified in accordance with the Intercreditor Agreement.

“Warrant Holder” is as defined in the Subordinated Warrant Agreement.

“Warrants” is as defined in the Subordinated Warrant Agreement.

2.            Consents and Acknowledgments.

(a)          Subject to the other terms of this agreement, the Senior Lender hereby expressly consents to (1) the amendments contemplated by, and the execution by the Borrower and the Subordinate Creditor of, the Subordinate Amendment; and (2) the deemed modifications to the Subordinate Creditor’s Documents and the other transactions described in section 3 below (including, without limitation, the delivery of a Put Notice and the issuance of the Subordinated Warrant Conversion Note, in each case done or effected in accordance with this agreement and with the Subordinate Creditor’s Documents (as deemed modified by this agreement).

(b)          Subject to the other terms of this agreement, the Subordinate Creditor hereby expressly consents to the amendments contemplated by, and the execution by the Borrower and the Senior Lender of, the Senior Amendment.

3.            Deemed Modifications to Subordinate Creditor’s Documents. Notwithstanding any provision of the Subordinated Warrant Agreement, any other Subordinate Creditor’s Document (including the Subordinate Amendment), the Credit Agreement, any other Loan Document (including the Senior Amendment), or the Intercreditor Agreement to the contrary, the following terms apply with respect to the exercise of the Put Rights and the Subordinate Creditor’s Documents are hereby deemed modified by those terms:

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(a)          The Subordinate Creditor and the other Warrant Holders may deliver a Put Notice at any time after the date of this agreement.

(b)          Upon the Borrower’s receipt of any such Put Notice, the Subordinate Creditor and the other Warrant Holders will be deemed to have requested that the Borrower, in its capacity as “Issuer” under the Subordinated Warrant Agreement, issue, and the Borrower, in its capacity as “Issuer” under the Subordinated Warrant Agreement, shall issue upon any such deemed request and effective as of the date that the Borrower receives any such Put Notice and deemed request, a promissory note payable to the Subordinate Creditor and the other Warrant Holders with the following terms and otherwise in form and substance acceptable to the Subordinate Creditor (that promissory note, which would be the “BMO Mezzanine Warrant Conversion Note” under and as defined in the Credit Agreement (after giving effect to the Senior Amendment) and the “Warrant Conversion Note” under and as defined in the Purchase Agreement (after giving effect to the Subordinate Amendment), the “Subordinated Warrant Conversion Note”):

(1) the principal amount of the Subordinated Warrant Conversion Note will be an amount equal to the aggregate Redemption Price as determined in accordance with the Subordinated Warrant Agreement as of the date that the Subordinated Warrant Conversion Note is issued;

(2) (A) the unpaid principal amount of the Subordinated Warrant Conversion Note will bear interest from and after the date that the Subordinated Warrant Conversion Notice is issued at a rate per annum equal to 11.50%, which is the “Current Interest Rate” (as defined in the Purchase Agreement, as in effect on the date of this agreement (after giving effect to the Subordinate Amendment)), compounded daily; and (B) any regularly scheduled non-cash payment-in-kind of the Subordinated Warrant Conversion Note resulting from (or deemed to result from) any such accrual or compounding of interest will be deemed to be a Permitted Payment under the Intercreditor Agreement;

(3) subject to the Intercreditor Agreement, all accrued interest under the Subordinated Warrant Conversion Note payable in cash will be payable upon the earlier to occur of (A) the Subordinated Maturity Date, and (B) the payment in full of the outstanding principal amount of the Subordinated Warrant Conversion Note;

(4) the maturity date of the Subordinated Warrant Conversion Note will be the Subordinated Maturity Date; and

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(5) all other terms of the Subordinated Warrant Conversion Note will be substantially consistent with the applicable terms of the Subordinated Note (as in effect on the date of this agreement or as amended, restated, supplemented, or otherwise modified in accordance with the Intercreditor Agreement).

(c)          The delivery of a Put Notice by the Subordinate Creditor and the other Warrant Holders and the issuance of the Subordinated Warrant Conversion Note, in each case done or effected in accordance with this agreement and with the Subordinate Creditor’s Documents (as deemed modified by this agreement), will not be deemed (1) to constitute an Event of Default, (2) to constitute an “Event of Default” under and as defined in the Subordinate Creditor’s Documents, or (3) to violate the Intercreditor Agreement.

(d)          If the Subordinated Warrant Conversion Note is issued in accordance with this agreement and with the Subordinate Creditor’s Documents (as deemed modified by this agreement), then the following will occur, in each case effective upon the issuance of the Subordinated Warrant Conversion Note: (1) the Subordinated Warrant Agreement and all Put Rights and other rights of the Subordinate Creditor and the other Warrant Holders under the Subordinated Warrant Agreement will automatically terminate; and (2) all indebtedness, obligations, and liabilities of the Loan Parties to the Subordinate Creditor and the other Warrant Holders evidenced solely by the Subordinated Warrant Agreement and the Warrants (including as deemed modified by this agreement) will be deemed to have been replaced and superseded by the indebtedness, obligations, and liabilities of the Loan Parties evidenced by the Subordinated Warrant Conversion Note.

(e)          Each of the Subordinated Creditor (for itself and on behalf of each other Warrant Holder) and the Borrower hereby acknowledges the following: (1) that all indebtedness, obligations, and liabilities of the Loan Parties under, evidenced by, or otherwise with respect to the Subordinated Warrant Agreement and the Warrants (including as deemed modified by this agreement) constitute Subordinated Debt under the Intercreditor Agreement; (2) that, except as specifically provided by the terms of this agreement, all Put Rights are, and after giving effect to this agreement remain, subject to the Intercreditor Agreement; (3) that all indebtedness, obligations, and liabilities of the Loan Parties evidenced by the Subordinated Warrant Conversion Note will, upon the issuance of the Subordinated Warrant Conversion Note, constitute Subordinated Debt under the Intercreditor Agreement; and (4) that, except as specifically provided by the terms of this agreement, all rights of the Subordinate Creditor and the other Warrant Holders with respect to the Subordinated Warrant Conversion Note, if issued, will be subject to the Intercreditor Agreement.

(f)          In connection with or following the issuance, if any, of the Subordinated Warrant Conversion Note, the Senior Lender, the Subordinate Creditor, and the Borrower shall negotiate in good faith to document and enter into any amendment to the Intercreditor Agreement reasonably requested by the Senior Lender, the Subordinate Creditor, or the Borrower as necessary or desirable to effect the purposes of, or to otherwise evidence the agreements set forth in, this section 3 with respect to the Subordinated Warrant Conversion Note. In the absence of any such amendment, this agreement and, except as specifically provided by the terms of this agreement, the Intercreditor Agreement will apply with respect to the Subordinated Warrant Conversion Note.

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4.            Conditions. The effectiveness of this agreement is subject to satisfaction of the following conditions:

(1) that each of the parties has received a copy of this agreement, duly executed by all parties; and

(2) that all conditions to the effectiveness of the Senior Amendment (other than the execution and delivery of this agreement) have been satisfied.

5.            General.

(a)          This agreement and the rights and duties of the parties hereto are governed by, and are to be construed in accordance with, the internal laws of State of Illinois without regard to principles of conflicts of laws. Wherever possible each provision of this agreement is to be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this agreement is prohibited by or invalid under any such law, that provision will be deemed ineffective to the extent of that prohibition or invalidity, without invalidating the remainder of that provision or the remaining provisions of this agreement.

(b)          This agreement binds each party and their respective successors and assigns, and this agreement inures to the benefit of each party and their respective successors and assigns.

(c)          Except as specifically provided by the terms of this agreement, (1) the terms and provisions of the Intercreditor Agreement are incorporated by reference herein and in all respects continue in full force and effect; and (2) each of the Senior Lender, the Subordinate Creditor, and the Borrower, by execution of this agreement, hereby reaffirms, assumes, and binds itself to all of the obligations, duties, rights, covenants, terms, and conditions contained in the Intercreditor Agreement.

(d)          Except as specifically provided by the terms of this agreement and the Senior Amendment, (1) the terms and provisions of the Credit Agreement and the other Loan Documents in all respects continue in full force and effect; and (2) each of the Senior Lender and the Borrower, by execution of this agreement, hereby reaffirms, assumes, and binds itself to all of the obligations, duties, rights, covenants, terms, and conditions contained in the Credit Agreement and the other Loan Documents.

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(e)          Except as specifically provided by the terms of this agreement and the Subordinate Amendment, (1) the terms and provisions of the Subordinated Warrant Agreement and the other Subordinate Creditor’s Documents in all respects continue in full force and effect; and (2) each of the Subordinate Creditor and the Borrower, by execution of this agreement, hereby reaffirms, assumes, and binds itself to all of the obligations, duties, rights, covenants, terms, and conditions contained in the Subordinated Warrant Agreement and the other Subordinate Creditor’s Documents.

(f)          The parties may sign this agreement in several counterparts, each of which will be deemed an original but all of which together will constitute one instrument. Receipt of an executed signature page to this agreement by facsimile or other electronic transmission will constitute effective delivery of that executed signature page.

[Signature pages follow]

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The parties are signing this Consent and Acknowledgment effective as of the effective date stated in the introductory clause.

BMO Harris BANK N.A.,
as the Senior Lender
By:	/s/ Lauren M. Buysse
Name:	Lauren M. Buysse
Title:	Vice President
BMO Private Equity (U.S.), Inc.,
as the Subordinate Creditor
By:	/s/ Jason Swanson
Name:	Jason Swanson
Title:	Managing Director
CTI Industries Corporation,
as the Borrower
By:	/s/ John H. Schwan
Name:	John H. Schwan
Title:	Chairman/CEO

Signature page to Consent and Acknowledgment

ExhibitA

Form of Senior Amendment

See attached.

ExhibitB

Form of Subordinate Amendment

See attached.

EX-10.3

Exhibit 10.3

Amendment No. 5
to NOTE AND WARRANT PURCHASE Agreement

This Amendment No. 5 to Note and Warrant Purchase Agreement is dated as of July 28, 2017 to be effective as of July 18, 2017, and is between CTI Industries Corporation, an Illinois corporation (the “Company”); CTI Supply, Inc., an Illinois corporation f/k/a CTI Helium, Inc., and a Wholly-Owned Subsidiary of the Company, in its capacity as a guarantor (the “Subsidiary Guarantor”); and BMO PRIVATE EQUITY (U.S.), INC., a Delaware corporation (the “Purchaser”).

The Company and the Purchaser entered into a Note and Warrant Purchase Agreement dated as of July 17, 2012 (as amended, restated, supplemented or otherwise modified prior to the effective date hereof, the “Purchase Agreement”), under which, among other things, the Company sold to the Purchaser and the Purchaser purchased from the Company a note in the aggregate principal amount of $5,000,000.

