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Long-Term Debt
 3 Months Ended
Mar. 31, 2023
Debt Disclosure [Abstract]  
Long-Term Debt Line of Credit
Pursuant to the terms of the Business Loan Agreement, dated February 23, 2018, between Lollicup, as borrower, and Hanmi Bank, as lender (as amended, the “Loan Agreement”), the Company has a line of credit with a maximum borrowing capacity of $40,000,000 (the “Line of Credit”) secured by the Company’s assets. The Line of Credit also includes a standby letter of credit sublimit, which was amended and increased to $2,000,000 on August 18, 2022. The Company is not required to pay a commitment (unused) fee on the undrawn portion of the Line of Credit and interest is payable monthly. The Company is required to comply with certain financial covenants, including a minimum current ratio, minimum debt to earnings before interest, taxes, depreciation and amortization ("EBITDA") ratio and a minimum fixed charge coverage ratio.
On March 14, 2023, the Company amended the Line of Credit. Prior to March 14, 2023, interest accrued at the annual rate of prime less 0.25% with a minimum floor of 3.25%. The amendment on March 14, 2023, among other things, (1) extended the maturity date to March 14, 2025, and (2) revised the interest on any Line of Credit borrowings to an annual rate of one month term Secured Overnight Financing Rate ("SOFR") plus 2.50%, with a SOFR floor of 1.0%.
As of March 31, 2023, the maximum remaining amount that could be borrowed under the Line of Credit was $38,864,000. The Company had $0 of borrowings outstanding under the Line of Credit as of both March 31, 2023 and
December 31, 2022. The amount issued under the standby letter of credit was $1,136,000 and $1,070,000 as of March 31, 2023 and 2022, respectively. As of both March 31, 2023 and December 31, 2022, the Company was in compliance with the financial covenants under the Line of Credit.Long-Term Debt
Long-term debt consists of the following:
March 31, 2023December 31, 2022
(in thousands)
The 2026 Term Loan, with an initial balance of $16,115,000 and an option to request for additional advances up to a maximum of $6,885,000 through September 2022, which the Company exercised in February 2022. Interest accrues at a fixed rate of 3.5% per annum. Principal and interest payments of $116,000 are due monthly throughout the term of the loan, with the remaining principal balance due at maturity. The loan is collateralized by substantially all of Global Wells’ assets and is guaranteed by Global Wells and one of the Company’s stockholders. In accordance with the loan agreement, Global Wells is required to comply with certain financial covenants, including a minimum debt service coverage ratio.
$22,014 $22,168 
The 2027 Term Loan, with an initial balance of $20,700,000 and an option to request for additional advances up to a maximum of $8,000,000 through June 30, 2023, which the Company exercised in March 2023. Interest accrues at a fixed rate of 4.375% per annum. Principal and interest payments of $104,000 are due monthly throughout the term of the loan, with the remaining principal balance due at maturity. The loan is collateralized by substantially all of Global Wells’ assets and is guaranteed by one of the Company’s stockholders. In accordance with the loan agreement, Global Wells is required to comply with certain financial covenants, including a minimum debt coverage ratio.
$28,475 $20,563 
Long-term debt50,489 42,731 
Less: unamortized loan fees(202)(216)
Less: current portion(962)(957)
Long-term debt, net of current portion$49,325 $41,558 
At March 31, 2023, future maturities are:
(in thousands)
2023 (remainder)$715 
2024990 
20251,040 
202620,653 
202727,091 
$50,489 
The 2027 Loan was a refinance from a previous $21,580,000 term loan in June 2022, and was accounted for as a debt modification. The Company was in compliance with all of its financial covenants as of both March 31, 2023 and December 31, 2022.