LIFECORE BIOMEDICAL, INC. \DE\

Previous wording

•our ability to fund redemptions of shares of the outstanding Series A Redeemable Convertible Preferred Stock in accordance with their terms;

Current wording

•our ability to fund redemptions of shares of the outstanding Series A Preferred Stock in accordance with their terms;

Previous wording

•our ability to comply with stringent U.S. and foreign government regulation in the manufacture of pharmaceutical products, including current Good Manufacturing Practice, or cGMP; and

Current wording

•our ability to comply with stringent U.S. and foreign government regulation in the manufacture of pharmaceutical products, including current Good Manufacturing Practice, or cGMP;

Previous wording

•the outcome and cost of existing and any new litigation or regulatory proceedings.

Current wording

•the outcome and cost of existing and any new litigation or regulatory proceedings; and

Previous wording

We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Accordingly, our actual results could differ materially from those projected in the forward-looking statements for many reasons, including the risk factors referenced in Item 1A. “Risk Factors” of the 2025 Transition Report.

Current wording

We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Accordingly, our actual results could differ materially from those projected in the forward-looking statements for many reasons, including the risk factors referenced in Item 1A. “Risk Factors” of the 2025 Transition Report and Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q.

Previous wording

•We have strengthened our financial position through, among other actions, (i) raising $24.3 million in a private placement of Lifecore common stock in October 2024, (ii) a three-year term extension of our existing asset-based lending revolving credit facility with BMO in November 2024, (iii) the sale of certain excess capital equipment for $17 million in January 2025, (iv) the repayment of $19.7 million of borrowings on our outstanding revolving credit facility over the past 18 months, (v) reduced obligations with the payment of an aggregate amount of $4.7 million to the holders of the Redeemable Convertible Preferred Stock in full satisfaction of outstanding registration delay fees in November 2025, (vi) the implementation of operational cost reductions, including overhead costs and professional fees associated with legal, accounting and consulting spend; and (vii) in October 2024 we regained compliance with SEC reporting requirements and have been maintaining those requirements.

Current wording

•We have strengthened our financial position through, among other actions, (i) raising $24.3 million in a private placement of Lifecore common stock in October 2024, (ii) a three-year term extension of our existing asset-based lending revolving credit facility with BMO in November 2024, (iii) the sale of certain excess capital equipment for $17 million in January 2025, (iv) the repayment of $19.7 million of borrowings on our outstanding revolving credit facility, (v) reduced obligations with the payment of an aggregate amount of $4.7 million to the holders of the Series A Preferred Stock in full satisfaction of outstanding registration delay fees in November 2025, (vi) the implementation of operational cost reductions, including overhead costs and professional fees associated with legal, accounting and consulting spend; and (vii) in October 2024 we regained compliance with SEC reporting requirements and have been maintaining those requirements.

Previous wording

•We enhanced our business development strategy, increased our investment in sales and marketing to support brand visibility, and expanded our business development team with sales talent who will focus on key drug development geographies in the United States and internationally. We have signed a total of 13 programs over the last 12 months, including eight late-stage programs.

Current wording

•We enhanced our business development strategy, increased our investment in sales and marketing to support brand visibility, and expanded our business development team with sales talent who will focus on key drug development geographies in the United States and internationally.

Previous wording

Lifecore expects to further improve efficiencies and productivity through additional procurement and operational strategies that will build upon the new capabilities and information available from our ERP system. Lifecore expects this system to strengthen inventory control, support sharper financial management, and help reduce costs as the company grows. To further advance the Company’s efficiency objectives, the Company’s senior management team includes a head of business transformation who is championing the Company’s efforts to improve its cost structure, to drive productivity, and gain efficiencies. Through June 30, 2026, the Company has progressed more than 40 projects intended to promote cost reductions or productivity improvements.

Current wording

Lifecore expects to further improve efficiencies and productivity through additional procurement and operational strategies that will build upon the new capabilities and information available from our ERP system. Lifecore expects this system to strengthen inventory control, support sharper financial management, and help reduce costs as the company grows.

Previous wording

On August 1, 2025, our Board of Directors approved changing our fiscal year from a fiscal year ending on the last Sunday of May to a calendar year ending on December 31, and the Company has reported calendar periods since September 30, 2025. In accordance with SEC rules, the Company is presenting current period results compared to the most closely-comparable prior periods that can be derived from previously-reported results, which for this report were the three and six months ended May 25, 2025. With the exception of certain statements of operations, the Company did not previously report these periods on a standalone basis; rather, those periods were generally derived from the audited financial statements in the Company’s Form 10-K for the year ended May 25, 2025, less the unaudited results reported in its Forms 10-Q for the nine months ended February 23, 2025 and the six months ended November 24, 2024, respectively. In deriving the comparative period results, the Company reclassified certain amounts from previously-reported results to present them on a basis consistent with the current period presentation and, in some cases, the previously audited annual results. It was not practicable or cost-justifiable for the Company to prepare equivalent calendar-based comparative periods because the Company’s previous fiscal calendar does not align to the new calendar periods. The Company will begin providing calendar-based comparative periods beginning with its reporting as of and for the periods ended September 30, 2026.

Current wording

On August 1, 2025, our Board of Directors approved changing our fiscal year from a fiscal year ending on the last Sunday of May to a calendar year ending on December 31, and the Company has reported on a calendar-year basis since September 30, 2025. The accompanying consolidated financial statements are the first to present comparative results on a consistent calendar-year reporting basis following the Fiscal Year Change. The results for the three months ended September 30, 2025 were previously reported. The results for the nine months ended September 30, 2025 have not previously been reported on a standalone basis.

Previous wording

R&D expenses declined primarily due to increased utilization of R&D personnel on revenue-generating development projects, as well as a headcount reduction following an internal reorganization.

Current wording

R&D expenses declined primarily due to increased utilization of R&D personnel on revenue-generating development projects.

Previous wording

The increase in interest expense, net of interest income, included an increase of $1.4 million related to the Alcon term loans, which will continue to grow due to accumulating interest paid-in-kind and amortization of the debt discount and $0.7 million more interest expense caused by the completion of certain capital expenditure projects where interest was previously capitalized to property, plant and equipment.

Current wording

The increase in interest expense, net of interest income, included an increase of $1.4 million related to the Alcon term loans, which will continue to grow due to accumulating interest paid-in-kind and amortization of the debt discount.

Previous wording

The decrease of $14.2 million in revenueswas primarily due to a $13.0 million decrease in CDMO revenue, which was primarily from $8.8 million of overall lower sales volumes, $2.5 million of lower development revenue, and a $1.7 million take-or-pay arrangement in the prior period. In addition, HA manufacturing revenues decreased$1.3 million, $3.1 million of which was primarily due to timing of revenues from Lifecore’s largest customer’s supply chain initiatives, partially offset by $1.8 million of increased demand from other customers and pricing initiatives.

Current wording

The decrease of $23.0 million in revenueswas primarily due to a $20.3 million decrease in CDMO revenue, which was primarily from $15.6 million of overall lower sales volumes, $2.3 million of lower pricing primarily due to a price concession to a customer in exchange for a multi-year extension of its commercial agreement, a $1.7 million take-or-pay arrangement in the prior period, and$0.8 million of lower development revenue. In addition, HA manufacturing revenues decreased$2.7 million, $4.5 million of which was primarily due to timing of revenues from Lifecore’s largest customer’s supply chain initiatives, partially offset by $1.7 million of pricing and increased demand from other customers.

Previous wording

R&D expenses declined primarily due to increased utilization of R&D personnel on revenue-generating development projects as well as a headcount reduction following an internal reorganization. These were offset in part by increased stock-based compensation.

Current wording

R&D expenses declined primarily due to increased utilization of R&D personnel on revenue-generating development projects.

Previous wording

The $3.2 million decrease in SG&A expenses includes a reduction of $1.4 million in recurring accounting and legal expenses, and lower compensation, a $0.4 million reduction in stock-based compensation, and a $1.3 million reduction in non-recurring expenses primarily related to legacy matters and prior period restructuring.

Current wording

The $4.2 million decrease in SG&A expenses includes a reduction of $1.9 million in recurring expenses primarily from reduced accounting and legal fees and lower compensation costs and a $0.8 million reduction in stock-based compensation. Additionally, there was a $1.5 million net reduction in non-recurring expenses, driven by the absence of prior period spending for legacy matters and reorganization, which was partially offset by current period spending relating to the proposed Merger.

Previous wording

The three months ended May 25, 2025 included a credit of $2.6 million for the favorable reversal of a historical lease obligation of the divested Curation Foods business.

Current wording

The nine months ended September 30, 2025 included a credit of $2.6 million for the favorable reversal of a historical lease obligation of the divested Curation Foods business.

Previous wording

The$6.9 million loss on sale or disposal of assets in the prior period was primarily due to a $6.4 million loss on the sale of certain excess equipment. That loss was primarily related to the write-off of historically capitalized interest costs, as we recovered substantially all of the cash originally paid to purchase the equipment from the sale proceeds.

Current wording

The$6.9 million loss on sale or disposal of assets in the prior period was primarily due tothe write-off of interest capitalized into the historical cost of certain excess equipment, as we recovered substantially all of the cash originally paid to purchase the equipment from the sale proceeds.

Previous wording

The increase in interest expense, net of interest income, of $3.8 million was primarily from $2.8 million more interest related to the Alcon term loans, which will continue to grow due to accumulating interest paid-in-kind and amortization of the debt discount and $1.5 million more interest expense caused by the completion of certain capital expenditure projects where interest was previously capitalized to property, plant and equipment. These increases were partially offset from various other small items.

Current wording

The increase in interest expense, net of interest income, of $5.4 million was primarily from $3.9 million more interest related to the Alcon term loans, which will continue to grow due to accumulating interest paid-in-kind and amortization of the debt discount and $2.1 million more interest expense caused by the completion of certain capital expenditure projects where interest was previously capitalized to property, plant and equipment. These increases were partially offset by the absence of interest on prior year registration delay fees to its Series A Preferred Stock holders.

Previous wording

As of June 30, 2026, the Company had cash of $17.2 million and $21.6 million available for borrowing (together, “consolidated liquidity”) under its$40.0 million Revolving Credit Facility, with no amounts outstanding as of June 30, 2026. As of June 30, 2026, the Company had approximately$198.1 million in total indebtedness with Alcon, with $192.7 million outstanding under the Term Loan Credit Facility. The Company is subject to minimum liquidity covenants under its credit agreements, the most restrictive of which requires the Company to maintain at least$4.0 million of consolidated liquidity, as adjusted for any excess payables, at the end of each fiscal quarter. As of June 30, 2026, the Company was in compliance with all financial covenants under the Term Loan Credit Facility and Revolving Credit Facility. See “Part I, Item 1. Note 9 – Debt” in this Quarterly Report on Form 10-Q for a summary of the Term Loan Credit Facility and Revolving Credit Facility.

Current wording

As of September 30, 2026, the Company had cash of $23.0 million and $15.0 million available for borrowing (together, “consolidated liquidity”) under its$40.0 million Revolving Credit Facility, with no amounts outstanding as of September 30, 2026. As of September 30, 2026, the Company had approximately$201.3 million in total indebtedness with Alcon, with $196.1 million outstanding under the Term Loan Credit Facility. The Term Loan Credit Facility requires the Company to maintain at least$4.0 million of consolidated liquidity, as adjusted for any excess payables, at the end of each fiscal quarter. As of September 30, 2026, the Company was in compliance with all financial covenants under the Term Loan Credit Facility and Revolving Credit Facility. See “Part I, Item 1. Note 9 – Debt” in this Quarterly Report on Form 10-Q for a summary of the Term Loan Credit Facility and Revolving Credit Facility.

