0001005286-24-000145 | 10-Q | XBRL Viewer | Lifecore Biomedical INC DE

Fair Value Measurements

3 Months Ended

Aug. 25, 2024

Cash and cash equivalents represent cash in banks and highly liquid short-term investments that have maturities of three months or less when acquired. These highly liquid short-term investments are both readily convertible to known amounts of cash and so near to their maturity that they present insignificant risk of changes in value due to changes in interest rates.

The Term Loan Credit Facility (as defined in Note 10 – Debt) contains embedded derivatives requiring bifurcation as multiple derivative instruments (“debt derivative liability”). The debt derivative liability related to the Term Loan Credit Facility is recorded as a discount to the long-term debt in the Condensed Consolidated Financial Statements. The embedded debt derivative liability is recorded at fair value, and remeasured every reporting period, with changes in fair value recognized as a component of other expense, net. The fair value of the embedded derivative liabilities associated with the Term Loan Credit Facility was estimated using a probability weighted discounted cash flow model. The Term Loan Credit Facility has a fair value of $132,400 as of August 25, 2024, which was estimated using discounted cash flow model using Level 3 inputs and assumptions. Imprecision in estimating unobservable market inputs can affect the amount of gain or loss recorded for a particular position. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Outstanding borrowings under the Company's Revolving Credit Facility are carried at cost, which approximates their fair value as of August 25, 2024 and May 26, 2024, due to their short duration.

The following table summarizes the fair value of the Company’s assets and liabilities that are measured at fair value on a recurring and non-recurring basis:


	Fair Value at August 25, 2024						Fair Value at May 26, 2024
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Liabilities:
Debt derivative liability(1)	$	—	$	—	$	24,500	$	—	$	—	$	25,400
Total liabilities	$	—	$	—	$	24,500	$	—	$	—	$	25,400

(1) As of August 25, 2024 and May 26, 2024, the fair value of the debt derivative liability is included on its own line in the Company’s Condensed Consolidated Balance Sheets.

The key inputs to the valuation models that were utilized to estimate the fair value of the debt derivative liability, related party, were (i) a weighted average probability related to the timing of a change in control over the remaining term of the debt; (ii) the estimated probability related to an event of default of the Alcon Supply Agreement, as amended, weighted as to 30 days from the reporting date and at the end of the term of the Term Loan agreement.; and (iii) a risk-adjusted discount rate. There was no change in the probability related to event of default of the Alcon Supply Agreement during the first fiscal quarter of 2025.

Key inputs into the discount rate assumptions during the quarter ended August 25, 2024 and year ended May 26, 2024 were as follows:


	Three Months Ended	Year Ended
	August 25, 2024	May 26, 2024
Assumptions
Discount rate	20.4% — 22.2%	21.3% — 23.5%
Implied spread	16.8%	16.8% — 17.9%
Risk free rate	3.7% — 5.5%	4.3% — 5.6%

The following table reflects the fair value roll forward reconciliation of Level 3 assets and liabilities measured at fair value for the following periods:


	Three Months Ended
	August 25, 2024		August 27, 2023
Balance at beginning of period	$	25,400	$	64,900
Decrease in fair value(1)	(900)		(200)
Balance at end of period	$	24,500	$	64,700

(1) For the three months ended August 25, 2024 and August 27, 2023, the decreases in fair value are recorded in the “Change in fair value of debt derivative liability, related party” line within the condensed consolidated statement of operations.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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+ Details

Restructuring Costs

3 Months Ended

Aug. 25, 2024

Restructuring and Related Activities [Abstract]

Restructuring Costs

The following table summarizes the restructuring costs recognized in the Company’s Condensed Consolidated Statements of Operations, in connection with the previously announced restructuring plan. These costs are included within selling, general, and administrative costs on the consolidated statements of operations.


	Three Months Ended
	August 25, 2024		August 27, 2023
Employee severance and benefit costs	$	439	$	(18)
Lease costs	—		7
Other restructuring costs	44		1
Total restructuring costs	$	483	$	(10)

The following table presents the movement of the restructuring costs liability from May 26, 2024 through August 25, 2024, excluding discontinued operations, within current liabilities in the Condensed Consolidated Balance Sheet:


	May 26, 2024		Expense		Payments		August 25, 2024
Employee severance and benefit costs	$	217	$	439	$	(397)	$	259
Lease costs	4,290		—		—		4,290
Other restructuring costs	264		44		(40)		268
	$	4,771	$	483	$	(437)	$	4,817

Fair Value Measurements (Tables)

3 Months Ended

Aug. 25, 2024

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Assets and Liabilities

The following table summarizes the fair value of the Company’s assets and liabilities that are measured at fair value on a recurring and non-recurring basis:


	Fair Value at August 25, 2024						Fair Value at May 26, 2024
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Liabilities:
Debt derivative liability(1)	$	—	$	—	$	24,500	$	—	$	—	$	25,400
Total liabilities	$	—	$	—	$	24,500	$	—	$	—	$	25,400

(1) As of August 25, 2024 and May 26, 2024, the fair value of the debt derivative liability is included on its own line in the Company’s Condensed Consolidated Balance Sheets.

Schedule of Derivative Liabilities Assumptions

Key inputs into the discount rate assumptions during the quarter ended August 25, 2024 and year ended May 26, 2024 were as follows:


	Three Months Ended	Year Ended
	August 25, 2024	May 26, 2024
Assumptions
Discount rate	20.4% — 22.2%	21.3% — 23.5%
Implied spread	16.8%	16.8% — 17.9%
Risk free rate	3.7% — 5.5%	4.3% — 5.6%

Schedule of Fair Value Reconciliation of Level 3

The following table reflects the fair value roll forward reconciliation of Level 3 assets and liabilities measured at fair value for the following periods:


	Three Months Ended
	August 25, 2024		August 27, 2023
Balance at beginning of period	$	25,400	$	64,900
Decrease in fair value(1)	(900)		(200)
Balance at end of period	$	24,500	$	64,700

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details

Debt

3 Months Ended

Aug. 25, 2024

Debt Disclosure [Abstract]

Debt

Long-term debt, net consists of the following:


	August 25, 2024		May 26, 2024
Term loan credit facility, related party	$	161,245	$	157,313
Equipment financing, related party	6,957		7,150
Total principal amount of long-term debt	168,202		164,463
Less: unamortized debt discount	(479)		(504)
Less: debt discount, related party	(61,405)		(62,367)
Total long-term debt, net of discounts	106,318		101,592
Less: current portion of long-term debt, net, related party	(773)		(773)
Long-term debt, net	$	105,545	$	100,819

Revolving credit facility	$	21,605	$	19,691

The future minimum principal payments under the Company’s term loan credit facility and equipment financing liability for each year presented are as follows:


Remainder of Fiscal year 2025	$	580
Fiscal year 2026	773
Fiscal year 2027	773
Fiscal year 2028	773
Fiscal year 2029	162,018
Fiscal year 2030	773
Thereafter	2,512
Total	$	168,202

Term Loan Credit Facility

On May 22, 2023, the Company and Alcon (the “Borrowers”) entered into a Credit and Guaranty Agreement (the “Term Loan Credit Facility”). The Term Loan Credit Facility refinanced in full all obligations of the Company and their subsidiaries under its prior term loan credit facility. Upon entry into the Term Loan Credit Facility, the prior term loan credit facility was terminated and all noncompliance with debt covenants were thereby cured.

The Term Loan Credit Facility provided for up to $142,270 in term loans, excluding PIK interest added to the outstanding balance. The obligations under the Term Loan Credit Facility mature on May 22, 2029, and is secured by the same collateral that secures the Revolving Credit Facility (as defined below).

As of August 25, 2024 and May 26, 2024, the Company’s effective annual interest rate under the Term Loan Credit Facility was 22.5% for both periods. The annual stated rate is 10.0%.

Equipment Financing

On May 22, 2023, the Company entered into an equipment financing agreement with Alcon, totaling $7,730. The agreement calls for 40 quarterly principal payments of $193, plus 6% interest.

Revolving Credit Facility

On May 22, 2023, the Borrowers and certain of the Company’s other subsidiaries, as guarantors, entered into a Limited Waiver, Consent and Fifth Amendment to the credit agreement with BMO, as lender (the “Revolving Credit Facility”).

As of August 25, 2024 and May 26, 2024, the Company’s effective annual interest rate under the Revolving Credit Facility was linked to the Secured Overnight Financing Rate (SOFR), and was 8.35% for both periods.

Financial Covenants Compliance Status and Borrowing Capacity

As of August 25, 2024, the Company was in compliance with all financial covenants under the Term Loan Credit Facility and Revolving Credit Facility.

As of August 25, 2024, the Company had approximately $4,500 available for borrowing under our Revolving Credit Facility and the Term Loan Credit Facility was fully drawn.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Aug. 25, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Legal Contingencies In the ordinary course of business, the Company is involved in various legal proceedings and claims. The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least each fiscal quarter and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. Legal fees are expensed in the period in which they are incurred. Because recovery of amounts is contingent upon a legal settlement, no amounts have been recorded as recoverable costs through August 25, 2024. SEC Subpoena On February 16, 2024, the Chicago Regional Office of the SEC issued a subpoena to the Company seeking documents and information concerning the financial statement restatement. The Company is in the process of responding to the subpoena and intends to cooperate with the SEC. We cannot predict the duration or outcome of this matter at this time. Landlord Complaints On January 12, 2024, the landlord for a property leased by Curation filed a complaint of unlawful detainer against the Company in Santa Barbara County Superior Court, seeking possession of the building and alleging past due rent of approximately $171. On February 29, 2024, Curation surrendered possession of the premises to the landlord. The unlawful detainer action has thus been converted to an ordinary civil action. Landlord has filed an amended complaint against both Curation and the Company seeking to recover all rent which will accrue through the expiration of the lease, less any sums landlord collects from a replacement tenant. No trial date has been set yet. On January 12, 2024, a landlord for a different property leased by Curation delivered to the Company a pay or quit notice related to such property, seeking payment of past due rent of approximately $87 or requesting Curation to vacate the property. The Company has accrued past due rents, but the ultimate exposure to loss will depend on future events and is not reasonably certain at this time. Compliance Matters On December 1, 2018, the Company acquired all of the voting interests and substantially all of the assets of Yucatan (the “Yucatan Acquisition”), which owns a guacamole manufacturing plant in Mexico called Procesadora Tanok, S de RL de C.V. (“Tanok”). On October 21, 2019, the Company retained Latham & Watkins, LLP to conduct an internal investigation relating to potential environmental and Foreign Corrupt Practices Act (“FCPA”) compliance matters associated with regulatory permitting at the Tanok facility in Mexico. The Company subsequently voluntarily self-disclosed to the SEC and the U.S. Department of Justice (“DOJ”) the conduct under investigation, and these agencies commenced an investigation. The Company also disclosed the conduct under investigation to the Office of the Attorney General in Mexico, which in December 2021 decided (a) that Curation Foods, Inc., did not commit or participate in the criminal conduct disclosed, (b) no criminal action would be taken against Curation Foods, Inc., (c) that no criminal liability was established against Tanok and Yucatan after they were acquired by Curation Foods, Inc., and (d) the decisions do not apply to any individuals who may be responsible for misconduct. The Company also disclosed the misconduct to other regulators in Mexico. The conduct at issue began prior to the Yucatan Acquisition, and the agreement for the Yucatan Acquisition provides the Company with certain indemnification rights that may allow the Company to recover the cost of a portion of the liabilities that have been and may be incurred by the Company in connection with these compliance matters. On September 2, 2020, one of the former owners of Yucatan filed a lawsuit against the Company in Los Angeles County Superior Court for breach of employment agreement, breach of contract, breach of holdback agreement, declaratory relief and accounting, and related claims. The Plaintiff seeks over $10 million in damages, including delivery of shares of his stock held in escrow for the indemnification claims described above. On November 3, 2020, the Company filed an answer and cross-complaint against the Plaintiff and other former equity holders of Yucatan for fraud, indemnification, and other claims, and seeking no less than $80 million in damages. In fiscal 2022, 2023 and 2024, the Company reached settlements with several of the cross-defendants, pursuant to which the settling cross-defendants agreed that certain of the shares of stock they received when the Company acquired Yucatan either be sold and the proceeds paid to the Company, or that those shares be released to the Company. As of October 1, 2024, the matter is still proceeding against the Plaintiff and the remaining cross-defendants. On November 16, 2023, the Company and the DOJ executed a letter (“Declination Letter”) in which the DOJ has declined to prosecute the Company for violations of the FCPA involving the Company’s formerly-held subsidiary, Yucatan Foods L.P. (“Yucatan”). Pursuant to the Declination Letter, in connection with the DOJ’s declination to prosecute, in fiscal 2023 the Company agreed to pay disgorgement in the amount of $407, and to continue to fully cooperate with any ongoing government investigations and any prosecutions that might result in the future. The Company paid the disgorgement amount in full in fiscal 2024. At this stage, the ultimate outcome of these or any other investigations, legal actions, or potential claims that may arise from the matters under investigation is uncertain and the Company cannot reasonably predict the timing or outcomes, or estimate the amount of net loss after indemnification, or its effect, if any, on its financial statements. Separately, there are indemnification provisions in the purchase agreement that may allow the Company to recover costs for breach of the purchase agreement from the seller. Because recovery of amounts is contingent upon a legal settlement, no amounts have been recorded as recoverable costs through August 25, 2024.

