•fluctuations in the demand for our products in light of changes in laws and regulations applicable to food and beverages and changes in consumer preferences;

•supply chain disruptions that could interrupt product manufacturing and increase product costs;

•our ability to source raw materials and navigate a shortage of available materials;

•our ability to compete successfully in our industry;

•our ability to accurately forecast demand for our products or our results of operations;

•the impact of problems relating to delays or disruptions in the shipment of our goods through operational ports;

•our ability to expand into additional foodservice and geographic markets;

•our ability to successfully design and develop new products;

•fluctuations in freight carrier costs related to the shipment of our products could have a material adverse impact on our results of operations;

•the effects of COVID-19 or other public health crises;

•our ability to attract and retain skilled personnel and senior management; and

We manage and evaluate our operations in one reportable segment.

•We invested $4.0 million during the three months ended June 30, 2022 to establish a joint venture in Taiwan for the manufacturing of compostable foodservice products from bagasse and currently expect manufacturing to start in the second half of 2022.

•We completed the refinancing of a new term loan in June 2022, which provided increased liquidity, financial flexibility and improved pricing.

The following trends have contributed to the results of our operations, and we anticipate that they will continue to affect our future results:

•Fluctuations in foreign currency exchange rates could impact either positively or negatively various aspects of our business activities, including but not limited to our purchasing power and capacity to source inventory.

Critical Accounting Policies and Estimates

Three Months Ended June 30, 2022 Compared to the Three Months Ended June 30, 2021

Operating income for the three months ended June 30, 2022 was $7.8 million compared to $6.9 million for the three months ended June 30, 2021, an increase of $0.9 million, or 13.6%. The increase was primarily due to an increase in gross profit of $5.9 million partially offset by the increase in operating expenses of $4.9 million.

Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021

Our primary non-GAAP financial measures are listed below and reflect how we evaluate our operating results.

Adjusted EBITDA and Adjusted EBITDA Margin

Set forth below is a reconciliation of net income to Adjusted EBITDA and net income margin to Adjusted EBITDA margin.

Sources and Uses of Funds

The following table summarizes total current assets, liabilities and working capital at June 30, 2022 compared to December 31, 2021:

For additional information on financing entered into subsequent to June 30, 2022, see Note 17 - Subsequent Events in the Notes to the Condensed Consolidated Financial Statements included in this Quarter Report on Form 10-Q.

forgiveness of debt, and depreciation and amortization, partially offset by a decrease in cash of $14.1 million due to changes in working capital.

For a description of significant related party transactions, see Note 14 - Related Party Transactions in the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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