Correction of Errors in Previously Reported Fiscal Year 2022 and 2021 Annual Financial Statements (Tables)

12 Months Ended

May 28, 2023

Accounting Changes and Error Corrections [Abstract]

Schedule of Error Corrections

The effects of the restatement on the consolidated balance sheet as of May 29, 2022 are summarized in the following table:

	May 29, 2022
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
ASSETS
Current Assets:
Cash and cash equivalents	$	1,643	$	—	$	1,643	$	(652)	$	991
Accounts receivable, net	48,172		(522)		47,650		(9,336)		38,314
Inventories	66,845		(4,833)		62,012		(26,012)		36,000
Prepaid expenses and other current assets	7,052		(1,689)		5,363		(3,310)		2,053
Current Assets, discontinued operations	—		—		—		39,310		39,310
Total Current Assets	123,712		(7,044)		116,668		—		116,668
Property and equipment, net	118,531		4,035		122,566		(3,896)		118,670
Operating lease right-of-use assets	8,580		(94)		8,486		(2,933)		5,553
Goodwill	13,881		—		13,881		—		13,881
Trademarks/tradenames, net	8,700		—		8,700		(4,500)		4,200
Customer relationships, net	1,400		—		1,400		(1,400)		—
Other assets	3,002		—		3,002		(113)		2,889
Non-current Assets, discontinued operations	—		—		—		12,842		12,842
Total Assets	$	277,806	$	(3,103)	$	274,703	$	—	$	274,703
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	15,802	$	—	$	15,802	$	(2,850)	$	12,952
Accrued compensation	9,238		—		9,238		(297)		8,941
Other accrued liabilities	7,647		(229)		7,418		(939)		6,479
Current portion of lease liabilities	5,026		—		5,026		(658)		4,368
Deferred revenue	919		—		919		—		919
Line of credit	40,000		—		40,000		—		40,000
Current portion of long-term debt, net	98,178		—		98,178		—		98,178
Current liabilities, discontinued operations	—		—		—		4,744		4,744
Total Current Liabilities	176,810		(229)		176,581		—		176,581
Long-term lease liabilities	9,983		—		9,983		(2,325)		7,658
Deferred taxes, net	126		—		126		—		126
Other non-current liabilities	190		—		190		—		190
Non-current liabilities, discontinued operations	—		—		—		2,325		2,325
Total Liabilities	187,109		(229)		186,880		—		186,880
Stockholders’ Equity:
Common stock, $0.001 par value; 50,000 shares authorized	30		—		30		—		30
Additional paid-in capital	167,352		—		167,352		—		167,352
Accumulated deficit	(76,099)		(2,874)		(78,973)		—		(78,973)
Accumulated other comprehensive loss	(586)		—		(586)		—		(586)
Total Stockholders’ Equity	90,697		(2,874)		87,823		—		87,823
Total Liabilities and Stockholders’ Equity	$	277,806	$	(3,103)	$	274,703	$	—	$	274,703

The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the year ended May 29, 2022 are summarized in the following table:

	Year ended May 29, 2022
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Product sales	$	185,786	$	40	$	185,826	$	(74,556)	$	111,270
Cost of product sales	135,416		3,903		139,319		(67,115)		72,204
Gross profit	50,370		(3,863)		46,507		(7,441)		39,066
Operating costs and expenses:
Research and development	7,841		521		8,362		(523)		7,839
Selling, general and administrative	46,127		(395)		45,732		(11,073)		34,659
Impairment of goodwill and long-lived and indefinite-lived assets	46,089		—		46,089		(46,089)		—
Restructuring costs	8,961		(602)		8,359		—		8,359
Total operating costs and expenses	109,018		(476)		108,542		(57,685)		50,857
Operating (loss) income	(58,648)		(3,387)		(62,035)		50,244		(11,791)
Interest income	81		—		81		—		81
Interest expense	(17,357)		1,806		(15,551)		—		(15,551)
Transition services income	5,814		—		5,814		—		5,814
Other expense	641		119		760		—		760
Net (loss) income from continuing operations before taxes	(69,469)		(1,462)		(70,931)		50,244		(20,687)
Income tax benefit (provision)	5,945		(287)		5,658		(447)		5,211
Net (loss) income from continuing operations	(63,524)		(1,749)		(65,273)		49,797		(15,476)
Discontinued operations:
Loss from discontinued operations	(51,276)		(409)		(51,685)		(50,244)		(101,929)
Income tax benefit	121		122		243		447		690
Loss from discontinued operations, net of tax	(51,155)		(287)		(51,442)		(49,797)		(101,239)
Net loss	(114,679)		(2,036)		(116,715)		—		(116,715)
Basic net (loss) income per share:
Loss from continuing operations	$	(2.16)	$	(0.06)	$	(2.22)	$	1.69	$	(0.53)
Loss from discontinued operations	$	(1.74)	$	(0.01)	$	(1.75)	$	(1.69)	$	(3.44)
Total basic loss income per share	$	(3.90)	$	(0.07)	$	(3.97)	$	—	$	(3.97)
Diluted net loss per share:
Loss from continuing operations	$	(2.16)	$	(0.06)	$	(2.22)	$	1.69	$	(0.53)
Loss from discontinued operations	$	(1.74)	$	(0.01)	$	(1.75)	$	(1.69)	$	(3.44)
Total diluted net loss per share	$	(3.90)	$	(0.07)	$	(3.97)	$	—	$	(3.97)
Shares used in per share computation
Basic	29,466		—		29,466		—		29,466
Diluted	29,466		—		29,466		—		29,466

