XML 89 R38.htm IDEA: XBRL DOCUMENT
v3.24.1

Unaudited Quarterly Consolidated Financial Information (Tables) | 12 Months Ended
--- | ---
May 28, 2023
Quarterly Financial Information Disclosure [Abstract] |
Quarterly Financial Information | The quarterly financial information for fiscal years 2023 and 2022 has been reclassified to present the information after taking into effect the O Olive Sale, Yucatan Disposition, and Eat Smart Disposition as disclosed in Note 1 – Organization, Basis of Presentation, and Summary of Significant Accounting Policies - Discontinued Operations - O Olive Sale, Yucatan Disposition, BreatheWay Disposition and Eat Smart Disposition. The following is a summary of the unaudited quarterly results of operations for fiscal years 2023 and 2022 (in thousands, except for per share amounts).
|  | As restated |  | As restated |  | As restated |  |  |  |
Fiscal Year 2023 |  | 1st Quarter |  | 2nd Quarter |  | 3rd Quarter |  | 4th Quarter |  | Annual
Product sales |  | $ | 23,724 |  |  | $ | 21,864 |  |  | $ | 26,536 |  |  | $ | 31,145 |  |  | $ | 103,269 |
Gross profit |  | 5,979 |  |  | 5,679 |  |  | 8,548 |  |  | 7,779 |  |  | 27,985 |
Net loss from continuing operations |  | (6,707) |  |  | (9,201) |  |  | (11,330) |  |  | (36,998) |  |  | (64,236) |
Net loss from discontinued operations |  | (4,259) |  |  | (3,605) |  |  | (25,177) |  |  | (2,286) |  |  | (35,327) |
Net loss per basic and diluted share from continuing operations |  | $ | (0.23) |  |  | $ | (0.31) |  |  | $ | (0.37) |  |  | $ | (1.23) |  |  | $ | (2.14) |
Net loss per basic and diluted share from discontinued operations |  | $ | (0.14) |  |  | $ | (0.12) |  |  | $ | (0.83) |  |  | $ | (0.09) |  |  | $ | (1.18) |
Total net loss per basic and diluted share |  | $ | (0.37) |  |  | $ | (0.43) |  |  | $ | (1.20) |  |  | $ | (1.32) |  |  | $ | (3.32) |
|  | As restated |  | As restated |  | As restated |  |  |  | As restated
Fiscal Year 2022 |  | 1st Quarter |  | 2nd Quarter |  | 3rd Quarter |  | 4th Quarter |  | Annual
Product sales |  | $ | 22,330 |  |  | $ | 25,601 |  |  | $ | 35,232 |  |  | $ | 28,107 |  |  | $ | 111,270 |
Gross profit |  | 5,545 |  |  | 11,458 |  |  | 11,639 |  |  | 10,424 |  |  | 39,066 |
Net loss from continuing operations |  | (8,473) |  |  | 7,547 |  |  | (10,920) |  |  | (3,630) |  |  | (15,476) |
Net loss from discontinued operations |  | (914) |  |  | (46,018) |  |  | (2,666) |  |  | (51,641) |  |  | (101,239) |
Net loss per basic and diluted share from continuing operations |  | $ | (0.29) |  |  | $ | 0.25 |  |  | $ | (0.37) |  |  | $ | (0.12) |  |  | $ | (0.53) |
Net loss per basic and diluted share from discontinued operations |  | $ | (0.03) |  |  | $ | (1.56) |  |  | $ | (0.09) |  |  | $ | (1.76) |  |  | $ | (3.44) |
Total net loss per basic and diluted share |  | $ | (0.32) |  |  | $ | (1.31) |  |  | $ | (0.46) |  |  | $ | (1.88) |  |  | $ | (3.97) |
The following is a summary of the unaudited quarterly results of operations for fiscal years 2023, 2022 and 2021 (in thousands, except for per share amounts). Refer to see Note 13 - Correction of Errors in Previously Reported Fiscal Year 2022 and 2021 Annual Financial Statements. Description of Quarterly Restatement Tables In lieu of filing amended quarterly reports on Form 10-Q, the tables below represent our restated unaudited consolidated financial statements for each of the previously completed quarters during the fiscal years ended May 28, 2023, May 29, 2022, May 30, 2021. The following tables present the impact of the restatement on our previously reported consolidated statements of operations, balance sheets, statements of stockholders' equity (deficit), statements of cash flows, and certain disclosures for which the values were derived from our Quarterly Reports on Form 10-Q for the interim periods of fiscal years 2023, 2022 and 2021. For further information on the restatement, refer to Note 13 - Correction of Error in Previously Reported Fiscal Year 2022 and 2021 Financial Statements. As of and for the three and nine months ended February 26, 2023 The effects of the restatement on the consolidated balance sheet as of February 26, 2023 are summarized in the following table:
| February 26, 2023
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
ASSETS |  |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 2,950 |  |  | $ | — |  |  | $ | 2,950 |  |  | $ | — |  |  | $ | 2,950 |
Accounts receivable, net | 32,371 |  |  | (671) |  |  | 31,700 |  |  | (726) |  |  | 30,974 |
Inventories | 48,696 |  |  | (3,437) |  |  | 45,259 |  |  | (3,217) |  |  | 42,042 |
Prepaid expenses and other current assets | 4,422 |  |  | (1,205) |  |  | 3,217 |  |  | (1,744) |  |  | 1,473 |
Current assets, discontinued operations | — |  |  | — |  |  | — |  |  | 5,687 |  |  | 5,687 |
Total Current Assets | 88,439 |  |  | (5,313) |  |  | 83,126 |  |  | — |  |  | 83,126 |
Property and equipment, net | 120,799 |  |  | 5,933 |  |  | 126,732 |  |  | (406) |  |  | 126,326 |
Operating lease right-of-use assets | 5,924 |  |  | (117) |  |  | 5,807 |  |  | (707) |  |  | 5,100 |
Goodwill | 13,881 |  |  | — |  |  | 13,881 |  |  | — |  |  | 13,881 |
Trademarks/tradenames, net | 4,400 |  |  | — |  |  | 4,400 |  |  | (200) |  |  | 4,200 |
Other non-current assets | 2,710 |  |  | — |  |  | 2,710 |  |  | (11) |  |  | 2,699 |
Non-current assets, discontinued operations | — |  |  | — |  |  | — |  |  | 1,324 |  |  | 1,324 |
Total Assets | $ | 236,153 |  |  | $ | 503 |  |  | $ | 236,656 |  |  | $ | — |  |  | $ | 236,656 |
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities: |  |  |  |  |  |  |  |  |
Accounts payable | $ | 14,762 |  |  | $ | (79) |  |  | $ | 14,683 |  |  | $ | (26) |  |  | $ | 14,657 |
Accrued compensation | 6,733 |  |  | — |  |  | 6,733 |  |  | — |  |  | 6,733 |
Other accrued liabilities | 12,012 |  |  | (193) |  |  | 11,819 |  |  | (193) |  |  | 11,626 |
Current portion of lease liabilities | 1,455 |  |  | — |  |  | 1,455 |  |  | (239) |  |  | 1,216 |
Deferred revenue | 2,711 |  |  | — |  |  | 2,711 |  |  | — |  |  | 2,711 |
Current liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 458 |  |  | 458 |
Total Current Liabilities | 37,673 |  |  | (272) |  |  | 37,401 |  |  | — |  |  | 37,401 |
Line of credit | 16,000 |  |  | — |  |  | 16,000 |  |  | — |  |  | 16,000 |
Long-term debt, net | 98,964 |  |  | (64) |  |  | 98,900 |  |  | — |  |  | 98,900 |
Long-term lease liabilities | 10,516 |  |  | — |  |  | 10,516 |  |  | (518) |  |  | 9,998 |
Deferred taxes, net | 80 |  |  | — |  |  | 80 |  |  | — |  |  | 80 |
Other non-current liabilities | 203 |  |  | — |  |  | 203 |  |  | — |  |  | 203 |
Non-current liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 518 |  |  | 518 |
Total Liabilities | 163,436 |  |  | (336) |  |  | 163,100 |  |  | — |  |  | 163,100 |
Convertible Preferred Stock | $ | 38,510 |  |  | $ | 25 |  |  | $ | 38,535 |  |  | $ | — |  |  | $ | 38,535 |
Stockholders’ Equity: |  |  |  |  |  |  |  |  |
Common stock | 30 |  |  | — |  |  | 30 |  |  | — |  |  | 30 |
Additional paid-in capital | 174,268 |  |  | (25) |  |  | 174,243 |  |  | — |  |  | 174,243 |
(Accumulated deficit) Retained earnings | (140,091) |  |  | 839 |  |  | (139,252) |  |  | — |  |  | (139,252) |
Total Stockholders’ Equity | 34,207 |  |  | 814 |  |  | 35,021 |  |  | — |  |  | 35,021 |
Total Liabilities and Stockholders’ Equity | $ | 236,153 |  |  | $ | 503 |  |  | $ | 236,656 |  |  | $ | — |  |  | $ | 236,656 |
The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the three months February 26, 2023 are summarized in the following table:
| Three Months Ended February 26, 2023
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Product sales | $ | 27,600 |  |  | $ | 206 |  |  | $ | 27,806 |  |  | $ | (1,270) |  |  | $ | 26,536 |
Cost of product sales | 21,622 |  |  | (2,263) |  |  | 19,359 |  |  | (1,371) |  |  | 17,988 |
Gross profit | 5,978 |  |  | 2,469 |  |  | 8,447 |  |  | 101 |  |  | 8,548 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |
Research and development | 1,964 |  |  | 276 |  |  | 2,240 |  |  | (6) |  |  | 2,234 |
Selling, general and administrative | 10,972 |  |  | (53) |  |  | 10,919 |  |  | (640) |  |  | 10,279 |
Restructuring costs | 2,741 |  |  | (175) |  |  | 2,566 |  |  | — |  |  | 2,566 |
Total operating costs and expenses | 15,677 |  |  | 48 |  |  | 15,725 |  |  | (646) |  |  | 15,079 |
Operating (loss) income | (9,699) |  |  | 2,421 |  |  | (7,278) |  |  | 747 |  |  | (6,531) |
Interest income | 22 |  |  | — |  |  | 22 |  |  | — |  |  | 22 |
Interest expense | (5,818) |  |  | 963 |  |  | (4,855) |  |  | — |  |  | (4,855) |
Transition services income | 70 |  |  | 8 |  |  | 78 |  |  | — |  |  | 78 |
Other income (expense) | 34 |  |  | (8) |  |  | 26 |  |  | — |  |  | 26 |
Net (loss) income from continuing operations before taxes | (15,391) |  |  | 3,384 |  |  | (12,007) |  |  | 747 |  |  | (11,260) |
Income tax expense | (70) |  |  | — |  |  | (70) |  |  | — |  |  | (70) |
Net (loss) income from continuing operations | (15,461) |  |  | 3,384 |  |  | (12,077) |  |  | 747 |  |  | (11,330) |
Discontinued operations: |  |  |  |  |  |  |  |  |
(Loss) gain from discontinued operations | (24,731) |  |  | 301 |  |  | (24,430) |  |  | (747) |  |  | (25,177) |
(Loss) gain from discontinued operations, net of tax | (24,731) |  |  | 301 |  |  | (24,430) |  |  | (747) |  |  | (25,177) |
Consolidated net (loss) income | $ | (40,192) |  |  | $ | 3,685 |  |  | $ | (36,507) |  |  | $ | — |  |  | $ | (36,507) |
Basic net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.51) |  |  | $ | 0.12 |  |  | $ | (0.39) |  |  | $ | 0.02 |  |  | $ | (0.37) |
(Loss) income from discontinued operations | $ | (0.82) |  |  | $ | 0.01 |  |  | $ | (0.81) |  |  | $ | (0.02) |  |  | $ | (0.83) |
Total basic net (loss) income per share | $ | (1.33) |  |  | $ | 0.13 |  |  | $ | (1.20) |  |  | $ | — |  |  | $ | (1.20) |
Diluted net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.51) |  |  | $ | 0.12 |  |  | $ | (0.39) |  |  | $ | 0.02 |  |  | $ | (0.37) |
(Loss) income from discontinued operations | $ | (0.82) |  |  | $ | 0.01 |  |  | $ | (0.81) |  |  | $ | (0.02) |  |  | $ | (0.83) |
Total diluted net (loss) income per share | $ | (1.33) |  |  | $ | 0.13 |  |  | $ | (1.20) |  |  | $ | — |  |  | $ | (1.20) |
Shares used in per share computation |  |  |  |  |  |  |  |  |
Basic | 30,304 |  | — |  |  | 30,304 |  | — |  |  | 30,304
Diluted | 30,304 |  | — |  |  | 30,304 |  | — |  |  | 30,304
| Three Months Ended February 26, 2023
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Net (loss) income | $ | (40,192) |  |  | $ | 3,685 |  |  | $ | (36,507) |  |  | $ | — |  |  | $ | (36,507) |
Total comprehensive (loss) income | $ | (40,192) |  |  | $ | 3,685 |  |  | $ | (36,507) |  |  | $ | — |  |  | $ | (36,507) |
The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the nine months February 26, 2023 are summarized in the following table:
| Nine Months Ended February 26, 2023
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Product sales | $ | 77,748 |  |  | $ | 400 |  |  | $ | 78,148 |  |  | $ | (6,025) |  |  | $ | 72,123 |
Cost of product sales | 58,178 |  |  | (905) |  |  | 57,273 |  |  | (5,356) |  |  | 51,917 |
Gross profit | 19,570 |  |  | 1,305 |  |  | 20,875 |  |  | (669) |  |  | 20,206 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |
Research and development | 6,128 |  |  | 525 |  |  | 6,653 |  |  | (32) |  |  | 6,621 |
Selling, general and administrative | 31,201 |  |  | (2,417) |  |  | 28,784 |  |  | (2,109) |  |  | 26,675 |
Impairment of indefinite-lived intangible assets | 300 |  |  | — |  |  | 300 |  |  | (300) |  |  | — |
Gain on sale of BreatheWay | (2,108) |  |  | — |  |  | (2,108) |  |  | — |  |  | (2,108) |
Restructuring costs | 4,611 |  |  | (435) |  |  | 4,176 |  |  | — |  |  | 4,176 |
Total operating costs and expenses | 40,132 |  |  | (2,327) |  |  | 37,805 |  |  | (2,441) |  |  | 35,364 |
Operating (loss) income | (20,562) |  |  | 3,632 |  |  | (16,930) |  |  | 1,772 |  |  | (15,158) |
Interest income | 53 |  |  | — |  |  | 53 |  |  | — |  |  | 53 |
Interest expense | (13,715) |  |  | 1,990 |  |  | (11,725) |  |  | — |  |  | (11,725) |
Transition services income | 70 |  |  | 76 |  |  | 146 |  |  | — |  |  | 146 |
Other (expense) income | (481) |  |  | 5 |  |  | (476) |  |  | — |  |  | (476) |
Net (loss) income from continuing operations before taxes | (34,635) |  |  | 5,703 |  |  | (28,932) |  |  | 1,772 |  |  | (27,160) |
Income tax expense | (78) |  |  | — |  |  | (78) |  |  | — |  |  | (78) |
Net (loss) income from continuing operations | (34,713) |  |  | 5,703 |  |  | (29,010) |  |  | 1,772 |  |  | (27,238) |
Discontinued operations: |  |  |  |  |  |  |  |  |
(Loss) income from discontinued operations | (29,279) |  |  | (1,990) |  |  | (31,269) |  |  | (1,772) |  |  | (33,041) |
(Loss) income from discontinued operations, net of tax | (29,279) |  |  | (1,990) |  |  | (31,269) |  |  | (1,772) |  |  | (33,041) |
Consolidated net (loss) income | $ | (63,992) |  |  | $ | 3,713 |  |  | $ | (60,279) |  |  | $ | — |  |  | $ | (60,279) |
Basic net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (1.16) |  |  | $ | 0.19 |  |  | $ | (0.97) |  |  | $ | 0.06 |  |  | $ | (0.91) |
Loss from discontinued operations | $ | (0.98) |  |  | $ | (0.07) |  |  | $ | (1.05) |  |  | $ | (0.06) |  |  | $ | (1.11) |
Total basic net (loss) income per share | $ | (2.14) |  |  | $ | 0.12 |  |  | $ | (2.02) |  |  | $ | — |  |  | $ | (2.02) |
Diluted net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (1.16) |  |  | $ | 0.19 |  |  | $ | (0.97) |  |  | $ | 0.06 |  |  | $ | (0.91) |
Loss from discontinued operations | $ | (0.98) |  |  | $ | (0.07) |  |  | $ | (1.05) |  |  | $ | (0.06) |  |  | $ | (1.11) |
Total diluted net (loss) income per share | $ | (2.14) |  |  | $ | 0.12 |  |  | $ | (2.02) |  |  | $ | — |  |  | $ | (2.02) |
Shares used in per share computation |  |  |  |  |  |  |  |  |
Basic | 29,838 |  | — |  |  | 29,838 |  | — |  |  | 29,838
Diluted | 29,838 |  | — |  |  | 29,838 |  | — |  |  | 29,838
| Nine Months Ended February 26, 2023
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Net (loss) income | $ | (63,992) |  |  | $ | 3,713 |  |  | $ | (60,279) |  |  | $ | — |  |  | $ | (60,279) |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |  |
Net unrealized gains on interest rate swaps, net of tax | 586 |  |  | — |  |  | 586 |  |  | — |  |  | 586 |
Other comprehensive income, net of tax | 586 |  |  | — |  |  | 586 |  |  | — |  |  | 586 |
Total comprehensive (loss) income | $ | (63,406) |  |  | $ | 3,713 |  |  | $ | (59,693) |  |  | $ | — |  |  | $ | (59,693) |
The effects of the restatement on the consolidated statement of convertible preferred stock and stockholders' equity (deficit) for the three and nine months ended February 26, 2023 are summarized in the following table:
| Convertible Preferred Stock |  |  | Common Stock |  | Additional Paid-in Capital |  | Retained Earnings (Accumulated Deficit) |  | Accumulated Other Comprehensive Loss |  | Total Stockholders’ Equity
| Shares |  | Amount |  |  | Shares |  | Amount |  |  |  |
As Reported |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 29, 2022 | — |  |  | $ | — |  |  |  | 29,513 |  |  | $ | 30 |  |  | $ | 167,352 |  |  | $ | (76,099) |  |  | $ | (586) |  |  | $ | 90,697 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 80 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (67) |  |  | — |  |  | — |  |  | (67) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 785 |  |  | — |  |  | — |  |  | 785 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (11,351) |  |  | — |  |  | (11,351) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 300 |  |  | 300 |
Balance at August 28, 2022 | — |  |  | $ | — |  |  |  | 29,593 |  |  | $ | 30 |  |  | $ | 168,070 |  |  | $ | (87,450) |  |  | $ | (286) |  |  | $ | 80,364 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 76 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (142) |  |  | — |  |  | — |  |  | (142) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 1,108 |  |  | — |  |  | — |  |  | 1,108 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (12,449) |  |  | — |  |  | (12,449) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 286 |  |  | 286 |
Issuance of shares to Wynnefield Capital, Inc., net of issuance costs | — |  |  | — |  |  |  | 628 |  |  | — |  |  | 5,000 |  |  | — |  |  | — |  |  | 5,000 |
Balance at November 27, 2022 | — |  |  | $ | — |  |  |  | 30,297 |  |  | $ | 30 |  |  | $ | 174,036 |  |  | $ | (99,899) |  |  | $ | — |  |  | $ | 74,167 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 22 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Proceeds of Convertible Preferred Stock, net of issuance costs | 39 |  |  | 38,082 |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Convertible Preferred Stock PIK dividend | — |  |  | 428 |  |  |  | — |  |  | — |  |  | (428) |  |  | — |  |  | — |  |  | (428) |
Cost of issuance of shares to Wynnefield Capital, Inc. | — |  |  | — |  |  |  | — |  |  | — |  |  | (178) |  |  | — |  |  | — |  |  | (178) |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (65) |  |  | — |  |  | — |  |  | (65) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 903 |  |  | — |  |  | — |  |  | 903 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (40,192) |  |  | — |  |  | (40,192) |
Balance at February 26, 2023 | 39 |  |  | $ | 38,510 |  |  |  | 30,319 |  |  | $ | 30 |  |  | $ | 174,268 |  |  | $ | (140,091) |  |  | $ | — |  |  | $ | 34,207 |
Restatements Adjustments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Opening retained earnings (at May 29, 2022) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (2,874) |  |  | — |  |  | (2,874) |
Net income at August 28, 2022 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | 385 |  |  | — |  |  | 385 |
Opening retained earnings (at August 28, 2022) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (2,489) |  |  | — |  |  | (2,489) |
Cost of issuance of shares to Wynnefield Capital, Inc. | — |  |  | — |  |  |  | — |  |  | — |  |  | (178) |  |  | — |  |  | — |  |  | (178) |
Net loss at November 27, 2022 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (357) |  |  | — |  |  | (357) |
Opening retained earnings | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (2,846) |  |  | — |  |  | (2,846) |
Q3 Accretion of Preferred Stock Issue costs | — |  |  | 25 |  |  |  | — |  |  | — |  |  | (25) |  |  | — |  |  | — |  |  | (25) |
Net income at February 26, 2023 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | 3,685 |  |  | — |  |  | 3,685 |
As Restated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 29, 2022 | — |  |  | $ | — |  |  |  | 29,513 |  |  | $ | 30 |  |  | $ | 167,352 |  |  | $ | (78,973) |  |  | $ | (586) |  |  | $ | 87,823 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 80 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (67) |  |  | — |  |  | — |  |  | (67) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 785 |  |  | — |  |  | — |  |  | 785 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (10,966) |  |  | — |  |  | (10,966) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 300 |  |  | 300 |
Balance at August 28, 2022 | — |  |  | $ | — |  |  |  | 29,593 |  |  | $ | 30 |  |  | $ | 168,070 |  |  | $ | (89,939) |  |  | $ | (286) |  |  | $ | 77,875 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 76 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (142) |  |  | — |  |  | — |  |  | (142) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 1,108 |  |  | — |  |  | — |  |  | 1,108 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (12,806) |  |  | — |  |  | (12,806) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 286 |  |  | 286 |
Issuance of shares to Wynnefield Capital, Inc., net of issuance costs | — |  |  | — |  |  |  | 628 |  |  | — |  |  | 4,822 |  |  | — |  |  | — |  |  | 4,822 |
Balance at November 27, 2022 | — |  |  | $ | — |  |  |  | 30,297 |  |  | $ | 30 |  |  | $ | 173,858 |  |  | $ | (102,745) |  |  | $ | — |  |  | $ | 71,143 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 22 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Proceeds of Convertible Preferred Stock, net of issuance costs | 39 |  |  | 38,082 |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Accretion of Convertible Preferred Stock | — |  |  | 25 |  |  |  | — |  |  | — |  |  | (25) |  |  | — |  |  | — |  |  | (25) |
Convertible Preferred Stock PIK dividend | — |  |  | 428 |  |  |  | — |  |  | — |  |  | (428) |  |  | — |  |  | — |  |  | (428) |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (65) |  |  | — |  |  | — |  |  | (65) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 903 |  |  | — |  |  | — |  |  | 903 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (36,507) |  |  | — |  |  | (36,507) |
Balance at February 26, 2023 | 39 |  |  | $ | 38,535 |  |  |  | 30,319 |  |  | $ | 30 |  |  | $ | 174,243 |  |  | $ | (139,252) |  |  | $ | — |  |  | $ | 35,021 |
The effects of the restatement on the consolidated statement of cash flows for the nine months ended February 26, 2023 are summarized in the following table:
| Nine Months Ended February 26, 2023
| As Reported |  | Restatement Adjustment |  | As Restated
Cash flows from operating activities: |  |  |  |  |
Net (loss) income | $ | (63,992) |  |  | $ | 3,713 |  |  | $ | (60,279) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |  |  |  |  |
Impairment of indefinite-lived intangible assets and goodwill | 300 |  |  | — |  |  | 300 |
Depreciation, amortization of intangibles, debt costs and right-of-use assets | 10,392 |  |  | 115 |  |  | 10,507 |
Gain on sale of BreatheWay | (2,108) |  |  | — |  |  | (2,108) |
Stock-based compensation expense | 2,796 |  |  | — |  |  | 2,796 |
Deferred taxes | 57 |  |  | — |  |  | 57 |
Provision for expected credit losses | — |  |  | 200 |  |  | 200 |
Loss (gain) on sale of Yucatan | 21,039 |  |  | (376) |  |  | 20,663 |
Other, net | 101 |  |  | — |  |  | 101 |
Changes in current assets and current liabilities: |  |  |  |  |
Accounts receivable, net | 8,994 |  |  | (51) |  |  | 8,943 |
Inventories | (13,451) |  |  | (1,396) |  |  | (14,847) |
Prepaid expenses and other current assets | (1,169) |  |  | (140) |  |  | (1,309) |
Accounts payable | 11,405 |  |  | (75) |  |  | 11,330 |
Accrued compensation | (1,895) |  |  | — |  |  | (1,895) |
Other accrued liabilities | 8,570 |  |  | — |  |  | 8,570 |
Deferred revenue | 1,792 |  |  | — |  |  | 1,792 |
Net cash (used in) provided by operating activities | (17,169) |  |  | 1,990 |  |  | (15,179) |
Cash flows from investing activities: |  |  |  |  |
Purchases of property and equipment | (12,319) |  |  | (1,990) |  |  | (14,309) |
Proceeds from the sale of BreatheWay, net | 3,135 |  |  | — |  |  | 3,135 |
Proceeds from the sale of Yucatan, net | 12,531 |  |  | — |  |  | 12,531 |
Net cash provided by (used in) investing activities | 3,347 |  |  | (1,990) |  |  | 1,357 |
Cash flows from financing activities: |  |  |  |  |
Proceeds from sale of common stock, net of issuance costs | 4,822 |  |  | — |  |  | 4,822 |
Proceeds from long-term debt | 3,367 |  |  | — |  |  | 3,367 |
Payments on long-term debt | (3,199) |  |  | — |  |  | (3,199) |
Proceeds from line of credit | 18,400 |  |  | — |  |  | 18,400 |
Payments on line of credit | (42,400) |  |  | — |  |  | (42,400) |
Taxes paid for employee stock plans | (274) |  |  | — |  |  | (274) |
Payments for debt issuance costs | (3,669) |  |  | — |  |  | (3,669) |
Proceeds from sale of preferred stock, net of issuance costs | 38,082 |  |  | — |  |  | 38,082 |
Net cash provided by financing activities | 15,129 |  |  | — |  |  | 15,129 |
Net increase in cash and cash equivalents | 1,307 |  |  | — |  |  | 1,307 |
Cash and cash equivalents, beginning of period | 1,643 |  |  | — |  |  | 1,643 |
Cash and cash equivalents, end of period | $ | 2,950 |  |  | $ | — |  |  | $ | 2,950 |
Supplemental disclosure of non-cash investing and financing activities: |  |  |  |  |
Purchases of property and equipment on trade vendor credit | $ | 3,918 |  |  | $ | — |  |  | $ | 3,918 |
Convertible Preferred Stock PIK dividend | $ | (428) |  |  | $ | — |  |  | $ | (428) |
The effects of this error on our previously reported changes in the Company’s allowance for sales returns and credit losses for the nine months ended February 26, 2023 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| February 26, 2023
(in thousands) | Balance at beginning of period |  | Provision (benefit) for expected credit losses |  | Write offs, net of recoveries |  |  |  | Balance at end of period
Nine months ended February 26, 2023, As Reported | $ | 5 |  |  | — |  |  | (1) |  |  |  |  | $ | 4 |
Restatement Adjustment | $ | 522 |  |  | 200 |  |  | (200) |  |  |  |  | $ | 522 |
Nine months ended February 26, 2023, As Restated | $ | 527 |  |  | 200 |  |  | (201) |  |  |  |  | $ | 526 |
Discontinued Operations | $ | (5) |  |  | — |  |  | 1 |  |  |  |  | $ | (4) |
Nine months ended February 26, 2023, As Restated, after Discontinued Operations | $ | 522 |  |  | 200 |  |  | (200) |  |  |  |  | $ | 522 |
The effects of this error on our previously reported inventories as of February 26, 2023 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| February 26, 2023
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Finished goods | $ | 14,636 |  |  | $ | 189 |  |  | $ | 14,825 |  |  | $ | (1,284) |  |  | $ | 13,541 |
Raw materials | 22,554 |  |  | (1,970) |  |  | 20,584 |  |  | (1,933) |  |  | 18,651 |
Work in progress | 11,506 |  |  | (1,656) |  |  | 9,850 |  |  | — |  |  | 9,850 |
Total inventories | $ | 48,696 |  |  | $ | (3,437) |  |  | $ | 45,259 |  |  | $ | (3,217) |  |  | $ | 42,042 |
The effects of this error on our previously reported basic and diluted net loss per share for the three months ended February 26, 2023 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| Three Months Ended February 26, 2023
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Numerator: |  |  |  |  |  |  |  |  |
Net (loss) income applicable to Common Stockholders | $ | (40,192) |  |  | $ | 3,685 |  |  | $ | (36,507) |  |  | $ | — |  |  | $ | (36,507) |
Denominator: |  |  |  |  |  |  |  |  |
Weighted average shares for basic net income per share | 30,304 |  |  | — |  |  | 30,304 |  |  | — |  |  | 30,304 |
Weighted average shares for diluted net income per share | 30,304 |  |  | — |  |  | 30,304 |  |  | — |  |  | 30,304 |
Diluted net (loss) income per share | $ | (1.33) |  |  | $ | 0.13 |  |  | $ | (1.20) |  |  | $ | — |  |  | $ | (1.20) |
The effects of this error on our previously reported basic and diluted net loss per share for the nine months ended February 26, 2023 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| Nine Months Ended February 26, 2023
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Numerator: |  |  |  |  |  |  |  |  |
Net (loss) income applicable to Common Stockholders | $ | (63,992) |  |  | $ | 3,713 |  |  | $ | (60,279) |  |  | $ | — |  |  | $ | (60,279) |
Denominator: |  |  |  |  |  |  |  |  |
Weighted average shares for basic net income per share | 29,838 |  |  | — |  |  | 29,838 |  |  | — |  |  | 29,838 |
Weighted average shares for diluted net income per share | 29,838 |  |  | — |  |  | 29,838 |  |  | — |  |  | 29,838 |
Diluted net (loss) income per share | $ | (2.14) |  |  | $ | 0.12 |  |  | $ | (2.02) |  |  | $ | — |  |  | $ | (2.02) |
The effects of this error on our previously reported disaggregated revenue for the three months ended February 26, 2023 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Contact development and manufacturing organization | $ | 17,809 |  |  | $ | 206 |  |  | $ | 18,015 |  |  | $ | — |  |  | $ | 18,015 |
Fermentation | 8,521 |  |  | — |  |  | 8,521 |  |  | — |  |  | 8,521 |
Total | $ | 26,330 |  |  | $ | 206 |  |  | $ | 26,536 |  |  | $ | — |  |  | $ | 26,536 |
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Olive oil and vinegars | $ | 1,270 |  |  | $ | — |  |  | $ | 1,270 |  |  | $ | (1,270) |  |  | $ | — |
Total | $ | 1,270 |  |  | $ | — |  |  | $ | 1,270 |  |  | $ | (1,270) |  |  | $ | — |
The effects of this error on our previously reported disaggregated revenue for the nine months ended February 26, 2023 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Contact development and manufacturing organization | $ | 52,088 |  |  | $ | 400 |  |  | $ | 52,488 |  |  | $ | — |  |  | $ | 52,488 |
Fermentation | 19,635 |  |  | — |  |  | 19,635 |  |  | — |  |  | 19,635 |
Total | $ | 71,723 |  |  | $ | 400 |  |  | $ | 72,123 |  |  | $ | — |  |  | $ | 72,123 |
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Olive oil and vinegars | $ | 6,025 |  |  | $ | — |  |  | $ | 6,025 |  |  | $ | (6,025) |  |  | $ | — |
Total | $ | 6,025 |  |  | $ | — |  |  | $ | 6,025 |  |  | $ | (6,025) |  |  | $ | — |
The effects of this error on our previously reported segment reporting as of and for the three months ended February 26, 2023 as presented in the Company’s Quarterly Report on Form 10-Q Note 7, are as follows. The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements as of and for the three months ended February 26, 2023. Refer to Note 14 for the related income statement line items reported in the segment table of the Company after giving effect to the discontinued operations previously reported under the Curation segment. The Company disclosed Other to reconcile the segment information to the consolidated financial statements.
| Three Months Ended February 26, 2023
(in thousands) | Lifecore |  | Curation Foods |  | Other |  | Total
Three Months Ended February 26, 2023, As Reported |  |  |  |  |  |  |
Net sales | $ | 26,330 |  |  | $ | 1,270 |  |  | $ | — |  |  | $ | 27,600 |
Gross profit | 6,072 |  |  | (94) |  |  | — |  |  | 5,978 |
Net income (loss) from continuing operations | 851 |  |  | 280 |  |  | (16,592) |  |  | (15,461) |
Loss from discontinued operations, net of tax | — |  |  | (22,802) |  |  | (1,929) |  |  | (24,731) |
Depreciation and amortization | 1,878 |  |  | 243 |  |  | 10 |  |  | 2,131 |
Interest income | 16 |  |  | — |  |  | 6 |  |  | 22 |
Interest expense | — |  |  | — |  |  | 5,818 |  |  | 5,818 |
Income tax (benefit) expense, continuing operations | 268 |  |  | (3,019) |  |  | 2,821 |  |  | 70 |
Corporate overhead allocation | 739 |  |  | 241 |  |  | (980) |  |  | — |
Restatement Adjustments |  |  |  |  |  |  |
Net sales | 206 |  |  | — |  |  | — |  |  | 206 |
Gross profit | 2,469 |  |  | — |  |  | — |  |  | 2,469 |
Net income from continuing operations | 2,557 |  |  | (2,882) |  |  | 3,709 |  |  | 3,384 |
Loss from discontinued operations, net of tax | — |  |  | 301 |  |  | — |  |  | 301 |
Depreciation and amortization | 31 |  |  | — |  |  | — |  |  | 31 |
Interest expense | — |  |  | — |  |  | (963) |  |  | (963) |
Income tax (benefit) expense, continuing operations | (288) |  |  | 3,034 |  |  | (2,746) |  |  | — |
Three Months Ended February 26, 2023, As Restated |  |  |  |  |  |  |
Net sales | $ | 26,536 |  |  | $ | 1,270 |  |  | $ | — |  |  | $ | 27,806 |
Gross profit | 8,541 |  |  | (94) |  |  | — |  |  | 8,447 |
Net income (loss) from continuing operations | 3,408 |  |  | (2,602) |  |  | (12,883) |  |  | (12,077) |
Loss from discontinued operations, net of tax | — |  |  | (22,501) |  |  | (1,929) |  |  | (24,430) |
Depreciation and amortization | 1,909 |  |  | 243 |  |  | 10 |  |  | 2,162 |
Interest income | 16 |  |  | — |  |  | 6 |  |  | 22 |
Interest expense | — |  |  | — |  |  | 4,855 |  |  | 4,855 |
Income tax (benefit) expense, continuing operations | (20) |  |  | 15 |  |  | 75 |  |  | 70 |
Corporate overhead allocation | 739 |  |  | 241 |  |  | (980) |  |  | — |
The effects of this error on our previously reported segment reporting for the nine months ended February 26, 2023 as presented in the Company’s Quarterly Report on Form 10-Q Note 7, are as follows. The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the nine months ended February 26, 2023. Refer to Note 14 for the related income statement line items reported in the segment table of the Company after giving effect to the discontinued operations previously reported under the Curation segment. The Company disclosed Other to reconcile the segment information to the consolidated financial statements.
| Nine Months Ended February 26, 2023
(in thousands) | Lifecore |  | Curation Foods |  | Other |  | Total
Nine Months Ended February 26, 2023, As Reported |  |  |  |  |  |  |
Net sales | $ | 71,723 |  |  | $ | 6,025 |  |  | $ | — |  |  | $ | 77,748 |
Gross profit | 18,847 |  |  | 723 |  |  | — |  |  | 19,570 |
Net income (loss) from continuing operations | 2,269 |  |  | (1,974) |  |  | (35,008) |  |  | (34,713) |
Loss from discontinued operations, net of tax | — |  |  | (27,350) |  |  | (1,929) |  |  | (29,279) |
Depreciation and amortization | 5,492 |  |  | 2,637 |  |  | 31 |  |  | 8,160 |
Interest income | 47 |  |  | — |  |  | 6 |  |  | 53 |
Interest expense | — |  |  | 1 |  |  | 13,714 |  |  | 13,715 |
Income tax expense (benefit), continuing operations | 717 |  |  | (4,135) |  |  | 3,496 |  |  | 78 |
Corporate overhead allocation | 2,799 |  |  | 858 |  |  | (3,657) |  |  | — |
Restatement Adjustments |  |  |  |  |  |  |
Net sales | 400 |  |  | — |  |  | — |  |  | 400 |
Gross profit | 1,355 |  |  | (50) |  |  | — |  |  | 1,305 |
Net income (loss) from continuing operations | 1,883 |  |  | (1,587) |  |  | 5,407 |  |  | 5,703 |
Loss from discontinued operations, net of tax | — |  |  | (1,990) |  |  | — |  |  | (1,990) |
Depreciation and amortization | 92 |  |  | — |  |  | — |  |  | 92 |
Interest expense | — |  |  | — |  |  | (1,990) |  |  | (1,990) |
Income tax (benefit) expense, continuing operations | (728) |  |  | 4,145 |  |  | (3,417) |  |  | — |
Nine Months Ended February 26, 2023, As Restated |  |  |  |  |  |  |
Net sales | $ | 72,123 |  |  | $ | 6,025 |  |  | $ | — |  |  | $ | 78,148 |
Gross profit | 20,202 |  |  | 673 |  |  | — |  |  | 20,875 |
Net income (loss) from continuing operations | 4,152 |  |  | (3,561) |  |  | (29,601) |  |  | (29,010) |
Loss from discontinued operations, net of tax | — |  |  | (29,340) |  |  | (1,929) |  |  | (31,269) |
Depreciation and amortization | 5,584 |  |  | 2,637 |  |  | 31 |  |  | 8,252 |
Interest income | 47 |  |  | — |  |  | 6 |  |  | 53 |
Interest expense | — |  |  | 1 |  |  | 11,724 |  |  | 11,725 |
Income tax (benefit) expense, continuing operations | (11) |  |  | 10 |  |  | 79 |  |  | 78 |
Corporate overhead allocation | 2,799 |  |  | 858 |  |  | (3,657) |  |  | — |
The effects of this error on our previously reported discontinued operations as of February 26, 2023 as presented in the Company’s Quarterly Report on Form 10-Q Note 9, are as follows:
| Yucatan Foods - As of May 29, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  |  |  |
ASSETS |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 652 |  |  | $ | — |  |  | $ | 652 |  |  |  |  |
Accounts receivable, less allowance for credit losses | 8,078 |  |  | — |  |  | 8,078 |  |  |  |  |
Inventories | 22,545 |  |  | (120) |  |  | 22,425 |  |  |  |  |
Prepaid expenses and other current assets | 1,869 |  |  | (498) |  |  | 1,371 |  |  |  |  |
Total current assets, discontinued operations | 33,144 |  |  | (618) |  |  | 32,526 |  |  |  |  |
Property and equipment, net | 3,500 |  |  | — |  |  | 3,500 |  |  |  |  |
Operating lease right-of-use assets | 2,061 |  |  | — |  |  | 2,061 |  |  |  |  |
Trademarks/tradenames, net | 4,000 |  |  | — |  |  | 4,000 |  |  |  |  |
Customer relationships, net | 1,400 |  |  | — |  |  | 1,400 |  |  |  |  |
Other assets | 102 |  |  | — |  |  | 102 |  |  |  |  |
Total other assets, discontinued operations | 11,063 |  |  | — |  |  | 11,063 |  |  |  |  |
Total assets, discontinued operations | $ | 44,207 |  |  | $ | (618) |  |  | $ | 43,589 |  |  |  |  |
LIABILITIES |  |  |  |  |  |  |  |  |
Accounts payable | $ | 2,814 |  |  | $ | — |  |  | $ | 2,814 |  |  |  |  |
Accrued compensation | 297 |  |  | — |  |  | 297 |  |  |  |  |
Other accrued liabilities | 800 |  |  | (36) |  |  | 764 |  |  |  |  |
Current portion of lease liabilities | 434 |  |  | — |  |  | 434 |  |  |  |  |
Total current liabilities, discontinued operations | 4,345 |  |  | (36) |  |  | 4,309 |  |  |  |  |
Long-term lease liabilities | 1,627 |  |  | — |  |  | 1,627 |  |  |  |  |
Non-current liabilities, discontinued operations | 1,627 |  |  | — |  |  | 1,627 |  |  |  |  |
Total liabilities, discontinued operations | $ | 5,972 |  |  | $ | (36) |  |  | $ | 5,936 |  |  |  |  |
The effects of this error on our previously reported restructuring cost for the three months ended February 26, 2023 as presented in the Company’s Quarterly Report on Form 10-Q Note 8, are as follows:
| Three Months Ended February 26, 2023
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Employee severance and benefit costs | $ | 2,362 |  |  | $ | (175) |  |  | $ | 2,187 |  |  | $ | — |  |  | $ | 2,187 |
Lease costs | 43 |  |  | — |  |  | 43 |  |  | — |  |  | 43 |
Other restructuring costs | 336 |  |  | — |  |  | 336 |  |  | — |  |  | 336 |
Total restructuring costs | $ | 2,741 |  |  | $ | (175) |  |  | $ | 2,566 |  |  | $ | — |  |  | $ | 2,566 |
| Three Months Ended February 26, 2023
| Curation |  | Other |  | Total
Total restructuring costs, As reported | $ | 901 |  |  | $ | 1,840 |  |  | $ | 2,741 |
Restatement adjustments | (175) |  |  | — |  |  | (175) |
Total restructuring costs, As restated | $ | 726 |  |  | $ | 1,840 |  |  | $ | 2,566 |
The effects of this error on our previously reported restructuring cost for the nine months ended February 26, 2023 as presented in the Company’s Quarterly Report on Form 10-Q Note 8, are as follows:
| Nine Months Ended February 26, 2023
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Employee severance and benefit costs | $ | 2,606 |  |  | $ | (324) |  |  | $ | 2,282 |  |  | $ | — |  |  | $ | 2,282 |
Lease costs | 88 |  |  | — |  |  | 88 |  |  | — |  |  | 88 |
Other restructuring costs | 1,917 |  |  | (111) |  |  | 1,806 |  |  | — |  |  | 1,806 |
Total restructuring costs | $ | 4,611 |  |  | $ | (435) |  |  | $ | 4,176 |  |  | $ | — |  |  | $ | 4,176 |
| Nine Months Ended February 26, 2023
| Curation |  | Other |  | Total
Total restructuring costs, As reported | $ | 1,509 |  |  | $ | 3,102 |  |  | $ | 4,611 |
Restatement adjustments | (435) |  |  | — |  |  | (435) |
Total restructuring costs, As restated | $ | 1,074 |  |  | $ | 3,102 |  |  | $ | 4,176 |
As of and for the three and six months ended November 27, 2022 The effects of the restatement on the consolidated balance sheet as of November 27, 2022 are summarized in the following table:
| November 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
ASSETS |  |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 6,830 |  |  | $ | — |  |  | $ | 6,830 |  |  | $ | (892) |  |  | $ | 5,938 |
Accounts receivable, net | 35,689 |  |  | (522) |  |  | 35,167 |  |  | (7,709) |  |  | 27,458 |
Inventories | 77,524 |  |  | (5,936) |  |  | 71,588 |  |  | (33,168) |  |  | 38,420 |
Prepaid expenses and other current assets | 7,049 |  |  | (1,553) |  |  | 5,496 |  |  | (3,823) |  |  | 1,673 |
Current Assets, discontinued operations | — |  |  | — |  |  | — |  |  | 45,592 |  |  | 45,592 |
Total Current Assets | 127,092 |  |  | (8,011) |  |  | 119,081 |  |  | — |  |  | 119,081 |
Property and equipment, net | 118,852 |  |  | 5,001 |  |  | 123,853 |  |  | (3,666) |  |  | 120,187 |
Operating lease right-of-use assets | 7,951 |  |  | (90) |  |  | 7,861 |  |  | (2,610) |  |  | 5,251 |
Goodwill | 13,881 |  |  | — |  |  | 13,881 |  |  | — |  |  | 13,881 |
Trademarks/tradenames, net | 7,400 |  |  | — |  |  | 7,400 |  |  | (3,200) |  |  | 4,200 |
Customer relationships, net | 1,292 |  |  | — |  |  | 1,292 |  |  | (1,292) |  |  | — |
Other assets | 2,605 |  |  | — |  |  | 2,605 |  |  | (113) |  |  | 2,492 |
Non-current Assets, discontinued operations | — |  |  | — |  |  | — |  |  | 10,881 |  |  | 10,881 |
Total Assets | $ | 279,073 |  |  | $ | (3,100) |  |  | $ | 275,973 |  |  | $ | — |  |  | $ | 275,973 |
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities: |  |  |  |  |  |  |  |  |
Accounts payable | $ | 27,971 |  |  | $ | (25) |  |  | 27,946 |  |  | $ | (14,645) |  |  | 13,301 |
Accrued compensation | 4,602 |  |  | — |  |  | 4,602 |  |  | (498) |  |  | 4,104 |
Other accrued liabilities | 10,426 |  |  | (51) |  |  | 10,375 |  |  | (1,010) |  |  | 9,365 |
Current portion of lease liabilities | 5,013 |  |  | — |  |  | 5,013 |  |  | (679) |  |  | 4,334 |
Deferred revenue | 731 |  |  | — |  |  | 731 |  |  | — |  |  | 731 |
Line of credit | 48,000 |  |  | — |  |  | 48,000 |  |  | — |  |  | 48,000 |
Current portion of long-term debt | 98,953 |  |  | — |  |  | 98,953 |  |  | — |  |  | 98,953 |
Current liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 16,832 |  |  | 16,832 |
Total Current Liabilities | 195,696 |  |  | (76) |  |  | 195,620 |  |  | — |  |  | 195,620 |
Long-term lease liabilities | 8,999 |  |  | — |  |  | 8,999 |  |  | (1,979) |  |  | 7,020 |
Deferred taxes, net | 10 |  |  | — |  |  | 10 |  |  | — |  |  | 10 |
Other non-current liabilities | 201 |  |  | — |  |  | 201 |  |  | — |  |  | 201 |
Non-current liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 1,979 |  |  | 1,979 |
Total Liabilities | 204,906 |  |  | (76) |  |  | 204,830 |  |  | — |  |  | 204,830 |
Stockholders’ Equity: |  |  |  |  |  |  |  |  |
Common stock | $ | 30 |  |  | $ | — |  |  | 30 |  |  | $ | — |  |  | 30 |
Additional paid-in capital | $ | 174,036 |  |  | $ | (178) |  |  | 173,858 |  |  | — |  |  | 173,858 |
Accumulated deficit | (99,899) |  |  | (2,846) |  |  | (102,745) |  |  | — |  |  | (102,745) |
Total Stockholders’ Equity | 74,167 |  |  | (3,024) |  |  | 71,143 |  |  | — |  |  | 71,143 |
Total Liabilities and Stockholders’ Equity | $ | 279,073 |  |  | $ | (3,100) |  |  | $ | 275,973 |  |  | $ | — |  |  | $ | 275,973 |
The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the three months November 27, 2022 are summarized in the following table:
| Three Months Ended November 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Product sales | $ | 38,802 |  |  | $ | 173 |  |  | $ | 38,975 |  |  | $ | (17,111) |  |  | $ | 21,864 |
Cost of product sales | 31,694 |  |  | 1,280 |  |  | 32,974 |  |  | (16,789) |  |  | 16,185 |
Gross profit | 7,108 |  |  | (1,107) |  |  | 6,001 |  |  | (322) |  |  | 5,679 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |
Research and development | 2,118 |  |  | 149 |  |  | 2,267 |  |  | (90) |  |  | 2,177 |
Selling, general and administrative | 10,773 |  |  | (23) |  |  | 10,750 |  |  | (2,459) |  |  | 8,291 |
Impairment of indefinite-lived intangible assets | 1,300 |  |  | — |  |  | 1,300 |  |  | (1,300) |  |  | — |
Restructuring costs | 823 |  |  | (260) |  |  | 563 |  |  | — |  |  | 563 |
Total operating costs and expenses | 15,014 |  |  | (134) |  |  | 14,880 |  |  | (3,849) |  |  | 11,031 |
Operating (loss) income | (7,906) |  |  | (973) |  |  | (8,879) |  |  | 3,527 |  |  | (5,352) |
Interest income | 16 |  |  | — |  |  | 16 |  |  | — |  |  | 16 |
Interest expense | (4,219) |  |  | 595 |  |  | (3,624) |  |  | — |  |  | (3,624) |
Transition services income | — |  |  | 24 |  |  | 24 |  |  | — |  |  | 24 |
Other (expense) income | (336) |  |  | 75 |  |  | (261) |  |  | — |  |  | (261) |
Net (loss) income from continuing operations before taxes | (12,445) |  |  | (279) |  |  | (12,724) |  |  | 3,527 |  |  | (9,197) |
Income tax expense | (4) |  |  | — |  |  | (4) |  |  | — |  |  | (4) |
Net (loss) income from continuing operations | (12,449) |  |  | (279) |  |  | (12,728) |  |  | 3,527 |  |  | (9,201) |
Discontinued operations: |  |  |  |  |  |  |  |  |
Loss from discontinued operations | — |  |  | (78) |  |  | (78) |  |  | (3,527) |  |  | (3,605) |
Loss from discontinued operations, net of tax | — |  |  | (78) |  |  | (78) |  |  | (3,527) |  |  | (3,605) |
Consolidated net loss | $ | (12,449) |  |  | $ | (357) |  |  | $ | (12,806) |  |  | $ | — |  |  | $ | (12,806) |
Basic net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.42) |  |  | $ | (0.01) |  |  | $ | (0.43) |  |  | $ | 0.12 |  |  | $ | (0.31) |
Loss from discontinued operations | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (0.12) |  |  | $ | (0.12) |
Total basic net loss per share | $ | (0.42) |  |  | $ | (0.01) |  |  | $ | (0.43) |  |  | $ | — |  |  | $ | (0.43) |
Diluted net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.42) |  |  | $ | (0.01) |  |  | $ | (0.43) |  |  | $ | 0.12 |  |  | $ | (0.31) |
Loss from discontinued operations | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (0.12) |  |  | $ | (0.12) |
Total diluted net loss per share | $ | (0.42) |  |  | $ | (0.01) |  |  | $ | (0.43) |  |  | $ | — |  |  | $ | (0.43) |
Shares used in per share computation |  |  |  |  |  |  |  |  |
Basic | 29,634 |  | — |  |  | 29,634 |  | — |  |  | 29,634
Diluted | 29,634 |  | — |  |  | 29,634 |  | — |  |  | 29,634
| Three Months Ended November 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Net loss | $ | (12,449) |  |  | $ | (357) |  |  | $ | (12,806) |  |  | $ | — |  |  | $ | (12,806) |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |  |
Net unrealized gains on interest rate swaps, net of tax | 286 |  |  | — |  |  | 286 |  |  | — |  |  | 286 |
Other comprehensive income, net of tax | 286 |  |  | — |  |  | 286 |  |  | — |  |  | 286 |
Total comprehensive loss | $ | (12,163) |  |  | $ | (357) |  |  | $ | (12,520) |  |  | $ | — |  |  | $ | (12,520) |
The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the six months November 27, 2022 are summarized in the following table:
| Six Months Ended November 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Product sales | $ | 82,157 |  |  | $ | 194 |  |  | $ | 82,351 |  |  | $ | (36,764) |  |  | $ | 45,587 |
Cost of product sales | 68,797 |  |  | 1,358 |  |  | 70,155 |  |  | (36,226) |  |  | 33,929 |
Gross profit | 13,360 |  |  | (1,164) |  |  | 12,196 |  |  | (538) |  |  | 11,658 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |
Research and development | 4,166 |  |  | 391 |  |  | 4,557 |  |  | (169) |  |  | 4,388 |
Selling, general and administrative | 21,435 |  |  | 1,788 |  |  | 23,223 |  |  | (6,828) |  |  | 16,395 |
Impairment of indefinite-lived intangible assets | 1,300 |  |  | — |  |  | 1,300 |  |  | (1,300) |  |  | — |
Gain on sale of BreatheWay | — |  |  | (2,108) |  |  | (2,108) |  |  | — |  |  | (2,108) |
Restructuring costs | 1,870 |  |  | (260) |  |  | 1,610 |  |  | — |  |  | 1,610 |
Total operating costs and expenses | 28,771 |  |  | (189) |  |  | 28,582 |  |  | (8,297) |  |  | 20,285 |
Operating (loss) income | (15,411) |  |  | (975) |  |  | (16,386) |  |  | 7,759 |  |  | (8,627) |
Interest income | 31 |  |  | — |  |  | 31 |  |  | — |  |  | 31 |
Interest expense | (7,897) |  |  | 1,027 |  |  | (6,870) |  |  | — |  |  | (6,870) |
Transition services income | — |  |  | 68 |  |  | 68 |  |  | — |  |  | 68 |
Other (expense) income | (515) |  |  | 13 |  |  | (502) |  |  | — |  |  | (502) |
Net (loss) income from continuing operations before taxes | (23,792) |  |  | 133 |  |  | (23,659) |  |  | 7,759 |  |  | (15,900) |
Income tax expense | (8) |  |  | — |  |  | (8) |  |  | — |  |  | (8) |
Net (loss) income from continuing operations | (23,800) |  |  | 133 |  |  | (23,667) |  |  | 7,759 |  |  | (15,908) |
Discontinued operations: |  |  |  |  |  |  |  |  |
Loss from discontinued operations | — |  |  | (105) |  |  | (105) |  |  | (7,759) |  |  | (7,864) |
Loss from discontinued operations, net of tax | — |  |  | (105) |  |  | (105) |  |  | (7,759) |  |  | (7,864) |
Consolidated net (loss) income | $ | (23,800) |  |  | $ | 28 |  |  | $ | (23,772) |  |  | $ | — |  |  | $ | (23,772) |
Basic net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.80) |  |  | $ | — |  |  | $ | (0.80) |  |  | $ | 0.26 |  |  | $ | (0.54) |
Loss from discontinued operations | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (0.26) |  |  | $ | (0.26) |
Total basic net loss per share | $ | (0.80) |  |  | $ | — |  |  | $ | (0.80) |  |  | $ | — |  |  | $ | (0.80) |
Diluted net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.80) |  |  | $ | — |  |  | $ | (0.80) |  |  | $ | 0.26 |  |  | $ | (0.54) |
Loss from discontinued operations | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (0.26) |  |  | $ | (0.26) |
Total diluted net loss per share | $ | (0.80) |  |  | $ | — |  |  | $ | (0.80) |  |  | $ | — |  |  | $ | (0.80) |
Shares used in per share computation |  |  |  |  |  |  |  |  |
Basic | 29,605 |  | — |  |  | 29,605 |  | — |  |  | 29,605
Diluted | 29,605 |  | — |  |  | 29,605 |  | — |  |  | 29,605
| Six Months Ended November 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Net (loss) income | $ | (23,800) |  |  | $ | 28 |  |  | $ | (23,772) |  |  | $ | — |  |  | $ | (23,772) |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |  |
Net unrealized gains on interest rate swaps, net of tax | 586 |  |  | — |  |  | 586 |  |  | — |  |  | 586 |
Other comprehensive income, net of tax | 586 |  |  | — |  |  | 586 |  |  | — |  |  | 586 |
Total comprehensive (loss) income | $ | (23,214) |  |  | $ | 28 |  |  | $ | (23,186) |  |  | $ | — |  |  | $ | (23,186) |
The effects of the restatement on the consolidated statement of convertible preferred stock and stockholders’ equity (deficit) for the three and six months ended November 27, 2022 are summarized in the following table:
| Convertible Preferred Stock |  |  | Common Stock |  | Additional Paid-in Capital |  | Retained Earnings (Accumulated Deficit) |  | Accumulated Other Comprehensive Loss |  | Total Stockholders’ Equity
| Shares |  | Amount |  |  | Shares |  | Amount |  |  |  |
As Reported |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 29, 2022 | — |  |  | $ | — |  |  |  | 29,513 |  |  | $ | 30 |  |  | $ | 167,352 |  |  | $ | (76,099) |  |  | $ | (586) |  |  | $ | 90,697 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 80 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (67) |  |  | — |  |  | — |  |  | (67) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 785 |  |  | — |  |  | — |  |  | 785 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (11,351) |  |  | — |  |  | (11,351) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 300 |  |  | 300 |
Balance at August 28, 2022 | — |  |  | $ | — |  |  |  | 29,593 |  |  | $ | 30 |  |  | $ | 168,070 |  |  | $ | (87,450) |  |  | $ | (286) |  |  | $ | 80,364 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 76 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (142) |  |  | — |  |  | — |  |  | (142) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 1,108 |  |  | — |  |  | — |  |  | 1,108 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (12,449) |  |  | — |  |  | (12,449) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 286 |  |  | 286 |
Issuance of shares to Wynnefield Capital, Inc., net of issuance costs | — |  |  | — |  |  |  | 628 |  |  | — |  |  | 5,000 |  |  | — |  |  | — |  |  | 5,000 |
Balance at November 27, 2022 | — |  |  | $ | — |  |  |  | 30,297 |  |  | $ | 30 |  |  | $ | 174,036 |  |  | $ | (99,899) |  |  | $ | — |  |  | $ | 74,167 |
Restatements Adjustments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Opening retained earnings (at May 29, 2022) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (2,874) |  |  | — |  |  | (2,874) |
Net income at August 28, 2022 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | 385 |  |  | — |  |  | 385 |
Opening retained earnings (at August 28, 2022) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (2,489) |  |  | — |  |  | (2,489) |
Cost of issuance of shares to Wynnefield Capital, Inc. | — |  |  | — |  |  |  | — |  |  | — |  |  | (178) |  |  | — |  |  | — |  |  | (178) |
Net loss at November 27, 2022 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (357) |  |  | — |  |  | (357) |
As Restated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 29, 2022 | — |  |  | $ | — |  |  |  | 29,513 |  |  | $ | 30 |  |  | $ | 167,352 |  |  | $ | (78,973) |  |  | $ | (586) |  |  | $ | 87,823 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 80 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (67) |  |  | — |  |  | — |  |  | (67) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 785 |  |  | — |  |  | — |  |  | 785 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (10,966) |  |  | — |  |  | (10,966) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 300 |  |  | 300 |
Balance at August 28, 2022 | — |  |  | $ | — |  |  |  | 29,593 |  |  | $ | 30 |  |  | $ | 168,070 |  |  | $ | (89,939) |  |  | $ | (286) |  |  | $ | 77,875 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 76 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (142) |  |  | — |  |  | — |  |  | (142) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 1,108 |  |  | — |  |  | — |  |  | 1,108 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (12,806) |  |  | — |  |  | (12,806) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 286 |  |  | 286 |
Issuance of shares to Wynnefield Capital, Inc., net of issuance costs | — |  |  | — |  |  |  | 628 |  |  | — |  |  | 4,822 |  |  | — |  |  | — |  |  | 4,822 |
Balance at November 27, 2022 | — |  |  | $ | — |  |  |  | 30,297 |  |  | $ | 30 |  |  | $ | 173,858 |  |  | $ | (102,745) |  |  | $ | — |  |  | $ | 71,143 |
The effects of the restatement on the consolidated statement of cash flows for the six months ended November 27, 2022 are summarized in the following table:
| Six Months Ended November 27, 2022
| As Reported |  | Restatement Adjustment |  | As Restated
Cash flows from operating activities: |  |  |  |  |
Net (loss) income | $ | (23,800) |  |  | $ | 28 |  |  | $ | (23,772) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |  |  |  |  |
Impairment of indefinite-lived intangible assets and goodwill | 1,300 |  |  | — |  |  | 1,300 |
Depreciation, amortization of intangibles, debt costs and right-of-use assets | 7,237 |  |  | 57 |  |  | 7,294 |
Gain on sale of BreatheWay | (2,108) |  |  | — |  |  | (2,108) |
Stock-based compensation expense | 1,893 |  |  | — |  |  | 1,893 |
Deferred taxes | (13) |  |  | — |  |  | (13) |
Net loss on disposal of property and equipment held and used | 22 |  |  | — |  |  | 22 |
Other, net | 86 |  |  | — |  |  | 86 |
Changes in current assets and current liabilities: |  |  |  |  |
Accounts receivable, net | 12,483 |  |  | — |  |  | 12,483 |
Inventories | (10,679) |  |  | 1,103 |  |  | (9,576) |
Prepaid expenses and other current assets | (585) |  |  | (140) |  |  | (725) |
Accounts payable | 11,730 |  |  | (21) |  |  | 11,709 |
Accrued compensation | (4,636) |  |  | — |  |  | (4,636) |
Other accrued liabilities | 2,777 |  |  | — |  |  | 2,777 |
Deferred revenue | (188) |  |  | — |  |  | (188) |
Net cash (used in) provided by operating activities | (4,481) |  |  | 1,027 |  |  | (3,454) |
Cash flows from investing activities: |  |  |  |  |
Proceeds from sale of BreatheWay, net | 3,135 |  |  | — |  |  | 3,135 |
Purchases of property and equipment | (6,182) |  |  | (1,027) |  |  | (7,209) |
Net cash used in investing activities | (3,047) |  |  | (1,027) |  |  | (4,074) |
Cash flows from financing activities: |  |  |  |  |
Proceeds from sale of common stock | 5,000 |  |  | — |  |  | 5,000 |
Payments on long-term debt | (76) |  |  | — |  |  | (76) |
Proceeds from line of credit | 8,800 |  |  | — |  |  | 8,800 |
Payments on line of credit | (800) |  |  | — |  |  | (800) |
Taxes paid by Company for employee stock plans | (209) |  |  | — |  |  | (209) |
Net cash provided by financing activities | 12,715 |  |  | — |  |  | 12,715 |
Net increase in cash and cash equivalents | 5,187 |  |  | — |  |  | 5,187 |
Cash and cash equivalents, beginning of period | 1,643 |  |  | — |  |  | 1,643 |
Cash and cash equivalents, end of period | $ | 6,830 |  |  | $ | — |  |  | $ | 6,830 |
Supplemental disclosure of non-cash investing and financing activities: |  |  |  |  |
Purchases of property and equipment on trade vendor credit | $ | 2,700 |  |  | $ | — |  |  | $ | 2,700 |
The effects of this error on our previously reported changes in the Company’s allowance for sales returns and credit losses for the quarter ended November 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| November 27, 2022
| Balance at beginning of period |  | Provision (benefit) for expected credit losses |  | Write offs, net of recoveries |  |  |  | Balance at end of period
Six months ended November 27, 2022, As Reported | $ | 65 |  |  | — |  |  | — |  |  |  |  | $ | 65 |
Restatement Adjustment | $ | 522 |  |  | — |  |  | — |  |  |  |  | $ | 522 |
Six months ended November 27, 2022, As Restated | $ | 587 |  |  | — |  |  | — |  |  |  |  | $ | 587 |
Discontinued Operations | $ | (65) |  |  | — |  |  | — |  |  |  |  | $ | (65) |
Six months ended November 27, 2022, As Restated, after Discontinued Operations | $ | 522 |  |  | — |  |  | — |  |  |  |  | $ | 522 |
The effects of this error on our previously reported inventories as of November 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| November 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Finished goods | $ | 38,882 |  |  | $ | 185 |  |  | $ | 39,067 |  |  | $ | (23,408) |  |  | $ | 15,659 |
Raw materials | 26,959 |  |  | (2,482) |  |  | 24,477 |  |  | (9,000) |  |  | 15,477 |
Work in progress | 11,683 |  |  | (3,639) |  |  | 8,044 |  |  | (760) |  |  | 7,284 |
Total inventories | $ | 77,524 |  |  | $ | (5,936) |  |  | $ | 71,588 |  |  | $ | (33,168) |  |  | $ | 38,420 |
The effects of this error on our previously reported basic and diluted net loss per share for the three months ended November 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| Three Months Ended November 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Numerator: |  |  |  |  |  |  |  |  |
Net loss applicable to Common Stockholders | $ | (12,449) |  |  | $ | (357) |  |  | $ | (12,806) |  |  | $ | — |  |  | $ | (12,806) |
Denominator: |  |  |  |  |  |  |  |  |
Weighted average shares for basic net income per share | 29,634 |  |  | — |  |  | 29,634 |  |  | — |  |  | 29,634 |
Weighted average shares for diluted net income per share | 29,634 |  |  | — |  |  | 29,634 |  |  | — |  |  | 29,634 |
Diluted net loss per share | $ | (0.42) |  |  | $ | (0.01) |  |  | $ | (0.43) |  |  | $ | — |  |  | $ | (0.43) |
The effects of this error on our previously reported basic and diluted net loss per share for the six months ended November 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| Six Months Ended November 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Numerator: |  |  |  |  |  |  |  |  |
Net (loss) income applicable to Common Stockholders | $ | (23,800) |  |  | $ | 28 |  |  | $ | (23,772) |  |  | $ | — |  |  | $ | (23,772) |
Denominator: |  |  |  |  |  |  |  |  |
Weighted average shares for basic net income per share | 29,605 |  |  | — |  |  | 29,605 |  |  | — |  |  | 29,605 |
Weighted average shares for diluted net income per share | 29,605 |  |  | — |  |  | 29,605 |  |  | — |  |  | 29,605 |
Diluted loss income per share | $ | (0.80) |  |  | $ | — |  |  | $ | (0.80) |  |  | $ | — |  |  | $ | (0.80) |
The effects of this error on our previously reported disaggregated revenue for the three months ended November 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Contact development and manufacturing organization | $ | 16,032 |  |  | $ | 173 |  |  | $ | 16,205 |  |  | $ | — |  |  | $ | 16,205 |
Fermentation | 5,659 |  |  | — |  |  | 5,659 |  |  | — |  |  | 5,659 |
Total | $ | 21,691 |  |  | $ | 173 |  |  | $ | 21,864 |  |  | $ | — |  |  | $ | 21,864 |
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Avocado Products | $ | 14,915 |  |  | $ | — |  |  | $ | 14,915 |  |  | $ | (14,915) |  |  | $ | — |
Olive oil and vinegars | 2,196 |  |  | — |  |  | 2,196 |  |  | (2,196) |  |  | — |
Total | $ | 17,111 |  |  | $ | — |  |  | $ | 17,111 |  |  | $ | (17,111) |  |  | $ | — |
The effects of this error on our previously reported disaggregated revenue for the six months ended November 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Contact development and manufacturing organization | $ | 34,279 |  |  | $ | 194 |  |  | $ | 34,473 |  |  | $ | — |  |  | $ | 34,473 |
Fermentation | 11,114 |  |  | — |  |  | 11,114 |  |  | — |  |  | 11,114 |
Total | $ | 45,393 |  |  | $ | 194 |  |  | $ | 45,587 |  |  | $ | — |  |  | $ | 45,587 |
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Avocado Products | $ | 32,009 |  |  | $ | — |  |  | $ | 32,009 |  |  | $ | (32,009) |  |  | $ | — |
Olive oil and vinegars | 4,755 |  |  | — |  |  | 4,755 |  |  | (4,755) |  |  | — |
Total | $ | 36,764 |  |  | $ | — |  |  | $ | 36,764 |  |  | $ | (36,764) |  |  | $ | — |
The effects of this error on our previously reported segment reporting for the three months ended November 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 7, are as follows. The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the three months ended November 27, 2022. Refer to Note 14 for the related income statement line items reported in the segment table of the Company after giving effect to the discontinued operations previously reported under the Curation segment. The Company disclosed Other to reconcile the segment information to the consolidated financial statements.
