XML 23 R10.htm IDEA: XBRL DOCUMENT
v3.22.2.2

Organization, Basis of Presentation, and Summary of Significant Accounting Policies | 12 Months Ended
--- | ---
May 29, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Organization, Basis of Presentation, and Summary of Significant Accounting Policies | Organization, Basis of Presentation, and Summary of Significant Accounting Policies Organization Landec Corporation and its subsidiaries (“Landec” or the “Company”) design, develop, manufacture, and sell differentiated products for food and biomaterials markets, and license technology applications to partners. Landec’s biomedical company, Lifecore Biomedical, Inc. (“Lifecore”), is a fully integrated contract development and manufacturing organization (“CDMO”) that offers highly differentiated capabilities in the development, fill and finish of sterile, injectable-grade pharmaceutical products in syringes and vials. As a leading manufacturer of premium, injectable grade Hyaluronic Acid, Lifecore brings 37 years of expertise as a partner for global and emerging biopharmaceutical and biotechnology companies across multiple therapeutic categories to bring their innovations to market. Lifecore recognizes revenue in two different product categories, CDMO and Fermentation. Landec’s natural food company, Curation Foods, Inc. (“Curation Foods”), is focused on innovating and distributing plant-based foods with 100% clean ingredients to retail, club and foodservice channels throughout North America. Its products are sold in natural food, conventional grocery and mass retail stores, primarily in the United States and Canada. The company categorizes revenue in three categories, avocado products, olive oil and wine vinegars and technology which reports revenues for BreatheWay patented supply chain solutions. Eat Smart Sale and Discontinued Operations On December 13, 2021 (the “Closing Date”), Landec and Curation Foods (together, the “Sellers”), and Taylor Farms Retail, Inc. (“Taylor Farms” and together with the Sellers, the “Parties”) completed the sale (the “Eat Smart Disposition”) of Curation Foods’ Eat Smart business, including its salad and cut vegetable businesses (the “Business”), pursuant to the terms of an asset purchase agreement executed by the Parties on December 13, 2021 (the “Asset Purchase Agreement”). Pursuant to the Asset Purchase Agreement, Taylor Farms acquired the Business for a purchase price of $73.5 million, subject to post-closing adjustments based upon negotiation of the net working capital balances at the Closing Date. As part of the Eat Smart Disposition, Taylor Farms acquired, among other assets and liabilities related to the Business, the manufacturing facility and warehouses (and corresponding equipment) located in Bowling Green, Ohio and Guadalupe, California, as well as inventory, accounts receivable, accounts payable, intellectual property and information related to the Business, and assumed certain liabilities and executory obligations under the Company’s and Curation Foods’ outstanding contracts related to the Business, in each case, subject to the terms of the Asset Purchase Agreement. Following the Eat Smart Disposition, Curation Foods retains its O Olive Oil & Vinegar (“O”) and Yucatan Foods businesses and its rights and interests in BreatheWay, and the Company retains its Lifecore business. During the third quarter of its fiscal year, the Company used net proceeds from the Eat Smart Disposition to repay $67.9 million in borrowings under the Company’s existing credit agreements. The accounting requirements for reporting the Eat Smart business as a discontinued operation were met when the Eat Smart Disposition was completed on the Closing Date. Accordingly, the consolidated financial statements and notes to the consolidated financial statements reflect the results of the Eat Smart business as a discontinued operation for all periods presented. A loss of $0.3 million from the Eat Smart Disposition is included in Loss from discontinued operations, net of tax, within the Consolidated Statements of Operations during the fiscal year ended May 29, 2022. Refer to Note 12 - Discontinued Operations for additional information. Basis of Presentation and Consolidation The consolidated financial statements are presented on the accrual basis of accounting in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and include the accounts of Landec Corporation and its subsidiaries, Curation Foods and Lifecore. All material inter-company transactions and balances have been eliminated. The Company’s fiscal year is the 52- or 53-week period that ends on the last Sunday of May with quarters within each year ending on the last Sunday of August, November, and February; however, in instances where the last Sunday would result in a quarter being 12-weeks in length, the Company’s policy is to extend that quarter to the following Sunday. A 14th week is included in the fiscal year every five or six years to realign the Company’s fiscal quarters with calendar quarters. Arrangements that are not controlled through voting or similar rights are reviewed under the guidance for variable interest entities (“VIEs”). A company is required to consolidate the assets, liabilities and operations of a VIE if it is determined to be the primary beneficiary of the VIE. An entity is a VIE and subject to consolidation, if by design: a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by any parties, including equity holders or b) as a group the holders of the equity investment at risk lack any one of the following three characteristics: (i) the power, through voting rights or similar rights to direct the activities of an entity that most significantly impact the entity’s economic performance, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity. The Company reviewed the consolidation guidance and concluded that the equity investment in the non-public company by the Company is not a VIE. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates that require management’s most significant and subjective judgments include revenue recognition; loss contingencies; sales returns and credit losses; recognition and measurement of current and deferred income tax assets and liabilities; the assessment of recoverability of long-lived and indefinite lived assets (including intangible assets and goodwill), and inventory; and the valuation and recognition of stock-based compensation. These estimates involve the consideration of complex factors and require management to make judgments. The analysis of historical and future trends can require extended periods of time to resolve and are subject to change from period to period. The actual results may differ from management’s estimates. Concentrations of Risk Cash and cash equivalents and trade accounts receivable are financial instruments that potentially subject the Company to concentrations of credit risk. Our Company policy limits, among other things, the amount of credit exposure to any one issuer and to any one type of investment, other than securities issued or guaranteed by the U.S. government. The Company routinely assesses the financial strength of customers and, as a consequence, believes that trade receivables credit risk exposure is limited. Credit losses for bad debt are provided for in the consolidated financial statements through a charge to operations. A valuation allowance is provided for known and anticipated credit losses. The recorded amounts for these financial instruments approximate their fair value. Several of the raw materials the Company uses to manufacture its products are currently purchased from a single source, including some monomers used to synthesize Intelimer polymers, substrate materials for its breathable membrane products, and raw materials for its HA products. During the fiscal years ended May 29, 2022, May 30, 2021,and May 31, 2020 the Company had sales concentrations of 10% or greater from two customers, accounting for 16% and 13%, 18% and 13%, and 16% and 11%, respectively. The Company’s same two customers had accounts receivable concentrations of 10% or greater, accounting for 26% and 13% of accounts receivable as of May 29, 2022, and 18% and 16%, as of May 30, 2021. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of assets is measured by comparison of the carrying amount of the asset to the net undiscounted future cash flow expected to be generated from the asset. If the future undiscounted cash flows are not sufficient to recover the carrying value of the assets, the assets’ carrying value is adjusted to fair value. The Company regularly evaluates its long-lived assets for indicators of possible impairment. Financial Instruments The Company’s financial instruments are primarily composed of commercial-term trade payables, debt instruments, and derivative instruments. For short-term instruments, the historical carrying amount approximates the fair value of the instrument. The fair value of long-term debt and lines of credit approximates their carrying value. Cash Flow Hedges The Company has entered into interest rate swap agreements to manage interest rate risk. These derivative instruments may offset a portion of the changes in interest expense. The Company designates these derivative instruments as cash flow hedges. The Company accounts for its derivative instruments as either an asset or a liability and carries them at fair value in Other assets or Other non-current liabilities. The accounting for changes in the fair value of the derivative instrument depends on the intended use of the derivative instrument and the resulting designation. For derivative instruments that hedge the exposure to variability in expected future cash flows and are designated as cash flow hedges, the entire change in the fair value of the hedging instrument is recorded as a component of Accumulated other comprehensive loss (“AOCL”) in Stockholders’ Equity. Those amounts are subsequently reclassified to earnings in the same line item in the Consolidated Statement of Operations as impacted when the hedged item affects earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. During the third quarter of fiscal year 2021, the Company discontinued its hedge accounting prospectively since it was determined that the derivatives are no longer highly effective in offsetting changes in the net investment. The derivatives continue to be carried at fair value in the accompanying Consolidated Balance Sheets with changes in their fair values from the date of discontinued hedge accounting recognized in current period earnings in Other income (expense), net in the Consolidated Statements of Operations. Amounts previously accumulated in AOCL during the period of effectiveness will continue to be realized over the remaining term of the underlying forecasted debt payments as a component of AOCL in Stockholders’ Equity. Accumulated Other Comprehensive Loss Comprehensive income consists of two components, Net loss and Other comprehensive (loss) income (“OCI”). OCI refers to revenue, expenses, and gains and losses that under GAAP are recorded as a component of stockholders’ equity but are excluded from net loss. The Company’s OCI consists of net deferred gains and losses on its interest rate swap derivative instruments. The components of AOCL, net of tax, are as follows (in thousands):
| AOCL
Balance as of May 30, 2021 | $ | (1,358) |
Amounts reclassified from OCI | 772
Other comprehensive (loss) income, net | 772 |
Balance as of May 29, 2022 | $ | (586) |
The Company expects to reclassify approximately $0.6 million into earnings in the next 12 months. Based on these assumptions, management believes the fair market values of the Company’s financial instruments are not significantly different from their recorded amounts as of May 29, 2022 and May 30, 2021. Accounts Receivable, Sales Returns and Allowance for Credit Losses The Company carries its accounts receivable at their face amounts less an allowance for estimated sales returns and credit losses. Sales return allowances are estimated based on historical sales return amounts. The Company uses the loss rate method to estimate its expected credit losses on trade accounts receivable and contract assets. In order to estimate expected credit losses, the Company assessed recent historical experience, current economic conditions and any reasonable and supportable forecast to identify risk characteristics that are shared within the financial asset. These risk characteristics are then used to bifurcate the loss rate method into risk pools. The risk pools were determined based on the industries in which the Company operates. Historical credit loss for each risk pool is then applied to the current period aging as presented in the identified risk pool to determine the needed reserve allowance. At times when there are no current economic conditions or forecasts that may affect future credit losses, the Company has determined that recent historical experience provides the best basis for estimating credit losses. The information obtained from assessing historical experience, current economic conditions and reasonable and supportable forecasts were used to identify risk characteristics that can affect future credit loss experience. There were no significant risk characteristics identified in the review of historical experiences or in the review of estimates of current economic conditions and forecasts. Estimating credit losses based on risk characteristics requires significant judgment by management. Significant judgments include, but are not limited to: assessing current economic conditions and the extent to which they are relevant to the existing characteristics of the Company’s financial assets, the estimated life of financial assets, and the level of reliance on historical experience in light of economic conditions. The Company will continually review and update, when necessary, its historical risk characteristics that are meaningful to estimating credit losses, any new risk characteristics that arise in the natural course of business, and the estimated life of its financial assets. The changes in the Company’s allowance for sales returns and credit losses are summarized in the following table (in thousands):
| Balance at beginning of period |  |  |  | Provision (benefit) for expected credit losses |  | Write offs, net of recoveries |  | Balance at end of period
Year Ended May 31, 2020 | $ | 644 |  |  |  |  | $ | (460) |  |  | $ | 2 |  |  | $ | 186 |
Year Ended May 30, 2021 | $ | 186 |  |  |  |  | $ | 187 |  |  | $ | (288) |  |  | $ | 85 |
Year Ended May 29, 2022 | $ | 85 |  |  |  |  | $ | (14) |  |  | $ | (6) |  |  | $ | 65 |
Contract Assets and Liabilities Contract assets primarily relate to the Company’s conditional right to consideration for work completed but not billed at the reporting date. The Company’s contract assets as of May 29, 2022, and May 30, 2021, were $10.2 million and $10.6 million, respectively. Contract liabilities primarily relate to payments received from customers in advance of performance under the contract. The Company’s contract liabilities as of May 29, 2022, and May 30, 2021, were $0.9 million and $0.9 million, respectively. Revenue recognized during the fiscal year ended May 29, 2022 that was included in the contract liability balance at the beginning of fiscal year 2022, was $0.4 million. Revenue Recognition The Company follows the five step, principles-based model to recognize revenue upon the transfer of promised goods or services to customers and in an amount that reflects the consideration for which the Company expects to be entitled in exchange for those goods or services. Revenue, net of estimated allowances and returns, is recognized when or as the Company satisfies its performance obligations under a contract and control of the product is transferred to the customer. Lifecore Lifecore generates revenue from two integrated activities: CDMO and Fermentation. CDMO is comprised of aseptic and development services. Lifecore’s standard terms of sale are generally included in its contracts and purchase orders. Shipping and other transportation costs charged to customers are recorded in both revenue and cost of goods sold. Lifecore has elected