Goodwill and Intangible Assets

12 Months Ended

May 29, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets, As Restated

Goodwill

The following table presents the changes in goodwill during fiscal 2022 and fiscal 2021 (in thousands):


	2022		2021
Balance at beginning of year	$	33,916	$	33,916
Impairment	(20,035)		—


Balance at end of year	$	13,881	$	33,916

We have determined that the Eat Smart, Yucatan Foods, O, and Lifecore are the appropriate reporting units for testing goodwill for impairment. As disclosed in Note 1, an impairment charge of $5.2 million and $2.7 million in O and Yucatan Foods reporting units, respectively, was recorded during the year ended May 31, 2020. As disclosed in Note 1, an impairment charge of $32.1 million and $20.0 million in the Eat Smart and Yucatan Foods reporting units, respectively, was recorded during the year ended May 29, 2022. As of May 29, 2022, the Lifecore reporting unit had $13.9 million of goodwill.

Intangible Assets, as restated

As restated, the following table presents the changes in intangible assets during fiscal 2022 and fiscal 2021 (in thousands):


	2022		2021
	As restated
Balance at beginning of year	$	25,632	$	27,040
Amortization of long-lived intangible assets	(1,382)		(1,408)
Impairment	(14,150)		—
Balance at end of year	$	10,100	$	25,632

As of May 29, 2022 and May 30, 2021, the Company's intangible assets consisted of the following (in thousands):


		May 29, 2022				May 30, 2021
	Amortization Period (years)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
		As restated		As restated
Customer relationships
Lifecore	12	$	3,700	$	3,700	$	3,700	$	3,418


Yucatan Foods (Curation Foods)	12	1,400		—		11,000		2,750
Total customer relationships		$	5,100	$	3,700	$	14,700	$	6,168
Trademarks/tradenames
Lifecore		$	4,200	$	—	$	4,200	$	—

O (Curation Foods)		500		—		500		—
Yucatan Foods (Curation Foods)		4,000		—		12,400		—
Total trademarks/tradenames		$	8,700	$	—	$	17,100	$	—
Total intangible assets		$	13,800	3,700		$	31,800	$	6,168

Amortization expense related to long-lived intangible assets was $1.4 million, $1.4 million, and $1.5 million in fiscal 2022, 2021 and 2020, respectively.

The amortization expense for each year presented are as follows (in thousands):


	As restated
Fiscal year 2023	$	215
Fiscal year 2024	215
Fiscal year 2025	215
Fiscal year 2026	215
Fiscal year 2027	215
Total	$	1,075

As discussed in Note 1, the Company recognized an impairment of the customer relationships in the Curation Foods business segment (in the O reporting unit) of $0.5 million during the year ended May 31, 2020. In addition, the Company recognized an impairment of the trademarks in the Curation Foods business segment for O and Yucatan Foods of $1.1 million and $3.5 million, respectively during the year ended May 31, 2020. During the year ended May 29, 2022, the Company recognized an impairment of the trademarks in the Curation Foods business segment for Yucatan Foods amounting to $8.4 million.

As disclosed in Note 1 - Correction of Error in Previously Reported Fiscal Year 2022 Annual Financial Statements, the Company is restating its previously issued financial statements to record an impairment of the trademarks/tradenames and

customer relationships intangible asset in the Curation Foods business segment for Yucatan Foods amounting to $3.4 million and $5.8 million for the year ended May 29, 2022.