	Year ended May 29, 2022
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Net loss applicable to common shareholders	$	(114,679)	$	(2,036)	$	(116,715)	$	—	$	(116,715)
Other comprehensive (loss) income, net of tax:
Net unrealized gains on interest rate swaps (net of tax effect of $(430)	$	772	$	—	$	772	$	—	$	772
Other comprehensive (loss) income, net of tax	$	772	$	—	$	772	$	—	$	772
Total comprehensive (loss) income	$	(113,907)	$	(2,036)	$	(115,943)	$	—	$	(115,943)

The effects of the restatement on the consolidated statement of stockholders’ equity (deficit) for the year ended May 29, 2022 are summarized in the following table:

(in thousands, except per share amounts)	Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	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	180	1		—		—		—		1
Taxes paid by Company for employee stock plans	—	—		(789)		—		—		(789)
Stock-based compensation	—	—		2,608		—		—		2,608
Net loss	—	—		—		(114,679)		—		(114,679)
Other comprehensive income, net of tax	—	—		—		—		772		772
Balance at May 29, 2022	29,513	$	30	$	167,352	$	(76,099)	$	(586)	$	90,697
Restatements Adjustments
Opening retained earnings	—	—		—		(838)		—		(838)
Net loss	—	—		—		(2,036)		—		(2,036)
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	180	1		—		—		—		1
Taxes paid by Company for employee stock plans	—	—		(789)		—		—		(789)
Stock-based compensation	—	—		2,608		—		—		2,608
Net loss	—	—		—		(116,715)		—		(116,715)
Other comprehensive income, net of tax	—	—		—		—		772		772
Balance at May 29, 2022	29,513	$	30	$	167,352	$	(78,973)	$	(586)	$	87,823

The effects of the restatement on the consolidated statement of cash flows for the year ended May 29, 2022 are summarized in the following table:

	Year Ended May 29, 2022
	As Reported		Restatement Adjustment		As Restated
Cash flows from operating activities:
Net loss	$	(114,679)	$	(2,036)	$	(116,715)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Impairment of goodwill and long-lived and indefinite-lived assets	78,146		—		78,146
Depreciation, amortization of intangibles, debt costs and right-of-use assets	17,884		177		18,061
Deferred taxes	(6,990)		165		(6,825)
Loss on disposal of property and equipment related to restructuring, net	5,185		—		5,185
Stock-based compensation expense	2,608		—		2,608
Loss on sale of Eat Smart	336		—		336
Net loss on disposal of property and equipment held and used	152		—		152
Provision for expected credit losses	(14)		—		(14)
Other, net	(426)		—		(426)
Changes in current assets and current liabilities:
Accounts receivable, net	(6,138)		—		(6,138)
Inventory	(5,960)		3,780		(2,180)
Prepaid expenses and other current assets	(602)		(87)		(689)
Accounts payable	9,343		—		9,343
Accrued compensation	(2,546)		—		(2,546)
Other accrued liabilities	(680)		(193)		(873)
Deferred revenue	(18)		—		(18)
Net cash (used in) provided by operating activities	(24,399)		1,806		(22,593)
Cash flows from investing activities:
Proceeds from the Sale of Eat Smart	73,500		—		73,500
Eat Smart sale net working capital adjustment	(9,839)		—		(9,839)
Proceeds from sale of investment in non-public company	45,100		—		45,100
Purchases of property and equipment	(28,134)		(1,806)		(29,940)
Proceeds from sales of property and equipment	1,141		—		1,141
Net cash provided by (used in) investing activities	81,768		(1,806)		79,962
Cash flows from financing activities:
Proceeds from long-term debt	20,000		—		20,000
Payments on long-term debt	(86,411)		—		(86,411)
Proceeds from line of credit	55,111		—		55,111
Payments on line of credit	(44,111)		—		(44,111)
Payments for debt issuance costs	(821)		—		(821)
Taxes paid by Company for employee stock plans	(789)		—		(789)
Net cash used in financing activities	(57,021)		—		(57,021)
Net increase in cash, cash equivalents and restricted cash	348		—		348
Cash, cash equivalents and restricted cash, beginning of period	1,295		—		1,295
Cash, cash equivalents and restricted cash, end of period	$	1,643	$	—	$	1,643

The effects of this error on our previously reported fiscal year 2022 changes in the Company’s allowance for sales returns and credit losses for the year ended May 29, 2022 as presented in the Company’s fiscal year 2022 Annual Report on Form 10-K/A Note 1, are as follows:

	Year Ended May 29, 2022
(in thousands)	Balance at beginning of period		Provision (benefit) for expected credit losses	Write offs, net of recoveries	Balance at end of period
Year ended May 29, 2022, As Reported	$	85	(14)	(6)	$	65
Restatement Adjustment	$	522	—	—	$	522
Year ended May 29, 2022, As Restated	$	607	(14)	(6)	$	587
Discontinued Operations	$	(85)	14	6	$	(65)
Year ended May 29, 2022, As Restated, after Discontinued Operations	$	522	—	—	$	522

The effects of this error on our previously reported fiscal year 2022 inventories as of May 29, 2022 as presented in the Company’s fiscal year 2022 Annual Report on Form 10-K/A Note 1, are as follows:

	May 29, 2022
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Finished goods	$	33,029	$	(3)	$	33,026	$	(19,629)	$	13,397
Raw materials	24,221		(2,393)		21,828		(6,340)		15,488
Work in progress	9,595		(2,437)		7,158		(43)		7,115
Total inventories	$	66,845	$	(4,833)	$	62,012	$	(26,012)	$	36,000

The effects of this error on our previously reported fiscal year 2022 basic and diluted net loss per share for the year ended May 29, 2022 as presented in the Company’s fiscal year 2022 Annual Report on Form 10-K/A Note 1, are as follows:

	Year ended May 29, 2022
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Numerator:
Net loss applicable to Common Stockholders	$	(114,679)	$	(2,036)	$	(116,715)	$	—	$	(116,715)
Denominator:
Weighted average shares for basic net income per share	29,466		—		29,466		—		29,466
Weighted average shares for diluted net income per share	29,466		—		29,466		—		29,466
Diluted net loss per share	$	(3.90)	$	(0.07)	$	(3.97)	$	—	$	(3.97)

The effects of this error on our previously reported fiscal year 2022 disaggregated revenue for the year ended May 29, 2022 as presented in the Company’s fiscal year 2022 Annual Report on Form 10-K/A Note 1, are as follows:

	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Contact development and manufacturing organization	$	86,313	$	40	$	86,353	$	—	$	86,353
Fermentation	23,007		—		23,007		—		23,007
Total	$	109,320	$	40	$	109,360	$	—	$	109,360
	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Avocado Products	$	65,269	$	—	$	65,269	$	(65,269)	$	—
Olive oil and vinegars	9,287		—		9,287		(9,287)		—
Technology	1,910		—		1,910		—		1,910
Total	$	76,466	$	—	$	76,466	$	(74,556)	$	1,910

The effects of this error on our previously reported fiscal year 2022 property and equipment, net as of May 29, 2022 as presented in the Company’s fiscal year 2022 Annual Report on Form 10-K/A Note 3, are as follows:

	May 29, 2022
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Land	$	3,710	$	—	$	3,710	$	—	$	3,710
Buildings	58,359		—		58,359		—		58,359
Leasehold improvements	5,143		—		5,143		(1,124)		4,019
Computers, capitalized software, machinery, equipment and autos	74,974		—		74,974		(4,512)		70,462
Furniture and fixtures	2,099		—		2,099		(8)		2,091
Construction in process	22,786		4,118		26,904		(12)		26,892
Gross property and equipment	167,071		4,118		171,189		(5,656)		165,533
Less accumulated depreciation and amortization	(48,540)		(83)		(48,623)		1,760		(46,863)
Net property and equipment	$	118,531	$	4,035	$	122,566	$	(3,896)	$	118,670

The effects of this error on our previously reported fiscal year 2022 income taxes as of and for the year ended May 29, 2022 as presented in the Company’s fiscal year 2022 Annual Report on Form 10-K/A Note 7, are as follows:

	For the Year Ended May 29, 2022
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Current:
State	23		—		23		—		23
Foreign	356		—		356		—		356
	379		—		379		—		379
Deferred:
Federal	$	(5,670)	$	287	$	(5,383)	$	447	$	(4,936)
State	(654)		—		(654)		—		(654)
	(6,324)		287		(6,037)		447		(5,590)
Total (provision) benefit for income taxes	(5,945)		287		(5,658)		447		(5,211)

	For the Year Ended May 29, 2022
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Tax at U.S. statutory rate	$	(14,548)	$	(288)	$	(14,836)	$	10,492	$	(4,344)
State income taxes, net of federal benefit	(2,195)		(44)		(2,239)		1,601		(638)
Change in valuation allowance	10,134		634		10,768		(11,833)		(1,065)
Tax credit carryforwards	(436)		—		(436)		—		(436)
Other compensation-related activity	234		—		234		—		234
Impairment of goodwill	2,347		—		2,347		—		2,347
Foreign rate differential	(496)		—		(496)		—		(496)
Other	(985)		(15)		(1,000)		187		(813)
Income tax (expense) benefit	$	(5,945)	$	287	$	(5,658)	$	447	$	(5,211)