to account for shipping and handling as fulfillment activities, and not as a separate performance obligation. Lifecore’s standard payment terms with its customers generally range from 30 days to 60 days. Aseptic Lifecore provides aseptic formulation and filling of syringes and vials with precisely formulated medical grade HA and non-HA materials for injectable products used for medical purposes. In instances where our customers contract with us to aseptically fill syringes or vials with our HA, the goods are not distinct in the context of the contract. Lifecore recognizes revenue for these products at the point in time when legal title to the product is transferred to the customer, which is at the time that shipment is made or upon delivery of the product. Development Services Lifecore provides product development services to assist its customers in obtaining regulatory approval for the commercial sale of their drug product. These services include activities such as technology development, material component changes, analytical method development, formulation development, pilot studies, stability studies, process validation and production of materials for use within clinical studies. The Company’s customers benefit from the expertise of its scientists who have extensive experience performing such tasks. Each of the promised goods and services are not distinct in the context of the contract as the goods and services are highly interdependent and interrelated. The services described above are significantly affected by each other because Lifecore would not be able to fulfill its promise by transferring each of the goods or services independently. Revenues generated from development services arrangements are recognized over time as Lifecore is creating an asset without an alternate use as it is unique to the customer. Furthermore, the Company has an enforceable right to payment for the performance completed to date for its costs incurred in satisfying the performance obligation plus a reasonable profit margin. For each of the development activities performed by Lifecore as described above, labor is the primary input (i.e., labor costs represent the majority of the costs incurred in the completion of the services). The Company determined that labor hours are the best measure of progress as it most accurately depicts the effort extended to satisfy the performance obligation over time. Fermentation Lifecore manufactures and sells pharmaceutical-grade sodium hyaluronate (“HA”) in bulk form to its customers. The HA produced is distinct as customers are able to utilize the product provided under HA supply contracts when they obtain control. Lifecore recognizes revenue for these products at the point in time when legal title to the product is transferred to the customer, which is at the time that shipment is made or upon delivery of the product to our customer. Curation Foods Curation Foods’ standard terms of sale, both prior to and following the Eat Smart Disposition, are generally included in its contracts and purchase orders. Revenue is recognized at the time shipment is made or upon delivery as control of the product is transferred to the customer. Shipping and other transportation costs charged to customers are recorded in both revenue and cost of goods sold. Curation Foods has elected to account for shipping and handling as fulfillment activities, and not as a separate performance obligation. Curation Foods’ standard payment terms with its customers generally range from 30 days to 90 days. Certain customers may receive cash-based incentives (including: volume rebates, discounts, and promotions), which are accounted for as variable consideration to Curation Foods’ performance obligations. Curation Foods estimates these sales incentives based on the expected amount to be provided to its customers and reduces revenues recognized towards its performance obligations. The Company has not historically had and does not anticipate significant changes in its estimates for variable consideration. The Company disaggregates its revenue by segment based on how it markets its products and services and reviews results of operations. The following tables disaggregate segment revenue by major product lines and services (in thousands):
| Year Ended
Lifecore: | May 29, 2022 |  | May 30, 2021 |  | May 31, 2020
Contract development and manufacturing organization | $ | 86,313 |  |  | $ | 75,297 |  |  | $ | 64,781 |
Fermentation | 23,007 |  |  | 22,790 |  |  | 21,052 |
Total | $ | 109,320 |  |  | $ | 98,087 |  |  | $ | 85,833 |
| Year Ended
Curation Foods: | May 29, 2022 |  | May 30, 2021 |  | May 31, 2020
Avocado products | $ | 65,269 |  |  | $ | 63,575 |  |  | $ | 62,194 |
Olive oil and wine vinegars | 9,287 |  |  | 7,589 |  |  | 7,783 |
Technology | 1,910 |  |  | 2,295 |  |  | 4,256 |
Total | $ | 76,466 |  |  | $ | 73,459 |  |  | $ | 74,233 |
Shipping and Handling Costs Amounts billed to third-party customers for shipping and handling are included as a component of revenues. Shipping and handling costs incurred are included as a component of cost of products sold and represent costs incurred to ship product from the processing facility or distribution center to the end consumer markets. Cash and Cash Equivalents The Company records all highly liquid securities with three months or less from date of purchase to maturity as cash equivalents. Cash equivalents consist mainly of money market funds. The market value of cash equivalents approximates their historical cost given their short-term nature. Reconciliation of Cash and Cash Equivalents and Cash as presented on the Statements of Cash Flows The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows (in thousands):
| May 29, 2022 |  | May 30, 2021 |  | May 31, 2020
Cash and cash equivalents | $ | 1,643 |  |  | $ | 1,159 |  |  | $ | 360 |
Restricted cash | — |  |  | — |  |  | 193 |
Cash and cash equivalents, discontinued operations | — |  |  | 136 |  |  | — |
Cash, cash equivalents and restricted cash | $ | 1,643 |  |  | $ | 1,295 |  |  | $ | 553 |
Inventories Inventories are stated at the lower of cost (using the first-in, first-out method) or net realizable value. As of May 29, 2022 and May 30, 2021, inventories consisted of the following (in thousands):
| Year Ended
| May 29, 2022 |  | May 30, 2021
Finished goods | $ | 33,029 |  |  | $ | 40,204 |
Raw materials | 24,221 |  |  | 16,644 |
Work in progress | 9,595 |  |  | 6,228 |
Total inventories | $ | 66,845 |  |  | $ | 63,076 |
If the cost of the inventories exceeds their net realizable value, provisions are recorded currently to reduce them to net realizable value. The Company also records a provision for slow moving and obsolete inventories based on the estimate of demand for its products. Advertising Expense Advertising expenditures for the Company are expensed as incurred and included in selling, general, and administrative in the accompanying Consolidated Statements of Operations. Advertising expense for the Company for fiscal years 2022, 2021 and 2020 was $0.2 million, $0.1 million and $0.1 million, respectively. Related Party Transactions The Company sells and licenses its BreatheWay® food packaging technology to Windset Holdings 2010 Ltd. (“Windset”), in which, as further described in Note 2 - Investment in Non-public Company, the Company had a 26.9% ownership interest until it sold that interest on June 1, 2021. During fiscal years 2021 and 2020, the Company recognized revenues of $0.5 million and $0.6 million, respectively, from the sale of products to and license fees from Windset. These amounts have been included in Product sales in the accompanying Consolidated Statements of Operations. The related receivable balance of $0.1 million from Windset is included in Accounts receivable in the accompanying Consolidated Balance Sheets as of May 30, 2021. All related party transactions are monitored quarterly by the Company and approved by the Audit Committee of the Board of Directors. Property and Equipment and Finite-Lived Intangible Assets Property and equipment and finite-lived intangible assets are stated at cost. Expenditures