LIFECORE BIOMEDICAL, INC. \DE\ (LFCR)
SIC breadcrumb: Manufacturing > Chemicals And Allied Products > SIC 2834 Pharmaceutical Preparations
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1005286. Latest filing source: 0001005286-25-000108.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 128,867,000 | USD | 2025 | 2025-08-07 |
| Net income | -38,717,000 | USD | 2025 | 2025-08-07 |
| Assets | 239,342,000 | USD | 2025 | 2025-08-07 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-08-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001005286.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 469,776,000 | 524,227,000 | 557,559,000 | 160,066,000 | 100,874,000 | 111,270,000 | 103,269,000 | 128,261,000 | 128,867,000 | ||
| Net income | -11,641,000 | 10,590,000 | 24,829,000 | 411,000 | -38,191,000 | -32,294,000 | -116,715,000 | -99,563,000 | 12,013,000 | -38,717,000 | |
| Operating income | -20,628,000 | 14,668,000 | 13,587,000 | 5,475,000 | -25,876,000 | -8,823,000 | -11,791,000 | -21,796,000 | -8,844,000 | -17,245,000 | |
| Gross profit | 66,781,000 | 79,212,000 | 78,338,000 | 81,003,000 | 39,387,000 | 38,937,000 | 39,066,000 | 27,985,000 | 41,850,000 | 40,298,000 | |
| Diluted EPS | -0.43 | 0.38 | 0.89 | 0.01 | -1.31 | -1.10 | -3.97 | -3.32 | 0.33 | -1.27 | |
| Operating cash flow | 20,762,000 | 29,838,000 | 19,779,000 | 16,020,000 | -17,041,000 | 16,471,000 | -22,593,000 | -17,441,000 | 257,000 | -206,000 | |
| Capital expenditures | 17,511,000 | 39,695,000 | 23,003,000 | 33,590,000 | 44,734,000 | 12,214,000 | 19,264,000 | 26,226,000 | 18,395,000 | 13,415,000 | |
| Assets | 342,653,000 | 358,608,000 | 404,703,000 | 519,091,000 | 498,069,000 | 421,308,000 | 275,973,000 | 253,545,000 | 253,960,000 | 239,342,000 | |
| Liabilities | 130,303,000 | 130,456,000 | 152,141,000 | 248,947,000 | 290,072,000 | 265,884,000 | 204,830,000 | 218,457,000 | 200,058,000 | 191,909,000 | |
| Stockholders' equity | 210,728,000 | 226,609,000 | 252,562,000 | 270,144,000 | 207,997,000 | 201,946,000 | 87,823,000 | -4,230,000 | 11,315,000 | 1,336,000 | |
| Cash and cash equivalents | 9,968,000 | 5,998,000 | 2,899,000 | 1,080,000 | 2,476,000 | 609,000 | 5,938,000 | 19,091,000 | 8,462,000 | 8,265,000 | |
| Free cash flow | -18,933,000 | 6,835,000 | -13,811,000 | -28,714,000 | -29,255,000 | -2,793,000 | -48,819,000 | -18,138,000 | -13,621,000 |
Ratios
| Metric | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | 2.25% | 4.74% | 0.07% | -23.86% | -32.01% | -104.89% | -96.41% | 9.37% | -30.04% | ||
| Operating margin | 3.12% | 2.59% | 0.98% | -16.17% | -8.75% | -10.60% | -21.11% | -6.90% | -13.38% | ||
| Return on equity | -5.52% | 4.67% | 9.83% | 0.15% | -18.36% | -15.99% | -132.90% | 106.17% | |||
| Return on assets | -3.40% | 2.95% | 6.14% | 0.08% | -7.67% | -7.67% | -42.29% | -39.27% | 4.73% | -16.18% | |
| Liabilities / equity | 0.62 | 0.58 | 0.60 | 0.92 | 1.39 | 1.32 | 2.33 | 17.68 | |||
| Current ratio | 1.53 | 1.58 | 1.10 | 0.97 | 0.87 | 1.23 | 0.61 | 2.39 | 2.08 | 2.84 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001005286.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2021-Q2 | 2020-11-29 | -0.45 | reported discrete quarter | ||
| 2021-Q3 | 2021-02-28 | -0.19 | reported discrete quarter | ||
| 2022-Q1 | 2021-08-29 | -0.32 | reported discrete quarter | ||
| 2022-Q2 | 2021-08-29 | -9,477,000 | reported discrete quarter | ||
| 2022-Q2 | 2021-11-28 | 129,492,000 | -1.30 | reported discrete quarter | |
| 2022-Q4 | 2022-05-29 | 47,628,000 | -36,663,000 | derived Q4 = FY annual - nine-month YTD | |
| 2022-Q3 | 2022-08-28 | 43,355,000 | -12,064,000 | -0.41 | reported discrete quarter |
| 2023-Q2 | 2022-11-27 | 38,802,000 | -12,449,000 | -0.42 | reported discrete quarter |
| 2023-Q3 | 2023-02-26 | 27,600,000 | -40,192,000 | -1.33 | reported discrete quarter |
| 2024-Q3 | 2024-02-25 | 35,704,000 | 15,632,000 | 0.42 | reported discrete quarter |
| 2024-Q4 | 2024-05-26 | 37,886,000 | -7,083,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2024-08-25 | 24,705,000 | -16,230,000 | -0.53 | reported discrete quarter |
| 2025-Q2 | 2024-08-25 | -16,230,000 | reported discrete quarter | ||
| 2025-Q2 | 2024-11-24 | 32,564,000 | -0.25 | reported discrete quarter | |
| 2025-Q3 | 2025-02-23 | 35,154,000 | -14,769,000 | -0.47 | reported discrete quarter |
| 2025-Q4 | 2025-05-25 | 36,444,000 | -1,147,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 23,193,000 | -14,980,000 | -0.43 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001005286-26-000020.
Item 2. Management’s discussion and analysis of financial condition and results of operations The following discussion should be read in conjunction with the unaudited consolidated financial statements and accompanying notes included in Part I, Item 1, of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Transition Report on Form 10-KT for the transition period ended December 31, 2025 (the “2025 Transition Report”). This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results that are subject to the safe harbor created under the Private Securities Litigation Reform Act of 1995 and other safe harbors under the Securities Act of 1933, as amended, and the Exchange Act. Words such as “anticipate,” “estimate,” “expect,” “project,” “aim,” “designed to,” “plan,” “intend,” “believe,” “may,” “might,” “will,” “should,” “can have,” “likely” and similar expressions are used to identify forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected. Potential risks and uncertainties include, without limitation: •the timing and amount of future expenses, revenue, cash flow and capital requirements, and timing and availability of and the need for additional financing; •our ability to maintain or expand our relationships with our current customers, including the impact of changes in consumer demand for the products we manufacture for our customers; •our ability to grow and diversify our business with new customers, including the potential loss of development customers if they do not receive required funding or regulatory approvals or for other reasons; •our ability to comply with covenants under our credit agreements and to pay required interest and principal payments when due; •our ability to fund any redemptions of shares of the outstanding Series A Redeemable Convertible Preferred Stock if requested by holders in accordance with their terms; •our ability to raise additional capital for ongoing needs, including through equity financing, debt financing, collaborations, strategic alliances or licensing arrangements; •the impact of macroeconomic events or circumstances on our operations and financial performance, including inflation, tariffs, interest rates, social unrest and global instability; •the performance of our third-party suppliers; •pharmaceutical industry market forces that may impact our customers’ success and continued demand for the products we produce for those customers; •our ability to recruit or retain key scientific, technical, business development, and management personnel and our executive officers; •our ability to comply with stringent U.S. and foreign government regulation in the manufacture of pharmaceutical products, including current Good Manufacturing Practice, or cGMP; and •the outcome and cost of existing and any new litigation or regulatory proceedings. 25 Table of Contents We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Accordingly, our actual results could differ materially from those projected in the forward-looking statements for many reasons, including the risk factors referenced in Item 1A. “Risk Factors” of the 2025 Transition Report. All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements as well as others made in this report, the 2025 Transition Report, and hereafter in our other SEC filings and public communications. You should evaluate all forward-looking statements made by us in the context of all risks and uncertainties described with respect to our business. We caution you that the risks and uncertainties identified by us may not be all of the factors that are important to you. Furthermore, the forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Overview Lifecore is a fully integrated CDMO that offers highly differentiated clinical and commercial capabilities in the development, cGMP manufacturing and aseptic filling of complex formulations and highly viscous sterile injectable pharmaceutical drug or medical device products in syringes, vials and cartridges, across a wide variety of modalities. We manufacture pharmaceutical-grade, non-animal-sourced hyaluronic acid (“HA”) in bulk form as well as for use in formulated and filled syringes and vials for our customers’ injectable products used in treating a broad spectrum of medical conditions and procedures, including ophthalmic and orthopedic applications. We also offer product development service capabilities to our customers that include analytical method development and validation, formulation development, sterile filtration, process scale-up, pilot studies, stability studies, process validation and production of materials for clinical studies. Since May 2024, Lifecore has continued to make impactful improvements to its operations and financial position: •We have improved operations by expanding our revenue‑generating capacity, increasing our focus on manufacturing efficiency and cost management, and investing in systems and processes to support more effective execution. In September 2024, the Company expanded its aseptic filling capabilities through the installation of a fully automated high‑speed, multi‑purpose 5‑head aseptic isolator filler. In January 2026, Lifecore implemented a new enterprise resource planning (“ERP”) system designed to enhance inventory control, data visibility, and financial management. Through these and other initiatives, the Company believes that it has improved workforce productivity, reflecting the performance-driven culture at Lifecore and underscoring the Company’s commitment to continuous improvement. •We have strengthened our financial position through, among other actions, (i) raising $24.3 million in a private placement of Lifecore common stock in October 2024, (ii) a three-year term extension of our existing asset-based lending revolving credit facility with BMO in November 2024, (iii) the sale of certain excess capital equipment for $17 million in January 2025, (iv) the repayment of $19.7 million of borrowings on our outstanding revolving credit facility over the past 18 months, (v) reduced obligations with the payment of an aggregate amount of $4.7 million to the holders of the Redeemable Convertible Preferred Stock in full satisfaction of outstanding registration delay fees in November 2025, and (vi) the implementation of operational cost reductions, including overhead costs and professional fees associated with legal, accounting and consulting spend. 26 Table of Contents Lifecore expects to further improve efficiencies and productivity through additional procurement and operational strategies that will build upon the new capabilities and information available from our ERP system. Lifecore expects this system to strengthen inventory control, support sharper financial management, and help reduce costs as the company grows. To further advance the Company’s efficiency objectives, Lifecore recently hired a seasoned industry executive in the role of head of business transformation. This newly created position will champion the Company’s efforts to improve its cost structure, to drive productivity, and gain efficiencies. On August 1, 2025, our Board of Directors approved a change in the Company’s fiscal year from a fiscal year ending on the last Sunday of May to a calendar year ending on December 31. Since September 30, 2025, the Company has been reporting calendar periods in its quarterly periodic reports. In accordance with SEC rules, the Company is presenting current period results compared to the most closely-comparable previously-reported three-month period through June 30, 2026. For this report, the most closely-comparable previously-reported period is the three-month period ended February 23, 2025. 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. Beginning September 30, 2026, the Company will provide calendar-based comparative periods. Financial overview Lifecore generates revenues from two activities within a single, integrated segment: CDMO and HA manufacturing. CDMO includes aseptic formulation and filling of syringes, vials and cartridges for injectable products used for medical purposes and product development services to assist its customers in obtaining regulatory approval for the commercial sale of their device or drug product. HA manufacturing includes the production and sale of pharmaceutical-grade, non-animal-sourced HA using our proprietary, fermentation-based HA process in bulk form. The following costs are included in cost of sales: raw materials (including packaging, syringes, fermentation supplies and purification supplies), direct labor, overhead (including indirect labor, depreciation, and facility-related costs), and shipping and shipping-related costs. Numerous factors can influence gross profit, including product mix, customer mix, manufacturing costs, timing of production, production yields, volume, sales discounts, contractual provisions, and charges for excess or obsolete inventory, among others. Many of these factors influence or are interrelated with other factors. R&D expenses consist primarily of product development and commercialization initiatives. SG&A expenses consist of salaries and related costs for administrative, public company and business development functions as well as legal fees, and consulting fees. Public company costs include compliance, audit, tax, insurance and investor relations. The debt derivative liability, related party, represents the fair value of various features in the credit facility that require bifurcation and accounting as a derivative instrument. Changes in the fair value are recorded as non-operating income or expense. 27 Table of Contents Three months ended March 31, 2026 Revenues and gross profit Three months ended Change (dollars in thousands) March 31, 2026 February 23, 2025 Amount % Revenues: CDMO $ 15,775 $ 20,789 $ (5,014) (24) % HA manufacturing 7,418 14,365 (6,947) (48) % Total revenues 23,193 35,154 (11,961) (34) % Cost of goods sold 18,731 25,309 (6,578) (26) % Gross profit 4,462 9,845 (5,383) (55) % Gross profit percentage 19.2 % 28.0 % (8.8) % The decrease in revenues of $12.0 million was primarily due to a $6.9 million decrease in HA manufacturing revenues primarily from the absence of increased demand in the prior period from a customer due to its supply chain initiatives. In addition, CDMO revenues decreased $5.0 million, which was primarily from $2.9 million of lower sales volumes, $1.3 million of lower development revenue due to completion of discrete development projects in the prior comparable period and timing of customer project lifecycles, and a $0.9 million contractual tak [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. Management’s discussion and analysis of financial condition and results of operations 28 Table of Contents The following discussion should be read in conjunction with the Company’s consolidated financial statements and notes contained in Part IV, Item 15 of this Annual Report on Form 10-K. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. Please see “Part I, Item 1A. Risk Factors” and “Cautionary Note About Forward-Looking Statements” contained in this Annual Report on Form 10-K. Overview Lifecore is a fully integrated CDMO that offers highly differentiated clinical and commercial capabilities in the development, cGMP manufacturing and aseptic filling of complex formulations and highly viscous sterile injectable pharmaceutical drug or medical device products in syringes, vials and cartridges, across a wide variety of modalities. We manufacture HA in bulk form as well as for use in formulated and filled syringes and vials for our customers’ injectable products used in treating a broad spectrum of medical conditions and procedures, including ophthalmic and orthopedic applications. We also offer product development service capabilities to our customers that include analytical method development and validation, formulation development, sterile filtration, process scale-up, pilot studies, stability studies, process validation and production of materials for clinical studies. During fiscal year 2025, Lifecore continued to execute on the previously announced strategic initiatives to support higher performance as a CDMO. We have made significant improvements to our revenue generating capacity, financial position, management team, governance, financial reporting and stock exchange compliance, and business development efforts. In addition, we implemented various process improvements to ensure improved productivity and discipline in key areas of our business. Based on all of these improvements, together with our competitive advantages and our strategic plan described below, we believe that we are well-positioned for future growth. For additional information, see “Part I, Item 1. Business” of this Annual Report on Form 10-K. Financial overview Lifecore generates revenues from two activities within a single, integrated segment: CDMO and HA manufacturing. CDMO includes aseptic formulation and filling of syringes, vials and cartridges for injectable products used for medical purposes and product development services to assist its customers in obtaining regulatory approval for the commercial sale of their device or drug product. HA manufacturing includes the production and sale of pharmaceutical-grade, non-animal-sourced HA using our proprietary, fermentation-based HA process in bulk form. The following costs are included in cost of goods sold: raw materials (including packaging, syringes, fermentation supplies and purification supplies), direct labor, overhead (including indirect labor, depreciation, and facility-related costs), and shipping and shipping-related costs. Numerous factors can influence gross profit, including product mix, customer mix, manufacturing costs, timing of production, production yields, volume, sales discounts, contractual provisions, and charges for excess or obsolete inventory, among others. Many of these factors influence or are interrelated with other factors. R&D expenses consist primarily of product development and commercialization initiatives. SG&A expenses consist of salaries and related costs for administrative, public company and business development functions as well as legal fees, and consulting fees. Public company costs include compliance, audit, tax, insurance and investor relations. 29 Table of Contents The debt derivative liability, related party, is a set of embedded derivatives recorded at fair value each period. The derivatives represent certain call and put premiums contained in the credit facility that can be exercised upon qualifying events of default or changes in control. Changes in the fair value are recorded as non-operating income or expense. Results of operations – Fiscal year ended May 25, 2025 compared to year ended May 26, 2024 Revenues and gross profit Year ended Change (in thousands) May 25, 2025 May 26, 2024 Amount % Revenues: CDMO $ 90,095 $ 96,616 $ (6,521) (7) % HA manufacturing 38,772 31,645 7,127 23 % Total revenues 128,867 128,261 606 — % Cost of goods sold 88,569 86,411 2,158 2 % Gross profit 40,298 41,850 (1,552) (4) % Gross profit percentage 31.3 % 32.6 % (1.3) % The increase in revenues was due to a $7.1 million increase in HA manufacturing demand primarily due to our largest customer's supply chain initiatives. The HA manufacturing revenue increase was partially offset by the $6.5 million decline in CDMO revenues that is primarily due to $6.2 million lower development revenue due to completion of a discrete development project in the prior comparable period, timing of customer project lifecycles, $4.3 million of reduced volumes primarily driven by a customer working down inventory levels built in the prior fiscal year period, and $3.2 million of lower sales volume from a customer termination, partially offset by $5.4 million of value focused customer pricing initiatives and $1.8 million from a contractual take-or-pay arrangement recognized in fiscal year 2025. The $1.6 million decrease in gross profit is due to a $5.9 million decrease in CDMO gross profit, partially offset by a net $4.3 million increase in HA manufacturing gross profit due to increased volumes and manufacturing variances. There were a combination of factors within CDMO gross profit including a $3.3 million fluctuation on the adjustment of inventories to their net realizable value primarily due to the absence of a favorable adjustment in the prior fiscal year due to an improvement in sales prices, a $2.1 million decrease due to a customer termination that also resulted in a write-off of inventory and equipment, and an otherwise consistent overall sales mix that included a contractual take-or-pay arrangement and pricing improvements that offset the margin on lower development revenues described above. Operating expenses Year ended Change (in thousands) May 25, 2025 May 26, 2024 Amount % Research and development $ 8,258 $ 8,575 $ (317) (4) % Selling, general and administrative 44,046 40,463 3,583 9 % Loss on sale or disposal of assets, net of portion classified as cost of sales 6,986 — 6,986 n/m Restructuring (recovery) costs (1,747) 1,656 (3,403) (205) % Total operating expenses $ 57,543 $ 50,694 $ 6,849 14 % 30 Table of Contents Research and development (“R&D”) The decrease of $0.3 million in R&D expenses was primarily due to fewer headcount for the fiscal year ended May 25, 2025 compared to the prior period. Selling, general, and administrative (“SG&A”) The increase of $3.6 million in SG&A expenses was primarily due to a $3.7 million increase in stock-based compensation, the majority of which was related to new hire performance stock unit grants to our executive officers. Also included in SG&A expenses for the current period is $11.6 million primarily related to legal expenses related to legacy matters including the SEC subpoena, an activist investor and a securities class action claim, as well as costs associated with the legacy financial restatement. The prior period included $10.2 million primarily related to incremental audit and consulting fees for the legacy financial restatement, expenses related to strategic alternatives and the divestiture of Curation Foods, and $1.7 million of other one-time costs associated with becoming a standalone CDMO. Loss on sale or disposal of assets The $7.0 million loss on sale or disposal of assets was primarily due to a $6.4 million loss on the sale of certain excess equipment that was primarily related to the write-off of historically capitalized interest costs, as well as $0.6 million related to capital projects that were abandoned. Restructuring costs The $1.7 million net recovery for the current fiscal year includes a recovery of $3.2 million following the favorable reversal of a historical lease obligation of the divested Curation Foods business, for which we recorded $1.0 million of expense in the prior fiscal year. The current fiscal year recovery was partially offset by $1.4 million of severance expense related to the transformation of the finance and accounting department. Non-operating income or expense Year ended Change (in thousands) May 25, 2025 May 26, 2024 Amount % Interest expense, net $ (21,835) $ (18,090) $ (3,745) 21 % Change in fair value of debt derivative liability, related party 409 39,500 (39,091) (99) % Other expense, net (3) (3,052) 3,049 (100) % Income tax expense (43) (183) 140 (77) % Interest expense, net The increase in interest expense, net of interest income, was primarily from $3.8 million more interest related to the Alcon term loans, which will continue to grow due to accumulating interest paid-in-kind and amortization of the debt discount. Change in fair value of debt derivative liability, related party The change in the fair value of debt derivative liability, related party, in fiscal year 2025 was primarily caused by the absence of significant changes recognized in fiscal year 2024. Those changes were primarily due to changes in the probability factors related to the timing of a change in control event. Management moved back the estimated timing of that event following the conclusion of a strategic review process at the end of fiscal year 2024. 31 Table of Contents Other expense, net The decrease of $3.0 million in other expense was primarily driven by a $2.7 million decrease compared to the prior fiscal year for monetary penalties associated with late filings accrued under the registration rights agreement with the preferred stockholders (see “Part IV, Item 15. Note 11 - Equity” elsewhere in this Annual Report on Form 10-K). Income tax expense Neither income tax expense nor its changes were material to the periods presented. Liquidity and capital resources As of May 25, 2025, the Company had cash of $8.3 million and, based on the borrowing base at May 25, 2025, the Company had approximately $27.3 million available for borrowing under the Revolving Credit Facility of the $40 million maximum committed amount. Under the Revolving Credit Facility, the Company is subject to a springing fixed charge ratio covenant of 1:1 generally in the event that the Company's available liquidity under the Revolving Credit Facility falls below $2.5 million. As of May 25, 2025, the Company was in compliance with all financial covenants under the Term Loan Credit Facility and Revolving Credit Facility. See “Part IV, Item 15. Note 10 - Debt” in this Annual Report on Form 10-K for a summary of the Term Loan Credit Facility and Revolving Credit Facility. Cash outflows of $0.2 million during the fiscal year ended May 25, 2025 improved by $10.4 million compared to cash outflows of $10.6 million during the fiscal year ended May 26, 2024 for the following reasons: •Financing proceeds, net, of $23.9 million from the issuance of common stock in October 2024 and $2.4 million from a lease amendment in the fiscal year 2025 period were used to repay a net $17.2 million of borrowings under our revolving credit facility, $0.9 million of other borrowings and $1.3 million related to employee stock plans, compared to $5.0 million of financing proceeds from a customer deposit and net borrowings under the revolving credit facility of $2.9 million received in the fiscal year 2024 period; •We received investing proceeds of $7.0 million from the sale of excess equipment in January 2025, and we reduced capital spending by $5.0 million in fiscal year 2025 compared to fiscal year 2024; •Net working capital investments required $1.0 million more cash in fiscal year 2025 compared to fiscal year 2024, partially offset by a $0.5 million increase in earnings as adjusted for non-cash items. 32 Table of Contents Contractual and other cash obligations The Company’s material contractual obligations for the next five years mainly relate to its debt and lease obligations. The Company’s future capital requirements will depend on numerous factors, including our future capital expenditure requirements; development, production and manufacturing activities; administrative requirements (including salaries, insurance expenses and legal compliance costs); ability to establish and maintain new and existing customer arrangements; the costs associated with any legal proceedings and claims; any decision to pursue acquisition opportunities; the timing and amount of amounts payable or payments owed under customer agreements; the ability to comply with regulatory requirements; the emergence of competitive technology and market forces; the effectiveness of customers’ activities and arrangements; payment of the accrued and unpaid liquidation preference on shares of the Convertible Preferred Stock, if required; payments required under the Term Loan Credit Facility and Revolving Credit Facility; and other factors. If the Company’s currently available funds, together with the internally generated cash flow from operations are not sufficient to satisfy its capital needs, the Company would be required to seek additional funding through various financing transactions or arrangements, including equity financing, debt financing, collaborations, strategic alliances or licensing arrangements, or other means. There can be no assurance that additional funds, if required, will be available to the Company on favorable terms, if at all. The Company’s principal sources of liquidity consist of its existing cash, cash generated by operations (if any), proceeds from the sale of certain excess equipment, and availability under its Revolving Credit Facility. The Company expects these sources will be sufficient to finance its current operational and capital requirements for at least the next twelve months. There is no assurance that our cash, cash generated from operations, if any, and available borrowing under the Revolving Credit Facility will be sufficient to fund our anticipated capital needs and operating expenses, particularly if we do not generate revenues in the amounts currently anticipated or if our operating costs are greater than anticipated. Indebtedness Refer to “Part IV, Item 15. Note 10. – Debt” elsewhere in this Annual Report on Form 10-K for a description of the terms of outstanding indebtedness, including the Term Loan Credit Facility and Revolving Credit Facility, which is incorporated herein by reference. As of May 25, 2025 the Company had $173.5 million in borrowings outstanding under the Term Loan Credit Facility at an effective annual interest rate of 20.9%, which includes the amortization of the debt discount. The stated annual interest rate is 10%, which is payable-in-kind until May 2026, following which interest is payable at a fixed rate of 3% per annum in cash with the remainder payable-in-kind. The obligations under the Term Loan Credit Facility mature on May 22, 2029. Interest paid-in-kind under the Term Loan Credit Facility in fiscal year 2025 was $16.3 million. As of May 25, 2025, the Company had $2.5 million in borrowings outstanding under the Revolving Credit Facility, at an effective annual interest rate of 8.69%. The Company repaid those borrowings in June 2025 and this repayment was a condition to the Company being able to access any other borrowings under the Revolving Credit Facility. The obligations under the Revolving Credit Facility mature on November 26, 2027. Interest paid under the Revolving Credit Facility in fiscal year 2025 was $0.9 million. 33 Table of Contents Critical accounting policies and estimates This management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. We have determined that certain accounting policies and estimates are critical to the preparation of the financial statements. We have prepared the following additional disclosures to supplement our summary of significant accounting policies located in note 1 to the consolidated financial statements in “Part IV, Item 15” of this Annual Report on Form 10-K. Valuation of debt derivative liability The Company reported a fair value of its debt derivative liability of $25.0 million, and recorded income from changes in the fair value of its debt derivative liability of $0.4 million and $39.5 million for the fiscal years ended May 25, 2025 and May 26, 2024, respectively. The debt derivative liability represents the fair value of various features in the Term Loan Credit Agreement that require bifurcation and accounting as a derivative instrument. Its fair value is estimated using a discounted cash flow method that includes annually weighted probabilities that certain call and put premiums are exercised upon qualifying events of default or changes in control. Management makes key judgments and estimates that are input into the valuation model, the most sensitive of which is the probability and timing of a change in control event occurring over the remaining term of the debt. Changes in these assumptions could result in a significant increase to our liabilities and expenses. For example, if all other assumptions were held equal, a one year acceleration of the most likely date of a change in control would have increased the fair value of the debt derivative liability and increased our net loss by $3.2 million for the year ended May 25, 2025. Revenue recognition for development services The Company recognized revenues for development services of $23.2 million and $29.4 million for the fiscal years ended May 25, 2025 and May 26, 2024, respectively. Revenue for these services is recognized over time based on highly subjective measures of progress. To measure progress, management uses a proportion of labor hours incurred compared to the total estimated hours at the individual development project level. Individual development projects can be unique, complex and/or novel. Determining the total estimated hours to complete any given project is highly subjective, and so the total amount of development revenue recognized by the Company is sensitive to changes in those hours. To mitigate the risk of such changes, management utilizes several data points to estimate total project hours, including project quotations and periodic status updates from project managers. If total project hours were underestimated by 10% on $10 million of development projects that were halfway complete at the end of the year, we would overstate development revenue by $0.5 million. Qualitative impairment reviews of goodwill and other indefinite-lived intangible assets The Company reported goodwill of $13.9 million and indefinite-lived intangible assets of $4.2 million as of May 25, 2025. We are required to review these assets on an annual basis to determine whether impairment may exist. The impairment analysis consists of an optional qualitative assessment potentially followed by a quantitative analysis. If we determine that the carrying value of these assets exceeds their fair value, an impairment charge is recorded for the excess. 34 Table of Contents The critical judgments involved in our annual qualitative testing include an assessment of unfavorable events, an analysis of prior year valuation assumptions and their sensitivity to change, and in the case of goodwill, a comparison of its carrying value against its fair value based on our market capitalization, derived from quoted stock prices, and balance sheet carrying values. We make judgments about whether any of that information puts our goodwill or other indefinite-lived intangible assets at enough risk of impairment to warrant the performance of more rigorous quantitative testing. In fiscal year 2025, the Company’s qualitative assessment indicated a minimal risk of impairment. For example, with respect to our qualitative testing of goodwill, even a 50% decrease in our quoted stock price would not have caused the carrying value of our goodwill to exceed its fair value. We observed a similar amount of sensitivity to changes in assumptions for our indefinite-lived intangible assets.