LIFECORE BIOMEDICAL, INC. \DE\

10. Equity

Common stock

The Company is authorized to issue up to 75,000,000 shares of common stock, $0.001 par value (“Common Stock”). The Company is generally not permitted to pay cash dividends to common stockholders due to prohibitions and restrictions arising from the Term Loan Credit Facility, the Revolving Credit Facility and the Series A Preferred Stock, as defined below. Under the Merger Agreement, the Company also is prohibited from paying cash dividends without the consent of Parent.

Series A Preferred Stock

On January 9, 2023, the Company issued 38,750 shares of Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), that is in certain cases redeemable for cash and/or convertible into shares of Common Stock at the election of the holders, each as discussed further below. The Series A Preferred Stock ranks senior to the Common Stock with respect to dividends, distributions and payments on liquidation, winding-up and dissolution. The Company received gross proceeds of $38,750 at issuance and incurred issuance costs of $668. The deduction for issuance costs was being amortized through June 29, 2026 as a charge to additional paid-in capital.

The Company is generally not permitted to pay cash to holders of the Series A Preferred Stock, including in connection with distributions or redemptions, pursuant to the prohibitions on restricted payments under the Term Loan Credit Facility and the Revolving Credit Facility, without the consent of the lenders. Under the Merger Agreement, the Company is prohibited from paying cash dividends on or redeeming the Series A Preferred Stock without the consent of Parent.

As of September 30, 2026 and December 31, 2025, the aggregate liquidation preference of the Series A Preferred Stock was equal to the aggregate Conversion Amount (defined below) of $51,128 and $48,356, respectively.

Under the Merger Agreement, each share of Series A Preferred Stock issued and outstanding immediately prior to the effective time will be canceled and cease to exist and be converted into the right to receive an amount in cash per share of Series A Preferred Stock equal to the Conversion Amount plusone (1) CVR per share of Common Stock into which Series A Preferred Stock is convertible as of immediately prior to the effective time. As of September 27, 2026, the Conversion Amount per share of Series A Preferred Stock represents an amount equal to $6.53 per share of Common Stock into which the Series A Preferred Stock would have been converted as of such date.

Dividends

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 $941 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.

Conversion

Each holder has the right, any time at its option, to convert its Series A Preferred Stock, in whole or in part, into an amount of fully paid and non-assessable shares of Common Stock equal to $1,000 per share of Series A Preferred Stock, plus accrued and unpaid dividends in arrears (the “Conversion Amount”), divided by the conversion price. The initial conversion price of $7.00 per share was subsequently reduced to approximately $6.53 per share following the issuance of Common Stock for less than its conversion price in 2024. The Series A Preferred Stock continues to be subject to customary anti-dilution adjustments, including in the event of any future stock split, stock dividend, recapitalization or similar events, and in the event of any subsequent offerings of Common Stock or convertible securities by the Company for less than the conversion price. As of September 30, 2026, the Series A Preferred Stock was convertible into 7,825,882 shares of Common Stock.

The Company may also elect to convert the Series A Preferred Stock if, for at least 20 consecutive trading days during the respective measuring period, the Company's closing stock price equals or exceeds $10.50 per share and certain other conditions are satisfied.

Redemption

Holders had the right to request that the Company redeem all or part of their Series A Preferred Stock beginning on June 29, 2026. 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 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 and it would be a breach of those credit agreements if the payment in cash were made without such consent. Additionally, under the Merger Agreement, the Company is prohibited from redeeming the Series A Preferred Stock without the consent of the Parent. On the redemption date, the Company would be required to pay in cash an amount equal to $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. To the extent that the Company does not or cannot redeem all of the Series A Preferred Shares submitted for redemption (whether because of the terms of the credit agreements, the Merger Agreement or otherwise), the Company would be subject to interest on the unpaid balance at a rate of 1% per month from the redemption date until paid in full, in addition to its continuing obligation to accrue dividends paid in kind at 7.5% per annum.

At the effective time of the Merger and by virtue of the Merger, each Series A Preferred Stock holder will receive in cash the Conversion Amount per share of Series A Preferred Stock (which is the same amount such holder would receive if the Company paid the redemption price) plus 1 CVR per share of Common Stock into which such Series A Preferred Stock would have been converted as of such date.

The Merger Agreement does not affect the rights of the holders of Series A Preferred Stock to convert those shares into Common Stock. Holders retain their right to convert the Series A Preferred Stock even while the Company is under notice of redemption and is subject to the Merger Agreement, so the instrument does not meet the definition of mandatorily redeemable under GAAP. As a result, the Company continues to present the Series A Preferred Stock as temporary equity on the consolidated balance sheets.

Voting

Each holder is entitled to vote with the holders of the shares of Common Stock on all matters submitted for a vote of holders of shares of Common Stock, with certain limited exceptions. Each holder is entitled to the whole number of votes equal to the number of shares of Common Stock into which such holder’s shares of Series A Preferred Stock would be convertible on the record date for the vote. The holders of the Series A Preferred Stock are also entitled to electtwo directors to serve on the Company's board of directors so long as at least 30% of the initial shares of Series A Preferred Stock remain outstanding.

Registration rights

The holders of the Series A Preferred Stock also entered into a registration rights agreement with the Company. This agreement required the Company to file an initial registration statement covering sufficient shares of Common Stock into which the Series A Preferred Stock may be converted, which the Company filed in 2023. The agreement contains monetary penalties if the Company fails to maintain the effectiveness of that registration statement. The agreement has no specified termination date and no specified maximum amount of penalties. The Company has paid a total of $5,238 pursuant tothe registration rights agreement, including $4,703 in November 2025 due to a lapse in the effectiveness of the initial registration statement following the Company’s failure to timely file periodic reports with the SEC in 2023 and 2024.