for major improvements are capitalized while repairs and maintenance are charged to expense. Depreciation is expensed on a straight-line basis over the estimated useful lives of the respective assets. Customer relationships are amortized to operating expense on an accelerated basis that reflects the pattern in which the economic benefits are consumed. Leasehold improvements are amortized on a straight-line basis over the lesser of the economic life of the improvement or the life of the lease. The Company capitalizes software development costs for internal use. Capitalization of software development costs begins in the application development stage and ends when the asset is placed into service. The Company amortizes such costs on a straight-line basis over estimated useful lives of three to seven years. Property, plant and equipment and finite-lived intangible assets are reviewed for possible impairment whenever events or changes in circumstances occur that indicate that the carrying amount of an asset (or asset group) may not be recoverable. The Company’s impairment review requires significant management judgment including estimating the future success of product lines, future sales volumes, revenue and expense growth rates, alternative uses for the assets and estimated proceeds from the disposal of the assets. The Company conducts quarterly reviews of idle and underutilized equipment, and reviews business plans for possible impairment indicators. Impairment is indicated when the carrying amount of the asset (or asset group) exceeds its estimated future undiscounted cash flows and the impairment is viewed as other than temporary. When impairment is indicated, an impairment charge is recorded for the difference between the asset’s book value and its estimated fair value. Depending on the asset, estimated fair value may be determined either by use of a discounted cash flow model or by reference to estimated selling values of assets in similar condition. The use of different assumptions would increase or decrease the estimated fair value of assets and would increase or decrease any impairment measurement. During fiscal year 2020, the Company recorded impairment charges of $1.3 million and $0.5 million related to O property and equipment, and finite-lived intangible assets (customer relationships), respectively. The impairment was determined using the present value of cash flows method and was primarily a result of the recently updated (lowered) financial outlook for the O reporting unit, related to a recent shift in strategic focus within the Curation Foods business segment. The impairment charge of property and equipment is included in Selling, general and administrative in the Consolidated Statements of Operations. The impairment charge of the customer relationships intangible asset impairment charge is included in the line item Impairment of goodwill and intangible assets on the Consolidated Statements of Operations, and is in the Curation Foods business segment. Impairment Review of Goodwill and Indefinite-Lived Intangible Asset The Company tests its goodwill and trademarks with indefinite lives annually for impairment in the fiscal fourth quarter or earlier if there are indications during a different interim period that these assets may have become impaired. On a quarterly basis, the Company considers the need to update its most recent annual tests for possible impairment of its indefinite-lived intangible assets and goodwill, based on management’s assessment of changes in its business and other economic factors since the most recent annual evaluation. Such changes, if significant or material, could indicate a need to update the most recent annual tests for impairment of the indefinite-lived intangible assets during the current period. The results of these tests could lead to write-downs of the carrying values of these assets in the current period. With respect to goodwill, the Company has the option to first assess qualitative factors such as macro-economic conditions, industry and market environment, cost factors, overall financial performance of the Company, cash flow from operating activities, market capitalization, litigation, and stock price. If the result of a qualitative test indicates a potential for impairment of a reporting unit, a quantitative test is performed. The quantitative test compares the carrying amount of a reporting unit that includes goodwill to its fair value. The Company determines the fair value using an income approach. To determine the fair value of a reporting unit as part of its quantitative test, the Company uses a discounted cash flow ("DCF") method under the income approach, as it believes that this approach is the most reliable indicator of the fair value of its businesses and the fair value of their future earnings and cash flows. Under this approach, which requires significant judgments, the Company estimates the future cash flows of each reporting unit and discounts these cash flows at a rate of return that reflects their relative risk and rate of return an outside investor could expect to earn. The cash flows used in the DCF method are consistent with those the Company uses in its internal planning, which gives consideration to actual business trends experienced, and the broader business strategy for the long term. The other key estimates and factors used in the DCF method include, but are not limited to, future volumes, net sales and expense growth rates, and gross margin and gross margin growth rates. Changes in such estimates or the application of alternative assumptions could produce different results. A goodwill impairment loss is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. For trademarks and other intangible assets with indefinite lives, the Company has the option to first assess qualitative factors such as macro-economic conditions, industry and market environment, cost factors, overall financial performance of the Company, litigation, and changes in the business in its annual, qualitative analysis to test for impairment. If the results of a qualitative test indicate a potential for impairment of an intangible asset with an indefinite life, a quantitative test is performed. The quantitative test compares the estimated fair value of an asset to its carrying amount. If the carrying amount of such asset exceeds its estimated fair value, an impairment charge is recorded for the difference between the carrying amount and the estimated fair value. The Company uses the income approach to estimate the fair value of its trademarks. This approach requires significant judgments in determining the royalty rates and the assets’ estimated cash flows as well as the appropriate discount rates applied to those cash flows to determine fair value. Changes in such estimates or the use of alternative assumptions could produce different results. During fiscal year 2020, the Company recorded an impairment charge of $1.1 million and $3.5 million related to its O and Yucatan Foods trademarks, respectively. The Company also recorded an impairment charge of $5.2 million and $2.7 million related to its O and Yucatan Foods goodwill, respectively. The O impairment charges were primarily a result of the recently updated (lowered) financial outlook for the O reporting unit, related to a recent shift in strategic focus within the Curation Foods business segment. The Yucatan Foods impairment charges were primarily a result of an increase in the Yucatan Foods carrying value and an increase in the discount rate, as a result of uncertainty in forecasting the effects of COVID-19 and general economic uncertainties. These impairment charges are included in the line item Impairment of goodwill and intangible assets on the Consolidated Statements of Operations, and both are in the Curation Foods business segment. During fiscal year 2022, the Company recorded impairment charges of $32.1 million and $20.0 million related to its Eat Smart business and Yucatan Foods goodwill, respectively. The Company also recorded an impairment charge of $8.7 million related to its Yucatan Foods trademarks. These impairment charges were primarily a result of an indication of a decrease in the fair market values of the Eat Smart and Yucatan Foods businesses driven by lower market valuations and a decrease in projected cash flows. The goodwill impairment charge related to the Eat Smart business goodwill is included in Loss from discontinued operations within the Consolidated Statements of Operations. The Yucatan Foods related impairment charges are included in the line item Impairment of goodwill and intangible assets on the Consolidated Statements of Operations and are in the Curation Foods business segment. Other than the goodwill and intangibles write-offs discussed above, there were no other impairment losses for goodwill or intangibles during fiscal years 2022, 2021 and 2020. Investment in Non-Public Company On February 15, 2011, the Company made an investment in Windset which is reported at fair value in the accompanying Consolidated Balance Sheets as of May 30, 2021. The Company has elected to account for its investment in Windset under the fair value option. See Note 2 – Investment in Non-public Company for further information. On June 1, 2021, the Company sold all of its equity interest in Windset to the Newell Capital Corporation and Newell Brothers Investment 2 Corp. Business Interruption Insurance Recoveries In the third quarter of fiscal year 2019, the Company recalled five SKUs of Eat Smart single-serve Salad Shake-Ups™. In the fourth quarter of fiscal year 2019, the Company submitted a product recall claim. In fiscal year 2020, the Company recognized $3.0 million of business interruption insurance recoveries. Amounts received on insurance recoveries related to business interruption are recorded when amounts are realized and are included within Loss from discontinued operations in the Consolidated Statement of Operations and as operating cash flows. Deferred Revenue Cash received in advance of services performed are recorded as deferred revenue. Income Taxes The Company accounts for income taxes in accordance with accounting guidance which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. The Company maintains valuation allowances when it is likely that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the Company’s income tax provision in the period of change. In determining whether a valuation allowance is warranted, the Company takes into account such factors as prior earnings history, expected future earnings, unsettled circumstances that, if unfavorably resolved, would adversely affect utilization of a deferred tax asset, carryback and carryforward periods and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. In addition to valuation allowances, the Company establishes accruals for uncertain tax positions. The tax-contingency accruals are adjusted in light of changing facts and circumstances, such as the progress of tax audits, case law and emerging legislation. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. The Company’s effective tax rate includes the impact of tax-contingency accruals as considered appropriate by management. A number of years may elapse before a particular matter, for which the Company has accrued, is audited and finally resolved. The number of years with open tax audits varies by jurisdiction. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, the Company believes its tax-contingency accruals are adequate to address known tax contingencies. Favorable resolution of such matters could be recognized as a reduction to the Company’s effective tax rate in the year of resolution. Unfavorable settlement of any particular issue could increase the Company's effective tax rate in the year of resolution. Any resolution of a tax issue may require the use of cash in the year of resolution. The Company’s tax-contingency accruals are recorded in Other accrued liabilities in the accompanying Consolidated Balance Sheets. Per Share Information Accounting guidance requires the presentation of basic and diluted earnings per share. Basic earnings per share excludes any dilutive effects of options, warrants and convertible securities and is computed using the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution as if securities or other contracts to issue common stock were exercised or converted into common stock. Diluted common equivalent shares consist of stock options and restricted stock units, calculated using the treasury stock method. The following table sets forth the computation of diluted net loss per share:
| Year Ended
(in thousands, except per share amounts) | May 29, 2022 |  | May 30, 2021 |  | May 31, 2020
Numerator: |  |  |  |  |
Net loss | $ | (97,431) |  |  | $ | (32,665) |  |  | $ | (38,191) |
Denominator: |  |  |  |  |
Weighted average shares for basic net loss per share | 29,466 |  |  | 29,294 |  |  | 29,162 |
Effect of dilutive securities: |  |  |  |  |
Stock options and restricted stock units | — |  |  | — |  |  | — |
Weighted average shares for diluted net loss per share | 29,466 |  |  | 29,294 |  |  | 29,162 |
Diluted net loss per share | $ | (3.31) |  |  | $ | (1.12) |  |  | $ | (1.31) |
Due to the Company’s net loss in fiscal years 2022, 2021, and 2020 the net loss per share includes only the weighted average shares outstanding and thus excludes restricted stock unit awards ("RSUs") and stock options, as such impact would be antidilutive. See Note 5 - Stock Based Compensation and Stockholders' Equity for more information on outstanding RSUs and stock options. Research and Development Expenses Costs related to both research and development contracts and Company-funded research is included in research and development expenses. Research and development costs are primarily comprised of salaries and related benefits, supplies, travel expenses, consulting expenses and corporate allocations. Accounting for Stock-Based Compensation The Company’s stock-based awards include stock option grants and RSUs. The Company records compensation expense for stock-based awards issued to employees and directors in exchange for services provided based on the estimated fair value of the awards on their grant dates and is recognized over the required service periods, generally the vesting period. The estimated fair value for stock options, which determines the Company’s calculation of stock-based compensation expense, is based on the Black-Scholes option pricing model. The use of Black-Scholes requires the Company to make estimates and assumptions, such as expected volatility, expected term, and risk-free interest rate. RSUs are valued at the closing market price of the Company’s common stock on the date of grant. The Company uses the straight-line single option method to calculate and recognize the fair value of stock-based compensation arrangements. Employee Savings and Investment Plans The Company sponsors a 401(k) plan (“Landec Plan”), which is available to all full-time Landec employees and allows participants to contribute from 1% to 50% of their salaries, up to the Internal Revenue Service limitation into designated investment funds. The Company matches 100% on the first 3% and 50% on the next 2% contributed by an employee. Employee and Company contributions are fully vested at the time of the contributions. The Company retains the right, by action of the Board of Directors, to amend, modify, or terminate the plan. For fiscal years 2022, 2021 and 2020, the Company contributed $1.4 million, $1.1 million and $1.1 million, respectively, to the Landec Plan. Fair Value Measurements The Company uses fair value measurement accounting for financial assets and liabilities and for financial instruments and certain other items measured at fair value. The Company has elected the fair value option for its investment in a non-public company. The Company has not elected the fair value option for any of its other eligible financial assets or liabilities. Applicable accounting guidance establishes a three-tier hierarchy for fair value measurements, which prioritizes the inputs used in measuring fair value as follows: Level 1 – observable inputs such as quoted prices for identical instruments in active markets. Level 2 – inputs other than quoted prices in active markets that are observable either directly or indirectly through corroboration with observable market data. Level 3 – unobservable inputs in which there is little or no market data, which would require the Company to develop its own assumptions. As of May 29, 2022 and May 30, 2021, the Company held certain assets and liabilities that were required to be measured at fair value on a recurring basis, including its interest rate swap, and its minority interest investment in Windset. The fair value of the Company’s interest rate swap contracts is determined based on model inputs that can be observed in a liquid market, including yield curves, and is categorized as a Level 2 fair value measurement and is included in Other assets or Other non-current liabilities in the accompanying Consolidated Balance Sheets. As of May 29, 2022, related to the assets of Curation Foods’ BreatheWay packaging technology business, the Company had $1.0 million in Prepaid expenses and other current assets within the Consolidated Balance Sheets meeting the criteria of held for sale. As of May 30, 2021, related to Curation Foods’ distribution facility in Rock Hill, South Carolina the Company had $0.5 million in Current assets, discontinued operations within the Consolidated Balance Sheets meeting the criteria of assets held for sale. These assets are recognized at the lower of cost or fair value less cost to sell using market approach. The fair value of these assets are classified as level 3 in the fair value hierarchy due to a mix of unobservable inputs utilized such as independent research in the market as well as actual quotes from market participants. See Note 3 - Property and Equipment and Note 13 - Restructuring Costs for additional information. The Company elected the fair value option of accounting for its investment in Windset. The calculation of fair value utilized significant unobservable inputs, including projected cash flows, growth rates, and discount rates. As a result, the Company’s investment in Windset was considered to be a Level 3 measurement investment. The Company sold its entire investment in Windset on June 1, 2021 for $45.1 million. No gain or loss was recorded upon the sale of the Company’s investment in Windset. In determining the fair value of the Company's investment in Windset, the Company utilizes the following significant unobservable inputs in the discounted cash flow models:
|  |  | May 30, 2021 Range (Weighted Average)
Revenue growth rates |  |  | 7% (6.9%)
Expense growth rates |  |  | 0% to 8% (5.5%)
Discount rates |  |  | 10%
Imprecision in estimating unobservable market inputs can affect the amount of gain or loss recorded for a particular position. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The following table summarizes the fair value of the Company’s assets and liabilities that are measured at fair value on a recurring and non-recurring basis (in thousands):
| Fair Value at May 29, 2022 |  | Fair Value at May 30, 2021
Assets: | Level 1 |  | Level 2 |  | Level 3 |  | Level 1 |  | Level 2 |  | Level 3
Assets held for sale - nonrecurring | $ | — |  |  | $ | — |  |  | $ | 1,027 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Current assets, discontinued operations |  |  |  |  |  |  |  |  |  |  |
Assets held for sale - nonrecurring | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 515 |
Other assets, discontinued operations |  |  |  |  |  |  |  |  |  |  |
Investment in non-public company | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 45,100 |
Total assets | $ | — |  |  | $ | — |  |  | $ | 1,027 |  |  | $ | — |  |  | $ | — |  |  | $ | 45,615 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Interest rate swap contracts | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,736 |  |  | $ | — |
Total liabilities | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,736 |  |  | $ | — |
The following table reflects the fair value roll forward reconciliation of Level 3 assets and liabilities measured at fair value for the twelve months ended May 29, 2022 (in thousands):
| Windset Investment |  |
Balance as of May 30, 2021 | $ | 45,100 |  |  |
Sale of Investment in non-public company | (45,100) |  |  |
Balance as of May 29, 2022 | $ | — |  |  |
Correction of Error in Previously Reported Fiscal Year 2022 Interim Financial Statements (Unaudited) The Company is restating (the “Restatement”) its previously issued (i) unaudited consolidated balance sheets as of February 27, 2022 and May 30, 2021, (ii) unaudited consolidated statements of comprehensive (loss) income for the three and nine months ended February 27, 2022, (iii) unaudited consolidated statement of cash flows for the nine months ended February 27, 2022, (iv) unaudited consolidated statement of changes in stockholders' equity, and (v) unaudited Note 4, Note 7, Note 8, and Note 9 to the consolidated financial statements, in each case, as previously reported in our Quarterly Report on Form 10-Q for the period ended February 27, 2022 (the “Prior Financial Statements”). We assessed the materiality of this error in accordance with the U.S. Securities and Exchange Commission Staff Accounting Bulletin No. 99, Materiality and have concluded that the Prior Financial Statements should be restated. This restatement reflected in the tables below results from corrections by us primarily related to: (i) the classification of certain expenses and the recording of accruals related to the Company’s recent disposition activities and the Company’s corporate transition of Landec Corporation to Lifecore Biomedical, which were previously classified as restructuring expenses from continuing operations in our Prior Financial Statements, but which the Company intends to correct to classify as selling, general and administrative expenses, and cost of goods sold within continuing operations; (ii) the treatment of the fees received and costs incurred by the Company pursuant to the transition services agreement related to the sale of the Curation Foods’ Eat Smart business (the “TSA”), for which the Company had previously recognized the net of the TSA fees received and costs incurred as loss on sale of Eat Smart within discontinued operations, but for which the Company intends to correct to classify the TSA fees received by the Company within transition services income and the TSA costs incurred by the Company as selling, general and administrative expenses within continuing operations; and (iii) the classification of certain costs and expenses related to the Company’s recent disposition activities and the Company’s corporate transition of Landec Corporation to Lifecore Biomedical, which were previously classified as loss on sale of Eat Smart within discontinued operations, but which the Company intends to correct to classify as selling, general and administrative expenses within continuing operations. The effects of this error on our previously reported February 27, 2022 and May 30, 2021 consolidated balance sheets as presented in the Company’s fiscal year 2022 third quarter Form 10-Q are as follows:
| As reported |  |  |  | As restated
(in thousands) | February 27, 2022 |  | Adjustment |  | February 27, 2022
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |
Other accrued liabilities | $ | 13,735 |  |  | $ | 348 |  |  | $ | 14,083 |
Total Current Liabilities | 90,065 |  |  | 348 |  |  | 90,413 |
Total Liabilities | 181,510 |  |  | 348 |  |  | 181,858 |
Retained earnings (accumulated deficit) | (22,188) |  |  | (348) |  |  | (22,536) |
Total Stockholders’ Equity | 144,072 |  |  | (348) |  |  | 143,724 |
Total Liabilities and Stockholders’ Equity | $ | 325,582 |  |  | $ | — |  |  | $ | 325,582 |
| As reported |  |  |  | As restated
(in thousands) | May 30, 2021 |  | Adjustment |  | May 30, 2021
ASSETS |  |  |  |  |
Property and equipment, net | $ | 112,770 |  |  | $ | 7,516 |  |  | $ | 120,286 |
Operating lease right-of-use assets | 7,480 |  |  | 9,618 |  |  | 17,098 |
Other assets, discontinued operations | 171,274 |  |  | (17,134) |  |  | 154,140 |
Total Assets | 502,924 |  |  | — |  |  | 502,924 |