Previous wording

The following table presents comparative summary cash flows for thesix months ended June 30, 2026 and May 25, 2025:

Current wording

The following table presents comparative summary cash flows for thenine months ended September 30, 2026 and September 30, 2025:

Previous wording

Cash flow improved by $1.0 million in the six months ended June 30, 2026 compared to the six months ended May 25, 2025 for the following reasons:

Current wording

Cash flow decreased by $9.4 million in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 for the following reasons:

Previous wording

•Operating cash flows decreased $4.0 million primarily due to the decline in revenue period over period. In the 2026 period, the combined effect of net loss and the non-working capital adjustments to reconcile net loss to operating cash flows generated $5.6 million of cash, which was partially offset by changes in working capital of $3.1 million primarily related to an increase in accounts receivable. In the 2025 period, the combined effect of net loss and the non-working capital adjustments to reconcile net loss to operating cash flows generated $10.0 million, which was partially offset by $3.5 million of net working capital changes;

Current wording

•Operating cash flows decreased $3.0 million primarily due to the decline in profits period over period, partially offset by working capital recoveries. In the 2026 period, the combined effect of net loss and the non-working capital adjustments to reconcile net loss to operating cash flows generated $7.0 million of cash, as compared to $15.6 million in the 2025 period, an $8.6 million decline. This was partially offset by a $5.6 million working capital effect, driven by a $2.5 million improvement in the 2026 period and a $3.1 million decline in the 2025 period;

Previous wording

•Investing cash outflows decreased by $1.1 million due to the absence of $7.0 million cash from the sale of certain excess equipment in the 2025 period, partially offset by lower capital spending in the 2026 period compared to the 2025 period; and

Current wording

•Investing cash flows decreased by $9.8 million due to the absence of $17.0 million in cash proceeds from the sale of certain excess equipment in the 2025 period, partially offset by lower capital spending in the 2026 period compared to the 2025 period; and

Previous wording

•Financing cash outflows decreased $6.1 million primarily from the absence of a net $6.0 million of repayments under the revolving credit facility in the 2025 period.

Current wording

•Financing cash outflows decreased $3.4 million primarily from the absence of $2.5 million of net repayments under the revolving credit facility in the 2025 period.

Previous wording

The Company’s future capital requirements will depend on numerous factors, including our future capital expenditure requirements; development, production and manufacturing activities; administrative requirements (including salaries, insurance expenses and legal compliance costs); ability to establish and maintain new and existing customer arrangements; the costs associated with any legal proceedings and claims; any decision to pursue acquisition opportunities; the timing and amount of amounts payable or payments owed under customer agreements; the ability to comply with regulatory requirements; the emergence of competitive technology and market forces; the effectiveness of customers’ activities and arrangements; the redemptions of the Redeemable Convertible Preferred Stock and any payment of the accrued and unpaid liquidation preference on shares of the Redeemable Convertible Preferred Stock, if required; payments required under the Term Loan Credit Facility and Revolving Credit Facility; and other factors. If the Company’s currently available funds, together with the internally generated cash flow from operations are not sufficient to satisfy its capital needs, the Company would be required to seek additional funding through various financing transactions or arrangements, including equity financing, debt financing, collaborations, strategic alliances or licensing arrangements, or other means. There can be no assurance that additional funds, if required, will be available to the Company on favorable terms, if at all.

Current wording

The Company’s future capital requirements will depend on numerous factors, including our future capital expenditure requirements; development, production and manufacturing activities; administrative requirements (including salaries, insurance expenses and legal compliance costs); ability to establish and maintain new and existing customer arrangements; the costs associated with any legal proceedings and claims; any decision to pursue acquisition opportunities; the timing and amount of amounts payable or payments owed under customer agreements; the ability to comply with regulatory requirements; the emergence of competitive technology and market forces; the effectiveness of customers’ activities and arrangements; the redemptions of the Series A Preferred Stock and any payment of the accrued and unpaid liquidation preference on shares of the Series A Preferred Stock, if required; payments required under the Term Loan Credit Facility and Revolving Credit Facility; expenses relating to the Merger; and other factors. If the Company’s currently available funds, together with the internally generated cash flow from operations are not sufficient to satisfy its capital needs, the Company would be required to seek additional funding through various financing transactions or arrangements, including equity financing, debt financing, collaborations, strategic alliances or licensing arrangements, or other means. There can be no assurance that additional funds, if required, will be available to the Company on favorable terms, if at all. The Merger Agreement prohibits the Company from undertaking any equity or debt financing.

Previous wording

Cash obligations relating to Redeemable Convertible Preferred Stock

Current wording

Cash obligations relating to Series A Preferred Stock

Previous wording

On January 9, 2023, the Company issued 38,750 shares of Redeemable Convertible Preferred Stock for a purchase price of $1,000 per share (the stated value) and gross proceeds of $38.8 million. The Redeemable Convertible Preferred Stock accrues dividends and is redeemable at the option of the holder as discussed further below.

Current wording

On January 9, 2023, the Company issued 38,750 shares of Series A Preferred Stock for a purchase price of $1,000 per share (the stated value) and gross proceeds of $38.8 million. The Series A Preferred Stock accrues dividends and is redeemable at the option of the holder as discussed further below.

Previous wording

The holders of Redeemable Convertible Preferred Stock are entitled to dividends at a rate of 7.5% per annum, or $75 per share, payable in-kind and compounding quarterly. The holders are also entitled to participate in dividends declared or paid on the Common Stock on an as-converted basis. At June 30, 2026, there were $0.9 million of dividends in arrears that had not yet been paid-in-kind in the form of additional shares of Redeemable Convertible Preferred Stock, representing $18.75 per preferred share.

Current wording

The holders of Series A Preferred Stock are entitled to dividends at a rate of 7.5% per annum, or $75 per share, payable in-kind and compounding quarterly. The holders are also entitled to participate in dividends declared or paid on the Common Stock on an as-converted basis. At September 30, 2026, there were $0.9 million of dividends in arrears that had not yet been paid-in-kind in the form of additional shares of Series A Preferred Stock, representing $18.75 per preferred share.

Previous wording

Each holder of outstanding shares of Redeemable Convertible Preferred Stock had the right to request that the Company redeem all or part of such holder’s outstanding Redeemable Convertible Preferred Stock beginning on June 29, 2026. To make such cash redemption payments the Company would be required to obtain a consent to such cash redemption payments or waiver of the restriction on cash dividends and/or redemptions set forth in each of the Company’s credit agreements. To the extent consents or waivers are not obtained under each of the Company’s credit agreements, the Company would be in breach thereof if such payments in cash were made. The redemption price for each share of Redeemable Convertible Preferred Stock is an amount equal to its liquidation preference of $1,000 per share of Redeemable Convertible Preferred Stock to be redeemed plus accrued and unpaid dividends on such shares through the date of redemption. As of June 30, 2026 and December 31, 2025, the aggregate liquidation preference of the Redeemable Convertible Preferred Stock was $50.2 million and $48.4 million, respectively. As of June 30, 2026, the Company had received notices of redemption for all 49,263 shares of Redeemable Convertible Preferred Stock. Pursuant to the terms of the Redeemable Convertible Preferred Stock, the redemption date and payment of the redemption price for all shares of the Redeemable Convertible Preferred Stock would occur on December 28, 2026. To the extent that the Company does not or cannot redeem all shares of Redeemable Convertible Preferred Stock that are submitted for redemption, we would be subject to interest on the unpaid balance at a rate of 1% per month in respect of that holder’s unredeemed shares of Redeemable Convertible Preferred Stock from the redemption date until paid in full in addition to our continuing obligation to accrue dividends paid in kind at 7.5% per annum.

Current wording

Each holder of outstanding shares of Series A Preferred Stock had the right to request that the Company redeem all or part of such holder’s outstanding Series A Preferred Stock beginning on June 29, 2026. To make such cash redemption payments the Company would be required to obtain a consent to such cash redemption payments or waiver of the restriction on cash dividends and/or redemptions set forth in each of the Company’s credit agreements. To the extent consents or waivers are not obtained under each of the Company’s credit agreements, the Company would be in breach thereof if such payments in cash were made. The redemption price for each share of Series A Preferred Stock is an amount equal to its liquidation preference of $1,000 per share of Series A Preferred Stock to be redeemed plus accrued and unpaid dividends on such shares through the date of redemption. As of September 30, 2026 and December 31, 2025, the aggregate liquidation preference of the Series A Preferred Stock was $51.1 million and $48.4 million, respectively. As of September 30, 2026, the Company had received notices of redemption for all 50,187 shares of Series A Preferred Stock. Pursuant to the terms of the Series A Preferred Stock, the redemption date and payment of the redemption price for all shares of the Series A Preferred Stock would occur on December 28, 2026. To the extent that the Company does not or cannot redeem all shares of Series A Preferred Stock that are submitted for redemption, we would be subject to interest on the unpaid balance at a rate of 1% per month in respect of that holder’s unredeemed shares of Series A Preferred Stock from the redemption date until paid in full in addition to our continuing obligation to accrue dividends paid in kind at 7.5% per annum.

Previous wording

In November 2025, the Company paid an aggregate amount of $4.7 million to the holders of the Redeemable Convertible Preferred Stock in full satisfaction of the outstanding registration delay fees.

Current wording

In November 2025, the Company paid an aggregate amount of $4.7 million to the holders of the Series A Preferred Stock in full satisfaction of the outstanding registration delay fees.

Previous wording

As of June 30, 2026 the Company had $192.7 million in borrowings outstanding under the Term Loan Credit Facility at an effective annual interest rate of 20.9%, which includes the amortization of the debt discount. The stated annual interest rate is 10%, which is payable-in-kind until May 2026, following which interest is payable at a fixed rate of 3% per annum in cash with the remainder payable-in-kind. The obligations under the Term Loan Credit Facility mature on May 22, 2029. Interest paid-in-kind under the Term Loan Credit Facility for the six months ended June 30, 2026 was $8.6 million. In June 2026, the Company made its first quarterly payment of 3% cash interest for the first month following the third anniversary of entering into the Term Loan Credit Facility in the amount of $0.6 million.

Current wording

As of September 30, 2026, the Company had $196.1 million in borrowings outstanding under the Term Loan Credit Facility at an effective annual interest rate of 20.9%, which includes the amortization of the debt discount. The stated annual interest rate is 10%, which was payable-in-kind until May 2026, following which interest is payable at a fixed rate of 3% per annum in cash with the remainder payable-in-kind. The obligations under the Term Loan Credit Facility mature on May 22, 2029. Interest paid-in-kind under the Term Loan Credit Facility for the nine months ended September 30, 2026 was $12.0 million. Beginning in June 2026, the Company was required to make quarterly cash interest payments at a rate of 3.0% following the third anniversary of entering into the Term Loan Credit Facility. The Company paid $2.1 million of cash interest during the nine months ended September 30, 2026.

Previous wording

As of June 30, 2026, the Company had no outstanding borrowings under the Revolving Credit Facility. The obligations under the Revolving Credit Facility mature on November 26, 2027. Interest paid under the Revolving Credit Facility for the six months ended June 30, 2026 was negligible.

Current wording

As of September 30, 2026, the Company had no outstanding borrowings under the Revolving Credit Facility. The obligations under the Revolving Credit Facility mature on November 26, 2027. Interest paid under the Revolving Credit Facility for the nine months ended September 30, 2026 was negligible.

Previous wording

There have been no material changes to the Company’s critical accounting estimates from those disclosed in the Company’s 2025 Transition Report. For a discussion of our critical accounting estimates, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Use of Estimates” in Part II, Item 7 of the Company’s 2025 Transition Report.

Current wording

There have been no material changes to the disclosures about critical accounting policies and estimates provided in the Company’s 2025 Transition Report. For a discussion of our critical accounting policies and estimates, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” in Part II, Item 7 of the Company’s 2025 Transition Report.