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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">UNITED STATES</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SECURITIES AND EXCHANGE COMMISSION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Washington, D.C. 20549</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934</P>

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    <TD STYLE="width: 35%; font-size: 10pt">Date of Report (Date of earliest event reported):</TD>
    <TD STYLE="width: 53%; font-size: 10pt; border-bottom: Black 1pt solid">July 17, 2012</TD>
    <TD STYLE="width: 12%">&nbsp;</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="width: 100%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: none; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-weight: normal; text-underline-style: none">CTI INDUSTRIES CORPORATION</FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">(Exact name of registrant as specified in its charter)</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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    <TD STYLE="width: 34%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: none; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-weight: normal"><U STYLE="text-decoration: none">Illinois</U></FONT></TD>
    <TD STYLE="width: 33%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-weight: normal"><U STYLE="text-decoration: none">0-23115</U></FONT></TD>
    <TD STYLE="width: 33%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: none; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-weight: normal"><U STYLE="text-decoration: none">36-2848943</U></FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">(State or other jurisdiction</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">(Commission</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">(IRS Employer</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">of incorporation)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">File Number)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Identification No.)</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">22160 North Pepper Road, Lake Barrington, IL</TD>
    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">60010</TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom">(Address of principal executive offices)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom">(Zip Code)</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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    <TD STYLE="width: 35%; font-size: 10pt">Registrant's telephone number, including area code</TD>
    <TD STYLE="width: 65%; font-size: 10pt; border-bottom: Black 1pt solid">(847) 382-1000</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="width: 100%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-decoration: none; text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">N/A</TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">(Former name or former address, if changed since last report.)</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Check the appropriate box below if the Form 8-K is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Wingdings">&#168;</FONT></TD><TD STYLE="text-align: justify">Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)</TD>
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<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Wingdings">&#168;</FONT></TD><TD STYLE="text-align: justify">Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17CFR 240.14a-12)</TD>
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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Wingdings">&#168;</FONT></TD><TD STYLE="text-align: justify">Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))</TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Wingdings">&#168;</FONT></TD><TD STYLE="text-align: justify">Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))</TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Item No. 1.01 &ndash; Entry in to a Material Definitive Agreement</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On July 17, 2012, Registrant entered into
Amendment Number 3 to the Credit Agreement between Registrant and BMO Harris Bank N.A. (&ldquo;BMO Harris&rdquo;) 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 Registrant and BMO Private Equity (U.S.), Inc. (&ldquo;BMO Equity&rdquo;) and (iii) the
term of credit and loans to Registrant provided in the Credit Agreement and BMO Harris was extended to July 17, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Also, on July 17, 2012, Registrant entered
into a Note and Warrant Purchase Agreement with BMO Equity pursuant to which (i) BMO Equity advanced to Registrant the sum of $5
million and (ii) Registrant issued to BMO Equity a warrant to purchase up to Four Percent (4%) of the outstanding shares of common
stock of Registrant on a fully-diluted basis (140,048 shares of common stock of Registrant) at the price of One Cent ($0.01) per
share. The term of the loan provided for in the Agreement is five years. Interest is payable on the outstanding balance of the
loan at the rate of 11.5% per annum.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Note and Warrant Purchase Agreement
includes provisions for:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in; text-align: left">(i)</TD><TD STYLE="text-align: justify">a closing fee of $100,000</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

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<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in; text-align: left">(ii)</TD><TD STYLE="text-align: justify">payment of the principal amount in five years with optional
prepayment subject to certain prepayment premiums;</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in; text-align: left">(iii)</TD><TD STYLE="text-align: justify">security for the note obligations in all assets of Registrant
junior to the security interest of BMO Harris;</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in; text-align: left">(iv)</TD><TD STYLE="text-align: justify">various representations and warranties and covenants of
Registrant;</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