In connection with the Purchase Agreement, the Subsidiary Guarantor entered into a Guaranty dated as of July 17, 2012 (the “Subsidiary Guaranty”), under which, among other things, the Subsidiary Guarantor guarantees the prompt and complete payment and performance of the Obligations.

The parties now desire to amend the Purchase Agreement in certain respects.

The parties therefore agree as follows:

1.            Definitions. Defined terms used but not defined in this agreement are as defined in the Purchase Agreement.

2.            Amendments to Purchase Agreement. (a) The definition of “Operative Documents” in Section 5.1 of the Purchase Agreement is hereby amended and restated to read in its entirety as follows:

“             “Operative Documents” means this Agreement, the Note, the Warrant Conversion Note (if any), the Warrant, the Subsidiary Guaranties, the Collateral Documents, the Side Letter and all other documents, instruments and agreements executed by or on behalf of the Company and delivered concurrently herewith or at any time hereafter to or for the Purchaser or any Affiliate of Purchaser, all as amended, restated or supplemented from time to time.

“Total Funded Debt” means, at any time the same is to be determined, the aggregate of all Indebtedness for Borrowed Money of the Company and its Subsidiaries, on a consolidated basis, at such time, plus all Indebtedness for Borrowed Money of any other person or entity which is directly or indirectly guaranteed by the Company or any of its Subsidiaries or which the Company or any of its Subsidiaries has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which the Company or any of its Subsidiaries has otherwise assured a creditor against loss. For purposes of this Agreement, (a) “Total Funded Debt” includes (i) the 2016 CTI–Merrick Debt and the 2016 CTI–Schwan Debt, and (ii) subject to clause (b)(iii) below, the Obligations, but (b) “Total Funded Debt” does not include (i) any Excluded Flexo VIE Debt, (ii) the Subordinated Debt owing to John H. Schwan and Stephen M. Merrick described in Section 8.7(f) or (iii) that portion of the Obligations, if any, evidenced by the Warrant Conversion Note (it being understood and agreed that all other Obligations, including, without limitation, those Obligations evidenced by the Note shall be included in the calculation of Total Funded Debt hereunder).”

(b)           Section 5.1 of the Purchase Agreement is hereby amended by inserting each of the following new definitions in the appropriate alphabetical order:

“            “2017 Extension Period” means the period from and including the Amendment No. 5 Effective Date through and including the Maturity Date.

“Amendment No. 5” means an Amendment No. 5 to Note and Warrant Purchase Agreement dated as of July 28, 2017, to be effective as of July 18, 2017, between the Company, CTI Helium, and the Purchaser.

“Amendment No. 5 Effective Date” means July 18, 2017, which is the effective date of Amendment No. 5.

“Side Letter” means that certain Consent and Acknowledgement dated as of July 28, 2017 to be effective as of the Amendment No. 5 Effective Date, by and among the Senior Lender, the Purchaser and the Company.

“Warrant Conversion Note” means a promissory note in an aggregate principal amount required by the Warrant issued to the Purchaser by the Company in connection with an exercise of the Put Notice (as defined in the Warrant) under the Warrant and the corresponding conversion thereafter to debt in accordance with (and as more particularly described in) the Warrant, as revised by the Side Letter, as such promissory note may be amended, restated, replaced, substituted or otherwise modified from time to time. ”

(c)          A new Section 8.29 is hereby added to the Purchase Agreement immediately following Section 8.28 thereof to read as follows:

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“Section 8.29         2017 Extension Period; Engagement of Financial Consultant.

(a)          The Company shall engage, for the duration of the 2017 Extension Period (or any shorter period approved in writing by the Purchaser), at the Company’s expense, an independent consultant of recognized standing selected by the Company and reasonably acceptable to the Purchaser (the “Financial Consultant”) to provide business financial planning and other advisory services to the Company and its Subsidiaries.

(b)          Without limitation, duplication, or derogation of Section 8.5 hereof, during the 2017 Extension Period the Company shall, and shall cause each Subsidiary to, furnish to the Purchaser and its duly authorized representatives such information respecting the business and financial condition of the Company and its Subsidiaries as the Purchaser may reasonably request; and without any request, shall furnish to the Purchaser:

(i)          as soon as available, and in any event no later than July 20, 2017 (or any later date approved in writing by the Purchaser), an engagement letter, in form and substance (including scope of work) reasonably satisfactory to the Purchaser, with respect to the engagement by the Company of the Financial Consultant, duly executed by the Company and the Financial Consultant;

(ii)         as soon as available, and in any event no later than July 31, 2017 (or any later date approved in writing by the Purchaser), a report, in reasonable detail and in form reasonably satisfactory to the Purchaser, either prepared by the Financial Consultant or prepared by the Company and verified by the Financial Consultant, and in any event certified to by the Company’s chief financial officer or such other officer acceptable to the Purchaser, showing analyses of the following with respect to the Company and its Subsidiaries: (A) revenue and profitability by customer and product line; (B) expense-reduction and margin-improvement initiatives; and (C) working-capital improvements;

(iii)        as soon as available, and in any event no later than July 31, 2017 (or any later date approved in writing by the Purchaser), and thereafter as soon as available and in any event by the first Business Day of each week (unless otherwise approved in writing by the Purchaser), a 13-week cash flow forecast, in reasonable detail and in form reasonably satisfactory to the Purchaser, showing projected cash receipts and cash disbursements (including referencing line item sources and uses of cash) of the Company and its Subsidiaries over the immediately succeeding 13-week period, together with a reconciliation of actual cash receipts and cash disbursements of the Company and its Subsidiaries from the prior week against the then-current forecast of the Company and its Subsidiaries (and showing any deviations on a cumulative basis and providing a written explanation of the variances), either prepared by the Financial Consultant or prepared by the Company and verified by the Financial Consultant, and in any event certified to by the Company’s chief financial officer or such other officer acceptable to the Purchaser;

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(iv)        as soon as available, and in any event by the first Business Day of each week (or any later date approved in writing by the Purchaser), an accounts receivable and accounts payable aging, prepared by the Company and certified to by its chief financial officer or such other officer acceptable to the Purchaser;

(v)         as soon as available, and in any event no later than August 15, 2017 (or any later date approved in writing by the Purchaser), a copy of the Company’s strategic plan to address before the end of the 2017 Extension Period (as defined in the Senior Credit Agreement) the pending maturities of the Obligations and the Senior Debt, such strategic plan to be in reasonable detail prepared by the Company and in form reasonably satisfactory to the Purchaser;

(vi)        as soon as available, and in any event no later than August 31, 2017 (or any later date approved in writing by the Purchaser), evidence, in form and substance satisfactory to the Purchaser, of the Company’s having taken action satisfactory to the Purchaser to implement and effect the strategic plan described in clause (v) above; and

(vii)       as soon as available, and in any event no later than September 15, 2017 (or any later date approved in writing by the Purchaser), a collateral checklist, a perfection certificate, and updated schedules to this Agreement, each in reasonable detail and in form and substance reasonably satisfactory to the Purchaser.

(c)          The Company shall cause the management of the Company and its Subsidiaries to meet with the Financial Consultant and the Purchaser, in person or by telephone, at such reasonable times and reasonable intervals as the Company may determine, but at least once per week by telephone during the 2017 Extension Period (or less frequently as approved in writing by the Purchaser).”

3.            Fee. As consideration for the (x) consent of the Purchaser to the Senior Lender Tenth Amendment (as defined below) and (y) amendments to the Purchase Agreement to be effected by this agreement, the Company shall pay to the Purchaser a fee in an amount equal to the product of (a) $834,666, times (b) 11.5% per annum, compounded daily, which fee shall accrue on a daily basis commencing on the date hereof and continuing thereafter until the earlier of (i) the date of receipt by the Company of a Put Notice (as such term is defined in the Warrant), or such later date, when a promissory note is issued by the Company to the Purchaser evidencing the obligations under the Warrant in accordance with the terms and conditions of the Side Letter and otherwise in form and substance acceptable to the Purchaser (the “Warrant Note”) and (ii) October 17, 2017, and be fully earned upon the execution of this agreement by the Purchaser, and due and payable upon the earlier of (x) January 17, 2018 and (y) indefeasible payment in full in cash of the Warrant Note. The foregoing fee shall be nonrefundable once paid.

4.            Reaffirmation of Subsidiary Guaranty. The Subsidiary Guarantor hereby expressly does each of the following:

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(1) consents to the execution by the Company and the Purchaser of this agreement;

(2) acknowledges that the “Indebtedness” (as defined in the Subsidiary Guaranty) includes all of the “Obligations” under and as defined in the Purchase Agreement, as amended from time to time (including as amended by this agreement);

(3) acknowledges that the Subsidiary Guarantor does not have any set-off, defense, or counterclaim to the payment or performance of any of the obligations of the Company under the Purchase Agreement or the Subsidiary Guarantor under the Subsidiary Guaranty;

(4) reaffirms, assumes, and binds itself in all respects to all of the obligations, liabilities, duties, covenants, terms, and conditions contained in the Subsidiary Guaranty;

(5) agrees that all such obligations and liabilities under the Subsidiary Guaranty continue in full force and that the execution and delivery of this agreement to, and its acceptance by, the Purchaser will not in any manner whatsoever do any of the following:

(A) impair or affect the liability of the Subsidiary Guarantor to Purchaser under the Subsidiary Guaranty;

(B) prejudice, waive, or be construed to impair, affect, prejudice, or waive the rights and abilities of the Purchaser at law, in equity, or by statute against the Subsidiary Guarantor pursuant to the Subsidiary Guaranty; or

(C) release or discharge, or be construed to release or discharge, any of the obligations and liabilities owing to the Purchaser by the Subsidiary Guarantor under the Subsidiary Guaranty; and

(6) represents and warrants that each of the representations and warranties made by the Subsidiary Guarantor in any of the documents executed in connection with the Note and the other Operative Documents remain true and correct as of the date of this agreement.

