LIFECORE BIOMEDICAL INC DE

Fiscal year end change

On August 1, 2025, the Company’s Board of Directors approved a change in the Company’s fiscal year from 52- or 53-week periods that end on the last Sunday of May to calendar years ending on December 31. The Company will report its financial results for a transition period from May 26, 2025 to December 31, 2025 on a Transition Report on Form 10-K/T. Thereafter, the Company plans to file annual reports for twelve-month periods ending December 31 beginning with the year ending December 31, 2026. Prior to filing the transition report, the Company will file a Quarterly Report on Form 10-Q for the quarter ending September 30, 2025.

The Company will be moving its fiscal year end to align with the calendar year, effective for the December 31, 2025 calendar period. This decision to move its fiscal year-end, which had been based on the legacy businesses seasonality, will allow Lifecore to report in a timely manner with the majority of its peer companies, customers and other stakeholders, which the company believes is an important factor in evaluating operational and financial performance. It also aligns with the launch of the new ERP system and expected associated benefits.

2025 bonus plan payouts

As previously reported, on July 18, 2024, the Company’s Board of Directors approved a cash incentive award plan for the Company’s fiscal year 2025 (the “2025 Bonus Plan”) which was recommended by the Compensation Committee. Under the 2025 Bonus Plan, eligible participants, including Paul Josephs, the Company’s President and Chief Executive Officer, and Ryan Lake, the Company’s Chief Financial Officer, were eligible to earn cash bonuses based on the Company’s adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) for fiscal year 2025 and four business objectives, weighted at 80% and 20%, respectively. Additionally, if minimum fiscal year 2025 Adjusted EBITDA was not achieved, the 2025 Bonus Plan provided that no bonus amounts would be earned. Adjusted EBITDA for purposes of the 2025 Bonus Plan was based on the Company’s fiscal year 2025 EBITDA which excluded changes in the fair value of debt derivatives, financing fees, restructuring and reorganization costs, state franchise taxes, amounts paid in settlement of governance matters, and stock-based compensation expense, but includes the cost of bonuses under the 2025 Bonus Plan.

Based upon the Company’s results for fiscal year 2025, the Company achieved two of the four business objectives under the 2025 Bonus Plan, but 2025 Adjusted EBITDA failed to meet the minimum amount, primarily due to unexpected legal, auditing and related costs associated with legacy matters. However, the Compensation Committee approved and the Board of Directors, on the recommendation of the Compensation Committee, approved the exercise of discretion to permit payouts under the 2025 Bonus Plan. In determining to exercise their discretion, the Compensation Committee and the Board considered the steps taken by the Company to actively mitigate the unexpected expenses and to improve the Company’s overall expense structure, and the initiatives implemented to position the Company well for sustainable growth, including measures to ensure compliance with SEC and Nasdaq listing requirements, enhance the leadership team, recalibrate the Company’s workforce, improve investor relations, and mitigate legal and operational risk.

Messrs. Josephs and Lake were eligible to participate in the 2025 Bonus Plan at 100% and 60% at the target level of achievement as a percentage of their respective annual base salaries. Based upon the discretion exercised by the Board and in light of their achievements and high performance in their respective roles, the Board of Directors approved payouts under the 2025 Bonus Plan of 50% of the target bonus amount for each of Messrs. Josephs and Lake effective August 1, 2025. Accordingly, the payouts under the 2025 Bonus Plan to Mr. Josephs and Mr. Lake will be 50% and 30% of their respective annual base salaries, or $275,000 and $141,000, respectively.