LIABILITIES |  |  |  |  |
Current portion of lease liabilities | 1,465 |  |  | 135 |  |  | 1,600 |
Current liabilities, discontinued operations | 42,779 |  |  | (135) |  |  | 42,644 |
Total Current Liabilities | 101,888 |  |  | — |  |  | 101,888 |
Long-term lease liabilities | 9,581 |  |  | 10,778 |  |  | 20,359 |
Non-current liabilities, discontinued operations | 14,759 |  |  | (10,778) |  |  | 3,981 |
Total Liabilities | $ | 300,140 |  |  | $ | — |  |  | $ | 300,140 |
The effects of this error on our previously reported fiscal year 2022 interim consolidated statements of comprehensive (loss) income for the three month period ended February 27, 2022 are as follows:
| As reported |  |  |  | As restated
(in thousands, except per share amounts) | February 27, 2022 |  | Adjustment |  | February 27, 2022
Product sales | $ | 53,074 |  |  | $ | — |  |  | $ | 53,074 |
Cost of product sales | 39,179 |  |  | 675 |  |  | 39,854 |
Gross profit | 13,895 |  |  | (675) |  |  | 13,220 |
Operating costs and expenses: |  |  |  |  |
Research and development | 2,056 |  |  | — |  |  | 2,056 |
Selling, general and administrative | 9,725 |  |  | 6,625 |  |  | 16,350 |
Restructuring cost | 5,865 |  |  | (595) |  |  | 5,270 |
Total operating costs and expenses | 17,646 |  |  | 6,030 |  |  | 23,676 |
Operating loss | (3,751) |  |  | (6,705) |  |  | (10,456) |
Interest income | 20 |  |  | — |  |  | 20 |
Interest expense | (4,105) |  |  | — |  |  | (4,105) |
Transition services income | — |  |  | 5,473 |  |  | 5,473 |
Other income (expense), net | 454 |  |  | — |  |  | 454 |
Net loss from continuing operations before taxes | (7,382) |  |  | (1,232) |  |  | (8,614) |
Income tax benefit | 276 |  |  | 37 |  |  | 313 |
Net loss from continuing operations | (7,106) |  |  | (1,195) |  |  | (8,301) |
Loss from discontinued operations, net of tax | (5,744) |  |  | 959 |  |  | (4,785) |
Net loss | $ | (12,850) |  |  | $ | (236) |  |  | $ | (13,086) |
Basic and diluted net loss per share: |  |  |  |  |
Loss from continuing operations | $ | (0.24) |  |  | $ | (0.04) |  |  | $ | (0.28) |
Loss from discontinued operations | (0.19) |  |  | 0.03 |  |  | (0.16) |
Total basic and diluted net loss per share | $ | (0.43) |  |  | $ | (0.01) |  |  | $ | (0.44) |
Other comprehensive income (loss), net of tax: |  |  |  |  |
Net unrealized gain (losses) on interest rate swaps (net of tax effect) | $ | 104 |  |  | $ | — |  |  | $ | 104 |
Other comprehensive income (loss), net of tax | 104 |  |  | — |  |  | 104 |
Total comprehensive loss | $ | (12,746) |  |  | $ | (236) |  |  | $ | (12,982) |
The effects of this error on our previously reported fiscal year 2022 interim consolidated statements of comprehensive (loss) income for the nine-month period ended February 27, 2022 are as follows:
| As reported |  |  |  | As restated
(in thousands, except per share amounts) | February 27, 2022 |  | Adjustment |  | February 27, 2022
Product sales | $ | 138,158 |  |  | $ | — |  |  | $ | 138,158 |
Cost of product sales | 99,113 |  |  | 787 |  |  | 99,900 |
Gross profit | 39,045 |  |  | (787) |  |  | 38,258 |
Operating costs and expenses: |  |  |  |  |
Research and development | 5,785 |  |  | — |  |  | 5,785 |
Selling, general and administrative | 27,207 |  |  | 6,906 |  |  | 34,113 |
Restructuring costs | 8,406 |  |  | (876) |  |  | 7,530 |
Total operating costs and expenses | 41,398 |  |  | 6,030 |  |  | 47,428 |
Operating loss | (2,353) |  |  | (6,817) |  |  | (9,170) |
Interest income | 66 |  |  | — |  |  | 66 |
Interest expense | (13,877) |  |  | — |  |  | (13,877) |
Transition services income | — |  |  | 5,473 |  |  | 5,473 |
Other income (expense), net | 642 |  |  | — |  |  | 642 |
Net loss from continuing operations before taxes | (15,522) |  |  | (1,344) |  |  | (16,866) |
Income tax benefit | 5,012 |  |  | 14 |  |  | 5,026 |
Net loss from continuing operations | (10,510) |  |  | (1,330) |  |  | (11,840) |
Loss from discontinued operations, net of tax | (50,258) |  |  | 982 |  |  | (49,276) |
Net loss | $ | (60,768) |  |  | $ | (348) |  |  | $ | (61,116) |
Basic and diluted net loss per share: |  |  |  |  |
Loss from continuing operations | $ | (0.36) |  |  | $ | (0.05) |  |  | $ | (0.41) |
Loss from discontinued operations | (1.71) |  |  | 0.03 |  |  | (1.68) |
Total basic and diluted net loss per share | $ | (2.07) |  |  | $ | (0.02) |  |  | $ | (2.09) |
Other comprehensive income (loss), net of tax: |  |  |  |  |
Net unrealized gain (losses) on interest rate swaps (net of tax effect) | $ | 646 |  |  | $ | — |  |  | $ | 646 |
Other comprehensive income (loss), net of tax | 646 |  |  | — |  |  | 646 |
Total comprehensive loss | $ | (60,122) |  |  | $ | (348) |  |  | $ | (60,470) |
The effects of this error on our previously reported fiscal year 2022 consolidated statements of changes in stockholders' equity for the nine-month period ended February 27, 2022 are as follows:
|  | As reported |  | As reported |  | Adjustment |  | As restated |  | As restated |  |
|  | Retained Earnings (Accumulated Deficit) |  | Total Stockholders’ Equity |  |  |  | Retained Earnings (Accumulated Deficit) |  | Total Stockholders’ Equity |  |
(In thousands) |  |  |  |  |  |  |
Balance at May 30, 2021 |  | $ | 38,580 |  |  | $ | 202,784 |  |  | $ | — |  |  | $ | 38,580 |  |  | $ | 202,784 |  |  |
Net loss |  | (9,477) |  |  | (9,477) |  |  | (32) |  |  | (9,509) |  |  | (9,509) |  |  |
Balance at August 29, 2021 |  | 29,103 |  |  | 193,865 |  |  | (32) |  |  | 29,071 |  |  | 193,833 |  |  |
Net loss |  | (38,441) |  |  | (38,441) |  |  | (80) |  |  | (38,521) |  |  | (38,521) |  |  |
Balance at November 28, 2021 |  | (9,338) |  |  | 156,202 |  |  | (112) |  |  | (9,450) |  |  | 156,090 |  |  |
Net loss |  | (12,850) |  |  | (12,850) |  |  | (236) |  |  | (13,086) |  |  | (13,086) |  |  |
Balance at February 27, 2022 |  | $ | (22,188) |  |  | $ | 144,072 |  |  | $ | (348) |  |  | $ | (22,536) |  |  | $ | 143,724 |  |  |
The effects of this error on our previously reported fiscal year 2022 consolidated statements of cash flows for the nine-month period ended February 27, 2022 are as follows:
| As reported |  |  |  | As restated
(in thousands) | February 27, 2022 |  | Adjustment |  | February 27, 2022
Cash flows from operating activities: |  |  |  |  |
Net loss | $ | (60,768) |  |  | $ | (348) |  |  | $ | (61,116) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |  |  |  |  |
Impairment of goodwill | 32,057 |  |  | — |  |  | 32,057 |
Depreciation, amortization of intangibles, debt costs and right-of-use assets | 14,488 |  |  | — |  |  | 14,488 |
Loss on disposal of property and equipment related to restructuring, net | 5,185 |  |  | — |  |  | 5,185 |
Deferred taxes | (5,471) |  |  | — |  |  | (5,471) |
Loss on sale of Eat Smart | 4,354 |  |  | (4,119) |  |  | 235 |
Stock-based compensation expense | 1,928 |  |  | — |  |  | 1,928 |
Net loss on disposal of property and equipment held and used | 25 |  |  | — |  |  | 25 |
Provision (benefit) for expected credit losses | (14) |  |  | — |  |  | (14) |
Other, net | (551) |  |  | — |  |  | (551) |
Changes in current assets and current liabilities: |  |  |  |  |
Accounts receivable, net | (7,525) |  |  | — |  |  | (7,525) |
Inventories | (11,910) |  |  | — |  |  | (11,910) |
Prepaid expenses and other current assets | (1,448) |  |  | — |  |  | (1,448) |
Accounts payable | 13,055 |  |  | 452 |  |  | 13,507 |
Accrued compensation | (3,849) |  |  | 1,822 |  |  | (2,027) |
Other accrued liabilities | (4,195) |  |  | 4,125 |  |  | (70) |
Deferred revenue | 204 |  |  | 458 |  |  | 662 |
Net cash (used in) provided by operating activities | (24,435) |  |  | 2,390 |  |  | (22,045) |
Cash flows from investing activities: |  |  |  |  |
Proceeds from sale of Eat Smart | 73,500 |  |  | — |  |  | 73,500 |
Sale of Investment in non-public company | 45,100 |  |  | — |  |  | 45,100 |
Purchases of property and equipment | (18,539) |  |  | — |  |  | (18,539) |
Proceeds from sales of property and equipment | 1,096 |  |  | — |  |  | 1,096 |
Eat Smart sale net working capital adjustment and cash sale expenses | — |  |  | (2,390) |  |  | (2,390) |
