Item 1.01 Entry into a Material Definitive Agreement.
The disclosures set forth below in the second paragraph of Item 5.02 are
incorporated into this Item 1.01 by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Appointment of Chief Executive Officer
On January 11, 2022, the Board of Directors (the "Board") of Yunhong CTI Ltd.
(the "Company"), announced the appointment of Frank Cesario, 52, as Chief
Executive Officer, effective January 1, 2022. Mr. Cesario has served on the
Board from December 2019 until September 2020, and again from March 2021 through
present, and is a member of the Audit Committee. He most recently served as
Chief Financial Officer of Radiac Abrasives, Inc., a leading manufacturer of
high-performance products for the automotive, bearing, aviation, cutting tools
and primary metals industries. Previously, Mr. Cesario served as the Company's
President and Chief Executive Officer (from January 2020 to September 2020) and
Chief Financial Officer (from November 2017 until June 2020). Mr. Cesario brings
20 years of CEO, CFO, director, and controller experience at manufacturing
entities. Prior to his earlier tenure with the Company, Mr. Cesario served in
such roles with Nanophase Technologies Corporation and ISCO International, Inc.,
publicly-traded global suppliers of advanced materials and telecommunications
equipment, respectively, as well as Turf Ventures LLC, a privately-held
chemicals distributor. He began his career with KPMG Peat Marwick and then
served in progressively responsible finance positions within Material Sciences
Corporation and Outokumpu Copper, Inc. Mr. Cesario holds an MBA (Finance) from
DePaul University and a B.S. (Accountancy) from the University of Illinois, and
is a registered CPA in the State of Illinois. There are no family relationships
between Mr Cesario and any other director or executive officer of the Company.
There are no related party transactions involving Mr. Cesario that are
reportable under Item 404(a) of Regulation S-K.
Mr. Cesario entered into an employment agreement with the Company, effective
January 1, 2022, which includes a base salary of $250,000 per year. Mr. Cesario
received an inducement grant of stock in the amount of 250,000 shares, 25,000 of
which vested immediately, with the remaining shares scheduled to vest based upon
the achievement of certain goals and objectives as set forth in the agreement.
Mr. Cesario is eligible to receive a performance-based bonus of $300,000. In the
event that Mr. Cesario is terminated without cause, he is eligible to receive
twelve (12) months of salary in accordance with the agreement. A copy of the
agreement is attached hereto as Exhibit 10.1.
Departure of Chief Financial Officer and Appointment of Acting Chief Financial
Officer
On January 4, 2022, the Board received notice of the resignation of Jennifer
Connerty as Chief Financial Officer, effective January 7, 2022. The Board
expressed its appreciation for her years of service to the Company. On January
7, 2022, the Board appointed Mr. Cesario as Acting Chief Financial Officer.
Departure of Directors
On January 4, 2022, the Board received notice that John Klimek, Wan Zhang and
Yaping Zhang would resign from the Board, effective January 10, 2022. In each
case, the director's decision to resign was not the result of any disagreement
with the Company, the Board, or management, with respect to any matter relating
to the Company's operations, policies or practices. The Board expressed its
appreciation for their years of service to the Company. Prior to the
effectiveness of the resignations of Messrs. Klimek, Zhang and Zhang, the Board
unanimously approved the appointment of three new directors as set forth below.
Appointment of Directors
The Board has appointed three new directors to serve on the Board, effective
January 10, 2022, to fill the vacancies created by the resignations of Messrs.
Klimek, Zhang and Zhang, each to serve as a director until the next meeting of
shareholders at which directors are to be elected:
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Douglas Bosley, 54, is a founding partner of Witan Law Group and a member of the
firm's Corporate Transactional and Securities practice. Mr. Bosley represents
businesses and entrepreneurs at all stages of growth from inception to exit. Mr.
Bosley's practice focuses on three general areas of financing transactions,
mergers and acquisitions and general corporate matters. Mr. Bosley's financing
experience includes representing venture capital firms and venture-backed
companies, mezzanine debt transactions, and a wide range of other types of
financing and securities transactions, as well as general corporate matters
including formation and start-ups; equity compensation; contracts such as
licensing, joint ventures, representative agreements, and development and
service level agreements; and corporate governance matters. Before founding
Witan Law, Mr. Bosley was a partner at Bosley Till Neue & Talerico (BTNT), a law
firm, where he headed the transactional and securities practices. Prior to BTNT,
Mr. Bosley operated Bosley Business Law, which he founded after more than a
decade of sophisticated corporate and securities transactional experience at
some of the world's largest and most reputable corporate law firms. Mr. Bosley
also served as general counsel of a Sacramento-based venture capital and
professional services firm. He is a frequent speaker on legal issues related to
start-ups, mergers and acquisitions and venture capital transactions. Mr. Bosley
is a graduate of the Duke University School of Law, graduating with high honors
and earning Order of the Coif. He received his B.A. in Economics from California
State University, Sacramento.
Gerald (J.D.) Roberts, Jr., 62, is Vice President of Strategy and Business
Development at Centene Corporation, having served in that capacity since 2018.
In the previous 20 years, he held several senior roles at Aerojet Rocketdyne
Holdings, Inc. and GenCorp/Aerojet. His career began in the aerospace and
electronics industries in the United States and Australia, where he worked with
companies including E-Systems, McDonnell Douglas, Northrop-Grumman, Gulfstream,
Learjet and Hawker de Havilland. Mr. Roberts combined his credentials in
engineering, finance and operations and his significant experience in strategic
planning, organizational restructuring, and mergers, acquisitions, and
divestitures to build value in international business opportunities. Mr.
Roberts holds a Six Sigma greenbelt certification and has completed
post-graduate coursework in Mergers and Acquisitions, leadership, strategic
alliances, negotiation, innovation, and financial analysis. He received his MBA
(Finance) from the University of California, Davis, and his B.S. in Mechanical
Engineering from Virginia Tech..
Philip Wong, 43, is CEO of Shark AI Capital Corporation, an innovative business
lending firm which he co-founded in 2020. Previously, he served as Chief
Investment Officer of American Credit, Inc., as a Commercial Loan Officer at
Applepie Capital, Inc., as Vice President / Senior Relationship Manager at Bank
of the West / BNP Paribas, and as First Vice President / Senior Relationship
Manager at Preferred Bank, among other roles in banking in business credit. Mr.
Wong and has completed certifications in agile software development, software
products management, healthcare analytics, and product management and marketing.
He received his B.A. in Asian Studies from San Francisco State University.
Each of the new directors will serve on the Audit Committee, the Compensation
Committee and the Nominating and Governance Committee of the Board.
None of the new directors has any direct or indirect material interest in any
transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K,
has any arrangement or understanding with any other person required to be
disclosed pursuant to Item 401(a) of Regulation S-K, or has any family
relationships required to be disclosed pursuant to Item 401(d) of Regulation
S-K.
Item 8.01 Other Events
On January 11, 2022, the Company issued a press release announcing the officer
and director appointments set forth above. A copy of the press release is
included as Exhibit 99.1 to this report.
Item 9.01 Financial Statements And Exhibits.
(d) Exhibits
The exhibit listed below is filed as an Exhibit to this Current Report on Form
8-K.
Exhibit No. Description
10.1 Employment Agreement (Offer Letter), dated as of December 31,
2021
99.1 Press Release, dated January 11, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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