SC 13D 1 v046171.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 CTI INDUSTRIES CORPORATION -------------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK, NO PAR VALUE -------------------------------------------------------------------------------- (Title of Class of Securities) 125961 30 0 -------------------------------------------------------------------------------- (CUSIP Number) Stephen M. Merrick, Executive Vice-President 22160 N. Pepper Road, Barrington, Illinois 60010 (847) 382-1000 -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 12, 2006 -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Section 13D, and is filing this schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g) check the following box . Note: Schedules filed in paper format shall include a signed original and five copies of the Schedule, including all exhibits. See ss. 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosure provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 713398105 13D -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY). Stephen M. Merrick -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) |_| (b) |_| -------------------------------------------------------------------------------- 3 SEC USE ONLY PF -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 698,123 Shares of Common Stock ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY None OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON 698,123 Shares of Common Stock WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER None -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 698,123 Shares of Common Stock -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 30.6% of the issued and outstanding Common Stock -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN -------------------------------------------------------------------------------- *SEE INSTRUCTIONS 2 CUSIP No. 713398105 13D SCHEDULE 13D ITEM 1. Security and Issuer. Common Stock CTI Industries Corporation 22160 North Pepper Road Barrington, Illinois 60010 ITEM 2. Identity and Background. (a) Name: Stephen M. Merrick (b) Business Address: CTI Industries Corporation 22160 North Pepper Road Barrington, Illinois 60010 (c) Occupation: Executive Vice-President and Secretary of CTI Industries Corporation CTI Industries Corporation 22160 North Pepper Road Barrington, Illinois 60010 (d) Mr. Merrick, during the last five years, has not been convicted in a criminal proceeding. (e) Mr. Merrick, during the last five years was not a party to a civil proceeding of a judicial or administrative body of competent jurisdiction which as a result of such proceeding was subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Citizenship: United States 3 CUSIP No. 713398105 13D ITEM 3. Source and Amount of Funds or Other Consideration Personal Funds of Mr. Merrick in the amount of $140,795 ITEM 4. Purpose of Transaction On June 12, 2006, in a private transaction, the Reporting Person purchased 39,683 shares of CTI Industries Corporation Common Stock for approximately $1.50 per share, for a total purchase price of $59,525. The purpose of the transaction was to exercise an warrant dated July 17, 2001, which was set to expire on July 17, 2006. Also on June 12, 2006, in a private transaction, the Reporting Person purchased 26,216 shares of CTI Industries Common Stock for approximately $3.10 per share for a total purchase price of $81,270. The purpose of this purchase was to transfer shares in the name of Merrick & Associates, P.C., a law firm of which Mr. Merrick is the principal and sole practitioner, into his own name. ITEM 5. Interest in Securities of the Issuer (a) 698,123 shares of common stock, constituting approximately 30.6% of the issued and outstanding common stock. (b) There is sole power to vote or to direct the vote and sole power to dispose or to direct the disposition of the 698,123 shares of common stock held by the Reporting Person. (c) On June 12, 2006, in a private transaction, the Reporting Person purchased 39,683 shares of CTI Industries Corporation Common Stock for approximately $1.50 per share, for a total purchase price of $59,525. The purpose of the transaction was to exercise an warrant dated July 17, 2001, which was set to expire on July 17, 2006. Also on June 12, 2006, in a private transaction, the Reporting Person purchased 26,216 shares of CTI Industries Common Stock for approximately $3.10 per share for a total purchase price of $81,270. The purpose of this purchase was to transfer shares in the name of Merrick & Associates, P.C., a law firm of which Mr. Merrick is the principal and sole practitioner, into his own name. (d) No other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of such securities. (e) Not applicable. 4 CUSIP No. 713398105 13D ITEM 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of The Issuer N/A ITEM 7. Material to be Filed as Exhibits N/A Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. June 23, 2006 --------------------------- Date /s/ Stephen M. Merrick ------------------------------------ Stephen M. Merrick