What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-11-06 compared with 2025-04-03 · 360 added, 509 removed, 350 unchanged (71% of the section changed)

Financial statements (unaudited)

Condensed Consolidated Balance Sheets as of February 23, 2025 and May 26, 2024

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended February 23, 2025 and February 25, 2024

Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended February 23, 2025 and February 25, 2024

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended February 23, 2025 and February 25, 2024

Notes to the Condensed Consolidated Financial Statements

Consolidated Balance Sheets as of September 30, 2025 and May 25, 2025

Consolidated Statements of Operations for the Three Months Ended September 30, 2025 and August 25, 2024

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Three Months Ended September 30, 2025 and August 25, 2024

Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2025 and August 25, 2024

Notes to the Consolidated Financial Statements

Organization, basis of presentation and summary of significant accounting policies

Income or loss per share

Discontinued operations

Segment reporting for single reportable segment

Accounts and note receivable

Inventories, net

Property, plant and equipment, net

Accrued expenses and other liabilities

Restructuring costs

Accrued expenses and other current liabilities

Commitments and contingencies

Revenue recognition

Stock-based compensation

Fair value measurements

Fair value of financial instruments

Related party transactions

Subsequent events

LIFECORE BIOMEDICAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts) February 23,

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts) September 30,

ASSETS (unaudited)

6 unchanged sentences

Contract assets 4,385 6,979

Inventories, net 34,596 39,979

33,801 32,291

Prepaid expenses and other current assets 2,138 1,454

2 unchanged sentences

128,575 129,006

Operating lease right-of-use assets 2,233 2,442

Goodwill 13,881 13,881

2 unchanged sentences

Total assets $ 235,204 $ 239,342

LIABILITIES AND EQUITY

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

Accounts payable $ 10,115 $ 8,220

Current portion of operating lease liabilities

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities, see note 7

19,843 21,958

4 unchanged sentences

Debt derivative liability, related party 25,491 24,991

Operating lease liabilities, net of current portion

Other liabilities

5 unchanged sentences

47,323 46,097

Stockholders’ equity:

Stockholders’ (deficit) equity:

Common Stock, $ 0.001 par value;

3 unchanged sentences

Accumulated deficit ( 218,095 ) ( 205,240 )

Total stockholders’ equity

Total liabilities, redeemable convertible preferred stock, and stockholders’ equity

Total stockholders’ (deficit) equity

( 10,537 ) 1,336

See accompanying notes to the condensed consolidated financial statements

Total liabilities, convertible preferred stock and stockholders’ (deficit) equity

$ 235,204 $ 239,342

See accompanying notes to the consolidated financial statements

LIFECORE BIOMEDICAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended Nine months ended

(in thousands)

2025 February 25,

2024 February 23,

2025 February 25,

CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended

(in thousands, except share and per share amounts)

September 30,

2025 August 25,

Revenues $ 19,293 $ 16,793

5 unchanged sentences

Selling, general, and administrative expenses 8,895 14,785

Loss on sale or disposal of assets, net of portion classified as cost of sales

Operating loss

( 3,067 ) ( 11,584 )

Restructuring (recovery) costs

Interest income

Interest expense

( 551 ) ( 983 )

Operating loss ( 9,029 ) ( 895 ) ( 22,572 ) ( 10,993 )

Interest expense, net ( 641 ) ( 921 ) ( 2,558 ) ( 2,546 )

Interest expense, related party ( 5,833 ) ( 4,400 )

1 unchanged sentence

Other income (expense), net

Loss before income taxes

( 9,658 ) ( 16,255 )

(Loss) income from continuing operations before income taxes ( 14,777 ) 15,002 ( 37,560 ) 16,657

Income tax benefit (expense) 8 ( 217 ) ( 10 ) ( 240 )

(Loss) income from continuing operations ( 14,769 ) 14,785 ( 37,570 ) 16,417

Income from discontinued operations — 847 — 2,679

Net (loss) income $ ( 14,769 ) $ 15,632 $ ( 37,570 ) $ 19,096

See accompanying notes to the condensed consolidated financial statements

LIFECORE BIOMEDICAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

Three months ended Nine months ended

(in thousands, except share and per share amounts)

2025 February 25,

2024 February 23,

2025 February 25,

Net (loss) income $ ( 14,769 ) $ 15,632 $ ( 37,570 ) $ 19,096

Income tax (expense) benefit

( 9,991 ) ( 16,230 )

Preferred stock dividends

Accretion of preferred stock to redemption value

Loss available to common stockholders

$ ( 10,913 ) $ ( 16,230 )

Fair value of conversion ratio improvement to preferred stockholders

Loss per share, basic and diluted

$ ( 0.29 ) $ ( 0.53 )

(Loss) income available to common stockholders $ ( 17,379 ) $ 15,632 $ ( 42,312 ) $ 19,096

Basic income or loss per share:

(Loss) income from continuing operations available to common stockholders $ ( 0.47 ) $ 0.48 $ ( 1.24 ) $ 0.54

Income from discontinued operations — 0.03 — 0.09

Basic (loss) income per share $ ( 0.47 ) $ 0.51 $ ( 1.24 ) $ 0.63

Diluted income or loss per share:

(Loss) income from continuing operations available to common stockholders $ ( 0.47 ) $ 0.40 $ ( 1.24 ) $ 0.45

Income from discontinued operations — 0.02 — 0.07

Diluted (loss) income per share $ ( 0.47 ) $ 0.42 $ ( 1.24 ) $ 0.52

Weighted average shares outstanding:

Basic 37,020,570 30,487,596 34,080,062 30,449,673

Diluted 37,020,570 36,608,904 34,080,062 36,468,871

See accompanying notes to the condensed consolidated financial statements

LIFECORE BIOMEDICAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Redeemable Convertible Preferred Stock

Common Stock Additional

capital Accumulated deficit Total

stockholders’

equity (deficit)

(dollars in thousands) Shares Amount Shares Amount

Balance at November 24, 2024 44,068 $ 44,312 36,980,790 $ 37 $ 204,736 $ ( 189,324 ) $ 15,449

Issuance of stock, net of fees — — — — 16 — 16

Dividends paid-in-kind 826 837 — — ( 837 ) — ( 837 )

Accretion to redemption value — 48 — — ( 48 ) — ( 48 )

Settlement of stock-based awards — — 44,541 — ( 134 ) — ( 134 )

Stock-based compensation — — — — 2,552 — 2,552

Net loss — — — — — ( 14,769 ) ( 14,769 )

Balance at February 23, 2025 44,894 $ 45,197 37,025,331 $ 37 $ 206,285 $ ( 204,093 ) $ 2,229

Balance at May 26, 2024 42,461 $ 42,587 30,562,961 $ 31 $ 177,807 $ ( 166,523 ) $ 11,315

Issuance of stock, net of fees — — 5,928,775 6 23,852 — 23,858

Dividends paid-in-kind 2,433 2,466 — — ( 2,466 ) — ( 2,466 )

Accretion of issuance costs — 144 — — ( 144 ) — ( 144 )

Settlement of stock-based awards — — 533,595 — ( 1,107 ) — ( 1,107 )

Stock-based compensation — — — — 8,343 — 8,343

Net loss — — — — — ( 37,570 ) ( 37,570 )

Balance at February 23, 2025 44,894 $ 45,197 37,025,331 $ 37 $ 206,285 $ ( 204,093 ) $ 2,229

See accompanying notes to the condensed consolidated financial statements

Weighted average shares outstanding, basic and diluted 37,402,912 30,855,742

See accompanying notes to the consolidated financial statements

LIFECORE BIOMEDICAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Redeemable Convertible Preferred Stock

4 unchanged sentences

(dollars in thousands) Shares Amount Shares Amount

Balance at November 26, 2023 40,912 $ 40,924 30,458,621 $ 30 $ 176,463 $ ( 175,072 ) $ 1,421

Issuance of stock, net of fees — — — — — — —

Balance at June 30, 2025 45,736 $ 46,402 37,026,234 $ 37 $ 207,206 $ ( 208,104 ) $ ( 861 )

Dividends paid-in-kind 858 874 — — ( 874 ) — ( 874 )

Accretion to redemption value — 48 — — ( 48 ) — ( 48 )

( 1 ) ( 1 ) 154 — 1 — 1

Settlement of stock-based awards — — 439,964 — ( 1,156 ) — ( 1,156 )

1 unchanged sentence

— — — — — ( 9,991 ) ( 9,991 )

Balance at February 25, 2024 41,679 $ 41,748 30,546,936 $ 30 $ 177,096 $ ( 159,440 ) $ 17,686

Balance at September 30, 2025 46,593 $ 47,323 37,466,352 $ 37 $ 207,521 $ ( 218,095 ) $ ( 10,537 )

Balance at May 26, 2024 42,461 $ 42,587 30,562,961 $ 31 $ 177,807 $ ( 166,523 ) $ 11,315

2 unchanged sentences

Accretion to redemption value

— 48 — — ( 48 ) — ( 48 )

Settlement of stock-based awards — — — — ( 589 ) — ( 589 )

1 unchanged sentence

— — — — — ( 16,230 ) ( 16,230 )

Balance at February 25, 2024 41,679 $ 41,748 30,546,936 $ 30 $ 177,096 $ ( 159,440 ) $ 17,686

See accompanying notes to the condensed consolidated financial statements.

Balance at August 25, 2024 43,257 $ 43,441 30,898,255 $ 31 $ 178,783 $ ( 182,753 ) $ ( 3,939 )

See accompanying notes to the consolidated financial statements.

LIFECORE BIOMEDICAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (In thousands)

Nine months ended

2025 February 25,

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

(in thousands)

September 30,

2025 August 25,

Cash flows from operating activities:

Net (loss) income $ ( 37,570 ) $ 19,096

Adjustments to reconcile net income or loss to net cash used in operating activities:

$ ( 9,991 ) $ ( 16,230 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization 1,981 1,993

Stock-based compensation 2,392 2,419

Non-cash interest expense, related party

Non-cash interest expense 1,404 812

Change in debt derivative liability, related party ( 1,500 ) ( 41,900 )

Loss on sale or disposal of assets

Non-cash interest expense, inclusive of related party

Change in fair value of debt derivative liability, related party

Other, net 255 ( 111 )

Changes in operating assets and liabilities:

Accounts receivable ( 602 ) ( 2,711 )

Accounts receivable, inclusive of related party

( 4,575 ) 6,075

Contract assets

1,968 ( 1,663 )

Inventories 5,384 1,171

Other assets ( 90 ) ( 214 )

1 unchanged sentence

Accrued expenses and other liabilities ( 3,561 ) ( 273 )

Net cash used in operating activities ( 5,553 ) ( 8,459 )

Net cash provided by (used in) operating activities

1,762 ( 613 )

Cash flows from investing activities:

Purchases of property, plant, and equipment ( 1,737 ) ( 3,422 )

Proceeds from sale of equipment

Net cash used in investing activities

( 1,737 ) ( 3,422 )

Cash flows from financing activities:

Issuance of common stock, net of fees — 1

Payments on revolving credit facility

( 12,100 ) ( 29,910 )

Proceeds from revolving credit facility

12,100 31,824

Payments of debt principal ( 232 ) ( 233 )

Payments for debt issuance costs ( 435 ) ( 124 )

Proceeds from noncurrent customer deposit — 5,000

Proceeds from exercise of stock options — 724

Proceeds from finance lease incentive 2,400 —

(Repayments of) proceeds from revolving credit facility, net ( 17,191 ) 3,104

Payments related to employee stock plans ( 1,156 ) ( 589 )

Net cash provided by financing activities 6,826 8,123

Net cash (used in) provided by financing activities

( 1,388 ) 1,093

Net decrease in cash and cash equivalents

2 unchanged sentences

Cash and cash equivalents, end of period $ 18,856 $ 5,520

See accompanying notes to the condensed consolidated financial statements.

For supplemental cash flow information, see note 1.

See accompanying notes to the consolidated financial statements.

LIFECORE BIOMEDICAL, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (in thousands, except share and per share values)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited) (amounts in thousands of U.S.

dollars, except share and per share values)

Organization, basis of presentation and summary of significant accounting policies

2 unchanged sentences

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, the instructions for Form 10-Q and Regulation S-X of the Securities and Exchange Commission (the “SEC”).

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 February 23, 2025, 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 SEC.

The accompanying unaudited consolidated financial statements of the Company and the consolidated balance sheet as of May 25, 2025, which has been derived from audited financial statements, have been prepared in accordance with U.S.

Generally Accepted Accounting Principles (“U.S.

GAAP”) for interim financial information, the instructions for Form 10-Q and Regulation S-X of the Securities and Exchange Commission (the “SEC”).

In the opinion of management, all adjustments (which were of a normal recurring nature) have been made which are necessary to present fairly the financial position of the Company at September 30, 2025, 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 the notes to the financial statements prepared following U.S.

GAAP may have been condensed or omitted per the rules and regulations of 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 25, 2025.

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.

During the nine months ended February 23, 2025, the Company changed the basis of presentation for certain items to simplify and improve the usefulness of the financial statements, none of which had a material effect to any of the periods presented.

The accounting policies underlying the accompanying consolidated financial statements are set forth in note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended May 25, 2025.

There have been no material changes in the Company’s significant accounting policies during the three months ended September 30, 2025.

On August 1, 2025, the Company’s Board of Directors approved a change in the Company’s fiscal year that ended on the last Sunday of May to a fiscal year that corresponds with the calendar year, ending on December 31, effective for the fiscal period beginning May 26, 2025 and ending December 31, 2025 (the “Fiscal Year Change”).

The Fiscal Year Change is applied on a prospective basis and does not adjust operating results for prior periods.

As a result of the Fiscal Year Change, commencing with this Quarterly Report on Form 10-Q, the Company will be filing Quarterly Reports on Form 10-Q covering quarterly periods on a calendar year basis.

Also as a result of the Fiscal Year Change, the Company will file a Form 10-KT covering the “transition period” beginning May 26, 2025 and ending December 31, 2025, which will include separate reporting of the approximately one-month period from May 26 to June 30, 2025.

For periodic reports covering periods through and including June 30, 2026 (including this Quarterly Report on Form 10-Q), the Company will select comparative financial information in accordance with SEC rules that are applicable to the Fiscal Year Change.

Specifically, for balance sheet information, the Company will present information from the latest audited date, which for this Quarterly Report on Form 10-Q is May 25, 2025;

and for period-based information, the Company will present the most closely-comparable previously reported three-month period, which for this Quarterly Report on Form 10-Q is the three months ended August 25, 2024.

This comparative information is selected to provide meaningful context for evaluating the Company’s performance through and including June 30, 2026.

It is not practicable or cost-justifiable for the Company to prepare equivalent calendar-based comparative periods because the Company’s previous fiscal calendar does not align to the new calendar periods.

Certain prior period amounts have been reclassified to conform to the current period’s presentation.

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.

The consolidated financial statements have been prepared in accordance with U.S.

All intercompany accounts and transactions 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 preparation of financial statements and the notes to the financial statements in accordance with U.S.

GAAP requires management to make estimates and judgments that affect the amounts reported.

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;

evaluating assets for reserves and potential impairment;

the valuation and recognition of stock-based compensation;

and the valuation of the debt derivative liability.

For these areas, it is at least reasonably possible that a change in estimate could occur over the next twelve months.

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.

Actual results may differ from management’s estimates.

Supplemental disclosures of cash flow information

The following table presents supplemental cash flow information:

Nine months ended

2025 February 25,

Cash paid for income taxes $ 127 $ 70

Three months ended

September 30, 2025 August 25, 2024

Cash paid for income taxes, net

Cash paid for interest 265 628

1 unchanged sentence

Purchases of property, plant and equipment in accounts payable

Non-cash portion of sale of property, plant and equipment via note receivable

Increases to property, plant and equipment from finance leases

Capitalization of non-cash interest to property, plant and equipment

Dividends paid-in-kind on Redeemable Convertible Preferred Stock

Reportable segments

The Company operates as one reportable segment.

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.

Income or loss per share

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 Redeemable 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 Redeemable 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.

Recent accounting pronouncements

In November 2024, a new accounting standards update 2024-03 was issued that requires more detailed disclosures related to certain costs and expenses.

The guidance requires entities to disclose amounts of certain expense categories included in expense captions presented on the face of the income statement, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization.

This update is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted.

The disclosure requirements may be applied either prospectively or retrospectively.

Management is currently evaluating the impact that the adoption of this update will have on its financial statements.

In December 2023, a new accounting standards update 2023-09 was issued to improve income tax disclosures.

In December 2023, accounting standards update 2023-09 was issued to improve income tax disclosures.

This update includes disclosure of disaggregated information about both the effective tax rate reconciliation and income taxes paid.

This update is effective for annual periods beginning after December 15, 2024, which will be our fiscal year ending May 23, 2026, with early adoption permitted.

This update is effective for annual periods beginning after December 15, 2024, which for Lifecore begins with the transition period ending December 31, 2025, with early adoption permitted.

The amendments in this update may be applied prospectively or retrospectively.

Management is currently evaluating the impact that the adoption of this update will have on its financial statements.

In November 2023, a new accounting standards update 2023-07 was issued to enhance disclosure of significant expenses that are regularly provided to the chief operating decision maker and are included with each reported measure of segment profit and loss.

The update also specifies that companies with a single reportable segment are subject to this standard.

The update is effective for annual reporting periods beginning after December 15, 2023, which will be our fiscal year ending May 25, 2025, and interim reporting periods thereafter, with early adoption permitted.

The amendments in this update must be applied retrospectively to all periods presented.

In November 2024, accounting standards update 2024-03, which was subsequently clarified by accounting standards update 2025-01, was issued to require more detailed disclosures related to certain costs and expenses.

This guidance is effective for public entities for annual periods beginning after December 15, 2026, which for Lifecore begins with the year ending December 31, 2027, and for interim reporting periods following that year.

Management is currently evaluating the impact that the adoption of this update will have on its financial statements.

In September 2025, accounting standards update 2025-06 was issued to modernize the recognition and disclosure framework for internal-use software costs, removing the previous "development stage" model and introducing a more judgment-based approach.

This guidance is effective for annual periods beginning after December 15, 2027, which for Lifecore begins with the year ending December 31, 2028, and interim periods therein.

Early adoption is permitted as of the beginning of an annual reporting period.

Management is currently evaluating the impact that the adoption of this update may have on its financial statements.

Management has evaluated recently issued accounting pronouncements outside of those mentioned above and does not believe that any of these pronouncements will have a significant impact on the Company’s consolidated financial statements and related disclosures.

Income or loss per share

The following table sets forth the weighted average shares used in the computation of basic and diluted income or loss per share:

Due to the Company’s net loss for all periods presented, the inclusion of dilutive securities would be antidilutive because it would reduce the amount of loss incurred per share.

As a result, no additional dilutive shares were included in diluted loss per share, and there were no differences between basic and diluted loss per share.

The following securities on an as-converted basis were excluded from the computations of diluted loss per share.

Three months ended

Nine months ended

February 23, 2025 February 25, 2024 February 23, 2025 February 25, 2024

Weighted average shares for basic income or loss per share 37,020,570 30,487,596 34,080,062 30,449,673

September 30, 2025 August 25, 2024

Redeemable Convertible Preferred Stock

7,131,888 6,179,556

Stock options, RSUs and PSUs — 221,920 — 227,389

Weighted average shares for diluted income or loss per share 37,020,570 36,608,904 34,080,062 36,468,871

Due to the Company’s net loss for the three and nine months ended February 23, 2025, the diluted income or loss per share is calculated using only the basic weighted average common shares outstanding and thus excludes the following securities on an as-converted basis as of February 23, 2025.

Redeemable Convertible Preferred Stock

Stock options 1,152,621 2,074,785

Restricted stock units 1,531,850

Performance share units 2,175,000

1,377,482 1,436,240

2,283,000 1,500,000

Total 11,944,991 11,190,581

See note 11 for more information about Series A Redeemable Convertible Preferred Stock and note 13 for more information about stock options, restricted stock units and performance share units.

Discontinued operations

The Company previously operated a food business 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.

Interest and income tax expense are not allocated to discontinued operations for periods presented due to their immateriality.

During the nine months ended February 25, 2024, the Company reached settlement agreements related to the Curation Foods business that resulted in the receipt of cash payments totaling $ 2,679 , which were recognized as income from discontinued operations in the nine months ended February 25, 2024.

The $ 2,679 cash received is included in net cash from operating activities on the consolidated statement of cash flows.

See note 10 for more information about Redeemable Convertible Preferred Stock and note 12 for more information about stock options, restricted stock units (“RSUs”) and performance share units (“PSUs”).

Segment reporting for single reportable segment

The following table presents the components of net income or loss, which is the measure of profit or loss used for the Company’s single reportable segment:

Three months ended

September 30, 2025 August 25, 2024

$ 31,109 $ 24,705

Personnel costs (1)

11,129 12,637

Materials and non-depreciation overhead (2)

Depreciation and amortization

Stock-based compensation

Reorganization costs

All other operating expenses (3)

Interest expense, net 6,326 5,368

Change in fair value of debt derivative liability 375 ( 900 )

Other (income) expense, net

Income tax expense (benefit)

$ ( 9,991 ) $ ( 16,230 )

(1) Includes all wages and salary, bonus, employer taxes, and employee benefit plan expenses

(2) Represents cost of goods sold, excluding direct labor and all personnel cost and depreciation allocations

(3) Includes expenses for accounting, legal and other professional services, software licensing, insurance costs, public company costs and board fees.

For the three months ended September 30, 2025, the Company earned revenue of approximately 60 % in the United States, 20 % in Belgium, 10 % in the Netherlands and 10 % in all other countries combined.

For the three months ended August 25, 2024, the Company earned revenue of approximately 65 % in the United States, 10 % in Belgium, 10 % in the Netherlands and 15 % in all other countries combined.

Accounts and note receivable

Accounts receivable

Two of the Company’s customers had accounts receivable concentrations of 10% or greater as of February 23, 2025, accounting for 47 % and 19 % of accounts receivable.

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

Three of the Company’s customers had accounts receivable concentrations of 10% or greater as of September 30, 2025, with those customers comprising 28 %, 19 % and 17 % of accounts receivable.

Two of the Company’s customers had accounts receivable concentrations of 10% or greater as of May 25, 2025, with those customers comprising 45 % and 16 % of accounts receivable.

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

Nine months ended

2025 February 25,

Three months ended

September 30, 2025 August 25, 2024

Beginning balance $ 1,351 $ 711

Provision (reversal of provision)

Charge-offs ( 547 ) —

Balance at February 23, 2025 $ 897 $ 525

Factors that are currently influencing our estimate of expected credit losses includes knowledge of certain customers whose development projects are awaiting additional funding.

Ending balance

The primary factor that is currently influencing management’s estimate of expected credit losses is its knowledge of the status of certain customers’ development projects.

Note receivable

On January 7, 2025, the Company accepted a $ 10,000 note as a portion of the proceeds for the sale of the isolator-filler described in note 6.

The note matures on July 7, 2026 and may be paid in whole or in part at any time prior to maturity without penalty or premium.

Otherwise, the note is scheduled to be paid as follows:

On January 7, 2025, the Company accepted a $ 10,000 note as a portion of the proceeds from the sale of certain excess equipment.

The note would have matured on July 7, 2026 and was receivable in whole or in part at any time prior to maturity without penalty or premium.

Otherwise, the note was scheduled to be collected as follows:

$ 4,000 on July 7, 2025, $ 4,000 on January 7, 2026 and $ 2,000 on July 7, 2026.

The note is interest-free through July 7, 2025 and thereafter principal bears interest at the U.S.

The note was interest-free through July 7, 2025, and thereafter principal would have earned interest at the U.S.

prime rate plus 1 % until repayment.

Management concluded that interest should be imputed for the full duration of the note at an effective interest rate of 8.5 %, representing the stated rate as of February 23, 2025.

Management imputed interest for the full duration of the note at an effective interest rate of 8.5 %, representing the stated rate as of February 23, 2025.

As a result, the Company recorded an initial discount of $ 410 as an offset to the noncurrent portion of the note based on its maturity date.

As of February 23, 2025, the note receivable of $ 10,000 , net of discount of $ 305 , is classified on our balance sheet as follows:

$ 8,000 as a standalone current asset and $ 1,695 as a component of other assets.

Interest income of $ 105 is included on our statement of operations within interest expense, net.

Inventories, net

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.

Inventory costs include the purchase price of raw materials, and additionally for work in process and finished goods, direct labor costs and allocated portions of indirect labor, property, plant and equipment costs needed in the manufacturing process.

Inventories consisted of the following:

On June 11, 2025, the note holder paid the note in full.

The following table presents the components of inventory:

September 30, 2025 May 25,

Finished goods $ 14,113 $ 13,379

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Work in process 7,387 8,743

Inventories, net $ 34,596 $ 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.

$ 33,801 $ 32,291

Property, plant and equipment, net

All property, plant and equipment is located in the United States.

Property, plant, and equipment, net, consists of the following:

The following table presents the components of property, plant and equipment:

September 30, 2025 May 25,

Land and land improvements $ 3,506 $ 3,739

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Property, plant, and equipment, net $ 128,575 $ 129,006

The major components of the construction in process are related to aseptic filler production to significantly increase manufacturing capacity.

On January 7, 2025, the Company entered into an agreement for the sale of the Company's previously purchased, but not yet installed, isolator-filler.

During the three months ended September 30, 2025, the Company completed its capacity expansion project which is expected to more than double its overall aseptic capacity.

As a result of the completion of the capacity expansion project, depreciation expense is expected to increase by approximately $ 1,600 per annum.

On January 7, 2025, the Company entered into an agreement for the sale of certain excess equipment.

The aggregate purchase price was $ 17,000 .

Lifecore received $ 7,000 cash and paid fees of $ 752 at closing .

Lifecore also accepted a note for the remainder of the proceeds (see note 4) and recorded current and noncurrent payables of $ 800 and $ 200 , respectively, for remaining selling fees to be paid to a third-party broker.

Lifecore also accepted a note for the remainder of the proceeds (see note 4) and recorded current and noncurrent payables of $ 800 and $ 200 , respectively, for selling fees due to a third-party broker.

The note and the payables were each cash-settled in June 2025.

The sale resulted in a $ 21,239 reduction in idle construction in process.

The Company recorded a loss on the sale of the equipment of $ 6,400 , which is included with other losses of $ 451 and $ 495 for the three and nine months ended February 23, 2025, respectively, in loss on sale or disposal of assets, net of portion classified as cost of sales, within the statement of operations.

The Company also recognized other losses on disposal of assets of $ 790 as cost of sales within the statement of operations.

Depreciation and amortization expense for property, plant, and equipment for the three months ended February 23, 2025 and February 25, 2024 was $ 2,076 and $ 2,006 , respectively.

Depreciation and amortization expense for property, plant, and equipment for the nine months ended February 23, 2025 and February 25, 2024 was $ 6,113 and $ 5,940 , respectively.

The Company recorded a loss on the sale of the equipment of $ 6,400 , which is included with other losses for the fiscal year ended May 25, 2025 , respectively, in loss on sale or disposal of assets, net of portion classified as cost of sales, within the statement of operations.

Depreciation and amortization expense for property, plant, and equipment for the three months ended September 30, 2025 and August 25, 2024 was $ 1,981 and $ 1,993 , respectively.

Accrued expenses and other current liabilities

The following table presents the components of accrued expenses and other current liabilities:

September 30, 2025 May 25,

Accrued payable to Redeemable Convertible Preferred Stockholders $ 4,664 $ 4,499

Accrued compensation 4,157 6,144

$ 5,843 $ 6,165

Accrued payable to Series A preferred stockholders

Accrued customer pass-through expenditures 2,101 3,509

Accrued professional fees

Contract liabilities, related party 4,131 2,731

Current portion of debt

Contract liabilities 3,083 684

Current portion of debt, related party 773 773

Current portion of debt 174 2,664

Accrued customer pass-through expenditures — 1,911

Accrued expenses and other current liabilities $ 19,843 $ 21,958

Restructuring costs

During fiscal year 2020, the Company commenced a multi-year restructuring plan to improve profitability and to redesign the organization to focus on strategic assets so that it could compete and thrive as a standalone public CDMO business.

We expect to finish incurring expenses under this plan by the end of fiscal year 2025.

Types of costs associated with this plan include:

(i) employee termination costs, as a result of multiple reductions-in-force;

and (ii) other costs related to the sale of non-strategic assets, including contract termination costs and asset write-offs.

These costs are included as a separate caption on the statements of operations.

The following table presents the restructuring costs or recovery recognized during the period:

Three months ended

Nine months ended

February 23, 2025 February 25, 2024 February 23, 2025 February 25, 2024

Employee termination costs $ 472 $ 76 $ 1,307 $ 215

Other (recoveries) costs

( 587 ) 695 ( 535 ) 703

$ ( 115 ) $ 771 $ 772 $ 918

The following table presents a reconciliation of the beginning and ending restructuring liabilities:

Employee termination costs Other costs Total

Balance at May 26, 2024 $ 217 $ 4,554 $ 4,771

Expense (recoveries)

1,307 ( 535 ) 772

Payments ( 1,204 ) ( 59 ) ( 1,263 )

Balance at February 23, 2025 $ 320 $ 3,960 $ 4,280

The following table presents the balance sheet classification of restructuring liabilities:

Current portion of operating lease liabilities

$ 3,575 $ 3,575

Accrued expenses and other current liabilities – accrued compensation

Accrued expenses and other current liabilities – other

Restructuring liabilities

$ 4,280 $ 4,771

The following table presents actual and expected expenses incurred or to be incurred under the plan:

Incurred through February 23, 2025 Expected remaining costs to be incurred Total expected costs

Employee termination costs $ 5,640 $ 535 $ 6,175

Other costs (recoveries) 12,850 ( 2,506 ) 10,344

$ 18,490 $ ( 1,971 ) $ 16,519

Commitments and contingencies

Legal contingencies

In the ordinary course of business, the Company is involved in various legal proceedings and claims.

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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 February 23, 2025.

Investor dispute

On December 23, 2024, 22NW Fund, L.P.

(“22NW”), a holder of shares of the Company’s Common Stock and Series A Redeemable Convertible Preferred Stock, filed a complaint against the Company, two former officers, and five former or current directors in the Commercial Division of the Supreme Court of the State of New York, New York County.

(“22NW”), a holder of shares of the Company’s Common Stock and Series A Redeemable Convertible Preferred Stock (see note 10), filed a complaint against the Company, two former officers, and five former or current directors in the Commercial Division of the Supreme Court of the State of New York, New York County.

The complaint seeks money damages (including compensatory damages, court costs, and attorneys’ fees) for (i) alleged material misrepresentations by the Company on which 22NW allegedly relied when purchasing shares of the Series A Redeemable Convertible Preferred Stock and Common Stock, (ii) alleged breaches of certain express representations in the stock purchase agreement through which 22NW acquired its shares, and (iii) registration delay fees owed under a registration rights agreement entered into in connection with the issuance of the Series A Redeemable Convertible Preferred Stock.

The complaint also seeks the equitable remedy of specific performance under the aforementioned stock purchase agreement, requesting an order compelling the Company to file a proxy statement with the SEC and to hold a stockholder meeting to seek the approval of the removal of the current cap on the conversion of Series A Redeemable Convertible Preferred Stock into Common Stock as set forth in the Certificate of Designations related to the Redeemable Convertible Preferred Stock (the “Issuance Proposal”).

The Company has accrued for the registration delay fees (see note 11 ) , and the Company has both filed a proxy statement with the SEC on February 27, 2025, and has scheduled a stockholder meeting for April 10, 2025, to seek the approval of the Issuance Proposal.

Otherwise, the Company believes that the claims are without merit and intends to vigorously defend against them, and any potential loss arising from these other claims is not currently probable or estimable.

On February 24, 2025, the Company and the individual defendants filed separate motions to dismiss the complaint.

The motions are not yet fully briefed.

On March 27, 2025, the Court issued an order setting forth an initial schedule for discovery.

On February 24, 2025, the Company filed a motion to dismiss all claims against it except for the claims relating to the registration delay fees.

The individual defendants filed separate motions to dismiss the complaint against them in its entirety.

Those motions were fully briefed on April 9, 2025, and the Court held a hearing on the motions in early November 2025.

Discovery is ongoing.

The Company intends to vigorously defend itself and its former officers and directors in this action.

Any potential loss arising from these claims is not currently probable or estimable.

However, the Company has been accruing for the registration delay fees sought by 22NW (see note 10 for additional information, including with respect to the payment in full of this obligation in November 2025).

The Company also held a Special Meeting of Stockholders on April 10, 2025, at which time the stockholders approved the removal of the cap on the conversion of Series A Redeemable Convertible Preferred Stock into Common Stock.

Class action complaint

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The co-lead plaintiffs filed an amended complaint on January 24, 2025, which contained substantially similar allegations and claims as those set forth in the original complaint.

The Company filed a motion to dismiss the complaint on March 25, 2025.

The Company continues to believe that the claims are without merit and intends to vigorously defend against them.

Any potential loss arising from this claim is not currently probable or estimable.

The Company filed a motion to dismiss the complaint on March 25, 2025, and the plaintiffs filed their opposition to the motion to dismiss on May 23, 2025.

In November 2025, the Company and individual defendants entered into an agreement in principle with the plaintiffs to settle this matter, without any admission of wrongdoing, which is subject to court approval.

If approved by the court in its current form, this proposed settlement is expected to be covered by the Company’s insurance policies with no material loss incurred by the Company.

The Company continues to believe that the claims are without merit and intends to vigorously defend against them if the settlement is not so approved.

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 cooperating 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 Foods 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 Foods 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 Foods 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.

See note 18 for additional developments subsequent to the balance sheet date.

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.

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, did not commit or participate in the criminal conduct disclosed, (b) no criminal action would be taken against Curation Foods, (c) that no criminal liability was established against Tanok and Yucatan after they were acquired by Curation Foods, 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.

The Company has cooperated with the SEC.

The Company cannot predict the duration or outcome of this matter at this time.

Yucatan Litigation

On December 1, 2018, the Company acquired all of the voting interests and substantially all of the assets of Yucatan Foods L.P.

(“Yucatan”, collectively the “Yucatan Acquisition”), which owned a guacamole manufacturing plant in Mexico called Procesadora Tanok, S de RL de C.V.

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 sought over $ 10,000 in damages, including delivery of shares of his stock held in escrow for the indemnification claims described above.

The Plaintiff sought over $ 10,000 in damages, including delivery of shares of his stock held in escrow for Company’s indemnification claims to recover the cost of a portion of the liabilities that were incurred by the Company in connection with certain compliance matters arising from facts and circumstances prior to the closing of the Yucatan Acquisition.

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 $ 80,000 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.

The Company previously 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.

The trial for the remaining defendants was severed into two trials by the Court:

• The first trial involved claims by and against one defendant only.

This trial concluded on October 18, 2024, and final judgment was entered on March 21, 2025, with offsetting verdicts that resulted in a net award in the Company’s favor of $ 902 against the defendant in addition to the opportunity to recover costs currently estimated at $ 270 .

The defendant has 15 days to file motions and until May 20, 2025 to file an appeal.

This trial concluded on October 18, 2024, and final judgment was entered on March 21, 2025, with offsetting verdicts that resulted in a net award in the Company’s favor of $ 902 against the defendant and an award of recoverable costs of $ 275 for a total judgment of $ 1,177 .

The Company filed a notice of appeal on June 9, 2025 and the Plaintiff filed a notice of cross-appeal on July 1, 2025.

• The second trial for the other defendants will involve only the Company’s claims against them, and there are no claims made by those defendants against the Company.

That second trial has been stayed by the Court pending a final judgment, including any appeal, in the first trial.

The ultimate outcome of these or any other investigations, legal actions, or potential claims that may arise from the matters related to the litigation remains uncertain.

The Company cannot reasonably predict the timing or outcomes, or estimate the amount final judgments, or the effect, if any, they may have on its financial statements.

• The Plaintiff filed a new complaint seeking over $ 15,000 in damages and delivery of shares of his stock held in escrow, and served it on the Company on June 30, 2025.

The Plaintiff’s new lawsuit arises out of the same allegations as his earlier lawsuit, asserts the same claims, and seeks the same damages.

The Company will oppose the new complaint and seek to dismiss on the grounds it is duplicative of the first lawsuit.

The ultimate outcome of these matters or any other investigations, legal actions, or potential claims that may arise from these matters remains uncertain.

The Company cannot reasonably predict the timing or outcomes, or estimate the amount of final judgments, or the effect, if any, they may have on its financial statements.

Separately, future rulings from the Court will affect pending claims against the severed defendants for indemnification under provisions in the purchase agreement.

Because recovery of amounts is still contingent upon the resolution of certain issues, no amounts have been recorded as recoverable costs through February 23, 2025.

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.

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.

Because recovery of amounts is still contingent upon the resolution of certain issues, no amounts have been recorded as recoverable costs through September 30, 2025.

The following table presents the components of debt:

September 30, 2025 May 25,

Debt principal:

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Total debt, net of discounts $ 135,951 $ 130,436

The following table presents future minimum principal payments:

Remainder of fiscal year 2025 $ 231

The following table presents future minimum principal payments at September 30, 2025:

Remainder of 2025

Thereafter 6,595

1 unchanged sentence

The following table presents the classification of interest in the consolidated financial statements:

Three months ended Nine months ended

February 23, 2025 February 25, 2024 February 23, 2025 February 25, 2024

Three months ended

September 30, 2025 August 25, 2024

Expensed in statement of operations

5,481 4,289 16,314 12,300

Capitalized to property, plant and equipment

798 1,187 2,254 3,250

Total interest incurred $ 6,956 $ 6,094

As of February 23, 2025, the Company was in compliance with all financial covenants under the Term Loan Credit Facility and Revolving Credit Facility.

As of September 30, 2025, the Company was in compliance with all financial covenants under the Term Loan Credit Facility and Revolving Credit Facility.

Term Loan Credit Facility

On May 22, 2023, the Company entered into a Credit and Guaranty Agreement with Alcon Research, LLC ("Alcon," collectively 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.

This facility has been amended three times for the purpose of (i) enhancing and clarifying certain reporting requirements;

and (ii) most recently on November 26, 2024, to provide limited waivers of potential events of default and permit the Company to retain cash proceeds from the recent sale of the isolator-filler (see note 6).

On May 22, 2023, the Company entered into a Credit and Guaranty Agreement (the “Term Loan Credit Facility”) with Alcon Research, LLC (“Alcon”).

The Term Loan Credit Facility refinanced in full all obligations of the Company and its subsidiaries under its prior term loan credit facility.

This facility has been amended from time to time, including for the purpose of (i) enhancing and clarifying certain reporting requirements;

(ii) providing limited waivers of potential events of default and permitting the Company to retain cash proceeds from the recent sale of the isolator-filler (see note 6);

and (iii) most recently, on November 6, 2025, making certain changes to reporting requirements to correspond to the Fiscal Year Change and providing the Company with flexibility regarding the investment of excess cash and alignment on making certain third party payments.

The Company initially made $ 142,270 of term loan borrowings under the facility.

The term loans bear interest at a fixed rate of 10 % per annum payable-in-kind until the third anniversary of the closing date, following which interest is payable at a fixed rate of 3 % per annum in cash with the remainder payable-in-kind.

The Company may elect to pay any amounts of interest in cash instead of in-kind.

The Company may elect to pay any amount of interest in cash instead of in-kind.

The obligations under the Term Loan Credit Facility mature on May 22, 2029.

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The Term Loan Credit Facility contains customary affirmative covenants including, but not limited to, financial reporting requirements and maintenance of existence requirements and negative covenants, including, but not limited to, limitations on the incurrence of debt, liens, investments, restricted payments, restricted debt payments, and affiliate transactions.

The Term Loan Credit Facility contains one financial covenant, a minimum liquidity covenant, requiring $ 4,000 of Consolidated Liquidity (as defined in the Term Loan Credit Facility) as of May 28, 2023 and as of the end of the first, second and third fiscal quarters of 2024 of the Company.

During the fourth quarter of fiscal year 2024, the minimum liquidity covenant was increased to $ 4,500 .

As of February 23, 2025, the Company’s effective annual interest rate under the Term Loan Credit Facility was 20.9 %.

The Term Loan Credit Facility contains one financial covenant, a minimum liquidity covenant, requiring $ 4,500 of Consolidated Liquidity (as defined in the Term Loan Credit Facility) as of the end of each quarter.

As of September 30, 2025, the Company’s effective annual interest rate under the Term Loan Credit Facility was 20.9 %.

Borrowings are guaranteed and secured by substantially all of the Company’s consolidated assets.

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(“BMO,” collectively the “Revolving Credit Facility”).

The Revolving Credit Facility has been amended nine times for the purpose of (i) providing limited waivers from historical events of default;

The Revolving Credit Facility has been amended from time to time, including for the purpose of (i) providing limited waivers from historical events of default;

(ii) as a result of discontinued operations, reducing the maximum committed amount to its current level of $ 40,000 ;

(iii) creating an additional $ 2,500 borrowing tranche beyond the maximum committed amount that must be repaid prior to any other borrowings (the "FILO Tranche");

and (iv) most recently on November 26, 2024.

extending the maturity date to November 26, 2027, reducing the applicable interest rates and making certain other changes to the financial and reporting covenants.

The Company can make ordinary borrowings under the facility in an amount up to the lesser of (i) the maximum committed amount and (ii) a specified borrowing base calculated as of the end of each month.

(iii) creating an additional $ 2,500 borrowing tranche, which was repaid in June 2025;

(iv) extending the maturity date to November 26, 2027, reducing the applicable interest rates and making certain other changes to the financial and reporting covenants;

and (v) most recently, on November 6, 2025, making certain changes to reporting requirements to correspond to the Fiscal Year Change and providing the Company with flexibility regarding the investment of excess cash and alignment on making certain third party payments.

The Company can borrow under the facility in an amount up to the lesser of (i) the maximum committed amount and (ii) a specified borrowing base calculated as of the end of each month.

The monthly borrowing base is determined using specified percentages of qualifying accounts receivable and inventory that serve as collateral under the facility, net of reserves.

As of February 23, 2025, the Company's borrowing base was $ 25,500 , and the Company had no outstanding borrowings.

These borrowings, when outstanding, bear interest based on an average daily SOFR rate plus a spread of 2.50 % per annum for a total interest rate of 8.67 % as of February 23, 2025.

As of September 30, 2025, the Company's borrowing base was $ 23,600 , and the Company had no ordinary borrowings under this tranche.

These borrowings, when outstanding, bear interest based on an average daily SOFR rate plus a spread of 2.00 % to 2.50 % per annum based on average availability.

The facility also bears a commitment fee on unused availability of 0.375 % per annum.

As of February 23, 2025, the Company has a $ 2,500 borrowing under the FILO Tranche.

This borrowing bears interest at the same rate as ordinary borrowings as described above.

The following table presents average borrowings and interest rates for the periods presented:

Three months ended Nine months ended

2025 February 25,

2024 February 23,

2025 February 25,

Average borrowings $ 4,500 $ 18,757 $ 12,023 $ 19,551

Weighted average interest rate 8.72 % 10.97 % 9.08 % 10.32 %

Average borrowings under the facility were no t material for the three months ended September 30, 2025.

For the three months ended August 25, 2024, average borrowings were $ 19,535 and the weighted average interest rate on those borrowings was 10.9 %.

Borrowings are guaranteed and secured by substantially all of the Company’s consolidated assets.

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The sale and leaseback did not meet the requirements for sale-leaseback accounting, which resulted in the creation of a $ 7,730 leaseback liability representing the Company's total payment obligation under the lease.

The lease expires on the earlier of May 22, 2033 or the date on which the Company exercises its option to repurchase the leased equipment, at which time the Company shall automatically repurchase the equipment for a nominal amount.

The lease expires on the earlier of May 22, 2033 or the date on which the Company exercises its option to repurchase the leased equipment, at which time the Company must automatically repurchase the equipment for a nominal amount.

During the lease term, the Company is obligated to make quarterly principal payments to Alcon of $ 193 plus interest at a rate of 6 % per annum on the unpaid principal balance.

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its remedies for other breaches of the lease are limited to monetary damages.

The Company is authorized to issue up to 75,000,000 shares of common stock, $ 0.001 par value.

The Company is generally not permitted to pay cash dividends to common stockholders due to restrictions arising from the Term Loan Credit Facility, the Revolving Credit Facility and the Redeemable Convertible Preferred Stock.

The Company is authorized to issue up to 75,000,000 shares of common stock, $ 0.001 par value (“Common Stock”).

On October 3, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain entities.

6 unchanged sentences

Redeemable Convertible Preferred Stock

On January 9, 2023, the Company issued 38,750 shares of Series A Redeemable Convertible Preferred Stock, par value $ 0.001 per share, that is in certain cases redeemable at the option of the holder as discussed further below (the “Redeemable Convertible Preferred Stock”).

On January 9, 2023, the Company issued 38,750 shares of Series A Convertible Preferred Stock, par value $ 0.001 per share, that is in certain cases redeemable at the option of the holder as discussed further below (the “Redeemable Convertible Preferred Stock”).

The Redeemable Convertible Preferred Stock is convertible into shares of Common Stock at the election of the holders of the Redeemable Convertible Preferred Stock.

The Redeemable 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 Redeemable Convertible Preferred Stock proceeds of $ 38,750 , net of issuance costs of $ 668 .

The Company received proceeds of $ 38,750 at issuance, net of issuance costs of $ 668 .

The deduction for issuance costs is being amortized through June 29, 2026 as a charge to additional paid-in capital.

1 unchanged sentence

The holders are also entitled to participate in dividends declared or paid on the Common Stock on an as-converted basis.

At February 23, 2025, there were $ 561 of dividends in arrears that had not yet been paid-in-kind in the form of additional shares of Redeemable Convertible Preferred Stock, representing $ 12.50 per preferred share.

As of February 23, 2025 and May 26, 2024, the aggregate liquidation preference of the Redeemable Convertible Preferred Stock was $ 45,455 and $ 42,991 , respectively.

At September 30, 2025, there were $ 874 of dividends in arrears that had not yet been paid-in-kind in the form of additional shares of Redeemable Convertible Preferred Stock, representing $ 12.50 per preferred share.

As of September 30, 2025 and May 25, 2025, the aggregate liquidation preference of the Redeemable Convertible Preferred Stock was $ 47,466 and $ 46,308 , respectively.

Each holder has the right, any time at its option, to convert its Redeemable 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.

The conversion is also capped at a maximum of 6,056,284 as a result of an exchange listing rule (the "Exchange Cap").

The issuance of 5,928,775 shares of Common Stock on October 3, 2024 triggered an adjustment to the conversion price to $ 6.53 per share.

As of February 23, 2025, the Redeemable Convertible Preferred Stock would have been convertible into 6,875,074 shares of common stock if not for the Exchange Cap.

The Company may also elect to convert the Redeemable Convertible Preferred Stock, subject to certain conditions, once the Company's closing stock price equals or exceeds $ 10.50 per share.

The Redeemable Convertible Preferred Stock is redeemable by the holders after June 29, 2026.

Until such date, it is redeemable contingent upon the occurrence of certain events that may be outside of the control of the Company.

The issuance of 5,928,775 shares of Common Stock on October 3, 2024 triggered an adjustment to the conversion price to approximately $ 6.53 per share.

In addition, in April 2025, the Company held a Special Meeting of Stockholders at which stockholders approved the removal of the 19.99 % “exchange cap” on the issuance of Common Stock underlying the Redeemable Convertible Preferred Stock.

As of September 30, 2025, the Redeemable Convertible Preferred Stock was convertible into 7,131,888 shares of Common Stock.

The Company may also elect to convert the Redeemable Convertible Preferred Stock, subject to certain conditions, if, for at least 20 consecutive trading days during the respective measuring period, the Company's closing stock price equals or exceeds $ 10.50 per share.

Holders have the right to redeem the Redeemable Convertible Preferred Stock after the earlier of June 29, 2026 or the termination or waiver of the restriction on cash dividends and/or redemptions that is set forth in the Company’s credit agreements.

In the event that any holders exercise this right to redeem a portion or all of their holdings, the redemption date would be 180 days after providing such notice to the Company.

On such date the Company would be required to pay in cash an amount equal to the liquidation preference.

If the Company is unable to redeem all of the Redeemable Convertible Preferred Shares submitted for redemption, the Company would also be subject to interest on the unpaid balance at the rate of 1 % percent per month.

In addition, the Redeemable Convertible Preferred Stock is also redeemable contingent upon the occurrence of certain events that may be outside of the control of the Company.

As a result, the Company has presented the Redeemable Convertible Preferred Stock as temporary equity on the consolidated balance sheets.

7 unchanged sentences

The agreement has no specified termination date and no specified maximum amount of penalties.

As of February 23, 2025, the Company had accumulated $ 4,912 o f monetary penalties and interest under the registration rights agreement.

As of September 30, 2025, the Company had accumulated $ 5,199 o f monetary penalties and interest under the registration rights agreement.

The penalties accumulated because of delinquent filings of the Company’s annual and quarterly reports with the SEC, which caused the initial registration statement to cease to be effective.

2 unchanged sentences

Meanwhile, interest continues to accrue on the penalty amount at a rate of 12 % per annum until paid.

Penalties are recorded in other expense, net, and interest is recorded in interest expense, net, on the consolidated statements of operations.

The Company paid $ 535 of these monetary penalties during fiscal year 2023.

The accrual for penalties and interest was $ 4,377 as of February 23, 2025, which is included in accrued expenses and other accrued liabilities (see note 7).

Penalties are recorded in other income or expense, net, and interest is recorded in interest expense on the consolidated statements of operations.

The Company initially paid $ 535 of these monetary penalties leaving a remaining obligation for penalties and interest of $ 4,664 as of September 30, 2025, which is included in accrued expenses and other current liabilities (see note 7).

In November 2025, the Company paid the remaining obligation in full.

Revenue recognition

2 unchanged sentences

Three months ended

Nine months ended

2025 February 25,

2024 February 23,

2025 February 25,

September 30,

2025 August 25,

CDMO $ 21,749 $ 20,180

3 unchanged sentences

Three months ended

Nine months ended

2025 February 25,

2024 February 23,

2025 February 25,

September 30,

2025 August 25,

Revenues recognized over time $ 4,533 $ 5,876

1 unchanged sentence

Total $ 31,109 $ 24,705

During the three months ended February 23, 2025, the Company had revenues concentrations of 10% or greater from two customers, accounting for 54 % and 18 %.

During the three months ended February 25, 2024, the Company had revenues concentrations of 10% or greater from two customers, accounting for 52 % and 14 %.

During the nine months ended February 23, 2025, the Company had revenues concentrations of 10% or greater from three customers, accounting for 43 %, 20 % and 11 %.

During the nine months ended February 25, 2024, the Company had revenues concentrations of 10% or greater from three customers, accounting for 40 %, 19 %, and 10 %.

During the three months ended September 30, 2025, the Company had revenue concentrations of 10% or greater from two customers, with those customers comprising 38 % and 20 % of revenue.

During the three months ended August 25, 2024, the Company had revenue concentrations of 10% or greater from two customers, with those customers comprising 32 % and 24 % of revenue.

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

4 unchanged sentences

Contract liabilities, noncurrent

Balance at May 26, 2024 $ 4,069 $ ( 2,113 ) $ ( 4,960 )

Changes to the beginning balance arising from:

Balance at June 30, 2025 $ 9,025 $ ( 5,195 ) $ ( 2,560 )

Changes to the comparative balance sheet amount arising from:

Amounts billed as accounts receivable as the result of rights to consideration becoming unconditional

2 unchanged sentences

Reclassification of scheduled satisfaction of performance obligations from noncurrent to current due to passage of time

Net change to contract balances recognized after the beginning of the period due to amounts billed, recognition of revenue, changes in estimate, reclassifications from noncurrent to current, and interest from significant financing component

Net change to contract balances recognized after the comparative balance sheet date due to amounts billed, recognition of revenue, changes in estimate, reclassifications from noncurrent to current, and interest from significant financing component

325 ( 2,431 ) ( 95 )

Balance at February 23, 2025 $ 6,150 $ ( 2,565 ) $ ( 4,419 )

Balance at September 30, 2025 $ 4,385 $ ( 7,214 ) $ ( 1,168 )

Stock-based compensation

3 unchanged sentences

Under the plan, no recipient may receive awards during any fiscal year that exceed 500,000 stock options, 250,000 stock grants or stock units, or 500,000 stock appreciation rights, nor may any non-employee director be granted awards in excess of $ 120 .

As of February 23, 2025, the Company had 1,547,216 common shares reserved for new awards under the plan.

As of September 30, 2025, the Company had 2,097,452 common shares reserved for new awards under the 2019 Stock Incentive Plan.

• The Equity Inducement Plan became effective on March 20, 2024.

This plan provides for the grant of equity awards to individuals that were not previously employees or directors of the Company as an inducement material to the individual’s entry into employment with the Company.

As of February 23, 2025, the Company had 336,374 common shares reserved for new awards under the plan.

Most of the stock-based compensation expense arises from recent awards to our two principal executive officers under the Equity Inducement Plan.

Those awards include (i) an RSU award, a small portion of which vested immediately with the remainder vesting on each of the first five anniversaries of the grant date;

and (ii) PSU awards divided into ten equal tranches that will vest, if at all, based upon closing stock price milestones over a five-year performance period, and to the extent a PSU award tranche vests based on performance, 50 % of the shares for each tranche will be issued immediately, and 50 % of the shares will be issued on the one-year anniversary of the performance vesting date.

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 information about stock-based awards:

Nine months ended

2025 February 25,

Weighted-average grant date fair value per share:

As of September 30, 2025, the Company had 167,474 common shares reserved for new awards under the Equity Inducement Plan.

The following table presents information about the fair value of stock-based awards:

Stock options

RSUs and PSUs 4.39 8.25

Intrinsic value of stock options exercised — 115

Fair value of RSUs and PSUs vested $ 5.88 $ 7.74

Tax benefit of options exercised — 35

Weighted-average assumptions to value stock option grants:

Three months ended

September 30, 2025 August 25, 2024

Weighted-average grant date fair value per share

$ 5.36 $ 3.38

Weighted-average assumptions used to determine grant-date fair value:

Expected life

3 unchanged sentences

Dividend yield — % — %

A summary of the activity under the Company’s stock option plans as of February 23, 2025 and changes during the fiscal quarter then ended is presented below:

The following table presents other information about stock-based awards:

Three months ended

September 30, 2025 August 25, 2024

Weighted average grant-date fair value per share:

$ 7.72 $ 5.18

The following table presents information about stock option balances and activity:

Shares Weighted-average exercise price per share Weighted-average remaining contractual term Aggregate intrinsic value

(in thousands)

Outstanding at May 26, 2024 2,112,591 $ 10.88

Outstanding at June 30, 2025 1,249,680 $ 8.48

Granted 59,575 8.01

1 unchanged sentence

Expired ( 147,184 ) 10.42

Outstanding at February 23, 2025 1,418,355 9.35 3.9 years $ 45

Exercisable at February 23, 2025 864,223 10.70 2.2 years —

Outstanding at September 30, 2025 1,152,621 8.22 5.0 years $ 465

Exercisable at September 30, 2025 448,178 10.46 2.8 years 15

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.

Currently, the PSUs outstanding vest upon achievement of certain stock price hurdles and continued employment thereafter of our CEO and CFO.

The PSUs have a five-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 RSU award activity and PSU award activity as of February 23, 2025 and changes during the fiscal quarter then ended is presented below.

The following table presents information about recent RSU and PSU activity:

Shares Weighted-average grant date fair value per share Shares Weighted-average grant date fair value per share

Outstanding at May 26, 2024 1,622,004 $ 7.83 1,500,000 $ 4.66

Outstanding at June 30, 2025 1,523,137 $ 6.21 2,545,000 $ 4.35

Granted 177,386 7.72 — —

1 unchanged sentence

Forfeited ( 9,275 ) 8.01 — —

Outstanding at February 23, 2025 1,531,850 6.41 2,175,000 4.23

Stock-based compensation expense

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

Nine months ended

2025 February 25,

Cost of product sales $ 431 $ 549

Research and development expense ( 123 ) 126

Selling, general and administrative expense 8,035 3,928

Outstanding at September 30, 2025 1,377,482 6.46 2,283,000 4.25

Stock-based compensation expense

As of February 23, 2025, there was $ 12,473 of total unrecognized compensation expense related to unvested equity compensation awards granted under the Lifecore incentive stock plans.

Substantially all of the stock-based compensation expense is in selling, general and administrative expense for the periods presented.

Most of the stock-based compensation expense arises from recent awards to the Company’s executive officers and other newly hired employees under the Equity Inducement Plan.

Those awards include (i) RSUs that primarily vest on each of the first five anniversaries of the grant date;

As of September 30, 2025, there was $ 12,214 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 2.0 years.

The effective tax rate was approximately 1 % or less for all periods presented.

The effective tax rate was approximately negative 3 % for the three months ended September 30, 2025 and less than 1 % for the three months ended August 25, 2024.

The effective tax rates were lower than the U.S.

federal statutory tax rate in all periods due to the Company’s valuation allowance on its deferred tax assets.

federal statutory tax rate in all periods primarily due to the Company’s valuation allowance on its deferred tax assets.

The One, Big, Beautiful Bill Act was signed into law in July 2025 and contains significant tax law changes with various effective dates, including a permanent extension of the 21% flat corporate income tax rate which was previously set to expire after 2025.

The Company will be impacted by changes to the timing of certain tax deductions including depreciation expense, research and development expenditures and interest expense.

The new tax laws caused a one-time acceleration of various tax deductions which did not result in income due to the establishment of valuation allowances on all deferred tax assets.

At the same time, that acceleration reduced deductions available to offset future deferred tax liabilities, resulting in a one-time estimated deferred tax expense of $ 255 for the three months ended September 30, 2025.

Fair value of financial instruments

The following table presents the carrying value and fair value of financial liabilities:

February 23, 2025 May 26, 2024

Carrying value Fair value Carrying value Fair value

Term loan credit facility with related party $ 109,865 $ 128,600 $ 94,442 $ 124,700

Debt derivative liability 23,900 23,900 25,400 25,400

Leaseback liability with related party 6,571 * 7,150 *

Contract liability, related party

4,971 * 4,703 *

Customer deposit

4,140 * 4,576 *

* Fair value approximates carrying value

All fair value measurements presented in the table above were level 3 measurements.

Cash and cash equivalents

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.

All of our cash is deposited in the United States with a single financial institution, almost all of which exceeds amounts covered by Federal Deposit Insurance Corporation.

Term Loan Credit Facility and debt derivative liability

The Term Loan Credit Facility (as defined in note 10) contains various features that meet the definition of an embedded derivative and require bifurcation.

These features, which were necessary for the Company to accept in order for Alcon to agree to provide the term loan financing, comprise three options for early prepayment of the term loans at stated premiums above par in the event of certain future scenarios occurring, as described more fully in note 10.

The Term Loan Credit Facility contains various features that meet the definition of an embedded derivative and require bifurcation.

These features, which were necessary for the Company to accept in order for Alcon to agree to provide the term loan financing, comprise three options for early prepayment of the term loans at stated premiums above par if certain future events were to occur, as described more fully in note 9.

These embedded derivatives were initially recorded at fair value as a noncurrent liability (“debt derivative liability”) offset by a discount to the carrying value of the Term Loan Credit Facility that is being amortized to interest expense over the term of that facility.

The debt derivative liability is being subsequently remeasured at fair value every reporting period with changes in fair value recognized as a component of other expense, net.

The fair value of the debt derivative liability is estimated using a discounted cash flow model that includes annually weighted probabilities that certain call and put premiums contained in the Term Loan Credit Facility are exercised upon qualifying events of default or changes in control.

The key inputs to the valuation model are (i) the probability and timing of a change in control event occurring over the remaining term of the debt;

and (ii) the discount rate for the valuation of that scenario, which can be influenced by changes in the risk-free rate and the credit spread, which in turn can be influenced by the Company's credit rating as well as changes in the credit market.

Factors that can affect the estimate of fair value at each reporting date, and therefore the amount of gain or loss recorded for a particular period, include imprecision in estimating unobservable market inputs and the selection of particular methodologies and assumptions used to determine the fair value.

During the second quarter of 2025, we adjusted certain key assumptions by increasing the probability of a 2028 change in control and lowering the discount rate due to an improvement in the Company's credit rating.

Revolving Credit Facility

Outstanding borrowings under the Company's Revolving Credit Facility are carried at cost, which approximates their fair value as of February 23, 2025 and May 26, 2024, due to their short duration and variable rates of interest.

Contract liability with related party and customer deposit

Alcon, a related party, and another significant customer of the Company each agreed to provide upfront deposits due back after a certain number of years in order to finance the initial working capital requirements of their amended commercial supply agreements.

Management determined that the Alcon deposit represents a noncurrent contract liability that includes a significant financing component while the other deposit represents an ordinary noncurrent liability.

The deposits were initially recorded at fair value, and the resulting discounts are being amortized to interest expense through the contractual repayment date.

Conversion ratio improvement provided to preferred stockholders

During the three months ended November 24, 2024, we performed a non-recurring fair value measurement to record the value of a conversion ratio improvement provided to preferred stockholders as a result of the October 3, 2024 Securities Purchase Agreement referenced in note 11.

The fair value of the conversion feature was recorded as $ 2,132 adjustment to loss attributable to common stockholders.

The fair value was calculated using an as-converted method based on the contractual conversion ratio of the preferred shares and the closing price of our common stock, a level 1 measurement.

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

The disclosed fair value of the term loan and the recorded fair value of the debt derivative liability are estimated using a discounted cash flow method (a level 3 measurement) that includes annually weighted probabilities that certain call and put premiums are exercised upon qualifying events of default or changes in control.

As of September 30, 2025, the fair value of the term loan, excluding the value of the embedded debt derivative liability, was $ 142,700 with a carrying value of $ 124,045 ;

the fair value of the debt derivative liability was $ 25,491 , which was the same as its carrying value.

As of May 25, 2025, the fair value of the term loan, excluding the value of the embedded debt derivative liability, was $ 132,100 with a carrying value of $ 115,594 ;

the fair value of the debt derivative liability was $ 24,991 , which was the same as its carrying value.

The debt derivative liability is currently the only financial instrument recorded at fair value on a recurring basis in the accompanying balance sheets.

The following table presents information about those measurements:

Type of measurement Measurement date Type of measurement

Level 1 Level 2 Level 3

Debt derivative liability Recurring February 23, 2025 — — 23,900

Debt derivative liability Recurring September 30, 2025 — — 25,491

Debt derivative liability Recurring May 25, 2025 — — 24,991

Key inputs used to develop the discount rate for the fair value measurements at the balance sheet dates were as follows:

Probability of change in control event 80 % 80 %

Weighted average discount rate 18.0 % 21.4 %

The weighted average discount rate was calculated based on the individual discount rate used for each future payment and weighted by both the present value of the future payments and the probability of each scenario.

The following table reflects the roll forward reconciliation of Level 3 recurring fair value measurements:

Three months ended Nine months ended

2025 February 25,

2024 February 23,

2025 February 25,

The following table presents the rollforward reconciliation of this Level 3 recurring fair value measurement:

Three months ended

September 30,

2025 August 25,

Balance at beginning of period $ 25,116 $ 25,400

1 unchanged sentence

Balance at end of period $ 25,491 $ 24,500

(1) For the three and nine months ended February 23, 2025 and February 25, 2024, 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.

Operating lease right-of-use assets and liabilities are classified as standalone captions on the consolidated balance sheets, finance lease assets are classified as property, plant and equipment, and finance lease liabilities are classified as debt.

The key inputs to the valuation model are (i) the probability and timing of a change in control event occurring over the remaining term of the debt;

and (ii) the discount rate, which can be influenced by changes in the risk-free rate, the Company's credit rating and/or as changes in the overall credit market.

During the three months ended August 25, 2024, there was a decrease in discount rates that lowered the fair value of the debt derivative liability.

During the three months ended September 30, 2025, the passage of time slightly increased the fair value of the debt derivative liability.

Key inputs used to develop the fair value measurement were as follows:

September 30, 2025 May 25,

Probability of change in control event 80.0 % 80.0 %

Weighted average discount rate 17.8 % 18.4 %

Cash and Revolving Credit Facility

Outstanding cash and outstanding borrowings under the Company's Revolving Credit Facility are carried at cost, which approximates fair value due to their short duration and variable rates of interest (a level 2 measurement).

Leaseback liability with related party

As discussed further in note 9, the Company maintains a financial liability for an equipment sale and leaseback with Alcon for which control of the asset was deemed not to have transferred.

In accordance with U.S.

GAAP, the Company presents supplemental fair value information based on market conditions of the underlying financial instrument.

The fair value information does not change the stated rate or carrying value of the instrument.

The fair value of the leaseback liability was estimated using a discounted cash flow method (a level 3 measurement) that assumes a weighted-average discount rate of 5.2 % and 5.8 % as of September 30, 2025 and May 25, 2025, respectively.

As of September 30, 2025 and May 25, 2025, the fair value of the leaseback liability approximated its carrying value.

Customer deposit

A significant customer of the Company agreed to provide an upfront cash deposit in order to finance working capital requirements for the duration of its commercial supply agreement with us.

The deposit bears no interest and matures upon termination of the commercial supply agreement, which can be extended indefinitely upon mutual agreement of the parties, and was most recently extended in March 2024 for a period of 1.75 years to December 31, 2026.

In accordance with U.S.

GAAP, the Company presents supplemental fair value information based on market conditions of the underlying financial instrument.

The fair value information does not change the stated rate or carrying value of the instrument.

The fair value of the deposit is estimated using a discounted cash flow method (a level 3 measurement) that includes assumed discount rates of 6.2 % and 6.6 % as of September 30, 2025 and May 25, 2025, respectively.

The fair value assumes repayment in 1.3 years and 1.6 years as of September 30, 2025 and May 25, 2025, respectively, which was the remaining contractual term of the agreement as of each measurement date.

As of September 30, 2025 and May 25, 2025, the fair value of the deposit approximated its carrying value.

Conversion ratio improvement provided to preferred stockholders

During the three months ended November 24, 2024, the Company performed a non-recurring fair value measurement to record the value of a conversion ratio improvement provided to preferred stockholders as a result of the October 3, 2024 Securities Purchase Agreement referenced in note 10.

The fair value of the conversion feature was recorded as $ 2,132 adjustment to loss attributable to common stockholders.

The fair value was calculated using an as-converted method based on the contractual conversion ratio of the preferred shares and the closing price of Common Stock, a level 1 measurement.

Substantially all current lease activity comes from two active facilities near the Company’s owned headquarters facility in Chaska, Minnesota.

Additionally, an operating lease liability for the abandoned headquarters of the Curation Foods business in Santa Maria, California was settled with the landlord in the March 2025 for a gain of $ 2,642 .

None of the Company’s other leases are material to the periods presented.

Operating lease assets are included in other assets and operating lease liabilities are presented in accrued expenses and other current liabilities and other liabilities on the consolidated balance sheets.

Finance lease assets are included in property, plant and equipment and finance lease liabilities are classified as debt.

In January 2016, a lease commenced for the Company’s warehouse and final packaging building in Chaska, Minnesota.

The lease has since been amended twice to accomplish the following:

(i) to extend the term of the lease to September 2034, (ii) to add a buyout option equal to the balance of the lessor’s mortgage loan, valued at $ 3,100 as of September 30, 2025;

and (iii) to provide a $ 2,400 cash payment to the Company in October 2024 in exchange for an increased rent payment schedule and an updated purchase option.

The lease is classified as a finance lease and has a discount rate of 9 %, which was the Company’s incremental borrowing rate at the time of the most recent amendment to the lease in August 2024.

In January 2021, a lease commenced for the Company’s warehouse and office space in Chanhassen, Minnesota.

The lease term extends through March 2033.

The lease is classified as an operating lease and has a discount rate of 3 %, which was the Company’s incremental borrowing rate at lease inception.

The components of lease cost were as follows:

Nine months ended

2025 February 25,

Three months ended

September 30, 2025 August 25, 2024

Finance lease cost:

2 unchanged sentences

Operating lease cost 74 74

Variable lease cost — 306

Sublease income — ( 148 )

Total lease cost $ 244 $ 201

Weighted-average remaining lease term:

Operating leases 7.9 years 8.5 years

Finance leases 9.5 years 3.7 years

Weighted-average discount rate:

Operating leases 3.02 % 3.04 %

Finance leases 8.91 % 11.10 %

As most of the leases do not provide an implicit rate, the Company determines its incremental borrowing rate based on information available at the lease commencement date.

The relatively lower discount rates for operating leases reflect favorable market rates of interest and company credit ratings in 2020 when the largest operating lease for its Chanhassen, Minnesota lease commenced (as described further below).

Likewise, the relatively higher discount rates for finance leases reflect the less favorable market rates of interest and company credit ratings in 2024 when the largest finance lease for its Chaska, Minnesota lease commenced (as described further below).

The Company’s leases have original lease periods ending through 2033.

The Company’s maturity analysis of operating and finance lease liabilities as of February 23, 2025 are as follows:

The Company’s maturity analysis of operating and finance lease liabilities as of September 30, 2025 are as follows:

leases Finance

Remainder of fiscal year 2025 $ 3,685 $ 170

Remainder of 2025

2026 $ 410 $ 691

Thereafter 347 5,975

2 unchanged sentences

Present value of lease liabilities $ 1,582 $ 5,914

Current portion $ 3,966 $ 157

Noncurrent portion 1,436 5,846

Classification on consolidated balance sheet:

Accrued expenses and other current liabilities (see note 7)

Debt, net of current portion

Other liabilities

Present value of lease liabilities $ 1,582 $ 5,914

Most of the amount shown above as due during the remainder of 2025 relates to overdue payments for a leased facility in California.

The Company anticipates settling these obligations in the fourth quarter of fiscal 2025.

See section entitled "Landlord complaints" in note 9 and note 18 for additional details.

Supplemental cash flow information related to leases are as follows:

Nine months ended

2025 February 25,

Three months ended

September 30, 2025 August 25, 2024

Cash paid for amounts included in the measurement of lease liabilities:

2 unchanged sentences

Financing cash flows from finance leases 39 40

Lease liabilities arising from obtaining right-of-use assets:

Finance leases

In September 2015, Lifecore executed a lease for a building in Chaska, Minnesota near 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 to provide for a $ 2,400 cash payment to the Company in exchange for a revised rent payment schedule and an updated purchase option.

This cash payment was received in October 2024, which made the amendment fully effective, and increased the future lease payments by $ 2,637 .

The amendment extended the lease term to September 30, 2034 , and the future payment obligations were discounted at the Company’s incremental borrowing rate of 9 %.

The finance lease obligation at February 23, 2025 assumed the amended buyout option would be exercised on September 30, 2034 , which is estimated to be $ 3,100 .

The only other finance lease that Lifecore has relates to a truck that was executed during fiscal year 2024.

The truck lease runs for six 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 building in Chanhassen, Minnesota containing a warehouse and office space.

The lease commenced on January 1, 2021 with an initial term of seven years and two months , 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 $ 1,956 as of February 23, 2025.

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 $ 39 as of February 23, 2025.

Related party transactions

Alcon has been and continues to be one of the Company's largest customers, comprising 43 % of its revenues for the nine months ended February 23, 2025.

Alcon has been and continues to be one of the Company's largest customers, comprising 38 % and 32 % of its revenues for the three months ended September 30, 2025 and August 25, 2024, respectively.

On May 22, 2023, Alcon entered into the Term Loan Credit Facility with the Company as described in note 9.

This new relationship as the Company's largest creditor, combined with its existing position as one of the Company's largest customers, caused management to conclude that Alcon has the ability to exert significant influence over the Company.

Accordingly, management designated Alcon as a related party beginning in May 2023.

The following list summarizes Alcon's transactions with the Company:

• Customary current financial positions for a customer of Alcon's size, including accounts receivable, contract liabilities and revenue, each as presented in the consolidated balance sheets and statements of operations.

Alcon has provided the Company guaranteed contractual minimum purchasing commitments, and the Company is required to maintain certain manufacturing capacity levels, each through 2031;

• Cash advances Alcon provided to the Company to purchase and install Alcon-owned equipment on the Company's premises totaling $ 465 and $ 1,207 at February 23, 2025 and May 26, 2024, respectively;

• A significant noncurrent contract liability of $ 4,053 and current contract liability of $ 918 , representing a prepayment Alcon made to the Company in the fourth quarter of fiscal 2024 of $ 5,500 that was initially recorded at present value due to the existence of a significant financing component.

This relationship as the Company's largest creditor, combined with its position as one of the Company's largest customers, caused management to conclude that Alcon has the ability to exert significant influence over the Company and therefore meets the definition of a related party beginning in May 2023.

Alcon’s transactions with the Company are as follows:

Alcon has provided the Company guaranteed contractual minimum purchasing commitments through 2031, and the Company is required to maintain certain manufacturing capacity levels through 2033;

• Cash advances Alcon provided to the Company to purchase and install Alcon-owned equipment on the Company's premises totaling $ 307 at May 25, 2025;

• A significant individual prepayment that Alcon made to the Company in May 2024 of $ 5,500 .

The prepayment was accounted for as a contract liability, initially recorded at present value due to the existence of a significant financing component, and now being accreted to its settlement value via charges to interest expense, related party.

This contract liability will be settled beginning January 2026 by issuing twelve monthly credit memos to Alcon totaling $ 5,500 .

The contract liability is being accreted to its settlement value via charges to interest expense, related party.

See note 15 for additional information;

• Proceeds of $ 142,270 used to payoff prior borrowings from term loans issued in May 2023.

The term loan principal plus accrued interest has grown to $ 169,287 through February 23, 2025 as a result of 10 % interest paid-in-kind.

The contract liability is classified on the balance sheet as a current portion of $ 4,131 and a noncurrent portion of $ 1,058 , which is included in other liabilities on the balance sheet;

• Proceeds of $ 142,270 from term loans issued in May 2023 that were used to repay prior borrowings.

The term loan principal plus accrued interest has grown to $ 179,562 through September 30, 2025 as a result of 10 % interest paid-in-kind.

See note 9 for additional information;

• Alcon purchased equipment in May 2023 for $ 7,730 that it is leasing back to the Company in exchange for quarterly payments over a ten-year period.

Payments to Alcon under the lease were $ 295 and $ 306 for the three-month periods ended February 23, 2025 and February 25, 2024, respectively, and $ 893 and $ 667 for the respective nine-month periods then ended.

Payments to Alcon under the lease were $ 286 and $ 301 for the three months ended September 30, 2025 and August 25, 2024.

See note 9 for additional information.

Subsequent events

On March 24, 2025, the Company agreed to resolve a historical lease obligation of the Curation Foods business that is expected to result in a gain of $ 2,455 during the fourth quarter of fiscal year 2025.

• Interest expense incurred from the Alcon borrowings noted above was $ 5,833 and $ 4,400 for the three months ended September 30, 2025 and August 25, 2024, respectively.

Included in those amounts was non-cash interest expense of $ 5,740 and $ 4,296 for the three months ended September 30, 2025 and August 25, 2024, respectively.

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-Q

Item 1. Financial Statements