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Leases
 12 Months Ended
May 26, 2024
Leases [Abstract]  
Leases Leases
Operating Leases
The Company has entered into various non-cancellable operating lease agreements for manufacturing and distribution facilities, equipment and office space. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company leases facilities and equipment under operating lease agreements with various terms and conditions, which expire at various dates through fiscal year 2033. Certain of these leases have renewal options. Variable lease payments include property taxes and common area maintenance fees and are recorded and paid based on the terms and conditions of the related invoices. The only active operating real estate lease relates to a 21,384 square foot building in Chanhassen, Minnesota, containing a warehouse and office space. The lease commenced on September 1, 2020 with an initial term of seven years, plus an option to extend for an additional five years. The extension period was included in the lease obligation at inception since it was reasonably certain to be exercised. The future lease payments under this lease, which extend through 2033, total $2.3 million as of May 26, 2024. The operating lease for office space of the Curation Foods former headquarters located in Santa Maria, California was terminated in December 2023. The ROU asset carrying value of approximately $1.4 million was written-off. The lease liability for the future estimated payments under this lease, approximated $3.6 million as of May 26, 2024.
Finance Leases
On September 3, 2015, Lifecore leased an 80,950 square foot building in Chaska, MN, two miles from its current facility. The initial term of the lease was seven years with two five-year renewal options. In December 2022, Lifecore exercised one of the options to renew the lease for an additional five years. The lease contains a buyout option at any time during the renewal period with the purchase price equal to the mortgage balance on the lessor’s loan secured by the building. The finance lease obligation at May 26, 2024 assumes the buyout option will be exercised during fiscal year 2028, which is estimated to be approximately $2.6 million. Gross assets recorded under finance leases, included in property and equipment, net, were $4.1 million and $3.9 million as of May 26, 2024 and May 28, 2023, respectively. Accumulated amortization associated with finance leases was $0.9 million and $0.8 million as of May 26, 2024 and May 28, 2023, respectively. The monthly lease payment was initially $34,000 and increases by 2.40% per year. Lifecore and the lessor made capital improvements prior to occupancy and thus the lease did not become effective until January 1, 2016. Lifecore is currently using the building for warehousing and final packaging.
The components of lease cost were as follows:
Year Ended
(In thousands, except term and discount rate)May 26, 2024May 28, 2023
Finance lease cost:
Amortization of leased assets$137$119
Interest on lease liabilities373351
Operating lease cost3441,286
Variable lease cost306600
Sublease income(148)(53)
Total lease cost$1,012$2,303
Weighted-average remaining lease term:
Operating leases8.537.69
Finance leases3.674.57
Weighted-average discount rate:
Operating leases3.04 %4.60 %
Finance leases11.10 %11.40 %

The Company’s leases have original lease periods ending through 2033. The Company’s maturity analysis of operating and finance lease liabilities as of May 26, 2024 are as follows:
(in thousands)Operating LeasesFinance LeasesTotal
2025$4,020 $529 $4,549 
2026433 541 974 
2027416 553 969 
2028302 2,910 3,212 
2029146 36 182 
Thereafter585 9 594 
Total lease payments5,902 4,578 10,480 
Less: interest(211)(1,192)(1,403)
Present value of lease liabilities5,691 3,386 9,077 
Less: current obligation of lease liabilities(3,962)(171)(4,133)
Total long-term lease liabilities$1,729 $3,215 $4,944 

Supplemental cash flow information related to leases are as follows:

