LIFECORE BIOMEDICAL INC DE
For the period ended Aug 25, 2024. Filed Oct 4, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 25, 2024 · Filed Oct 4, 2024
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Stock-based Compensation
- Stock-based Compensation
Stock-Based Compensation Activity
The Company uses the Black-Scholes option pricing model to calculate the grant date fair value of stock option awards. The use of an option pricing model requires the Company to make estimates and assumptions, including the expected stock price volatility, expected life of option awards and risk-free interest rate which have a significant impact on the fair value estimates. The following table displays the estimated fair value of stock options granted and the weighted average assumptions utilized:
| Three Months Ended | |
|---|---|
| August 25, 2024 | |
| Weighted-average grant date fair value | $2.48 |
| Assumptions: | |
| Expected life (in years) | 4.35 |
| Risk-free interest rate | 3.88% |
| Volatility | 53% |
| Dividend yield | —% |
A summary of the activity under the Company’s stock option plans as of August 25, 2024 and changes during the fiscal quarter then ended is presented below:
| Options Outstanding | Weighted-Average Exercise Price Per Share | Total Intrinsic Value of Options Exercised (in thousands) | Weighted-Average Remaining Contractual Term in Years | Aggregate Intrinsic Value (in thousands) | |
|---|---|---|---|---|---|
| Options outstanding at May 26, 2024 | 2,112,591 | $10.88 | 2.44 | $— | |
| Options granted | 54,150 | $5.28 | |||
| Options exercised | — | $— | $— | ||
| Options forfeited | (16,956) | $10.13 | |||
| Options expired | (75,000) | $14.00 | |||
| Options outstanding at August 25, 2024 | 2,074,785 | $10.63 | 2.24 | $39 | |
| Options exercisable at August 25, 2024 | 1,872,086 | $10.82 | 1.89 | $— | |
The intrinsic values presented in the table above were calculated as the excess, if any, of the market price or closing price of the Company’s common stock over the exercise price of the options multiplied by the number of options exercised, outstanding or exercisable, as applicable.
RSUs are valued using the closing price of the Company’s common stock on their grant date and expensed ratably over the requisite vesting period ofone tothree years. All vesting is subject to continued service. A summary of the Company’s RSU award activity as of August 25, 2024 and changes during the fiscal quarter then ended is presented below:
| Restricted Stock Units Outstanding | Weighted-Average Grant Date Fair Value Per Share | |
|---|---|---|
| RSUs outstanding at May 26, 2024 | 1,622,004 | $7.83 |
| Granted | 358,392 | $5.18 |
| Vested | (435,448) | $8.54 |
| Forfeited | (108,708) | $7.06 |
| RSUs outstanding at August 25, 2024 | 1,436,240 | $7.01 |
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Currently, the PSUs outstanding vest upon achievement of certain stock price hurdles and continued employment thereafter of our CEO. The PSUs have a 5-year term and any unvested awards at the end of the term will be forfeited. PSUs subject to market conditions are valued using a Monte Carlo simulation model and expensed on an accelerated attribution basis over the derived service period. If the stock price hurdles are not met, expense is not reversed as long as the requisite service period has been met. A summary of the Company’s PSU award activity as of August 25, 2024 and changes during the fiscal quarter then ended is presented below:
| Performance Share Units Outstanding | Weighted-Average Grant Date Fair Value Per Share | |
|---|---|---|
| PSUs outstanding at May 26, 2024 | 1,500,000 | $4.66 |
| Granted | — | $— |
| Vested | — | $— |
| Forfeited | — | $— |
| PSUs outstanding at August 25, 2024 | 1,500,000 | $4.66 |
Stock-Based Compensation Expense
The following table summarizes stock-based compensation by income statement line item:
| Three Months Ended | ||
|---|---|---|
| August 25, 2024 | August 27, 2023 | |
| Cost of product sales | $141 | $184 |
| Research and development | 13 | 43 |
| Selling, general and administrative | 2,265 | 1,306 |
| Stock-based compensation expense | 2,419 | 1,533 |
| Amount capitalized into property, plant, and equipment | — | 8 |
| Total stock-based compensation costs | $2,419 | $1,541 |
As of August 25, 2024, there was $13,049 of total unrecognized compensation expense related to unvested equity compensation awards granted under the Lifecore incentive stock plans. This total expense is expected to be recognized over a weighted-average period of 2.06 years.
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