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<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in; text-align: left">(v)</TD><TD STYLE="text-align: justify">financial covenants including an applicable senior leverage
ratio, fixed charge coverage ratio and tangible net worth amount.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">A press release concerning the foregoing
transaction is attached hereto as Exhibit 99.1.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Item No. 3.02 &ndash; Unregistered Sales of Equity Securities</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In connection with and pursuant to the Note
and Warrant Purchase Agreement, on July 17, 2012, Registrant issued to BMO Equity a warrant to purchase up to 140,048 shares of
the common stock of Registrant at the price of One Cent ($0.01) per share. The warrant is for a ten year term. The warrant may
be exercised at any time during its term, in whole or in part. The number of shares subject to the warrant is subject to adjustment
if Registrant issues stock below market price. The Warrant Agreement includes (i) the right of BMO Equity to one demand registration
of the shares subject to the warrant, (ii) the right to participate in any registration of shares by Registrant, (iii) the right
of BMO Equity to require Registrant to repurchase the warrants at market value within 18 months of payment or maturity of the Note
or a default by Registrant under the Note and Warrant Purchase Agreement, Note or Warrant and (iv) the right of BMO Equity to participate
in a sale of a majority interest in Registrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The sale of the securities to BMO Equity
is exempt from registration pursuant to Section 4(1) of the Securities Act of 1933 as a transaction not involving a public offering.
The purchaser of the securities is accredited within the meaning of the Act and regulations, purchased the securities for investment
and not with a view to re-sale or distribution thereof and the securities include a restriction that they may not be sold or transferred
in the absence of registration or an exemption therefrom.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Item No. 9.01 &ndash; Exhibit</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following exhibit is attached hereto:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
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    <TD STYLE="width: 15%; border-bottom: Black 1pt solid; text-decoration: none">Exhibit No.</TD>
    <TD STYLE="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 82%; border-bottom: Black 1pt solid; text-decoration: none">Exhibit</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>99.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD>Press Release Dated July 17, 2012</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid">CTI Industries Corporation</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 35%">(Registrant)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 12%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date:&nbsp;&nbsp; July 17, 2012</TD>
    <TD>By:</TD>
    <TD STYLE="text-decoration: none; border-bottom: Black 1pt solid">/s/ Stephen M. Merrick</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Stephen M. Merrick</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Executive Vice President</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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[{"type": "8-K", "sequence": "1", "filename": "v318690_8k.htm", "description": "FORM 8-K", "secsgml_size_bytes": 23481}]
{"company-data": {"conformed-name": "CTI INDUSTRIES CORP", "cik": "0001042187", "assigned-sic": "3060", "irs-number": "362848943", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-23115", "film-number": "12966051"}, "business-address": {"street1": "22160 N PEPPER RD", "city": "BARRINGTON", "state": "IL", "zip": "60010"}, "mail-address": {"street1": "22160 N PEPPER RD", "city": "BARRINGTON", "state": "IL", "zip": "60010"}}
UNITED STATES
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 17, 2012
CTI INDUSTRIES CORPORATION
(Exact name of registrant as specified in its charter)
Illinois
0-23115
36-2848943
(State or other jurisdiction
(Commission
(IRS Employer
of incorporation)
File Number)
Identification No.)
22160 North Pepper Road, Lake Barrington, IL
60010
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code
(847) 382-1000
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Item No. 1.01 – Entry in to a Material Definitive Agreement
On July 17, 2012, Registrant entered into
Amendment Number 3 to the Credit Agreement between Registrant and BMO Harris Bank N.A. ("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 Registrant and BMO Private Equity (U.S.), Inc. ("BMO Equity") and (iii) the
term of credit and loans to Registrant provided in the Credit Agreement and BMO Harris was extended to July 17, 2017.
Also, on July 17, 2012, Registrant entered
into a Note and Warrant Purchase Agreement with BMO Equity pursuant to which (i) BMO Equity advanced to Registrant the sum of $5
million and (ii) Registrant issued to BMO Equity a warrant to purchase up to Four Percent (4%) of the outstanding shares of common
stock of Registrant on a fully-diluted basis (140,048 shares of common stock of Registrant) at the price of One Cent ($0.01) per
share. The term of the loan provided for in the Agreement is five years. Interest is payable on the outstanding balance of the
loan at the rate of 11.5% per annum.
The Note and Warrant Purchase Agreement
includes provisions for:
(i)
a closing fee of $100,000
(ii)
payment of the principal amount in five years with optional
prepayment subject to certain prepayment premiums;
(iii)
security for the note obligations in all assets of Registrant
junior to the security interest of BMO Harris;
(iv)
various representations and warranties and covenants of
Registrant;
(v)
financial covenants including an applicable senior leverage
ratio, fixed charge coverage ratio and tangible net worth amount.
A press release concerning the foregoing
transaction is attached hereto as Exhibit 99.1.
2
Item No. 3.02 – Unregistered Sales of Equity Securities
In connection with and pursuant to the Note
and Warrant Purchase Agreement, on July 17, 2012, Registrant issued to BMO Equity a warrant to purchase up to 140,048 shares of
the common stock of Registrant at the price of One Cent ($0.01) per share. The warrant is for a ten year term. The warrant may
be exercised at any time during its term, in whole or in part. The number of shares subject to the warrant is subject to adjustment
if Registrant issues stock below market price. The Warrant Agreement includes (i) the right of BMO Equity to one demand registration
of the shares subject to the warrant, (ii) the right to participate in any registration of shares by Registrant, (iii) the right
of BMO Equity to require Registrant to repurchase the warrants at market value within 18 months of payment or maturity of the Note
or a default by Registrant under the Note and Warrant Purchase Agreement, Note or Warrant and (iv) the right of BMO Equity to participate
in a sale of a majority interest in Registrant.
The sale of the securities to BMO Equity
is exempt from registration pursuant to Section 4(1) of the Securities Act of 1933 as a transaction not involving a public offering.
The purchaser of the securities is accredited within the meaning of the Act and regulations, purchased the securities for investment
and not with a view to re-sale or distribution thereof and the securities include a restriction that they may not be sold or transferred
in the absence of registration or an exemption therefrom.
Item No. 9.01 – Exhibit
The following exhibit is attached hereto:
Exhibit No.
Exhibit
99.1
Press Release Dated July 17, 2012
3
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 17, 2012
By:
/s/ Stephen M. Merrick
Stephen M. Merrick
Executive Vice President
4