5.            Representations and Warranties. To induce the Purchaser to enter into this agreement, the Company hereby represents to the Purchaser as follows:

(1) that the Company is duly authorized to execute and deliver this agreement and is and will continue to be duly authorized to borrow monies under the Purchase Agreement, as amended by this agreement, and to perform its obligations under the Purchase Agreement, as amended by this agreement;

(2) that the execution and delivery of this agreement and the performance by the Company of its obligations under the Purchase Agreement, as amended by this agreement, do not and will not conflict with any provision of law or of the articles of organization or operating agreement of the Company or of any agreement binding upon the Company;

(3) that the Purchase Agreement, as amended by this agreement, is a legal, valid, and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability might be limited by bankruptcy, insolvency, or other similar laws of general application affecting the enforcement of creditors’ rights or by general principles of equity limiting the availability of equitable remedies;

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(4) that the representation and warranties set forth in Section 6 of the Purchase Agreement, as amended by this agreement, and Section 6 of the Senior Credit Agreement, as amended, in each case are true and correct with the same effect as if those representations and warranties had been made on the date hereof, except that all references to the financial statements mean the financial statements most recently delivered to the Purchaser and except for changes specifically permitted under the Purchase Agreement, as amended by this agreement;

(5) that the Company has complied with and is in compliance with all of the covenants set forth in the Purchase Agreement, as amended by this agreement, including the covenants stated in section 8 of the Purchase Agreement; and

(6) that as of the date of this agreement no Default and no Event of Default under Section 10 of the Purchase Agreement, as amended by this agreement, has occurred or is continuing.

6.            Conditions. The effectiveness of this agreement is subject to satisfaction of the following conditions:

(1) that the Purchaser has received the following:

(A) a copy of this agreement, duly executed by the parties;

(B) a copy of an amendment to the Senior Credit Agreement (the “Senior Lender Tenth Amendment”) and each of the other documents required to be delivered in accordance with that amendment, each in form and substance satisfactory to the Purchaser and duly executed by all applicable Persons;

(C) a consent under the subordination and intercreditor agreement in respect of the BMO Mezzanine Debt, in form and substance satisfactory to the Purchaser, duly executed by all applicable Persons;

(D) a side letter in form and substance acceptable to the Purchaser from Senior Lender and acknowledged and agreed to by the Company that includes (x) a consent regarding permitting the Purchaser to (1) exercise its put right under the Warrant at any time and (2) at such time, convert the value of such put right under the Warrant to indebtedness constituting “Subordinated Debt” under the Senior Subordination Agreement pursuant to the issuance of a promissory note by the Company in favor of the Purchaser, (y) the agreement by the parties thereto to the corresponding terms in respect of such “Subordinated Debt” and promissory note, including, without limitation, a non-default interest rate of no less than 11.5% per annum, compounded daily, and (z) the agreement of the Senior Lender to exclude the new “Subordinated Debt” related to the Warrant Note from the calculation of the Total Leverage Ratio; and

(E) all other documents, certificates, resolutions, and opinions of counsel as the Purchaser requests;

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(2) that the Company has paid, and the Purchaser has received, the fees and expenses of counsel for the Purchaser in an amount equal to $30,800.00; and

(3) that all legal matters incident to the execution and delivery of this agreement are satisfactory to the Purchaser and its counsel.

7.          General. (a) This agreement and the rights and duties of the parties hereto are governed by, and are to be construed in accordance with, the internal laws of State of Illinois without regard to principles of conflicts of laws. Wherever possible each provision of the Purchase Agreement and this agreement is to be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Purchase Agreement and this agreement is prohibited by or invalid under any such law, that provision will be deemed ineffective to the extent of that prohibition or invalidity, without invalidating the remainder of that provision or the remaining provisions of the Purchase Agreement and this agreement.

(b)          This agreement is an Operative Document.

(c)          This agreement binds each party and their respective successors and assigns, and this agreement inures to the benefit of each party and the successors and assigns of the Purchaser.

(d)          Except as specifically modified or amended by the terms of this agreement, the terms and provisions of the Purchase Agreement, the Subsidiary Guaranty, and the other Operative Documents are incorporated by reference herein and in all respects continue in full force and effect. The Company, by execution of this agreement, hereby reaffirms, assumes, and binds itself to all of the obligations, duties, rights, covenants, terms, and conditions contained in the Purchase Agreement and the other Operative Documents to which it is a party.

(e)          Each reference in the Purchase Agreement to “this Agreement,” “hereunder,” “hereof,” or words of like import, and each reference to the Purchase Agreement in any and all instruments or documents delivered in connection therewith, are deemed to refer to the Purchase Agreement, as amended by this agreement.

(f)          The Company shall pay all costs and expenses in connection with the preparation of this agreement and other related loan documents, including, without limitation, reasonable attorneys’ fees and time charges of attorneys who are employees of the Purchaser or any affiliate or parent of the Purchaser. The Company shall pay any and all stamp and other taxes, UCC search fees, filing fees, and other costs and expenses in connection with the execution and delivery of this agreement and the other instruments and documents to be delivered hereunder, and agrees to save the Purchaser harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such costs and expenses.

(g)          The Company hereby waives and releases any and all current existing claims, counterclaims, defenses, or set-offs of every kind and nature which it has or might have against the Purchaser arising out of, pursuant to, or pertaining in any way to the Purchase Agreement, any and all documents and instruments in connection with or relating to the foregoing, or this agreement. The Company hereby further covenants and agrees not to sue the Purchaser or assert any claims, defenses, demands, actions, or liabilities against the Purchaser arising out of, pursuant to, or pertaining in any way to the Purchase Agreement, any and all documents and instruments in connection with or relating to the foregoing, or this agreement.

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(h)          The parties may sign this agreement in several counterparts, each of which will be deemed an original but all of which together will constitute one instrument. Receipt of an executed signature page to this agreement by facsimile or other electronic transmission will constitute effective delivery of that executed signature page. Electronic records of executed Operative Documents (including this agreement) maintained by the Purchaser will be deemed to be originals.

[Signature pages follow]

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(Signature Page to Amendment No. 5 to Note and Warrant Purchase Agreement)

The parties are signing this Amendment No. 5 to Note and Warrant Purchase Agreement effective as of the effective date stated in the introductory clause.

CTI INDUSTRIES CORPORATION
By:	/s/ John H. Schwan
Name:	John H. Schwan
Title:	Chairman/CEO
CTI SUPPLY, INC.
(f/k/a CTI Helium, Inc.)
By:	/s/ John H. Schwan
Name:	John H. Schwan
Title:	Vice President
BMO PRIVATE EQUITY (U.S.), INC.
By:	/s/ Jason Swanson
Name:	Jason Swanson
Title:	Managing Director

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, John H. Schwan, certify that:

1.          I have reviewed this quarterly report on Form 10-Q of CTI Industries Corporation.

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the condensed consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.           The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 14, 2017

/s/ John H. Schwan

John H. Schwan,

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Timothy S. Patterson, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of CTI Industries Corporation.

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the condensed consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.           The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 14, 2017

By:	/s/ Timothy S. Patterson
	Timothy S. Patterson
	Chief Financial Officer
	Senior Vice President Finance

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of CTI Industries Corporation (the “Company”) for the quarterly period ended June 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), John H. Schwan, as Chief Executive Officer of the Company, and Timothy S. Patterson, as Senior Vice President Finance and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)           The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John H. Schwan

John H. Schwan

Chief Executive Officer

Date: August 14, 2017

/s/ Timothy S. Patterson

Timothy S. Patterson

Chief Financial Officer

Senior Vice President Finance

Date: August 14, 2017

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and is not being “filed” as part of the Form 10-Q or as a separate disclosure document for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent that this Exhibit 32 is expressly and specifically incorporated by reference in any such filing.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 01, 2017
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Entity Registrant Name	CTI INDUSTRIES CORP
Entity Central Index Key	0001042187
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	CTIB
Entity Common Stock, Shares Outstanding		3,525,227

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Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents (VIE $12,000 and $51,000, respectively)	$ 456,426	$ 563,043
Accounts receivable, (less allowance for doubtful accounts of $152,000 and $137,000, respectively) (VIE $11,000 and $6,000, respectively)	10,020,280	14,838,978
Inventories, net (VIE $583,000 and $719,000, respectively)	18,947,606	18,348,011
Prepaid expenses (VIE $35,000 and $18,000, respectively)	750,586	678,689
Other current assets (VIE $1,000 and $0, respectively)	854,936	530,669
Total current assets	31,029,834	34,959,390
Property, plant and equipment:
Machinery and equipment (VIE $0 and $0, respectively)	26,877,412	26,348,443
Building	3,387,323	3,379,636
Office furniture and equipment (VIE $217,000 and $154,000, respectively)	3,440,515	3,597,158
Intellectual property	752,044	482,088
Land	250,000	250,000
Leasehold improvements	418,073	395,603
Fixtures and equipment at customer locations	3,302,868	3,302,868
Projects under construction	169,274	493,859
Property, Plant and Equipment, Gross	38,597,509	38,249,655
Less : accumulated depreciation and amortization (VIE $33,000 and $29,000, respectively)	(33,478,495)	(32,938,267)
Total property, plant and equipment, net	5,119,014	5,311,388
Other assets:
Goodwill (VIE $440,000 and $440,000, respectively)	1,473,176	1,473,176
Net deferred income tax asset	1,868,561	1,696,690
Other assets (due from related party $49,000 and $47,000, respectively)	428,953	473,095
Total other assets	3,770,690	3,642,961
TOTAL ASSETS	39,919,538	43,913,739
Current liabilities:
Checks written in excess of bank balance	1,074,901	1,688,675
Trade payables (VIE $10,000 and $92,000, respectively)	4,926,507	5,861,932
Line of credit (VIE $373,000 and $408,000, respectively)	9,545,148	11,263,531
Notes payable - current portion (net discount of $17,000 and $113,000, respectively) (VIE $0 and $0, respectively)	6,659,095	1,709,220
Notes payable officers - current portion	0	180,000
Notes payable affiliates - current portion	9,967	8,141
Capital Lease - current portion	23,714	40,660
Accrued liabilities (VIE $149,000 and $140,000, respectively)	2,551,157	3,127,425
Total current liabilities	24,790,489	23,879,584
Long-term liabilities:
Notes payable - affiliates	213,677	218,858
Notes payable, net of current portion (net discount of $0 and $0, respectively) (VIE $206,000 and $301,000, respectively)	205,978	5,301,491
Notes payable - officers, subordinated	1,465,162	1,416,138
Capital Lease	0	4,690
Deferred gain (non current)	286,858	297,521
Total long-term debt, net of current portion	2,171,675	7,238,698
Warrants Payable	794,072	817,880
Total long-term liabilities	2,965,747	8,056,578
CTI Industries Corporation stockholders' equity:
Preferred Stock - no par value, 2,000,000 shares authorized, 0 shares issued and outstanding	0	0
Common stock - no par value, 5,000,000 shares authorized, 3,568,885 shares issued and 3,525,227 shares outstanding	13,898,494	13,898,494
Paid-in-capital	2,227,880	2,250,235
Accumulated earnings	1,855,668	2,323,326
Accumulated other comprehensive loss	(4,840,509)	(5,593,878)
Less: Treasury stock, 43,658 shares	(160,784)	(160,784)
Total CTI Industries Corporation stockholders' equity	12,980,749	12,717,393
Noncontrolling interest	(817,447)	(739,816)
Total Equity	12,163,302	11,977,577
TOTAL LIABILITIES AND EQUITY	$ 39,919,538	$ 43,913,739

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Condensed Consolidated Balance Sheets [Parenthetical] - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Cash and cash equivalents	$ 456,426	$ 563,043
Allowance for doubtful accounts	152,000	137,000
Inventory, Net	18,947,606	18,348,011
Prepaid expenses	750,586	678,689
Other current assets	854,936	530,669
Machinery and equipment	26,877,412	26,348,443
Office Furniture and Equipment	3,440,515	3,597,158
Goodwill	1,473,176	1,473,176
Due from related party	49,000	47,000
Trade payables	4,926,507	5,861,932
Line of Credit, Current	9,545,148	11,263,531
Notes Payable, net of current portion, net discount	17,000	113,000
Accrued liabilities	2,551,157	3,127,425
Notes Payable, net of non current portion, net discount	$ 0	$ 0
Preferred Stock, Par or Stated Value Per Share (in dollars per share)	$ 0	$ 0
Preferred Stock, shares authorized (in shares)	2,000,000	2,000,000
Preferred Stock, shares issued (in shares)	0	0
Preferred Stock, shares outstanding (in shares)	0	0
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	5,000,000	5,000,000
Common stock, shares issued (in shares)	3,568,885	3,568,885
Common stock, shares outstanding (in shares)	3,525,227	3,525,227
Treasury Stock, Shares (in shares)	43,658	43,658
Variable Interest Entity, Primary Beneficiary [Member]
Cash and cash equivalents	$ 12,000	$ 51,000
Allowance for doubtful accounts	11,000	6,000
Inventory, Net	583,000	719,000
Prepaid expenses	35,000	18,000
Other current assets	1,000	0
Machinery and equipment	0	0
Office Furniture and Equipment	217,000	154,000
Accumulated depreciation and amortization	33,000	29,000
Goodwill	440,000	440,000
Trade payables	10,000	92,000
Line of Credit, Current	373,000	408,000
Notes Payable, net of current portion, net discount	0	0
Accrued liabilities	149,000	140,000
Notes Payable, net of non current portion, net discount	$ 206,000	$ 301,000

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Condensed Consolidated Statements of Comprehensive Income - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Net Sales	$ 12,811,697	$ 14,150,504	$ 28,171,335	$ 29,355,498
Cost of Sales	9,694,288	10,313,825	21,436,477	21,596,973
Gross profit	3,117,409	3,836,679	6,734,858	7,758,525
Operating expenses:
General and administrative	1,866,615	1,904,874	3,767,871	3,662,224
Selling	1,187,904	1,192,794	1,909,294	2,184,155
Advertising and marketing	537,372	536,631	1,093,781	1,062,709
Gain on sale of assets	(22,401)	0	(91,701)	0
Other operating income	(1,416)	0	(1,416)	0
Total operating expenses	3,568,074	3,634,299	6,677,829	6,909,088
(Loss) Income from operations	(450,665)	202,380	57,029	849,437
Other (expense) income:
Interest expense	(359,782)	(357,192)	(732,646)	(715,652)
Change in fair value of warrants	4,202	(39,214)	23,808	(226,878)
Foreign currency loss	(50,428)	78,161	(80,954)	67,677
Total other expense, net	(406,008)	(318,245)	(789,792)	(874,853)
Net income before taxes	(856,673)	(115,865)	(732,763)	(25,416)
Income tax expense	(263,110)	4,865	(187,473)	11,851
Net income	(593,563)	(120,730)	(545,290)	(37,267)
Less: Net (loss) income attributable to noncontrolling interest	(67,435)	(37,800)	(77,632)	38,900
Net loss attributable to CTI Industries Corporation	(526,128)	(82,930)	(467,658)	(76,167)
Other Comprehensive Income (Loss)
Foreign currency adjustment	442,057	(536,409)	753,369	(604,011)
Comprehensive Income (Loss)	$ (84,071)	$ (619,339)	$ 285,711	$ (680,178)
Basic loss per common share	$ (0.15)	$ (0.02)	$ (0.13)	$ (0.02)
Diluted loss per common share	$ (0.14)	$ (0.02)	$ (0.12)	$ (0.02)
Weighted average number of shares and equivalent shares of common stock outstanding:
Basic	3,616,693	3,363,986	3,616,693	3,363,986
Diluted	3,771,581	3,535,075	3,772,236	3,519,906

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Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net (loss) income	$ (545,290)	$ (37,267)
Adjustment to reconcile net income to cash provided by operating activities:
Depreciation and amortization	781,042	784,399
Amortization of debt discount	95,906	82,163
Change in fair value of warrants	(23,808)	226,878
Stock based compensation	0	23,334
Amortization of deferred gain on sale/leaseback	(53,258)	0
Provision for losses on accounts receivable	4,117	8,039
Provision for losses on inventories	42,366	(48,935)
Deferred income taxes	(254,401)	(106,619)
Change in assets and liabilities:
Accounts receivable	5,311,938	1,404,314
Inventories	137,620	(1,416,051)
Prepaid expenses and other assets	(268,403)	(1,809,612)
Trade payables	(1,236,877)	654,759
Accrued liabilities	(788,625)	(150,018)
Net cash provided by (used in) operating activities	3,202,327	(384,616)
Cash flows from investing activities:
Proceeds from equipment sale-leaseback	0	783,134
Cash used in investment in subsidiary	0	(43,750)
Purchases of property, plant and equipment	(526,565)	(433,304)
Net cash (used in) provided by investing activities	(526,565)	306,080
Cash flows from financing activities:
Change in checks written in excess of bank balance	(613,774)	70,171
Net change in revolving line of credit	(1,780,835)	883,940
Proceeds from issuance of long-term debt	0	492
Repayment of long-term debt (related parties $0 and $0)	(423,627)	(557,655)
Contributions received by Variable Interest Entity	0	288,750
Redemption of Variable Interest Entity members	0	(455,000)
Net cash (used in) provided by financing activities	(2,818,236)	230,698
Effect of exchange rate changes on cash	35,857	(23,525)
Net decrease in cash and cash equivalents	(106,617)	128,637
Cash and cash equivalents at beginning of period	563,043	346,404
Cash and cash equivalents at end of period	456,426	475,041
Supplemental disclosure of cash flow information:
Cash payments for interest	627,586	608,758
Cash payments for taxes	300,000	0
Supplemental Disclosure of non-cash investing and financing activity
Property, Plant & Equipment acquisitions funded by liabilities	8,704	30,721
Contributed Capital to Clever Container
Stock	0	122,500
Debt	0	43,750
Accounts Receivable	$ 0	$ 183,750

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Condensed Consolidated Statements of Cash Flows [Parenthetical] - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Repayment of related party debt	$ 0	$ 0

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Condensed Consolidated Earnings per Share - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Average shares outstanding: (Basic)
Weighted average number of common shares outstanding	3,616,693	3,363,986	3,616,693	3,363,986
Net loss:
Net loss attributable to CTI Industries Corporation	$ (526,128)	$ (82,930)	$ (467,658)	$ (76,167)
Per share amount	$ (0.15)	$ (0.02)	$ (0.13)	$ (0.02)
Average shares outstanding: (Diluted)
Weighted average number of common shares outstanding	3,616,693	3,363,986	3,616,693	3,363,986
Effect of dilutive shares	154,888	171,089	155,543	155,920
Weighted average number of shares and equivalent shares of common stock outstanding	3,771,581	3,535,075	3,772,236	3,519,906
Net loss:
Net loss attributable to CTI Industries Corporation	$ (526,128)	$ (82,930)	$ (467,658)	$ (76,167)
Per share amount	$ (0.14)	$ (0.02)	$ (0.12)	$ (0.02)

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Basis of Presentation

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation Of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1 - Basis of Presentation

The accompanying condensed (a) consolidated balance sheet as of December 31, 2016, which has been derived from audited consolidated financial statements, and (b) the unaudited interim condensed consolidated financial statements have been prepared and, in the opinion of management, contain all the adjustments (consisting of those of a normal recurring nature) considered necessary to present fairly the consolidated financial position and the consolidated statements of comprehensive income and consolidated cash flows for the periods presented in conformity with generally accepted accounting principles for interim consolidated financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America. Operating results for the three months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2017. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2016.

Principles of consolidation and nature of operations:

The condensed consolidated financial statements include the accounts of CTI Industries Corporation and its wholly-owned subsidiaries, CTI Balloons Limited and CTI Supply, Inc., its majority-owned subsidiaries, Flexo Universal, S. de R.L. de C.V. and CTI Europe gmbH, as well as the accounts of Venture Leasing S. A. de R. L., Venture Leasing L.L.C and Clever Container Company, L.L.C. (the “Company”). The last three entities have been consolidated as variable interest entities. All significant intercompany transactions and accounts have been eliminated in consolidation. The Company (i) designs, manufactures and distributes balloon products throughout the world, (ii) operates systems for the production, lamination, coating and printing of films used for food packaging and other commercial uses and for conversion of films to flexible packaging containers and other products, and (iii) distributes vacuum sealing products and home organization products in the United States.

Variable Interest Entities (“VIE’s”):

The determination of whether or not to consolidate a variable interest entity under U.S. GAAP requires a significant amount of judgment concerning the degree of control over an entity by its holders of variable interest. To make these judgments, management has conducted an analysis of the relationship of the holders of variable interest to each other, the design of the entity, the expected operations of the entity, which holder of variable interests is most “closely associated” to the entity and which holder of variable interests is the primary beneficiary required to consolidate the entity. Upon the occurrence of certain events, management reviews and reconsiders its previous conclusion regarding the status of an entity as a variable interest entity. There are three entities that have been consolidated as variable interest entities.

Use of estimates:

In preparing condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amount of revenue and expenses during the reporting period in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. The Company’s significant estimates include reserves for doubtful accounts, reserves for the lower of cost or market of inventory, reserves for deferred tax assets and recovery value of goodwill.

Earnings per share:

Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during each period.

Diluted earnings per share is computed by dividing the net income by the weighted average number of shares of common stock and equivalents (stock options and warrants), unless anti-dilutive, during each period.

As of June 30, 2017 and 2016, shares to be issued upon the exercise of options and warrants aggregated 359,817 and 288,048, respectively. The number of anti-dilutive shares (not included in the determination of earnings on a diluted basis) for the three and six months ended June 30, 2017 and 2016 were 153,350 and 0, respectively.

Significant Accounting Policies:

The Company’s significant accounting policies are summarized in Note 2 of the Company’s consolidated financial statements for the year ended December 31, 2016. There were no significant changes to these accounting policies during the three and six months ended June 30, 2017.

Reclassification:

Certain 2016 amounts have been reclassified to conform to the 2017 presentation. (See footnote regarding ASU 2015-17.)

Recent Accounting Pronouncements:

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This guidance amended the existing requirements for disclosing information about an entity’s ability to continue as a going concern, requires management to assess an entity’s ability to continue as a going concern and then to provide related disclosure in certain circumstances. This guidance is effective for annual reporting periods ending after December 2016 and for annual and interim reporting periods thereafter. See Note 2 for management’s assessment of its ability to continue as a going concern.

In 2014, the FASB issued guidance on revenue recognition, which provides for a single five-step model to be applied to all revenue contracts with customers. The guidance also requires additional financial statement disclosures that will enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts. The guidance provides an option to use either a retrospective approach or a cumulative effect adjustment approach to implement the guidance. In 2015, the FASB issued a deferral of the effective date of the guidance to 2018, with early adoption permitted in 2017. In 2016, the FASB issued final amendments clarifying the implementation guidance for principal versus agent considerations, identifying performance obligations and the accounting of intellectual property licenses. In addition, the FASB introduced practical expedients related to disclosures of remaining performance obligations, as well as other amendments to guidance on collectibility, non-cash consideration and the presentation of sales and other similar taxes. We are currently evaluating the impact of this guidance on our financial statements and the timing of adoption, and have not yet selected a transition approach.

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, to eliminate the current requirements to classify deferred income tax assets and liabilities between current and noncurrent. To simplify the presentation of deferred income taxes, the amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. For public business entities, the amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The Company has adopted the standard and the impact to our consolidated financial statements for the period ending June 30, 2017 is a reclassification of $761,000 in deferred tax assets to noncurrent, and a reclassification of $773,000 in deferred tax assets to noncurrent for the period ending December 31, 2016.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), aimed at making leasing activities more transparent and comparable. The new standard requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including today’s operating leases. For public business entities, the standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. When the standard becomes effective, we expect that our property, plant and equipment will increase significantly due to the addition of assets under lease and the lease liabilities will correspondingly increase. There is not expected to be a significant impact on the income statement.

On August 26, 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230), a consensus of the FASB’s Emerging Issues Task Force (“ASU 2016-15”). The new guidance amends Accounting Standards Codification No. 230 (“ASC 230”) to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. ASC 230 lacks consistent principles for evaluating the classification of cash payments and receipts in the statement of cash flows. This has led to diversity in practice and, in certain circumstances, financial statement restatements. Therefore, the FASB issued the ASU 2016-15 with the intent of reducing diversity in practice with respect to eight types of cash flows. ASU 2016-15 is effective for annual and interim periods in fiscal years beginning after December 15, 2017, and is effective for the Company for the year ending December 31, 2018. The Company is currently evaluating the impact that the implementation of this standard will have on the Company’s consolidated financial statements.

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Liquidity and Going Concern

6 Months Ended

Jun. 30, 2017

Liquidity and Going Concern [Abstract]

Liquidity and Going Concern [Text Block]

Note 2 – Liquidity and Going Concern

The Company’s primary sources of liquidity are cash and cash equivalents as well as availability under the Credit Agreement with BMO Harris. The Company has historically used availability under this revolving credit facility to fund operations.

For the six months ended June 30, 2017, the Company generated net cash from operating activities in the amount of $3,202,237, although the Company did incur a loss for the quarter ended June 30, 2017 of $526,000 and for the six months ended June 30, 2017 of $468,000.

Assuming a continuation of the revolving credit under the Credit Agreement, the Company has forecast a profit for the second half of the year, which is expected to generate sufficient cash flow for the Company to meet its current obligations.

As of June 30, 2017, the Company had total borrowings outstanding under the Credit Agreement including $9,172,000 on the revolving credit loan and $1,664,000 on the mortgage facility. As of June 30, 2017, the Company had cash balances of $456,000.

Also, the Company owes $5 million on its outstanding subordinated loan with BMO Equity, which matures on January 17, 2018.

As of June 30, 2017, we met the debt covenants of the BMO Harris loan and the BMO Equity loan.

The obligations of the Credit Agreement (revolving credit loan and mortgage) were to mature on July 17, 2017 under the terms. By amendment to the Credit Agreement, BMO Harris has agreed to extend the maturity of these obligations to October 18, 2017. BMO Equity consented to this extension in exchange for a fee and for the right to exercise at any time its put of warrants issued under the Note and Warrant Agreement, with payment deferred to the maturity date of the BMO Equity loan.

The extension provides for the retention by the Company of a consultant to advise as to financial planning, forecasting, cost management and financing.

Management’s plans include

(1) Acting to reduce operating expense to achieve a higher level of profitability,

(2) Working with our consultant to reduce operating expenses, negotiate financing terms, identify financing sources,

(3) Contacts and negotiations with our current lenders and with additional financing sources to extend our present loan facilities or to provide alternative sources for one or both of our current lenders, and

(4) Maintaining active contact and a loan process with several potential lenders, as well as our current lenders, and receipt of non-binding proposals for our financing.

Management Assessment

Based upon our historical ability to obtain necessary financing and our current expectations, we believe that we are likely to obtain necessary financing to continue operating as a going concern. However, we do not have firm commitments at this time for alternative financing or loan extensions.

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Stock-Based Compensation; Changes in Equity

6 Months Ended

Jun. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 3 - Stock-Based Compensation; Changes in Equity

The Company has adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the condensed consolidated financial statements based on their grant-date fair values.

The Company has applied the Black-Scholes model to value stock-based awards and issued warrants related to notes payable. That model incorporates various assumptions in the valuation of stock-based awards relating to the risk-free rate of interest to be applied, the estimated dividend yield and expected volatility of our common stock. The risk-free rate of interest is the related U.S. Treasury yield curve for periods within the expected term of the option at the time of grant. The dividend yield on our common stock is estimated to be 0%, as the Company did not issue dividends during 2017 and 2016. The expected volatility is based on historical volatility of the Company’s common stock.

The Company’s net loss for the three months ended June 30, 2017 and 2016 includes approximately $5,000 and $11,000, respectively, of compensation costs related to share based payments. The Company’s net loss for the six months ended June 30, 2017 and 2016 includes approximately $10,000 and $23,000, respectively, of compensation costs related to share based payments. As of June 30, 2017, there is $16,000 of unrecognized compensation expense related to non-vested stock option grants and stock grants. We expect approximately $5,000 of additional stock-based compensation expense to be recognized over the remainder of 2017, $7,000 to be recognized during 2018, $3,000 to be recognized during 2019 and $1,000 to be recognized during 2020.

As of June 30, 2017, the Company had three stock-based compensation plans pursuant to which stock options were, or may be, granted. The Plans provide for the award of options, which may either be incentive stock options (“ISOs”) within the meaning of Section 422A of the Internal Revenue Code of 1986, as amended (the “Code”) or non-qualified options (“NQOs”) which are not subject to special tax treatment under the Code, as well as for stock grants.

On April 10, 2009, the Board of Directors approved for adoption, and on June 5, 2009, the shareholders of the Corporation approved, a 2009 Stock Incentive Plan (“2009 Plan”). The 2009 Plan authorizes the issuance of up to 250,000 shares of stock or options to purchase stock of the Company (including cancelled shares reissued under the plan.) As of June 30, 2017, options for 250,000 shares had been granted and options for 143,094 shares remain outstanding.

A summary of the Company’s stock option activity and related information is as follows:

					Weighted
			Weighted		Average
	Shares		Average		Remaining		Aggregate
	under		Exercise		Contractual		Intrinsic
	Option		Price		Life		Value
Balance at December 31, 2016		143,094	$	5.22		2.9	$	89,494
Granted		-		-		-		-
Cancelled/Expired		-		-		-		-
Exercised		-		-		-		-
Outstanding at June 30, 2017		143,094	$	5.22		1.5	$	65,518
Exercisable at June 30, 2017		113,238	$	5.21		1.0	$	53,748

On July 17, 2012, the Company entered into a Note and Warrant Purchase Agreement with BMO Private Equity (U.S.), Inc. (“BMO Equity”) pursuant to which (i) BMO Equity advanced to the Company the sum of $5 million and (ii) the Company issued to BMO Equity a warrant to purchase up to Four Percent (4%) of the outstanding shares of common stock of the Company on a fully-diluted basis (140,048 shares of common stock of the Company) at the price of One Cent ($0.01) per share. The term of the loan provided for in this Agreement is five and a half years. Interest is payable on the outstanding balance of the loan at the rate of 11.5% per annum. As of June 30, 2017, the Company was in compliance with all of the financial covenants under the Note and Warrant Purchase Agreement.

On July 29, 2016, the Company and certain accredited investors entered into a Securities Purchase Agreement wherein the investors purchased 152,850 shares of common stock of the Company at a price of $6.00 per share. As additional consideration for the purchases of the shares in the offering, each investor received, with each share of common stock purchased, one-half of a warrant, with one warrant entitling the investor to purchase one share of the Company’s common stock at the price of $7.00. The warrants are exercisable between six months and three years from the investment date. As a result of the completion of the sale under the Purchase Agreement, warrants to purchase 76,675 shares of common stock at $7.00 per share were issued.

In addition to the Purchase Agreement, the Company and each of the investors entered into a Registration Rights Agreement pursuant to which the Company agreed to file a Registration Statement with the SEC to register the common stock sold to the investors.

A summary of the Company’s stock warrant activity and related information is as follows:

					Weighted
			Weighted		Average
	Shares		Average		Remaining		Aggregate
	under		Exercise		Contractual		Intrinsic
	Warrant		Price		Life		Value
Balance at December 31, 2016		216,723	$	2.48		4.49	$	817,880
Granted		-		-		-		-
Cancelled		-		-		-		-
Exercised		-		-		-		-
Outstanding at June 30, 2017		216,723	$	2.48		4.00	$	794,072
Exercisable at June 30, 2017		76,675	$	7.00		2.08		-

A summary of the Company’s stock option activity by grant date as of June 30, 2017 is as follows:

	Options Outstanding								Options Vested
			Weighted		Remain.		Intrinsic				Weighted		Remain.
Options by Grant Date	Shares		Avg.		Life		Val		Shares		Avg.		Life		Intrinsic Val
Dec 2005		-		-		-		-		-		-		-		-
Dec 2010		-		-		-		-		-		-		-		-
Jan 2011		-		-		-		-		-		-		-		-
Nov 2012		90,000	$	5.17		0.4	$	45,900		90,000	$	5.17		0.4	$	45,900
Nov 2013		5,000	$	5.75		1.4	$	0		4,000	$	5.75		1.4	$	0
Dec 2015		48,094	$	5.27		3.5	$	19,618		19,238	$	5.27		3.5	$	7,848
TOTAL		143,094	$	5.22		1.5	$	65,518		113,238	$	5.21		1.0	$	53,748

The aggregate intrinsic value in the tables above represents the total pre-tax intrinsic value (the difference between the closing price of the Company’s common stock on the last trading day of the quarter ended June 30, 2017 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all the holders exercised their options on June 30, 2017.

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Legal Proceedings

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 4 - Legal Proceedings

The Company is party to certain claims or actions arising in the normal course of business. The ultimate outcome of these matters is unknown but, in the opinion of management, the resolution of these matters is not expected to have a significant effect on the future financial position or results of operations of the Company.

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Other Comprehensive Income

6 Months Ended

Jun. 30, 2017

Stockholders' Equity Note [Abstract]

Comprehensive Income (Loss) Note [Text Block]

Note 5 - Other Comprehensive Income

In the three and six months ended June 30, 2017, the Company incurred other comprehensive income of approximately $442,000 and $753,000, respectively, all from foreign currency translation adjustments.

The following table sets forth the accumulated balance of other comprehensive income and each component.

			Total
			Accumulated Other
	Foreign Currency Items		Comprehensive Income
Beginning balance as of January 1, 2017	$	(5,593,878)	$	(5,593,878)
Current period change, net of tax		753,369		753,369
Ending Balance as of June 30, 2017		(4,840,509)		(4,840,509)

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Inventories, Net

6 Months Ended

Jun. 30, 2017

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note 6 - Inventories, Net

	June 30,		December 31,
	2017		2016
Raw materials	$	3,516,267	$	3,310,310
Work in process		2,508,025		1,942,600
Finished goods		13,760,317		13,889,328
Allowance for excess quantities		(837,003)		(794,227)
Total inventories	$	18,947,606	$	18,348,011

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Geographic Segment Data

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 7 - Geographic Segment Data

The Company has determined that it operates primarily in one business segment that designs, manufactures and distributes film and film related products for use in packaging, storage and novelty balloon products. The Company operates in foreign and domestic regions. Information about the Company's operations by geographic area is as follows:

	Net Sales to Outside Customers				Net Sales to Outside Customers
	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
United States	$	9,478,000	$	11,050,000	$	21,125,000	$	23,135,000
Europe		917,000		618,000		1,864,000		1,166,000
Mexico		1,956,000		1,852,000		3,979,000		3,715,000
United Kingdom		459,000		631,000		1,203,000		1,339,000
	$	12,810,000	$	14,151,000	$	28,171,000	$	29,355,000

	Total Assets at
	June 30,		December 31,
	2017		2016
United States	$	27,180,000	$	33,108,000
Europe		2,910,000		2,418,000
Mexico		8,817,000		7,064,000
United Kingdom		1,013,000		1,324,000
	$	39,920,000	$	43,914,000

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Concentration of Credit Risk

6 Months Ended

Jun. 30, 2017

Risks and Uncertainties [Abstract]

Concentration Risk Disclosure [Text Block]

Note 8 - Concentration of Credit Risk

Concentration of credit risk with respect to trade accounts receivable is generally limited due to the large number of entities comprising the Company's customer base. The Company performs ongoing credit evaluations and provides an allowance for potential credit losses against the portion of accounts receivable which is estimated to be uncollectible. Such losses have historically been within management's expectations. During the three and six months ended June 30, 2017 and 2016, there were two customers whose purchases represented more than 10% of the Company’s consolidated net sales, respectively. Sales to these customers for the three months ended June 30, 2017 and 2016 are as follows:

	Three Months Ended					Three Months Ended
	June 30, 2017					June 30, 2016
			% of Net					% of Net
Customer	Net Sales		Sales			Net Sales		Sales
Customer A	$	3,867,000		30.2	%	$	3,607,000		25.5	%
Customer B	$	1,565,000		12.2	%	$	2,460,000		17.4	%

	Six Months Ended					Six Months Ended
	June 30, 2017					June 30, 2016
			% of Net					% of Net
Customer	Net Sales		Sales			Net Sales		Sales
Customer A	$	8,294,000		29.4	%	$	8,772,000		29.9	%
Customer B	$	4,174,000		14.8	%	$	4,800,000		16.4	%

As of June 30, 2017, the total amounts owed to the Company by these customers were approximately $2,104,000 or 21.2%, and $1,606,000 or 16.2%, of the Company’s consolidated net accounts receivable, respectively. The amounts owed at June 30, 2016 by these customers were approximately $2,018,000 or 20.2%, and $2,112,000 or 21.2% of the Company’s consolidated net accounts receivable, respectively.

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Related Party Transactions

6 Months Ended

Jun. 30, 2017

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Note 9 - Related Party Transactions

Stephen M. Merrick, President of the Company, is of counsel to the law firm of Vanasco Genelly and Miller PC which provides legal services to the Company. Legal fees paid by the Company to this firm for the three months ended June 30, 2017 and 2016, respectively, were $38,000 and $33,000. Legal fees paid by the Company to this firm for the six months ended June 30, 2017 and 2016, respectively, were $64,000 and $71,000.

Interest payments have been made or accrued to John H. Schwan, Chief Executive Officer of the Company, for loans made to the Company. During the three months ended June 30, 2017 and 2016, these interest accruals totaled $25,000 and $23,000, respectively. During the six months ended June 30, 2017 and 2016, these interest accruals totaled $49,000 and $46,000, respectively.

John H. Schwan, Chief Executive Officer of the Company, through an investment entity, and Stephen M. Merrick, President of the Company, also through an investment entity own, in aggregate, a 50% interest in Clever Container Company L.L.C., an Illinois limited liability company (“Clever Container”). During the three months ended June 30, 2017 and 2016, Clever Container purchased various products from the Company in the amount of $250,000 and $293,000, respectively. During the six months ended June 30, 2017 and 2016, Clever Container purchased various products from the Company in the amount of $454,000 and $478,000, respectively. As of June 30, 2017 and 2016, the balance of accounts receivable from Clever Container to the Company were $831,000 and $397,000, respectively. The Company owns a 28.5% interest in Clever Container.

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Derivative Instruments; Fair Value

6 Months Ended

Jun. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Fair Value [Text Block]

Note 10 - Derivative Instruments; Fair Value

The following tables represents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value:

	Amount as of
Description	6/30/2017		Level 1		Level 2		Level 3
Warrant Liability	$	794,000		-	$	794,000		-
	$	794,000		-	$	794,000		-

	Amount as of
Description	12/31/2016		Level 1		Level 2		Level 3
Warrant Liability	$	818,000		-	$	818,000		-
	$	818,000			$	818,000

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of consolidation and nature of operations:

The condensed consolidated financial statements include the accounts of CTI Industries Corporation and its wholly-owned subsidiaries, CTI Balloons Limited and CTI Supply, Inc., its majority-owned subsidiaries, Flexo Universal, S. de R.L. de C.V. and CTI Europe gmbH, as well as the accounts of Venture Leasing S. A. de R. L., Venture Leasing L.L.C and Clever Container Company, L.L.C. (the “Company”). The last three entities have been consolidated as variable interest entities. All significant intercompany transactions and accounts have been eliminated in consolidation. The Company (i) designs, manufactures and distributes balloon products throughout the world, (ii) operates systems for the production, lamination, coating and printing of films used for food packaging and other commercial uses and for conversion of films to flexible packaging containers and other products, and (iii) distributes vacuum sealing products and home organization products in the United States.

Consolidation, Variable Interest Entity, Policy [Policy Text Block]

Variable Interest Entities (“VIE’s”):

The determination of whether or not to consolidate a variable interest entity under U.S. GAAP requires a significant amount of judgment concerning the degree of control over an entity by its holders of variable interest. To make these judgments, management has conducted an analysis of the relationship of the holders of variable interest to each other, the design of the entity, the expected operations of the entity, which holder of variable interests is most “closely associated” to the entity and which holder of variable interests is the primary beneficiary required to consolidate the entity. Upon the occurrence of certain events, management reviews and reconsiders its previous conclusion regarding the status of an entity as a variable interest entity. There are three entities that have been consolidated as variable interest entities.

Use of Estimates, Policy [Policy Text Block]

Use of estimates:

In preparing condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amount of revenue and expenses during the reporting period in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. The Company’s significant estimates include reserves for doubtful accounts, reserves for the lower of cost or market of inventory, reserves for deferred tax assets and recovery value of goodwill.

Earnings Per Share, Policy [Policy Text Block]

Earnings per share:

Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during each period.

Diluted earnings per share is computed by dividing the net income by the weighted average number of shares of common stock and equivalents (stock options and warrants), unless anti-dilutive, during each period.

As of June 30, 2017 and 2016, shares to be issued upon the exercise of options and warrants aggregated 359,817 and 288,048, respectively. The number of anti-dilutive shares (not included in the determination of earnings on a diluted basis) for the three and six months ended June 30, 2017 and 2016 were 153,350 and 0, respectively.

Reclassification, Policy [Policy Text Block]

Reclassification:

Certain 2016 amounts have been reclassified to conform to the 2017 presentation. (See footnote regarding ASU 2015-17.)

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements:

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This guidance amended the existing requirements for disclosing information about an entity’s ability to continue as a going concern, requires management to assess an entity’s ability to continue as a going concern and then to provide related disclosure in certain circumstances. This guidance is effective for annual reporting periods ending after December 2016 and for annual and interim reporting periods thereafter. See Note 2 for management’s assessment of its ability to continue as a going concern.

In 2014, the FASB issued guidance on revenue recognition, which provides for a single five-step model to be applied to all revenue contracts with customers. The guidance also requires additional financial statement disclosures that will enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts. The guidance provides an option to use either a retrospective approach or a cumulative effect adjustment approach to implement the guidance. In 2015, the FASB issued a deferral of the effective date of the guidance to 2018, with early adoption permitted in 2017. In 2016, the FASB issued final amendments clarifying the implementation guidance for principal versus agent considerations, identifying performance obligations and the accounting of intellectual property licenses. In addition, the FASB introduced practical expedients related to disclosures of remaining performance obligations, as well as other amendments to guidance on collectibility, non-cash consideration and the presentation of sales and other similar taxes. We are currently evaluating the impact of this guidance on our financial statements and the timing of adoption, and have not yet selected a transition approach.

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, to eliminate the current requirements to classify deferred income tax assets and liabilities between current and noncurrent. To simplify the presentation of deferred income taxes, the amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. For public business entities, the amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The Company has adopted the standard and the impact to our consolidated financial statements for the period ending June 30, 2017 is a reclassification of $761,000 in deferred tax assets to noncurrent, and a reclassification of $773,000 in deferred tax assets to noncurrent for the period ending December 31, 2016.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), aimed at making leasing activities more transparent and comparable. The new standard requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including today’s operating leases. For public business entities, the standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. When the standard becomes effective, we expect that our property, plant and equipment will increase significantly due to the addition of assets under lease and the lease liabilities will correspondingly increase. There is not expected to be a significant impact on the income statement.

On August 26, 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230), a consensus of the FASB’s Emerging Issues Task Force (“ASU 2016-15”). The new guidance amends Accounting Standards Codification No. 230 (“ASC 230”) to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. ASC 230 lacks consistent principles for evaluating the classification of cash payments and receipts in the statement of cash flows. This has led to diversity in practice and, in certain circumstances, financial statement restatements. Therefore, the FASB issued the ASU 2016-15 with the intent of reducing diversity in practice with respect to eight types of cash flows. ASU 2016-15 is effective for annual and interim periods in fiscal years beginning after December 15, 2017, and is effective for the Company for the year ending December 31, 2018. The Company is currently evaluating the impact that the implementation of this standard will have on the Company’s consolidated financial statements.

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Stock-Based Compensation; Changes in Equity (Tables)

6 Months Ended

Jun. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

A summary of the Company’s stock option activity and related information is as follows:

					Weighted
			Weighted		Average
	Shares		Average		Remaining		Aggregate
	under		Exercise		Contractual		Intrinsic
	Option		Price		Life		Value
Balance at December 31, 2016		143,094	$	5.22		2.9	$	89,494
Granted		-		-		-		-
Cancelled/Expired		-		-		-		-
Exercised		-		-		-		-
Outstanding at June 30, 2017		143,094	$	5.22		1.5	$	65,518
Exercisable at June 30, 2017		113,238	$	5.21		1.0	$	53,748

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

A summary of the Company’s stock warrant activity and related information is as follows:

					Weighted
			Weighted		Average
	Shares		Average		Remaining		Aggregate
	under		Exercise		Contractual		Intrinsic
	Warrant		Price		Life		Value
Balance at December 31, 2016		216,723	$	2.48		4.49	$	817,880
Granted		-		-		-		-
Cancelled		-		-		-		-
Exercised		-		-		-		-
Outstanding at June 30, 2017		216,723	$	2.48		4.00	$	794,072
Exercisable at June 30, 2017		76,675	$	7.00		2.08		-

Schedule Of Share Based Compensation Arrangement By Share Based Payment Award Options Vested Outstanding By Grant Date [Table Text Block]

A summary of the Company’s stock option activity by grant date as of June 30, 2017 is as follows:

	Options Outstanding								Options Vested
			Weighted		Remain.		Intrinsic				Weighted		Remain.
Options by Grant Date	Shares		Avg.		Life		Val		Shares		Avg.		Life		Intrinsic Val
Dec 2005		-		-		-		-		-		-		-		-
Dec 2010		-		-		-		-		-		-		-		-
Jan 2011		-		-		-		-		-		-		-		-
Nov 2012		90,000	$	5.17		0.4	$	45,900		90,000	$	5.17		0.4	$	45,900
Nov 2013		5,000	$	5.75		1.4	$	0		4,000	$	5.75		1.4	$	0
Dec 2015		48,094	$	5.27		3.5	$	19,618		19,238	$	5.27		3.5	$	7,848
TOTAL		143,094	$	5.22		1.5	$	65,518		113,238	$	5.21		1.0	$	53,748

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Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2017

Stockholders' Equity Note [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The following table sets forth the accumulated balance of other comprehensive income and each component.

			Total
			Accumulated Other
	Foreign Currency Items		Comprehensive Income
Beginning balance as of January 1, 2017	$	(5,593,878)	$	(5,593,878)
Current period change, net of tax		753,369		753,369
Ending Balance as of June 30, 2017		(4,840,509)		(4,840,509)

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Inventories, Net (Tables)

6 Months Ended

Jun. 30, 2017

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

	June 30,		December 31,
	2017		2016
Raw materials	$	3,516,267	$	3,310,310
Work in process		2,508,025		1,942,600
Finished goods		13,760,317		13,889,328
Allowance for excess quantities		(837,003)		(794,227)
Total inventories	$	18,947,606	$	18,348,011

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Geographic Segment Data (Tables)

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

The Company has determined that it operates primarily in one business segment that designs, manufactures and distributes film and film related products for use in packaging, storage and novelty balloon products. The Company operates in foreign and domestic regions. Information about the Company's operations by geographic area is as follows:

	Net Sales to Outside Customers				Net Sales to Outside Customers
	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
United States	$	9,478,000	$	11,050,000	$	21,125,000	$	23,135,000
Europe		917,000		618,000		1,864,000		1,166,000
Mexico		1,956,000		1,852,000		3,979,000		3,715,000
United Kingdom		459,000		631,000		1,203,000		1,339,000
	$	12,810,000	$	14,151,000	$	28,171,000	$	29,355,000

	Total Assets at
	June 30,		December 31,
	2017		2016
United States	$	27,180,000	$	33,108,000
Europe		2,910,000		2,418,000
Mexico		8,817,000		7,064,000
United Kingdom		1,013,000		1,324,000
	$	39,920,000	$	43,914,000

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Concentration of Credit Risk (Tables)

6 Months Ended

Jun. 30, 2017

Risks and Uncertainties [Abstract]

Schedules of Concentration of Risk, by Risk Factor [Table Text Block]

Sales to these customers for the three months ended June 30, 2017 and 2016 are as follows:

	Three Months Ended					Three Months Ended
	June 30, 2017					June 30, 2016
			% of Net					% of Net
Customer	Net Sales		Sales			Net Sales		Sales
Customer A	$	3,867,000		30.2	%	$	3,607,000		25.5	%
Customer B	$	1,565,000		12.2	%	$	2,460,000		17.4	%

	Six Months Ended					Six Months Ended
	June 30, 2017					June 30, 2016
			% of Net					% of Net
Customer	Net Sales		Sales			Net Sales		Sales
Customer A	$	8,294,000		29.4	%	$	8,772,000		29.9	%
Customer B	$	4,174,000		14.8	%	$	4,800,000		16.4	%

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Derivative Instruments; Fair Value (Tables)

6 Months Ended

Jun. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following tables represents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value:

	Amount as of
Description	6/30/2017		Level 1		Level 2		Level 3
Warrant Liability	$	794,000		-	$	794,000		-
	$	794,000		-	$	794,000		-

	Amount as of
Description	12/31/2016		Level 1		Level 2		Level 3
Warrant Liability	$	818,000		-	$	818,000		-
	$	818,000			$	818,000

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Basis of Presentation (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares To Be Issued Upon Exercise Of Options And Warrant	359,817	288,048	359,817	288,048
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	153,350	153,350	0	0
Accounting Standards Update 2015-17 [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets	$ 761,000	$ 773,000	$ 761,000	$ 773,000

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Liquidity and Going Concern (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016	Dec. 31, 2015
Net Cash Provided by (Used in) Operating Activities, Continuing Operations, Total			$ 3,202,327	$ (384,616)
Net Income (Loss) Attributable To Parent	$ (526,128)	$ (82,930)	(467,658)	(76,167)
Cash and Cash Equivalents, at Carrying Value	456,426	$ 475,041	456,426	$ 475,041	$ 563,043	$ 346,404
Revolving Credit Facility [Member]
Long-term Line of Credit	9,172,000		9,172,000
Mortgages [Member]
Long-term Debt, Gross	$ 1,664,000		1,664,000
Subordinated Debt [Member]
Proceeds from Issuance of Debt			$ 5,000,000

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Stock-Based Compensation; Changes in Equity (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares Outstanding at the end of period (in shares)	143,094
Shares, Exercisable (in shares)	113,238
Weighted Average Exercise Price, Outstanding at the end of period (in dollars per share)	$ 5.22
Weighted Average Exercise Price, Exercisable (in dollars per share)	$ 5.21
Weighted Average Remaining Contractual Life, Outstanding (in years)	1 year 6 months
Weighted Average Remaining Contractual Life, Exercisable (in years)	1 year
Aggregate Intrinsic Value Outstanding (in dollars)	$ 65,518
Aggregate Intrinsic Value, Exercisable (in dollars)	$ 53,748
Employee Stock Option [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares Outstanding, beginning of period (in shares)	143,094
Shares, Granted (in shares)	0
Shares, Cancelled (in shares)	0
Shares, Exercised (in shares)	0
Shares Outstanding at the end of period (in shares)	143,094	143,094
Shares, Exercisable (in shares)	113,238
Weighted Average Exercise Price, Outstanding, beginning of period (in dollars per share)	$ 5.22
Weighted Average Exercise Price, Granted (in dollars per share)	0
Weighted Average Exercise Price, Cancelled (in dollars per share)	0
Weighted Average Exercise Price, Exercised (in dollars per share)	0
Weighted Average Exercise Price, Outstanding at the end of period (in dollars per share)	5.22	$ 5.22
Weighted Average Exercise Price, Exercisable (in dollars per share)	$ 5.21
Weighted Average Remaining Contractual Life, Outstanding (in years)	1 year 6 months	2 years 10 months 24 days
Weighted Average Remaining Contractual Life, Exercisable (in years)	1 year
Aggregate Intrinsic Value Outstanding (in dollars)	$ 65,518	$ 89,494
Aggregate Intrinsic Value, Exercisable (in dollars)	$ 53,748

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Stock-Based Compensation; Changes in Equity (Details 1) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares Outstanding at the end of period (in shares)	143,094
Shares, Exercisable (in shares)	113,238
Weighted Average Exercise Price, Outstanding at the end of period (in dollars per share)	$ 5.22
Weighted Average Exercise Price, Exercisable (in dollars per share)	$ 5.21
Weighted Average Remaining Contractual Life, Outstanding (in years)	1 year 6 months
Weighted Average Remaining Contractual Life, Exercisable (in years)	1 year
Aggregate Intrinsic Value Outstanding (in dollars)	$ 65,518
Aggregate Intrinsic Value, Exercisable (in dollars)	$ 53,748
Warrant [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares Outstanding, beginning of period (in shares)	216,723
Shares, Cancelled (in shares)	0
Shares, Exercised (in shares)	0
Shares Outstanding at the end of period (in shares)	216,723	216,723
Shares, Exercisable (in shares)	76,675
Weighted Average Exercise Price, Outstanding, beginning of period (in dollars per share)	$ 2.48
Weighted Average Exercise Price, Cancelled (in dollars per share)	0
Weighted Average Exercise Price, Exercised (in dollars per share)	0
Weighted Average Exercise Price, Outstanding at the end of period (in dollars per share)	2.48	$ 2.48
Weighted Average Exercise Price, Exercisable (in dollars per share)	$ 7
Weighted Average Remaining Contractual Life, Outstanding (in years)	4 years	4 years 5 months 26 days
Weighted Average Remaining Contractual Life, Exercisable (in years)	2 years 29 days
Aggregate Intrinsic Value Outstanding (in dollars)	$ 794,072	$ 817,880
Aggregate Intrinsic Value, Exercisable (in dollars)	$ 0

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Stock-Based Compensation; Changes in Equity (Details 2)	6 Months Ended
	Jun. 30, 2017 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Options Outstanding (in shares) | shares	143,094
Weighted Average, Options Outstanding (in dollars per share) | $ / shares	$ 5.22
Remaining Life, Options Outstanding	1 year 6 months
Intrinsic Value, Options Outstanding (in dollars) | $	$ 65,518
Shares, Options Vested (in shares) | shares	113,238
Weighted Average, Options Vested (in dollars per share) | $ / shares	$ 5.21
Remaining Life, Option Vested	1 year
Intrinsic Value, Options Vested (in dollars) | $	$ 53,748
Stock Options By Grant Date Dec 2005 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Options Outstanding (in shares) | shares	0
Weighted Average, Options Outstanding (in dollars per share) | $ / shares	$ 0
Remaining Life, Options Outstanding	0 years
Intrinsic Value, Options Outstanding (in dollars) | $	$ 0
Shares, Options Vested (in shares) | shares	0
Weighted Average, Options Vested (in dollars per share) | $ / shares	$ 0
Remaining Life, Option Vested	0 years
Intrinsic Value, Options Vested (in dollars) | $	$ 0
Stock Options By Grant Date Dec 2010 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Options Outstanding (in shares) | shares	0
Weighted Average, Options Outstanding (in dollars per share) | $ / shares	$ 0
Remaining Life, Options Outstanding	0 years
Intrinsic Value, Options Outstanding (in dollars) | $	$ 0
Shares, Options Vested (in shares) | shares	0
Weighted Average, Options Vested (in dollars per share) | $ / shares	$ 0
Remaining Life, Option Vested	0 years
Intrinsic Value, Options Vested (in dollars) | $	$ 0
Stock Options By Grant Date Jan 2011 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Options Outstanding (in shares) | shares	0
Weighted Average, Options Outstanding (in dollars per share) | $ / shares	$ 0
Remaining Life, Options Outstanding	0 years
Intrinsic Value, Options Outstanding (in dollars) | $	$ 0
Shares, Options Vested (in shares) | shares	0
Weighted Average, Options Vested (in dollars per share) | $ / shares	$ 0
Remaining Life, Option Vested	0 years
Intrinsic Value, Options Vested (in dollars) | $	$ 0
Stock Options By Grant Date Nov 2012 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Options Outstanding (in shares) | shares	90,000
Weighted Average, Options Outstanding (in dollars per share) | $ / shares	$ 5.17
Remaining Life, Options Outstanding	4 months 24 days
Intrinsic Value, Options Outstanding (in dollars) | $	$ 45,900
Shares, Options Vested (in shares) | shares	90,000
Weighted Average, Options Vested (in dollars per share) | $ / shares	$ 5.17
Remaining Life, Option Vested	4 months 24 days
Intrinsic Value, Options Vested (in dollars) | $	$ 45,900
Stock Options By Grant Date Nov 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Options Outstanding (in shares) | shares	5,000
Weighted Average, Options Outstanding (in dollars per share) | $ / shares	$ 5.75
Remaining Life, Options Outstanding	1 year 4 months 24 days
Intrinsic Value, Options Outstanding (in dollars) | $	$ 0
Shares, Options Vested (in shares) | shares	4,000
Weighted Average, Options Vested (in dollars per share) | $ / shares	$ 5.75
Remaining Life, Option Vested	1 year 4 months 24 days
Intrinsic Value, Options Vested (in dollars) | $	$ 0
Stock Options By Grant Date Dec 2015 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Options Outstanding (in shares) | shares	48,094
Weighted Average, Options Outstanding (in dollars per share) | $ / shares	$ 5.27
Remaining Life, Options Outstanding	3 years 6 months
Intrinsic Value, Options Outstanding (in dollars) | $	$ 19,618
Shares, Options Vested (in shares) | shares	19,238
Weighted Average, Options Vested (in dollars per share) | $ / shares	$ 5.27
Remaining Life, Option Vested	3 years 6 months
Intrinsic Value, Options Vested (in dollars) | $	$ 7,848

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Stock-Based Compensation; Changes in Equity (Details Textual) - USD ($)	1 Months Ended		3 Months Ended		6 Months Ended
	Jul. 29, 2016	Jul. 17, 2012	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Apr. 10, 2009
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate					0.00%
Share-Based Compensation					$ 0	$ 23,334
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized			$ 16,000		$ 16,000
Diluted			3,771,581	3,535,075	3,772,236	3,519,906
Earnings Per Share, Diluted			$ (0.14)	$ (0.02)	$ (0.12)	$ (0.02)
Stock Issued During Period, Shares, New Issues	152,850
Shares Issued, Price Per Share	$ 6.00
Class of Warrant or Right, Exercise Price of Warrants or Rights	7.00
Warrant [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 7.00
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	76,675
BMO Equity [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Related Party Transaction, Due from (to) Related Party		$ 5,000,000
Warrants Issued To Purchase Common Stock Percentage		4.00%
Debt Instrument, Interest Rate, Stated Percentage		11.50%
Diluted		140,048
Earnings Per Share, Diluted		$ 0.01
Stock Incentive Plan 2009 [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized							250,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross					250,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number			143,094		143,094
Year 2017 [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share-Based Compensation					$ 5,000
Year 2018 [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share-Based Compensation					7,000
Year 2019 [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share-Based Compensation					3,000
Year 2020 [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share-Based Compensation					$ 1,000

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Other Comprehensive Income (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Foreign Currency Items, Beginning balance			$ (5,593,878)
Foreign Currency Items, Current period change	$ 442,057	$ (536,409)	753,369	$ (604,011)
Foreign Currency Items, Ending Balance	(4,840,509)		(4,840,509)
Total Accumulated Other Comprehensive Income, Beginning balance			(5,593,878)
Total Accumulated Other Comprehensive Income, Current period change			753,369
Total Accumulated Other Comprehensive Income, Ending Balance	$ (4,840,509)		$ (4,840,509)

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Other Comprehensive Income (Details Textual) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax	$ 442,000	$ 753,000

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Inventories, Net (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Inventory [Line Items]
Raw materials	$ 3,516,267	$ 3,310,310
Work in process	2,508,025	1,942,600
Finished goods	13,760,317	13,889,328
Allowance for excess quantities	(837,003)	(794,227)
Total inventories	$ 18,947,606	$ 18,348,011

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Geographic Segment Data (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Segment Reporting Information [Line Items]
Net Sales	$ 12,811,697	$ 14,150,504	$ 28,171,335	$ 29,355,498
Total Assets at	39,919,538		39,919,538		$ 43,913,739
United States [Member]
Segment Reporting Information [Line Items]
Net Sales	9,478,000	11,050,000	21,125,000	23,135,000
Total Assets at	27,180,000		27,180,000		33,108,000
United Kingdom [Member]
Segment Reporting Information [Line Items]
Net Sales	459,000	631,000	1,203,000	1,339,000
Total Assets at	1,013,000		1,013,000		1,324,000
Europe [Member]
Segment Reporting Information [Line Items]
Net Sales	917,000	618,000	1,864,000	1,166,000
Total Assets at	2,910,000		2,910,000		2,418,000
Mexico [Member]
Segment Reporting Information [Line Items]
Net Sales	1,956,000	$ 1,852,000	3,979,000	$ 3,715,000
Total Assets at	$ 8,817,000		$ 8,817,000		$ 7,064,000

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Concentration of Credit Risk (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net Sales	$ 12,811,697	$ 14,150,504	$ 28,171,335	$ 29,355,498
Customer A [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net Sales	$ 3,867,000	$ 3,607,000	$ 8,294,000	$ 8,772,000
Percentage of Net Sales	30.20%	25.50%	29.40%	29.90%
Customer B [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net Sales	$ 1,565,000	$ 2,460,000	$ 4,174,000	$ 4,800,000
Percentage of Net Sales	12.20%	17.40%	14.80%	16.40%

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Concentration of Credit Risk (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accounts Receivable, Net, Current	$ 10,020,280		$ 10,020,280		$ 14,838,978
Customer A [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Concentration Risk, Percentage	30.20%	25.50%	29.40%	29.90%
Customer A [Member] | Accounts Receivable [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Concentration Risk, Percentage			21.20%	20.20%
Accounts Receivable, Net, Current	$ 2,104,000	$ 2,018,000	$ 2,104,000	$ 2,018,000
Customer B [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Concentration Risk, Percentage	12.20%	17.40%	14.80%	16.40%
Customer B [Member] | Accounts Receivable [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Concentration Risk, Percentage			16.20%	21.20%
Accounts Receivable, Net, Current	$ 1,606,000	$ 2,112,000	$ 1,606,000	$ 2,112,000
Two Customers [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Concentration Risk, Percentage	10.00%	10.00%

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Related Party Transactions (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Related Party Transaction [Line Items]
Legal Fees	$ 38,000	$ 33,000	$ 64,000	$ 71,000
Noncontrolling Interest, Ownership Percentage by Parent	50.00%		50.00%
John H Schwan [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Amounts of Transaction	$ 33,000	$ 302,017	$ 49,000	$ 46,000
Clever Container Company L.L.C [Member]
Related Party Transaction [Line Items]
Noncontrolling Interest, Ownership Percentage by Parent	28.50%	28.50%	28.50%	28.50%
Revenue from Related Parties	$ 33,000	$ 302,017	$ 71,000	$ 46,000
Accounts Receivable, Related Parties, Current	$ 831,000	$ 397,000	$ 831,000	$ 397,000

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Derivative Instruments; Fair Value (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Warrant Liability	$ 794,000	$ 818,000
Liabilities, Fair Value Disclosure	794,000	818,000
Fair Value, Inputs, Level 1 [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Warrant Liability	0	0
Liabilities, Fair Value Disclosure	0
Fair Value, Inputs, Level 2 [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Warrant Liability	794,000	818,000
Liabilities, Fair Value Disclosure	794,000	818,000
Fair Value, Inputs, Level 3 [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Warrant Liability	0	0
Liabilities, Fair Value Disclosure	$ 0