Net cash provided by investing activities | 101,157 |  |  | (2,390) |  |  | 98,767 |
Net cash used in financing activities | (76,163) |  |  | — |  |  | (76,163) |
Net increase in cash, cash equivalents and restricted cash | 559 |  |  | — |  |  | 559 |
Cash, cash equivalents and restricted cash, beginning of period | 1,295 |  |  | — |  |  | 1,295 |
Cash, cash equivalents and restricted cash, end of period | $ | 1,854 |  |  | $ | — |  |  | $ | 1,854 |
The effects of this error on our previously reported fiscal year 2022 diluted earnings per share for the three and nine month periods ended February 27, 2022 as presented in the Company’s fiscal year 2022 third quarter Form 10-Q Note 4 - Diluted Earnings per share are as follows:
| Three Months Ended |  | Nine Months Ended
| As reported |  |  |  | As restated |  | As reported |  |  |  | As restated
(in thousands, except per share amounts) | February 27, 2022 |  | Adjustment |  | February 27, 2022 |  | February 27, 2022 |  | Adjustment |  | February 27, 2022
Numerator: |  |  |  |  |  |  |  |  |  |  |
Net loss | $ | (12,850) |  |  | $ | (236) |  |  | $ | (13,086) |  |  | $ | (60,768) |  |  | $ | (348) |  |  | $ | (61,116) |
Denominator: |  |  |  |  |  |  |  |  |  |  |
Weighted average shares for diluted net loss per share | 29,482 |  |  | 29,482 |  |  | 29,482 |  |  | 29,459 |  |  | 29,459 |  |  | 29,459 |
Diluted net loss per share | $ | (0.43) |  |  | $ | (0.01) |  |  | $ | (0.44) |  |  | $ | (2.07) |  |  | $ | (0.02) |  |  | $ | (2.09) |
The effects of this error on our previously reported fiscal year 2022 operations by business segment for the three and nine month periods ended February 27, 2022 as presented in the Company’s fiscal year 2022 third quarter Form 10-Q Note 7 - Business Segment Reporting are as follows:
(In Thousands) |  | Lifecore |  | Curation Foods |  | Other |  | Total
Three Months Ended February 27, 2022 |  |  |  |  |  |  |  |
Gross profit, As reported |  | $ | 12,905 |  |  | $ | 990 |  |  | $ | — |  |  | $ | 13,895 |
Adjustment |  | — |  |  | (675) |  |  | — |  |  | (675) |
Gross profit, As restated |  | 12,905 |  |  | 315 |  |  | — |  |  | 13,220 |
Net income (loss) from continuing operations, As reported |  | 5,054 |  |  | (5,848) |  |  | (6,312) |  |  | (7,106) |
Adjustment |  | — |  |  | (1,195) |  |  | — |  |  | (1,195) |
Net income (loss) from continuing operations, As restated |  | 5,054 |  |  | (7,043) |  |  | (6,312) |  |  | (8,301) |
Loss from discontinued operations, As reported |  | — |  |  | (2,703) |  |  | (3,041) |  |  | (5,744) |
Adjustment |  | — |  |  | 959 |  |  | — |  |  | 959 |
Loss from discontinued operations, As restated |  | — |  |  | (1,744) |  |  | (3,041) |  |  | (4,785) |
Nine Months Ended February 27, 2022 |  |  |  |  |  |  |  |
Gross profit, As reported |  | $ | 30,384 |  |  | $ | 8,661 |  |  | $ | — |  |  | $ | 39,045 |
Adjustment |  | — |  |  | (787) |  |  | — |  |  | (787) |
Gross profit, As restated |  | 30,384 |  |  | 7,874 |  |  | — |  |  | 38,258 |
Net income (loss) from continuing operations, As reported |  | 11,317 |  |  | 5,513 |  |  | (27,340) |  |  | (10,510) |
Adjustment |  | — |  |  | (1,330) |  |  | — |  |  | (1,330) |
Net income (loss) from continuing operations, As restated |  | 11,317 |  |  | 4,183 |  |  | (27,340) |  |  | (11,840) |
Loss from discontinued operations, As reported |  | — |  |  | (47,217) |  |  | (3,041) |  |  | (50,258) |
Adjustment |  | — |  |  | 982 |  |  | — |  |  | 982 |
Loss from discontinued operations, As restated |  | — |  |  | (46,235) |  |  | (3,041) |  |  | (49,276) |
The effects of this error on our previously reported fiscal year 2022 restructuring costs for the three and nine month periods ended February 27, 2022 as presented in the Company’s fiscal year 2022 third quarter Form 10-Q Note 8 - Restructuring Costs are as follows:
(In thousands) |  |  |  |  |  |  |
Three Months Ended February 27, 2022 | Lifecore |  | Curation Foods |  | Other |  | Total
Total restructuring costs, As reported | $ | 271 |  |  | $ | 5,344 |  |  | $ | 250 |  |  | $ | 5,865 |
Adjustment | (271) |  |  | (124) |  |  | (200) |  |  | (595) |
Total restructuring costs, As restated | $ | — |  |  | $ | 5,220 |  |  | $ | 50 |  |  | $ | 5,270 |
(In thousands) |  |  |  |  |  |  |
Nine Months Ended February 27, 2022 | Lifecore |  | Curation Foods |  | Other |  | Total
Total restructuring costs, As reported | $ | 271 |  |  | $ | 5,810 |  |  | $ | 2,325 |  |  | $ | 8,406 |
Adjustment | (271) |  |  | (124) |  |  | (481) |  |  | (876) |
Total restructuring costs, As restated | $ | — |  |  | $ | 5,686 |  |  | $ | 1,844 |  |  | $ | 7,530 |
The effects of this error on our previously reported May 30, 2021 carrying amounts of the major classes of assets and liabilities of the Eat Smart business included in assets and liabilities of discontinued operations as presented in the Company’s fiscal year 2022 third quarter Form 10-Q Note 9 - Discontinued Operations are as follows:
| As reported |  |  |  | As restated
(in thousands) | May 30, 2021 |  | Adjustment |  | May 30, 2021
ASSETS |  |  |  |  |
Property and equipment, net | $ | 66,789 |  |  | $ | (7,516) |  |  | $ | 59,273 |
Operating lease right-of-use assets | 13,347 |  |  | (9,618) |  |  | 3,729 |
Other assets, discontinued operations | 171,274 |  |  | (17,134) |  |  | 154,140 |
LIABILITIES |  |  |  |  |
Current portion of lease liabilities | 2,424 |  |  | (135) |  |  | 2,289 |
Current liabilities, discontinued operations | 42,779 |  |  | (135) |  |  | 42,644 |
Long-term lease liabilities | 14,030 |  |  | (10,778) |  |  | 3,252 |
Non-current liabilities, discontinued operations | 14,759 |  |  | (10,778) |  |  | 3,981 |
The effects of this error on our previously reported fiscal year 2022 components of loss from discontinued operations for the three month period ended February 27, 2022 as presented in the Company’s fiscal year 2022 third quarter Form 10-Q Note 9 - Discontinued Operations are as follows:
| As reported |  |  |  | As restated
(in thousands) | February 27, 2022 |  | Adjustment |  | February 27, 2022
Operating costs and expenses: |  |  |  |  |
Loss on sale of Eat Smart | $ | 4,354 |  |  | $ | (4,119) |  |  | $ | 235 |
Restructuring cost | 86 |  |  | 3,123 |  |  | 3,209 |
Total operating costs and expenses | 5,601 |  |  | (996) |  |  | 4,605 |
Operating loss | (5,762) |  |  | 996 |  |  | (4,766) |
Income tax benefit | 222 |  |  | (37) |  |  | 185 |
Loss from discontinued operations, net of tax | $ | (5,744) |  |  | $ | 959 |  |  | $ | (4,785) |
The effects of this error on our previously reported fiscal year 2022 components of loss from discontinued operations for the nine-month period ended February 27, 2022 as presented in the Company’s fiscal year 2022 third quarter Form 10-Q Note 9 - Discontinued Operations are as follows:
| As reported |  |  |  | As restated
(in thousands) | February 27, 2022 |  | Adjustment |  | February 27, 2022
Operating costs and expenses: |  |  |  |  |
Loss on sale of Eat Smart | $ | 4,354 |  |  | $ | (4,119) |  |  | $ | 235 |
Restructuring cost | 1,519 |  |  | 3,123 |  |  | 4,642 |
Total operating costs and expenses | 53,198 |  |  | (996) |  |  | 52,202 |
Operating loss | (47,998) |  |  | 996 |  |  | (47,002) |
Income tax benefit | 422 |  |  | (14) |  |  | 408 |
Loss from discontinued operations, net of tax | $ | (50,258) |  |  | $ | 982 |  |  | $ | (49,276) |

X
- References No definition available. + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the organization, consolidation and basis of presentation of financial statements disclosure, and significant accounting policies of the reporting entity. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -URI https://asc.fasb.org/topic&trid=2122149 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -URI https://asc.fasb.org/topic&trid=2197479 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI https://asc.fasb.org/topic&trid=2122369 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -URI https://asc.fasb.org/topic&trid=2134479 + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureAndSignificantAccountingPoliciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration