Subsequent Events

3 Months Ended

Mar. 31, 2023

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

In April 2023, the Company entered into an 62-month lease agreement commencing on June 1, 2023 for a 83,000 square-foot distribution facility in Houston, Texas. The term of the lease expires on August 1, 2028 and requires monthly base lease payments ranging from $45,000 to $54,000 after an initial rent abatement period.

In April 2023, the Company determined that certain of its manufacturing machines met the criteria for assets held for sale subsequent to March 31, 2023. Such machines were used in the Company's Chino, California facility through April 2023. Property and equipment had a total net book value of $864,000, associated inventory had a value of $194,000. Assets are being disposed of in June 2023 with an estimated sales price of $400,000 which will yield an impairment of $858,000 during the second quarter of 2023.

On May 8, 2023, the Company's Board of Directors declared a special cash dividend of $0.35 per share of common stock, which will be paid on or around May 31, 2023 to shareholders of record at the close of business on May 23, 2023.

On May 8, 2023, Lollicup entered into a share transfer agreement (the “Share Transfer Agreement”) to sell all of its equity interest in Bio Earth to Keary Global for a total consideration of approximately $6,038,000 (the “Share Transfer”), representing the original investments totaling $6,000,000 made under the JV Agreement and interest accruing at 5% per annum totaling approximately $38,000. Keary Global and its affiliate, Keary International are both owned or controlled by Jeff Yu, brother of our Chief Executive Officer, Alan Yu. The transaction is expected to close within three months upon receipt of Taiwanese regulatory approval of the Share Transfer.

Concurrent with the Share Transfer Agreement on May 8, 2023, the Company entered into an Agreement with Keary Global, Bio Earth and Happiness Moon Co., Ltd. (“Happiness Moon”) pursuant to which (i) Lollicup agreed to transfer all Bio Earth shares, as well as its rights and obligations under the JV Agreement to Keary Global, (ii) Happiness Moon and Bio Earth agree to foregoing and (iii) Bio Earth shall manage the regulatory and registration requirements related to the Share Transfer.