Year EndedYear Ended
(in thousands)May 26, 2024May 28, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $761 $2,067 
Operating cash flows from finance leases 373 351 
Financing cash flows from finance leases 136 96 
Lease liabilities arising from obtaining right-of-use assets:
Operating leases $— $83 
During the year ended May 26, 2024, the Company recorded ROU asset impairments related to the Curation Foods Santa Maria Office lease of $1.4 million. During the year ended May 28, 2023, the Company recorded impairments related to the Curation Foods Santa Maria office lease of $0.6 million, and our Curation Foods Los Angeles, California office lease of $0.1 million.
Leases Leases
Operating Leases
The Company has entered into various non-cancellable operating lease agreements for manufacturing and distribution facilities, equipment and office space. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company leases facilities and equipment under operating lease agreements with various terms and conditions, which expire at various dates through fiscal year 2033. Certain of these leases have renewal options. Variable lease payments include property taxes and common area maintenance fees and are recorded and paid based on the terms and conditions of the related invoices. The only active operating real estate lease relates to a 21,384 square foot building in Chanhassen, Minnesota, containing a warehouse and office space. The lease commenced on September 1, 2020 with an initial term of seven years, plus an option to extend for an additional five years. The extension period was included in the lease obligation at inception since it was reasonably certain to be exercised. The future lease payments under this lease, which extend through 2033, total $2.3 million as of May 26, 2024. The operating lease for office space of the Curation Foods former headquarters located in Santa Maria, California was terminated in December 2023. The ROU asset carrying value of approximately $1.4 million was written-off. The lease liability for the future estimated payments under this lease, approximated $3.6 million as of May 26, 2024.
Finance Leases
On September 3, 2015, Lifecore leased an 80,950 square foot building in Chaska, MN, two miles from its current facility. The initial term of the lease was seven years with two five-year renewal options. In December 2022, Lifecore exercised one of the options to renew the lease for an additional five years. The lease contains a buyout option at any time during the renewal period with the purchase price equal to the mortgage balance on the lessor’s loan secured by the building. The finance lease obligation at May 26, 2024 assumes the buyout option will be exercised during fiscal year 2028, which is estimated to be approximately $2.6 million. Gross assets recorded under finance leases, included in property and equipment, net, were $4.1 million and $3.9 million as of May 26, 2024 and May 28, 2023, respectively. Accumulated amortization associated with finance leases was $0.9 million and $0.8 million as of May 26, 2024 and May 28, 2023, respectively. The monthly lease payment was initially $34,000 and increases by 2.40% per year. Lifecore and the lessor made capital improvements prior to occupancy and thus the lease did not become effective until January 1, 2016. Lifecore is currently using the building for warehousing and final packaging.
The components of lease cost were as follows:
Year Ended
(In thousands, except term and discount rate)May 26, 2024May 28, 2023
Finance lease cost:
Amortization of leased assets$137$119
Interest on lease liabilities373351
Operating lease cost3441,286
Variable lease cost306600
Sublease income(148)(53)
Total lease cost$1,012$2,303
Weighted-average remaining lease term:
Operating leases8.537.69
Finance leases3.674.57
Weighted-average discount rate:
Operating leases3.04 %4.60 %
Finance leases11.10 %11.40 %

The Company’s leases have original lease periods ending through 2033. The Company’s maturity analysis of operating and finance lease liabilities as of May 26, 2024 are as follows:
(in thousands)Operating LeasesFinance LeasesTotal
2025$4,020 $529 $4,549 
2026433 541 974 
2027416 553 969 
2028302 2,910 3,212 
2029146 36 182 
Thereafter585 9 594 
Total lease payments5,902 4,578 10,480 
Less: interest(211)(1,192)(1,403)
Present value of lease liabilities5,691 3,386 9,077 
Less: current obligation of lease liabilities(3,962)(171)(4,133)
Total long-term lease liabilities$1,729 $3,215 $4,944 

Supplemental cash flow information related to leases are as follows:

Year EndedYear Ended
(in thousands)May 26, 2024May 28, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $761 $2,067 
Operating cash flows from finance leases 373 351 
Financing cash flows from finance leases 136 96 
Lease liabilities arising from obtaining right-of-use assets:
Operating leases $— $83 
During the year ended May 26, 2024, the Company recorded ROU asset impairments related to the Curation Foods Santa Maria Office lease of $1.4 million. During the year ended May 28, 2023, the Company recorded impairments related to the Curation Foods Santa Maria office lease of $0.6 million, and our Curation Foods Los Angeles, California office lease of $0.1 million.