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Organization, Basis of Presentation, and Summary of Significant Accounting Policies (Tables)

3 Months Ended

Aug. 28, 2022

Accounting Policies [Abstract]

Schedule of Cash and Cash Equivalents

The following table provides a reconciliation of cash and cash equivalents and cash and cash equivalents, discontinued operations 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)			August 28, 2022						May 29, 2022						August 29, 2021						May 30, 2021
Cash and cash equivalents			$	4,222					$	1,643					$	1,406					$	1,159
Cash and cash equivalents, discontinued operations			—						—						41						136
Cash and cash equivalents			$	4,222					$	1,643					$	1,447					$	1,295

Schedule of Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value and consist of the following:

(In thousands)			August 28, 2022						May 29, 2022
Finished goods			$	25,266					$	33,029
Raw materials			27,402						24,221
Work in progress			11,617						9,595
Total			$	64,285					$	66,845

Schedule of Financing Receivable, Allowance for Credit Loss

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
Three months ended August 29, 2021			$	85											$	—					$	—					$	85
Three months ended August 28, 2022			$	65											$	—					$	—					$	65

Schedule of Accumulated Other Comprehensive 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 29, 2022			$	(586)
Amounts reclassified from OCI			300
Other comprehensive income, net			$	300
Balance as of August 28, 2022			$	(286)

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table summarizes the fair value of the Company’s assets and liabilities that are measured at fair value on a recurring and nonrecurring basis (in thousands):

			Fair Value at August 28, 2022																		Fair Value at May 29, 2022
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			—						86						—						—						—						—
Property & equipment, as restated			$	—					$	—					$	—					$	—					$	3,500					$	1,400
Customer relationships, as restated			$	—					$	—					$	—					$	—					$	—					$	4,000
Total assets			$	—					$	86					$	—					$	—					$	3,500					$	6,427

Schedule of Disaggregation of Revenue

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)			Three Months Ended
Lifecore:			August 28, 2022						August 29, 2021
Contract development and manufacturing organization			$	18,247					$	17,789
Fermentation			5,456						4,163
Total			$	23,703					$	21,952

(In thousands)			Three Months Ended
Curation Foods:			August 28, 2022						August 29, 2021
Avocado products			$	17,093					$	16,962
Olive oil and wine vinegars			2,559						2,340
Technology			—						378
Total			$	19,652					$	19,680

Schedule of Error Corrections and Prior Period Adjustments

			As reported												As restated
(in thousands)			August 28, 2022						Adjustment						August 28, 2022
ASSETS
Property and equipment, net			$	129,024					$	(11,473)					$	117,551
Trademarks/tradenames, net			$	8,400					$	300					$	8,700
Customer relationships, net			$	6,875					$	(5,529)					$	1,346
Total Assets			$	285,800					$	(16,702)					$	269,098
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deferred tax liability, net			$	291					$	(167)					$	124
Total Liabilities			$	188,901					$	(167)					$	188,734
Accumulated deficit			$	(70,915)					$	(16,535)					$	(87,450)
Total Stockholders’ Equity			$	96,899					$	(16,535)					$	80,364
Total Liabilities and Stockholders’ Equity			$	285,800					$	(16,702)					$	269,098

The effects of this error on our previously reported interim consolidated statement of comprehensive (loss) income for the three-month period ended August 28, 2022 as presented in the Original Prior Quarterly Report are as follows:

			Three Months Ended
			As reported												As restated
			August 28, 2022						Adjustment						August 28, 2022
Product sales			$	43,355					$	—					$	43,355
Cost of product sales			37,534						(431)						37,103
Gross profit			5,821						431						6,252
Operating costs and expenses:
Research and development			2,048						—						2,048
Selling, general and administrative			10,883						(222)						10,661
Restructuring costs			1,047						—						1,047
Total operating costs and expenses			13,978						(222)						13,756
Operating loss			(8,157)						653						(7,504)
Interest income			15						—						15
Interest expense			(3,678)						—						(3,678)
Other income (expense), net			(180)						—						(180)
Net loss before tax			(12,000)						653						(11,347)
Income tax (expense) benefit			(64)						60						(4)
Net loss from continuing operations			(12,064)						713						(11,351)
Loss from discontinued operations, net of tax			—						—						—
Net loss			$	(12,064)					$	713					$	(11,351)
Basic net loss per share:
Loss from continuing operations			$	(0.41)					$	0.03					$	(0.38)
Loss from discontinued operations			—						—						—
Total basic net loss per share			$	(0.41)					$	0.03					$	(0.38)
Diluted net loss per share:
Loss from continuing operations			$	(0.41)					$	0.03					$	(0.38)
Loss from discontinued operations			—						—						—
Total diluted net loss per share			$	(0.41)					$	0.03					$	(0.38)
Total comprehensive loss			$	(11,764)					$	713					$	(11,051)