| Three Months Ended November 27, 2022
(in thousands) | Lifecore |  | Curation Foods |  | Other |  | Total
Three Months Ended November 27, 2022, As Reported |  |  |  |  |  |  |
Net sales | $ | 21,691 |  |  | $ | 17,111 |  |  | $ | — |  |  | $ | 38,802 |
Gross profit | 6,675 |  |  | 433 |  |  | — |  |  | 7,108 |
Net income (loss) from continuing operations | 916 |  |  | (3,295) |  |  | (10,070) |  |  | (12,449) |
Depreciation and amortization | 1,843 |  |  | 588 |  |  | 11 |  |  | 2,442 |
Interest income | 16 |  |  | — |  |  | — |  |  | 16 |
Interest expense | — |  |  | — |  |  | 4,219 |  |  | 4,219 |
Income tax expense (benefit), continuing operations | 290 |  |  | (836) |  |  | 550 |  |  | 4 |
Corporate overhead allocation | 1,022 |  |  | 283 |  |  | (1,305) |  |  | — |
Restatement Adjustments |  |  |  |  |  |  |
Net sales | 173 |  |  | — |  |  | — |  |  | 173 |
Gross profit | (987) |  |  | (120) |  |  | — |  |  | (1,107) |
Net (loss) income from continuing operations | (697) |  |  | (724) |  |  | 1,142 |  |  | (279) |
Loss from discontinued operations, net of tax | — |  |  | (78) |  |  | — |  |  | (78) |
Depreciation and amortization | 31 |  |  | — |  |  | — |  |  | 31 |
Interest expense | — |  |  | — |  |  | (595) |  |  | (595) |
Income tax (benefit) expense, continuing operations | (290) |  |  | 837 |  |  | (547) |  |  | — |
Three Months Ended November 27, 2022, As Restated |  |  |  |  |  |  |
Net sales | $ | 21,864 |  |  | $ | 17,111 |  |  | $ | — |  |  | $ | 38,975 |
Gross profit | 5,688 |  |  | 313 |  |  | — |  |  | 6,001 |
Net loss from continuing operations | 219 |  |  | (4,019) |  |  | (8,928) |  |  | (12,728) |
Loss from discontinued operations, net of tax | — |  |  | (78) |  |  | — |  |  | (78) |
Depreciation and amortization | 1,874 |  |  | 588 |  |  | 11 |  |  | 2,473 |
Interest income | 16 |  |  | — |  |  | — |  |  | 16 |
Interest expense | — |  |  | — |  |  | 3,624 |  |  | 3,624 |
Income tax expense, continuing operations | — |  |  | 1 |  |  | 3 |  |  | 4 |
Corporate overhead allocation | 1,022 |  |  | 283 |  |  | (1,305) |  |  | — |
The effects of this error on our previously reported segment reporting for the six months ended November 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 7, are as follows. The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the six months ended November 27, 2022. Refer to Note 14 for the related income statement line items reported in the segment table of the Company after giving effect to the discontinued operations previously reported under the Curation segment. The Company disclosed Other to reconcile the segment information to the consolidated financial statements.
| Six Months Ended November 27, 2022
(in thousands) | Lifecore |  | Curation Foods |  | Other |  | Total
Six Months Ended November 27, 2022, As Reported |  |  |  |  |  |  |
Net sales | $ | 45,393 |  |  | $ | 36,764 |  |  | $ | — |  |  | $ | 82,157 |
Gross profit | 12,776 |  |  | 584 |  |  | — |  |  | 13,360 |
Net income (loss) from continuing operations | 1,419 |  |  | (6,017) |  |  | (19,202) |  |  | (23,800) |
Depreciation and amortization | 3,614 |  |  | 2,756 |  |  | 21 |  |  | 6,391 |
Interest income | 31 |  |  | — |  |  | — |  |  | 31 |
Interest expense | — |  |  | 1 |  |  | 7,896 |  |  | 7,897 |
Income tax (benefit) expense, continuing operations | 448 |  |  | (1,901) |  |  | 1,461 |  |  | 8 |
Corporate overhead allocation | 2,060 |  |  | 617 |  |  | (2,677) |  |  | — |
Restatement Adjustments |  |  |  |  |  |  |
Net sales | 194 |  |  | — |  |  | — |  |  | 194 |
Gross profit | (1,114) |  |  | (50) |  |  | — |  |  | (1,164) |
Net (loss) income from continuing operations | (666) |  |  | (1,684) |  |  | 2,483 |  |  | 133 |
Loss from discontinued operations, net of tax | — |  |  | (105) |  |  | — |  |  | (105) |
Depreciation and amortization | 61 |  |  | — |  |  | — |  |  | 61 |
Interest expense | — |  |  | — |  |  | (1,027) |  |  | (1,027) |
Income tax (benefit) expense, continuing operations | (448) |  |  | 1,904 |  |  | (1,456) |  |  | — |
Six Months Ended November 27, 2022, As Restated |  |  |  |  |  |  |
Net sales | $ | 45,587 |  |  | $ | 36,764 |  |  | $ | — |  |  | $ | 82,351 |
Gross profit | 11,662 |  |  | 534 |  |  | — |  |  | 12,196 |
Net income (loss) from continuing operations | 753 |  |  | (7,701) |  |  | (16,719) |  |  | (23,667) |
Loss from discontinued operations, net of tax | — |  |  | (105) |  |  | — |  |  | (105) |
Depreciation and amortization | 3,675 |  |  | 2,756 |  |  | 21 |  |  | 6,452 |
Interest income | 31 |  |  | — |  |  | — |  |  | 31 |
Interest expense | — |  |  | 1 |  |  | 6,869 |  |  | 6,870 |
Income tax (benefit) expense, continuing operations | — |  |  | 3 |  |  | 5 |  |  | 8 |
Corporate overhead allocation | 2,060 |  |  | 617 |  |  | (2,677) |  |  | — |
The effects of this error on our previously reported restructuring cost for the three months ended November 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 8, are as follows:
| Three Months Ended November 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Employee severance and benefit costs | $ | 36 |  |  | $ | (149) |  |  | $ | (113) |  |  | $ | — |  |  | $ | (113) |
Lease costs | 25 |  |  | — |  |  | 25 |  |  | — |  |  | 25 |
Other restructuring costs | 762 |  |  | (111) |  |  | 651 |  |  | — |  |  | 651 |
Total restructuring costs | $ | 823 |  |  | $ | (260) |  |  | $ | 563 |  |  | $ | — |  |  | $ | 563 |
| Three Months Ended November 27, 2022
| Curation |  | Other |  | Total
Total restructuring costs, As reported | $ | 186 |  |  | $ | 637 |  |  | $ | 823 |
Restatement adjustments | (260) |  |  | — |  |  | (260) |
Total restructuring costs, As restated | $ | (74) |  |  | $ | 637 |  |  | $ | 563 |
The effects of this error on our previously reported restructuring cost for the six months ended November 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 8, are as follows:
| Six Months Ended November 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Employee severance and benefit costs | $ | 244 |  |  | $ | (149) |  |  | $ | 95 |  |  | $ | — |  |  | $ | 95 |
Lease costs | 45 |  |  | — |  |  | 45 |  |  | — |  |  | 45 |
Other restructuring costs | 1,581 |  |  | (111) |  |  | 1,470 |  |  | — |  |  | 1,470 |
Total restructuring costs | $ | 1,870 |  |  | $ | (260) |  |  | $ | 1,610 |  |  | $ | — |  |  | $ | 1,610 |
| Six Months Ended November 27, 2022
| Curation |  | Other |  | Total
Total restructuring costs, As reported | $ | 608 |  |  | $ | 1,262 |  |  | $ | 1,870 |
Restatement adjustments | (260) |  |  | — |  |  | (260) |
Total restructuring costs, As restated | $ | 348 |  |  | $ | 1,262 |  |  | $ | 1,610 |
As of and for the three months ended August 28, 2022 The effects of the restatement on the consolidated balance sheet as of August 28, 2022 are summarized in the following table:
| August 28, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
ASSETS |  |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 4,222 |  |  | $ | — |  |  | $ | 4,222 |  |  | $ | (1,682) |  |  | $ | 2,540 |
Accounts receivable, net | 40,934 |  |  | (522) |  |  | 40,412 |  |  | (8,483) |  |  | 31,929 |
Inventories | 64,285 |  |  | (4,860) |  |  | 59,425 |  |  | (23,271) |  |  | 36,154 |
Prepaid expenses and other current assets | 7,157 |  |  | (1,711) |  |  | 5,446 |  |  | (3,460) |  |  | 1,986 |
Current Assets, discontinued operations | — |  |  | — |  |  | — |  |  | 36,896 |  |  | 36,896 |
Total Current Assets | 116,598 |  |  | (7,093) |  |  | 109,505 |  |  | — |  |  | 109,505 |
Property and equipment, net | 117,551 |  |  | 4,437 |  |  | 121,988 |  |  | (3,798) |  |  | 118,190 |
Operating lease right-of-use assets | 8,229 |  |  | (62) |  |  | 8,167 |  |  | (2,771) |  |  | 5,396 |
Goodwill | 13,881 |  |  | — |  |  | 13,881 |  |  | — |  |  | 13,881 |
Trademarks/tradenames, net | 8,700 |  |  | — |  |  | 8,700 |  |  | (4,500) |  |  | 4,200 |
Customer relationships, net | 1,346 |  |  | — |  |  | 1,346 |  |  | (1,346) |  |  | — |
Other assets | 2,793 |  |  | — |  |  | 2,793 |  |  | (113) |  |  | 2,680 |
Non-current Assets, discontinued operations | — |  |  | — |  |  | — |  |  | 12,528 |  |  | 12,528 |
Total Assets | $ | 269,098 |  |  | $ | (2,718) |  |  | $ | 266,380 |  |  | $ | — |  |  | $ | 266,380 |
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities: |  |  |  |  |  |  |  |  |
Accounts payable | $ | 16,366 |  |  | $ | — |  |  | $ | 16,366 |  |  | $ | (6,743) |  |  | $ | 9,623 |
Accrued compensation | 6,373 |  |  | — |  |  | 6,373 |  |  | (452) |  |  | 5,921 |
Other accrued liabilities | 7,832 |  |  | (229) |  |  | 7,603 |  |  | (981) |  |  | 6,622 |
Current portion of lease liabilities | 5,021 |  |  | — |  |  | 5,021 |  |  | (669) |  |  | 4,352 |
Deferred revenue | 803 |  |  | — |  |  | 803 |  |  | — |  |  | 803 |
Line of credit | 44,000 |  |  | — |  |  | 44,000 |  |  | — |  |  | 44,000 |
Current portion of long-term debt | 98,569 |  |  | — |  |  | 98,569 |  |  | — |  |  | 98,569 |
Current liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 8,845 |  |  | 8,845 |
Total Current Liabilities | 178,964 |  |  | (229) |  |  | 178,735 |  |  | — |  |  | 178,735 |
Long-term lease liabilities | 9,447 |  |  | — |  |  | 9,447 |  |  | (2,153) |  |  | 7,294 |
Deferred taxes, net | 124 |  |  | — |  |  | 124 |  |  | — |  |  | 124 |
Other non-current liabilities | 199 |  |  | — |  |  | 199 |  |  | — |  |  | 199 |
Non-current liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 2,153 |  |  | 2,153 |
Total Liabilities | 188,734 |  |  | (229) |  |  | 188,505 |  |  | — |  |  | 188,505 |
Stockholders’ Equity: |  |  |  |  |  |  |  |  |
Common stock | 30 |  |  | — |  |  | 30 |  |  | — |  |  | 30 |
Additional paid-in capital | 168,070 |  |  | — |  |  | 168,070 |  |  | — |  |  | 168,070 |
Accumulated deficit | (87,450) |  |  | (2,489) |  |  | (89,939) |  |  | — |  |  | (89,939) |
Accumulated other comprehensive loss | (286) |  |  | — |  |  | (286) |  |  | — |  |  | (286) |
Total Stockholders’ Equity | 80,364 |  |  | (2,489) |  |  | 77,875 |  |  | — |  |  | 77,875 |
Total Liabilities and Stockholders’ Equity | $ | 269,098 |  |  | $ | (2,718) |  |  | $ | 266,380 |  |  | $ | — |  |  | $ | 266,380 |
The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the three months August 28, 2022 are summarized in the following table:
| Three Months Ended August 28, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Product sales | $ | 43,355 |  |  | $ | 21 |  |  | $ | 43,376 |  |  | $ | (19,652) |  |  | $ | 23,724 |
Cost of product sales | 37,103 |  |  | 78 |  |  | 37,181 |  |  | (19,436) |  |  | 17,745 |
Gross profit | 6,252 |  |  | (57) |  |  | 6,195 |  |  | (216) |  |  | 5,979 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |
Research and development | 2,048 |  |  | 242 |  |  | 2,290 |  |  | (79) |  |  | 2,211 |
Selling, general and administrative | 10,661 |  |  | 1,811 |  |  | 12,472 |  |  | (4,369) |  |  | 8,103 |
Gain on sale of BreatheWay | — |  |  | (2,108) |  |  | (2,108) |  |  | — |  |  | (2,108) |
Restructuring costs | 1,047 |  |  | — |  |  | 1,047 |  |  | — |  |  | 1,047 |
Total operating costs and expenses | 13,756 |  |  | (55) |  |  | 13,701 |  |  | (4,448) |  |  | 9,253 |
Operating (loss) income | (7,504) |  |  | (2) |  |  | (7,506) |  |  | 4,232 |  |  | (3,274) |
Interest income | 15 |  |  | — |  |  | 15 |  |  | — |  |  | 15 |
Interest expense | (3,678) |  |  | 432 |  |  | (3,246) |  |  | — |  |  | (3,246) |
Transition services income | — |  |  | 44 |  |  | 44 |  |  | — |  |  | 44 |
Other expense | (180) |  |  | (62) |  |  | (242) |  |  | — |  |  | (242) |
Net (loss) income from continuing operations before taxes | (11,347) |  |  | 412 |  |  | (10,935) |  |  | 4,232 |  |  | (6,703) |
Income tax expense | (4) |  |  | — |  |  | (4) |  |  | — |  |  | (4) |
Net (loss) income from continuing operations | (11,351) |  |  | 412 |  |  | (10,939) |  |  | 4,232 |  |  | (6,707) |
Discontinued operations: |  |  |  |  |  |  |  |  |
Loss from discontinued operations | — |  |  | (27) |  |  | (27) |  |  | (4,232) |  |  | (4,259) |
Loss from discontinued operations, net of tax | — |  |  | (27) |  |  | (27) |  |  | (4,232) |  |  | (4,259) |
Consolidated net (loss) income | $ | (11,351) |  |  | $ | 385 |  |  | $ | (10,966) |  |  | $ | — |  |  | $ | (10,966) |
Basic net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.38) |  |  | $ | 0.01 |  |  | $ | (0.37) |  |  | $ | 0.14 |  |  | $ | (0.23) |
Loss from discontinued operations | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (0.14) |  |  | $ | (0.14) |
Total basic net (loss) income per share | $ | (0.38) |  |  | $ | 0.01 |  |  | $ | (0.37) |  |  | $ | — |  |  | $ | (0.37) |
Diluted net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.38) |  |  | $ | 0.01 |  |  | $ | (0.37) |  |  | $ | 0.14 |  |  | $ | (0.23) |
Loss from discontinued operations | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (0.14) |  |  | $ | (0.14) |
Total diluted net (loss) income per share | $ | (0.38) |  |  | $ | 0.01 |  |  | $ | (0.37) |  |  | $ | — |  |  | $ | (0.37) |
Shares used in per share computation |  |  |  |  |  |  |  |  |
Basic | 29,577 |  | — |  |  | 29,577 |  | — |  |  | 29,577
Diluted | 29,577 |  | — |  |  | 29,577 |  | — |  |  | 29,577
| Three Months Ended August 28, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Net (loss) income | $ | (11,351) |  |  | $ | 385 |  |  | $ | (10,966) |  |  | $ | — |  |  | $ | (10,966) |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |  |
Net unrealized gains on interest rate swaps, net of tax | 300 |  |  | — |  |  | 300 |  |  | — |  |  | 300 |
Other comprehensive income, net of tax | 300 |  |  | — |  |  | 300 |  |  | — |  |  | 300 |
Total comprehensive (loss) income | $ | (11,051) |  |  | $ | 385 |  |  | $ | (10,666) |  |  | $ | — |  |  | $ | (10,666) |
The effects of the restatement on the consolidated statement of convertible preferred stock and stockholders’ equity (deficit) for the three months ended August 28, 2022 are summarized in the following table:
| Convertible Preferred Stock |  |  | Common Stock |  | Additional Paid-in Capital |  | Retained Earnings (Accumulated Deficit) |  | Accumulated Other Comprehensive Loss |  | Total Stockholders’ Equity
| Shares |  | Amount |  |  | Shares |  | Amount |  |  |  |
As Reported |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 29, 2022 | — |  |  | $ | — |  |  |  | 29,513 |  |  | $ | 30 |  |  | $ | 167,352 |  |  | $ | (76,099) |  |  | $ | (586) |  |  | $ | 90,697 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 80 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (67) |  |  | — |  |  | — |  |  | (67) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 785 |  |  | — |  |  | — |  |  | 785 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (11,351) |  |  | — |  |  | (11,351) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 300 |  |  | 300 |
Balance at August 28, 2022 | — |  |  | $ | — |  |  |  | 29,593 |  |  | $ | 30 |  |  | $ | 168,070 |  |  | $ | (87,450) |  |  | $ | (286) |  |  | $ | 80,364 |
Restatements Adjustments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Opening retained earnings (at May 29, 2022) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (2,874) |  |  | — |  |  | (2,874) |
Net income at August 28, 2022 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | 385 |  |  | — |  |  | 385 |
As Restated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 29, 2022 | — |  |  | $ | — |  |  |  | 29,513 |  |  | $ | 30 |  |  | $ | 167,352 |  |  | $ | (78,973) |  |  | $ | (586) |  |  | $ | 87,823 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 80 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (67) |  |  | — |  |  | — |  |  | (67) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 785 |  |  | — |  |  | — |  |  | 785 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (10,966) |  |  | — |  |  | (10,966) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 300 |  |  | 300 |
Balance at August 28, 2022 | — |  |  | $ | — |  |  |  | 29,593 |  |  | $ | 30 |  |  | $ | 168,070 |  |  | $ | (89,939) |  |  | $ | (286) |  |  | $ | 77,875 |
The effects of the restatement on the consolidated statement of cash flows for the three months ended August 28, 2022 are summarized in the following table:
| Three Months Ended August 28, 2022
| As Reported |  | Restatement Adjustment |  | As Restated
Cash flows from operating activities: |  |  |  |  |
Net (loss) income | $ | (11,351) |  |  | $ | 385 |  |  | $ | (10,966) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |  |  |  |  |
Depreciation, amortization of intangibles, debt costs and right-of-use assets | 4,356 |  |  | (2) |  |  | 4,354 |
Gain on sale of BreatheWay | (2,108) |  |  | — |  |  | (2,108) |
Stock-based compensation expense | 785 |  |  | — |  |  | 785 |
Deferred taxes | (17) |  |  | — |  |  | (17) |
Other, net | (18) |  |  | — |  |  | (18) |
Changes in current assets and current liabilities: |  |  |  |  |
Accounts receivable, net | 7,238 |  |  | — |  |  | 7,238 |
Inventory | 2,560 |  |  | 27 |  |  | 2,587 |
Prepaid expenses and other current assets | (761) |  |  | 22 |  |  | (739) |
Accounts payable | 581 |  |  | — |  |  | 581 |
Accrued compensation | (2,865) |  |  | — |  |  | (2,865) |
Other accrued liabilities | 183 |  |  | — |  |  | 183 |
Deferred revenue | (116) |  |  | — |  |  | (116) |
Net cash (used in) provided by operating activities | (1,533) |  |  | 432 |  |  | (1,101) |
Cash flows from investing activities: |  |  |  |  |
Proceeds from sale of BreatheWay, net | 3,135 |  |  | — |  |  | 3,135 |
Purchases of property and equipment | (2,929) |  |  | (432) |  |  | (3,361) |
Net cash provided by (used in) investing activities | 206 |  |  | (432) |  |  | (226) |
Cash flows from financing activities: |  |  |  |  |
Payments on long-term debt | (27) |  |  | — |  |  | (27) |
Proceeds from line of credit | 4,000 |  |  | — |  |  | 4,000 |
Taxes paid by Company for employee stock plans | (67) |  |  | — |  |  | (67) |
Net cash provided by financing activities | 3,906 |  |  | — |  |  | 3,906 |
Net increase in cash and cash equivalents | 2,579 |  |  | — |  |  | 2,579 |
Cash and cash equivalents, beginning of period | 1,643 |  |  | — |  |  | 1,643 |
Cash and cash equivalents, end of period | $ | 4,222 |  |  | $ | — |  |  | $ | 4,222 |
Supplemental disclosure of non-cash investing and financing activities: |  |  |  |  |
Purchases of property and equipment on trade vendor credit | $ | 2,243 |  |  | $ | — |  |  | $ | 2,243 |
The effects of this error on our previously reported changes in the Company’s allowance for sales returns and credit losses for the quarter ended August 28, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| August 28, 2022
| 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 28, 2022, As Reported | $ | 65 |  |  | — |  |  | — |  |  |  |  | $ | 65 |
Restatement Adjustment | $ | 522 |  |  | — |  |  | — |  |  |  |  | $ | 522 |
Three months ended August 28, 2022, As Restated | $ | 587 |  |  | — |  |  | — |  |  |  |  | $ | 587 |
Discontinued Operations | $ | (65) |  |  | — |  |  | — |  |  |  |  | $ | (65) |
Three months ended August 28, 2022, As Restated, after Discontinued Operations | $ | 522 |  |  | — |  |  | — |  |  |  |  | $ | 522 |
The effects of this error on our previously reported inventories as of August 28, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| August 28, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Finished goods | $ | 25,266 |  |  | $ | (164) |  |  | $ | 25,102 |  |  | $ | (14,321) |  |  | $ | 10,781 |
Raw materials | 27,402 |  |  | (2,379) |  |  | 25,023 |  |  | (8,762) |  |  | 16,261 |
Work in progress | 11,617 |  |  | (2,317) |  |  | 9,300 |  |  | (188) |  |  | 9,112 |
Total inventories | $ | 64,285 |  |  | $ | (4,860) |  |  | $ | 59,425 |  |  | $ | (23,271) |  |  | $ | 36,154 |
The effects of this error on our previously reported basic and diluted net loss per share for the three months ended August 28, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| Three Months Ended August 28, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Numerator: |  |  |  |  |  |  |  |  |
Net (loss) income applicable to Common Stockholders | $ | (11,351) |  |  | $ | 385 |  |  | $ | (10,966) |  |  | $ | — |  |  | $ | (10,966) |
Denominator: |  |  |  |  |  |  |  |  |
Weighted average shares for basic net income per share | 29,577 |  |  | — |  |  | 29,577 |  |  | — |  |  | 29,577 |
Weighted average shares for diluted net income per share | 29,577 |  |  | — |  |  | 29,577 |  |  | — |  |  | 29,577 |
Diluted net (loss) income per share | $ | (0.38) |  |  | $ | 0.01 |  |  | $ | (0.37) |  |  | $ | — |  |  | $ | (0.37) |
The effects of this error on our previously reported disaggregated revenue for the three months ended August 28, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Contact development and manufacturing organization | $ | 18,247 |  |  | $ | 21 |  |  | $ | 18,268 |  |  | $ | — |  |  | $ | 18,268 |
Fermentation | 5,456 |  |  | — |  |  | 5,456 |  |  | — |  |  | 5,456 |
Total | $ | 23,703 |  |  | $ | 21 |  |  | $ | 23,724 |  |  | $ | — |  |  | $ | 23,724 |
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Avocado Products | $ | 17,093 |  |  | $ | — |  |  | $ | 17,093 |  |  | $ | (17,093) |  |  | $ | — |
Olive oil and vinegars | 2,559 |  |  | — |  |  | 2,559 |  |  | (2,559) |  |  | — |
Total | $ | 19,652 |  |  | $ | — |  |  | $ | 19,652 |  |  | $ | (19,652) |  |  | $ | — |
The effects of this error on our previously reported segment reporting for the three months ended August 28, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 7, are as follows. The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the three months ended August 28, 2022. Refer to Note 14 for the related income statement line items reported in the segment table of the Company after giving effect to the discontinued operations previously reported under the Curation segment. The Company disclosed Other to reconcile the segment information to the consolidated financial statements.
| Three Months Ended August 28, 2022
(in thousands) | Lifecore |  | Curation Foods |  | Other |  | Total
Three Months Ended August 28, 2022, As Reported |  |  |  |  |  |  |
Net sales | $ | 23,703 |  |  | $ | 19,652 |  |  | $ | — |  |  | $ | 43,355 |
Gross profit | 6,101 |  |  | 151 |  |  | — |  |  | 6,252 |
Net income (loss) from continuing operations | 502 |  |  | (2,721) |  |  | (9,132) |  |  | (11,351) |
Depreciation and amortization | 1,771 |  |  | 2,167 |  |  | 11 |  |  | 3,949 |
Interest income | 15 |  |  | — |  |  | — |  |  | 15 |
Interest expense | — |  |  | — |  |  | 3,678 |  |  | 3,678 |
Income tax (benefit) expense, continuing operations | 158 |  |  | (1,065) |  |  | 911 |  |  | 4 |
Corporate overhead allocation | 1,038 |  |  | 334 |  |  | (1,372) |  |  | — |
Restatement Adjustments |  |  |  |  |  |  |
Net sales | 21 |  |  | — |  |  | — |  |  | 21 |
Gross profit | (127) |  |  | 70 |  |  | — |  |  | (57) |
Net (loss) income from continuing operations | 31 |  |  | (959) |  |  | 1,340 |  |  | 412 |
Loss from discontinued operations, net of tax | — |  |  | (27) |  |  | — |  |  | (27) |
Depreciation and amortization | 30 |  |  | — |  |  | — |  |  | 30 |
Interest expense | — |  |  | — |  |  | (432) |  |  | (432) |
Income tax (benefit) expense, continuing operations | (158) |  |  | 1,066 |  |  | (908) |  |  | — |
Three Months Ended August 28, 2022, As Restated |  |  |  |  |  |  |
Net sales | $ | 23,724 |  |  | $ | 19,652 |  |  | $ | — |  |  | $ | 43,376 |
Gross profit | 5,974 |  |  | 221 |  |  | — |  |  | 6,195 |
Net income (loss) from continuing operations | 533 |  |  | (3,680) |  |  | (7,792) |  |  | (10,939) |
Loss from discontinued operations, net of tax | — |  |  | (27) |  |  | — |  |  | (27) |
Depreciation and amortization | 1,801 |  |  | 2,167 |  |  | 11 |  |  | 3,979 |
Interest income | 15 |  |  | — |  |  | — |  |  | 15 |
Interest expense | — |  |  | — |  |  | 3,246 |  |  | 3,246 |
Income tax expense, continuing operations | — |  |  | 1 |  |  | 3 |  |  | 4 |
Corporate overhead allocation | 1,038 |  |  | 334 |  |  | (1,372) |  |  | — |
As of and for the three and nine months ended February 27, 2022 The effects of the restatement on the consolidated balance sheet as of February 27, 2022 are summarized in the following table:
| February 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
ASSETS |  |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 1,854 |  |  | $ | — |  |  | $ | 1,854 |  |  | $ | (753) |  |  | $ | 1,101 |
Accounts receivable, net | 49,559 |  |  | (522) |  |  | 49,037 |  |  | (9,290) |  |  | 39,747 |
Inventories | 73,700 |  |  | (2,591) |  |  | 71,109 |  |  | (36,351) |  |  | 34,758 |
Prepaid expenses and other current assets | 6,924 |  |  | (1,784) |  |  | 5,140 |  |  | (3,322) |  |  | 1,818 |
Current assets, discontinued operations | — |  |  | — |  |  | — |  |  | 49,716 |  |  | 49,716 |
Total Current Assets | 132,037 |  |  | (4,897) |  |  | 127,140 |  |  | — |  |  | 127,140 |
Property and equipment, net | 123,209 |  |  | 3,557 |  |  | 126,766 |  |  | (16,263) |  |  | 110,503 |
Operating lease right-of-use assets | 8,796 |  |  | — |  |  | 8,796 |  |  | (3,093) |  |  | 5,703 |
Goodwill | 33,916 |  |  | — |  |  | 33,916 |  |  | (20,035) |  |  | 13,881 |
Trademarks/tradenames, net | 17,100 |  |  | — |  |  | 17,100 |  |  | (12,900) |  |  | 4,200 |
Customer relationships, net | 7,476 |  |  | — |  |  | 7,476 |  |  | (7,425) |  |  | 51 |
Other assets | 3,048 |  |  | — |  |  | 3,048 |  |  | (113) |  |  | 2,935 |
Non-current assets, discontinued operations | — |  |  | — |  |  | — |  |  | 59,829 |  |  | 59,829 |
Total Assets | $ | 325,582 |  |  | $ | (1,340) |  |  | $ | 324,242 |  |  | $ | — |  |  | $ | 324,242 |
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities: |  |  |  |  |  |  |  |  |
Accounts payable | $ | 20,014 |  |  | $ | 27 |  |  | $ | 20,041 |  |  | $ | (6,747) |  |  | $ | 13,294 |
Accrued compensation | 9,757 |  |  | — |  |  | 9,757 |  |  | (339) |  |  | 9,418 |
Other accrued liabilities | 14,083 |  |  | (36) |  |  | 14,047 |  |  | (1,054) |  |  | 12,993 |
Current portion of lease liabilities | 5,045 |  |  | — |  |  | 5,045 |  |  | (650) |  |  | 4,395 |
Deferred revenue | 1,614 |  |  | — |  |  | 1,614 |  |  | — |  |  | 1,614 |
Line of credit | 39,900 |  |  | — |  |  | 39,900 |  |  | — |  |  | 39,900 |
Current liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 8,790 |  |  | 8,790 |
Total Current Liabilities | 90,413 |  |  | (9) |  |  | 90,404 |  |  | — |  |  | 90,404 |
Long-term debt, net | 79,598 |  |  | — |  |  | 79,598 |  |  | — |  |  | 79,598 |
Long-term lease liabilities | 10,342 |  |  | — |  |  | 10,342 |  |  | (2,494) |  |  | 7,848 |
Deferred taxes, net | 961 |  |  | (165) |  |  | 796 |  |  | — |  |  | 796 |
Other non-current liabilities | 544 |  |  | — |  |  | 544 |  |  | — |  |  | 544 |
Non-current liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 2,494 |  |  | 2,494 |
Total Liabilities | 181,858 |  |  | (174) |  |  | 181,684 |  |  | — |  |  | 181,684 |
Stockholders’ Equity: |  |  |  |  |  |  |  |  |
Common stock | 29 |  |  | — |  |  | 29 |  |  | — |  |  | 29 |
Additional paid-in capital | 166,943 |  |  | — |  |  | 166,943 |  |  | — |  |  | 166,943 |
Accumulated deficit | (22,536) |  |  | (1,166) |  |  | (23,702) |  |  | — |  |  | (23,702) |
Accumulated other comprehensive loss | (712) |  |  | — |  |  | (712) |  |  | — |  |  | (712) |
Total Stockholders’ Equity | 143,724 |  |  | (1,166) |  |  | 142,558 |  |  | — |  |  | 142,558 |
Total Liabilities and Stockholders’ Equity | $ | 325,582 |  |  | $ | (1,340) |  |  | $ | 324,242 |  |  | $ | — |  |  | $ | 324,242 |
The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the three months February 27, 2022 are summarized in the following table:
| Three Months Ended February 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Product sales | $ | 37,399 |  |  | $ | 2 |  |  | $ | 37,401 |  |  | $ | (2,169) |  |  | $ | 35,232 |
Cost of product sales | 24,533 |  |  | 793 |  |  | 25,326 |  |  | (1,733) |  |  | 23,593 |
Gross profit | 12,866 |  |  | (791) |  |  | 12,075 |  |  | (436) |  |  | 11,639 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |
Research and development | 2,000 |  |  | 288 |  |  | 2,288 |  |  | (34) |  |  | 2,254 |
Selling, general and administrative | 14,163 |  |  | 175 |  |  | 14,338 |  |  | (589) |  |  | 13,749 |
Restructuring costs | 5,270 |  |  | 4 |  |  | 5,274 |  |  | — |  |  | 5,274 |
Total operating costs and expenses | 21,433 |  |  | 467 |  |  | 21,900 |  |  | (623) |  |  | 21,277 |
Operating loss | (8,567) |  |  | (1,258) |  |  | (9,825) |  |  | 187 |  |  | (9,638) |
Interest income | 20 |  |  | — |  |  | 20 |  |  | — |  |  | 20 |
Interest expense | (4,105) |  |  | 429 |  |  | (3,676) |  |  | — |  |  | (3,676) |
Transition services income | 5,473 |  |  | — |  |  | 5,473 |  |  | — |  |  | 5,473 |
Other income (expense) | 454 |  |  | (164) |  |  | 290 |  |  | — |  |  | 290 |
Net loss from continuing operations before taxes | (6,725) |  |  | (993) |  |  | (7,718) |  |  | 187 |  |  | (7,531) |
Income tax benefit (expense) | 87 |  |  | (2,014) |  |  | (1,927) |  |  | (1,462) |  |  | (3,389) |
Net loss from continuing operations | (6,638) |  |  | (3,007) |  |  | (9,645) |  |  | (1,275) |  |  | (10,920) |
Discontinued operations: |  |  |  |  |  |  |  |  |
(Loss) gain from discontinued operations | (6,859) |  |  | 494 |  |  | (6,365) |  |  | (187) |  |  | (6,552) |
Income tax benefit (expense) | 411 |  |  | 2,013 |  |  | 2,424 |  |  | 1,462 |  |  | 3,886 |
(Loss) income from discontinued operations, net of tax | (6,448) |  |  | 2,507 |  |  | (3,941) |  |  | 1,275 |  |  | (2,666) |
Consolidated net loss | $ | (13,086) |  |  | $ | (500) |  |  | $ | (13,586) |  |  | $ | — |  |  | $ | (13,586) |
Basic net (loss) income per share: |  |  |  |  |  |  |  |  |
Loss from continuing operations | $ | (0.23) |  |  | $ | (0.10) |  |  | $ | (0.33) |  |  | $ | (0.04) |  |  | $ | (0.37) |
Loss from discontinued operations | $ | (0.22) |  |  | $ | 0.09 |  |  | $ | (0.13) |  |  | $ | 0.04 |  |  | $ | (0.09) |
Total basic net loss per share | $ | (0.45) |  |  | $ | (0.01) |  |  | $ | (0.46) |  |  | $ | — |  |  | $ | (0.46) |
Diluted net (loss) income per share: |  |  |  |  |  |  |  |  |
Loss from continuing operations | $ | (0.23) |  |  | $ | (0.10) |  |  | $ | (0.33) |  |  | $ | (0.04) |  |  | $ | (0.37) |
Loss from discontinued operations | $ | (0.22) |  |  | $ | 0.09 |  |  | $ | (0.13) |  |  | $ | 0.04 |  |  | $ | (0.09) |
Total diluted net loss per share | $ | (0.45) |  |  | $ | (0.01) |  |  | $ | (0.46) |  |  | $ | — |  |  | $ | (0.46) |
Shares used in per share computation |  |  |  |  |  |  |  |  |
Basic | 29,482 |  | — |  |  | 29,482 |  | — |  |  | 29,482
Diluted | 29,482 |  | — |  |  | 29,482 |  | — |  |  | 29,482
| Three Months Ended February 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Net loss | $ | (13,086) |  |  | $ | (500) |  |  | $ | (13,586) |  |  | $ | — |  |  | $ | (13,586) |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |  |
Net unrealized gains on interest rate swaps, net of tax | 104 |  |  | — |  |  | 104 |  |  | — |  |  | 104 |
Other comprehensive income, net of tax | 104 |  |  | — |  |  | 104 |  |  | — |  |  | 104 |
Total comprehensive loss | $ | (12,982) |  |  | $ | (500) |  |  | $ | (13,482) |  |  | $ | — |  |  | $ | (13,482) |
The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the nine months February 27, 2022 are summarized in the following table:
| Nine Months Ended February 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Product sales | $ | 90,140 |  |  | $ | 40 |  |  | $ | 90,180 |  |  | $ | (7,016) |  |  | $ | 83,164 |
Cost of product sales | 58,507 |  |  | 1,637 |  |  | 60,144 |  |  | (5,622) |  |  | 54,522 |
Gross profit | 31,633 |  |  | (1,597) |  |  | 30,036 |  |  | (1,394) |  |  | 28,642 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |
Research and development | 5,722 |  |  | (17) |  |  | 5,705 |  |  | (81) |  |  | 5,624 |
Selling, general and administrative | 27,659 |  |  | 211 |  |  | 27,870 |  |  | (1,708) |  |  | 26,162 |
Restructuring costs | 7,530 |  |  | (502) |  |  | 7,028 |  |  | — |  |  | 7,028 |
Total operating costs and expenses | 40,911 |  |  | (308) |  |  | 40,603 |  |  | (1,789) |  |  | 38,814 |
Operating (loss) income | (9,278) |  |  | (1,289) |  |  | (10,567) |  |  | 395 |  |  | (10,172) |
Interest income | 66 |  |  | — |  |  | 66 |  |  | — |  |  | 66 |
Interest expense | (13,877) |  |  | 1,304 |  |  | (12,573) |  |  | — |  |  | (12,573) |
Transition services income | 5,473 |  |  | — |  |  | 5,473 |  |  | — |  |  | 5,473 |
Other income | 642 |  |  | 24 |  |  | 666 |  |  | — |  |  | 666 |
Net (loss) income from continuing operations before taxes | (16,974) |  |  | 39 |  |  | (16,935) |  |  | 395 |  |  | (16,540) |
Income tax benefit (expense) | 5,591 |  |  | — |  |  | 5,591 |  |  | (130) |  |  | 5,461 |
Net loss from continuing operations | (11,383) |  |  | 39 |  |  | (11,344) |  |  | 265 |  |  | (11,079) |
Discontinued operations: |  |  |  |  |  |  |  |  |
Loss from discontinued operations | (49,576) |  |  | (367) |  |  | (49,943) |  |  | (395) |  |  | (50,338) |
Income tax (expense) benefit | (157) |  |  | — |  |  | (157) |  |  | 130 |  |  | (27) |
Loss from discontinued operations, net of tax | (49,733) |  |  | (367) |  |  | (50,100) |  |  | (265) |  |  | (50,365) |
Consolidated net loss | $ | (61,116) |  |  | $ | (328) |  |  | $ | (61,444) |  |  | $ | — |  |  | $ | (61,444) |
Basic net (loss) income per share: |  |  |  |  |  |  |  |  |
Loss from continuing operations | $ | (0.39) |  |  | $ | — |  |  | $ | (0.39) |  |  | $ | 0.01 |  |  | $ | (0.38) |
Loss from discontinued operations | $ | (1.69) |  |  | $ | (0.01) |  |  | $ | (1.70) |  |  | $ | (0.01) |  |  | $ | (1.71) |
Total basic net loss per share | $ | (2.08) |  |  | $ | (0.01) |  |  | $ | (2.09) |  |  | $ | — |  |  | $ | (2.09) |
Diluted net (loss) income per share: |  |  |  |  |  |  |  |  |
Loss income from continuing operations | $ | (0.39) |  |  | $ | — |  |  | $ | (0.39) |  |  | $ | 0.01 |  |  | $ | (0.38) |
Loss from discontinued operations | $ | (1.69) |  |  | $ | (0.01) |  |  | $ | (1.70) |  |  | $ | (0.01) |  |  | $ | (1.71) |
Total diluted net loss per share | $ | (2.08) |  |  | $ | (0.01) |  |  | $ | (2.09) |  |  | $ | — |  |  | $ | (2.09) |
Shares used in per share computation |  |  |  |  |  |  |  |  |
Basic | 29,459 |  | — |  |  | 29,459 |  | — |  |  | 29,459
Diluted | 29,459 |  | — |  |  | 29,459 |  | — |  |  | 29,459
| Nine Months Ended February 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Net loss | $ | (61,116) |  |  | $ | (328) |  |  | $ | (61,444) |  |  | $ | — |  |  | $ | (61,444) |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |  |
Net unrealized gains on interest rate swaps, net of tax | 646 |  |  | — |  |  | 646 |  |  | — |  |  | 646 |
Other comprehensive income, net of tax | 646 |  |  | — |  |  | 646 |  |  | — |  |  | 646 |
Total comprehensive loss | $ | (60,470) |  |  | $ | (328) |  |  | $ | (60,798) |  |  | $ | — |  |  | $ | (60,798) |
The effects of the restatement on the consolidated statement of convertible preferred stock and stockholders’ equity (deficit) for the three and nine months ended February 27, 2022 are summarized in the following table:
| Convertible Preferred Stock |  |  | Common Stock |  | Additional Paid-in Capital |  | Retained Earnings (Accumulated Deficit) |  | Accumulated Other Comprehensive Loss |  | Total Stockholders’ Equity
| Shares |  | Amount |  |  | Shares |  | Amount |  |  |  |
As Reported |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 30, 2021 | — |  |  | $ | — |  |  |  | 29,333 |  |  | $ | 29 |  |  | $ | 165,533 |  |  | $ | 38,580 |  |  | $ | (1,358) |  |  | $ | 202,784 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 129 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (428) |  |  | — |  |  | — |  |  | (428) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 620 |  |  | — |  |  | — |  |  | 620 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (9,477) |  |  | — |  |  | (9,477) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 366 |  |  | 366 |
Balance at August 29, 2021 | — |  |  | $ | — |  |  |  | 29,462 |  |  | $ | 29 |  |  | $ | 165,725 |  |  | $ | 29,103 |  |  | $ | (992) |  |  | $ | 193,865 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 19 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (84) |  |  | — |  |  | — |  |  | (84) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 686 |  |  | — |  |  | — |  |  | 686 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (38,441) |  |  | — |  |  | (38,441) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 176 |  |  | 176 |
Balance at November 28, 2021 | — |  |  | $ | — |  |  |  | 29,481 |  |  | $ | 29 |  |  | $ | 166,327 |  |  | $ | (9,338) |  |  | $ | (816) |  |  | $ | 156,202 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (6) |  |  | — |  |  | — |  |  | (6) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 622 |  |  | — |  |  | — |  |  | 622 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (13,086) |  |  | — |  |  | (13,086) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 104 |  |  | 104 |
Balance at February 27, 2022 | — |  |  | $ | — |  |  |  | 29,482 |  |  | $ | 29 |  |  | $ | 166,943 |  |  | $ | (22,424) |  |  | $ | (712) |  |  | $ | 143,836 |
Restatements Adjustments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Opening retained earnings (at May 30, 2021) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (838) |  |  | — |  |  | (838) |
Net income at August 29, 2021 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | 90 |  |  | — |  |  | 90 |
Opening retained earnings (at August 29, 2021) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (748) |  |  | — |  |  | (748) |
Net loss at November 28, 2021 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (30) |  |  | — |  |  | (30) |
Opening retained earnings (at November 28, 2021) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (666) |  |  | — |  |  | (666) |
Net loss at February 27, 2022 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (500) |  |  | — |  |  | (500) |
As Restated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 30, 2021 | — |  |  | $ | — |  |  |  | 29,333 |  |  | $ | 29 |  |  | $ | 165,533 |  |  | $ | 37,742 |  |  | $ | (1,358) |  |  | $ | 201,946 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 129 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (428) |  |  | — |  |  | — |  |  | (428) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 620 |  |  | — |  |  | — |  |  | 620 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (9,387) |  |  | — |  |  | (9,387) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 366 |  |  | 366 |
Balance at August 29, 2021 | — |  |  | $ | — |  |  |  | 29,462 |  |  | $ | 29 |  |  | $ | 165,725 |  |  | $ | 28,355 |  |  | $ | (992) |  |  | $ | 193,117 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 19 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (84) |  |  | — |  |  | — |  |  | (84) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 686 |  |  | — |  |  | — |  |  | 686 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (38,471) |  |  | — |  |  | (38,471) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 176 |  |  | 176 |
Balance at November 28, 2021 | — |  |  | $ | — |  |  |  | 29,481 |  |  | $ | 29 |  |  | $ | 166,327 |  |  | $ | (10,116) |  |  | $ | (816) |  |  | $ | 155,424 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (6) |  |  | — |  |  | — |  |  | (6) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 622 |  |  | — |  |  | — |  |  | 622 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (13,586) |  |  | — |  |  | (13,586) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 104 |  |  | 104 |
Balance at February 27, 2022 | — |  |  | $ | — |  |  |  | 29,482 |  |  | $ | 29 |  |  | $ | 166,943 |  |  | $ | (23,702) |  |  | $ | (712) |  |  | $ | 142,558 |
The effects of the restatement on the consolidated statement of cash flows for the nine months ended February 27, 2022 are summarized in the following table:
| Nine Months Ended February 27, 2022
| As Reported |  | Restatement Adjustment |  | As Restated
Cash flows from operating activities: |  |  |  |  |
Net loss | $ | (61,116) |  |  | $ | (328) |  |  | $ | (61,444) |
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 |  |  | 59 |  |  | 14,547 |
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 | 235 |  |  | — |  |  | 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) |
Inventory | (11,910) |  |  | 1,538 |  |  | (10,372) |
Prepaid expenses and other current assets | (1,448) |  |  | 8 |  |  | (1,440) |
Accounts payable | 13,507 |  |  | 27 |  |  | 13,534 |
Accrued compensation | (2,027) |  |  | — |  |  | (2,027) |
Other accrued liabilities | (70) |  |  | — |  |  | (70) |
Deferred revenue | 662 |  |  | — |  |  | 662 |
Net cash (used in) provided by operating activities | (22,045) |  |  | 1,304 |  |  | (20,741) |
Cash flows from investing activities: |  |  |  |  |
Proceeds from the 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) |  |  | (1,304) |  |  | (19,843) |
Eat Smart sale net working capital adjustment | (2,390) |  |  | — |  |  | (2,390) |
Proceeds from sales of property and equipment | 1,096 |  |  | — |  |  | 1,096 |
Net cash provided by (used in) investing activities | 98,767 |  |  | (1,304) |  |  | 97,463 |
Cash flows from financing activities: |  |  |  |  |
Payments on long-term debt | (86,376) |  |  | — |  |  | (86,376) |
Proceeds from line of credit | 45,011 |  |  | — |  |  | 45,011 |
Payments on line of credit | (34,111) |  |  | — |  |  | (34,111) |
Taxes paid by Company for employee stock plans | (518) |  |  | — |  |  | (518) |
Payments for debt issuance costs | (169) |  |  | — |  |  | (169) |
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 |
Supplemental disclosure of non-cash investing and financing activities: |  |  |  |  |
Purchases of property and equipment on trade vendor credit | $ | 1,764 |  |  | $ | — |  |  | $ | 1,764 |
The effects of this error on our previously reported changes in the Company’s allowance for sales returns and credit losses for the quarter ended February 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| February 27, 2022
| Balance at beginning of period |  | Provision (benefit) for expected credit losses |  | Write offs, net of recoveries |  |  |  | Balance at end of period
Nine months ended February 27, 2022, As Reported | $ | 5 |  |  | — |  |  | — |  |  |  |  | $ | 5 |
Restatement Adjustment | $ | 522 |  |  | — |  |  | — |  |  |  |  | $ | 522 |
Nine months ended February 27, 2022, As Restated | $ | 527 |  |  | — |  |  | — |  |  |  |  | $ | 527 |
Discontinued Operations | $ | (5) |  |  | — |  |  | — |  |  |  |  | $ | (5) |
Nine months ended February 27, 2022, As Restated, after Discontinued Operations | $ | 522 |  |  | — |  |  | — |  |  |  |  | $ | 522 |
The effects of this error on our previously reported inventories as of February 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| February 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Finished goods | $ | 42,387 |  |  | $ | 52 |  |  | $ | 42,439 |  |  | $ | (29,036) |  |  | $ | 13,403 |
Raw materials | 26,644 |  |  | (1,937) |  |  | 24,707 |  |  | (7,294) |  |  | 17,413 |
Work in progress | 4,669 |  |  | (706) |  |  | 3,963 |  |  | (21) |  |  | 3,942 |
Total inventories | $ | 73,700 |  |  | $ | (2,591) |  |  | $ | 71,109 |  |  | $ | (36,351) |  |  | $ | 34,758 |
The effects of this error on our previously reported basic and diluted net loss per share for the three months ended February 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| Three Months Ended February 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Numerator: |  |  |  |  |  |  |  |  |
Net loss applicable to Common Stockholders | $ | (13,086) |  |  | $ | (500) |  |  | $ | (13,586) |  |  | $ | — |  |  | $ | (13,586) |
Denominator: |  |  |  |  |  |  |  |  |
Weighted average shares for basic net income per share | 29,482 |  |  | — |  |  | 29,482 |  |  | — |  |  | 29,482 |
Weighted average shares for diluted net income per share | 29,482 |  |  | — |  |  | 29,482 |  |  | — |  |  | 29,482 |
Diluted net loss per share | $ | (0.45) |  |  | $ | (0.01) |  |  | $ | (0.46) |  |  | $ | — |  |  | $ | (0.46) |
The effects of this error on our previously reported basic and diluted net loss per share for the nine months ended February 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| Nine Months Ended February 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Numerator: |  |  |  |  |  |  |  |  |
Net loss applicable to Common Stockholders | $ | (61,116) |  |  | $ | (328) |  |  | $ | (61,444) |  |  | $ | — |  |  | $ | (61,444) |
Denominator: |  |  |  |  |  |  |  |  |
Weighted average shares for basic net income per share | 29,459 |  |  | — |  |  | 29,459 |  |  | — |  |  | 29,459 |
Weighted average shares for diluted net income per share | 29,459 |  |  | — |  |  | 29,459 |  |  | — |  |  | 29,459 |
Diluted net loss per share | $ | (2.08) |  |  | $ | (0.01) |  |  | $ | (2.09) |  |  | $ | — |  |  | $ | (2.09) |
The effects of this error on our previously reported disaggregated revenue for the three months ended February 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Contact development and manufacturing organization | $ | 24,799 |  |  | $ | 2 |  |  | $ | 24,801 |  |  | $ | — |  |  | $ | 24,801 |
Fermentation | 10,009 |  |  | — |  |  | 10,009 |  |  | — |  |  | 10,009 |
Total | $ | 34,808 |  |  | $ | 2 |  |  | $ | 34,810 |  |  | $ | — |  |  | $ | 34,810 |
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Olive oil and vinegars | $ | 2,169 |  |  | $ | — |  |  | $ | 2,169 |  |  | $ | (2,169) |  |  | $ | — |
Technology | 422 |  |  | — |  |  | 422 |  |  | — |  |  | 422 |
Total | $ | 2,591 |  |  | $ | — |  |  | $ | 2,591 |  |  | $ | (2,169) |  |  | $ | 422 |
The effects of this error on our previously reported disaggregated revenue for the nine months ended February 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Contact development and manufacturing organization | $ | 63,951 |  |  | $ | 40 |  |  | $ | 63,991 |  |  | $ | — |  |  | $ | 63,991 |
Fermentation | 17,756 |  |  | — |  |  | 17,756 |  |  | — |  |  | 17,756 |
Total | $ | 81,707 |  |  | $ | 40 |  |  | $ | 81,747 |  |  | $ | — |  |  | $ | 81,747 |
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Olive oil and vinegars | $ | 7,016 |  |  | $ | — |  |  | $ | 7,016 |  |  | $ | (7,016) |  |  | $ | — |
Technology | 1,417 |  |  | — |  |  | 1,417 |  |  | — |  |  | 1,417 |
Total | $ | 8,433 |  |  | $ | — |  |  | $ | 8,433 |  |  | $ | (7,016) |  |  | $ | 1,417 |
The effects of this error on our previously reported segment reporting for the three months ended February 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 7, are as follows. The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the three months ended February 27, 2022. Refer to Note 14 for the related income statement line items reported in the segment table of the Company after giving effect to the discontinued operations previously reported under the Curation segment. The Company disclosed Other to reconcile the segment information to the consolidated financial statements.
| Three Months Ended February 27, 2022
(in thousands) | Lifecore |  | Curation Foods |  | Other |  | Total
Three Months Ended February 27, 2022, As Reported |  |  |  |  |  |  |
Net sales | $ | 34,808 |  |  | $ | 2,591 |  |  | $ | — |  |  | $ | 37,399 |
Gross profit | 12,905 |  |  | (39) |  |  | — |  |  | 12,866 |
Net income (loss) from continuing operations | 5,054 |  |  | (5,380) |  |  | (6,312) |  |  | (6,638) |
Loss from discontinued operations, net of tax | — |  |  | (3,407) |  |  | (3,041) |  |  | (6,448) |
Depreciation and amortization | 1,674 |  |  | 304 |  |  | 18 |  |  | 1,996 |
Interest income | 18 |  |  | — |  |  | 2 |  |  | 20 |
Interest expense | — |  |  | 26 |  |  | 4,079 |  |  | 4,105 |
Income tax (benefit) expense, continuing operations | 1,596 |  |  | (1,678) |  |  | (5) |  |  | (87) |
Corporate overhead allocation | 1,175 |  |  | 289 |  |  | (1,464) |  |  | — |
Restatement Adjustments |  |  |  |  |  |  |
Net sales | 2 |  |  | — |  |  | — |  |  | 2 |
Gross profit | (791) |  |  | — |  |  | — |  |  | (791) |
Net (loss) income from continuing operations | 2,268 |  |  | (4,229) |  |  | (1,046) |  |  | (3,007) |
Loss from discontinued operations, net of tax | — |  |  | 2,507 |  |  | — |  |  | 2,507 |
Depreciation and amortization | 24 |  |  | — |  |  | — |  |  | 24 |
Interest expense | — |  |  | — |  |  | (429) |  |  | (429) |
Income tax (benefit) expense, continuing operations | (3,059) |  |  | 3,598 |  |  | 1,475 |  |  | 2,014 |
Three Months Ended February 27, 2022, As Restated |  |  |  |  |  |  |
Net sales | $ | 34,810 |  |  | $ | 2,591 |  |  | $ | — |  |  | $ | 37,401 |
Gross profit | 12,114 |  |  | (39) |  |  | — |  |  | 12,075 |
Net income (loss) from continuing operations | 7,322 |  |  | (9,609) |  |  | (7,358) |  |  | (9,645) |
Loss from discontinued operations, net of tax | — |  |  | (900) |  |  | (3,041) |  |  | (3,941) |
Depreciation and amortization | 1,698 |  |  | 304 |  |  | 18 |  |  | 2,020 |
Interest income | 18 |  |  | — |  |  | 2 |  |  | 20 |
Interest expense | — |  |  | 26 |  |  | 3,650 |  |  | 3,676 |
Income tax (benefit) expense, continuing operations | (1,463) |  |  | 1,920 |  |  | 1,470 |  |  | 1,927 |
Corporate overhead allocation | 1,175 |  |  | 289 |  |  | (1,464) |  |  | — |
The effects of this error on our previously reported segment reporting for the nine months ended February 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 7, are as follows. The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the nine months ended February 27, 2022. Refer to Note 14 for the related income statement line items reported in the segment table of the Company after giving effect to the discontinued operations previously reported under the Curation segment. The Company disclosed Other to reconcile the segment information to the consolidated financial statements.
| Nine Months Ended February 27, 2022
(in thousands) | Lifecore |  | Curation Foods |  | Other |  | Total
Nine Months Ended February 27, 2022, As Reported |  |  |  |  |  |  |
Net sales | $ | 81,707 |  |  | $ | 8,433 |  |  | $ | — |  |  | $ | 90,140 |
Gross profit | 30,384 |  |  | 1,249 |  |  | — |  |  | 31,633 |
Net income (loss) from continuing operations | 11,317 |  |  | 4,640 |  |  | (27,340) |  |  | (11,383) |
Loss from discontinued operations, net of tax | — |  |  | (46,692) |  |  | (3,041) |  |  | (49,733) |
Depreciation and amortization | 4,894 |  |  | 364 |  |  | 70 |  |  | 5,328 |
Interest income | 57 |  |  | — |  |  | 9 |  |  | 66 |
Interest expense | — |  |  | 300 |  |  | 13,577 |  |  | 13,877 |
Income tax expense (benefit), continuing operations | 3,574 |  |  | (13,422) |  |  | 4,257 |  |  | (5,591) |
Corporate overhead allocation | 3,389 |  |  | 778 |  |  | (4,167) |  |  | — |
Restatement Adjustments |  |  |  |  |  |  |
Net sales | 40 |  |  | — |  |  | — |  |  | 40 |
Gross profit | (1,597) |  |  | — |  |  | — |  |  | (1,597) |
Net (loss) income from continuing operations | (2,412) |  |  | (10,300) |  |  | 12,751 |  |  | 39 |
Loss from discontinued operations, net of tax | — |  |  | (367) |  |  | — |  |  | (367) |
Depreciation and amortization | 59 |  |  | — |  |  | — |  |  | 59 |
Interest expense | — |  |  | — |  |  | (1,304) |  |  | (1,304) |
Income tax expense (benefit), continuing operations | 815 |  |  | 10,632 |  |  | (11,447) |  |  | — |
Nine Months Ended February 27, 2022, As Restated |  |  |  |  |  |  |
Net sales | $ | 81,747 |  |  | $ | 8,433 |  |  | $ | — |  |  | 90,180 |
Gross profit | 28,787 |  |  | 1,249 |  |  | — |  |  | 30,036 |
Net income (loss) from continuing operations | 8,905 |  |  | (5,660) |  |  | (14,589) |  |  | (11,344) |
Loss from discontinued operations, net of tax | — |  |  | (47,059) |  |  | (3,041) |  |  | (50,100) |
Depreciation and amortization | 4,953 |  |  | 364 |  |  | 70 |  |  | 5,387 |
Interest income | 57 |  |  | — |  |  | 9 |  |  | 66 |
Interest expense | — |  |  | 300 |  |  | 12,273 |  |  | 12,573 |
Income tax expense (benefit), continuing operations | 4,389 |  |  | (2,790) |  |  | (7,190) |  |  | (5,591) |
Corporate overhead allocation | 3,389 |  |  | 778 |  |  | (4,167) |  |  | — |
The effects of this error on our previously reported discontinued operations as of February 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 9, are as follows:
| Eat Smart - As of May 30, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  |  |  |
ASSETS |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 136 |  |  | $ | — |  |  | $ | 136 |  |  |  |  |
Accounts receivable, less allowance for credit losses | 28,583 |  |  | — |  |  | 28,583 |  |  |  |  |
Inventories | 6,587 |  |  | — |  |  | 6,587 |  |  |  |  |
Prepaid expenses and other current assets | 2,312 |  |  | (515) |  |  | 1,797 |  |  |  |  |
Total current assets, discontinued operations | 37,618 |  |  | (515) |  |  | 37,103 |  |  |  |  |
Investment in non-public company, fair value | 45,100 |  |  | (45,100) |  |  | — |  |  |  |  |
Property and equipment, net | 59,273 |  |  | — |  |  | 59,273 |  |  |  |  |
Operating lease right-of-use assets | 3,729 |  |  | — |  |  | 3,729 |  |  |  |  |
Goodwill | 35,470 |  |  | — |  |  | 35,470 |  |  |  |  |
Trademarks/tradenames, net | 8,228 |  |  | — |  |  | 8,228 |  |  |  |  |
Customer relationships, net | 2,260 |  |  | — |  |  | 2,260 |  |  |  |  |
Other assets | 80 |  |  | — |  |  | 80 |  |  |  |  |
Total other assets, discontinued operations | 154,140 |  |  | (45,100) |  |  | 109,040 |  |  |  |  |
Total assets, discontinued operations | $ | 191,758 |  |  | $ | (45,615) |  |  | $ | 146,143 |  |  |  |  |
LIABILITIES |  |  |  |  |  |  |  |  |
Accounts payable | 31,271 |  |  | — |  |  | 31,271 |  |  |  |  |
Accrued compensation | 4,550 |  |  | — |  |  | 4,550 |  |  |  |  |
Other accrued liabilities | 4,041 |  |  | 350 |  |  | 4,391 |  |  |  |  |
Current portion of lease liabilities | 2,289 |  |  | — |  |  | 2,289 |  |  |  |  |
Deferred revenue | 493 |  |  | (350) |  |  | 143 |  |  |  |  |
Total current liabilities, discontinued operations | 42,644 |  |  | — |  |  | 42,644 |  |  |  |  |
Long-term lease liabilities | 3,252 |  |  | — |  |  | 3,252 |  |  |  |  |
Other non-current liabilities | 729 |  |  | — |  |  | 729 |  |  |  |  |
Non-current liabilities, discontinued operations | 3,981 |  |  | — |  |  | 3,981 |  |  |  |  |
Total liabilities, discontinued operations | $ | 46,625 |  |  | $ | — |  |  | $ | 46,625 |  |  |  |  |
The effects of this error on our previously reported restructuring cost for the three months ended February 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 8, are as follows:
| Three Months Ended February 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Asset write-off costs | $ | 3,693 |  |  | $ | — |  |  | $ | 3,693 |  |  | $ | — |  |  | $ | 3,693 |
Employee severance and benefit costs | — |  |  | — |  |  | — |  |  | — |  |  | — |
Lease costs | 1,527 |  |  | — |  |  | 1,527 |  |  | — |  |  | 1,527 |
Other restructuring costs | 50 |  |  | 4 |  |  | 54 |  |  | — |  |  | 54 |
Total restructuring costs | $ | 5,270 |  |  | $ | 4 |  |  | $ | 5,274 |  |  | $ | — |  |  | $ | 5,274 |
| Three Months Ended February 27, 2022
| Curation |  | Other |  | Total
Total restructuring costs, As reported | $ | 5,220 |  |  | $ | 50 |  |  | $ | 5,270 |
Restatement adjustments | 4 |  |  | — |  |  | 4 |
Total restructuring costs, As restated | $ | 5,224 |  |  | $ | 50 |  |  | $ | 5,274 |
The effects of this error on our previously reported restructuring cost for the nine months ended February 27, 2022 as presented in the Company’s Quarterly Report on Form 10-Q Note 8, are as follows:
| Nine Months Ended February 27, 2022
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Asset write-off costs | $ | 3,693 |  |  | $ | (566) |  |  | $ | 3,127 |  |  | $ | — |  |  | $ | 3,127 |
Employee severance and benefit costs | — |  |  | 34 |  |  | 34 |  |  | — |  |  | 34 |
Lease costs | 1,995 |  |  | — |  |  | 1,995 |  |  | — |  |  | 1,995 |
Other restructuring costs | 1,842 |  |  | 30 |  |  | 1,872 |  |  | — |  |  | 1,872 |
Total restructuring costs | $ | 7,530 |  |  | $ | (502) |  |  | $ | 7,028 |  |  | $ | — |  |  | $ | 7,028 |
| Nine Months Ended February 27, 2022
| Curation |  | Other |  | Total
Total restructuring costs, As reported | $ | 5,686 |  |  | $ | 1,844 |  |  | $ | 7,530 |
Restatement adjustments | (502) |  |  | — |  |  | (502) |
Total restructuring costs, As restated | $ | 5,184 |  |  | $ | 1,844 |  |  | $ | 7,028 |
As of and for the three and six months ended November 28, 2021 The effects of the restatement on the consolidated balance sheet as of November 28, 2021 are summarized in the following table:
| November 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
ASSETS |  |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 1,091 |  |  | $ | — |  |  | $ | 1,091 |  |  | $ | (482) |  |  | $ | 609 |
Accounts receivable, less allowance for doubtful accounts | 65,276 |  |  | (522) |  |  | 64,754 |  |  | (37,259) |  |  | 27,495 |
Inventories | 79,433 |  |  | (1,824) |  |  | 77,609 |  |  | (37,894) |  |  | 39,715 |
Prepaid expenses and other current assets | 8,721 |  |  | (1,622) |  |  | 7,099 |  |  | (5,658) |  |  | 1,441 |
Current assets, discontinued operations | — |  |  | — |  |  | — |  |  | 81,293 |  |  | 81,293 |
Total Current Assets | 154,521 |  |  | (3,968) |  |  | 150,553 |  |  | — |  |  | 150,553 |
Property and equipment, net | 179,929 |  |  | 3,152 |  |  | 183,081 |  |  | (74,320) |  |  | 108,761 |
Operating lease right-of-use assets | 11,979 |  |  | — |  |  | 11,979 |  |  | (4,492) |  |  | 7,487 |
Goodwill | 37,329 |  |  | — |  |  | 37,329 |  |  | (23,448) |  |  | 13,881 |
Trademarks/tradenames, net | 25,328 |  |  | — |  |  | 25,328 |  |  | (21,128) |  |  | 4,200 |
Customer relationships, net | 9,799 |  |  | — |  |  | 9,799 |  |  | (9,671) |  |  | 128 |
Other assets | 3,239 |  |  | — |  |  | 3,239 |  |  | (156) |  |  | 3,083 |
Non-current assets, discontinued operations | — |  |  | — |  |  | — |  |  | 133,215 |  |  | 133,215 |
Total Assets | $ | 422,124 |  |  | $ | (816) |  |  | $ | 421,308 |  |  | $ | — |  |  | $ | 421,308 |
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities: |  |  |  |  |  |  |  |  |
Accounts payable | $ | 59,098 |  |  | $ | 52 |  |  | $ | 59,150 |  |  | $ | (50,495) |  |  | $ | 8,655 |
Accrued compensation | 7,214 |  |  | — |  |  | 7,214 |  |  | (3,958) |  |  | 3,256 |
Other accrued liabilities | 9,804 |  |  | 76 |  |  | 9,880 |  |  | (6,000) |  |  | 3,880 |
Current portion of lease liabilities | 2,988 |  |  | — |  |  | 2,988 |  |  | (1,770) |  |  | 1,218 |
Deferred revenue | 1,160 |  |  | — |  |  | 1,160 |  |  | (193) |  |  | 967 |
Line of credit | 42,000 |  |  | — |  |  | 42,000 |  |  | — |  |  | 42,000 |
Current Liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 62,416 |  |  | 62,416 |
Total Current Liabilities | 122,264 |  |  | 128 |  |  | 122,392 |  |  | — |  |  | 122,392 |
Long-term debt, net | 124,194 |  |  | — |  |  | 124,194 |  |  | — |  |  | 124,194 |
Long-term lease liabilities | 14,203 |  |  | — |  |  | 14,203 |  |  | (2,859) |  |  | 11,344 |
Deferred taxes, net | 1,367 |  |  | (166) |  |  | 1,201 |  |  | — |  |  | 1,201 |
Other non-current liabilities | 3,894 |  |  | — |  |  | 3,894 |  |  | (1,962) |  |  | 1,932 |
Non-current liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 4,821 |  |  | 4,821 |
Total Liabilities | 265,922 |  |  | (38) |  |  | 265,884 |  |  | — |  |  | 265,884 |
Stockholders’ Equity: |  |  |  |  |  |  |  |  |
Common stock | 29 |  |  | — |  |  | 29 |  |  | — |  |  | 29 |
Additional paid-in capital | 166,327 |  |  | — |  |  | 166,327 |  |  | — |  |  | 166,327 |
Accumulated deficit | (9,338) |  |  | (778) |  |  | (10,116) |  |  | — |  |  | (10,116) |
Accumulated other comprehensive loss | (816) |  |  | — |  |  | (816) |  |  | — |  |  | (816) |
Total Stockholders’ Equity | 156,202 |  |  | (778) |  |  | 155,424 |  |  | — |  |  | 155,424 |
Total Liabilities and Stockholders’ Equity | $ | 422,124 |  |  | $ | (816) |  |  | $ | 421,308 |  |  | $ | — |  |  | $ | 421,308 |
The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the three months November 28, 2021 are summarized in the following table:
| Three Months Ended November 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Product sales | $ | 43,452 |  |  | $ | 38 |  |  | $ | 43,490 |  |  | $ | (17,889) |  |  | $ | 25,601 |
Cost of product sales | 28,737 |  |  | 616 |  |  | 29,353 |  |  | (15,210) |  |  | 14,143 |
Gross profit | 14,715 |  |  | (578) |  |  | 14,137 |  |  | (2,679) |  |  | 11,458 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |
Research and development | 1,856 |  |  | — |  |  | 1,856 |  |  | (176) |  |  | 1,680 |
Selling, general and administrative | 8,012 |  |  | 82 |  |  | 8,094 |  |  | (2,633) |  |  | 5,461 |
Restructuring costs | 707 |  |  | (80) |  |  | 627 |  |  | — |  |  | 627 |
Total operating costs and expenses | 10,575 |  |  | 2 |  |  | 10,577 |  |  | (2,809) |  |  | 7,768 |
Operating income (loss) | 4,140 |  |  | (580) |  |  | 3,560 |  |  | 130 |  |  | 3,690 |
Interest income | 19 |  |  | — |  |  | 19 |  |  | — |  |  | 19 |
Interest expense | (3,094) |  |  | 327 |  |  | (2,767) |  |  | — |  |  | (2,767) |
Other income | 79 |  |  | 251 |  |  | 330 |  |  | — |  |  | 330 |
Net income (loss) from continuing operations before taxes | 1,144 |  |  | (2) |  |  | 1,142 |  |  | 130 |  |  | 1,272 |
Income tax benefit | 3,085 |  |  | 2,147 |  |  | 5,232 |  |  | 1,043 |  |  | 6,275 |
Net income from continuing operations | 4,229 |  |  | 2,145 |  |  | 6,374 |  |  | 1,173 |  |  | 7,547 |
Discontinued operations: |  |  |  |  |  |  |  |  |
Loss from discontinued operations | (42,409) |  |  | (52) |  |  | (42,461) |  |  | (130) |  |  | (42,591) |
Income tax expense | (261) |  |  | (2,123) |  |  | (2,384) |  |  | (1,043) |  |  | (3,427) |
Loss from discontinued operations, net of tax | (42,670) |  |  | (2,175) |  |  | (44,845) |  |  | (1,173) |  |  | (46,018) |
Consolidated net loss | $ | (38,441) |  |  | $ | (30) |  |  | $ | (38,471) |  |  | $ | — |  |  | $ | (38,471) |
Basic net (loss) income per share: |  |  |  |  |  |  |  |  |
Income from continuing operations | $ | 0.14 |  |  | $ | 0.07 |  |  | $ | 0.21 |  |  | $ | 0.04 |  |  | $ | 0.25 |
Loss from discontinued operations | $ | (1.44) |  |  | $ | (0.08) |  |  | $ | (1.52) |  |  | $ | (0.04) |  |  | $ | (1.56) |
Total basic net loss per share | $ | (1.30) |  |  | $ | (0.01) |  |  | $ | (1.31) |  |  | $ | — |  |  | $ | (1.31) |
Diluted net (loss) income per share: |  |  |  |  |  |  |  |  |
Income from continuing operations | $ | 0.14 |  |  | $ | 0.07 |  |  | $ | 0.21 |  |  | $ | 0.04 |  |  | $ | 0.25 |
Loss from discontinued operations | $ | (1.44) |  |  | $ | (0.08) |  |  | $ | (1.52) |  |  | $ | (0.04) |  |  | $ | (1.56) |
Total diluted net loss income per share | $ | (1.30) |  |  | $ | (0.01) |  |  | $ | (1.31) |  |  | $ | — |  |  | $ | (1.31) |
Shares used in per share computation |  |  |  |  |  |  |  |  |
Basic | 29,471 |  | — |  | 29,471 |  | — |  | 29,471
Diluted | 29,471 |  | — |  | 29,471 |  | — |  | 29,471
| Three Months Ended November 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Net (loss) income | $ | (38,441) |  |  | $ | (30) |  |  | $ | (38,471) |  |  | $ | — |  |  | $ | (38,471) |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |  |
Net unrealized gains on interest rate swaps, net of tax | 176 |  |  | — |  |  | 176 |  |  | — |  |  | 176 |
Other comprehensive income, net of tax | 176 |  |  | — |  |  | 176 |  |  | — |  |  | 176 |
Total comprehensive (loss) income | $ | (38,265) |  |  | $ | (30) |  |  | $ | (38,295) |  |  | $ | — |  |  | $ | (38,295) |
The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the six months November 28, 2021 are summarized in the following table:
| Six Months Ended November 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Product sales | $ | 85,084 |  |  | $ | 38 |  |  | $ | 85,122 |  |  | $ | (37,191) |  |  | $ | 47,931 |
Cost of product sales | 59,934 |  |  | 956 |  |  | 60,890 |  |  | (29,962) |  |  | 30,928 |
Gross profit | 25,150 |  |  | (918) |  |  | 24,232 |  |  | (7,229) |  |  | 17,003 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |
Research and development | 3,729 |  |  | — |  |  | 3,729 |  |  | (360) |  |  | 3,369 |
Selling, general and administrative | 17,482 |  |  | 314 |  |  | 17,796 |  |  | (5,384) |  |  | 12,412 |
Restructuring costs | 2,541 |  |  | (786) |  |  | 1,755 |  |  | — |  |  | 1,755 |
Total operating costs and expenses | 23,752 |  |  | (472) |  |  | 23,280 |  |  | (5,744) |  |  | 17,536 |
Operating income (loss) | 1,398 |  |  | (446) |  |  | 952 |  |  | (1,485) |  |  | (533) |
Interest income | 46 |  |  | — |  |  | 46 |  |  | — |  |  | 46 |
Interest expense | (9,772) |  |  | 875 |  |  | (8,897) |  |  | — |  |  | (8,897) |
Other income | 188 |  |  | 188 |  |  | 376 |  |  | — |  |  | 376 |
Net (loss) income from continuing operations before taxes | (8,140) |  |  | 617 |  |  | (7,523) |  |  | (1,485) |  |  | (9,008) |
Income tax benefit | 4,736 |  |  | 2,014 |  |  | 6,750 |  |  | 1,332 |  |  | 8,082 |
Net (loss) income from continuing operations | (3,404) |  |  | 2,631 |  |  | (773) |  |  | (153) |  |  | (926) |
Discontinued operations: |  |  |  |  |  |  |  |  |
(Loss) gain from discontinued operations | (44,714) |  |  | (558) |  |  | (45,272) |  |  | 1,485 |  |  | (43,787) |
Income tax benefit (provision) | 200 |  |  | (2,013) |  |  | (1,813) |  |  | (1,332) |  |  | (3,145) |
(Loss) gain from discontinued operations, net of tax | (44,514) |  |  | (2,571) |  |  | (47,085) |  |  | 153 |  |  | (46,932) |
Consolidated net (loss) income | $ | (47,918) |  |  | $ | 60 |  |  | $ | (47,858) |  |  | $ | — |  |  | $ | (47,858) |
Basic net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.12) |  |  | $ | 0.09 |  |  | $ | (0.03) |  |  | $ | (0.01) |  |  | $ | (0.04) |
(Loss) income from discontinued operations | $ | (1.51) |  |  | $ | (0.09) |  |  | $ | (1.60) |  |  | $ | 0.01 |  |  | $ | (1.59) |
Total basic net (loss) income per share | $ | (1.63) |  |  | $ | — |  |  | $ | (1.63) |  |  | $ | — |  |  | $ | (1.63) |
Diluted net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.12) |  |  | $ | 0.09 |  |  | $ | (0.03) |  |  | $ | (0.01) |  |  | $ | (0.04) |
Loss from discontinued operations | $ | (1.51) |  |  | $ | (0.09) |  |  | $ | (1.60) |  |  | $ | 0.01 |  |  | $ | (1.59) |
Total diluted net (loss) income per share | $ | (1.63) |  |  | $ | — |  |  | $ | (1.63) |  |  | $ | — |  |  | $ | (1.63) |
Shares used in per share computation |  |  |  |  |  |  |  |  |
Basic | 29,448 |  | — |  | 29,448 |  | — |  | 29,448
Diluted | 29,448 |  | — |  | 29,448 |  | — |  | 29,448
| Six Months Ended November 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Net (loss) income | $ | (47,918) |  |  | $ | 60 |  |  | $ | (47,858) |  |  | $ | — |  |  | $ | (47,858) |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |  |
Net unrealized gains on interest rate swaps, net of tax | 542 |  |  | — |  |  | 542 |  |  | — |  |  | 542 |
Other comprehensive income, net of tax | 542 |  |  | — |  |  | 542 |  |  | — |  |  | 542 |
Total comprehensive (loss) income | $ | (47,376) |  |  | $ | 60 |  |  | $ | (47,316) |  |  | $ | — |  |  | $ | (47,316) |
The effects of the restatement on the consolidated statement of convertible preferred stock and stockholders’ equity (deficit) for the three and six months ended November 28, 2021 are summarized in the following table:
| Convertible Preferred Stock |  |  | Common Stock |  | Additional Paid-in Capital |  | Retained Earnings (Accumulated Deficit) |  | Accumulated Other Comprehensive Loss |  | Total Stockholders’ Equity
| Shares |  | Amount |  |  | Shares |  | Amount |  |  |  |
As Reported |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 30, 2021 | — |  |  | $ | — |  |  |  | 29,333 |  |  | $ | 29 |  |  | $ | 165,533 |  |  | $ | 38,580 |  |  | $ | (1,358) |  |  | $ | 202,784 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 129 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (428) |  |  | — |  |  | — |  |  | (428) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 620 |  |  | — |  |  | — |  |  | 620 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (9,477) |  |  | — |  |  | (9,477) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 366 |  |  | 366 |
Balance at August 29, 2021 | — |  |  | $ | — |  |  |  | 29,462 |  |  | $ | 29 |  |  | $ | 165,725 |  |  | $ | 29,103 |  |  | $ | (992) |  |  | $ | 193,865 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 19 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (84) |  |  | — |  |  | — |  |  | (84) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 686 |  |  | — |  |  | — |  |  | 686 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (38,441) |  |  | — |  |  | (38,441) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 176 |  |  | 176 |
Balance at November 28, 2021 | — |  |  | $ | — |  |  |  | 29,481 |  |  | $ | 29 |  |  | $ | 166,327 |  |  | $ | (9,338) |  |  | $ | (816) |  |  | $ | 156,202 |
Restatements Adjustments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Opening retained earnings (at May 30, 2021) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (838) |  |  | — |  |  | (838) |
Net income at August 29, 2021 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | 90 |  |  | — |  |  | 90 |
Opening retained earnings (at August 29, 2021) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (748) |  |  | — |  |  | (748) |
Net loss at November 28, 2021 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (30) |  |  | — |  |  | (30) |
As Restated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 30, 2021 | — |  |  | $ | — |  |  |  | 29,333 |  |  | $ | 29 |  |  | $ | 165,533 |  |  | $ | 37,742 |  |  | $ | (1,358) |  |  | $ | 201,946 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 129 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (428) |  |  | — |  |  | — |  |  | (428) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 620 |  |  | — |  |  | — |  |  | 620 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (9,387) |  |  | — |  |  | (9,387) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 366 |  |  | 366 |
Balance at August 29, 2021 | — |  |  | $ | — |  |  |  | 29,462 |  |  | $ | 29 |  |  | $ | 165,725 |  |  | $ | 28,355 |  |  | $ | (992) |  |  | $ | 193,117 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 19 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (84) |  |  | — |  |  | — |  |  | (84) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 686 |  |  | — |  |  | — |  |  | 686 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (38,471) |  |  | — |  |  | (38,471) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 176 |  |  | 176 |
Balance at November 28, 2021 | — |  |  | $ | — |  |  |  | 29,481 |  |  | $ | 29 |  |  | $ | 166,327 |  |  | $ | (10,116) |  |  | $ | (816) |  |  | $ | 155,424 |
The effects of the restatement on the consolidated statement of cash flows for the six months ended November 28, 2021 are summarized in the following table:
| Six Months Ended November 28, 2021
| As Reported |  | Restatement Adjustment |  | As Restated
Cash flows from operating activities: |  |  |  |  |
Net (loss) income | $ | (47,918) |  |  | $ | 60 |  |  | $ | (47,858) |
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 | 10,959 |  |  | 35 |  |  | 10,994 |
Deferred taxes | (4,963) |  |  | (1) |  |  | (4,964) |
Stock-based compensation expense | 1,306 |  |  | — |  |  | 1,306 |
Provision for expected credit losses | 196 |  |  | — |  |  | 196 |
Net loss on disposal of property and equipment held and used | 22 |  |  | — |  |  | 22 |
Loss on disposal of property and equipment related to restructuring, net | (92) |  |  | — |  |  | (92) |
Other, net | (111) |  |  | — |  |  | (111) |
Changes in current assets and current liabilities: |  |  |  |  |
Accounts receivable, net | 4,541 |  |  | — |  |  | 4,541 |
Inventory | (9,770) |  |  | 771 |  |  | (8,999) |
Prepaid expenses and other current assets | (1,784) |  |  | (154) |  |  | (1,938) |
Accounts payable | 15,148 |  |  | 52 |  |  | 15,200 |
Accrued compensation | (5,090) |  |  | — |  |  | (5,090) |
Other accrued liabilities | 1,163 |  |  | 112 |  |  | 1,275 |
Deferred revenue | 30 |  |  | — |  |  | 30 |
Net cash (used in) provided by operating activities | (4,306) |  |  | 875 |  |  | (3,431) |
Cash flows from investing activities: |  |  |  |  |
Sale of investment in non-public company | 45,100 |  |  | — |  |  | 45,100 |
Purchases of property and equipment | (13,010) |  |  | (875) |  |  | (13,885) |
Proceeds from sales of property and equipment | 1,082 |  |  | — |  |  | 1,082 |
Net cash provided by (used in) investing activities | 33,172 |  |  | (875) |  |  | 32,297 |
Cash flows from financing activities: |  |  |  |  |
Payments on long-term debt | (41,426) |  |  | — |  |  | (41,426) |
Proceeds from line of credit | 26,000 |  |  | — |  |  | 26,000 |
Payments on line of credit | (13,000) |  |  | — |  |  | (13,000) |
Payments for debt issuance costs | (132) |  |  | — |  |  | (132) |
Taxes paid by Company for employee stock plans | (512) |  |  | — |  |  | (512) |
Net cash used in financing activities | (29,070) |  |  | — |  |  | (29,070) |
Net decrease in cash, cash equivalents and restricted cash | (204) |  |  | — |  |  | (204) |
Cash, cash equivalents and restricted cash, beginning of period | 1,295 |  |  | — |  |  | 1,295 |
Cash, cash equivalents and restricted cash, end of period | $ | 1,091 |  |  | $ | — |  |  | $ | 1,091 |
Supplemental disclosure of non-cash investing and financing activities: |  |  |  |  |
Purchases of property and equipment on trade vendor credit | $ | 1,105 |  |  | $ | — |  |  | $ | 1,105 |
The effects of this error on our previously reported changes in the Company’s allowance for sales returns and credit losses for the quarter ended November 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| November 28, 2021
| Balance at beginning of period |  | Provision (benefit) for expected credit losses |  | Write offs, net of recoveries |  |  |  | Balance at end of period
Six months ended November 28, 2021, As Reported | $ | 85 |  |  | $ | (14) |  |  | $ | — |  |  |  |  | $ | 71 |
Restatement Adjustment | $ | 522 |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | 522 |
Six months ended November 28, 2021, As Restated | $ | 607 |  |  | $ | (14) |  |  | $ | — |  |  |  |  | $ | 593 |
Discontinued Operations | $ | (85) |  |  | $ | 14 |  |  | $ | — |  |  |  |  | $ | (71) |
Six months ended November 28, 2021, As Restated, after Discontinued Operations | $ | 522 |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | 522 |
The effects of this error on our previously reported inventories as of November 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| November 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Finished goods | $ | 42,967 |  |  | $ | 227 |  |  | $ | 43,194 |  |  | $ | (22,309) |  |  | $ | 20,885 |
Raw materials | 31,924 |  |  | (1,602) |  |  | 30,322 |  |  | (15,583) |  |  | 14,739 |
Work in progress | 4,542 |  |  | (449) |  |  | 4,093 |  |  | (2) |  |  | 4,091 |
Total inventories | $ | 79,433 |  |  | $ | (1,824) |  |  | $ | 77,609 |  |  | $ | (37,894) |  |  | $ | 39,715 |
The effects of this error on our previously reported basic and diluted net loss per share for the three and six months ended November 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| Three Months Ended November 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Numerator: |  |  |  |  |  |  |  |  |
Net loss applicable to Common Stockholders | $ | (38,441) |  |  | $ | (30) |  |  | $ | (38,471) |  |  | $ | — |  |  | $ | (38,471) |
Denominator: |  |  |  |  |  |  |  |  |
Weighted average shares for basic net income per share | 29,471 |  |  | — |  |  | 29,471 |  |  | — |  |  | 29,471 |
Weighted average shares for diluted net income per share | 29,471 |  |  | — |  |  | 29,471 |  |  | — |  |  | 29,471 |
Diluted net loss per share | $ | (1.30) |  |  | $ | (0.01) |  |  | $ | (1.31) |  |  | $ | — |  |  | $ | (1.31) |
| Six Months Ended November 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Numerator: |  |  |  |  |  |  |  |  |
Net (loss) income applicable to Common Stockholders | $ | (47,918) |  |  | $ | 60 |  |  | $ | (47,858) |  |  | $ | — |  |  | $ | (47,858) |
Denominator: |  |  |  |  |  |  |  |  |
Weighted average shares for basic net income per share | 29,448 |  |  | — |  |  | 29,448 |  |  | — |  |  | 29,448 |
Weighted average shares for diluted net income per share | 29,448 |  |  | — |  |  | 29,448 |  |  | — |  |  | 29,448 |
Diluted net (loss) income per share | $ | (1.63) |  |  | $ | — |  |  | $ | (1.63) |  |  | $ | — |  |  | $ | (1.63) |
The effects of this error on our previously reported disaggregated revenue for the three months ended November 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Contact development and manufacturing organization | $ | 21,363 |  |  | $ | 38 |  |  | $ | 21,401 |  |  | $ | — |  |  | $ | 21,401 |
Fermentation | 3,583 |  |  | — |  |  | 3,583 |  |  | — |  |  | 3,583 |
Total | $ | 24,946 |  |  | $ | 38 |  |  | $ | 24,984 |  |  | $ | — |  |  | $ | 24,984 |
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Avocado Products | $ | 15,381 |  |  | $ | — |  |  | $ | 15,381 |  |  | $ | (15,381) |  |  | $ | — |
Olive oil and vinegars | 2,508 |  |  | — |  |  | 2,508 |  |  | (2,508) |  |  | — |
Technology | 617 |  |  | — |  |  | 617 |  |  | — |  |  | 617 |
Total | $ | 18,506 |  |  | $ | — |  |  | $ | 18,506 |  |  | $ | (17,889) |  |  | $ | 617 |
The effects of this error on our previously reported disaggregated revenue for the six months ended November 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Contact development and manufacturing organization | $ | 39,152 |  |  | $ | 38 |  |  | $ | 39,190 |  |  | $ | — |  |  | $ | 39,190 |
Fermentation | 7,746 |  |  | — |  |  | 7,746 |  |  | — |  |  | 7,746 |
Total | $ | 46,898 |  |  | $ | 38 |  |  | $ | 46,936 |  |  | $ | — |  |  | $ | 46,936 |
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Avocado Products | $ | 32,343 |  |  | $ | — |  |  | $ | 32,343 |  |  | $ | (32,343) |  |  | $ | — |
Olive oil and vinegars | 4,848 |  |  | — |  |  | 4,848 |  |  | (4,848) |  |  | — |
Technology | 995 |  |  | — |  |  | 995 |  |  | — |  |  | 995 |
Total | $ | 38,186 |  |  | $ | — |  |  | $ | 38,186 |  |  | $ | (37,191) |  |  | $ | 995 |
The effects of this error on our previously reported segment reporting for the three months ended November 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 7, are as follows. The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the three months ended November 28, 2021. Refer to Note 14 for the related income statement line items reported in the segment table of the Company after giving effect to the discontinued operations previously reported under the Curation segment. The Company disclosed Other to reconcile the segment information to the consolidated financial statements.
| Three Months Ended November 28, 2021
(in thousands) | Lifecore |  | Curation Foods |  | Other |  | Total
Three Months Ended November 28, 2021, As Reported |  |  |  |  |  |  |
Net sales | $ | 24,946 |  |  | $ | 18,506 |  |  | $ | — |  |  | $ | 43,452 |
Gross profit | 11,715 |  |  | 3,000 |  |  | — |  |  | 14,715 |
Net income (loss) from continuing | 5,682 |  |  | (747) |  |  | (706) |  |  | 4,229 |
Loss from discontinued operations, net of tax | — |  |  | (42,670) |  |  | — |  |  | (42,670) |
Depreciation and amortization | 1,673 |  |  | 886 |  |  | 26 |  |  | 2,585 |
Interest income | 19 |  |  | — |  |  | — |  |  | 19 |
Interest expense | — |  |  | 136 |  |  | 2,958 |  |  | 3,094 |
Income tax (benefit) expense, continuing operations | 1,794 |  |  | (579) |  |  | (4,300) |  |  | (3,085) |
Corporate overhead allocation | 1,078 |  |  | 1,231 |  |  | (2,309) |  |  | — |
Restatement Adjustments |  |  |  |  |  |  |
Net sales | 38 |  |  | — |  |  | — |  |  | 38 |
Gross profit | (498) |  |  | (80) |  |  | — |  |  | (578) |
Net (loss) income from continuing operations | (5,293) |  |  | 716 |  |  | 6,722 |  |  | 2,145 |
Loss from discontinued operations, net of tax | — |  |  | (2,175) |  |  | — |  |  | (2,175) |
Depreciation and amortization | 24 |  |  | — |  |  | — |  |  | 24 |
Interest expense | — |  |  | — |  |  | (327) |  |  | (327) |
Income tax (benefit) expense, continuing operations | 4,795 |  |  | (547) |  |  | (6,395) |  |  | (2,147) |
Three Months Ended November 28, 2021, As Restated |  |  |  |  |  |  |
Net sales | $ | 24,984 |  |  | $ | 18,506 |  |  | $ | — |  |  | $ | 43,490 |
Gross profit | 11,217 |  |  | 2,920 |  |  | — |  |  | 14,137 |
Net income (loss) from continuing | 389 |  |  | (31) |  |  | 6,016 |  |  | 6,374 |
Loss from discontinued operations, net of tax | — |  |  | (44,845) |  |  | — |  |  | (44,845) |
Depreciation and amortization | 1,697 |  |  | 886 |  |  | 26 |  |  | 2,609 |
Interest income | 19 |  |  | — |  |  | — |  |  | 19 |
Interest expense | — |  |  | 136 |  |  | 2,631 |  |  | 2,767 |
Income tax (benefit) expense, continuing operations | 6,589 |  |  | (1,126) |  |  | (10,695) |  |  | (5,232) |
Corporate overhead allocation | 1,078 |  |  | 1,231 |  |  | (2,309) |  |  | — |
The effects of this error on our previously reported segment reporting for the six months ended November 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 7, are as follows. The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the six months ended November 28, 2021. Refer to Note 14 for the related income statement line items reported in the segment table of the Company after giving effect to the discontinued operations previously reported under the Curation segment. The Company disclosed Other to reconcile the segment information to the consolidated financial statements.
| Six Months Ended November 28, 2021
(in thousands) | Lifecore |  | Curation Foods |  | Other |  | Total
Six Months Ended November 28, 2021, As Reported |  |  |  |  |  |  |
Net sales | $ | 46,898 |  |  | $ | 38,186 |  |  | $ | — |  |  | $ | 85,084 |
Gross profit | 17,479 |  |  | 7,671 |  |  | — |  |  | 25,150 |
Net income (loss) from continuing operations | 6,262 |  |  | (1,030) |  |  | (8,636) |  |  | (3,404) |
Loss from discontinued operations, net of tax | — |  |  | (44,514) |  |  | — |  |  | (44,514) |
Depreciation and amortization | 3,220 |  |  | 1,767 |  |  | 52 |  |  | 5,039 |
Interest income | 39 |  |  | — |  |  | 7 |  |  | 46 |
Interest expense | — |  |  | 273 |  |  | 9,499 |  |  | 9,772 |
Income tax (benefit) expense, continuing operations | 1,977 |  |  | (797) |  |  | (5,916) |  |  | (4,736) |
Corporate overhead allocation | 2,215 |  |  | 2,702 |  |  | (4,917) |  |  | — |
Restatement Adjustments |  |  |  |  |  |  |
Net sales | 38 |  |  | — |  |  | — |  |  | 38 |
Gross profit | (806) |  |  | (112) |  |  | — |  |  | (918) |
Net (loss) income from continuing operations | (5,498) |  |  | 899 |  |  | 7,230 |  |  | 2,631 |
Loss from discontinued operations, net of tax | — |  |  | (2,571) |  |  | — |  |  | (2,571) |
Depreciation and amortization | 35 |  |  | — |  |  | — |  |  | 35 |
Interest expense | — |  |  | — |  |  | (875) |  |  | (875) |
Income tax (benefit) expense, continuing operations | 4,692 |  |  | (351) |  |  | (6,355) |  |  | (2,014) |
Six Months Ended November 28, 2021, As Restated |  |  |  |  |  |  |
Net sales | $ | 46,936 |  |  | $ | 38,186 |  |  | $ | — |  |  | $ | 85,122 |
Gross profit | 16,673 |  |  | 7,559 |  |  | — |  |  | 24,232 |
Net income (loss) from continuing operations | 764 |  |  | (131) |  |  | (1,406) |  |  | (773) |
Loss from discontinued operations, net of tax | — |  |  | (47,085) |  |  | — |  |  | (47,085) |
Depreciation and amortization | 3,255 |  |  | 1,767 |  |  | 52 |  |  | 5,074 |
Interest income | 39 |  |  | — |  |  | 7 |  |  | 46 |
Interest expense | — |  |  | 273 |  |  | 8,624 |  |  | 8,897 |
Income tax (benefit) expense, continuing operations | 6,669 |  |  | (1,148) |  |  | (12,271) |  |  | (6,750) |
Corporate overhead allocation | 2,215 |  |  | 2,702 |  |  | (4,917) |  |  | — |
The effects of this error on our previously reported restructuring cost for the three months ended November 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 8, are as follows:
| Three Months Ended November 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Other restructuring costs | $ | 707 |  |  | $ | (80) |  |  | $ | 627 |  |  | $ | — |  |  | $ | 627 |
Total restructuring costs | $ | 707 |  |  | $ | (80) |  |  | $ | 627 |  |  | $ | — |  |  | $ | 627 |
| Three Months Ended November 28, 2021
| Curation |  | Other |  | Total
Total restructuring costs, As reported | $ | (2) |  |  | $ | 709 |  |  | $ | 707 |
Restatement adjustments | (80) |  |  | — |  |  | (80) |
Total restructuring costs, As restated | $ | (82) |  |  | $ | 709 |  |  | $ | 627 |
The effects of this error on our previously reported restructuring cost for the six months ended November 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 8, are as follows:
| Six Months Ended November 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Asset write-off costs | $ | — |  |  | $ | (566) |  |  | $ | (566) |  |  | $ | — |  |  | $ | (566) |
Employee severance and benefit costs | — |  |  | 34 |  |  | 34 |  |  | — |  |  | 34 |
Lease costs | $ | 468 |  |  | $ | — |  |  | $ | 468 |  |  | $ | — |  |  | $ | 468 |
Other restructuring costs | 2,073 |  |  | (254) |  |  | 1,819 |  |  | — |  |  | 1,819 |
Total restructuring costs | $ | 2,541 |  |  | $ | (786) |  |  | $ | 1,755 |  |  | $ | — |  |  | $ | 1,755 |
| Six Months Ended November 28, 2021
| Curation |  | Other |  | Total
Total restructuring costs, As reported | $ | 466 |  |  | $ | 2,075 |  |  | $ | 2,541 |
Restatement adjustments | (786) |  |  | — |  |  | (786) |
Total restructuring costs, As restated | $ | (320) |  |  | $ | 2,075 |  |  | $ | 1,755 |
As of and for the three months ended August 29, 2021 The effects of the restatement on the consolidated balance sheet as of August 29, 2021 are summarized in the following table:
| August 29, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
ASSETS |  |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 1,447 |  |  | $ | — |  |  | $ | 1,447 |  |  | $ | (508) |  |  | $ | 939 |
Accounts receivable, less allowance for doubtful accounts | 61,956 |  |  | (522) |  |  | 61,434 |  |  | (35,218) |  |  | 26,216 |
Inventories | 69,415 |  |  | (1,350) |  |  | 68,065 |  |  | (31,196) |  |  | 36,869 |
Prepaid expenses and other current assets | 9,591 |  |  | (1,871) |  |  | 7,720 |  |  | (6,396) |  |  | 1,324 |
Current assets, discontinued operations | — |  |  | — |  |  | — |  |  | 73,318 |  |  | 73,318 |
Total Current Assets | 142,409 |  |  | (3,743) |  |  | 138,666 |  |  | — |  |  | 138,666 |
Property and equipment, net | 180,460 |  |  | 2,849 |  |  | 183,309 |  |  | (74,909) |  |  | 108,400 |
Operating lease right-of-use assets | 14,299 |  |  | — |  |  | 14,299 |  |  | (6,603) |  |  | 7,696 |
Goodwill | 69,386 |  |  | — |  |  | 69,386 |  |  | (55,505) |  |  | 13,881 |
Trademarks/tradenames, net | 25,328 |  |  | — |  |  | 25,328 |  |  | (21,128) |  |  | 4,200 |
Customer relationships, net | 10,295 |  |  | — |  |  | 10,295 |  |  | (10,090) |  |  | 205 |
Other assets | 3,442 |  |  | — |  |  | 3,442 |  |  | (191) |  |  | 3,251 |
Non-current assets, discontinued operations | — |  |  | — |  |  | — |  |  | 168,426 |  |  | 168,426 |
Total Assets | $ | 445,619 |  |  | $ | (894) |  |  | $ | 444,725 |  |  | $ | — |  |  | $ | 444,725 |
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities: |  |  |  |  |  |  |  |  |
Accounts payable | $ | 46,355 |  |  | $ | — |  |  | 46,355 |  |  | $ | (37,749) |  |  | 8,606 |
Accrued compensation | 9,173 |  |  | — |  |  | 9,173 |  |  | (4,438) |  |  | 4,735 |
Other accrued liabilities | 10,855 |  |  | (4) |  |  | 10,851 |  |  | (6,138) |  |  | 4,713 |
Current portion of lease liabilities | 4,054 |  |  | — |  |  | 4,054 |  |  | (2,818) |  |  | 1,236 |
Deferred revenue | 1,216 |  |  | — |  |  | 1,216 |  |  | (147) |  |  | 1,069 |
Line of credit | 32,000 |  |  | — |  |  | 32,000 |  |  | — |  |  | 32,000 |
Current Liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 51,290 |  |  | 51,290 |
Total Current Liabilities | 103,653 |  |  | (4) |  |  | 103,649 |  |  | — |  |  | 103,649 |
Long-term debt, net | 123,833 |  |  | — |  |  | 123,833 |  |  | — |  |  | 123,833 |
Long-term lease liabilities | 17,072 |  |  | — |  |  | 17,072 |  |  | (5,417) |  |  | 11,655 |
Deferred taxes, net | 4,091 |  |  | (142) |  |  | 3,949 |  |  | — |  |  | 3,949 |
Other non-current liabilities | 3,105 |  |  | — |  |  | 3,105 |  |  | (729) |  |  | 2,376 |
Non-current liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 6,146 |  |  | 6,146 |
Total Liabilities | 251,754 |  |  | (146) |  |  | 251,608 |  |  | — |  |  | 251,608 |
Stockholders’ Equity: |  |  |  |  |  |  |  |  |
Common stock | 29 |  |  | — |  |  | 29 |  |  | $ | — |  |  | 29 |
Additional paid-in capital | 165,725 |  |  | — |  |  | 165,725 |  |  | — |  |  | 165,725 |
Retained earnings (accumulated deficit) | 29,103 |  |  | (748) |  |  | 28,355 |  |  | — |  |  | 28,355 |
Accumulated other comprehensive loss | (992) |  |  | — |  |  | (992) |  |  | — |  |  | (992) |
Total Stockholders’ Equity | 193,865 |  |  | (748) |  |  | 193,117 |  |  | — |  |  | 193,117 |
Total Liabilities and Stockholders’ Equity | $ | 445,619 |  |  | $ | (894) |  |  | $ | 444,725 |  |  | $ | — |  |  | $ | 444,725 |
The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the three months August 29, 2021 are summarized in the following table:
| Three Months Ended August 29, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Product sales | $ | 41,632 |  |  | $ | — |  |  | $ | 41,632 |  |  | $ | (19,302) |  |  | $ | 22,330 |
Cost of product sales | 31,197 |  |  | 340 |  |  | 31,537 |  |  | (14,752) |  |  | 16,785 |
Gross profit | 10,435 |  |  | (340) |  |  | 10,095 |  |  | (4,550) |  |  | 5,545 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |
Research and development | 1,873 |  |  | — |  |  | 1,873 |  |  | (184) |  |  | 1,689 |
Selling, general and administrative | 9,470 |  |  | 232 |  |  | 9,702 |  |  | (2,751) |  |  | 6,951 |
Restructuring costs | 1,834 |  |  | (706) |  |  | 1,128 |  |  | — |  |  | 1,128 |
Total operating costs and expenses | 13,177 |  |  | (474) |  |  | 12,703 |  |  | (2,935) |  |  | 9,768 |
Operating loss | (2,742) |  |  | 134 |  |  | (2,608) |  |  | (1,615) |  |  | (4,223) |
Interest income | 27 |  |  | — |  |  | 27 |  |  | — |  |  | 27 |
Interest expense | (6,678) |  |  | 548 |  |  | (6,130) |  |  | — |  |  | (6,130) |
Other income (expense) | 109 |  |  | (63) |  |  | 46 |  |  | — |  |  | 46 |
Net (loss) income from continuing operations before taxes | (9,284) |  |  | 619 |  |  | (8,665) |  |  | (1,615) |  |  | (10,280) |
Income tax benefit (expense) | 1,651 |  |  | (133) |  |  | 1,518 |  |  | 289 |  |  | 1,807 |
Net (loss) income from continuing operations | (7,633) |  |  | 486 |  |  | (7,147) |  |  | (1,326) |  |  | (8,473) |
Discontinued operations: |  |  |  |  |  |  |  |  |
(Loss) gain from discontinued operations | (2,305) |  |  | (506) |  |  | (2,811) |  |  | 1,615 |  |  | (1,196) |
Income tax benefit | 461 |  |  | 110 |  |  | 571 |  |  | (289) |  |  | 282 |
(Loss) gain from discontinued operations, net of tax | (1,844) |  |  | (396) |  |  | (2,240) |  |  | 1,326 |  |  | (914) |
Consolidated net (loss) income | $ | (9,477) |  |  | $ | 90 |  |  | $ | (9,387) |  |  | $ | — |  |  | $ | (9,387) |
Basic net (loss) income per share: |  |  |  |  |  |  |  |  |
Loss from continuing operations | $ | (0.26) |  |  | $ | 0.02 |  |  | $ | (0.24) |  |  | $ | (0.05) |  |  | $ | (0.29) |
Loss from discontinued operations | $ | (0.06) |  |  | $ | (0.02) |  |  | $ | (0.08) |  |  | $ | 0.05 |  |  | $ | (0.03) |
Total basic net loss per share | $ | (0.32) |  |  | $ | — |  |  | $ | (0.32) |  |  | $ | — |  |  | $ | (0.32) |
Diluted net (loss) income per share: |  |  |  |  |  |  |  |  |
Loss from continuing operations | $ | (0.26) |  |  | $ | 0.02 |  |  | $ | (0.24) |  |  | $ | (0.05) |  |  | $ | (0.29) |
Loss from discontinued operations | $ | (0.06) |  |  | $ | (0.02) |  |  | $ | (0.08) |  |  | $ | 0.05 |  |  | $ | (0.03) |
Total diluted net loss per share | $ | (0.32) |  |  | $ | — |  |  | $ | (0.32) |  |  | $ | — |  |  | $ | (0.32) |
Shares used in per share computation |  |  |  |  |  |  |  |  |
Basic | 29,424 |  | — |  |  | 29,424 |  |  | — |  |  | 29,424
Diluted | 29,424 |  | — |  |  | 29,424 |  |  | — |  |  | 29,424
| Three Months Ended August 29, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Net (loss) income | $ | (9,477) |  |  | $ | 90 |  |  | $ | (9,387) |  |  | $ | — |  |  | $ | (9,387) |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |  |
Net unrealized gains on interest rate swaps, net of tax | 366 |  |  | — |  |  | 366 |  |  | — |  |  | 366 |
Other comprehensive income, net of tax | 366 |  |  | — |  |  | 366 |  |  | — |  |  | 366 |
Total comprehensive (loss) income | $ | (9,111) |  |  | $ | 90 |  |  | $ | (9,021) |  |  | $ | — |  |  | $ | (9,021) |
The effects of the restatement on the consolidated statement of convertible preferred stock and stockholders’ equity (deficit) for the three months ended August 29, 2021 are summarized in the following table:
| Convertible Preferred Stock |  |  | Common Stock |  | Additional Paid-in Capital |  | Retained Earnings (Accumulated Deficit) |  | Accumulated Other Comprehensive Loss |  | Total Stockholders’ Equity
| Shares |  | Amount |  |  | Shares |  | Amount |  |  |  |
As Reported |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 30, 2021 | — |  |  | $ | — |  |  |  | 29,333 |  |  | $ | 29 |  |  | $ | 165,533 |  |  | $ | 38,580 |  |  | $ | (1,358) |  |  | $ | 202,784 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 129 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (428) |  |  | — |  |  | — |  |  | (428) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 620 |  |  | — |  |  | — |  |  | 620 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (9,477) |  |  | — |  |  | (9,477) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 366 |  |  | 366 |
Balance at August 29, 2021 | $ | — |  |  | $ | — |  |  |  | 29,462 |  |  | $ | 29 |  |  | $ | 165,725 |  |  | $ | 29,103 |  |  | $ | (992) |  |  | $ | 193,865 |
Restatements Adjustments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Opening retained earnings (at May 30, 2021) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (838) |  |  | — |  |  | (838) |
Net income at August 29, 2021 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | 90 |  |  | — |  |  | 90 |
As Restated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 30, 2021 | — |  |  | $ | — |  |  |  | 29,333 |  |  | $ | 29 |  |  | $ | 165,533 |  |  | $ | 37,742 |  |  | $ | (1,358) |  |  | $ | 201,946 |
Issuance of stock under stock plans, net of shares withheld | — |  |  | — |  |  |  | 129 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (428) |  |  | — |  |  | — |  |  | (428) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 620 |  |  | — |  |  | — |  |  | 620 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (9,387) |  |  | — |  |  | (9,387) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 366 |  |  | 366 |
Balance at August 29, 2021 | $ | — |  |  | $ | — |  |  |  | 29,462 |  |  | $ | 29 |  |  | $ | 165,725 |  |  | $ | 28,355 |  |  | $ | (992) |  |  | $ | 193,117 |
The effects of the restatement on the consolidated statement of cash flows for the three months ended August 29, 2021 are summarized in the following table:
| Three Months Ended August 29, 2021
| As Reported |  | Restatement Adjustment |  | As Restated
Cash flows from operating activities: |  |  |  |  |
Net (loss) income | $ | (9,477) |  |  | $ | 90 |  |  | $ | (9,387) |
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Depreciation, amortization of intangibles, debt costs and right-of-use assets | 5,054 |  |  | 11 |  |  | 5,065 |
Deferred taxes | (2,138) |  |  | 23 |  |  | (2,115) |
Stock-based compensation expense | 620 |  |  | — |  |  | 620 |
Provision for expected credit losses | 60 |  |  | — |  |  | 60 |
Net loss on disposal of property and equipment held and used | 16 |  |  | — |  |  | 16 |
Loss on disposal of property and equipment related to restructuring, net | (92) |  |  | — |  |  | (92) |
Other, net | (70) |  |  | — |  |  | (70) |
Changes in current assets and current liabilities: |  |  |  |  |
Accounts receivable, net | 7,997 |  |  | — |  |  | 7,997 |
Inventory | 248 |  |  | 297 |  |  | 545 |
Prepaid expenses and other current assets | (2,697) |  |  | 95 |  |  | (2,602) |
Accounts payable | 1,517 |  |  | — |  |  | 1,517 |
Accrued compensation | (3,131) |  |  | — |  |  | (3,131) |
Other accrued liabilities | 2,838 |  |  | 32 |  |  | 2,870 |
Deferred revenue | 86 |  |  | — |  |  | 86 |
Net cash provided by operating activities | 831 |  |  | 548 |  |  | 1,379 |
Cash flows from investing activities: |  |  |  |  |
Sale of investment in non-public company | 45,100 |  |  | — |  |  | 45,100 |
Purchases of property and equipment | (7,913) |  |  | (548) |  |  | (8,461) |
Proceeds from sales of property and equipment | 1,082 |  |  | — |  |  | 1,082 |
Net cash provided by (used in) investing activities | 38,269 |  |  | (548) |  |  | 37,721 |
Cash flows from financing activities: |  |  |  |  |
Payments on long-term debt | (41,388) |  |  | — |  |  | (41,388) |
Proceeds from line of credit | 8,000 |  |  | — |  |  | 8,000 |
Payments on line of credit | (5,000) |  |  | — |  |  | (5,000) |
Payments for debt issuance costs | (132) |  |  | — |  |  | (132) |
Taxes paid by Company for employee stock plans | (428) |  |  | — |  |  | (428) |
Net cash used in financing activities | (38,948) |  |  | — |  |  | (38,948) |
Net increase in cash, cash equivalents and restricted cash | 152 |  |  | — |  |  | 152 |
Cash, cash equivalents and restricted cash, beginning of period | 1,295 |  |  | — |  |  | 1,295 |
Cash, cash equivalents and restricted cash, end of period | $ | 1,447 |  |  | $ | — |  |  | $ | 1,447 |
Supplemental disclosure of non-cash investing and financing activities: |  |  |  |  |
Purchases of property and equipment on trade vendor credit | $ | 1,994 |  |  | $ | — |  |  | $ | 1,994 |
The effects of this error on our previously reported changes in the Company’s allowance for sales returns and credit losses for the quarter ended August 29, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| August 29, 2021
| 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, As Reported | $ | 85 |  |  | — |  |  | — |  |  |  |  | $ | 85 |
Restatement Adjustment | $ | 522 |  |  | — |  |  | — |  |  |  |  | $ | 522 |
Three months ended August 29, 2021, As Restated | $ | 607 |  |  | — |  |  | — |  |  |  |  | $ | 607 |
Discontinued Operations | $ | (85) |  |  | — |  |  | — |  |  |  |  | $ | (85) |
Three months ended August 29, 2021, As Restated, after Discontinued Operations | $ | 522 |  |  | — |  |  | — |  |  |  |  | $ | 522 |
The effects of this error on our previously reported inventories as of August 29, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| August 29, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Finished goods | $ | 35,142 |  |  | $ | 180 |  |  | $ | 35,322 |  |  | $ | (16,278) |  |  | $ | 19,044 |
Raw materials | 30,344 |  |  | (1,088) |  |  | 29,256 |  |  | (14,914) |  |  | 14,342 |
Work in progress | 3,929 |  |  | (442) |  |  | 3,487 |  |  | (4) |  |  | 3,483 |
Total inventories | $ | 69,415 |  |  | $ | (1,350) |  |  | $ | 68,065 |  |  | $ | (31,196) |  |  | $ | 36,869 |
The effects of this error on our previously reported basic and diluted net loss per share for the three months ended August 29, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| Three Months Ended August 29, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Numerator: |  |  |  |  |  |  |  |  |
Net (loss) income applicable to Common Stockholders | $ | (9,477) |  |  | $ | 90 |  |  | $ | (9,387) |  |  | $ | — |  |  | $ | (9,387) |
Denominator: |  |  |  |  |  |  |  |  |
Weighted average shares for basic net income per share | 29,424 |  |  | — |  |  | 29,424 |  |  | — |  |  | 29,424 |
Weighted average shares for diluted net income per share | 29,424 |  |  | — |  |  | 29,424 |  |  | — |  |  | 29,424 |
Diluted net loss per share | $ | (0.32) |  |  | $ | — |  |  | $ | (0.32) |  |  | $ | — |  |  | $ | (0.32) |
The effects of this error on our previously reported disaggregated revenue for the three months ended August 29, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Contact development and manufacturing organization | $ | 17,789 |  |  | $ | — |  |  | $ | 17,789 |  |  | $ | — |  |  | $ | 17,789 |
Fermentation | 4,163 |  |  | — |  |  | 4,163 |  |  | — |  |  | 4,163 |
Total | $ | 21,952 |  |  | $ | — |  |  | $ | 21,952 |  |  | $ | — |  |  | $ | 21,952 |
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Avocado Products | $ | 16,962 |  |  | $ | — |  |  | $ | 16,962 |  |  | $ | (16,962) |  |  | $ | — |
Olive oil and vinegars | 2,340 |  |  | — |  |  | 2,340 |  |  | (2,340) |  |  | — |
Technology | 378 |  |  | — |  |  | 378 |  |  | — |  |  | 378 |
Total | $ | 19,680 |  |  | $ | — |  |  | $ | 19,680 |  |  | $ | (19,302) |  |  | $ | 378 |
The effects of this error on our previously reported segment reporting for the three months ended August 29, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 7, are as follows. The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the three months ended August 29, 2021. Refer to Note 14 for the related income statement line items reported in the segment table of the Company after giving effect to the discontinued operations previously reported under the Curation segment. The Company disclosed Other to reconcile the segment information to the consolidated financial statements.
| Three Months Ended August 29, 2021
(in thousands) | Lifecore |  | Curation Foods |  | Other |  | Total
Three Months Ended August 29, 2021, As Reported |  |  |  |  |  |  |
Net sales | $ | 21,952 |  |  | $ | 19,680 |  |  | $ | — |  |  | $ | 41,632 |
Gross profit | 5,764 |  |  | 4,671 |  |  | — |  |  | 10,435 |
Net income (loss) from continuing operations | 580 |  |  | (284) |  |  | (7,929) |  |  | (7,633) |
Loss from discontinued operations, net of taxes | — |  |  | (1,844) |  |  | — |  |  | (1,844) |
Depreciation and amortization | 1,547 |  |  | 881 |  |  | 26 |  |  | 2,454 |
Interest income | 20 |  |  | — |  |  | 7 |  |  | 27 |
Interest expense | — |  |  | 137 |  |  | 6,541 |  |  | 6,678 |
Income tax (benefit) expense, continuing operations | 183 |  |  | (218) |  |  | (1,616) |  |  | (1,651) |
Corporate overhead allocation | 1,137 |  |  | 1,471 |  |  | (2,608) |  |  | — |
Restatement Adjustments |  |  |  |  |  |  |
Net sales | — |  |  | — |  |  | — |  |  | — |
Gross profit | (308) |  |  | (32) |  |  | — |  |  | (340) |
Net (loss) income from continuing operations | (205) |  |  | 183 |  |  | 508 |  |  | 486 |
Loss from discontinued operations, net of taxes | — |  |  | (396) |  |  | — |  |  | (396) |
Depreciation and amortization | 11 |  |  | — |  |  | — |  |  | 11 |
Interest expense | — |  |  | — |  |  | (548) |  |  | (548) |
Income tax (benefit) expense, continuing operations | (103) |  |  | 196 |  |  | 40 |  |  | 133 |
Three Months Ended August 29, 2021, As Restated |  |  |  |  |  |  |
Net sales | $ | 21,952 |  |  | $ | 19,680 |  |  | $ | — |  |  | $ | 41,632 |
Gross profit | 5,456 |  |  | 4,639 |  |  | — |  |  | 10,095 |
Net income (loss) from continuing operations | 375 |  |  | (101) |  |  | (7,421) |  |  | (7,147) |
Loss from discontinued operations, net of taxes | — |  |  | (2,240) |  |  | — |  |  | (2,240) |
Depreciation and amortization | 1,558 |  |  | 881 |  |  | 26 |  |  | 2,465 |
Interest income | 20 |  |  | — |  |  | 7 |  |  | 27 |
Interest expense | — |  |  | 137 |  |  | 5,993 |  |  | 6,130 |
Income tax (benefit) expense, continuing operations | 80 |  |  | (22) |  |  | (1,576) |  |  | (1,518) |
Corporate overhead allocation | 1,137 |  |  | 1,471 |  |  | (2,608) |  |  | — |
The effects of this error on our previously reported restructuring cost for the three months ended August 29, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 8, are as follows:
| Three Months Ended August 29, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Asset write-off costs | $ | — |  |  | $ | (566) |  |  | $ | (566) |  |  | $ | — |  |  | $ | (566) |
Employee severance and benefit costs | — |  |  | 34 |  |  | 34 |  |  | — |  |  | 34 |
Lease costs | $ | 468 |  |  | $ | — |  |  | $ | 468 |  |  | $ | — |  |  | $ | 468 |
Other restructuring costs | 1,366 |  |  | (174) |  |  | 1,192 |  |  | — |  |  | 1,192 |
Total restructuring costs | $ | 1,834 |  |  | $ | (706) |  |  | $ | 1,128 |  |  | $ | — |  |  | $ | 1,128 |
| Three Months Ended August 29, 2021
| Curation |  | Other |  | Total
Total restructuring costs, As reported | $ | 468 |  |  | $ | 1,366 |  |  | $ | 1,834 |
Restatement adjustments | (706) |  |  | — |  |  | (706) |
Total restructuring costs, As restated | $ | (238) |  |  | $ | 1,366 |  |  | $ | 1,128 |
As of and for the three and nine months ended February 28, 2021 The effects of the restatement on the consolidated balance sheet as of February 28, 2021 are summarized in the following table:
| February 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
ASSETS |  |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 2,248 |  |  | $ | — |  |  | $ | 2,248 |  |  | $ | (395) |  |  | $ | 1,853 |
Accounts receivable, less allowance for doubtful accounts | 69,577 |  |  | — |  |  | 69,577 |  |  | (40,714) |  |  | 28,863 |
Inventories | 76,779 |  |  | (1,473) |  |  | 75,306 |  |  | (43,865) |  |  | 31,441 |
Prepaid expenses and other current assets | 14,323 |  |  | (3,132) |  |  | 11,191 |  |  | (5,245) |  |  | 5,946 |
Current assets, discontinued operations | — |  |  | — |  |  | — |  |  | 90,219 |  |  | 90,219 |
Total Current Assets | 162,927 |  |  | (4,605) |  |  | 158,322 |  |  | — |  |  | 158,322 |
Investment in non-public company, fair value | 45,100 |  |  | — |  |  | 45,100 |  |  | — |  |  | 45,100 |
Property and equipment, net | 168,693 |  |  | 1,644 |  |  | 170,337 |  |  | (74,548) |  |  | 95,789 |
Operating lease right-of-use assets | 23,528 |  |  | — |  |  | 23,528 |  |  | (8,125) |  |  | 15,403 |
Goodwill | 69,386 |  |  | — |  |  | 69,386 |  |  | (55,505) |  |  | 13,881 |
Trademarks/tradenames, net | 25,328 |  |  | — |  |  | 25,328 |  |  | (21,128) |  |  | 4,200 |
Customer relationships, net | 11,288 |  |  | — |  |  | 11,288 |  |  | (10,929) |  |  | 359 |
Other assets | 3,573 |  |  | — |  |  | 3,573 |  |  | (198) |  |  | 3,375 |
Non-current assets, discontinued operations | — |  |  | — |  |  | — |  |  | 170,433 |  |  | 170,433 |
Total Assets | $ | 509,823 |  |  | $ | (2,961) |  |  | $ | 506,862 |  |  | $ | — |  |  | $ | 506,862 |
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities: |  |  |  |  |  |  |  |  |
Accounts payable | $ | 56,323 |  |  | $ | — |  |  | $ | 56,323 |  |  | $ | (47,436) |  |  | $ | 8,887 |
Accrued compensation | 11,218 |  |  | — |  |  | 11,218 |  |  | (4,794) |  |  | 6,424 |
Other accrued liabilities | 11,186 |  |  | 314 |  |  | 11,500 |  |  | (5,724) |  |  | 5,776 |
Current portion of lease liabilities | 4,027 |  |  | — |  |  | 4,027 |  |  | (3,022) |  |  | 1,005 |
Deferred revenue | 1,595 |  |  | (350) |  |  | 1,245 |  |  | (505) |  |  | 740 |
Line of credit | 41,000 |  |  | — |  |  | 41,000 |  |  | — |  |  | 41,000 |
Current Liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 61,481 |  |  | 61,481 |
Total Current Liabilities | 125,349 |  |  | (36) |  |  | 125,313 |  |  | — |  |  | 125,313 |
Long-term debt, net | 145,051 |  |  | — |  |  | 145,051 |  |  | — |  |  | 145,051 |
Long-term lease liabilities | 24,430 |  |  | — |  |  | 24,430 |  |  | (6,511) |  |  | 17,919 |
Deferred taxes, net | 6,608 |  |  | (504) |  |  | 6,104 |  |  | — |  |  | 6,104 |
Other non-current liabilities | 3,761 |  |  | — |  |  | 3,761 |  |  | (729) |  |  | 3,032 |
Non-current liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 7,240 |  |  | 7,240 |
Total Liabilities | 305,199 |  |  | (540) |  |  | 304,659 |  |  | — |  |  | 304,659 |
Stockholders’ Equity: |  |  |  |  |  |  |  |  |
Common stock | 29 |  |  | — |  |  | 29 |  |  | — |  |  | 29 |
Additional paid-in capital | 164,865 |  |  | — |  |  | 164,865 |  |  | — |  |  | 164,865 |
Retained earnings (accumulated deficit) | 41,446 |  |  | (2,421) |  |  | 39,025 |  |  | — |  |  | 39,025 |
Accumulated other comprehensive loss | (1,716) |  |  | — |  |  | (1,716) |  |  | — |  |  | (1,716) |
Total Stockholders’ Equity | 204,624 |  |  | (2,421) |  |  | 202,203 |  |  | — |  |  | 202,203 |
Total Liabilities and Stockholders’ Equity | $ | 509,823 |  |  | $ | (2,961) |  |  | $ | 506,862 |  |  | $ | — |  |  | $ | 506,862 |
The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the three months February 28, 2021 are summarized in the following table:
| Three Months Ended February 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Product sales | $ | 44,690 |  |  | $ | 142 |  |  | $ | 44,832 |  |  | $ | (17,025) |  |  | $ | 27,807 |
Cost of product sales | 30,249 |  |  | 1,037 |  |  | 31,286 |  |  | (14,409) |  |  | 16,877 |
Gross profit | 14,441 |  |  | (895) |  |  | 13,546 |  |  | (2,616) |  |  | 10,930 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |
Research and development | 1,843 |  |  | — |  |  | 1,843 |  |  | (206) |  |  | 1,637 |
Selling, general and administrative | 8,134 |  |  | 1,304 |  |  | 9,438 |  |  | (2,289) |  |  | 7,149 |
Restructuring costs | 2,023 |  |  | 48 |  |  | 2,071 |  |  | — |  |  | 2,071 |
Total operating costs and expenses | 12,000 |  |  | 1,352 |  |  | 13,352 |  |  | (2,495) |  |  | 10,857 |
Operating income (loss) | 2,441 |  |  | (2,247) |  |  | 194 |  |  | (121) |  |  | 73 |
Interest income | 13 |  |  | — |  |  | 13 |  |  | — |  |  | 13 |
Interest expense | (2,939) |  |  | 377 |  |  | (2,562) |  |  | — |  |  | (2,562) |
Transition services income | (1,110) |  |  | — |  |  | (1,110) |  |  | — |  |  | (1,110) |
Other income (expense) | 72 |  |  | 233 |  |  | 305 |  |  | — |  |  | 305 |
Net loss from continuing operations before taxes | (1,523) |  |  | (1,637) |  |  | (3,160) |  |  | (121) |  |  | (3,281) |
Income tax benefit | 58 |  |  | 339 |  |  | 397 |  |  | 1,133 |  |  | 1,530 |
Net loss from continuing operations | (1,465) |  |  | (1,298) |  |  | (2,763) |  |  | 1,012 |  |  | (1,751) |
Discontinued operations: |  |  |  |  |  |  |  |  |
(Loss) gain from discontinued operations | (4,192) |  |  | (233) |  |  | (4,425) |  |  | 121 |  |  | (4,304) |
Income tax benefit (provision) | 159 |  |  | 51 |  |  | 210 |  |  | (1,133) |  |  | (923) |
(Loss) gain from discontinued operations, net of tax | (4,033) |  |  | (182) |  |  | (4,215) |  |  | (1,012) |  |  | (5,227) |
Consolidated net loss | $ | (5,498) |  |  | $ | (1,480) |  |  | $ | (6,978) |  |  | $ | — |  |  | $ | (6,978) |
Basic net (loss) income per share: |  |  |  |  |  |  |  |  |
Loss from continuing operations | $ | (0.05) |  |  | $ | (0.04) |  |  | $ | (0.09) |  |  | $ | 0.03 |  |  | $ | (0.06) |
Loss from discontinued operations | $ | (0.14) |  |  | $ | (0.01) |  |  | $ | (0.15) |  |  | $ | (0.03) |  |  | $ | (0.18) |
Total basic net loss per share | $ | (0.19) |  |  | $ | (0.05) |  |  | $ | (0.24) |  |  | $ | — |  |  | $ | (0.24) |
Diluted net (loss) income per share: |  |  |  |  |  |  |  |  |
Loss from continuing operations | $ | (0.05) |  |  | $ | (0.04) |  |  | $ | (0.09) |  |  | $ | 0.03 |  |  | $ | (0.06) |
Loss from discontinued operations | $ | (0.14) |  |  | $ | (0.01) |  |  | $ | (0.15) |  |  | $ | (0.03) |  |  | $ | (0.18) |
Total diluted net loss per share | $ | (0.19) |  |  | $ | (0.05) |  |  | $ | (0.24) |  |  | $ | — |  |  | $ | (0.24) |
Shares used in per share computation |  |  |  |  |  |  |  |  |
Basic | 29,323 |  | — |  |  | 29,323 |  | — |  |  | 29,323
Diluted | 29,323 |  | — |  |  | 29,323 |  | — |  |  | 29,323
| Three Months Ended February 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Net loss | $ | (5,498) |  |  | $ | (1,480) |  |  | $ | (6,978) |  |  | $ | — |  |  | $ | (6,978) |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |  |
Net unrealized gains on interest rate swaps, net of tax | 387 |  |  | — |  |  | 387 |  |  | — |  |  | 387 |
Other comprehensive income, net of tax | 387 |  |  | — |  |  | 387 |  |  | — |  |  | 387 |
Total comprehensive loss | $ | (5,111) |  |  | $ | (1,480) |  |  | $ | (6,591) |  |  | $ | — |  |  | $ | (6,591) |
The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the nine months February 28, 2021 are summarized in the following table:
| Nine Months Ended February 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Product sales | $ | 126,629 |  |  | $ | 394 |  |  | $ | 127,023 |  |  | $ | (52,749) |  |  | $ | 74,274 |
Cost of product sales | 90,739 |  |  | 1,347 |  |  | 92,086 |  |  | (44,808) |  |  | 47,278 |
Gross profit | 35,890 |  |  | (953) |  |  | 34,937 |  |  | (7,941) |  |  | 26,996 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |
Research and development | 5,523 |  |  | — |  |  | 5,523 |  |  | (555) |  |  | 4,968 |
Selling, general and administrative | 27,968 |  |  | 1,338 |  |  | 29,306 |  |  | (7,958) |  |  | 21,348 |
Legal settlement charge | 1,763 |  |  | (1,763) |  |  | — |  |  | — |  |  | — |
Restructuring costs | 2,826 |  |  | 7,011 |  |  | 9,837 |  |  | — |  |  | 9,837 |
Total operating costs and expenses | 38,080 |  |  | 6,586 |  |  | 44,666 |  |  | (8,513) |  |  | 36,153 |
Operating (loss) income | (2,190) |  |  | (7,539) |  |  | (9,729) |  |  | 572 |  |  | (9,157) |
Interest income | 31 |  |  | — |  |  | 31 |  |  | — |  |  | 31 |
Interest expense | (6,609) |  |  | 786 |  |  | (5,823) |  |  | — |  |  | (5,823) |
Transition services income | (1,110) |  |  | — |  |  | (1,110) |  |  | — |  |  | (1,110) |
Other income (expense) | 64 |  |  | (10,984) |  |  | (10,920) |  |  | — |  |  | (10,920) |
Net (loss) income from continuing operations before taxes | (9,814) |  |  | (17,737) |  |  | (27,551) |  |  | 572 |  |  | (26,979) |
Income tax benefit | 1,025 |  |  | 3,877 |  |  | 4,902 |  |  | (127) |  |  | 4,775 |
Net (loss) income from continuing operations | (8,789) |  |  | (13,860) |  |  | (22,649) |  |  | 445 |  |  | (22,204) |
Discontinued operations: |  |  |  |  |  |  |  |  |
Loss from discontinued operations | (27,210) |  |  | 16,205 |  |  | (11,005) |  |  | (572) |  |  | (11,577) |
Income tax benefit | 6,200 |  |  | (3,557) |  |  | 2,643 |  |  | 127 |  |  | 2,770 |
Loss from discontinued operations, net of tax | (21,010) |  |  | 12,648 |  |  | (8,362) |  |  | (445) |  |  | (8,807) |
Consolidated net loss | $ | (29,799) |  |  | $ | (1,212) |  |  | $ | (31,011) |  |  | $ | — |  |  | $ | (31,011) |
Basic net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.30) |  |  | $ | (0.47) |  |  | $ | (0.77) |  |  | $ | 0.01 |  |  | $ | (0.76) |
Loss from discontinued operations | $ | (0.72) |  |  | $ | 0.43 |  |  | $ | (0.29) |  |  | $ | (0.01) |  |  | $ | (0.30) |
Total basic net loss per share | $ | (1.02) |  |  | $ | (0.04) |  |  | $ | (1.06) |  |  | $ | — |  |  | $ | (1.06) |
Diluted net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.30) |  |  | $ | (0.47) |  |  | $ | (0.77) |  |  | $ | 0.01 |  |  | $ | (0.76) |
Loss from discontinued operations | $ | (0.72) |  |  | $ | 0.43 |  |  | $ | (0.29) |  |  | $ | (0.01) |  |  | $ | (0.30) |
Total diluted net loss per share | $ | (1.02) |  |  | $ | (0.04) |  |  | $ | (1.06) |  |  | $ | — |  |  | $ | (1.06) |
Shares used in per share computation |  |  |  |  |  |  |  |  |
Basic | 29,282 |  | — |  |  | 29,282 |  | — |  |  | 29,282
Diluted | 29,282 |  | — |  |  | 29,282 |  | — |  |  | 29,282
| Nine Months Ended February 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Net loss | $ | (29,799) |  |  | $ | (1,212) |  |  | $ | (31,011) |  |  | $ | — |  |  | $ | (31,011) |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |  |
Net unrealized gains on interest rate swaps, net of tax | 1,092 |  |  | — |  |  | 1,092 |  |  | — |  |  | 1,092 |
Other comprehensive income, net of tax | 1,092 |  |  | — |  |  | 1,092 |  |  | — |  |  | 1,092 |
Total comprehensive loss | $ | (28,707) |  |  | $ | (1,212) |  |  | $ | (29,919) |  |  | $ | — |  |  | $ | (29,919) |
The effects of the restatement on the consolidated statement of convertible preferred stock and stockholders’ equity (deficit) for the three and nine months ended February 28, 2021 are summarized in the following table:
| Convertible Preferred Stock |  |  | Common Stock |  | Additional Paid-in Capital |  | Retained Earnings (Accumulated Deficit) |  | Accumulated Other Comprehensive Loss |  | Total Stockholders’ Equity
| Shares |  | Amount |  |  | Shares |  | Amount |  |  |  |
As Reported |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 31, 2020 | — |  |  | $ | — |  |  |  | 29,224 |  |  | $ | 29 |  |  | $ | 162,578 |  |  | $ | 71,245 |  |  | $ | (2,808) |  |  | $ | 231,044 |
Issuance of stock under stock plans | — |  |  | — |  |  |  | 18 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (82) |  |  | — |  |  | — |  |  | (82) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 892 |  |  | — |  |  | — |  |  | 892 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (11,000) |  |  | — |  |  | (11,000) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 304 |  |  | 304 |
Balance at August 30, 2020 | — |  |  | $ | — |  |  |  | 29,242 |  |  | $ | 29 |  |  | $ | 163,388 |  |  | $ | 60,245 |  |  | $ | (2,504) |  |  | $ | 221,158 |
Issuance of stock under stock plans | — |  |  | — |  |  |  | 81 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (215) |  |  | — |  |  | — |  |  | (215) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 895 |  |  | — |  |  | — |  |  | 895 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (13,301) |  |  | — |  |  | (13,301) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 401 |  |  | 401 |
Balance at November 29, 2020 | — |  |  | $ | — |  |  |  | 29,323 |  |  | $ | 29 |  |  | $ | 164,068 |  |  | $ | 46,944 |  |  | $ | (2,103) |  |  | $ | 208,938 |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 797 |  |  | — |  |  | — |  |  | 797 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (5,498) |  |  | — |  |  | (5,498) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 387 |  |  | 387 |
Balance at February 28, 2021 | — |  |  | $ | — |  |  |  | 29,323 |  |  | $ | 29 |  |  | $ | 164,865 |  |  | $ | 41,446 |  |  | $ | (1,716) |  |  | $ | 204,624 |
Restatements Adjustments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Opening retained earnings (at May 31, 2020) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (1,209) |  |  | — |  |  | (1,209) |
Net income (loss) at August 30, 2020 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (1,410) |  |  | — |  |  | (1,410) |
Opening retained earnings (at August 30, 2020) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (2,619) |  |  | — |  |  | (2,619) |
Net income (loss) at November 29, 2020 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | 1,678 |  |  | — |  |  | 1,678 |
Opening retained earnings (at February 28, 2021) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (941) |  |  | — |  |  | (941) |
Net income (loss) at February 28, 2021 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (1,480) |  |  | — |  |  | (1,480) |
As Restated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 31, 2020 | — |  |  | $ | — |  |  |  | 29,224 |  |  | $ | 29 |  |  | $ | 162,578 |  |  | $ | 70,036 |  |  | $ | (2,808) |  |  | $ | 229,835 |
Issuance of stock under stock plans | — |  |  | — |  |  |  | 18 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (82) |  |  | — |  |  | — |  |  | (82) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 892 |  |  | — |  |  | — |  |  | 892 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (12,410) |  |  | — |  |  | (12,410) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 304 |  |  | 304 |
Balance at August 30, 2020 | — |  |  | $ | — |  |  |  | 29,242 |  |  | $ | 29 |  |  | $ | 163,388 |  |  | $ | 57,626 |  |  | $ | (2,504) |  |  | $ | 218,539 |
Issuance of stock under stock plans | — |  |  | — |  |  |  | 81 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (215) |  |  | — |  |  | — |  |  | (215) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 895 |  |  | — |  |  | — |  |  | 895 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (11,623) |  |  | — |  |  | (11,623) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 401 |  |  | 401 |
Balance at November 29, 2020 | — |  |  | $ | — |  |  |  | 29,323 |  |  | $ | 29 |  |  | $ | 164,068 |  |  | $ | 46,003 |  |  | $ | (2,103) |  |  | $ | 207,997 |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 797 |  |  | — |  |  | — |  |  | 797 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (6,978) |  |  | — |  |  | (6,978) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 387 |  |  | 387 |
Balance at February 28, 2021 | — |  |  | $ | — |  |  |  | 29,323 |  |  | $ | 29 |  |  | $ | 164,865 |  |  | $ | 39,025 |  |  | $ | (1,716) |  |  | $ | 202,203 |
The effects of the restatement on the consolidated statement of cash flows for the nine months ended February 28, 2021 are summarized in the following table:
| Nine Months Ended February 28, 2021
| As Reported |  | Restatement Adjustment |  | As Restated
Cash flows from operating activities: |  |  |  |  |
Net loss | $ | (29,799) |  |  | $ | (1,212) |  |  | $ | (31,011) |
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Depreciation, amortization of intangibles, debt costs and right-of-use assets | 14,808 |  |  | — |  |  | 14,808 |
Loss on debt refinancing | 1,110 |  |  | — |  |  | 1,110 |
Stock-based compensation expense | 2,584 |  |  | — |  |  | 2,584 |
Provision for expected credit losses | 284 |  |  | — |  |  | 284 |
Deferred taxes | (7,307) |  |  | (320) |  |  | (7,627) |
Change in investment in non-public company, fair value | 11,800 |  |  | — |  |  | 11,800 |
Net loss on disposal of property and equipment held and used | 39 |  |  | — |  |  | 39 |
Loss on disposal of property and equipment related to restructuring, net | 7,881 |  |  | — |  |  | 7,881 |
Other, net | (12) |  |  | — |  |  | (12) |
Changes in current assets and current liabilities: |  |  |  |  |
Accounts receivable, net | 6,345 |  |  | — |  |  | 6,345 |
Inventory | (10,468) |  |  | 953 |  |  | (9,515) |
Prepaid expenses and other current assets | 350 |  |  | 1,365 |  |  | 1,715 |
Accounts payable | 6,372 |  |  | — |  |  | 6,372 |
Accrued compensation | 2,184 |  |  | — |  |  | 2,184 |
Other accrued liabilities | 3,186 |  |  | 350 |  |  | 3,536 |
Deferred revenue | 1,243 |  |  | (350) |  |  | 893 |
Net cash provided by operating activities | 10,600 |  |  | 786 |  |  | 11,386 |
Cash flows from investing activities: |  |  |  |  |
Proceeds from sales of property and equipment | 12,885 |  |  | — |  |  | 12,885 |
Purchases of property and equipment | (11,383) |  |  | (786) |  |  | (12,169) |
Net cash provided by (used in) investing activities | 1,502 |  |  | (786) |  |  | 716 |
Cash flows from financing activities: |  |  |  |  |
Proceeds from long-term debt | 150,000 |  |  | — |  |  | 150,000 |
Payments on line of credit | (119,400) |  |  | — |  |  | (119,400) |
Payments on long-term debt | (114,095) |  |  | — |  |  | (114,095) |
Proceeds from line of credit | 83,000 |  |  | — |  |  | 83,000 |
Payments for debt issuance costs | (9,615) |  |  | — |  |  | (9,615) |
Taxes paid by Company for employee stock plans | (297) |  |  | — |  |  | (297) |
Net cash used in financing activities | (10,407) |  |  | — |  |  | (10,407) |
Net increase in cash, cash equivalents and restricted cash | 1,695 |  |  | — |  |  | 1,695 |
Cash, cash equivalents and restricted cash, beginning of period | 553 |  |  | — |  |  | 553 |
Cash, cash equivalents and restricted cash, end of period | $ | 2,248 |  |  | $ | — |  |  | $ | 2,248 |
Supplemental disclosure of non-cash investing and financing activities: |  |  |  |  |
Purchases of property and equipment on trade vendor credit | $ | 1,124 |  |  | $ | — |  |  | $ | 1,124 |
The effects of this error on our previously reported changes in the Company’s allowance for sales returns and credit losses for the quarter ended February 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| February 28, 2021
| Balance at beginning of period |  | Provision (benefit) for expected credit losses |  | Write offs, net of recoveries |  |  |  | Balance at end of period
Nine months ended February 28, 2021, As Reported | $ | 186 |  |  | 284 |  |  | (385) |  |  |  |  | $ | 85 |
Nine months ended February 28, 2021, As Restated | $ | 186 |  |  | 284 |  |  | (385) |  |  |  |  | $ | 85 |
Discontinued Operations | $ | (186) |  |  | (284) |  |  | 385 |  |  |  |  | $ | (85) |
Nine months ended February 28, 2021, As Restated, after Discontinued Operations | $ | — |  |  | — |  |  | — |  |  |  |  | $ | — |
The effects of this error on our previously reported inventories as of February 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| February 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Finished goods | $ | 41,533 |  |  | $ | (5) |  |  | $ | 41,528 |  |  | $ | (28,877) |  |  | $ | 12,651 |
Raw materials | 26,855 |  |  | (863) |  |  | 25,992 |  |  | (14,983) |  |  | 11,009 |
Work in progress | 8,391 |  |  | (605) |  |  | 7,786 |  |  | (5) |  |  | 7,781 |
Total inventories | $ | 76,779 |  |  | $ | (1,473) |  |  | $ | 75,306 |  |  | $ | (43,865) |  |  | $ | 31,441 |
The effects of this error on our previously reported basic and diluted net loss per share for the three and nine months ended February 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| Three Months Ended February 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Numerator: |  |  |  |  |  |  |  |  |
Net loss applicable to Common Stockholders | $ | (5,498) |  |  | $ | (1,480) |  |  | $ | (6,978) |  |  | $ | — |  |  | $ | (6,978) |
Denominator: |  |  |  |  |  |  |  |  |
Weighted average shares for basic net income per share | 29,323 |  |  | — |  |  | 29,323 |  |  | — |  |  | 29,323 |
Weighted average shares for diluted net income per share | 29,323 |  |  | — |  |  | 29,323 |  |  | — |  |  | 29,323 |
Diluted net loss per share | $ | (0.19) |  |  | $ | (0.05) |  |  | $ | (0.24) |  |  | $ | — |  |  | $ | (0.24) |
| Nine Months Ended February 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Numerator: |  |  |  |  |  |  |  |  |
Net loss applicable to Common Stockholders | $ | (29,799) |  |  | $ | (1,212) |  |  | $ | (31,011) |  |  | $ | — |  |  | $ | (31,011) |
Denominator: |  |  |  |  |  |  |  |  |
Weighted average shares for basic net income per share | 29,282 |  |  | — |  |  | 29,282 |  |  | — |  |  | 29,282 |
Weighted average shares for diluted net income per share | 29,282 |  |  | — |  |  | 29,282 |  |  | — |  |  | 29,282 |
Diluted net loss per share | $ | (1.02) |  |  | $ | (0.04) |  |  | $ | (1.06) |  |  | $ | — |  |  | $ | (1.06) |
The effects of this error on our previously reported disaggregated revenue for the three months ended February 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Contact development and manufacturing organization | $ | 18,628 |  |  | $ | 142 |  |  | $ | 18,770 |  |  | $ | — |  |  | $ | 18,770 |
Fermentation | 8,597 |  |  | — |  |  | 8,597 |  |  | — |  |  | 8,597 |
Total | $ | 27,225 |  |  | $ | 142 |  |  | $ | 27,367 |  |  | $ | — |  |  | $ | 27,367 |
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Avocado Products | $ | 15,378 |  |  | $ | — |  |  | $ | 15,378 |  |  | $ | (15,378) |  |  | $ | — |
Olive oil and vinegars | 1,647 |  |  | — |  |  | 1,647 |  |  | (1,647) |  |  | — |
Technology | 440 |  |  | — |  |  | 440 |  |  | — |  |  | 440 |
Total | $ | 17,465 |  |  | $ | — |  |  | $ | 17,465 |  |  | $ | (17,025) |  |  | $ | 440 |
The effects of this error on our previously reported disaggregated revenue for the nine months ended February 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Contact development and manufacturing organization | $ | 53,374 |  |  | $ | 394 |  |  | $ | 53,768 |  |  | $ | — |  |  | $ | 53,768 |
Fermentation | 18,874 |  |  | — |  |  | 18,874 |  |  | — |  |  | 18,874 |
Total | $ | 72,248 |  |  | $ | 394 |  |  | $ | 72,642 |  |  | $ | — |  |  | $ | 72,642 |
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Avocado Products | $ | 47,107 |  |  | $ | — |  |  | $ | 47,107 |  |  | $ | (47,107) |  |  | $ | — |
Olive oil and vinegars | 5,642 |  |  | — |  |  | 5,642 |  |  | (5,642) |  |  | — |
Technology | 1,632 |  |  | — |  |  | 1,632 |  |  | — |  |  | 1,632 |
Total | $ | 54,381 |  |  | $ | — |  |  | $ | 54,381 |  |  | $ | (52,749) |  |  | $ | 1,632 |
The effects of this error on our previously reported segment reporting for the three months ended February 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 7, are as follows. The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the three months ended February 28, 2021. Refer to Note 14 for the related income statement line items reported in the segment table of the Company after giving effect to the discontinued operations previously reported under the Curation segment. The Company disclosed Other to reconcile the segment information to the consolidated financial statements.
| Three Months Ended February 28, 2021
(in thousands) | Lifecore |  | Curation Foods |  | Other |  | Total
Three Months Ended February 28, 2021, As Reported |  |  |  |  |  |  |
Net sales | $ | 27,225 |  |  | $ | 17,465 |  |  | $ | — |  |  | $ | 44,690 |
Gross profit | 11,561 |  |  | 2,880 |  |  | — |  |  | 14,441 |
Net income (loss) from continuing operations | 5,104 |  |  | (394) |  |  | (6,175) |  |  | (1,465) |
Loss from discontinued operations, net of tax | — |  |  | (4,033) |  |  | — |  |  | (4,033) |
Depreciation and amortization | 1,385 |  |  | 830 |  |  | 22 |  |  | 2,237 |
Interest income | — |  |  | — |  |  | 13 |  |  | 13 |
Interest expense | — |  |  | 136 |  |  | 2,803 |  |  | 2,939 |
Income tax (benefit) expense, continuing operations | 1,612 |  |  | (1,614) |  |  | (56) |  |  | (58) |
Corporate overhead allocation | 1,102 |  |  | 87 |  |  | (1,189) |  |  | — |
Restatement Adjustments |  |  |  |  |  |  |
Net sales | 142 |  |  | — |  |  | — |  |  | 142 |
Gross profit | (895) |  |  | — |  |  | — |  |  | (895) |
Net income (loss) from continuing operations | (14) |  |  | (2,340) |  |  | 1,056 |  |  | (1,298) |
Loss from discontinued operations, net of tax | — |  |  | (182) |  |  | — |  |  | (182) |
Interest expense | — |  |  | — |  |  | (377) |  |  | (377) |
Income tax (benefit) expense, continuing operations | (881) |  |  | 1,221 |  |  | (679) |  |  | (339) |
Three Months Ended February 28, 2021, As Restated |  |  |  |  |  |  |
Net sales | $ | 27,367 |  |  | $ | 17,465 |  |  | $ | — |  |  | $ | 44,832 |
Gross profit | 10,666 |  |  | 2,880 |  |  | — |  |  | 13,546 |
Net income (loss) from continuing operations | 5,090 |  |  | (2,734) |  |  | (5,119) |  |  | (2,763) |
Loss from discontinued operations, net of tax | — |  |  | (4,215) |  |  | — |  |  | (4,215) |
Depreciation and amortization | 1,385 |  |  | 830 |  |  | 22 |  |  | 2,237 |
Interest income | — |  |  | — |  |  | 13 |  |  | 13 |
Interest expense | — |  |  | 136 |  |  | 2,426 |  |  | 2,562 |
Income tax (benefit) expense, continuing operations | 731 |  |  | (393) |  |  | (735) |  |  | (397) |
Corporate overhead allocation | 1,102 |  |  | 87 |  |  | (1,189) |  |  | — |
The effects of this error on our previously reported segment reporting for the nine months ended February 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 7, are as follows. The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the nine months ended February 28, 2021. Refer to Note 14 for the related income statement line items reported in the segment table of the Company after giving effect to the discontinued operations previously reported under the Curation segment. The Company disclosed Other to reconcile the segment information to the consolidated financial statements.
| Nine Months Ended February 28, 2021
(in thousands) | Lifecore |  | Curation Foods |  | Other |  | Total
Nine Months Ended February 28, 2021, As Reported |  |  |  |  |  |  |
Net sales | $ | 72,248 |  |  | $ | 54,381 |  |  | $ | — |  |  | $ | 126,629 |
Gross profit | 27,036 |  |  | 8,854 |  |  | — |  |  | 35,890 |
Net income (loss) from continuing operations | 9,708 |  |  | (1,346) |  |  | (17,151) |  |  | (8,789) |
Loss from discontinued operations, net of taxes | — |  |  | (21,010) |  |  | — |  |  | (21,010) |
Depreciation and amortization | 4,055 |  |  | 2,451 |  |  | 76 |  |  | 6,582 |
Interest income | — |  |  | — |  |  | 31 |  |  | 31 |
Interest expense | — |  |  | 410 |  |  | 6,199 |  |  | 6,609 |
Income tax (benefit) expense, continuing operations | 3,066 |  |  | (2,095) |  |  | (1,996) |  |  | (1,025) |
Corporate overhead allocation | 3,668 |  |  | 621 |  |  | (4,289) |  |  | — |
Restatement Adjustments |  |  |  |  |  |  |
Net sales | 394 |  |  | — |  |  | — |  |  | 394 |
Gross profit | (953) |  |  | — |  |  | — |  |  | (953) |
Net (loss) income | 10 |  |  | (15,927) |  |  | 2,057 |  |  | (13,860) |
Loss from discontinued operations, net of taxes | — |  |  | 12,648 |  |  | — |  |  | 12,648 |
Interest expense | — |  |  | — |  |  | (786) |  |  | (786) |
Income tax (benefit) expense, continuing operations | (963) |  |  | (1,643) |  |  | (1,271) |  |  | (3,877) |
Nine Months Ended February 28, 2021, As Restated |  |  |  |  |  |  |
Net sales | $ | 72,642 |  |  | $ | 54,381 |  |  | $ | — |  |  | $ | 127,023 |
Gross profit | 26,083 |  |  | 8,854 |  |  | — |  |  | 34,937 |
Net income (loss) from continuing operations | 9,718 |  |  | (17,273) |  |  | (15,094) |  |  | (22,649) |
Loss from discontinued operations, net of taxes | — |  |  | (8,362) |  |  | — |  |  | (8,362) |
Depreciation and amortization | 4,055 |  |  | 2,451 |  |  | 76 |  |  | 6,582 |
Interest income | — |  |  | — |  |  | 31 |  |  | 31 |
Interest expense | — |  |  | 410 |  |  | 5,413 |  |  | 5,823 |
Income tax (benefit) expense, continuing operations | 2,103 |  |  | (3,738) |  |  | (3,267) |  |  | (4,902) |
Corporate overhead allocation | 3,668 |  |  | 621 |  |  | (4,289) |  |  | — |
The effects of this error on our previously reported restructuring cost for the three months ended February 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 8, are as follows:
| Three Months Ended February 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Asset write-off costs | $ | 1,897 |  |  | $ | (20) |  |  | $ | 1,877 |  |  | $ | — |  |  | $ | 1,877 |
Employee severance and benefit costs | — |  |  | 65 |  |  | 65 |  |  | — |  |  | 65 |
Other restructuring costs | 126 |  |  | 3 |  |  | 129 |  |  | — |  |  | 129 |
Total restructuring costs | $ | 2,023 |  |  | $ | 48 |  |  | $ | 2,071 |  |  | $ | — |  |  | $ | 2,071 |
| Three Months Ended February 28, 2021
| Curation |  | Other |  | Total
Total restructuring costs, As reported | $ | 1,908 |  |  | $ | 115 |  |  | $ | 2,023 |
Restatement adjustments | 48 |  |  | — |  |  | 48 |
Total restructuring costs, As restated | $ | 1,956 |  |  | $ | 115 |  |  | $ | 2,071 |
The effects of this error on our previously reported restructuring cost for the nine months ended February 28, 2021 as presented in the Company’s Quarterly Report on Form 10-Q Note 8, are as follows:
| Nine Months Ended February 28, 2021
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Asset write-off costs | $ | 1,897 |  |  | $ | 5,985 |  |  | $ | 7,882 |  |  | $ | — |  |  | $ | 7,882 |
Employee severance and benefit costs | — |  |  | 116 |  |  | 116 |  |  | — |  |  | 116 |
Other restructuring costs | 929 |  |  | 910 |  |  | 1,839 |  |  | — |  |  | 1,839 |
Total restructuring costs | $ | 2,826 |  |  | $ | 7,011 |  |  | $ | 9,837 |  |  | $ | — |  |  | $ | 9,837 |
| Nine Months Ended February 28, 2021
| Curation |  | Other |  | Total
Total restructuring costs, As reported | $ | 1,908 |  |  | $ | 918 |  |  | $ | 2,826 |
Restatement adjustments | 7,011 |  |  | — |  |  | 7,011 |
Total restructuring costs, As restated | $ | 8,919 |  |  | $ | 918 |  |  | $ | 9,837 |
As of and for the three and six months ended November 29, 2020 The effects of the restatement on the consolidated balance sheet as of November 29, 2020 are summarized in the following table:
| November 29, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
ASSETS |  |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 2,491 |  |  | $ | — |  |  | $ | 2,491 |  |  | $ | (15) |  |  | $ | 2,476 |
Accounts receivable, less allowance for doubtful accounts | 66,545 |  |  | — |  |  | 66,545 |  |  | (36,945) |  |  | 29,600 |
Inventories | 71,202 |  |  | (578) |  |  | 70,624 |  |  | (38,220) |  |  | 32,404 |
Prepaid expenses and other current assets | 13,949 |  |  | (1,780) |  |  | 12,169 |  |  | (5,374) |  |  | 6,795 |
Current assets, discontinued operations | — |  |  | — |  |  | — |  |  | 80,554 |  |  | 80,554 |
Total Current Assets | 154,187 |  |  | (2,358) |  |  | 151,829 |  |  | — |  |  | 151,829 |
Investment in non-public company, fair value | 45,100 |  |  | — |  |  | 45,100 |  |  | — |  |  | 45,100 |
Property and equipment, net | 170,973 |  |  | 1,267 |  |  | 172,240 |  |  | (77,252) |  |  | 94,988 |
Operating lease right-of-use assets | 21,070 |  |  | — |  |  | 21,070 |  |  | (8,379) |  |  | 12,691 |
Goodwill | 69,386 |  |  | — |  |  | 69,386 |  |  | (55,505) |  |  | 13,881 |
Trademarks/tradenames, net | 25,328 |  |  | — |  |  | 25,328 |  |  | (21,128) |  |  | 4,200 |
Customer relationships, net | 11,784 |  |  | — |  |  | 11,784 |  |  | (11,348) |  |  | 436 |
Other assets | 1,332 |  |  | — |  |  | 1,332 |  |  | (200) |  |  | 1,132 |
Non-current assets, discontinued operations | — |  |  | — |  |  | — |  |  | 173,812 |  |  | 173,812 |
Total Assets | $ | 499,160 |  |  | $ | (1,091) |  |  | $ | 498,069 |  |  | $ | — |  |  | $ | 498,069 |
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities: |  |  |  |  |  |  |  |  |
Accounts payable | $ | 60,892 |  |  | $ | — |  |  | $ | 60,892 |  |  | $ | (52,907) |  |  | $ | 7,985 |
Accrued compensation | 7,689 |  |  | — |  |  | 7,689 |  |  | (3,561) |  |  | 4,128 |
Other accrued liabilities | 12,715 |  |  | (36) |  |  | 12,679 |  |  | (6,564) |  |  | 6,115 |
Current portion of lease liabilities | 3,785 |  |  | — |  |  | 3,785 |  |  | (3,075) |  |  | 710 |
Deferred revenue | 644 |  |  | — |  |  | 644 |  |  | (347) |  |  | 297 |
Line of credit | 77,000 |  |  | — |  |  | 77,000 |  |  | — |  |  | 77,000 |
Current portion of long-term debt | 11,189 |  |  | — |  |  | 11,189 |  |  | — |  |  | 11,189 |
Current Liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 66,454 |  |  | 66,454 |
Total Current Liabilities | 173,914 |  |  | (36) |  |  | 173,878 |  |  | — |  |  | 173,878 |
Long-term debt, net | 82,000 |  |  | — |  |  | 82,000 |  |  | — |  |  | 82,000 |
Long-term lease liabilities | 22,206 |  |  | — |  |  | 22,206 |  |  | (6,731) |  |  | 15,475 |
Deferred taxes, net | 6,745 |  |  | (114) |  |  | 6,631 |  |  | — |  |  | 6,631 |
Other non-current liabilities | 5,357 |  |  | — |  |  | 5,357 |  |  | (1,333) |  |  | 4,024 |
Non-current liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 8,064 |  |  | 8,064 |
Total Liabilities | 290,222 |  |  | (150) |  |  | 290,072 |  |  | — |  |  | 290,072 |
Stockholders’ Equity: |  |  |  |  |  |  |  |  |
Common stock | 29 |  |  | — |  |  | 29 |  |  | $ | — |  |  | 29 |
Additional paid-in capital | 164,068 |  |  | — |  |  | 164,068 |  |  | — |  |  | 164,068 |
Retained earnings (accumulated deficit) | 46,944 |  |  | (941) |  |  | 46,003 |  |  | — |  |  | 46,003 |
Accumulated other comprehensive loss | (2,103) |  |  | — |  |  | (2,103) |  |  | — |  |  | (2,103) |
Total Stockholders’ Equity | 208,938 |  |  | (941) |  |  | 207,997 |  |  | — |  |  | 207,997 |
Total Liabilities and Stockholders’ Equity | $ | 499,160 |  |  | $ | (1,091) |  |  | $ | 498,069 |  |  | $ | — |  |  | $ | 498,069 |
The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the three months November 29, 2020 are summarized in the following table:
| Three Months Ended November 29, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Product sales | $ | 130,904 |  |  | $ | 24 |  |  | $ | 130,928 |  |  | $ | (107,136) |  |  | $ | 23,792 |
Cost of product sales | 110,267 |  |  | (18) |  |  | 110,249 |  |  | (97,231) |  |  | 13,018 |
Gross profit | 20,637 |  |  | 42 |  |  | 20,679 |  |  | (9,905) |  |  | 10,774 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |
Research and development | 2,572 |  |  | — |  |  | 2,572 |  |  | (981) |  |  | 1,591 |
Selling, general and administrative | 16,106 |  |  | — |  |  | 16,106 |  |  | (9,396) |  |  | 6,710 |
Legal settlement charge | 1,763 |  |  | (1,763) |  |  | — |  |  | — |  |  | — |
Restructuring costs | 1,662 |  |  | — |  |  | 1,662 |  |  | (563) |  |  | 1,099 |
Total operating costs and expenses | 22,103 |  |  | (1,763) |  |  | 20,340 |  |  | (10,940) |  |  | 9,400 |
Operating (loss) income | (1,466) |  |  | 1,805 |  |  | 339 |  |  | 1,035 |  |  | 1,374 |
Dividend income | 281 |  |  | — |  |  | 281 |  |  | (281) |  |  | — |
Interest income | 10 |  |  | — |  |  | 10 |  |  | — |  |  | 10 |
Interest expense | (3,039) |  |  | 204 |  |  | (2,835) |  |  | 1,239 |  |  | (1,596) |
Other (expense) income | (11,787) |  |  | 1,800 |  |  | (9,987) |  |  | 281 |  |  | (9,706) |
Net (loss) income from continuing operations before taxes | (16,001) |  |  | 3,809 |  |  | (12,192) |  |  | 2,274 |  |  | (9,918) |
Income tax benefit (expense) | 2,700 |  |  | (731) |  |  | 1,969 |  |  | (441) |  |  | 1,528 |
Net (loss) income from continuing operations | (13,301) |  |  | 3,078 |  |  | (10,223) |  |  | 1,833 |  |  | (8,390) |
Discontinued operations: |  |  |  |  |  |  |  |  |
Loss from discontinued operations | — |  |  | (1,763) |  |  | (1,763) |  |  | (2,274) |  |  | (4,037) |
Income tax benefit | — |  |  | 363 |  |  | 363 |  |  | 441 |  |  | 804 |
Loss from discontinued operations, net of tax | — |  |  | (1,400) |  |  | (1,400) |  |  | (1,833) |  |  | (3,233) |
Consolidated net (loss) income | $ | (13,301) |  |  | $ | 1,678 |  |  | $ | (11,623) |  |  | $ | — |  |  | $ | (11,623) |
Basic net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.45) |  |  | $ | 0.10 |  |  | $ | (0.35) |  |  | $ | 0.06 |  |  | $ | (0.29) |
Loss from discontinued operations | $ | — |  |  | $ | (0.05) |  |  | $ | (0.05) |  |  | $ | (0.06) |  |  | $ | (0.11) |
Total basic net (loss) income per share | $ | (0.45) |  |  | $ | 0.05 |  |  | $ | (0.40) |  |  | $ | — |  |  | $ | (0.40) |
Diluted net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.45) |  |  | $ | 0.10 |  |  | $ | (0.35) |  |  | $ | 0.06 |  |  | $ | (0.29) |
Loss from discontinued operations | $ | — |  |  | $ | (0.05) |  |  | $ | (0.05) |  |  | $ | (0.06) |  |  | $ | (0.11) |
Total diluted net (loss) income per share | $ | (0.45) |  |  | $ | 0.05 |  |  | $ | (0.40) |  |  | $ | — |  |  | $ | (0.40) |
Shares used in per share computation |  |  |  |  |  |  |  |  |
Basic | 29,280 |  | — |  |  | 29,280 |  | — |  |  | 29,280
Diluted | 29,280 |  | — |  |  | 29,280 |  | — |  |  | 29,280
| Three Months Ended November 29, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Net (loss) income | $ | (13,301) |  |  | $ | 1,678 |  |  | $ | (11,623) |  |  | $ | — |  |  | $ | (11,623) |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |  |
Net unrealized gains on interest rate swaps, net of tax | 401 |  |  | — |  |  | 401 |  |  | — |  |  | 401 |
Other comprehensive income, net of tax | 401 |  |  | — |  |  | 401 |  |  | — |  |  | 401 |
Total comprehensive (loss) income | $ | (12,900) |  |  | $ | 1,678 |  |  | $ | (11,222) |  |  | $ | — |  |  | $ | (11,222) |
The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the six months November 29, 2020 are summarized in the following table:
| Six Months Ended November 29, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Product sales | $ | 266,547 |  |  | $ | 252 |  |  | $ | 266,799 |  |  | $ | (220,331) |  |  | $ | 46,468 |
Cost of product sales | 229,564 |  |  | 310 |  |  | 229,874 |  |  | (199,473) |  |  | 30,401 |
Gross profit | 36,983 |  |  | (58) |  |  | 36,925 |  |  | (20,858) |  |  | 16,067 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |
Research and development | 5,080 |  |  | — |  |  | 5,080 |  |  | (1,750) |  |  | 3,330 |
Selling, general and administrative | 34,009 |  |  | 34 |  |  | 34,043 |  |  | (19,843) |  |  | 14,200 |
Legal settlement charge | 1,763 |  |  | (1,763) |  |  | — |  |  | — |  |  | — |
Restructuring costs | 10,066 |  |  | — |  |  | 10,066 |  |  | (2,300) |  |  | 7,766 |
Total operating costs and expenses | 50,918 |  |  | (1,729) |  |  | 49,189 |  |  | (23,893) |  |  | 25,296 |
Operating (loss) income | (13,935) |  |  | 1,671 |  |  | (12,264) |  |  | 3,035 |  |  | (9,229) |
Dividend income | 563 |  |  | — |  |  | 563 |  |  | (563) |  |  | — |
Interest income | 18 |  |  | — |  |  | 18 |  |  | — |  |  | 18 |
Interest expense | (6,148) |  |  | 409 |  |  | (5,739) |  |  | 2,478 |  |  | (3,261) |
Other (expense) income | (11,808) |  |  | 21 |  |  | (11,787) |  |  | 562 |  |  | (11,225) |
Net (loss) income from continuing operations before taxes | (31,310) |  |  | 2,101 |  |  | (29,209) |  |  | 5,512 |  |  | (23,697) |
Income tax benefit (expense) | 7,009 |  |  | (433) |  |  | 6,576 |  |  | (1,260) |  |  | 5,316 |
Net (loss) income from continuing operations | (24,301) |  |  | 1,668 |  |  | (22,633) |  |  | 4,252 |  |  | (18,381) |
Discontinued operations: |  |  |  |  |  |  |  |  |
Loss from discontinued operations | — |  |  | (1,763) |  |  | (1,763) |  |  | (5,512) |  |  | (7,275) |
Income tax benefit | — |  |  | 363 |  |  | 363 |  |  | 1,260 |  |  | 1,623 |
Loss from discontinued operations, net of tax | — |  |  | (1,400) |  |  | (1,400) |  |  | (4,252) |  |  | (5,652) |
Consolidated net (loss) income | $ | (24,301) |  |  | $ | 268 |  |  | $ | (24,033) |  |  | $ | — |  |  | $ | (24,033) |
Basic net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.83) |  |  | $ | 0.06 |  |  | $ | (0.77) |  |  | $ | 0.14 |  |  | $ | (0.63) |
Loss from discontinued operations | $ | — |  |  | $ | (0.05) |  |  | $ | (0.05) |  |  | $ | (0.14) |  |  | $ | (0.19) |
Total basic net (loss) income per share | $ | (0.83) |  |  | $ | 0.01 |  |  | $ | (0.82) |  |  | $ | — |  |  | $ | (0.82) |
Diluted net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.83) |  |  | $ | 0.06 |  |  | $ | (0.77) |  |  | $ | 0.14 |  |  | $ | (0.63) |
Loss from discontinued operations | $ | — |  |  | $ | (0.05) |  |  | $ | (0.05) |  |  | $ | (0.14) |  |  | $ | (0.19) |
Total diluted net (loss) income per share | $ | (0.83) |  |  | $ | 0.01 |  |  | $ | (0.82) |  |  | $ | — |  |  | $ | (0.82) |
Shares used in per share computation |  |  |  |  |  |  |  |  |
Basic | 29,261 |  | — |  |  | 29,261 |  | — |  |  | 29,261
Diluted | 29,261 |  | — |  |  | 29,261 |  | — |  |  | 29,261
| Six Months Ended November 29, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Net (loss) income | $ | (24,301) |  |  | $ | 268 |  |  | $ | (24,033) |  |  | $ | — |  |  | $ | (24,033) |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |  |
Net unrealized gains on interest rate swaps, net of tax | 705 |  |  | — |  |  | 705 |  |  | — |  |  | 705 |
Other comprehensive income, net of tax | 705 |  |  | — |  |  | 705 |  |  | — |  |  | 705 |
Total comprehensive (loss) income | $ | (23,596) |  |  | $ | 268 |  |  | $ | (23,328) |  |  | $ | — |  |  | $ | (23,328) |
The effects of the restatement on the consolidated statement of convertible preferred stock and stockholders’ equity (deficit) for the six months ended November 29, 2020 are summarized in the following table:
| Convertible Preferred Stock |  |  | Common Stock |  | Additional Paid-in Capital |  | Retained Earnings (Accumulated Deficit) |  | Accumulated Other Comprehensive Loss |  | Total Stockholders’ Equity
| Shares |  | Amount |  |  | Shares |  | Amount |  |  |  |
As Reported |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 31, 2020 | — |  |  | $ | — |  |  |  | 29,224 |  |  | $ | 29 |  |  | $ | 162,578 |  |  | $ | 71,245 |  |  | $ | (2,808) |  |  | $ | 231,044 |
Issuance of stock under stock plans | — |  |  | — |  |  |  | 18 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (82) |  |  | — |  |  | — |  |  | (82) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 892 |  |  | — |  |  | — |  |  | 892 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (11,000) |  |  | — |  |  | (11,000) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 304 |  |  | 304 |
Balance at August 30, 2020 | — |  |  | $ | — |  |  |  | 29,242 |  |  | $ | 29 |  |  | $ | 163,388 |  |  | $ | 60,245 |  |  | $ | (2,504) |  |  | $ | 221,158 |
Issuance of stock under stock plans | — |  |  | — |  |  |  | 81 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (215) |  |  | — |  |  | — |  |  | (215) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 895 |  |  | — |  |  | — |  |  | 895 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (13,301) |  |  | — |  |  | (13,301) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 401 |  |  | 401 |
Balance at November 29, 2020 | — |  |  | $ | — |  |  |  | 29,323 |  |  | $ | 29 |  |  | $ | 164,068 |  |  | $ | 46,944 |  |  | $ | (2,103) |  |  | $ | 208,938 |
Restatements Impacts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Opening retained earnings (at May 31, 2020) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (1,209) |  |  | — |  |  | (1,209) |
Net income (loss) at August 30, 2020 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (1,410) |  |  | — |  |  | (1,410) |
Opening retained earnings (at August 30, 2020) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (2,619) |  |  | — |  |  | (2,619) |
Net income (loss) at November 29, 2020 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | 1,678 |  |  | — |  |  | 1,678 |
As Restated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 31, 2020 | — |  |  | $ | — |  |  |  | 29,224 |  |  | $ | 29 |  |  | $ | 162,578 |  |  | $ | 70,036 |  |  | $ | (2,808) |  |  | $ | 229,835 |
Issuance of stock under stock plans | — |  |  | — |  |  |  | 18 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (82) |  |  | — |  |  | — |  |  | (82) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 892 |  |  | — |  |  | — |  |  | 892 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (12,410) |  |  | — |  |  | (12,410) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 304 |  |  | 304 |
Balance at August 30, 2020 | — |  |  | $ | — |  |  |  | 29,242 |  |  | $ | 29 |  |  | $ | 163,388 |  |  | $ | 57,626 |  |  | $ | (2,504) |  |  | $ | 218,539 |
Issuance of stock under stock plans | — |  |  | — |  |  |  | 81 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (215) |  |  | — |  |  | — |  |  | (215) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 895 |  |  | — |  |  | — |  |  | 895 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (11,623) |  |  | — |  |  | (11,623) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 401 |  |  | 401 |
Balance at November 29, 2020 | — |  |  | $ | — |  |  |  | 29,323 |  |  | $ | 29 |  |  | $ | 164,068 |  |  | $ | 46,003 |  |  | $ | (2,103) |  |  | $ | 207,997 |
The effects of the restatement on the consolidated statement of cash flows for the six months ended November 29, 2020 are summarized in the following table:
| Six Months Ended November 29, 2020
| As Reported |  | Restatement Adjustment |  | As Restated
Cash flows from operating activities: |  |  |  |  |
Net (loss) income | $ | (24,301) |  |  | $ | 268 |  |  | $ | (24,033) |
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Depreciation, amortization of intangibles and amortization of debt costs | 9,826 |  |  | — |  |  | 9,826 |
Stock-based compensation expense | 1,787 |  |  | — |  |  | 1,787 |
Deferred taxes | (7,070) |  |  | 70 |  |  | (7,000) |
Change in investment in non-public company, fair value | 11,800 |  |  | — |  |  | 11,800 |
Net gain on disposal of property and equipment held and used | (34) |  |  | — |  |  | (34) |
Loss on disposal of property and equipment related to restructuring, net | 6,005 |  |  | — |  |  | 6,005 |
Other, net | 21 |  |  | — |  |  | 21 |
Changes in current assets and current liabilities: |  |  |  |  |
Accounts receivable, net | 9,661 |  |  | — |  |  | 9,661 |
Inventory | (4,891) |  |  | 58 |  |  | (4,833) |
Prepaid expenses and other current assets | 1,539 |  |  | 13 |  |  | 1,552 |
Accounts payable | 10,539 |  |  | — |  |  | 10,539 |
Accrued compensation | (1,345) |  |  | — |  |  | (1,345) |
Other accrued liabilities | 4,627 |  |  | — |  |  | 4,627 |
Deferred revenue | 292 |  |  | — |  |  | 292 |
Net cash provided by operating activities | 18,456 |  |  | 409 |  |  | 18,865 |
Cash flows from investing activities: |  |  |  |  |
Proceeds from sales of property and equipment | 12,885 |  |  | — |  |  | 12,885 |
Purchases of property and equipment | (7,407) |  |  | (409) |  |  | (7,816) |
Net cash provided by (used in) investing activities | 5,478 |  |  | (409) |  |  | 5,069 |
Cash flows from financing activities: |  |  |  |  |
Taxes paid by Company for employee stock plans | (297) |  |  | — |  |  | (297) |
Payments on long-term debt | (20,062) |  |  | — |  |  | (20,062) |
Proceeds from line of credit | 24,000 |  |  | — |  |  | 24,000 |
Payments on line of credit | (24,400) |  |  | — |  |  | (24,400) |
Payments for debt issuance costs | (1,237) |  |  | — |  |  | (1,237) |
Net cash used in financing activities | (21,996) |  |  | — |  |  | (21,996) |
Net increase in cash, cash equivalents and restricted cash | 1,938 |  |  | — |  |  | 1,938 |
Cash, cash equivalents and restricted cash, beginning of period | 553 |  |  | — |  |  | 553 |
Cash, cash equivalents and restricted cash, end of period | $ | 2,491 |  |  | $ | — |  |  | $ | 2,491 |
Supplemental disclosure of non-cash investing and financing activities: |  |  |  |  |
Purchases of property and equipment on trade vendor credit | $ | 1,526 |  |  | $ | — |  |  | $ | 1,526 |
The effects of this error on our previously reported changes in the Company’s allowance for sales returns and credit losses for the quarter ended November 29, 2020 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| November 29, 2020
| Balance at beginning of period |  | Provision (benefit) for expected credit losses |  | Write offs, net of recoveries |  |  |  | Balance at end of period
Six months ended November 29, 2020, As Reported | $ | 438 |  |  | $ | 102 |  |  | $ | (263) |  |  |  |  | $ | 277 |
Restatement Adjustment | $ | — |  |  | — |  |  | — |  |  |  |  | $ | — |
Six months ended November 29, 2020, As Restated | $ | 438 |  |  | 102 |  |  | (263) |  |  |  |  | $ | 277 |
Discontinued Operations | $ | (438) |  |  | (102) |  |  | 263 |  |  |  |  | $ | (277) |
Six months ended November 29, 2020, As Restated, after Discontinued Operations | $ | — |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | — |
The effects of this error on our previously reported inventories as of November 29, 2020 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| November 29, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Finished goods | $ | 36,325 |  |  | $ | 11 |  |  | $ | 36,336 |  |  | $ | (21,674) |  |  | $ | 14,662 |
Raw materials | 26,983 |  |  | (371) |  |  | 26,612 |  |  | (16,494) |  |  | 10,118 |
Work in progress | 7,894 |  |  | (218) |  |  | 7,676 |  |  | (52) |  |  | 7,624 |
Total inventories | $ | 71,202 |  |  | $ | (578) |  |  | $ | 70,624 |  |  | $ | (38,220) |  |  | $ | 32,404 |
The effects of this error on our previously reported basic and diluted net loss per share for the three and six months ended November 29, 2020 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| Three Months Ended November 29, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Numerator: |  |  |  |  |  |  |  |  |
Net (loss) income applicable to Common Stockholders | $ | (13,301) |  |  | $ | 1,678 |  |  | $ | (11,623) |  |  | $ | — |  |  | $ | (11,623) |
Denominator: |  |  |  |  |  |  |  |  |
Weighted average shares for basic net income per share | 29,280 |  |  | — |  |  | 29,280 |  |  | — |  |  | 29,280 |
Weighted average shares for diluted net income per share | 29,280 |  |  | — |  |  | 29,280 |  |  | — |  |  | 29,280 |
Diluted net (loss) income per share | $ | (0.45) |  |  | $ | 0.05 |  |  | $ | (0.40) |  |  | $ | — |  |  | $ | (0.40) |
| Six Months Ended November 29, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Numerator: |  |  |  |  |  |  |  |  |
Net (loss) income applicable to Common Stockholders | $ | (24,301) |  |  | $ | 268 |  |  | $ | (24,033) |  |  | $ | — |  |  | $ | (24,033) |
Denominator: |  |  |  |  |  |  |  |  |
Weighted average shares for basic net income per share | 29,261 |  |  | — |  |  | 29,261 |  |  | — |  |  | 29,261 |
Weighted average shares for diluted net income per share | 29,261 |  |  | — |  |  | 29,261 |  |  | — |  |  | 29,261 |
Diluted net (loss) income per share | $ | (0.83) |  |  | $ | 0.01 |  |  | $ | (0.82) |  |  | $ | — |  |  | $ | (0.82) |
The effects of this error on our previously reported disaggregated revenue for the three months ended November 29, 2020 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Contact development and manufacturing organization | $ | 18,259 |  |  | $ | 24 |  |  | $ | 18,283 |  |  | $ | — |  |  | $ | 18,283 |
Fermentation | 4,960 |  |  | — |  |  | 4,960 |  |  | — |  |  | 4,960 |
Total | $ | 23,219 |  |  | $ | 24 |  |  | $ | 23,243 |  |  | $ | — |  |  | $ | 23,243 |
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Fresh packaged salads and vegetables | $ | 92,423 |  |  | $ | — |  |  | $ | 92,423 |  |  | $ | (92,423) |  |  | $ | — |
Avocado products | 14,713 |  |  | — |  |  | 14,713 |  |  | (14,713) |  |  | — |
Technology | 549 |  |  | — |  |  | 549 |  |  | — |  |  | 549 |
Total | $ | 107,685 |  |  | $ | — |  |  | $ | 107,685 |  |  | $ | (107,136) |  |  | $ | 549 |
The effects of this error on our previously reported disaggregated revenue for the six months ended November 29, 2020 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Contact development and manufacturing organization | $ | 34,747 |  |  | $ | 252 |  |  | $ | 34,999 |  |  | $ | — |  |  | $ | 34,999 |
Fermentation | 10,277 |  |  | — |  |  | 10,277 |  |  | — |  |  | 10,277 |
Total | $ | 45,024 |  |  | $ | 252 |  |  | $ | 45,276 |  |  | $ | — |  |  | $ | 45,276 |
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Fresh packaged salads and vegetables | $ | 188,601 |  |  | $ | — |  |  | $ | 188,601 |  |  | $ | (188,601) |  |  | $ | — |
Avocado products | 31,730 |  |  | — |  |  | 31,730 |  |  | (31,730) |  |  | — |
Technology | 1,192 |  |  | — |  |  | 1,192 |  |  | — |  |  | 1,192 |
Total | $ | 221,523 |  |  | $ | — |  |  | $ | 221,523 |  |  | $ | (220,331) |  |  | $ | 1,192 |
The effects of this error on our previously reported segment reporting for the three months ended November 29, 2020 as presented in the Company’s Quarterly Report on Form 10-Q Note 7, are as follows. The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the three months ended November 29, 2020. Refer to Note 14 for the related income statement line items reported in the segment table of the Company after giving effect to the discontinued operations previously reported under the Curation segment. The Company disclosed Other to reconcile the segment information to the consolidated financial statements.
| Three Months Ended November 29, 2020
(in thousands) | Lifecore |  | Curation Foods |  | Other |  | Total
Three Months Ended November 29, 2020, As Reported |  |  |  |  |  |  |
Net sales | $ | 23,219 |  |  | $ | 107,685 |  |  | $ | — |  |  | $ | 130,904 |
Gross profit | 10,474 |  |  | 10,163 |  |  | — |  |  | 20,637 |
Net income (loss) from continuing operations | 4,492 |  |  | (12,383) |  |  | (5,410) |  |  | (13,301) |
Depreciation and amortization | 1,360 |  |  | 2,906 |  |  | 26 |  |  | 4,292 |
Dividend Income | — |  |  | 281 |  |  | — |  |  | 281 |
Interest income | — |  |  | — |  |  | 10 |  |  | 10 |
Interest expense | — |  |  | 1,376 |  |  | 1,663 |  |  | 3,039 |
Income tax (benefit) expense, continuing operations | 1,419 |  |  | (3,911) |  |  | (208) |  |  | (2,700) |
Corporate overhead allocation | 1,162 |  |  | 1,402 |  |  | (2,564) |  |  | — |
Restatement Adjustments |  |  |  |  |  |  |
Net sales | 24 |  |  | — |  |  | — |  |  | 24 |
Gross profit | 42 |  |  | — |  |  | — |  |  | 42 |
Net (loss) income | 500 |  |  | 1,708 |  |  | 870 |  |  | 3,078 |
Loss from discontinued operations | — |  |  | (1,400) |  |  | — |  |  | (1,400) |
Interest expense | — |  |  | — |  |  | (204) |  |  | (204) |
Income tax (benefit) expense, continuing operations | (458) |  |  | 1,855 |  |  | (666) |  |  | 731 |
Three Months Ended November 29, 2020, As Restated |  |  |  |  |  |  |
Net sales | $ | 23,243 |  |  | $ | 107,685 |  |  | $ | — |  |  | $ | 130,928 |
Gross profit | 10,516 |  |  | 10,163 |  |  | — |  |  | 20,679 |
Net income (loss) from continuing operations | 4,992 |  |  | (10,675) |  |  | (4,540) |  |  | (10,223) |
Loss from discontinued operations | $ | — |  |  | $ | (1,400) |  |  | $ | — |  |  | (1,400) |
Depreciation and amortization | 1,360 |  |  | 2,906 |  |  | 26 |  |  | 4,292 |
Dividend Income | — |  |  | 281 |  |  | — |  |  | 281 |
Interest income | — |  |  | — |  |  | 10 |  |  | 10 |
Interest expense | — |  |  | 1,376 |  |  | 1,459 |  |  | 2,835 |
Income tax (benefit) expense, continuing operations | 961 |  |  | (2,056) |  |  | (874) |  |  | (1,969) |
Corporate overhead allocation | 1,162 |  |  | 1,402 |  |  | (2,564) |  |  | — |
The effects of this error on our previously reported segment reporting for the six months ended November 29, 2020 as presented in the Company’s Quarterly Report on Form 10-Q Note 7, are as follows. The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the six months ended November 29, 2020. Refer to Note 14 for the related income statement line items reported in the segment table of the Company after giving effect to the discontinued operations previously reported under the Curation segment. The Company disclosed Other to reconcile the segment information to the consolidated financial statements.
| Six Months Ended November 29, 2020
(in thousands) | Lifecore |  | Curation Foods |  | Other |  | Total
Six Months Ended November 29, 2020, As Reported |  |  |  |  |  |  |
Net sales | $ | 45,024 |  |  | $ | 221,523 |  |  | $ | — |  |  | $ | 266,547 |
Gross profit | 15,476 |  |  | 21,507 |  |  | — |  |  | 36,983 |
Net income (loss) from continuing operations | 4,604 |  |  | (20,654) |  |  | (8,251) |  |  | (24,301) |
Loss from discontinued operations | — |  |  | — |  |  | — |  |  | — |
Depreciation and amortization | 2,669 |  |  | 6,316 |  |  | 54 |  |  | 9,039 |
Dividend Income | — |  |  | 563 |  |  | — |  |  | 563 |
Interest income | — |  |  | — |  |  | 18 |  |  | 18 |
Interest expense | — |  |  | 2,751 |  |  | 3,397 |  |  | 6,148 |
Income tax (benefit) expense, continuing operations | 1,454 |  |  | (6,523) |  |  | (1,940) |  |  | (7,009) |
Corporate overhead allocation | 2,565 |  |  | 3,258 |  |  | (5,823) |  |  | — |
Restatement Adjustments |  |  |  |  |  |  |
Net sales | 252 |  |  | — |  |  | — |  |  | 252 |
Gross profit | (58) |  |  | — |  |  | — |  |  | (58) |
Net income (loss) from continuing operations | 45 |  |  | 953 |  |  | 670 |  |  | 1,668 |
Loss from discontinued operations | — |  |  | (1,400) |  |  | — |  |  | (1,400) |
Interest expense | — |  |  | — |  |  | (409) |  |  | (409) |
Income tax (benefit) expense, continuing operations | (103) |  |  | 797 |  |  | (261) |  |  | 433 |
Six Months Ended November 29, 2020, As Restated |  |  |  |  |  |  |
Net sales | 45,276 |  |  | 221,523 |  |  | — |  |  | 266,799 |
Gross profit | 15,418 |  |  | 21,507 |  |  | — |  |  | 36,925 |
Net income (loss) from continuing operations | 4,649 |  |  | (19,701) |  |  | (7,581) |  |  | (22,633) |
Loss from discontinued operations | $ | — |  |  | $ | (1,400) |  |  | $ | — |  |  | (1,400) |
Depreciation and amortization | 2,669 |  |  | 6,316 |  |  | 54 |  |  | 9,039 |
Dividend Income | — |  |  | 563 |  |  | — |  |  | 563 |
Interest income | — |  |  | — |  |  | 18 |  |  | 18 |
Interest expense | — |  |  | 2,751 |  |  | 2,988 |  |  | 5,739 |
Income tax (benefit) expense, continuing operations | 1,351 |  |  | (5,726) |  |  | (2,201) |  |  | (6,576) |
Corporate overhead allocation | 2,565 |  |  | 3,258 |  |  | (5,823) |  |  | — |
The effects of this error on our previously reported restructuring cost for the three months ended November 29, 2020 as presented in the Company’s Quarterly Report on Form 10-Q Note 8, are as follows:
| Three Months Ended November 29, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Employee severance and benefit costs | 211 |  |  | — |  |  | 211 |  |  | (160) |  |  | 51 |
Other restructuring costs | 1,451 |  |  | — |  |  | 1,451 |  |  | (403) |  |  | 1,048 |
Total restructuring costs | $ | 1,662 |  |  | $ | — |  |  | $ | 1,662 |  |  | $ | (563) |  |  | $ | 1,099 |
| Three Months Ended November 29, 2020
| Curation |  | Other |  | Total
Total restructuring costs, As reported | $ | 1,506 |  |  | $ | 156 |  |  | $ | 1,662 |
Discontinued Operations adjustments | (563) |  |  | — |  |  | (563) |
Total restructuring costs, As restated | $ | 943 |  |  | $ | 156 |  |  | $ | 1,099 |
The effects of this error on our previously reported restructuring cost for the six months ended November 29, 2020 as presented in the Company’s Quarterly Report on Form 10-Q Note 8, are as follows:
| Six Months Ended November 29, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Asset write-off costs | $ | 6,005 |  |  | $ | — |  |  | $ | 6,005 |  |  | $ | — |  |  | $ | 6,005 |
Employee severance and benefit costs | 1,115 |  |  | — |  |  | 1,115 |  |  | (1,064) |  |  | 51 |
Other restructuring costs | 2,946 |  |  | — |  |  | 2,946 |  |  | (1,236) |  |  | 1,710 |
Total restructuring costs | $ | 10,066 |  |  | $ | — |  |  | $ | 10,066 |  |  | $ | (2,300) |  |  | $ | 7,766 |
| Six Months Ended November 29, 2020
| Curation |  | Other |  | Total
Total restructuring costs, As reported | $ | 9,263 |  |  | $ | 803 |  |  | $ | 10,066 |
Discontinued Operations adjustments | (2,300) |  |  | — |  |  | (2,300) |
Total restructuring costs, As restated | $ | 6,963 |  |  | $ | 803 |  |  | $ | 7,766 |
As of and for the three months ended August 30, 2020 The effects of the restatement on the consolidated balance sheet as of August 30, 2020 are summarized in the following table:
| August 30, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
ASSETS |  |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 589 |  |  | $ | — |  |  | $ | 589 |  |  | $ | (150) |  |  | $ | 439 |
Accounts receivable, less allowance for doubtful accounts | 65,027 |  |  | — |  |  | 65,027 |  |  | (37,855) |  |  | 27,172 |
Inventories | 59,998 |  |  | (620) |  |  | 59,378 |  |  | (30,469) |  |  | 28,909 |
Prepaid expenses and other current assets | 21,753 |  |  | (1,780) |  |  | 19,973 |  |  | (6,039) |  |  | 13,934 |
Current assets, discontinued operations | — |  |  | — |  |  | — |  |  | 74,513 |  |  | 74,513 |
Total Current Assets | 147,367 |  |  | (2,400) |  |  | 144,967 |  |  | — |  |  | 144,967 |
Investment in non-public company, fair value | 56,900 |  |  | (1,800) |  |  | 55,100 |  |  | — |  |  | 55,100 |
Property and equipment, net | 171,413 |  |  | 1,063 |  |  | 172,476 |  |  | (78,712) |  |  | 93,764 |
Operating lease right-of-use assets | 22,109 |  |  | — |  |  | 22,109 |  |  | (8,750) |  |  | 13,359 |
Goodwill | 69,386 |  |  | — |  |  | 69,386 |  |  | (55,505) |  |  | 13,881 |
Trademarks/tradenames, net | 25,328 |  |  | — |  |  | 25,328 |  |  | (21,128) |  |  | 4,200 |
Customer relationships, net | 12,281 |  |  | — |  |  | 12,281 |  |  | (11,767) |  |  | 514 |
Other assets | 1,396 |  |  | — |  |  | 1,396 |  |  | (203) |  |  | 1,193 |
Non-current assets, discontinued operations | — |  |  | — |  |  | — |  |  | 176,065 |  |  | 176,065 |
Total Assets | $ | 506,180 |  |  | $ | (3,137) |  |  | $ | 503,043 |  |  | $ | — |  |  | $ | 503,043 |
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities: |  |  |  |  |  |  |  |  |
Accounts payable | $ | 50,722 |  |  | $ | — |  |  | 50,722 |  |  | $ | (44,371) |  |  | 6,351 |
Accrued compensation | 8,895 |  |  | — |  |  | 8,895 |  |  | (4,921) |  |  | 3,974 |
Other accrued liabilities | 9,607 |  |  | (36) |  |  | 9,571 |  |  | (5,902) |  |  | 3,669 |
Current portion of lease liabilities | 4,001 |  |  | — |  |  | 4,001 |  |  | (3,290) |  |  | 711 |
Deferred revenue | 477 |  |  | — |  |  | 477 |  |  | (477) |  |  | — |
Line of credit | 69,000 |  |  | — |  |  | 69,000 |  |  | — |  |  | 69,000 |
Current portion of long-term debt | 11,027 |  |  | — |  |  | 11,027 |  |  | — |  |  | 11,027 |
Current Liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 58,961 |  |  | 58,961 |
Total Current Liabilities | 153,729 |  |  | (36) |  |  | 153,693 |  |  | — |  |  | 153,693 |
Long-term debt, net | 93,919 |  |  | — |  |  | 93,919 |  |  | — |  |  | 93,919 |
Long-term lease liabilities | 23,018 |  |  | — |  |  | 23,018 |  |  | (7,002) |  |  | 16,016 |
Deferred taxes, net | 9,359 |  |  | (482) |  |  | 8,877 |  |  | — |  |  | 8,877 |
Other non-current liabilities | 4,997 |  |  | — |  |  | 4,997 |  |  | (859) |  |  | 4,138 |
Non-current liabilities, discontinued operations | — |  |  | — |  |  | — |  |  | 7,861 |  |  | 7,861 |
Total Liabilities | 285,022 |  |  | (518) |  |  | 284,504 |  |  | — |  |  | 284,504 |
Stockholders’ Equity: |  |  |  |  |  |  |  |  |
Common stock | $ | 29 |  |  | $ | — |  |  | 29 |  |  | $ | — |  |  | 29 |
Additional paid-in capital | 163,388 |  |  | — |  |  | 163,388 |  |  | — |  |  | 163,388 |
Retained earnings (Accumulated deficit) | 60,245 |  |  | (2,619) |  |  | 57,626 |  |  | — |  |  | 57,626 |
Accumulated other comprehensive loss | (2,504) |  |  | — |  |  | (2,504) |  |  | — |  |  | (2,504) |
Total Stockholders’ Equity | 221,158 |  |  | (2,619) |  |  | 218,539 |  |  | — |  |  | 218,539 |
Total Liabilities and Stockholders’ Equity | $ | 506,180 |  |  | $ | (3,137) |  |  | $ | 503,043 |  |  | $ | — |  |  | $ | 503,043 |
The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the three months August 30, 2020 are summarized in the following table:
| Three Months Ended August 30, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Product sales | $ | 135,643 |  |  | $ | 228 |  |  | $ | 135,871 |  |  | $ | (113,196) |  |  | $ | 22,675 |
Cost of product sales | 119,296 |  |  | 328 |  |  | 119,624 |  |  | (102,243) |  |  | 17,381 |
Gross profit | 16,347 |  |  | (100) |  |  | 16,247 |  |  | (10,953) |  |  | 5,294 |
Operating costs and expenses: |  |  |  |  |  |  |  |  |
Research and development | 2,508 |  |  | — |  |  | 2,508 |  |  | (769) |  |  | 1,739 |
Selling, general and administrative | 17,903 |  |  | 34 |  |  | 17,937 |  |  | (10,447) |  |  | 7,490 |
Restructuring costs | 8,404 |  |  | — |  |  | 8,404 |  |  | (1,737) |  |  | 6,667 |
Total operating costs and expenses | 28,815 |  |  | 34 |  |  | 28,849 |  |  | (12,953) |  |  | 15,896 |
Operating (loss) income | (12,468) |  |  | (134) |  |  | (12,602) |  |  | 2,000 |  |  | (10,602) |
Dividend income | 281 |  |  | — |  |  | 281 |  |  | (281) |  |  | — |
Interest income | 8 |  |  | — |  |  | 8 |  |  | — |  |  | 8 |
Interest expense | (3,109) |  |  | 205 |  |  | (2,904) |  |  | 1,239 |  |  | (1,665) |
Other expense | (21) |  |  | (1,779) |  |  | (1,800) |  |  | 281 |  |  | (1,519) |
Net (loss) income from continuing operations before taxes | (15,309) |  |  | (1,708) |  |  | (17,017) |  |  | 3,239 |  |  | (13,778) |
Income tax benefit (expense) | 4,309 |  |  | 298 |  |  | 4,607 |  |  | (819) |  |  | 3,788 |
Net (loss) income from continuing operations | (11,000) |  |  | (1,410) |  |  | (12,410) |  |  | 2,420 |  |  | (9,990) |
Discontinued operations: |  |  |  |  |  |  |  |  |
Loss from discontinued operations | — |  |  | — |  |  | — |  |  | (3,239) |  |  | (3,239) |
Income tax benefit | — |  |  | — |  |  | — |  |  | 819 |  |  | 819 |
Loss from discontinued operations, net of tax | — |  |  | — |  |  | — |  |  | (2,420) |  |  | (2,420) |
Consolidated net loss | $ | (11,000) |  |  | $ | (1,410) |  |  | $ | (12,410) |  |  | $ | — |  |  | $ | (12,410) |
Basic net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.38) |  |  | $ | (0.04) |  |  | $ | (0.42) |  |  | $ | 0.08 |  |  | $ | (0.34) |
Loss from discontinued operations | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (0.08) |  |  | $ | (0.08) |
Total basic net loss per share | $ | (0.38) |  |  | $ | (0.04) |  |  | $ | (0.42) |  |  | $ | — |  |  | $ | (0.42) |
Diluted net (loss) income per share: |  |  |  |  |  |  |  |  |
(Loss) income from continuing operations | $ | (0.38) |  |  | $ | (0.04) |  |  | $ | (0.42) |  |  | $ | 0.08 |  |  | $ | (0.34) |
Loss from discontinued operations | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (0.08) |  |  | $ | (0.08) |
Total diluted net loss per share | $ | (0.38) |  |  | $ | (0.04) |  |  | $ | (0.42) |  |  | $ | — |  |  | $ | (0.42) |
Shares used in per share computation |  |  |  |  |  |  |  |  |
Basic | 29,242 |  | — |  |  | 29,242 |  |  | — |  |  | 29,242
Diluted | 29,242 |  | — |  |  | 29,242 |  |  | — |  |  | 29,242
| Three Months Ended August 30, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Net loss | $ | (11,000) |  |  | $ | (1,410) |  |  | $ | (12,410) |  |  | $ | — |  |  | $ | (12,410) |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |  |
Net unrealized gains on interest rate swaps, net of tax | 304 |  |  | — |  |  | 304 |  |  | — |  |  | 304 |
Other comprehensive income, net of tax | 304 |  |  | — |  |  | 304 |  |  | — |  |  | 304 |
Total comprehensive loss | $ | (10,696) |  |  | $ | (1,410) |  |  | $ | (12,106) |  |  | $ | — |  |  | $ | (12,106) |
The effects of the restatement on the consolidated statement of convertible preferred stock and stockholders’ equity (deficit) for the three months ended August 30, 2020 are summarized in the following table:
| Convertible Preferred Stock |  |  | Common Stock |  | Additional Paid-in Capital |  | Retained Earnings (Accumulated Deficit) |  | Accumulated Other Comprehensive Loss |  | Total Stockholders’ Equity
| Shares |  | Amount |  |  | Shares |  | Amount |  |  |  |
As Reported |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 31, 2020 | — |  |  | $ | — |  |  |  | 29,224 |  |  | $ | 29 |  |  | $ | 162,578 |  |  | $ | 71,245 |  |  | $ | (2,808) |  |  | $ | 231,044 |
Issuance of stock under stock plans | — |  |  | — |  |  |  | 18 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (82) |  |  | — |  |  | — |  |  | (82) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 892 |  |  | — |  |  | — |  |  | 892 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (11,000) |  |  | — |  |  | (11,000) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 304 |  |  | 304 |
Balance at August 30, 2020 | — |  |  | $ | — |  |  |  | 29,242 |  |  | $ | 29 |  |  | $ | 163,388 |  |  | $ | 60,245 |  |  | $ | (2,504) |  |  | $ | 221,158 |
Restatements Impacts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Opening retained earnings (at May 31, 2020) | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (1,209) |  |  | — |  |  | (1,209) |
Net income (loss) at August 30, 2020 | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (1,410) |  |  | — |  |  | (1,410) |
As Restated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at May 31, 2020 | — |  |  | $ | — |  |  |  | 29,224 |  |  | $ | 29 |  |  | $ | 162,578 |  |  | $ | 70,036 |  |  | $ | (2,808) |  |  | $ | 229,835 |
Issuance of stock under stock plans | — |  |  | — |  |  |  | 18 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Taxes paid by Company for employee stock plans | — |  |  | — |  |  |  | — |  |  | — |  |  | (82) |  |  | — |  |  | — |  |  | (82) |
Stock-based compensation | — |  |  | — |  |  |  | — |  |  | — |  |  | 892 |  |  | — |  |  | — |  |  | 892 |
Net loss | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | (12,410) |  |  | — |  |  | (12,410) |
Other comprehensive income, net of tax | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 304 |  |  | 304 |
Balance at August 30, 2020 | — |  |  | $ | — |  |  |  | 29,242 |  |  | $ | 29 |  |  | $ | 163,388 |  |  | $ | 57,626 |  |  | $ | (2,504) |  |  | $ | 218,539 |
The effects of the restatement on the consolidated statement of cash flows for the three months ended August 30, 2020 are summarized in the following table:
| Three Months Ended August 30, 2020
| As Reported |  | Restatement Adjustment |  | As Restated
Cash flows from operating activities: |  |  |  |  |
Net loss | $ | (11,000) |  |  | $ | (1,410) |  |  | $ | (12,410) |
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Depreciation, amortization of intangibles and amortization of debt costs | 5,102 |  |  | — |  |  | 5,102 |
Stock-based compensation expense | 892 |  |  | — |  |  | 892 |
Deferred taxes | (4,349) |  |  | (298) |  |  | (4,647) |
Net gain on disposal of property and equipment held and used | (11) |  |  | — |  |  | (11) |
Loss on Windset | — |  |  | 1,800 |  |  | 1,800 |
Loss on disposal of property and equipment related to restructuring, net | 6,005 |  |  | — |  |  | 6,005 |
Other, net | 21 |  |  | — |  |  | 21 |
Changes in current assets and current liabilities: |  |  |  |  |
Accounts receivable, net | 11,179 |  |  | — |  |  | 11,179 |
Inventory | 6,313 |  |  | 100 |  |  | 6,413 |
Prepaid expenses and other current assets | 1,353 |  |  | 13 |  |  | 1,366 |
Accounts payable | 917 |  |  | — |  |  | 917 |
Accrued compensation | (139) |  |  | — |  |  | (139) |
Other accrued liabilities | 613 |  |  | — |  |  | 613 |
Deferred revenue | 125 |  |  | — |  |  | 125 |
Net cash provided by operating activities | 17,021 |  |  | 205 |  |  | 17,226 |
Cash flows from investing activities: |  |  |  |  |
Purchases of property and equipment | (4,623) |  |  | (205) |  |  | (4,828) |
Proceeds from sales of property and equipment | 4,855 |  |  | — |  |  | 4,855 |
Net cash provided by (used in) investing activities | 232 |  |  | (205) |  |  | 27 |
Cash flows from financing activities: |  |  |  |  |
Taxes paid by Company for employee stock plans | (82) |  |  | — |  |  | (82) |
Payments on long-term debt | (8,030) |  |  | — |  |  | (8,030) |
Proceeds from line of credit | 11,000 |  |  | — |  |  | 11,000 |
Payments on line of credit | (19,400) |  |  | — |  |  | (19,400) |
Payments for debt issuance costs | (512) |  |  | — |  |  | (512) |
Net cash used in financing activities | (17,024) |  |  | — |  |  | (17,024) |
Net increase in cash, cash equivalents and restricted cash | 229 |  |  | — |  |  | 229 |
Cash, cash equivalents and restricted cash, beginning of period | 360 |  |  | — |  |  | 360 |
Cash, cash equivalents and restricted cash, end of period | $ | 589 |  |  | $ | — |  |  | $ | 589 |
Supplemental disclosure of non-cash investing and financing activities: |  |  |  |  |
Purchases of property and equipment on trade vendor credit | $ | 978 |  |  | $ | — |  |  | $ | 978 |
The effects of this error on our previously reported changes in the Company’s allowance for sales returns and credit losses for the quarter ended August 30, 2020 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| August 30, 2020
| 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 30, 2020, As Reported | $ | 438 |  |  | 35 |  |  | (169) |  |  |  |  | $ | 304 |
Three months ended August 30, 2020, As Restated | $ | 438 |  |  | 35 |  |  | (169) |  |  |  |  | $ | 304 |
Discontinued Operations | $ | (438) |  |  | (35) |  |  | 169 |  |  |  |  | $ | (304) |
Three months ended August 30, 2020, As Restated, after Discontinued Operations | $ | — |  |  | — |  |  | — |  |  |  |  | $ | — |
The effects of this error on our previously reported inventories as of August 30, 2020 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| August 30, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Finished goods | $ | 27,635 |  |  | $ | (2) |  |  | $ | 27,633 |  |  | $ | (14,727) |  |  | $ | 12,906 |
Raw materials | 25,794 |  |  | (479) |  |  | 25,315 |  |  | (15,675) |  |  | 9,640 |
Work in progress | 6,569 |  |  | (139) |  |  | 6,430 |  |  | (67) |  |  | 6,363 |
Total inventories | $ | 59,998 |  |  | $ | (620) |  |  | $ | 59,378 |  |  | $ | (30,469) |  |  | $ | 28,909 |
The effects of this error on our previously reported basic and diluted net loss per share for the three months ended August 30, 2020 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| Three Months Ended August 30, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Numerator: |  |  |  |  |  |  |  |  |
Net loss applicable to Common Stockholders | $ | (11,000) |  |  | $ | (1,410) |  |  | $ | (12,410) |  |  | $ | — |  |  | $ | (12,410) |
Denominator: |  |  |  |  |  |  |  |  |
Weighted average shares for basic net income per share | 29,242 |  |  | — |  |  | 29,242 |  |  | — |  |  | 29,242 |
Weighted average shares for diluted net income per share | 29,242 |  |  | — |  |  | 29,242 |  |  | — |  |  | 29,242 |
Diluted net loss per share | $ | (0.38) |  |  | $ | (0.04) |  |  | $ | (0.42) |  |  | $ | — |  |  | $ | (0.42) |
The effects of this error on our previously reported disaggregated revenue for the three months ended August 30, 2020 as presented in the Company’s Quarterly Report on Form 10-Q Note 1, are as follows:
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Contact development and manufacturing organization | $ | 16,488 |  |  | $ | 228 |  |  | $ | 16,716 |  |  | $ | — |  |  | $ | 16,716 |
Fermentation | 5,316 |  |  | — |  |  | 5,316 |  |  | — |  |  | 5,316 |
Total | $ | 21,804 |  |  | $ | 228 |  |  | $ | 22,032 |  |  | $ | — |  |  | $ | 22,032 |
| As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Fresh packaged salads and vegetables | $ | 96,179 |  |  | $ | — |  |  | $ | 96,179 |  |  | $ | (96,179) |  |  | $ | — |
Avocado Products | 17,017 |  |  | — |  |  | 17,017 |  |  | (17,017) |  |  | — |
Technology | 643 |  |  | — |  |  | 643 |  |  | — |  |  | 643 |
Total | $ | 113,839 |  |  | $ | — |  |  | $ | 113,839 |  |  | $ | (113,196) |  |  | $ | 643 |
The effects of this error on our previously reported segment reporting as of and for the three months ended August 30, 2020 as presented in the Company’s Quarterly Report on Form 10-Q Note 7, are as follows. The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the three months ended August 30, 2020. Refer to Note 14 for the related income statement line items reported in the segment table of the Company after giving effect to the discontinued operations previously reported under the Curation segment. The Company disclosed Other to reconcile the segment information to the consolidated financial statements.
| Three Months Ended August 30, 2020
(in thousands) | Lifecore |  | Curation Foods |  | Other |  | Total
Three Months Ended August 30, 2020, As Reported |  |  |  |  |  |  |
Net sales | $ | 21,804 |  |  | $ | 113,839 |  |  | $ | — |  |  | $ | 135,643 |
Gross profit | 5,002 |  |  | 11,345 |  |  | — |  |  | 16,347 |
Net income (loss) from continuing operations | 112 |  |  | (8,271) |  |  | (2,841) |  |  | (11,000) |
Depreciation and amortization | 1,310 |  |  | 3,410 |  |  | 28 |  |  | 4,748 |
Dividend Income | — |  |  | 281 |  |  | — |  |  | 281 |
Interest income | — |  |  | — |  |  | 8 |  |  | 8 |
Interest expense | — |  |  | 1,376 |  |  | 1,733 |  |  | 3,109 |
Income tax (benefit) expense, continuing operations | 35 |  |  | (2,612) |  |  | (1,732) |  |  | (4,309) |
Corporate overhead allocation | 1,403 |  |  | 1,856 |  |  | (3,259) |  |  | — |
Restatement Adjustments |  |  |  |  |  |  |
Net sales | 228 |  |  | — |  |  | — |  |  | 228 |
Gross profit | (100) |  |  | — |  |  | — |  |  | (100) |
Net (loss) income | (78) |  |  | (988) |  |  | (344) |  |  | (1,410) |
Interest expense | — |  |  | — |  |  | (205) |  |  | (205) |
Income tax (benefit) expense, continuing operations | (22) |  |  | (825) |  |  | 549 |  |  | (298) |
Three Months Ended August 30, 2020, As Restated |  |  |  |  |  |  |
Net sales | $ | 22,032 |  |  | $ | 113,839 |  |  | $ | — |  |  | $ | 135,871 |
Gross profit | 4,902 |  |  | 11,345 |  |  | — |  |  | 16,247 |
Net income (loss) from continuing operations | 34 |  |  | (9,259) |  |  | (3,185) |  |  | (12,410) |
Depreciation and amortization | 1,310 |  |  | 3,410 |  |  | 28 |  |  | 4,748 |
Dividend Income | — |  |  | 281 |  |  | — |  |  | 281 |
Interest income | — |  |  | — |  |  | 8 |  |  | 8 |
Interest expense | — |  |  | 1,376 |  |  | 1,528 |  |  | 2,904 |
Income tax (benefit) expense, continuing operations | 13 |  |  | (3,437) |  |  | (1,183) |  |  | (4,607) |
Corporate overhead allocation | 1,403 |  |  | 1,856 |  |  | (3,259) |  |  | — |
The effects of this error on our previously reported restructuring cost for the three months ended August 30, 2020 as presented in the Company’s Quarterly Report on Form 10-Q Note 8, are as follows:
| Three Months Ended August 30, 2020
(in thousands) | As Reported |  | Restatement |  | As Restated |  | Discontinued Operations |  | As Restated, after Discontinued Operations
Asset write-off costs | $ | 6,005 |  |  | $ | — |  |  | $ | 6,005 |  |  | $ | — |  |  | $ | 6,005 |
Employee severance and benefit costs | 905 |  |  | — |  |  | 905 |  |  | (905) |  |  | — |
Other restructuring costs | 1,494 |  |  | — |  |  | 1,494 |  |  | (832) |  |  | 662 |
Total restructuring costs | $ | 8,404 |  |  | $ | — |  |  | $ | 8,404 |  |  | $ | (1,737) |  |  | $ | 6,667 |
| Three Months Ended August 30, 2020
| Curation |  | Other |  | Total
Total restructuring costs, As reported | $ | 7,757 |  |  | $ | 647 |  |  | $ | 8,404 |
Discontinued Operations Adjustment | (1,737) |  |  | — |  |  | (1,737) |
Total restructuring costs, As restated | $ | 6,020 |  |  | $ | 647 |  |  | $ | 6,667 |

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

X
- Definition Tabular disclosure of quarterly financial data. Includes, but is not limited to, financial information for fiscal quarters, cumulative effect of a change in accounting principle and earnings per share data. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Section 50 -Paragraph 1 -SubTopic 10 -Topic 270 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482964/270-10-50-1 + Details
Name: | us-gaap_ScheduleOfQuarterlyFinancialInformationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration