8-K

                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   ----------

                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

         Date of Report (Date of Earliest Event Reported): July 1, 2004

                           CTI INDUSTRIES CORPORATION
             (Exact Name of Registrant as Specified in its Charter)

Illinois                  0-23115                            36-2848943
(State or Other           (Commission File Number)           (IRS Employer
Jurisdiction                                                 Identification No.)
Incorporation)

     22160 North Pepper Road, Barrington, IL                        60010
     (Address of Principal Executive Offices)                       (Zip Code)

                                 (847) 382-1000
              (Registrant's Telephone Number, including Area Code)



Item No. 5 - Other Events

      On July 7, 2004, CTI Industries Corporation issued a press release
announcing that on July 1, 2004, it had entered into a Standby Equity
Distribution Agreement ("SEDA") with US-based investment fund Cornell Capital
Partners LP ("Cornell") of $5 million.

      Under the SEDA, Cornell has committed to provide up to $5 million of
funding to the Registrant over a 24 month period, to be drawn down at the
Registrant's discretion by the purchase of the Registrant's common stock. The
purchase price of the shares purchased under the SEDA with respect to any
advance will be equal to 100% of the volume weighted average price of the
Registrant's common stock on the NASDAQ SmallCap Stock Market for the five days
immediately following the notice date for the advance, subject to payment to
Cornell of a commitment fee of 5% of the amount of each advance. The Registrant
may request up to $100,000 in any seven-day period (and up to $400,000 in any 30
day period) in exchange for issuing to Cornell shares of its common stock. The
facility may be used in whole or in part entirely at the Registrant's
discretion, subject to an effective registration. The Registrant intends the
SEDA to accomplish a twofold goal of increasing both the Registrant's access to
cash for general and special corporate purposes, and shareholder liquidity.

      In connection with the SEDA, the Registrant has committed to registering
approximately 1,540,000 shares of its common stock. The shares to be registered
include 1,500,000 shares of common stock to be issuable to Cornell from time to
time under the SEDA, as well as shares to be issued to Cornell for its
commitment and to the placement agent for its services.

      The matters discussed in this 8-K may include forward looking statements,
which are subject to various risks, uncertainties and other factors that could
cause actual results to differ materially from the results anticipated in such
forward looking statements. Such risks, uncertainties and other factors include
but are not limited to the governmental, economic, technological and competitive
risks detailed in the Registrant's reports on Forms 10-K/A Amendment No. 1 and
10-Q filed with the Securities and Exchange Commission. The forward-looking
statements are intended to help shareholders and others assess the Registrant's
business prospects and should be considered together with all information
available. They are made in reliance upon the safe harbor provisions of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended.


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Item No. 7 - Exhibit

      (c) The following exhibit is attached hereto:

      Exhibit No.             Exhibit
      -----------             -------

      99                      Press Release dated July 7, 2004, captioned: "CTI
                              Industries Reports Entering $5 Million Standby
                              Equity Distribution Agreement with Cornell Capital
                              Partners, L.P."


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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 hereunto duly authorized.

                                            CTI Industries Corporation
                                            (Registrant)


Date: July 7, 2004                      By: /s/ Howard W. Schwan
                                            ---------------------------------
                                            Howard W. Schwan, President


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EX-99

                                   EXHIBIT 99

NEWS RELEASE

FOR FURTHER INFORMATION CONTACT:

Stephen M. Merrick                  Thornhill Capital
Executive Vice President            Investor Relations
(847) 382-1000                      (239) 823-1151

                   CTI Industries Reports Entering $5 Million
                   Standby Equity Distribution Agreement with
                         Cornell Capital Partners, L.P.

FOR IMMEDIATE RELEASE
Wednesday, July 7, 2004

BARRINGTON, IL, July 7, 2004 - CTI Industries Corporation (NASDAQ Small
Cap-CTIB), a manufacturer and marketer of metalized balloons, latex balloons,
novelty items and printed and laminated films (the "Company") today announced
that effective July 1, 2004, it had entered into a Standby Equity Distribution
Agreement ("SEDA") with US-based investment fund Cornell Capital Partners LP
("Cornell") of $5 million.

Under the SEDA, Cornell has committed to provide up to $5 million of funding to
the Company over a 24 month period, to be drawn down at the Company's discretion
by the sale of the Company's common stock to Cornell. The purchase price of the
shares purchased under the SEDA with respect to any advance will be equal to
100% of the volume weighted average price of the Company's common stock on the
NASDAQ SmallCap Stock Market for the five days immediately following the notice
date for the advance, subject to payment to Cornell of a commitment fee of 5% of
the amount of each advance. The Company may request up to $100,000 in any
seven-day period (up to $400,000 in any 30 day period) in exchange for issuing
to Cornell shares of its common stock. The facility may be used in whole or in
part entirely at the Company's discretion, subject to an effective registration.

In connection with the SEDA, the Registrant has committed to registering
approximately 1,540,000 shares of its common stock. The shares to be registered
include 1,500,000 shares of common stock to be issuable to Cornell from time to
time under the SEDA, as well as shares to be issued to Cornell for its
commitment and to the placement agent for its services.

"We are very pleased with our arrangement with Cornell," said Stephen M.
Merrick, Executive Vice-President of the Company. "The Standby Equity
Distribution Agreement will address two important areas for us -- providing a
ready source of cash for general


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and special corporate purposes and increasing the liquidity of the market for
our common stock, which should be a benefit for our shareholders," he said.

This press release may contain forward-looking statements within the meaning of
Section 17A of the Securities Act and Section 21E of the Securities Exchange
Act. Actual results could differ materially from those projected in the
forward-looking statements, which involve a number of risks and uncertainties,
including (i) the risks of generating and maintaining sales in a highly
competitive market, (ii) the ability of the Company to enter into or maintain
contracts or relationships with customers, distributors, licensors and
suppliers, (iii) manufacturing risks, as well as other risks and uncertainties
reported by the Company in its SEC filings, and such statements should also be
considered in conjunction with cautionary statements contained in the Company's
most recent filing with the Securities and Exchange Commission on Form 10-K/A,
Amendment No. 1.


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