	As of May 29, 2022
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Deferred tax assets:
Accruals and reserves	$	867	$	886	$	1,753	$	—	$	1,753
Net operating loss carryforwards	28,558		399		28,957		—		28,957
Stock-based compensation	880		—		880		—		880
Research and AMT credit carryforwards	5,611		—		5,611		—		5,611
Lease Liability	2,874		—		2,874		—		2,874
Limitations on business interest expense	4,245		(741)		3,504		—		3,504
Goodwill and other indefinite life intangibles	2,745		—		2,745		—		2,745
Other	750		2		752		—		752
Gross deferred tax assets	46,530		546		47,076		—		47,076
Valuation Allowance	(35,942)		(589)		(36,531)		—		(36,531)
Net deferred tax assets	10,588		(43)		10,545		—		10,545
Deferred tax liabilities:
Depreciation and amortization	(8,614)		20		(8,594)		—		(8,594)
Right of use asset	(2,100)		23		(2,077)		—		(2,077)
Deferred tax liabilities	(10,714)		43		(10,671)		—		(10,671)
Net deferred tax liabilities	$	(126)	$	—	$	(126)	$	—	$	(126)

	As of May 29, 2022
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Unrecognized tax benefits – beginning of the period	$	942	$	16	$	958	$	—	$	958
Gross increases – current-period tax positions	83		—		83		—		83
Unrecognized tax benefits – end of the period	$	1,025	$	16	$	1,041	$	—	$	1,041

The effects of this error on our previously reported fiscal year 2022 segment reporting for the year ended May 29, 2022 as presented in the Company’s fiscal year 2022 Annual Report on Form 10-K/A Note 10, are as follows.

The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the period ending year ended May 29, 2022. Refer to Note 13 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.

	For the Year Ended May 29, 2022
(in thousands)	Lifecore		Curation Foods		Other		Total
Year Ended May 29, 2022, As Reported
Net sales	$	109,320	$	76,466	$	—	$	185,786
Gross profit	43,746		6,624		—		50,370
Net income (loss) from continuing operations	16,675		(47,783)		(32,416)		(63,524)
Loss from discontinued operations, net of tax	—		(48,114)		(3,041)		(51,155)
Total assets	213,969		59,594		4,243		277,806
Depreciation and amortization	6,673		4,004		80		10,757
Capital expenditures	23,552		2,674		—		26,226
Interest income	72		—		9		81
Interest expense	—		299		17,058		17,357
Income tax (benefit) expense, continuing operations	5,266		(13,831)		2,620		(5,945)
Corporate overhead allocation	4,484		1,092		(5,576)		—
Restatement Adjustments
Net sales	40		—		—		40
Gross profit	(3,863)		—		—		(3,863)
Net (loss) income from continuing operations	(39)		(8,411)		6,701		(1,749)
Loss from discontinued operations, net of tax	—		(287)		—		(287)
Total assets	(1,320)		(1,783)		—		(3,103)
Depreciation and amortization	83		—		—		83
Interest expense	—		—		(1,806)		(1,806)
Income tax (benefit) expense, continuing operations	(3,824)		8,960		(4,849)		287
Year Ended May 29, 2022, As Restated
Net sales	$	109,360	$	76,466	$	—	$	185,826
Gross profit	39,883		6,624		—		46,507
Net income (loss) from continuing operations	16,636		(56,194)		(25,715)		(65,273)
Loss from discontinued operations, net of tax	—		(48,401)		(3,041)		(51,442)
Total assets	212,649		57,811		4,243		274,703
Depreciation and amortization	6,756		4,004		80		10,840
Capital expenditures	23,552		2,674		—		26,226
Interest income	72		—		9		81
Interest expense	—		299		15,252		15,551
Income tax (benefit) expense, continuing operations	1,442		(4,871)		(2,229)		(5,658)
Corporate overhead allocation	4,484		1,092		(5,576)		—

The effects of this error on our previously reported fiscal year 2021 discontinued operations as of and for the year ended May 30, 2021 as presented in the Company’s fiscal year 2022 Annual Report on Form 10-K/A Note 12, 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 fiscal year 2022 restructuring cost for the year ended May 29, 2022 as presented in the Company’s fiscal year 2022 Annual Report on Form 10-K/A Note 13, are as follows:

	May 29, 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	371		34		405		—		405
Lease costs	2,072		—		2,072		—		2,072
Other restructuring costs	2,825		(70)		2,755		—		2,755
Total restructuring costs	$	8,961	$	(602)	$	8,359	$	—	$	8,359

	May 29, 2022
	Curation		Other		Total
Total restructuring costs, As reported	6,425		2,536		8,961
Restatement adjustments	(602)		—		(602)
Total restructuring costs, As restated	$	5,823	$	2,536	$	8,359

As of and for the year ended May 30, 2021

The effects of the restatement on the consolidated balance sheet as of May 30, 2021 are summarized in the following table:

	May 30, 2021
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
ASSETS
Current Assets:
Cash and cash equivalents	$	1,159	$	—	$	1,159	$	(396)	$	763
Accounts receivable, net	41,430		(522)		40,908		(9,317)		31,591
Inventories	63,076		(1,053)		62,023		(28,093)		33,930
Prepaid expenses and other current assets	5,038		(930)		4,108		(2,606)		1,502
Current assets, discontinued operations	37,618		(515)		37,103		40,412		77,515
Total Current Assets	148,321		(3,020)		145,301		—		145,301
Investment in non-public company, fair value	—		44,769		44,769		—		44,769
Property and equipment, net	120,286		2,312		122,598		(15,467)		107,131
Operating lease right-of-use assets	17,098		—		17,098		(3,562)		13,536
Goodwill	33,916		—		33,916		(20,035)		13,881
Trademarks/tradenames, net	17,100		—		17,100		(12,900)		4,200
Customer relationships, net	8,532		—		8,532		(8,250)		282
Other assets	3,531		—		3,531		(113)		3,418
Non-current assets, discontinued operations	154,140		(45,100)		109,040		60,327		169,367
Total Assets	$	502,924	$	(1,039)	$	501,885	$	—	$	501,885
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	16,298	$	—	$	16,298	$	(4,676)	$	11,622
Accrued compensation	7,754		—		7,754		(254)		7,500
Other accrued liabilities	3,955		314		4,269		(1,260)		3,009
Current portion of lease liabilities	1,600		—		1,600		(623)		977
Deferred revenue	637		(350)		287		—		287
Line of credit	29,000		—		29,000		—		29,000
Current liabilities, discontinued operations	42,644		—		42,644		6,813		49,457
Total Current Liabilities	101,888		(36)		101,852		—		101,852
Long-term debt, net	164,902		—		164,902		—		164,902
Long-term lease liabilities	20,359		—		20,359		(2,984)		17,375
Deferred taxes, net	6,140		(165)		5,975		—		5,975
Other non-current liabilities	2,870		—		2,870		—		2,870
Non-current liabilities, discontinued operations	3,981		—		3,981		2,984		6,965
Total Liabilities	300,140		(201)		299,939		—		299,939
Stockholders’ Equity:
Common stock, $0.001 par value; 50,000 shares authorized	29		—		29		—		29
Additional paid-in capital	165,533		—		165,533		—		165,533
Retained earnings (Accumulated deficit)	38,580		(838)		37,742		—		37,742
Accumulated other comprehensive loss	(1,358)		—		(1,358)		—		(1,358)
Total Stockholders’ Equity	202,784		(838)		201,946		—		201,946
Total Liabilities and Stockholders’ Equity	$	502,924	$	(1,039)	$	501,885	$	—	$	501,885

The effects of the restatement on the consolidated statement of operations and comprehensive income (loss) for the year ended May 30, 2021 are summarized in the following table:

	For the year ended May 30, 2021
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Product sales	$	171,546	$	492	$	172,038	$	(71,164)	$	100,874
Cost of product sales	121,075		1,025		122,100		(60,163)		61,937
Gross profit	50,471		(533)		49,938		(11,001)		38,937
Operating costs and expenses:
Research and development	7,423		—		7,423		(739)		6,684
Selling, general and administrative	37,660		457		38,117		(10,396)		27,721
Legal settlement charge	1,763		(1,763)		—		—		—
Restructuring costs	3,759		9,596		13,355		—		13,355
Total operating costs and expenses	50,605		8,290		58,895		(11,135)		47,760
Operating (loss) income	(134)		(8,823)		(8,957)		134		(8,823)
Interest income	48		—		48		—		48
Interest expense	(10,387)		1,454		(8,933)		—		(8,933)
Loss on debt refinancing	(1,110)		—		(1,110)		—		(1,110)
Other income (expense), net	111		(11,080)		(10,969)		—		(10,969)
Net (loss) income from continuing operations before taxes	(11,472)		(18,449)		(29,921)		134		(29,787)
Income tax benefit (provision)	1,903		4,899		6,802		(452)		6,350
Net (loss) income from continuing operations	(9,569)		(13,550)		(23,119)		(318)		(23,437)
Discontinued operations:
Loss from discontinued operations	(28,994)		18,839		(10,155)		(134)		(10,289)
Income tax benefit (provision)	5,898		(4,918)		980		452		1,432
Loss from discontinued operations, net of tax	(23,096)		13,921		(9,175)		318		(8,857)
Net (loss) income	$	(32,665)	$	371	$	(32,294)	$	—	$	(32,294)
Basic net loss per share:
Loss from continuing operations	$	(0.33)	$	(0.46)	$	(0.79)	$	(0.01)	$	(0.80)
Loss from discontinued operations	$	(0.79)	$	0.48	$	(0.31)	$	0.01	$	(0.30)
Total basic net loss per share	$	(1.12)	$	0.02	$	(1.10)	$	—	$	(1.10)
Diluted net loss per share:
Loss from continuing operations	$	(0.33)	$	(0.46)	$	(0.79)	$	(0.01)	$	(0.80)
Loss from discontinued operations	$	(0.79)	$	0.48	$	(0.31)	$	0.01	$	(0.30)
Total diluted net loss per share	$	(1.12)	$	0.02	$	(1.10)	$	—	$	(1.10)
Shares used in per share computation
Basic	29,294		—		29,294		—		29,294
Diluted	29,294		—		29,294		—		29,294
	For the year ended May 30, 2021

(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Net loss applicable to common shareholders	$	(32,665)	$	371	$	(32,294)	$	—	$	(32,294)
Other comprehensive (loss) income, net of tax:
Net unrealized gains on interest rate swaps (net of tax effect of $(455))	$	1,450	$	—	$	1,450	$	—	$	1,450
Other comprehensive income, net of tax	$	1,450	$	—	$	1,450	$	—	$	1,450
Total comprehensive (loss) income	$	(31,215)	$	371	$	(30,844)	$	—	$	(30,844)

The effects of the restatement on the consolidated statement of stockholders’ equity (deficit) for the year ended May 30, 2021 are summarized in the following table:

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	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, net of shares withheld	109	—		—		—		—		—
Taxes paid by Company for employee stock plans	—	—		(405)		—		—		(405)
Stock-based compensation	—	—		3,360		—		—		3,360
Net loss	—	—		—		(32,665)		—		(32,665)
Other comprehensive income, net of tax	—	—		—		—		1,450		1,450
Balance at May 30, 2021	29,333	$	29	$	165,533	$	38,580	$	(1,358)	$	202,784
Restatements Adjustments
Opening retained earnings	—	—		—		(1,209)		—		(1,209)
Net income	—	—		—		371		—		371
As Restated
Balance at May 31, 2020	29,224	$	29	$	162,578	$	70,036	$	(2,808)	$	229,835
Issuance of stock under stock plans, net of shares withheld	109	—		—		—		—		—
Taxes paid by Company for employee stock plans	—	—		(405)		—		—		(405)
Stock-based compensation	—	—		3,360		—		—		3,360
Net loss	—	—		—		(32,294)		—		(32,294)
Other comprehensive income, net of tax	—	—		—		—		1,450		1,450
Balance at May 30, 2021	29,333	$	29	$	165,533	$	37,742	$	(1,358)	$	201,946

The effects of the restatement on the consolidated statement of cash flows for the year ended May 30, 2021 are summarized in the following table:

	Year Ended May 30, 2021
	As Reported		Restatement Adjustment		As Restated
Cash flows from operating activities:
Net loss	$	(32,665)	$	371	$	(32,294)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, amortization of intangibles, debt costs and right-of-use assets	19,867		—		19,867
Loss on debt extinguishment	1,110		—		1,110
Stock-based compensation expense	3,360		—		3,360
Provision for expected credit losses	418		522		940
Deferred taxes	(7,893)		19		(7,874)
Change in investment in non-public company, fair value	11,800		(331)		11,469
Net loss on disposal of property and equipment	61		—		61
Loss on disposal of property and equipment related to restructuring, net	10,143		—		10,143
Other, net	(74)		—		(74)
Changes in current assets and current liabilities:
Accounts receivable, net	5,775		—		5,775
Inventory	(3,352)		533		(2,819)
Prepaid expenses and other current assets	7,941		340		8,281
Accounts payable	(5,982)		—		(5,982)
Accrued compensation	3,270		—		3,270
Other accrued liabilities	460		350		810
Deferred revenue	778		(350)		428
Net cash provided by operating activities	15,017		1,454		16,471
Cash flows from investing activities:
Purchases of property and equipment	(23,769)		(1,454)		(25,223)
Proceeds from sales of property and equipment	12,913		—		12,913
Net cash used in investing activities	(10,856)		(1,454)		(12,310)
Cash flows from financing activities:
Taxes paid by Company for employee stock plans	(405)		—		(405)
Proceeds from long-term debt	170,000		—		170,000
Payments on long-term debt	(114,130)		—		(114,130)
Proceeds from line of credit	100,000		—		100,000
Payments on line of credit	(148,400)		—		(148,400)
Payments for debt issuance costs	(10,484)		—		(10,484)
Net cash used in financing activities	(3,419)		—		(3,419)
Net increase in cash, cash equivalents and restricted cash	742		—		742
Cash, cash equivalents and restricted cash, beginning of period	$	553	$	—	$	553
Cash, cash equivalents and restricted cash, end of period	$	1,295	$	—	$	1,295

The effects of this error on our previously reported fiscal year 2021 changes in the Company’s allowance for sales returns and credit losses for the year ended May 30, 2021 as presented in the Company’s fiscal year 2021 Annual Report on Form 10-K Note 1, are as follows:

	May 30, 2021
(in thousands)	Balance at beginning of period		Provision (benefit) for expected credit losses	Write offs, net of recoveries	Balance at end of period
Year ended May 30, 2021, As Reported	$	186	187	(288)	$	85
Restatement Adjustment	$	—	522	—	$	522
Year ended May 30, 2021, As Restated	$	186	709	(288)	$	607
Discontinued Operations	$	(186)	64	37	$	(85)
Year ended May 30, 2021, As Restated, after Discontinued Operations	$	—	773	(251)	$	522

The effects of this error on our previously reported fiscal year 2021 inventories as of May 30, 2021 as presented in the Company’s fiscal year 2021 Annual Report on Form 10-K Note 1, are as follows:

	May 30, 2021
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Finished goods	$	40,204	$	3	$	40,207	$	(22,453)	$	17,754
Raw materials	16,644		(728)		15,916		(5,615)		10,301
Work in progress	6,228		(328)		5,900		(25)		5,875
Total inventories	$	63,076	$	(1,053)	$	62,023	$	(28,093)	$	33,930

The effects of this error on our previously reported fiscal year 2021 basic and diluted net loss per share for the year ended May 30, 2021 as presented in the Company’s fiscal year 2021 Annual Report on Form 10-K Note 1, are as follows:

	May 30, 2021
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Numerator:
Net (loss) income applicable to Common Stockholders	$	(32,665)	$	371	$	(32,294)	$	—	$	(32,294)
Denominator:
Weighted average shares for basic net income per share	29,294		—		29,294		—		29,294
Weighted average shares for diluted net income per share	29,294		—		29,294		—		29,294
Diluted net (loss) income per share	$	(1.12)	$	0.02	$	(1.10)	$	—	$	(1.10)

The effects of this error on our previously reported fiscal year 2021 fair value measurement as of May 30, 2021 as presented in the Company’s fiscal year 2021 Annual Report on Form 10-K Note 1, are as follows:

	Fair Value at May 30, 2021, As Reported
(in thousands)	Level 1		Level 2		Level 3
Assets:
Current assets, discontinued operations
Assets held for sale - nonrecurring	$	—	$	—	$	515
Other assets, discontinued operations
Investment in non-public company	—		—		45,100
Total assets	$	—	$	—	$	45,615
	Restatement Adjustments
Investment in non-public company	$	—	$	—	$	(331)
	Fair Value at May 30, 2021, As Restated
(in thousands)	Level 1		Level 2		Level 3
Assets:
Current assets, continuing operations (1)
Assets held for sale - nonrecurring, as restated	$	—	$	—	$	515
Other assets, continuing operations (1)
Investment in non-public company, as restated	—		—		44,769
Total assets	$	—	$	—	$	45,284

(1) The restatement adjustment also included a reclassification from discontinued operations to continuing operations.

The effects of this error on our previously reported fiscal year 2021 disaggregated revenue for the year ended May 30, 2021 as presented in the Company’s fiscal year 2021 Annual Report on Form 10-K Note 1, are as follows:

	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Contact development and manufacturing organization	$	75,297	$	492	$	75,789	$	—	$	75,789
Fermentation	22,790		—		22,790		—		22,790
Other	—		—		—		—		—
Total	$	98,087	$	492	$	98,579	$	—	$	98,579
	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Avocado Products	$	63,575	$	—	$	63,575	$	(63,575)	$	—
Olive oil and vinegars	7,589		—		7,589		(7,589)		—
Technology	2,295		—		2,295		—		2,295
Total	$	73,459	$	—	$	73,459	$	(71,164)	$	2,295

The effects of this error on our previously reported fiscal year 2021 property and equipment, net as of May 30, 2021 as presented in the Company’s fiscal year 2021 Annual Report on Form 10-K Note 4, are as follows:

	May 30, 2021
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Land	$	3,670	$	—	$	3,670	$	—	$	3,670
Buildings	47,880		—		47,880		(1,696)		46,184
Leasehold improvements	6,465		—		6,465		(2,410)		4,055
Computers, capitalized software, machinery, equipment and autos	71,832		—		71,832		(13,971)		57,861
Furniture and fixtures	2,513		—		2,513		(199)		2,314
Construction in process	31,383		2,312		33,695		(2,882)		30,813
Gross property and equipment	163,743		2,312		166,055		(21,158)		144,897
Less accumulated depreciation and amortization	(43,457)		—		(43,457)		5,691		(37,766)
Net property and equipment	$	120,286	$	2,312	$	122,598	$	(15,467)	$	107,131

The effects of this error on our previously reported fiscal year 2021 income taxes as of and for the year ended May 30, 2021 as presented in the Company’s fiscal year 2021 Annual Report on Form 10-K Note 8, are as follows:

	For the Year Ended May 30, 2021
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Current:
Federal	$	(38)	$	—	$	(38)	$	—	$	(38)
State	74		—		74		—		74
Foreign	56		—		56		—		56
	92		—		92		—		92
Deferred:
Federal	$	(1,536)	$	(4,899)	$	(6,435)	$	452	$	(5,983)
State	(459)		—		(459)		—		(459)
	(1,995)		(4,899)		(6,894)		452		(6,442)
Total provision for income taxes	(1,903)		(4,899)		(6,802)		452		(6,350)