Revenue

3 Months Ended

Aug. 25, 2024

Revenue from Contract with Customer [Abstract]

Revenue

The Company disaggregates its revenue based on how it markets its products and services and reviews results of operations. The following table disaggregates revenues by major product lines and services:


	Three Months Ended
	August 25, 2024		August 27, 2023
CDMO	$	20,180	$	21,539
Fermentation	4,525		2,983
Total	$	24,705	$	24,522

The following table disaggregates revenues by the timing of revenue recognition:


	Three Months Ended
	August 25, 2024		August 27, 2023
CDMO - Developmental Services revenue recognized over time	$	5,876	$	6,381
Revenues recognized at a point in time	18,829		18,141
Total	$	24,705	$	24,522

During the three months ended August 25, 2024, the Company had revenues concentrations of 10% or greater from two customers, accounting for 32% and 24%. During the three months ended August 27, 2023, the Company had revenues concentrations of 10% or greater from three customers, accounting for 31%, 21%, and 15%.

Contract Assets and Liabilities

Contract assets primarily relate to the Company’s unconditional right to consideration for work completed but not billed at the reporting date.

Contract liabilities primarily relate to payments received from customers in advance of performance under a contract. Any incremental costs of obtaining a contract are expensed as incurred.


	Description	Balance Sheet Presentation	August 25, 2024		May 26, 2024
Assets:
	Receivables not yet billed	Accounts receivable, less allowance for credit losses	$	4,033	$	3,885
	Related party receivables not yet billed	Accounts receivable, related party	92		184
		Total contract assets	$	4,125	$	4,069

Current Liabilities:
	Advances on customer-owned equipment	Other accrued liabilities	$	3,590	$	3,509
	Non related parties deferred revenue	Deferred revenues	339		1,088
	Related party deferred revenue	Deferred revenues, related party	315		1,025

Non-Current Liabilities:
	Related party deferred revenue	Deferred revenues, less current portion, related party	4,791		4,703
	Non-current customer deposit	Other non-current liabilities	216		257
		Total contract liabilities	$	9,251	$	10,582

Revenues recognized during the three months ended August 25, 2024 that were included in the contract liability balance at the beginning of fiscal year 2025, were $1,583.


	Description	Balance Sheet Presentation	August 27, 2023		May 28, 2023
Assets:
	Receivables not yet billed	Accounts receivable, less allowance for credit losses	$	4,082	$	3,055
	Related party receivables not yet billed	Accounts receivable, related party	44		143
		Total contract assets	$	4,126	$	3,198

Current Liabilities:
	Non related parties deferred revenue	Deferred revenues	$	101	$	552
	Related party deferred revenue	Deferred revenues, related party	8,256		3,503

Non-Current Liabilities:
	Related party deferred revenue	Deferred revenues, less current portion, related party	1,687		2,940
		Total contract liabilities	$	10,044	$	6,995

Revenues recognized during the three months ended August 27, 2023, that were included in the contract liability balance at the beginning of fiscal year 2024, were $2,022.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org/606/tableOfContent

+ Details

Stock-based Compensation

3 Months Ended

Aug. 25, 2024

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation

Stock-Based Compensation Activity

The Company uses the Black-Scholes option pricing model to calculate the grant date fair value of stock option awards. The use of an option pricing model requires the Company to make estimates and assumptions, including the expected stock price volatility, expected life of option awards and risk-free interest rate which have a significant impact on the fair value estimates. The following table displays the estimated fair value of stock options granted and the weighted average assumptions utilized:


	Three Months Ended
	August 25, 2024
Weighted-average grant date fair value	$	2.48
Assumptions:
Expected life (in years)	4.35
Risk-free interest rate	3.88		%
Volatility	53		%
Dividend yield	—		%

A summary of the activity under the Company’s stock option plans as of August 25, 2024 and changes during the fiscal quarter then ended is presented below:


	Options Outstanding	Weighted-Average Exercise Price Per Share		Total Intrinsic Value of Options Exercised (in thousands)		Weighted-Average Remaining Contractual Term in Years	Aggregate Intrinsic Value (in thousands)
Options outstanding at May 26, 2024	2,112,591	$	10.88			2.44	$	—
Options granted	54,150	$	5.28
Options exercised	—	$	—	$	—
Options forfeited	(16,956)	$	10.13
Options expired	(75,000)	$	14.00
Options outstanding at August 25, 2024	2,074,785	$	10.63			2.24	$	39
Options exercisable at August 25, 2024	1,872,086	$	10.82			1.89	$	—

The intrinsic values presented in the table above were calculated as the excess, if any, of the market price or closing price of the Company’s common stock over the exercise price of the options multiplied by the number of options exercised, outstanding or exercisable, as applicable.

RSUs are valued using the closing price of the Company’s common stock on their grant date and expensed ratably over the requisite vesting period of one to three years. All vesting is subject to continued service. A summary of the Company’s RSU award activity as of August 25, 2024 and changes during the fiscal quarter then ended is presented below:


	Restricted Stock Units Outstanding	Weighted-Average Grant Date Fair Value Per Share
RSUs outstanding at May 26, 2024	1,622,004	$	7.83
Granted	358,392	$	5.18
Vested	(435,448)	$	8.54
Forfeited	(108,708)	$	7.06
RSUs outstanding at August 25, 2024	1,436,240	$	7.01

Currently, the PSUs outstanding vest upon achievement of certain stock price hurdles and continued employment thereafter of our CEO. The PSUs have a 5-year term and any unvested awards at the end of the term will be forfeited. PSUs subject to market conditions are valued using a Monte Carlo simulation model and expensed on an accelerated attribution basis over the derived service period. If the stock price hurdles are not met, expense is not reversed as long as the requisite service period has been met. A summary of the Company’s PSU award activity as of August 25, 2024 and changes during the fiscal quarter then ended is presented below:


	Performance Share Units Outstanding	Weighted-Average Grant Date Fair Value Per Share
PSUs outstanding at May 26, 2024	1,500,000	$	4.66
Granted	—	$	—
Vested	—	$	—
Forfeited	—	$	—
PSUs outstanding at August 25, 2024	1,500,000	$	4.66

Stock-Based Compensation Expense

The following table summarizes stock-based compensation by income statement line item:


	Three Months Ended
	August 25, 2024		August 27, 2023
Cost of product sales	$	141	$	184
Research and development	13		43
Selling, general and administrative	2,265		1,306
Stock-based compensation expense	2,419		1,533
Amount capitalized into property, plant, and equipment	—		8
Total stock-based compensation costs	$	2,419	$	1,541

As of August 25, 2024, there was $13,049 of total unrecognized compensation expense related to unvested equity compensation awards granted under the Lifecore incentive stock plans. This total expense is expected to be recognized over a weighted-average period of 2.06 years.

Stock-based Compensation - Stock Options Activity (Details) - USD ($)	3 Months Ended	12 Months Ended
	Aug. 25, 2024	May 26, 2024
Options Outstanding
Options outstanding, beginning balance (in shares)	2,112,591
Options granted (in shares)	54,150
Options exercised (in shares)	0
Options forfeited (in shares)	(16,956)
Options expired (in shares)	(75,000)
Options outstanding, ending balance (in shares)	2,074,785	2,112,591
Options exercisable (in shares)	1,872,086
Weighted-Average Exercise Price Per Share
Options outstanding, beginning balance (in dollars per share)	$ 10.88
Options granted (in dollars per share)	5.28
Options exercised (in dollars per share)	0
Options forfeited (in dollars per share)	10.13
Options expires (in dollars per share)	14.00
Options outstanding, ending balance (in dollars per share)	10.63	$ 10.88
Options exercisable (in dollars per share)	$ 10.82
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Total Intrinsic Value of Options Exercised (in thousands)	$ 0
Weighted average remaining contractual term, options outstanding	2 years 2 months 26 days	2 years 5 months 8 days
Weighted average remaining contractual term, options exercisable	1 year 10 months 20 days
Aggregate intrinsic value, options outstanding	$ 39,000
Aggregate intrinsic value, options exercisable	$ 0

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit
Convertible Preferred Stock, beginning balance (in shares) at May. 28, 2023	39,420
Convertible Preferred Stock, beginning balance at May. 28, 2023	$ 39,318
Increase (Decrease) in Temporary Equity [Roll Forward]
Convertible Preferred Stock PIK dividend (in shares)	739
Convertible Preferred Stock PIK dividend	$ 748
Accretion of Convertible Preferred Stock issuance costs	$ 48
Convertible Preferred Stock, ending balance (in shares) at Aug. 27, 2023	40,159
Convertible Preferred Stock, ending balance at Aug. 27, 2023	$ 40,114
Beginning balance (in shares) at May. 28, 2023		30,322,169
Beginning balance at May. 28, 2023	(4,230)	$ 30	$ 174,276	$ (178,536)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock under stock plans, net of shares withheld (in shares)		133,469
Issuance of stock under stock plans, net of shares withheld	724		724
Convertible Preferred Stock paid-in-kind (“PIK”) dividend	(748)		(748)
Accretion of Convertible Preferred Stock issuance costs	(48)		(48)
Taxes paid by the Company for employee stock plans	(45)		(45)
Stock-based compensation costs	1,541		1,541
Net loss	(10,754)			(10,754)
Ending balance (in shares) at Aug. 27, 2023		30,455,638
Ending balance at Aug. 27, 2023	$ (13,560)	$ 30	175,700	(189,290)
Convertible Preferred Stock, beginning balance (in shares) at May. 26, 2024	42,461
Convertible Preferred Stock, beginning balance at May. 26, 2024	$ 42,587
Increase (Decrease) in Temporary Equity [Roll Forward]
Convertible Preferred Stock PIK dividend (in shares)	796
Convertible Preferred Stock PIK dividend	$ 806
Accretion of Convertible Preferred Stock issuance costs	$ 48
Convertible Preferred Stock, ending balance (in shares) at Aug. 25, 2024	43,257
Convertible Preferred Stock, ending balance at Aug. 25, 2024	$ 43,441
Beginning balance (in shares) at May. 26, 2024	30,562,961	30,562,961
Beginning balance at May. 26, 2024	$ 11,315	$ 30	177,808	(166,523)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock under stock plans, net of shares withheld (in shares)		335,294
Issuance of stock under stock plans, net of shares withheld	1	$ 1
Convertible Preferred Stock paid-in-kind (“PIK”) dividend	(806)		(806)
Accretion of Convertible Preferred Stock issuance costs	(48)		(48)
Taxes paid by the Company for employee stock plans	(589)		(589)
Stock-based compensation costs	2,419		2,419
Net loss	$ (16,230)			(16,230)
Ending balance (in shares) at Aug. 25, 2024	30,898,255	30,898,255
Ending balance at Aug. 25, 2024	$ (3,938)	$ 31	$ 178,784	$ (182,753)

Contract Assets and Liabilities - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	Aug. 25, 2024	May 26, 2024	Aug. 27, 2023	May 28, 2023
Assets:
Total contract assets	$ 4,125	$ 4,069	$ 4,126	$ 3,198
Current Liabilities:
Advances on customer-owned equipment	3,590	3,509
Non-Current Liabilities:
Related party deferred revenue	4,791	4,703
Non-current customer deposit	216	257
Total contract liabilities	9,251	10,582	10,044	6,995
Nonrelated party
Assets:
Total contract assets	4,033	3,885	4,082	3,055
Current Liabilities:
Deferred revenues	339	1,088	101	552
Related party
Assets:
Total contract assets	92	184	44	143
Current Liabilities:
Deferred revenues	315	1,025	8,256	3,503
Non-Current Liabilities:
Related party deferred revenue	$ 4,791	$ 4,703	$ 1,687	$ 2,940

Contract Assets and Liabilities (Tables)

3 Months Ended

Aug. 25, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Contract Assets and Liabilities

Contract liabilities primarily relate to payments received from customers in advance of performance under a contract. Any incremental costs of obtaining a contract are expensed as incurred.


	Description	Balance Sheet Presentation	August 25, 2024		May 26, 2024
Assets:
	Receivables not yet billed	Accounts receivable, less allowance for credit losses	$	4,033	$	3,885
	Related party receivables not yet billed	Accounts receivable, related party	92		184
		Total contract assets	$	4,125	$	4,069

Current Liabilities:
	Advances on customer-owned equipment	Other accrued liabilities	$	3,590	$	3,509
	Non related parties deferred revenue	Deferred revenues	339		1,088
	Related party deferred revenue	Deferred revenues, related party	315		1,025

Non-Current Liabilities:
	Related party deferred revenue	Deferred revenues, less current portion, related party	4,791		4,703
	Non-current customer deposit	Other non-current liabilities	216		257
		Total contract liabilities	$	9,251	$	10,582

Revenues recognized during the three months ended August 25, 2024 that were included in the contract liability balance at the beginning of fiscal year 2025, were $1,583.


	Description	Balance Sheet Presentation	August 27, 2023		May 28, 2023
Assets:
	Receivables not yet billed	Accounts receivable, less allowance for credit losses	$	4,082	$	3,055
	Related party receivables not yet billed	Accounts receivable, related party	44		143
		Total contract assets	$	4,126	$	3,198

Current Liabilities:
	Non related parties deferred revenue	Deferred revenues	$	101	$	552
	Related party deferred revenue	Deferred revenues, related party	8,256		3,503

Non-Current Liabilities:
	Related party deferred revenue	Deferred revenues, less current portion, related party	1,687		2,940
		Total contract liabilities	$	10,044	$	6,995

Fair Value Measurements - Derivative Liability Assumptions (Details)	Aug. 25, 2024	May 26, 2024
Discount rate \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assumptions	0.204	0.213
Discount rate \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assumptions	0.222	0.235
Implied spread
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assumptions	0.168
Implied spread \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assumptions		0.168
Implied spread \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assumptions		0.179
Risk free rate \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assumptions	0.037	0.043
Risk free rate \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assumptions	0.055	0.056

Earnings Per Share

3 Months Ended

Aug. 25, 2024

Earnings Per Share [Abstract]

Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:


	Three Months Ended
	August 25, 2024		August 27, 2023
Numerator:
Net loss from continuing operations	$	(16,230)	$	(12,610)
Income from discontinued operations, net of tax	—		1,856
Net loss	$	(16,230)	$	(10,754)

Denominator:
Weighted average shares for basic and diluted net income (loss) per share	30,855,742		30,403,392





Basic and diluted net income (loss) per share:
Loss from continuing operations	$	(0.53)	$	(0.41)
Income from discontinued operations	—		0.06
Total basic and diluted net loss per share	$	(0.53)	$	(0.35)

Due to the Company’s net loss for the three months ended August 25, 2024 and August 27, 2023, the net loss per share includes only the weighted average common shares outstanding and thus excludes the following, as such impact would be antidilutive:


	Three Months Ended
	August 25, 2024	August 27, 2023
Convertible Preferred Stock	5,956,239	5,684,230
Stock Options	21,111	611
Restricted Stock Units	123,406	271,695
Performance Share Units(1)	—	—
Total	6,100,756	5,956,536

(1) PSUs are not considered dilutive until performance targets are met.

See Note 13 – Convertible Preferred Stock and Common Stock for more information on outstanding Convertible Preferred Stock and Note 12 – Stock-based Compensation for more information on outstanding stock options, RSUs and PSUs.

Accounts Receivable - Narrative (Details) - Accounts Receivable - Customer Concentration Risk	3 Months Ended	12 Months Ended
	Aug. 25, 2024	May 26, 2024
Customer A
Concentration Risk [Line Items]
Concentration risk percentage	29.00%	34.00%
Customer B
Concentration Risk [Line Items]
Concentration risk percentage	22.00%	18.00%
Customer C
Concentration Risk [Line Items]
Concentration risk percentage	12.00%

Property, Plant, and Equipment - Components of Property and Equipment (Details) - USD ($) $ in Thousands	Aug. 25, 2024	May 26, 2024
Property, Plant and Equipment [Line Items]
Gross property, plant, and equipment	$ 201,083	$ 198,932
Less accumulated depreciation and amortization	(52,327)	(50,334)
Net property, plant, and equipment	148,756	148,598
Land and land improvements
Property, Plant and Equipment [Line Items]
Gross property, plant, and equipment	3,739	3,739
Buildings and building improvements
Property, Plant and Equipment [Line Items]
Gross property, plant, and equipment	$ 62,887	62,874
Buildings and building improvements \| Minimum
Property, Plant and Equipment [Line Items]
Depreciable Lives (in years)	7 years
Buildings and building improvements \| Maximum
Property, Plant and Equipment [Line Items]
Depreciable Lives (in years)	40 years
Machinery and equipment
Property, Plant and Equipment [Line Items]
Gross property, plant, and equipment	$ 61,249	61,013
Machinery and equipment \| Minimum
Property, Plant and Equipment [Line Items]
Depreciable Lives (in years)	7 years
Machinery and equipment \| Maximum
Property, Plant and Equipment [Line Items]
Depreciable Lives (in years)	25 years
Computer equipment and software
Property, Plant and Equipment [Line Items]
Gross property, plant, and equipment	$ 8,306	8,290
Computer equipment and software \| Minimum
Property, Plant and Equipment [Line Items]
Depreciable Lives (in years)	3 years
Computer equipment and software \| Maximum
Property, Plant and Equipment [Line Items]
Depreciable Lives (in years)	10 years
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Gross property, plant, and equipment	$ 1,642	1,631
Furniture and fixtures \| Minimum
Property, Plant and Equipment [Line Items]
Depreciable Lives (in years)	5 years
Furniture and fixtures \| Maximum
Property, Plant and Equipment [Line Items]
Depreciable Lives (in years)	10 years
Construction in process
Property, Plant and Equipment [Line Items]
Gross property, plant, and equipment	$ 63,260	$ 61,385
Land improvements \| Minimum
Property, Plant and Equipment [Line Items]
Depreciable Lives (in years)	10 years
Land improvements \| Maximum
Property, Plant and Equipment [Line Items]
Depreciable Lives (in years)	40 years
Transportation equipment \| Minimum
Property, Plant and Equipment [Line Items]
Depreciable Lives (in years)	5 years
Transportation equipment \| Maximum
Property, Plant and Equipment [Line Items]
Depreciable Lives (in years)	12 years
Tools, molds, and dies
Property, Plant and Equipment [Line Items]
Depreciable Lives (in years)	3 years

Convertible Preferred Stock and Common Stock	3 Months Ended
Convertible Preferred Stock and Common Stock	Aug. 25, 2024
Equity [Abstract]
Convertible Preferred Stock and Common Stock	Convertible Preferred Stock and Common Stock On January 9, 2023, the Company issued 38,750 shares of the Series A Convertible Preferred Stock, par value $0.001 per share (the “Convertible Preferred Stock”), all of which are convertible into shares of Common Stock at the election of the holders of the Convertible Preferred Stock. The Convertible Preferred Stock ranks senior to the Common Stock with respect to dividends, distributions and payments on liquidation, winding-up and dissolution. The Company recorded the Convertible Preferred Stock proceeds of $38,750, as well as issuance costs of $668. The issuance costs are being reduced over the period ending June 29, 2026 as a charge to additional paid-in capital. Dividends The holders of Convertible Preferred Stock are entitled to dividends on the liquidation preference at the rate of 7.5% per annum, payable in-kind. The holders are also entitled to participate in dividends declared or paid on the Common Stock on an as-converted basis. As of August 25, 2024 and May 26, 2024, the aggregate liquidation preference of the Convertible Preferred Stock was $43,797 and $42,991, respectively. Conversion Each holder has the right, at its option, to convert its Convertible Preferred Stock, in whole or in part, into fully paid and non-assessable shares of Common Stock at an initial conversion price equal to $7.00 per share. The conversion price is subject to customary anti-dilution adjustments, including in the event of any stock split, stock dividend, recapitalization or similar events, and is also subject to adjustment in the event of subsequent offerings of Common Stock or convertible securities by the Company for less than the conversion price. Voting Each holder is entitled to vote with the holders of the shares of Common Stock on all matters submitted for a vote of holders of shares of Common Stock. Each holder is entitled the whole number of votes equal to the number of shares of Common Stock into which such holder’s shares of Convertible Preferred Stock would be convertible on the record date for the vote or consent. Registration Rights Agreement The Registration Rights Agreement contains monetary penalties if the Company fails to maintain the effectiveness of the registration statement. As of August 25, 2024, the Company has incurred $4,377 in cumulative monetary penalties and interest under the Registration Rights Agreement due to the delinquent filing of the Company’s annual and quarterly reports with the SEC. The amounts expensed within non-operating other expense, net for monetary penalties during the three months ended August 25, 2024 and August 27, 2023 were $275 and $250, respectively. The Company also incurred $95 in interest on the monetary penalties for the three months ended August 25, 2024, and none for the prior year first quarter. The accrual for these liabilities was $3,841 as of August 25, 2024, which is included in other accrued liabilities.

Earnings Per Share - Schedule of Antidilutive Securities (Details) - shares	3 Months Ended
	Aug. 25, 2024	Aug. 27, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Amount of securities excluded from computation of earnings per share (in shares)	6,100,756	5,956,536
Convertible Preferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Amount of securities excluded from computation of earnings per share (in shares)	5,956,239	5,684,230
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Amount of securities excluded from computation of earnings per share (in shares)	21,111	611
Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Amount of securities excluded from computation of earnings per share (in shares)	123,406	271,695
Performance Share Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Amount of securities excluded from computation of earnings per share (in shares)	0	0

Contract Assets and Liabilities - Narratives (Details) - USD ($) $ in Thousands	3 Months Ended
	Aug. 25, 2024	Aug. 27, 2023
Revenue from Contract with Customer [Abstract]
Revenue recognized included in the contract liability	$ 1,583	$ 2,022

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Aug. 25, 2024	May 26, 2024
Current Assets:
Cash	$ 5,520	$ 8,462
Accounts receivable, less allowance for credit losses	25,145	31,153
Inventories, net	41,642	39,979
Prepaid expenses and other current assets	1,876	1,439
Total Current Assets	74,183	81,033
Property, plant, and equipment, net	148,756	148,598
Operating lease right-of-use assets	2,373	2,442
Goodwill	13,881	13,881
Intangible assets, net	4,200	4,200
Other long-term assets	3,431	3,806
Total Assets	246,824	253,960
Current Liabilities:
Accounts payable	18,010	16,334
Accrued compensation	5,565	5,533
Other accrued liabilities	11,380	9,986
Current portion of lease liabilities	4,141	4,133
Current portion of long-term debt, net, related party	773	773
Total Current Liabilities	40,523	38,872
Long-term debt, less current portion, net, related party	105,545	100,819
Revolving credit facility	21,605	19,691
Debt derivative liability, related party	24,500	25,400
Long-term lease liabilities, less current portion	4,800	4,944
Deferred taxes, net	443	543
Deferred revenues, less current portion, related party	4,791	4,703
Other non-current liabilities	5,114	5,086
Total Liabilities	207,321	200,058
Commitments and Contingencies, see Note 15
Convertible Preferred Stock, $0.001 par value; 2,000,000 shares authorized; 43,257 and 42,461 shares issued and outstanding at August 25, 2024 and May 26, 2024, respectively	43,441	42,587
Shareholders’ Equity:
Common Stock, $0.001 par value; 75,000,000 and 50,000,000 shares authorized; 30,898,255 and 30,562,961 shares issued and outstanding at August 25, 2024 and May 26, 2024, respectively	31	30
Additional paid-in capital	178,784	177,808
Accumulated deficit	(182,753)	(166,523)
Total Shareholders’ (Deficit) Equity	(3,938)	11,315
Total Liabilities, Convertible Preferred Stock, and Shareholders’ Equity	$ 246,824	$ 253,960
Common stock, shares authorized (in shares)	75,000,000	50,000,000
Nonrelated party
Current Assets:
Accounts receivable, less allowance for credit losses	$ 17,674	$ 20,343
Current Liabilities:
Deferred revenues	339	1,088
Related party
Current Assets:
Accounts receivable, less allowance for credit losses	7,471	10,810
Current Liabilities:
Deferred revenues	315	1,025
Deferred revenues, less current portion, related party	$ 4,791	$ 4,703

Fair Value Measurements - Narrative (Details) $ in Thousands	Aug. 25, 2024 USD ($)
Term loan credit facility, related party \| Level 3 \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Borrowings, fair value	$ 132,400

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Aug. 25, 2024	Aug. 27, 2023
Revenues	$ 24,705	$ 24,522
Cost of goods sold	19,318	21,794
Gross profit	5,387	2,728
Operating costs and expenses:
Research and development	2,186	2,146
Selling, general, and administrative	14,785	9,196
Total operating costs and expenses	16,971	11,342
Operating loss	(11,584)	(8,614)
Change in fair value of debt derivative liability, related party	900	200
Other expense, net	(203)	(170)
Net loss from continuing operations before taxes	(16,255)	(12,522)
Provision for income tax benefit (expense)	25	(88)
Net loss from continuing operations	(16,230)	(12,610)
Discontinued operations:
Income from discontinued operations	0	1,850
Income tax benefit	0	6
Income from discontinued operations, net of tax	0	1,856
Net loss	$ (16,230)	$ (10,754)
Basic and diluted net income (loss) per share:
Loss from continuing operations - basic (in dollars per share)	$ (0.53)	$ (0.41)
Income from discontinued operations - basic (in dollars per share)	0	0.06
Total basic net loss per share (in dollars per share)	(0.53)	(0.35)
Loss from continuing operations - diluted (in dollars per share)	(0.53)	(0.41)
Income from discontinued operations - diluted (in dollars per share)	0	0.06
Total diluted net loss per share (in dollars per share)	$ (0.53)	$ (0.35)
Shares used in per share computation:
Basic (in shares)	30,855,742	30,403,392
Diluted (in shares)	30,855,742	30,403,392
Nonrelated party
Revenues	$ 16,793	$ 16,953
Operating costs and expenses:
Interest expense, net	(968)	(793)
Related party
Revenues	7,912	7,569
Operating costs and expenses:
Interest expense, net	$ (4,400)	$ (3,145)

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Aug. 25, 2024	Aug. 27, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (16,230)	$ (10,754)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

Organization, Basis of Presentation, and Summary of Significant Accounting Policies (Details)	3 Months Ended
	Aug. 25, 2024 segment $ / shares	May 26, 2024 $ / shares
Accounting Policies [Abstract]
Number of reportable segments	1
Number of operating segments	1
Common stock, par value (in dollars per share) \| $ / shares	$ 0.001	$ 0.001

Property, Plant, and Equipment

3 Months Ended

Aug. 25, 2024

Property, Plant and Equipment [Abstract]

Property, Plant, and Equipment

Property, plant, and equipment consists of the following:


	August 25, 2024		May 26, 2024
Land and land improvements	$	3,739	$	3,739
Buildings and building improvements	62,887		62,874

Machinery and equipment	61,249		61,013
Computer equipment and software	8,306		8,290
Furniture and fixtures	1,642		1,631
Construction in process	63,260		61,385
Gross property, plant, and equipment	201,083		198,932
Less accumulated depreciation and amortization	(52,327)		(50,334)
Net property, plant, and equipment	$	148,756	$	148,598

The major components of the construction in process are related to two multi-head aseptic filler production lines, including the associated building modifications, to significantly increase manufacturing capacity.

Depreciation and amortization expense for property, plant, and equipment for the three months ended August 25, 2024 and August 27, 2023 was $1,993 and $1,947, respectively.

Capitalized interest on construction projects was $711 and $969 for three months ended August 25, 2024 and August 27, 2023, respectively. Interest is capitalized based on the average outstanding construction in process balance, excluding previously capitalized interest, using a 10% interest rate.

Property, plant, and equipment acquisitions that provide a benefit over several years, and exceed five thousand dollars, are capitalized. The depreciation policy for property, plant, and equipment is as follows:


	Depreciable Lives (in years)
Land improvements	10	—	40
Buildings and building improvements	7	—	40
Machinery and equipment	7	—	25
Transportation equipment	5	—	12
Computer hardware and software	3	—	10
Furniture, fixtures, and office equipment	5	—	10
Tools, molds, and dies	3

Convertible Preferred Stock and Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	Jan. 09, 2023	Aug. 25, 2024	Aug. 27, 2023	May 26, 2024
Class of Stock [Line Items]
Registration rights agreement penalty		$ 4,377
Registration rights agreement penalty, expense		275	$ 250
Registration rights agreement penalty, interest		95	$ 0
Registration rights agreement penalty, accrual		3,841
Series A Preferred Stock
Class of Stock [Line Items]
Proceeds of convertible preferred stock, net of issuance costs (in shares)	38,750
Temporary equity par value (usd per share)	$ 0.001
Proceeds from issuance of convertible preferred stock	$ 38,750
Stock issuance costs	$ 668
Dividend percentage rate	7.50%
Liquidation preference		$ 43,797		$ 42,991
Temporary equity, liquidation preference (usd per share)	$ 7.00

Revenue - Disaggregation of Revenue by Product Line (Details) - USD ($) $ in Thousands	3 Months Ended
	Aug. 25, 2024	Aug. 27, 2023
Segment Reporting Information [Line Items]
Revenues	$ 24,705	$ 24,522
CDMO
Segment Reporting Information [Line Items]
Revenues	20,180	21,539
Fermentation
Segment Reporting Information [Line Items]
Revenues	$ 4,525	$ 2,983

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

+ References

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-Topic 280
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+ Details

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Aug. 25, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Inventories - Schedule of Inventory (Details) - USD ($) $ in Thousands	Aug. 25, 2024	May 26, 2024
Inventory Disclosure [Abstract]
Finished goods	$ 15,287	$ 14,924
Raw materials	15,515	14,555
Work in process	12,072	11,915
Gross inventories	42,874	41,394
Less: Inventory reserve	(1,232)	(1,415)
Inventories, net	$ 41,642	$ 39,979

Accounts Receivable - Schedule of Accounts Receivable Balances (Details) - USD ($) $ in Thousands	Aug. 25, 2024	May 26, 2024
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	$ 25,845	$ 31,864
Less: Allowance for credit losses	(700)	(711)
Accounts receivable, less allowance for credit losses	25,145	31,153
Billed
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	21,720	27,795
Unbilled
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	$ 4,125	$ 4,069

Stock-based Compensation (Tables)

3 Months Ended

Aug. 25, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Option Weighted Average Assumptions

The following table displays the estimated fair value of stock options granted and the weighted average assumptions utilized:


	Three Months Ended
	August 25, 2024
Weighted-average grant date fair value	$	2.48
Assumptions:
Expected life (in years)	4.35
Risk-free interest rate	3.88		%
Volatility	53		%
Dividend yield	—		%

Summary of Stock Option Activity

A summary of the activity under the Company’s stock option plans as of August 25, 2024 and changes during the fiscal quarter then ended is presented below:


	Options Outstanding	Weighted-Average Exercise Price Per Share		Total Intrinsic Value of Options Exercised (in thousands)		Weighted-Average Remaining Contractual Term in Years	Aggregate Intrinsic Value (in thousands)
Options outstanding at May 26, 2024	2,112,591	$	10.88			2.44	$	—
Options granted	54,150	$	5.28
Options exercised	—	$	—	$	—
Options forfeited	(16,956)	$	10.13
Options expired	(75,000)	$	14.00
Options outstanding at August 25, 2024	2,074,785	$	10.63			2.24	$	39
Options exercisable at August 25, 2024	1,872,086	$	10.82			1.89	$	—

Summary of Stock-based Compensation Activity

A summary of the Company’s RSU award activity as of August 25, 2024 and changes during the fiscal quarter then ended is presented below:


	Restricted Stock Units Outstanding	Weighted-Average Grant Date Fair Value Per Share
RSUs outstanding at May 26, 2024	1,622,004	$	7.83
Granted	358,392	$	5.18
Vested	(435,448)	$	8.54
Forfeited	(108,708)	$	7.06
RSUs outstanding at August 25, 2024	1,436,240	$	7.01

A summary of the Company’s PSU award activity as of August 25, 2024 and changes during the fiscal quarter then ended is presented below:


	Performance Share Units Outstanding	Weighted-Average Grant Date Fair Value Per Share
PSUs outstanding at May 26, 2024	1,500,000	$	4.66
Granted	—	$	—
Vested	—	$	—
Forfeited	—	$	—
PSUs outstanding at August 25, 2024	1,500,000	$	4.66

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

The following table summarizes stock-based compensation by income statement line item:


	Three Months Ended
	August 25, 2024		August 27, 2023
Cost of product sales	$	141	$	184
Research and development	13		43
Selling, general and administrative	2,265		1,306
Stock-based compensation expense	2,419		1,533
Amount capitalized into property, plant, and equipment	—		8
Total stock-based compensation costs	$	2,419	$	1,541

Leases	3 Months Ended
Leases	Aug. 25, 2024
Leases [Abstract]
Leases	Leases Finance Leases In September 2015, Lifecore executed a lease for an 80,950 square foot building in Chaska, MN, two miles from its headquarters facility. Lifecore and the lessor made capital improvements prior to occupancy and thus the lease did not become effective until January 2016. Lifecore is currently using the building for warehousing and final packaging. The initial term of the lease was seven years with two five-year renewal options. In December 2022, Lifecore exercised one of the options to renew the lease for an additional five years, which extended the lease to December 31, 2027. That lease amendment contained a buyout option at any time during the renewal period with the purchase price equal to the mortgage balance on the lessor’s loan secured by the building. The finance lease obligation at May 26, 2024 assumed the buyout option would be exercised during fiscal year 2028, which was estimated to be $2,568. On August 9, 2024, Lifecore amended this lease, which will provide for $2,400 in cash to the Company in exchange for a revised rent payment schedule and an updated purchase option. The cash payment is scheduled to occur in the second fiscal quarter of 2025. This amendment, when fully executed through the receipt of the cash consideration, will increase the future lease payments by $2,637 and extend the term to September 30, 2034. During the second quarter when the $2,400 is scheduled to be received, the additional future payments will be discounted at the Company’s incremental borrowing rate, resulting in an increase to the present value of the finance lease obligation. The only other finance lease that Lifecore has relates to a truck that was executed during fiscal year 2024. The truck lease runs for three years and had an initial capitalized amount of $196. Operating Leases Lifecore leases facilities and equipment under operating lease agreements with various terms and conditions, which expire at various dates through fiscal year 2033. Certain of these leases have renewal options. The only active operating real estate lease relates to a 21,384 square foot building in Chanhassen, Minnesota, containing a warehouse and office space. The lease commenced on September 1, 2020 with an initial term of seven years, plus an option to extend it for an additional five years. The extension period was included in the lease obligation at inception since it was reasonably certain to be exercised. Prior to occupancy, $1,922 in improvements were made to the building, which was funded by the lessor. Lifecore is reimbursing the lessor for costs over 84 months. The future lease payments under this lease, which extend through 2033, total $2,157 as of August 25, 2024. An operating lease for the Curation Foods former headquarters located in Santa Maria, California was terminated in December 2023. The property was vacated and surrendered to the lessor on February 29, 2024. The only other Lifecore operating leases relate to printer/copiers, with terms ranging from 36 to 60 months. The future lease payments under these leases, which extend through March 2027, totaled $60 as of August 25, 2024.
Leases	Leases Finance Leases In September 2015, Lifecore executed a lease for an 80,950 square foot building in Chaska, MN, two miles from its headquarters facility. Lifecore and the lessor made capital improvements prior to occupancy and thus the lease did not become effective until January 2016. Lifecore is currently using the building for warehousing and final packaging. The initial term of the lease was seven years with two five-year renewal options. In December 2022, Lifecore exercised one of the options to renew the lease for an additional five years, which extended the lease to December 31, 2027. That lease amendment contained a buyout option at any time during the renewal period with the purchase price equal to the mortgage balance on the lessor’s loan secured by the building. The finance lease obligation at May 26, 2024 assumed the buyout option would be exercised during fiscal year 2028, which was estimated to be $2,568. On August 9, 2024, Lifecore amended this lease, which will provide for $2,400 in cash to the Company in exchange for a revised rent payment schedule and an updated purchase option. The cash payment is scheduled to occur in the second fiscal quarter of 2025. This amendment, when fully executed through the receipt of the cash consideration, will increase the future lease payments by $2,637 and extend the term to September 30, 2034. During the second quarter when the $2,400 is scheduled to be received, the additional future payments will be discounted at the Company’s incremental borrowing rate, resulting in an increase to the present value of the finance lease obligation. The only other finance lease that Lifecore has relates to a truck that was executed during fiscal year 2024. The truck lease runs for three years and had an initial capitalized amount of $196. Operating Leases Lifecore leases facilities and equipment under operating lease agreements with various terms and conditions, which expire at various dates through fiscal year 2033. Certain of these leases have renewal options. The only active operating real estate lease relates to a 21,384 square foot building in Chanhassen, Minnesota, containing a warehouse and office space. The lease commenced on September 1, 2020 with an initial term of seven years, plus an option to extend it for an additional five years. The extension period was included in the lease obligation at inception since it was reasonably certain to be exercised. Prior to occupancy, $1,922 in improvements were made to the building, which was funded by the lessor. Lifecore is reimbursing the lessor for costs over 84 months. The future lease payments under this lease, which extend through 2033, total $2,157 as of August 25, 2024. An operating lease for the Curation Foods former headquarters located in Santa Maria, California was terminated in December 2023. The property was vacated and surrendered to the lessor on February 29, 2024. The only other Lifecore operating leases relate to printer/copiers, with terms ranging from 36 to 60 months. The future lease payments under these leases, which extend through March 2027, totaled $60 as of August 25, 2024.

Revenue - Narrative (Details) - Revenues - Customer Concentration Risk	3 Months Ended
	Aug. 25, 2024	Aug. 27, 2023
Customer A
Related Party Transaction [Line Items]
Concentration risk percentage	32.00%	31.00%
Customer B
Related Party Transaction [Line Items]
Concentration risk percentage	24.00%	21.00%
Customer C
Related Party Transaction [Line Items]
Concentration risk percentage		15.00%

Inventories- Narrative (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
Inventories- Narrative (Details) - USD ($) $ in Thousands	Aug. 25, 2024	May 26, 2024
Inventory Disclosure [Abstract]
Inventory write-down	$ 1,217	$ 776

Earnings Per Share - Schedule of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Aug. 25, 2024	Aug. 27, 2023
Numerator:
Net loss from continuing operations	$ (16,230)	$ (12,610)
Income from discontinued operations, net of tax	0	1,856
Net loss	$ (16,230)	$ (10,754)
Denominator:
Weighted average shares for basic net income (loss) per share (in shares)	30,855,742	30,403,392
Weighted average shares for diluted net income (loss) per share (in shares)	30,855,742	30,403,392
Basic and diluted net income (loss) per share:
Loss from continuing operations - basic (in dollars per share)	$ (0.53)	$ (0.41)
Income from discontinued operations - basic (in dollars per share)	0	0.06
Total basic net loss per share (in dollars per share)	(0.53)	(0.35)
Loss from continuing operations - diluted (in dollars per share)	(0.53)	(0.41)
Income from discontinued operations - diluted (in dollars per share)	0	0.06
Total diluted net loss per share (in dollars per share)	$ (0.53)	$ (0.35)

Inventories (Tables)

3 Months Ended

Aug. 25, 2024

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories are stated at the lower of cost (using the first-in, first-out method) or net realizable value. Inventories consisted of the following:


	August 25, 2024		May 26, 2024
Finished goods	$	15,287	$	14,924
Raw materials	15,515		14,555
Work in process	12,072		11,915
Gross inventories	42,874		41,394
Less: Inventory reserve	(1,232)		(1,415)
Inventories, net	$	41,642	$	39,979

Debt - Future Minimum Principal Payments of Debt (Details) - USD ($) $ in Thousands	Aug. 25, 2024	May 26, 2024
Debt Disclosure [Abstract]
Remainder of Fiscal year 2025	$ 580
Fiscal year 2026	773
Fiscal year 2027	773
Fiscal year 2028	773
Fiscal year 2029	162,018
Fiscal year 2030	773
Thereafter	2,512
Total	$ 168,202	$ 164,463

Organization, Basis of Presentation, and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Aug. 25, 2024
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying Condensed Consolidated Balance Sheet as of May 26, 2024, which has been derived from audited financial statements, and the accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) have been made which are necessary to present fairly the financial position of the Company at August 25, 2024, and the results of operations and cash flows for all periods presented. Although the Company believes that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information normally included in financial statements and related footnotes prepared following GAAP have been condensed or omitted per the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying financial data should be reviewed in conjunction with the audited financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended May 26, 2024.
Fiscal Period	The Company’s fiscal year is the 52- or 53-week period that ends on the last Sunday of May with quarters within each year ending on the last Sunday of August, November, and February; however, in instances where the last Sunday would result in a quarter being 12-weeks in length, the Company’s policy is to extend that quarter to the following Sunday. A 14th week is included in the fiscal year every five or six years to realign the Company’s fiscal quarters with calendar quarters. The results reported in these interim condensed consolidated financial statements are not necessarily indicative of the results that may be reported for the entire year.
Statement of Comprehensive Income	Statement of Comprehensive Income In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 220, Comprehensive Income, a statement of comprehensive income has not been included as the Company has no items of other comprehensive income. Comprehensive loss is the same as net loss for all periods presented.
Basis of Consolidation	Basis of Consolidation The condensed consolidated financial statements are presented on the accrual basis of accounting in accordance with GAAP and include the accounts of the Company and its subsidiaries. All material inter-company transactions and balances have been eliminated.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates that require management’s most significant and subjective judgments include revenue recognition; recognition and measurement of current and deferred income tax assets and liabilities; the recoverability assessment of inventories; the valuation and recognition of stock-based compensation; and the valuation of the debt derivative liability. These estimates involve the consideration of complex factors and require management to make judgments. The analysis of historical and future trends can require extended periods of time to resolve and are subject to change from period to period. The actual results may differ from management’s estimates.
Reportable Segments	Reportable Segments The Company operates as one reportable segment: Lifecore. This is based on the objectives of the business and how our chief operating decision maker, the President and Chief Executive Officer, regularly reviews and manages the business, monitors operating performance and allocates resources.
Concentrations of Risk	Concentrations of Risk Cash and trade accounts receivable are financial instruments that potentially subject the Company to concentrations of credit risk. Our Company policy limits, among other things, the amount of credit exposure to any one issuer and to any one type of investment, other than securities issued or guaranteed by the U.S. government. The Company maintains cash in U.S. bank accounts, the balance of which may at times exceed the federally insured limit.
Per Share Information	Per Share Information Accounting guidance requires the presentation of basic and diluted earnings per share. Basic earnings per share is computed using the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution as if securities or other contracts to issue the Company’s common stock, par value $0.001 per share (“Common Stock”) were exercised or converted into Common Stock. The Company’s diluted common equivalent shares consist of convertible preferred stock, stock options, restricted stock units (“RSUs”), and performance share units (“PSUs”). Dilution related to stock options, RSUs and PSUs is calculated using the treasury stock method, which includes the assumed repurchase of common shares from cash received upon stock option exercises, and unrecognized compensation expense. The potential dilutive effect of the Convertible Preferred Stock is calculated using the if-converted method assuming the conversion as of the earliest period reported or at the date of issuance, if later, but are excluded if their effect is anti-dilutive.
Fair Value Measurements	Fair Value Measurements The Company uses fair value measurement accounting for financial assets and liabilities and for financial instruments and certain other items measured at fair value. The Company has not elected the fair value option for any of its other eligible financial assets or liabilities. Applicable accounting guidance establishes a three-tier hierarchy for fair value measurements, which prioritizes the inputs used in measuring fair value as follows: Level 1 – observable inputs such as quoted prices for identical instruments in active markets. Level 2 – inputs other than quoted prices in active markets that are observable either directly or indirectly through corroboration with observable market data. Level 3 – unobservable inputs in which there is little or no market data, which would require the Company to develop its own assumptions.
Related Party Transactions	Related Party Transactions The Company has reflected related party balances on the face of its financial statements beginning in the period which Alcon Research, LLC (“Alcon”) became a related party, which was as of May 22, 2023 at the time Alcon provided financing to the Company. Prior to providing financing, and continuing subsequently, Alcon was a customer of the Company.

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Aug. 25, 2024	May 26, 2024
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	2,000,000	2,000,000
Preferred stock, shares issued (in shares)	43,257	42,461
Preferred stock, shares outstanding (in shares)	43,257	42,461
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	75,000,000	50,000,000
Common stock, shares issued (in shares)	30,898,255	30,562,961
Common stock, shares outstanding (in shares)	30,898,255	30,562,961

Discontinued Operations	3 Months Ended
Discontinued Operations	Aug. 25, 2024
Discontinued Operations and Disposal Groups [Abstract]
Discontinued Operations	Discontinued Operations On August 24, 2023, the Company reached a confidential settlement and release agreement with a third-party insurance underwriter as a result of a claim filed by the Curation Foods business. In connection with this settlement agreement, the Company received a cash payment of $1,850 on September 19, 2023, which was recognized as income from discontinued operations in the three months ended August 27, 2023.

Restructuring Costs - Schedule of Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Aug. 25, 2024	Aug. 27, 2023
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 483	$ (10)
Employee severance and benefit costs
Restructuring Cost and Reserve [Line Items]
Restructuring costs	439	(18)
Lease costs
Restructuring Cost and Reserve [Line Items]
Restructuring costs	0	7
Other restructuring costs
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 44	$ 1

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Stock-based Compensation - Restricted Stock Unit Activity (Details) - Restricted Stock Units	3 Months Ended
	Aug. 25, 2024 $ / shares shares
Restricted Stock Units Outstanding
Beginning balance (in shares) \| shares	1,622,004
Granted (in shares) \| shares	358,392
Vested (in shares) \| shares	(435,448)
Forfeited (in shares) \| shares	(108,708)
Ending balance (in shares) \| shares	1,436,240
Weighted-Average Grant Date Fair Value Per Share
Beginning balance (in dollars per share) \| $ / shares	$ 7.83
Granted (in dollars per share) \| $ / shares	5.18
Vested (in dollars per share) \| $ / shares	8.54
Forfeited (in dollars per share) \| $ / shares	7.06
Ending balance (in dollars per share) \| $ / shares	$ 7.01

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Aug. 25, 2024	Aug. 27, 2023
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ (25)	$ 88
Effective tax rate	0.20%	(0.70%)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 270
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482964/270-10-50-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (ee)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-32

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 4: http://www.xbrl.org/2003/role/exampleRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 231
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482663/740-10-55-231

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-9

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 6.I.7)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 8
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-8

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-10

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-22

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(9))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477250/944-220-S99-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Subparagraph (a)
-SubTopic 20
-Topic 740
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482659/740-20-45-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h))
-SubTopic 10
-Topic 235
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

+ Details

Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Aug. 25, 2024	May 26, 2024
Debt Instrument [Line Items]
Total principal amount of long-term debt	$ 168,202	$ 164,463
Total long-term debt, net of discounts	106,318	101,592
Less: current portion of long-term debt, net, related party	(773)	(773)
Long-term debt, net	105,545	100,819
Revolving credit facility	21,605	19,691
Nonrelated party
Debt Instrument [Line Items]
Less: unamortized debt discount	(479)	(504)
Related party
Debt Instrument [Line Items]
Less: unamortized debt discount	(61,405)	(62,367)
Line of credit \| Term loan credit facility, related party
Debt Instrument [Line Items]
Total principal amount of long-term debt	161,245	157,313
Equipment financing, related party
Debt Instrument [Line Items]
Total principal amount of long-term debt	$ 6,957	$ 7,150

Restructuring Costs - Restructuring Costs Liability Roll-Forward (Details) - USD ($) $ in Thousands	3 Months Ended
	Aug. 25, 2024	Aug. 27, 2023
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	$ 4,771
Expense	$ 483	$ (10)
Restructuring Charges, Statement of Income or Comprehensive Income [Extensible Enumeration]	Selling, general, and administrative
Payments	$ (437)
Restructuring reserve, ending balance	4,817
Employee severance and benefit costs
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	217
Expense	439	(18)
Payments	(397)
Restructuring reserve, ending balance	259
Lease costs
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	4,290
Expense	0	7
Payments	0
Restructuring reserve, ending balance	4,290
Other restructuring costs
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	264
Expense	44	$ 1
Payments	(40)
Restructuring reserve, ending balance	$ 268

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Aug. 25, 2024	Aug. 27, 2023
Cash flows from operating activities:
Net loss	$ (16,230)	$ (10,754)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,993	2,168
Stock-based compensation	2,419	1,533
Deferred taxes	(100)	76
Change in debt derivative liability, related party	(900)	(200)
Provision for expected credit losses	(11)	21
Other, net	0	3
Changes in operating assets and liabilities:
Inventories	(1,663)	(849)
Other assets	(244)	(2,426)
Accounts payable	3,628	(4,202)
Accrued compensation	32	371
Other liabilities	1,154	(2,530)
Net cash used in operating activities	(643)	(8,329)
Cash flows from investing activities:
Purchases of property, plant, and equipment	(3,392)	(5,054)
Net cash used in investing activities	(3,392)	(5,054)
Cash flows from financing activities:
Issuance of common stock under stock-based compensation plans	1	0
Proceeds from exercise of stock options	0	724
Proceeds from revolving credit facility, net	1,914	2,281
Taxes paid by the Company for employee stock plans	(589)	(45)
Principal payments on equipment financing, related party	(193)	0
Principal payments on finance leases	(40)	(26)
Net cash provided by financing activities	1,093	2,934
Net decrease in cash	(2,942)	(10,449)
Cash, beginning of period	8,462	19,091
Cash, end of period	5,520	8,642
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property, plant, and equipment in accounts payable	5,906	4,741
Capitalized interest	711	969
Convertible Preferred Stock PIK dividend	806	748
Nonrelated party
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash interest expense	423	0
Changes in operating assets and liabilities:
Accounts receivable	2,680	9,241
Deferred revenues	(749)	(451)
Related party
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash interest expense	4,296	3,025
Changes in operating assets and liabilities:
Accounts receivable	3,339	(6,855)
Deferred revenues	$ (710)	$ 3,500

Organization, Basis of Presentation, and Summary of Significant Accounting Policies	3 Months Ended
	Aug. 25, 2024
Accounting Policies [Abstract]
Organization, Basis of Presentation, and Summary of Significant Accounting Policies	Organization, Basis of Presentation, and Summary of Significant Accounting Policies Organization Lifecore Biomedical, Inc. and its subsidiaries (“Lifecore” or the “Company”) is a fully integrated contract development and manufacturing organization (“CDMO”) that offers capabilities in the development, fill and finish of complex sterile injectable pharmaceutical products in syringes, vials, and cartridges. Discontinued Operations The Company previously operated a natural food company through its wholly-owned subsidiary, Curation Foods, Inc. (“Curation Foods”). During the year ended May 28, 2023, the Company entered into agreements for the sale or disposition of all subsidiaries within the Curation Foods business, which was completed during the year ended May 26, 2024. Upon completion of the dispositions, it ceased to operate the Curation Foods business. Basis of Presentation The accompanying Condensed Consolidated Balance Sheet as of May 26, 2024, which has been derived from audited financial statements, and the accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) have been made which are necessary to present fairly the financial position of the Company at August 25, 2024, and the results of operations and cash flows for all periods presented. Although the Company believes that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information normally included in financial statements and related footnotes prepared following GAAP have been condensed or omitted per the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying financial data should be reviewed in conjunction with the audited financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended May 26, 2024. The Company’s fiscal year is the 52- or 53-week period that ends on the last Sunday of May with quarters within each year ending on the last Sunday of August, November, and February; however, in instances where the last Sunday would result in a quarter being 12-weeks in length, the Company’s policy is to extend that quarter to the following Sunday. A 14th week is included in the fiscal year every five or six years to realign the Company’s fiscal quarters with calendar quarters. The results reported in these interim condensed consolidated financial statements are not necessarily indicative of the results that may be reported for the entire year. Statement of Comprehensive Income In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 220, Comprehensive Income, a statement of comprehensive income has not been included as the Company has no items of other comprehensive income. Comprehensive loss is the same as net loss for all periods presented. Basis of Consolidation The condensed consolidated financial statements are presented on the accrual basis of accounting in accordance with GAAP and include the accounts of the Company and its subsidiaries. All material inter-company transactions and balances have been eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates that require management’s most significant and subjective judgments include revenue recognition; recognition and measurement of current and deferred income tax assets and liabilities; the recoverability assessment of inventories; the valuation and recognition of stock-based compensation; and the valuation of the debt derivative liability. These estimates involve the consideration of complex factors and require management to make judgments. The analysis of historical and future trends can require extended periods of time to resolve and are subject to change from period to period. The actual results may differ from management’s estimates. Reportable Segments The Company operates as one reportable segment: Lifecore. This is based on the objectives of the business and how our chief operating decision maker, the President and Chief Executive Officer, regularly reviews and manages the business, monitors operating performance and allocates resources. Concentrations of Risk Cash and trade accounts receivable are financial instruments that potentially subject the Company to concentrations of credit risk. Our Company policy limits, among other things, the amount of credit exposure to any one issuer and to any one type of investment, other than securities issued or guaranteed by the U.S. government. The Company maintains cash in U.S. bank accounts, the balance of which may at times exceed the federally insured limit. During the three months ended August 25, 2024 and August 27, 2023, the company had significant sales concentrations with certain customers. The Company also had accounts receivable concentrations at August 25, 2024 and May 26, 2024. See Note 2 – Revenue and Note 7 – Accounts Receivable, for the quantification of these concentrations. Per Share Information Accounting guidance requires the presentation of basic and diluted earnings per share. Basic earnings per share is computed using the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution as if securities or other contracts to issue the Company’s common stock, par value $0.001 per share (“Common Stock”) were exercised or converted into Common Stock. The Company’s diluted common equivalent shares consist of convertible preferred stock, stock options, restricted stock units (“RSUs”), and performance share units (“PSUs”). Dilution related to stock options, RSUs and PSUs is calculated using the treasury stock method, which includes the assumed repurchase of common shares from cash received upon stock option exercises, and unrecognized compensation expense. The potential dilutive effect of the Convertible Preferred Stock is calculated using the if-converted method assuming the conversion as of the earliest period reported or at the date of issuance, if later, but are excluded if their effect is anti-dilutive. Fair Value Measurements The Company uses fair value measurement accounting for financial assets and liabilities and for financial instruments and certain other items measured at fair value. The Company has not elected the fair value option for any of its other eligible financial assets or liabilities. Applicable accounting guidance establishes a three-tier hierarchy for fair value measurements, which prioritizes the inputs used in measuring fair value as follows: Level 1 – observable inputs such as quoted prices for identical instruments in active markets. Level 2 – inputs other than quoted prices in active markets that are observable either directly or indirectly through corroboration with observable market data. Level 3 – unobservable inputs in which there is little or no market data, which would require the Company to develop its own assumptions. Related Party Transactions The Company has reflected related party balances on the face of its financial statements beginning in the period which Alcon Research, LLC (“Alcon”) became a related party, which was as of May 22, 2023 at the time Alcon provided financing to the Company. Prior to providing financing, and continuing subsequently, Alcon was a customer of the Company. Refer to Note 10 – Debt for additional discussion on the Company’s debt agreement with Alcon.

Earnings Per Share (Tables)

3 Months Ended

Aug. 25, 2024

Earnings Per Share [Abstract]

Schedule of Computation of Diluted Net Income Per Share

The following table sets forth the computation of basic and diluted earnings per share:


	Three Months Ended
	August 25, 2024		August 27, 2023
Numerator:
Net loss from continuing operations	$	(16,230)	$	(12,610)
Income from discontinued operations, net of tax	—		1,856
Net loss	$	(16,230)	$	(10,754)

Denominator:
Weighted average shares for basic and diluted net income (loss) per share	30,855,742		30,403,392





Basic and diluted net income (loss) per share:
Loss from continuing operations	$	(0.53)	$	(0.41)
Income from discontinued operations	—		0.06
Total basic and diluted net loss per share	$	(0.53)	$	(0.35)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share


	Three Months Ended
	August 25, 2024	August 27, 2023
Convertible Preferred Stock	5,956,239	5,684,230
Stock Options	21,111	611
Restricted Stock Units	123,406	271,695
Performance Share Units(1)	—	—
Total	6,100,756	5,956,536

(1) PSUs are not considered dilutive until performance targets are met.

Restructuring Costs (Tables)

3 Months Ended

Aug. 25, 2024

Restructuring and Related Activities [Abstract]

Schedule of Restructuring and Related Costs


	Three Months Ended
	August 25, 2024		August 27, 2023
Employee severance and benefit costs	$	439	$	(18)
Lease costs	—		7
Other restructuring costs	44		1
Total restructuring costs	$	483	$	(10)


	May 26, 2024		Expense		Payments		August 25, 2024
Employee severance and benefit costs	$	217	$	439	$	(397)	$	259
Lease costs	4,290		—		—		4,290
Other restructuring costs	264		44		(40)		268
	$	4,771	$	483	$	(437)	$	4,817

Inventories

3 Months Ended

Aug. 25, 2024

Inventory Disclosure [Abstract]

Inventories

Inventories primarily consist of in-process and finished goods related to sterile injectable pharmaceutical products in syringes, vials and cartridges. This includes premium, pharmaceutical grade HA in bulk form as well as formulated and filled syringes, vials and cartridges for injectable products used in treating a broad spectrum of medical conditions and procedures.

Inventories are stated at the lower of cost (using the first-in, first-out method) or net realizable value. Inventories consisted of the following:


	August 25, 2024		May 26, 2024
Finished goods	$	15,287	$	14,924
Raw materials	15,515		14,555
Work in process	12,072		11,915
Gross inventories	42,874		41,394
Less: Inventory reserve	(1,232)		(1,415)
Inventories, net	$	41,642	$	39,979

Adjustments to inventory are determined at the raw materials, work-in-process, and finished good levels to reflect obsolescence or impaired balances. Factors influencing inventory obsolescence include changes in demand, product life cycle, product pricing, physical deterioration, and quality concerns. The Company recorded adjustments of $1,217 and $776 to record inventory to its net realizable value as of August 25, 2024 and May 26, 2024, respectively.

The Company’s inventory serves as part of the collateral for certain of the Company’s debt arrangements. Refer to Note 10 – Debt for additional discussion on the Company’s debt arrangements and related collateral.

Stock-based Compensation - Performance Share Unit Activity (Details) - Performance Share Units	3 Months Ended
	Aug. 25, 2024 $ / shares shares
Performance Share Units Outstanding
Beginning balance (in shares) \| shares	1,500,000
Granted (in shares) \| shares	0
Vested (in shares) \| shares	0
Forfeited (in shares) \| shares	0
Ending balance (in shares) \| shares	1,500,000
Weighted-Average Grant Date Fair Value Per Share
Beginning balance (in dollars per share) \| $ / shares	$ 4.66
Granted (in dollars per share) \| $ / shares	0
Vested (in dollars per share) \| $ / shares	0
Forfeited (in dollars per share) \| $ / shares	0
Ending balance (in dollars per share) \| $ / shares	$ 4.66

Accounts Receivable - Changes in Allowance for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Aug. 25, 2024	Aug. 27, 2023
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 711	$ 485
Provision (Reduction)	(11)	21
Charge-offs	0	0
Ending Balance	$ 700	$ 506

Contract Assets and Liabilities

3 Months Ended

Aug. 25, 2024

Revenue from Contract with Customer [Abstract]

Contract Assets and Liabilities

Revenue


	Three Months Ended
	August 25, 2024		August 27, 2023
CDMO	$	20,180	$	21,539
Fermentation	4,525		2,983
Total	$	24,705	$	24,522

The following table disaggregates revenues by the timing of revenue recognition:


	Three Months Ended
	August 25, 2024		August 27, 2023
CDMO - Developmental Services revenue recognized over time	$	5,876	$	6,381
Revenues recognized at a point in time	18,829		18,141
Total	$	24,705	$	24,522

Contract Assets and Liabilities

Contract assets primarily relate to the Company’s unconditional right to consideration for work completed but not billed at the reporting date.

Contract liabilities primarily relate to payments received from customers in advance of performance under a contract. Any incremental costs of obtaining a contract are expensed as incurred.


	Description	Balance Sheet Presentation	August 25, 2024		May 26, 2024
Assets:
	Receivables not yet billed	Accounts receivable, less allowance for credit losses	$	4,033	$	3,885
	Related party receivables not yet billed	Accounts receivable, related party	92		184
		Total contract assets	$	4,125	$	4,069

Current Liabilities:
	Advances on customer-owned equipment	Other accrued liabilities	$	3,590	$	3,509
	Non related parties deferred revenue	Deferred revenues	339		1,088
	Related party deferred revenue	Deferred revenues, related party	315		1,025

Non-Current Liabilities:
	Related party deferred revenue	Deferred revenues, less current portion, related party	4,791		4,703
	Non-current customer deposit	Other non-current liabilities	216		257
		Total contract liabilities	$	9,251	$	10,582

Revenues recognized during the three months ended August 25, 2024 that were included in the contract liability balance at the beginning of fiscal year 2025, were $1,583.


	Description	Balance Sheet Presentation	August 27, 2023		May 28, 2023
Assets:
	Receivables not yet billed	Accounts receivable, less allowance for credit losses	$	4,082	$	3,055
	Related party receivables not yet billed	Accounts receivable, related party	44		143
		Total contract assets	$	4,126	$	3,198

Current Liabilities:
	Non related parties deferred revenue	Deferred revenues	$	101	$	552
	Related party deferred revenue	Deferred revenues, related party	8,256		3,503

Non-Current Liabilities:
	Related party deferred revenue	Deferred revenues, less current portion, related party	1,687		2,940
		Total contract liabilities	$	10,044	$	6,995

Revenues recognized during the three months ended August 27, 2023, that were included in the contract liability balance at the beginning of fiscal year 2024, were $2,022.

- Definition

+ References

+ Details

Income Taxes	3 Months Ended
Income Taxes	Aug. 25, 2024
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The provision for income taxes from continuing operations for the three months ended August 25, 2024 and August 27, 2023, was a benefit of $25 and an expense of $88, respectively. The effective tax rate for the three months ended August 25, 2024 and August 27, 2023 was 0.2% and (0.7)%, respectively. The effective tax rate for the three months ended August 25, 2024 and August 27, 2023, was lower than the statutory federal income tax rate of 21% primarily due to the valuation allowance recorded against certain deferred tax assets, offset by the federal and state research and development tax credits.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Stock-based Compensation - Summary of Stock-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Aug. 25, 2024	Aug. 27, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 2,419	$ 1,533
Amount capitalized into property, plant, and equipment	0	8
Total stock-based compensation costs	2,419	1,541
Cost of product sales
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	141	184
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	13	43
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 2,265	$ 1,306

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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+ Details

Property, Plant, and Equipment - Narrative (Details) $ in Thousands	3 Months Ended
	Aug. 25, 2024 USD ($) component	Aug. 27, 2023 USD ($)
Property, Plant and Equipment [Abstract]
Number of production lines \| component	2
Depreciation and amortization expense	$ 1,993	$ 1,947
Capitalized interest	$ 711	$ 969
Capitalized interest, rate	10.00%
Capitalization threshold	$ 5

Accounts Receivable (Tables)

3 Months Ended

Aug. 25, 2024

Receivables [Abstract]

Schedule of Accounts Receivable

Accounts receivable balances are as follows:


	August 25, 2024		May 26, 2024
Accounts receivable	$	25,845	$	31,864
Less: Allowance for credit losses	(700)		(711)
Accounts receivable, less allowance for credit losses	$	25,145	$	31,153

Gross receivable by bill type are as follows:


	August 25, 2024		May 26, 2024
Billed	$	21,720	$	27,795
Unbilled	4,125		4,069
Accounts receivable	$	25,845	$	31,864

Changes in the allowance for credit losses related to accounts receivable are as follows:


	Three Months Ended
	August 25, 2024		August 27, 2023
Beginning balance	$	711	$	485
Provision (Reduction)	(11)		21
Charge-offs	—		—

Ending Balance	$	700	$	506

Property, Plant, and Equipment (Tables)

3 Months Ended

Aug. 25, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

Property, plant, and equipment consists of the following:


	August 25, 2024		May 26, 2024
Land and land improvements	$	3,739	$	3,739
Buildings and building improvements	62,887		62,874

Machinery and equipment	61,249		61,013
Computer equipment and software	8,306		8,290
Furniture and fixtures	1,642		1,631
Construction in process	63,260		61,385
Gross property, plant, and equipment	201,083		198,932
Less accumulated depreciation and amortization	(52,327)		(50,334)
Net property, plant, and equipment	$	148,756	$	148,598


	Depreciable Lives (in years)
Land improvements	10	—	40
Buildings and building improvements	7	—	40
Machinery and equipment	7	—	25
Transportation equipment	5	—	12
Computer hardware and software	3	—	10
Furniture, fixtures, and office equipment	5	—	10
Tools, molds, and dies	3

Fair Value Measurements - Fair Value of Assets and Liabilities (Details) - Recurring - USD ($) $ in Thousands	Aug. 25, 2024	May 26, 2024
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt derivative liability	$ 0	$ 0
Total liabilities	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt derivative liability	0	0
Total liabilities	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt derivative liability	24,500	25,400
Total liabilities	$ 24,500	$ 25,400

- Definition

Fair value, after the effects of master netting arrangements, of a financial liability or contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset. Includes liabilities not subject to a master netting arrangement and not elected to be offset.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (bbb)(2)(i)
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-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 820
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Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
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-Section 50
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-Subparagraph (b)
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Debt - Narrative (Details) $ in Thousands	May 22, 2023 USD ($) payment	Aug. 25, 2024 USD ($)	May 26, 2024
Line of credit \| Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit, available borrowing capacity		$ 4,500
Equipment financing, related party
Debt Instrument [Line Items]
Debt instrument, face amount	$ 7,730
Stated interest rate	6.00%
Number of quarterly payments \| payment	40
Quarterly principal payment amount	$ 193
Term Loan Credit Agreement
Debt Instrument [Line Items]
Debt instrument, face amount	$ 142,270
Term Loan Credit Agreement \| Line of credit
Debt Instrument [Line Items]
Effective interest rate		22.50%	22.50%
Stated interest rate		10.00%
Revolving Credit Agreement \| Revolving Credit Facility
Debt Instrument [Line Items]
Effective interest rate		8.35%	8.35%

Commitments and Contingencies (Details) - USD ($)			12 Months Ended
Commitments and Contingencies (Details) - USD ($)	Nov. 03, 2020	Sep. 02, 2020	May 28, 2023	Aug. 25, 2024	Jan. 12, 2024
Landlord Complaint, Past Due Rent, One
Loss Contingencies [Line Items]
Loss contingency, minimum amount of damages					$ 171,000
Landlord Complaint, Past Due Rent, Two
Loss Contingencies [Line Items]
Loss contingency, minimum amount of damages					$ 87,000
Compliance Matters
Loss Contingencies [Line Items]
Damages sought		$ 10,000,000
Litigation settlement			$ 407,000
Recoverable amount				$ 0
Compliance Matters \| Minimum
Loss Contingencies [Line Items]
Damages sought	$ 80,000,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Discontinued Operations - Narrative (Details) $ in Thousands	Sep. 19, 2023 USD ($)
Discontinued Operations and Disposal Groups [Abstract]
Proceeds from legal settlements	$ 1,850

Fair Value Measurements - Fair Value Reconciliation of Level 3 (Details) - USD ($) $ in Thousands	3 Months Ended
	Aug. 25, 2024	Aug. 27, 2023
Fair Value Disclosures [Abstract]
Balance at beginning of period	$ 25,400	$ 64,900
Decrease in fair value	(900)	(200)
Balance at end of period	$ 24,500	$ 64,700

Accounts Receivable

3 Months Ended

Aug. 25, 2024

Receivables [Abstract]

Accounts Receivable

Accounts receivable balances are as follows:


	August 25, 2024		May 26, 2024
Accounts receivable	$	25,845	$	31,864
Less: Allowance for credit losses	(700)		(711)
Accounts receivable, less allowance for credit losses	$	25,145	$	31,153

Gross receivable by bill type are as follows:


	August 25, 2024		May 26, 2024
Billed	$	21,720	$	27,795
Unbilled	4,125		4,069
Accounts receivable	$	25,845	$	31,864

Three of the Company’s customers had accounts receivable concentrations of 10% or greater as of August 25, 2024, accounting for 29%, 22% and 12% of accounts receivable. Two of the Company’s customers had accounts receivable concentrations of 10% or greater as of May 26, 2024, accounting for and 34% and 18%.

Changes in the allowance for credit losses related to accounts receivable are as follows:


	Three Months Ended
	August 25, 2024		August 27, 2023
Beginning balance	$	711	$	485
Provision (Reduction)	(11)		21
Charge-offs	—		—

Ending Balance	$	700	$	506

Revenue - Disaggregation of Revenue by Timing of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Aug. 25, 2024	Aug. 27, 2023
Segment Reporting Information [Line Items]
Revenues	$ 24,705	$ 24,522
CDMO - Developmental Services revenue recognized over time
Segment Reporting Information [Line Items]
Revenues	5,876	6,381
Revenues recognized at a point in time
Segment Reporting Information [Line Items]
Revenues	$ 18,829	$ 18,141

- Definition

+ References

+ Details

Debt (Tables)

3 Months Ended

Aug. 25, 2024

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

Long-term debt, net consists of the following:


	August 25, 2024		May 26, 2024
Term loan credit facility, related party	$	161,245	$	157,313
Equipment financing, related party	6,957		7,150
Total principal amount of long-term debt	168,202		164,463
Less: unamortized debt discount	(479)		(504)
Less: debt discount, related party	(61,405)		(62,367)
Total long-term debt, net of discounts	106,318		101,592
Less: current portion of long-term debt, net, related party	(773)		(773)
Long-term debt, net	$	105,545	$	100,819

Revolving credit facility	$	21,605	$	19,691

Schedule of Maturities of Long-term Debt

The future minimum principal payments under the Company’s term loan credit facility and equipment financing liability for each year presented are as follows:


Remainder of Fiscal year 2025	$	580
Fiscal year 2026	773
Fiscal year 2027	773
Fiscal year 2028	773
Fiscal year 2029	162,018
Fiscal year 2030	773
Thereafter	2,512
Total	$	168,202

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(22))
-SubTopic 10
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480566/210-10-S99-1

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-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-7

+ Details

Stock-based Compensation - Narrative (Details) $ in Thousands	3 Months Ended
	Aug. 25, 2024 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 13,049
Weighted-average period	2 years 21 days
Restricted Stock Units \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	1 year
Restricted Stock Units \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years
Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award term	5-year

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Subsequent Events	3 Months Ended
Subsequent Events	Aug. 25, 2024
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On October 3, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain entities. Pursuant to the Purchase Agreement, the Company agreed to sell an aggregate of 5,928,775 shares of its common stock (the “Shares”) for aggregate gross proceeds of approximately $24,300 (the “Offering”). The purchase price for each Share was $4.10. The Offering closed on October 3, 2024. On August 28, 2024, the Company appointed Ryan D. Lake as the Company’s Chief Financial Officer and Secretary, effective September 3, 2024. Under Mr. Lake’s employment agreement, his compensation and benefits include a PSU award for up to 750,000 shares and an RSU award of 262,500 shares. The grant-date fair value of these PSUs was $2,518, of which $1,305, $890, and $323 are projected to be recognized during FY2025, FY2026, and FY2027, respectively. The grant-date fair value of the RSUs was $1,147, which will be recognized over the five-year vesting period.

Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended
	Oct. 03, 2024	Sep. 03, 2024	Aug. 25, 2024
PSUs
Subsequent Event [Line Items]
Units granted (in shares)			0
Weighted average grant date fair value (in dollars per share)			$ 0
RSUs
Subsequent Event [Line Items]
Units granted (in shares)			358,392
Weighted average grant date fair value (in dollars per share)			$ 5.18
Subsequent Event
Subsequent Event [Line Items]
Sale of stock, number of shares issued	5,928,775
Sale of stock, consideration received	$ 24,300
Sale of stock, price per share (in dollars per share)	$ 4.10
Subsequent Event \| PSUs \| Chief Financial Officer
Subsequent Event [Line Items]
Units granted (in shares)		750,000
Weighted average grant date fair value (in dollars per share)		$ 2,518
Subsequent Event \| PSUs \| Chief Financial Officer \| Tranche One
Subsequent Event [Line Items]
Weighted average grant date fair value (in dollars per share)		1,305
Subsequent Event \| PSUs \| Chief Financial Officer \| Tranche Two
Subsequent Event [Line Items]
Weighted average grant date fair value (in dollars per share)		890
Subsequent Event \| PSUs \| Chief Financial Officer \| Tranche Three
Subsequent Event [Line Items]
Weighted average grant date fair value (in dollars per share)		$ 323
Subsequent Event \| RSUs \| Chief Financial Officer
Subsequent Event [Line Items]
Units granted (in shares)		262,500
Weighted average grant date fair value (in dollars per share)		$ 1,147
Award vesting period		5 years

Revenue (Tables)

3 Months Ended

Aug. 25, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following table disaggregates revenues by major product lines and services:


	Three Months Ended
	August 25, 2024		August 27, 2023
CDMO	$	20,180	$	21,539
Fermentation	4,525		2,983
Total	$	24,705	$	24,522

The following table disaggregates revenues by the timing of revenue recognition:


	Three Months Ended
	August 25, 2024		August 27, 2023
CDMO - Developmental Services revenue recognized over time	$	5,876	$	6,381
Revenues recognized at a point in time	18,829		18,141
Total	$	24,705	$	24,522

Stock-based Compensation - Stock Option Weighted Average Assumptions (Details)	3 Months Ended
	Aug. 25, 2024 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average grant date fair value (in dollars per share)	$ 2.48
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life (in years)	4 years 4 months 6 days
Risk-free interest rate	3.88%
Volatility	53.00%
Dividend yield	0.00%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Cover Page - shares	3 Months Ended
Cover Page - shares	Aug. 25, 2024	Sep. 27, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Aug. 25, 2024
Document Transition Report	false
Entity File Number	000-27446
Entity Registrant Name	LIFECORE BIOMEDICAL, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	94-3025618
Entity Address, Address Line One	3515 Lyman Boulevard
Entity Address, City or Town	Chaska,
Entity Address, State or Province	MN
Entity Address, Postal Zip Code	55318
City Area Code	952
Local Phone Number	368-4300
Title of 12(b) Security	Common stock, par value $0.001 per share
Trading Symbol	LFCR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		30,898,255
Entity Central Index Key	0001005286
Current Fiscal Year End Date	--05-25
Document Fiscal Year Focus	2025
Document Fiscal Period Focus	Q1
Amendment Flag	false

Leases (Details) $ in Thousands		3 Months Ended
Leases (Details) $ in Thousands	Aug. 09, 2024 USD ($)	Nov. 24, 2024 USD ($)	Aug. 25, 2024 USD ($)	Aug. 27, 2023 USD ($)	May 26, 2024 USD ($)	Dec. 31, 2022	Sep. 01, 2020 USD ($) ft²	Sep. 30, 2015 ft² renewalOption mi
Operating Leased Assets [Line Items]
Payment on finance leases			$ 40	$ 26
Truck
Operating Leased Assets [Line Items]
Lessee, finance lease, term of contract			3 years
Finance lease obligation			$ 196
Office Equipment
Operating Leased Assets [Line Items]
Lessee, operating lease, liability, to be paid			$ 60
Minimum \| Office Equipment
Operating Leased Assets [Line Items]
Lessee, operating lease, remaining lease term			36 months
Maximum \| Office Equipment
Operating Leased Assets [Line Items]
Lessee, operating lease, remaining lease term			60 months
Chaska, Minnesota Facility
Operating Leased Assets [Line Items]
Area of real estate property \| ft²								80,950
Distance from current facility \| mi								2
Lessee, finance lease, term of contract								7 years
Lessee, finance lease, number of renewal terms \| renewalOption								2
Lessee, finance lease, renewal term						5 years		5 years
Finance lease, liability, buyout					$ 2,568
Consideration received for lease adjustment	$ 2,400
Lessee, operating lease, liability, to be paid			$ 2,637
Chaska, Minnesota Facility \| Forecast
Operating Leased Assets [Line Items]
Payment on finance leases		$ 2,400
Chanhassen, Minnesota Warehouse And Office
Operating Leased Assets [Line Items]
Area of real estate property \| ft²							21,384
Lessee, operating lease, liability, to be paid			$ 2,157
Lessee, operating lease, term of contract							7 years
Lessee, operating lease, renewal term							5 years
Chanhassen, Minnesota Warehouse And Office \| Building Improvements
Operating Leased Assets [Line Items]
Lessee, operating lease, term of contract							84 months
Operating lease liabilities							$ 1,922

Stock-based Compensation - Performance Share Unit Activity (Details) - Performance Share Units	3 Months Ended
	Aug. 25, 2024 $ / shares shares
Performance Share Units Outstanding
Beginning balance (in shares) \| shares	1,500,000
Granted (in shares) \| shares	0
Vested (in shares) \| shares	0
Forfeited (in shares) \| shares	0
Ending balance (in shares) \| shares	1,500,000
Weighted-Average Grant Date Fair Value Per Share
Beginning balance (in dollars per share) \| $ / shares	$ 4.66
Granted (in dollars per share) \| $ / shares	0
Vested (in dollars per share) \| $ / shares	0
Forfeited (in dollars per share) \| $ / shares	0
Ending balance (in dollars per share) \| $ / shares	$ 4.66