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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2022

Schedule of estimated useful life of property and equipment

The estimated useful life of property and equipment are as follows:


			Machinery and equipment			5 years to 15 years
			Leasehold improvements			Lesser of useful life or lease term
			Vehicles			5 years
			Furniture and fixtures			7 years
			Building			28 years to 40 years
			Property held under capital leases			3 years to 5 years
			Computer hardware and software			3 years

Schedule of goodwill

The following table summarizes the activity in the Company’s goodwill balance:


	(in thousands)
Balance at December 31, 2021	$	3,510
Goodwill acquired	—
Balance at September 30, 2022	$	3,510

Schedule of variable interest entity financial information

The following financial information includes assets and liabilities of Global Wells and are included in the accompanying condensed consolidated balance sheets, except for those that eliminate upon consolidation:


	September 30, 2022		December 31, 2021
	(in thousands)
Cash	$	1,568	$	1,163
Accounts receivable	255		384
Prepaid expenses and other current assets	187		63
Due from Lollicup USA Inc.	4,700		—
Property and equipment, net	45,702		46,612
Other assets	4,395		4,762
Total assets	$	56,807	$	52,984

Accounts payable	$	27	$	497
Accrued expenses	480		68
Income tax payable	—		9
Customer deposits	244		88
Due to Lollicup USA Inc.	—		2,620
Long-term debt, current portion	948		1,178
Long-term debt, net of current portion	41,789		35,339
Other liabilities	1,302		2,636
Total liabilities	$	44,790	$	42,435

Summary of net sales disaggregated by customer type

For the three and nine months ended September 30, 2022 and 2021, net sales disaggregated by customer type consists of the amounts shown below.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands)
National and regional chains	$	23,956	$	22,894	$	73,943	$	63,493
Distributors	63,555		57,317		189,078		148,294
Online	14,044		14,644		43,084		39,790
Retail	8,441		7,856		24,185		21,333
	$	109,996	$	102,711	$	330,290	$	272,910

Schedule of concentration of credit risk

For the three and nine months ended September 30, 2022 and 2021, respectively, purchases from the following vendor makes up greater than 10 percent of total purchases:


	Three Months Ended September 30,			Nine Months Ended September 30,
	2022	2021		2022		2021
Keary Global Ltd. ("Keary Global") and its affiliate, Keary International, Ltd.- related parties	*	13.7	%	10.9	%	14.3	%

*Amount purchased represented less than 10% of total purchases.

Amounts due to vendors that exceed 10 percent of total accounts payable at September 30, 2022 and December 31, 2021 are as follows:


	September 30, 2022		December 31, 2021
Keary Global and its affiliate, Keary International - related parties	21	%	10	%
Wen Ho Industrial Co., Ltd	*		11	%
Fuling Technology Co., Ltd.	15	%	21	%

*Amounts payable represented less than 10% of total accounts payable.

Summary of fair value measurements by level for the assets and liabilities measured at fair value on a recurring basis

The following table summarizes the Company’s fair value measurements by level at September 30, 2022 for the assets measured at fair value on a recurring basis (in thousands):


	Level 1		Level 2		Level 3
Cash equivalents	$	4,050	$	—	$	—
Fair value, September 30, 2022	$	4,050	$	—	$	—

The following table summarizes the Company’s fair value measurements by level at December 31, 2021 for the assets and liabilities measured at fair value on a recurring basis (in thousands):


	Level 1		Level 2		Level 3
Cash equivalents	$	2,000	$	—	$	—
Interest rate swap	—		(1,334)		—
Fair value, December 31, 2021	$	2,000	$	(1,334)	$	—

Summary of carrying values and estimated fair values of debt

The following is a summary of the carrying amount and estimated fair value of the $23,000,000 and $28,700,000 term loans that mature in September 2026 and July 2027, respectively (in thousands):


	September 30, 2022
	Carrying Amount		Estimated Fair Value
	(in thousands)
$23,000,000 term loan maturing in September 2026	$	22,318	$	19,993
$28,700,000 term loan maturing in July 2027	20,648		20,184
	$	42,966	$	40,177

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1A
-URI https://asc.fasb.org/extlink&oid=121556970&loc=SL108378252-109267

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 2
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13854-109267

Reference 11: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 55
-Paragraph 24
-URI https://asc.fasb.org/extlink&oid=122137925&loc=d3e14258-109268

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

+ Details

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details