	For the Year Ended May 30, 2021
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Tax at U.S. statutory rate	$	(2,409)	$	(4,245)	$	(6,654)	$	398	$	(6,256)
State income taxes, net of federal benefit	(304)		(580)		(884)		54		(830)
Change in valuation allowance	2,667		(70)		2,597		—		2,597
Tax credit carryforwards	(606)		—		(606)		—		(606)
Other compensation-related activity	249		—		249		—		249
Foreign rate differential	(1,414)		—		(1,414)		—		(1,414)
Other	(86)		(4)		(90)		—		(90)
Income tax expense	$	(1,903)	$	(4,899)	$	(6,802)	$	452	$	(6,350)

	As of May 30, 2021
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Deferred tax assets:
Accruals and reserves	$	3,366	$	256	$	3,622	$	—	$	3,622
Net operating loss carryforwards	21,916		167		22,083		—		22,083
Stock-based compensation	1,123		—		1,123		—		1,123
Research and AMT credit carryforwards	5,150		—		5,150		—		5,150
Lease Liability	5,902		—		5,902		—		5,902
Limitations on business interest expense	2,411		(303)		2,108		—		2,108
Other	927		13		940		—		940
Gross deferred tax assets	40,795		133		40,928		—		40,928
Valuation Allowance	(10,460)		32		(10,428)		—		(10,428)
Net deferred tax assets	30,335		165		30,500		—		30,500
Deferred tax liabilities:
Depreciation and amortization	(16,600)		—		(16,600)		—		(16,600)
Goodwill and other indefinite life intangibles	(13,406)		—		(13,406)		—		(13,406)
Basis difference in investment in non-public company	(1,382)		—		(1,382)		—		(1,382)
Right of use asset	(5,087)		—		(5,087)		—		(5,087)
Deferred tax liabilities	(36,475)		—		(36,475)		—		(36,475)
Net deferred tax liabilities	$	(6,140)	$	165	$	(5,975)	$	—	$	(5,975)

	As of May 30, 2021
(in thousands)	As Reported		Restatement		As Restated		Discontinued Operations		As Restated, after Discontinued Operations
Unrecognized tax benefits – beginning of the period	$	827	$	9	$	836	$	—	$	836
Gross increases – current-period tax positions	115		7		122		—		122
Unrecognized tax benefits – end of the period	$	942	$	16	$	958	$	—	$	958

The effects of this error on our previously reported fiscal year 2021 segment reporting for the year ended May 30, 2021 as presented in the Company’s fiscal year 2021 Annual Report on Form 10-K Note 11, are as follows.

The segment table below has been restated to reflect the correction of accounting errors within the consolidated financial statements for the period ending year ended May 30, 2021. Refer to Note 13 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.

	As of May 30, 2021
(in thousands)	Lifecore		Curation Foods		Other		Total
Year Ended May 30, 2021, As Reported
Net sales	$	98,087	$	73,459	$	—	$	171,546
Gross profit	38,265		12,206		—		50,471
Net income (loss) from continuing operations	14,461		(357)		(23,673)		(9,569)
Loss from discontinued operations, net of tax	—		(23,096)		—		(23,096)
Total assets	185,417		121,069		4,680		311,166
Depreciation and amortization	5,502		2,972		97		8,571
Capital expenditures	16,222		3,042		—		19,264
Interest income	—		—		48		48
Interest expense	—		(545)		(9,842)		(10,387)
Income tax (benefit) expense, continuing operations	4,568		(3,020)		(3,451)		(1,903)
Corporate overhead allocation	4,773		946		(5,719)		—
Restatement Adjustments
Net sales	492		—		—		492
Gross profit	(533)		—		—		(533)
Net (loss) income from continuing operations	(573)		(16,816)		3,839		(13,550)
Loss from discontinued operations, net of tax	—		13,921		—		13,921
Total assets	737		(1,776)		—		(1,039)
Interest expense	—		—		(1,454)		(1,454)
Income tax (benefit) expense, continuing operations	(482)		(2,032)		(2,385)		(4,899)
Year Ended May 30, 2021, As Restated
Net sales	$	98,579	$	73,459	$	—	$	172,038
Gross profit	37,732		12,206		—		49,938
Net income (loss) from continuing operations	13,888		(17,173)		(19,834)		(23,119)
Loss from discontinued operations, net of tax	—		(9,175)		—		(9,175)
Total assets	186,154		119,293		4,680		310,127
Depreciation and amortization	5,502		2,972		97		8,571
Capital expenditures	16,222		3,042		—		19,264
Interest income	—		—		48		48
Interest expense	—		(545)		(8,388)		(8,933)
Income tax (benefit) expense, continuing operations	4,086		(5,052)		(5,836)		(6,802)
Corporate overhead allocation	4,773		946		(5,719)		—