XML 35 R24.htm IDEA: XBRL DOCUMENT
v3.22.4

Subsequent Events | 12 Months Ended
--- | ---
May 29, 2022
Subsequent Events [Abstract] |
Subsequent Events | Subsequent EventsSale of BreatheWay Business Assets On June 2, 2022, the Company and Curation Foods entered into and closed an Asset Purchase Agreement (the “Purchase Agreement”) with Hazel Technologies, Inc. (the “Purchaser”), pursuant to which Curation Foods sold all of its assets related to BreatheWay packaging technology business to the Purchaser in exchange for an aggregate purchase price of $3.2 million. The Purchase Agreement included various representations, warranties and covenants of the parties generally customary for a transaction of this nature. Upon the sale, the Company received net proceeds of $3.1 million and recorded a gain of $2.1 million. Securities Purchase Agreement On November 25, 2022, the Company simultaneously signed and closed a Securities Purchase Agreement (the “Agreement”) with an existing shareholder for the sale and issuance of 627,746 shares of its Common Stock (par value $0.001 per share) at a price per share equal to $7.97, for an aggregate purchase price of $5.0 million. Pursuant to the Agreement, the Company granted the purchaser certain piggyback registration rights and agreed, among other things, to indemnify such party under any registration statement filed that includes the shares from certain losses, claims, damages and liabilities. The proceeds will be used for capital expenditures associated with equipment manufacturing milestones based on demand from the Company’s development pipeline. Limited waiver and Fourth Amendment to Term Loan and Revolver Credit Agreements On January 9, 2023, the Company entered into a Limited Waiver and Fourth Amendment to its existing term loan agreement with Goldman Sachs Specialty Lending Group, L.P. and Guggenheim Credit Services, LLC (“Amended Term Loan”) and its revolver credit agreement with BMO Harris Bank, N.A. (“Amended Revolver Credit Agreement” together with the Amended Term Loan, the “Credit Agreements”). Among other things, the limited waiver provided relief from events of default under the Credit Agreements related to certain financial covenant requirements as of November 27, 2022. There were no changes to the respective lending parties to the Credit Agreements. The Credit Agreements also provided for certain updates to the existing terms and covenants, including waiving the Fixed Charge Coverage and Leverage Ratios for the quarters ending November 27, 2022 and February 26, 2023 and were revised for all subsequent quarters; and the Minimum Consolidated Liquidity was reduced from $7.5 million to $1.0 million for the period from the effective date of the Amended Term Loan until May 28, 2023, then increasing to $7.5 million for subsequent periods. The Credit Agreements do not provide for any waiver of current or forecasted covenant violations as of the date of issuance of the consolidated financial statements. Amended Term Loan Pursuant to the Amended Term Loan, the term loan facility will remain at $170.0 million (comprised of the Initial Term Loan and Multi-Draw Term Loan, collectively, the “Term Loan”). The Amended Term Loan provides for principal payments by the Company of 5% per annum, payable quarterly in arrears in equal installments, commencing on February 28, 2025 (formerly March 30, 2023) with the remainder due at its original maturity date of December 25, 2025. Interest on the amounts outstanding under the Term Loan will include payment-in-kind interest (“PIK interest”) at the annual rate of 2%. The PIK interest expense charges will be added to the outstanding principal of the Term Loan. There were no changes to the spreads used in the determination of interest. Interest on the Term Loan is at a per annum rate based on either (i) the base rate plus a spread of 7.50% for the Initial Term Lean; or (ii) the SOFR rate plus a spread of 8.50% % for the Multi-Draw Loan. The Company paid a one-time amendment fee to the Term Loan lenders in an amount equal to 3% of the principal amount as of January 9, 2023. Amended Revolver Credit Agreement Pursuant to the Amended Revolver Credit, the revolving line of credit commitment was reduced from $75.0 million to $60.0 million. This commitment was further reduced to $50.0 million upon the sale of Yucatan. The Amended Revolver Credit maintained the original maturity date of December 25, 2025. There were no changes to the spreads used in the determination of the interest rate. Interest on Revolver is based upon the Company’s average availability, at a per annum rate of either (i) secured overnight finance rate or SOFR rate (formerly used LIBOR) plus a spread of between 2.00% and 2.50% or (ii) base rate plus a spread of between 1.00% and 1.50%, plus a commitment fee, as applicable, of 0.375%; and plus (iii) for the period from December 1, 2022 until January 31, 2023, additional 2% per annum. Series A Preferred Share Purchase Agreement On January 9, 2023, the Company simultaneously signed and closed a Securities Purchase Agreement (the “Purchase Agreement”) with a group of qualified investors. Pursuant to the Purchase Agreement, the Company issued and sold an aggregate of 38,750 shares of a new series of convertible preferred stock of the Company designated as Series A Preferred Shares, par value $0.001 per share (the “Preferred Shares”) for an aggregate of $38.75 million. The Preferred Shares rank senior to the Company’s Common Stock with respect to dividends, distributions and payments on liquidation, winding up and dissolution. Each holder of Preferred Shares has the right, at its option, to convert its Preferred Share, in whole or in part, into fully paid and non-assessable shares of our Common Stock at an initial conversion price equal to $7.00 per share. The conversion price is subject to customary anti-dilution adjustments, including in the event of any stock split, stock dividend, recapitalization or similar events, and is also subject to adjustment in the event of subsequent offerings of Common Stock or convertible securities by the Company for less than the conversion price. Immediately following the Closing, two Series A Preferred Share Directors were appointed to the Company’s Board of Directors. Sale of Curation Foods’ Avocado Business On February 7, 2023, the Company simultaneously signed and closed a Securities Purchase Agreement for the sale of all its outstanding equity interests in its Curation Foods’ avocado products business (the “SPA”) for an aggregate purchase price of $17.5 million in cash, subject to customary net working capital adjustments (the “Sale”). The SPA included a working capital adjustment period, various representations, warranties, and covenants of the parties generally customary for a transaction of this nature. The Company has entered into a Transition Services Agreement with the buyer to provide for a customary and orderly transition of the business, and such fees earned, and costs incurred for such transition services shall be included in continuing operations in subsequent periods. The Company expects to recognize a loss on the Sale in the third quarter ended February 26, 2023 of approximately $15 million to $17 million.

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

X
- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -URI https://asc.fasb.org/topic&trid=2122774 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6842918&loc=SL6314017-165662 + Details
Name: | us-gaap_SubsequentEventsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration