What changed in this filing

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Item 1. Business

2021-07-29 compared with 2020-08-14 · 43 added, 29 removed, 138 unchanged (34% of the section changed)

10 unchanged sentences

The Company’s principal executive offices are located at 2811 Airpark Drive Santa Maria, California 93455, and the telephone number is (650) 306-1650.

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Reportable Segments

Landec has three reportable business segments – Curation Foods, Lifecore and Other, which are described below.

During the fourth quarter of fiscal years 2019 and 2018 the Company discontinued its Now Planting® and Food Export businesses, respectively.

The operating results for the Now Planting and Food Export businesses are presented as discontinued operations in the Company’s accompanying Consolidated Financial Statements and the financial results for fiscal years 2020, 2019, and 2018.

During the fourth quarter of fiscal years 2019 the Company discontinued its Now Planting® business.

The operating results for the Now Planting business are presented as discontinued operations in the Company’s accompanying Consolidated Financial Statements and the financial results for fiscal years 2021, 2020 and 2019.

Curation Foods

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We believe that Curation Foods is well positioned as a single source of a broad range of products.

Curation Foods also has three East Coast processing facilities and five East Coast distribution centers for nationwide delivery of all of its packaged salads and vegetable products.

Curation Foods also has six processing facilities.

In addition to processing, the company has two distribution centers and a nationwide network of third party providers for nationwide delivery of all of its packaged salads, vegetable products, avocado products and specialty oil and vinegar products.

Our products are currently available in over 74% of retail and club stores across North America.

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The Company’s BreatheWay membrane technology establishes a beneficial packaging atmosphere adapting to changing fresh product respiration and temperature in order to extend freshness naturally.

The BreatheWay supply chain packaging technology extends shelf-life and reduces shrink (waste) for retailers and helps to ensure that consumers receive fresh produce by the time the product makes its way through the distribution chain to the consumer.

The Company generates revenue from the sale to and/or use of its BreatheWay patented packaging technology by partners such as Windset Holding 2010 Ltd., a Canadian corporation (“Windset”), for packaging of its greenhouse grown cucumbers and peppers.

In addition, the Company sells its complete supply chain solution for fresh pallets of product ensuring more marketable fruit and vegetables at retail.

Most vegetable products packaged in the Company’s BreatheWay packaging technology achieve a shelf-life of approximately 17 days.

These packaging license relationships generate revenues either from product sales or royalties once commercialized.

The Company is engaged in the testing and development of other BreatheWay products.

The Company manufactures its BreatheWay packaging through selected qualified contract manufacturers.

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The Company holds a 26.9% investment ownership in Windset, a leading edge grower of hydroponically-grown produce.

The Company believes that Windset’s know-how and growing practices of hydroponically-grown produce will result in higher yields with competitive growing costs that will provide dependable year-round supply to Windset’s customers.

In addition, the produce grown in Windset’s greenhouses uses significantly less water than field grown crops and has a very high safety profile as no soil is used in the growing process.

The BreatheWay supply chain packaging technology extends shelf-life and reduces shrink (waste) for retailers and helps to ensure that consumers receive fresh products.

The Company generates revenue from the sale to and/or use of its BreatheWay patented packaging technology and integrated packaging solutions.

Until June 1, 2021, the Company held a 26.9% investment ownership in Windset Holding 2010 Ltd.

(“Windset”), a leading edge grower of hydroponically-grown produce.

Windset owns and operates greenhouses in British Columbia, Canada and California.

1 unchanged sentence

The Curation Foods segment operating results include the dividends and Landec’s share of the change in fair market value of its investment in Windset.

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On June 1, 2021, the Company and Curation Foods entered into and closed a Share Purchase Agreement (the “Purchase Agreement”) with Newell Capital Corporation and Newell Brothers Investment 2 Corp., as Purchasers (the “Purchasers”) and Windset, pursuant to which Curation Foods sold all of its equity interests of Windset to the Purchasers in exchange for an aggregate purchase price of $45.1 million.

Pursuant to the terms of the Purchase Agreement, Curation Foods also retained certain rights to additional purchase price consideration in the event of certain transactions or equity issuances involving Windset until September 2022.

The Purchase Agreement included various representations, warranties and covenants of the parties generally customary for a transaction of this nature.

Lifecore Biomedical

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Lifecore CDMO provides product development services to its partners for HA-based, as well as non-HA based, aseptically formulated and filled products.

These services include activities such as technology transfer, material component changes, analytical method development, formulation development, pilot studies, stability studies, process validation, and production of materials for clinical studies.

These services include activities such as technology development, material component changes, analytical method development, formulation development, pilot studies, stability studies, process validation and production of materials for clinical studies.

Built over many years of experience, Lifecore separates itself from its competition based on its five areas of expertise, including but not limited to Lifecore’s ability to:

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With over 35 years of a superior track record with global regulatory bodies (FDA, EMA, ANVISA, etc.), Lifecore is the partner of choice for companies looking for proven experience in delivering QbD, cGMP compliance, and manufacturing excellence with pharmaceutical elegance and quality.

Lifecore’s world class quality and

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regulatory system and excellent track record with the global regulatory bodies ensure partners that they will safely bring innovative therapies to market.

Lifecore’s world class quality and regulatory system and excellent track record with the global regulatory bodies ensure partners that they will safely bring innovative therapies to market.

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Included in the Other segment is Corporate, which includes corporate general and administrative expenses, non-Curation Foods and non-Lifecore interest income and income tax expenses.

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Eat Smart Fresh Packaged Salads and Vegetables

Fresh packaged salads, vegetable products and fresh-cut packaged green beans are processed in the Company’s facilities located in Guadalupe, California;

Bowling Green, Ohio;

Hanover, Pennsylvania;

and Vero Beach, Florida.

Fresh packaged salads, vegetable products and fresh-cut packaged green beans are processed in the Company’s facilities located in Guadalupe, California and Bowling Green, Ohio.

Cooling of produce is done by third parties as well as our own cooling systems.

As part of Landec’s Project SWIFT, in June 2020 the Company began exploring opportunities for the planned divestiture of its underutilized Hanover manufacturing facility.

As part of Landec’s Project SWIFT, during the second quarter of fiscal year 2021, the Company sold the Hanover building and assets related thereto for net proceeds of $8.0 million.

O Olive Oil & Vinegar

7 unchanged sentences

The Company performs the label package conversion in its various processing facilities.

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Lifecore Biomedical

The commercial production of HA requires fermentation, separation, and purification and aseptic processing capabilities.

9 unchanged sentences

The food industry is highly competitive, and further consolidation with our customers would likely increase competition.

The Company’s principal competitors, Taylor Farms and Fresh Express, have substantial financial, marketing, and other resources.

The Company’s principal competitors, Taylor Farms, Fresh Express and Dole, have substantial financial, marketing, and other resources.

Increased competition can reduce our sales due to loss of market share or the need to reduce prices to respond to competitive and customer pressures.

16 unchanged sentences

In the U.S., food products are primarily regulated by the Food and Drug Administration (“FDA”), which has the authority to inspect the Company’s food facilities, and regulates, among other things, food manufacturing, food packing and holding, food additives, food safety, the growing and harvesting of produce intended for human consumption, food transportation,

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food labeling, food packaging, and food supplier controls including foreign supplier verification.

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FDA also maintains adverse event reporting requirements for drug products, among other post-market regulatory requirements.

Human Capital

The strength of our team and our workplace culture is essential to our ability to achieve our broader mission.

Attracting, developing and retaining exceptional employees is vitally important to us, and we invest in creating a differentiated culture for our team that enables continuous innovation at scale.

We want to be a force for good, a team that is helping to improve the quality of life for our customers and employees.

As of May 30, 2021, Landec had 905 full-time employees, of whom 675 were dedicated to research, development, manufacturing, quality control and regulatory affairs, and 230 were dedicated to sales, marketing and administrative activities.

Landec intends to recruit additional personnel in connection with the development, manufacturing and marketing of its products.

None of Landec’s employees are represented by a union, and Landec considers its relationship with its employees to be good.

Our employee engagement and culture

Our hiring process has been designed to provide an equitable candidate experience, facilitate the inclusion of new perspectives, foster innovation and creativity and leverage technology and data analytics to address gaps in representation.

We developed a COVID-19 Taskforce to assure employee health and safety throughout the workplace and encourage employees to carry this information into their communities.

We also partner with local health departments in our various locations to supply our employees with COVID-19 communications to keep them informed in the ever-changing environment.

We provide training to all employees in the areas of Food Safety, Human Safety and Human Resources.

Individual training plans for continued growth are developed between employees and supervisors or managers.

Frontline supervision workers at factory locations are provided continuous improvement tools for training in line with our "ZEST" efforts as well as employee interface training covering topics such as how to provide feedback or how to have difficult conversations regarding performance.

ZEST is our manufacturing operational system that will empower our people to work in a different way, changing their mindset and behaviors leading to an acceleration of our performance across our operations.

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• Zero Mindset - Zero breakdown, zero defects, zero recalls, zero accidents, zero pollution.

• Empowerment - Empower employees to impact change.

I own the outcomes.

• Standardization - Implementing the same practice across the network for efficiency.

• Training - The cornerstone of success and employee engagement.

We empower our employees to own their career path and seek out training programs to take them to the next level.

We are currently in the process of developing a platform for growth opportunities and ways to understand and communicate career pathways.

We have also invested in our training and development programs and infrastructure for our employees.

Available Information

4 unchanged sentences

The reference to the Company’s website address does not constitute incorporation by reference of the information contained on the website, and the information contained on the website is not part of this document.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business