The effects of this error on our previously reported consolidated statement of changes in stockholders' equity for the year ended August 28, 2022 as presented in the Prior Quarterly Report 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 29, 2022						$	(58,851)					$	107,945					$	(17,248)					$	(76,099)					$	90,697
Issuance of stock under stock plans, net of shares withheld						—						—						—						—						—
Taxes paid by Company for employee stock plans						—						(67)						—						—						(67)
Stock-based compensation						—						785						—						—						785
Net loss						(12,064)						(12,064)						713						(11,351)						(11,351)
Other comprehensive income, net of tax						—						300						—						—						300
Balance at August 28, 2022						$	(70,915)					$	96,899					$	(16,535)					$	(87,450)					$	80,364

The effects of this error on our previously reported consolidated statement of cash flows for the three-month period ended August 28, 2022 as presented in the Original Prior Quarterly Report are as follows:

			Three Months Ended
			As reported												As restated
(in thousands)			August 28, 2022						Adjustment						August 28, 2022
Cash flows from operating activities:
Net loss			$	(12,064)					$	713					$	(11,351)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization of intangibles, debt costs and right-of-use assets			$	5,009					$	(653)					$	4,356
Deferred taxes			$	43					$	(60)					$	(17)
Net cash (used in) provided by operating activities			$	(1,533)					$	—					$	(1,533)

The effects of this error on our previously reported diluted earnings per share for the three-month period ended August 28, 2022 as presented in Note 4 - Diluted Earnings of the unaudited consolidated financial statements reported in the Original Prior Quarterly Report are as follows:

			Three Months Ended
			As reported												As restated
(in thousands, except per share amounts)			August 28, 2022						Adjustment						August 28, 2022
Numerator:
Net loss			$	(12,064)					$	713					$	(11,351)
Denominator:
Weighted average shares for basic and diluted net loss per share			29,577						—						29,577
Basic Diluted net loss per share			$	(0.41)					$	0.03					$	(0.38)

The effects of this error on our previously reported income taxes per share for the three-month period ended August 28, 2022 as presented in Note 5 - Income Taxes of the unaudited consolidated financial statements reported in the Original Prior Quarterly Report are as follows:

			Three Months Ended
			As reported												As restated
(in thousands, except effective tax rate)			August 28, 2022						Adjustment						August 28, 2022
Income tax (expense) benefit			$	0.1	million				$	(0.1)	million				$	4.0	thousand
Effective Tax Rate			0.5		%				(0.5)		%				—		%

The effects of this error on our previously reported operations by business segment for the three-month period ended August 28, 2022 as presented in Note 7 - Business Segment Reporting of the unaudited consolidated financial statements reported in the Original Prior Quarterly Report are as follows:

(In Thousands)						Lifecore						Curation Foods						Other						Total
Three Months Ended August 28, 2022
Depreciation and amortization, as reported						$	1,771					$	2,820					$	11					$	4,602
Adjustment						—						(653)						—						(653)
Depreciation and amortization, as restated						$	1,771					$	2,167					$	11					$	3,949
Net income (loss) from continuing operations, as reported						$	502					$	(3,374)					$	(9,192)					$	(12,064)
Adjustment						—						653						60						713
Net income (loss) from continuing operations, as restated						$	502					$	(2,721)					$	(9,132)					$	(11,351)
Gross Profit, as reported						$	6,101					$	(280)					$	—					$	5,821
Adjustment						—						431						—						431
Gross Profit, as restated						$	6,101					$	151					$	—					$	6,252
Income tax (benefit) expense, as reported						$	158					$	(1,065)					$	971					$	64
Adjustment						—						—						(60)						(60)
Income tax (benefit) expense, as restated						$	158					$	(1,065)					$	911					$	4

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