LIFECORE BIOMEDICAL, INC. DE 10-Q

Item 1. Financial statements (unaudited) Consolidated Balance Sheets as of September 30, 2025 and May 25, 2025 1 Consolidated Statements of Operations for the Three Months Ended September 30, 2025 and August 25, 2024 2 Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Three Months Ended September 30, 2025 and August 25, 2024 3 Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2025 and August 25, 2024 4 Notes to the Consolidated Financial Statements 5 1 Organization, basis of presentation and summary of significant accounting policies 5 2 Income or loss per share 7 3 Segment reporting for single reportable segment 8 4 Accounts and note receivable 8 5 Inventory 9 6 Property, plant and equipment, net 10 7 Accrued expenses and other current liabilities 10 8 Commitments and contingencies 11 9 Debt 13 10 Equity 16 11 Revenue recognition 18 12 Stock-based compensation 19 13 Income taxes 20 14 Fair value of financial instruments 21 15 Leases 23 1 6 Related party transactions 25 1 Table of Contents LIFECORE BIOMEDICAL, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) September 30, 2025 May 25, 2025 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 18,856 $ 8,265 Accounts receivable, net of allowance for credit losses of $ 804 and $ 1,351 17,573 15,151 Accounts receivable, related party 7,175 13,537 Current portion of note receivable — 8,000 Contract assets 4,385 6,979 Inventory 33,801 32,291 Prepaid expenses and other current assets 2,138 1,454 Total current assets 83,928 85,677 Property, plant and equipment, net of accumulated depreciation of $ 59,622 and $ 57,412 128,575 129,006 Goodwill 13,881 13,881 Intangible assets, net of accumulated amortization of $ 3,700 4,200 4,200 Other assets 4,620 6,578 Total assets $ 235,204 $ 239,342 LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) Current liabilities: Accounts payable $ 10,115 $ 8,220 Accrued expenses and other current liabilities, see note 7 19,843 21,958 Total current liabilities 29,958 30,178 Debt, net of current portion 5,741 5,801 Debt, net of current portion, related party 129,263 121,198 Debt derivative liability, related party 25,491 24,991 Other liabilities 7,965 9,741 Total liabilities 198,418 191,909 Commitments and contingencies, see note 8 Series A Redeemable Convertible Preferred Stock, $ 0.001 par value; 2,000,000 shares authorized; 46,593 and 45,736 shares issued and outstanding, redemption value $ 47,466 and $ 46,308 47,323 46,097 Stockholders’ (deficit) equity: Common Stock, $ 0.001 par value; 75,000,000 shares authorized; 37,466,352 and 37,026,234 shares issued and outstanding 37 37 Additional paid-in capital 207,521 206,539 Accumulated deficit ( 218,095 ) ( 205,240 ) Total stockholders’ (deficit) equity ( 10,537 ) 1,336 Total liabilities, convertible preferred stock and stockholders’ (deficit) equity $ 235,204 $ 239,342 See accompanying notes to the consolidated financial statements 1 Table of Contents LIFECORE BIOMEDICAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three months ended (in thousands, except share and per share amounts) September 30, 2025 August 25, 2024 Revenues $ 19,293 $ 16,793 Revenues, related party 11,816 7,912 Total revenues 31,109 24,705 Cost of goods sold 23,318 19,318 Gross profit 7,791 5,387 Research and development expenses 1,963 2,186 Selling, general, and administrative expenses 8,895 14,785 Operating loss ( 3,067 ) ( 11,584 ) Interest income 58 15 Interest expense ( 551 ) ( 983 ) Interest expense, related party ( 5,833 ) ( 4,400 ) Change in fair value of debt derivative liability, related party ( 375 ) 900 Other income (expense), net 110 ( 203 ) Loss before income taxes ( 9,658 ) ( 16,255 ) Income tax (expense) benefit ( 333 ) 25 Net loss ( 9,991 ) ( 16,230 ) Preferred stock dividends ( 874 ) — Accretion of preferred stock to redemption value ( 48 ) — Loss available to common stockholders $ ( 10,913 ) $ ( 16,230 ) Loss per share, basic and diluted $ ( 0.29 ) $ ( 0.53 ) Weighted average shares outstanding, basic and diluted 37,402,912 30,855,742 See accompanying notes to the consolidated financial statements 2 Table of Contents LIFECORE BIOMEDICAL, INC. CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) (unaudited) Redeemable Convertible Preferred Stock Common Stock Additional paid-in capital Accumulated deficit Total stockholders’ equity (deficit) (dollars in thousands) Shares Amount Shares Amount 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 ) Conversions ( 1 ) ( 1 ) 154 — 1 — 1 Settlement of stock-based awards — — 439,964 — ( 1,156 ) — ( 1,156 ) Stock-based compensation — — — — 2,392 — 2,392 Net loss — — — — — ( 9,991 ) ( 9,991 ) 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 Issuance of stock, net of fees — — 335,294 — — — — Dividends paid-in-kind 796 806 — — ( 806 ) — ( 806 ) Accretion to redemption value — 48 — — ( 48 ) — ( 48 ) Settlement of stock-based awards — — — — ( 589 ) — ( 589 ) Stock-based compensation — — — — 2,419 — 2,419 Net loss — — — — — ( 16,230 ) ( 16,230 ) 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. 3 Table of Contents LIFECORE BIOMEDICAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Three months ended (in thousands) September 30, 2025 August 25, 2024 Cash flows from operating activities: Net loss $ ( 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, inclusive of related party 6,112 4,719 Change in fair value of debt derivative liability, related party 375 ( 900 ) Other, net 255 ( 111 ) Changes in operating assets and liabilities: Accounts receivable, inclusive of related party ( 4,575 ) 6,075 Contract assets 4,640 ( 56 ) Inventory 1,968 ( 1,663 ) Other assets ( 90 ) ( 214 ) Accounts payable 2,256 3,628 Accrued expenses and other liabilities ( 3,561 ) ( 273 ) 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 ) 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 related to employee stock plans ( 1,156 ) ( 589 ) Net cash (used in) provided by financing activities ( 1,388 ) 1,093 Net decrease in cash and cash equivalents ( 1,363 ) ( 2,942 ) Cash and cash equivalents, beginning of period 20,219 8,462 Cash and cash equivalents, end of period $ 18,856 $ 5,520 For supplemental cash flow information, see note 1. See accompanying notes to the consolidated financial statements. 4 Table of Contents LIFECORE BIOMEDICAL, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (amounts in thousands of U.S. dollars, except share and per share values) 1. Organization, basis of presentation and summary of significant accounting policies Organization Lifecore Biomedical, Inc. and its subsidiaries (“Lifecore” or the “Company”) is a fully integrated contract development and manufacturing organization (“CDMO”) that provides services in the development, fill and finish of complex sterile injectable pharmaceutical products in syringes, vials and cartridges. Basis of presentation 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 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. 5 Table of Contents Certain prior period amounts have been reclassified to conform to the current period’s presentation. Basis of consolidation The consolidated financial statements have been prepared in accordance with U.S. GAAP. All intercompany accounts and transactions have been eliminated. Use of estimates 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; evaluating assets for reserves and potential impairment; the valuation and recognition of stock-based compensation; and the valuation of the debt derivative liability. Actual results may differ from management’s estimates. Supplemental disclosures of cash flow information The following table presents supplemental cash flow information: Three months ended September 30, 2025 August 25, 2024 Cash paid for income taxes, net $ 17 $ — Cash paid for interest 265 628 Non-cash investing and financing activities: Purchases of property, plant and equipment in accounts payable 420 5,906 Capitalization of non-cash interest to property, plant and equipment 572 711 Dividends paid-in-kind on Redeemable Convertible Preferred Stock 874 806 Recent accounting pronouncements 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 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 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. 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 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. 6 Table of Contents 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. 2. 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 September 30, 2025 August 25, 2024 Redeemable Convertible Preferred Stock 7,131,888 6,179,556 Stock options 1,152,621 2,074,785 RSUs 1,377,482 1,436,240 PSUs 2,283,000 1,500,000 Total 11,944,991 11,190,581 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”). 7 Table of Contents 3. 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 Revenues $ 31,109 $ 24,705 Personnel costs (1) 11,129 12,637 Materials and non-depreciation overhead (2) 14,273 9,941 Depreciation and amortization 1,981 1,993 Stock-based compensation 2,392 2,419 Reorganization costs 1,571 3,592 All other operating expenses (3) 2,830 5,707 Interest expense, net 6,326 5,368 Change in fair value of debt derivative liability 375 ( 900 ) Other (income) expense, net ( 110 ) 203 Income tax expense (benefit) 333 ( 25 ) Net loss $ ( 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. 4. Accounts and note receivable 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. 8 Table of Contents Changes in the allowance for credit losses related to accounts receivable are as follows: Three months ended September 30, 2025 August 25, 2024 Beginning balance $ 1,351 $ 711 Provision (reversal of provision) — ( 11 ) Charge-offs ( 547 ) — Ending balance $ 804 $ 700 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 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 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 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. On June 11, 2025, the note holder paid the note in full. 5. Inventory The following table presents the components of inventory: September 30, 2025 May 25, 2025 Finished goods $ 14,113 $ 13,379 Raw materials 12,301 10,169 Work in process 7,387 8,743 Inventory $ 33,801 $ 32,291 9 Table of Contents 6. Property, plant and equipment, net All property, plant and equipment is located in the United States. The following table presents the components of property, plant and equipment: September 30, 2025 May 25, 2025 Land and land improvements $ 3,506 $ 3,739 Buildings and building improvements 82,314 63,732 Machinery and equipment 82,572 61,183 Computer equipment and software 8,330 8,373 Furniture and fixtures 1,610 1,635 Construction in process 4,921 42,231 Idle construction in process 4,944 5,525 Property, plant, and equipment, gross 188,197 186,418 Less: accumulated depreciation and amortization ( 59,622 ) ( 57,412 ) Property, plant, and equipment, net $ 128,575 $ 129,006 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 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 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. 7. Accrued expenses and other current liabilities The following table presents the components of accrued expenses and other current liabilities: September 30, 2025 May 25, 2025 Accrued payable to Redeemable Convertible Preferred Stockholders $ 4,664 $ 4,499 Accrued compensation 4,157 6,144 Contract liabilities, related party 4,131 2,731 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 Other 2,861 2,552 Accrued expenses and other current liabilities $ 19,843 $ 21,958 10 Table of Contents 8. Commitments and contingencies In the ordinary course of business, the Company is involved in various legal proceedings and claims. The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least each fiscal quarter and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. Legal fees are expensed in the period in which they are incurred. 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 (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. 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. 11 Table of Contents Class action complaint On July 29, 2024, a putative class action complaint was filed on behalf of stockholders of the Company in the United States District Court of Minnesota against the Company and certain of its named executive officers. The complaint generally alleges that statements made to the Company’s stockholders between October 7, 2020, and March 19, 2024 regarding the Company’s financial results, internal controls, remediation efforts, periodic reporting, and financial prospects were false and misleading in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that the individual defendants are liable for such statements because they are controlling persons under Section 20(a) of the Exchange Act. The complaint seeks compensatory damages, court costs, and attorneys’ fees. On November 15, 2024, the Court appointed co-lead plaintiffs and their respective counsel. 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, 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. SEC subpoena On February 16, 2024, the Chicago Regional Office of the SEC issued a subpoena to the Company seeking documents and information concerning the financial statement restatement. The Company 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. (“Tanok”). 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 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. 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 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. 12 Table of Contents • 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 September 30, 2025. 9. Debt The following table presents the components of debt: September 30, 2025 May 25, 2025 Debt principal: Term loan credit facility with related party $ 179,562 $ 173,508 Revolving credit facility — 2,500 Leaseback liability with related party 5,991 6,377 Finance lease liability 5,915 5,965 Debt principal 191,468 188,350 Unamortized debt discount on term loan credit facility with related party ( 55,517 ) ( 57,914 ) Total debt, net of discounts $ 135,951 $ 130,436 Classification on consolidated balance sheet: Accrued expenses and other current liabilities $ 947 $ 3,437 Debt, net of current portion 5,741 5,801 Debt, net of current portion, related party 129,263 121,198 Total debt, net of discounts $ 135,951 $ 130,436 The following table presents future minimum principal payments at September 30, 2025: Remainder of 2025 $ 232 2026 954 2027 986 2028 1,023 2029 180,610 2030 1,068 Thereafter 6,595 Debt principal $ 191,468 13 Table of Contents The following table presents the classification of interest in the consolidated financial statements: Three months ended September 30, 2025 August 25, 2024 Expensed in statement of operations 6,384 5,383 Capitalized to property, plant and equipment 572 711 Total interest incurred $ 6,956 $ 6,094 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 (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 amount of interest in cash instead of in-kind. The obligations under the Term Loan Credit Facility mature on May 22, 2029. Term loan principal generally cannot be repaid prior to the maturity date except as follows: (i) the Company is permitted to make voluntary prepayments beginning May 22, 2028 at a rate of 110 %; (ii) Alcon or the Company can require prepayment upon a change in control at a rate of 115 %; (iii) Alcon can require prepayment upon uncured material default of its supply agreement with the Company at a rate of 120 %; (iv) sales of certain collateral assets, with specific exception, require the Company to prepay the term loans in the amount of proceeds received. 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 $ 4,500 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. Pursuant to an intercreditor agreement between Alcon and BMO (as defined below), Alcon is generally entitled to a priority claim with respect to property, plant and equipment, intellectual property and all other collateral to which BMO does not have a priority claim, as described further below. The facility contains customary financial covenants and events of default under which the obligations thereunder could be accelerated and / or the interest rate increased in specified circumstances. 14 Table of Contents Revolving Credit Facility On December 31, 2020, the Company entered into a revolving credit agreement with BMO Harris Bank, N.A. (“BMO,” collectively the “Revolving Credit Facility”). 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, 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 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. 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. Pursuant to an intercreditor agreement between Alcon and BMO, BMO is generally entitled to a priority claim with respect to cash and cash equivalents, accounts receivable and inventory, subject to certain specific exclusions. The facility contains customary financial covenants and events of default under which the obligations thereunder could be accelerated and / or the interest rate increased in specified circumstances. Leaseback liability with related party On May 22, 2023, the Company entered into an equipment sale and leaseback transaction with Alcon. 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 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. The lease contains terms and provisions that are generally customary for a commercial lease of this nature, including obligations relating to the use, operation and maintenance of the equipment. During the term of the lease, Alcon is not permitted to sell or encumber the equipment. Alcon is only entitled to cancel the lease in the event of insolvency, liquidation or bankruptcy; its remedies for other breaches of the lease are limited to monetary damages. 15 Table of Contents 10. Equity Common stock The Company is authorized to issue up to 75,000,000 shares of common stock, $ 0.001 par value (“Common Stock”). 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, as defined below. On October 3, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain entities. Pursuant to the Purchase Agreement, the Company agreed to sell an aggregate of 5,928,775 shares of its common stock (the “Shares”) for aggregate gross proceeds of approximately $ 24,300 (the “Offering”). The purchase price for each Share was $ 4.10 . The Offering closed on October 3, 2024. The issuance costs of $ 467 were recorded as an offset to the Offering proceeds within additional paid-in capital. The issuance of these common shares triggered an anti-dilution provision of the Redeemable Convertible Preferred Stock, resulting in a $ 2,132 adjustment to loss attributable to common stockholders. This was determined by the additional 453,117 common shares the Preferred Stockholders could obtain upon conversion as of November 24, 2024, multiplied by the October 3, 2024 Lifecore closing stock price of $ 4.705 per share. 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 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. Dividends The holders of Redeemable Convertible Preferred Stock are entitled to dividends at a rate of 7.5 % per annum, or $ 75 per share, payable in-kind and compounding quarterly. The holders are also entitled to participate in dividends declared or paid on the Common Stock on an as-converted basis. 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. Conversion 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 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. 16 Table of Contents 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. Redemption 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. Voting Each holder is entitled to vote with the holders of the shares of Common Stock on all matters submitted for a vote of holders of shares of Common Stock, with certain limited exceptions. Each holder is entitled to the whole number of votes equal to the number of shares of Common Stock into which such holder’s shares of Redeemable Convertible Preferred Stock would be convertible on the record date for the vote. The holders of the Redeemable Convertible Preferred Stock are also entitled to elect two directors to serve on the Company's board of directors so long as at least 30 % of the initial shares of Redeemable Convertible Preferred Stock remain outstanding. Registration rights The holders of the Redeemable Convertible Preferred Stock also entered into a registration rights agreement with the Company. This agreement required the Company to file an initial registration statement covering sufficient shares of Common Stock into which the Redeemable Convertible Preferred Stock may be converted, which the Company filed in 2023. The agreement contains monetary penalties if the Company fails to maintain the effectiveness of that registration statement. The agreement has no specified termination date and no specified maximum amount of penalties. 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. In October 2024, the Company completed the necessary SEC filings to regain the effectiveness of the registration statement. This caused monetary penalties to stop accruing. Meanwhile, interest continues to accrue on the penalty amount at a rate of 12 % per annum until paid. 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. 17 Table of Contents 11. Revenue recognition The Company disaggregates its revenue based on how it markets its products and services and reviews results of operations. The following table disaggregates revenues by major product lines and services: Three months ended September 30, 2025 August 25, 2024 CDMO $ 21,749 $ 20,180 HA manufacturing 9,360 4,525 Total $ 31,109 $ 24,705 The following table disaggregates revenues by the timing of revenue recognition: Three months ended September 30, 2025 August 25, 2024 Revenues recognized over time $ 4,533 $ 5,876 Revenues recognized at a point in time 26,576 18,829 Total $ 31,109 $ 24,705 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. Contract liabilities primarily relate to payments received from customers in advance of performance under a contract. The following table presents changes in contract assets and liabilities: Contract assets, current Contract liabilities, current Contract liabilities, noncurrent 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 ( 4,965 ) — — Recognition of revenue as the result of performance obligations satisfied — 412 — Reclassification of scheduled satisfaction of performance obligations from noncurrent to current due to passage of time — — 1,487 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 September 30, 2025 $ 4,385 $ ( 7,214 ) $ ( 1,168 ) 18 Table of Contents 12. Stock-based compensation The Company provides stock-based compensation to its employees under two plans: • The 2019 Stock Incentive Plan became effective on October 16, 2019. This plan provides for the grant of stock options, stock grants, stock units and stock appreciation rights to employees, consultants and directors. 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 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 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 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 4.3 years 4.4 years Risk-free interest rate 3.8 % 3.9 % Volatility 88 % 82 % Dividend yield — % — % 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: RSUs awarded $ 7.72 $ 5.18 RSUs vested 5.94 8.54 PSUs vested 5.24 — 19 Table of Contents 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 Outstanding at June 30, 2025 1,249,680 $ 8.48 Granted 59,575 8.01 Forfeited ( 9,450 ) 7.15 Expired ( 147,184 ) 10.42 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. The following table presents information about recent RSU and PSU activity: RSUs PSUs Shares Weighted-average grant date fair value per share Shares Weighted-average grant date fair value per share Outstanding at June 30, 2025 1,523,137 $ 6.21 2,545,000 $ 4.35 Granted 177,386 7.72 — — Vested ( 313,766 ) 5.94 ( 262,000 ) 5.24 Forfeited ( 9,275 ) 8.01 — — Outstanding at September 30, 2025 1,377,482 6.46 2,283,000 4.25 Stock-based compensation expense 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; 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. 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. 13. Income taxes 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 primarily due to the Company’s valuation allowance on its deferred tax assets. 20 Table of Contents 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. 14. Fair value of financial instruments Term Loan Credit Facility and debt derivative liability 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 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 Liabilities Debt derivative liability Recurring September 30, 2025 — — 25,491 Debt derivative liability Recurring May 25, 2025 — — 24,991 21 Table of Contents The following table presents the rollforward reconciliation of this Level 3 recurring fair value measurement: Three months ended September 30, 2025 August 25, 2024 Balance at beginning of period $ 25,116 $ 25,400 Change in fair value 375 ( 900 ) Balance at end of period $ 25,491 $ 24,500 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. 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 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, 2025 Probability of change in control event 80.0 % 80.0 % Weighted average discount rate 17.8 % 18.4 % 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. 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. 22 Table of Contents 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. 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. 15. Leases 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. 23 Table of Contents The components of lease cost were as follows: Three months ended September 30, 2025 August 25, 2024 Finance lease cost: Amortization of leased assets $ 40 $ 36 Interest on lease liabilities 130 91 Operating lease cost 74 74 Total lease cost $ 244 $ 201 The Company’s maturity analysis of operating and finance lease liabilities as of September 30, 2025 are as follows: Operating leases Finance leases Remainder of 2025 $ 102 $ 169 2026 $ 410 $ 691 2027 414 707 2028 144 725 2029 148 729 2030 153 724 Thereafter 347 5,975 Total lease payments 1,718 9,720 Less: interest ( 136 ) ( 3,806 ) Present value of lease liabilities $ 1,582 $ 5,914 Classification on consolidated balance sheet: Accrued expenses and other current liabilities (see note 7) $ 368 $ 174 Debt, net of current portion — 5,740 Other liabilities 1,214 — Present value of lease liabilities $ 1,582 $ 5,914 Supplemental cash flow information related to leases are as follows: Three months ended September 30, 2025 August 25, 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 102 $ 101 Operating cash flows from finance leases 130 91 Financing cash flows from finance leases 39 40 24 Table of Contents 16. Related party transactions 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 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: • 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 and the notes thereto. 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 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; and • 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 $ 286 and $ 301 for the three months ended September 30, 2025 and August 25, 2024. See note 9 for additional information. • 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.