Organization, basis of presentation, and summary of significant accounting policies (Policies)	7 Months Ended
Dec. 31, 2025
Accounting Policies [Abstract]
Basis of presentation	Basis of presentation On August 1, 2025, the Company’s Board of Directors approved a change in the Company’s fiscal year from a fiscal year ending on the last Sunday of May to a calendar year (the “Fiscal Year Change”). As a result, these financial statements include the presentation of a transition period from May 26, 2025 to December 31, 2025.
Basis of consolidation	Basis of consolidation The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated.
Use of estimates	Use of estimates The preparation of financial statements and the notes to the financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect the amounts reported. The accounting estimates that require management’s most significant and subjective judgments include revenue recognition; recognition and measurement of current and deferred income tax assets and liabilities; evaluating assets for reserves and potential impairment; the valuation and recognition of stock-based compensation; and the valuation of the debt derivative liability. Actual results may differ from management’s estimates.
Discontinued operations	Discontinued operations The Company previously operated a food business through its wholly-owned subsidiary, Curation Foods, Inc. (“Curation Foods”). The Company completed the sale or disposition of all Curation Foods subsidiaries during the fiscal year ended May 26, 2024. Upon completion of the dispositions, it ceased to operate the Curation Foods business. Interest and income tax expense were not allocated to discontinued operations due to their immateriality. During the fiscal year ended May 26, 2024, the Company reached settlement agreements related to the Curation Foods business that resulted in the receipt of cash payments totaling $2,682, which were recognized as income from discontinued operations in the fiscal year ended May 26, 2024. The $2,682 cash received is included in net cash from operating activities on the consolidated statements of cash flows.
Income or loss per share	Income or loss per share Net loss per common share is computed using the two-class method required due to the participating nature of the Series A Convertible Preferred Stock, which is redeemable under certain circumstances either by the Company or by the holder thereof (the “Redeemable Convertible Preferred Stock”) (see note 11) given the rights to participate in dividends if declared on common stock. The two-class method is an earnings allocation formula that treats participating securities as having rights to earnings that would otherwise have been available to common stockholders. In addition, as these securities are participating securities, the Company is required to calculate diluted net income or loss per share under the if-converted and treasury stock method in addition to the two-class method and utilize the most dilutive result. In periods where there is a net loss, no allocation of undistributed net loss to the Series A Convertible Preferred stockholders is performed as the holders of these securities are not contractually obligated to participate in the Company’s losses. Basic income or loss per share is computed using the weighted average number of common shares outstanding during the reporting period. Diluted income or loss per share reflects the potential dilution as if securities or other contracts to issue the Company’s common stock, par value $0.001 per share (“Common Stock”) were exercised or converted into Common Stock. The Company’s diluted common equivalent shares consist of Redeemable Convertible Preferred Stock, stock options, restricted stock units (“RSUs”) and performance share units (“PSUs”). Dilution related to stock options, RSUs and PSUs is calculated using the treasury stock method, which includes the assumed repurchase of common shares from cash received upon stock option exercises, and unrecognized compensation expense. The potential dilutive effect of the Redeemable Convertible Preferred Stock is calculated using the if-converted method assuming the conversion as of the earliest period reported or at the date of issuance, if later, but are excluded if their effect is anti-dilutive.
Reportable segments	Reportable segments The Company’s Chief Operating Decision Maker (“CODM”), the President and Chief Executive Officer, manages CDMO and HA (defined below) manufacturing operations on the basis of a single, integrated segment. The CODM's review of financial results includes the consolidated financial statements of the Company, which the Company used to aid its determination that net income or loss is the measure of single-segment performance. Asset information is not separately identified nor internally reported to the Company’s CODM. Entity-wide disclosures of revenue by geographic area are presented based on the customer location.
Concentrations of risk	Concentrations of risk Cash and accounts receivable are financial assets that potentially subject the Company to concentrations of credit risk. Company policy limits, among other things, the amount of credit exposure to any one issuer and to any one type of investment, other than securities issued or guaranteed by the U.S. government. The Company maintains cash in U.S. bank accounts, the balances of which generally exceed the federally insured limit. A significant portion of accounts receivable is concentrated with a few large customers as described further in note 4.
Cash and cash equivalents	Cash and cash equivalents The Company records all highly liquid securities with original maturities of three months or less when acquired as cash equivalents. Cash equivalents consist mainly of money market funds. The market value of cash equivalents approximates their historical cost given their short-term nature.
Accounts receivable, net of allowance for credit losses	Accounts receivable, net of allowance for credit losses Accounts receivable generally represent amounts billed for services provided under customer contracts and are recorded at the invoiced amount net of an allowance for credit losses, if necessary. Management applies judgment in assessing the ultimate realization of its receivables and estimates an allowance for credit losses based on various factors, such as the aging of receivables, historical collection experience, current and future economic market conditions, and the financial condition of customers.
Inventory	Inventory Inventory consists of raw materials, work in process and finished goods related to sterile injectable pharmaceutical products in syringes, vials and cartridges. This includes premium, pharmaceutical-grade hyaluronic acid (“HA”) in bulk form as well as formulated and filled syringes, vials and cartridges for injectable products. Inventory is stated at the lower of cost (using the first-in, first-out method) or net realizable value. Work in process and finished goods cost includes the purchase price of applied raw materials, direct labor costs and allocated overhead primarily in the form of indirect labor and property, plant and equipment costs. The Company adjusts inventory to remove the value of excess and obsolete items. Factors influencing inventory obsolescence include changes in demand, product life cycle, product pricing, physical deterioration, and quality concerns.
Goodwill and intangible assets	Goodwill and intangible assets Goodwill represents the excess of the purchase price over the fair value of net assets acquired by the Company in a business combination, while intangible assets are acquired in a business combination. Neither goodwill nor indefinite-lived intangible assets are amortized but instead are each assessed for impairment on an annual basis or more frequently if impairment indicators exist. The impairment analyses each consist of an optional qualitative assessment, potentially followed by a quantitative analysis. If the Company determines that the carrying value of a reporting unit or indefinite-lived intangible asset exceeds its fair value, an impairment charge is recorded for the excess. The Company performs its annual impairment testing as of the first day of its fourth fiscal quarter or whenever an event or change in circumstances occurs that would require a reassessment of impairment. In performing the evaluation, the Company assesses qualitative factors such as overall financial performance, actual and anticipated changes in industry and market conditions, and competitive environments. As a result of the most recent annual impairment testing, the Company determined that there were no impairments. Definite-lived intangible assets are amortized on a straight-line basis over their estimated useful life. The Company reviews the carrying value of definite-lived intangible assets for recoverability whenever events occur or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.
Property, plant and equipment, net	Property, plant and equipment, net Property, plant and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are as follows: five to ten years for furniture and fixtures; three to ten years for computer equipment; seven to twenty-five years for machinery and equipment; seven to forty years for buildings and building improvements; and the shorter of the lease term or useful life for leasehold improvements. Repairs and maintenance costs are expensed as incurred. Depreciation expense for these assets is recorded either in cost of sales or selling, general and administrative expenses in the consolidated statements of operations, depending on the asset and its intended use. The Company capitalizes interest on construction in process projects. To determine the capitalization rate, management uses judgment with the objective of achieving a reasonable measure of the cost of financing those projects that theoretically could have been avoided if funding for the project had instead been used to repay debt. The Company reviews the carrying value of property and equipment for recoverability whenever events occur or changes in circumstances indicate that the carrying amount of individual assets or asset groups may not be recoverable. The Company conducts a quarterly review to determine if construction in process activities have gone idle and, if so, ceases to capitalize interest on idle projects. The Company capitalizes software development costs for internal use. Capitalization of software development costs begins in the application development stage and ends when the asset is placed into service. The Company depreciates such costs on a straight-line basis over estimated useful lives of three to seven years, and the depreciation expense is recorded either in cost of sales or selling, general and administrative expenses in the consolidated statements of operations, depending on the asset and its intended use.
Impairment of long-lived assets	Impairment of long-lived assets Long-lived assets or asset groups are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of assets or asset groups is measured by comparison of the carrying amount of the asset to the net undiscounted future cash flow expected to be generated from the asset or asset group. If the future undiscounted cash flows are not sufficient to recover the carrying value of the assets or asset group, its carrying value is adjusted to fair value. The Company regularly evaluates its long-lived assets for indicators of possible impairment.
Debt	Debt The Company capitalizes debt issuance costs related to term debt as an offset to the carrying value of the debt and amortizes these costs over the term of the agreement using the effective interest method. The Company capitalizes debt issuance costs related to revolving credit lines as other assets on the balance sheet and amortizes the costs over the life of the credit line using the straight-line method, as the effective interest method cannot be applied to the variable borrowings under these instruments. Amortization of deferred issuance costs is included as a component of interest expense in the consolidated statements of operations.
Revenue recognition	Revenue recognition The Company follows a five-step, principles-based model to recognize revenue upon the transfer of promised goods or services to customers at an amount that reflects the consideration for which the Company expects to be entitled in exchange for those goods or services. Revenue is recognized when or as the Company satisfies its performance obligations under a contract and control of the product is transferred to the customer. Standard terms of sale are generally included in contracts and purchase orders. Lifecore’s standard payment terms with its customers generally range from 30 days to 60 days. As a result of differences between the timing of performance obligations and customer payments, the Company may recognize contract assets or contract liabilities. Contract assets represent the Company’s right to consideration for goods or services transferred to customers when that right is conditional on something other than the passage of time, such as the completion of additional performance obligations. Contract liabilities represent the Company’s obligation to transfer goods or services to customers for which consideration has been received or is due in advance of performance. The Company evaluates contracts to determine whether they contain a significant financing component. A significant financing component may exist when the timing of payments agreed to by the parties provides the customer or the Company with a significant benefit of financing the transfer of goods or services. When a significant financing component is identified, the Company adjusts the promised amount of consideration for the effects of the time value of money so that revenue reflects the cash selling price of the promised goods or services at the time control transfers, and recognizes the related interest income or interest expense separately from revenue over the financing period. In making this assessment, the Company considers the expected length of time between transfer of the promised goods or services and payment, prevailing market interest rates, and whether the difference between promised consideration and the cash selling price arises for reasons other than financing. The Company follows the practical expedient available in U.S. GAAP that permits it to disregard these requirements when, at contract inception, the period between payment and transfer of the promised goods or services is expected to be one year or less. The Company accounts for shipping and handling as a fulfillment activity, and not as a separate performance obligation. Shipping and other transportation costs charged to customers are recorded in both revenue and cost of goods sold. Amounts billed to third-party customers for shipping and handling are included as a component of revenues. Shipping and handling costs incurred are included as a component of cost of products sold. The following sections provide additional details about the Company’s revenue recognition policies: CDMO Lifecore provides aseptic formulation and filling of syringes, vials and cartridges for injectable products used for medical purposes. In instances where the customer contracts with the Company for aseptic filling, the filled goods are distinct in the context of the contract. Lifecore generally recognizes revenue for these products when the product is released through the completion of the certificate of analysis. Lifecore provides product development services to assist its customers in obtaining regulatory approval for the commercial sale of their device or drug product. These services include analytical method development and validation, formulation development, sterile filtration, process scale-up, pilot studies, stability studies, process validation and production of materials for clinical studies. The promised services are not individually distinct in the context of the contract; rather, they are highly interdependent such that Lifecore would not be able to fulfill its promise by transferring any of the goods or services independently. Revenues generated from product development services are recognized over time, as Lifecore is creating an asset unique to each customer without alternative use and has an enforceable right to payment, including a reasonable profit margin, for performance completed to-date. The Company determined that labor hours, the primary input to such arrangements, are the best and most accurate measure of progress and measures that progress as a proportion of total estimated hours for an individual arrangement. HA manufacturing Lifecore manufactures and sells pharmaceutical-grade, non-animal-sourced HA using a proprietary, fermentation-based HA process in bulk form as well as for use in formulated and filled syringes and vials for customers’ injectable products used in treating a broad spectrum of medical conditions and procedures. The HA produced is distinct as customers are able to utilize the product provided under HA supply contracts when they obtain control. Lifecore recognizes revenue for these products at the point in time when legal title to the product is transferred to the customer, which is either (i) at the time shipment is made; or (ii) when the product is stored at the customer’s instruction for substantive reason, identified as belonging to the customer, ready for physical transfer to the customer and unable to be used or directed to another customer.
Defined contribution plan	Defined contribution plan The Company sponsors a defined contribution 401(k) plan which is available to all full-time Lifecore employees. The Company matches 100% of the first 3%, and 50% of the next 2%, that is contributed by an employee. Employee and Company contributions are fully vested at the time of the contributions. The Company retains the right, by action of the Board of Directors, to amend, modify, or terminate the plan.
Stock-based compensation	Stock-based compensation The Company issues stock-based awards to employees and non-employee directors in the form of stock options, RSUs and PSUs. The Company recognizes compensation expense for stock options and RSUs awards based on their estimated fair value on the date of grant on a straight-line basis over the single vesting period of the award as a whole. The Company recognizes compensation expense for PSUs based on the estimated fair value on the date of grant of each individual tranche over the vesting periods of each tranche of the award, resulting in a more accelerated expense pattern at the whole-award level as compared to the stock options and RSUs. The Company accounts for forfeitures as they occur. Stock options are exercisable generally for a period of seven years from the date of grant and generally vest over four years. RSUs generally vest over one to five years. PSUs vest based on achieving specified performance targets. All vesting is subject to continued service. The grant date fair value of stock options is estimated using the Black-Scholes option pricing model which relies upon management’s estimates and assumptions of the expected stock price volatility, the life of the award and the risk-free interest rate. RSUs are valued at the closing market price of the Common Stock on the date of grant. PSUs are valued on the grant date through the use of a Monte Carlo simulation model which relies upon management’s estimates and assumptions of the expected stock price volatility, the life of the award and the risk-free interest rate. For all awards, the Company estimates volatility using its historical stock price performance over a look-back period equal to the expected future life of the award.
Income taxes	Income taxes The Company measures deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. The Company maintains valuation allowances when it is likely that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the Company’s income tax provision in the period of change. In determining whether a valuation allowance is warranted, the Company considers such factors as prior earnings history, expected future earnings, unsettled circumstances that, if unfavorably resolved, would adversely affect utilization of a deferred tax asset, carryback and carryforward periods and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. In addition to valuation allowances, the Company establishes accruals for uncertain tax positions. The tax-contingency accruals are adjusted in light of changing facts and circumstances, such as the progress of tax audits, case law and emerging legislation. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. The Company’s effective tax rate includes the impact of tax-contingency accruals as considered appropriate by management. A number of years may elapse before a particular matter, for which the Company has accrued, is audited and finally resolved. The number of years with open tax audits varies by jurisdiction. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, the Company believes its tax-contingency accruals are adequate to address known tax contingencies. Favorable resolution of such matters could be recognized as a reduction to the Company’s effective tax rate in the year of resolution. Unfavorable settlement of any particular issue could increase the Company’s effective tax rate in the year of resolution. Any resolution of a tax issue may require the use of cash in the year of resolution. The Company’s tax-contingency accruals are recorded in other accrued liabilities in the accompanying consolidated balance sheets.
Derivative financial instruments	Derivative financial instruments The Company evaluates contracts to determine whether they contain features that meet the definition of an embedded derivative. When present, the Company bifurcates embedded derivatives from host instruments and accounts for them as free standing derivative financial instruments when (i) the economic characteristics and risks of the embedded derivative are not clearly and closely related to those of the host contract, (ii) the hybrid instrument is not remeasured at fair value with changes in fair value recognized in earnings, and (iii) a separate instrument with the same terms as the embedded feature would meet the definition of a derivative instrument. The Company has not entered into any derivative instruments for trading purposes nor has it designated any derivative instruments as hedging instruments. Derivative instruments that are not designated as hedges are presented on the consolidated balance sheets at fair value. Changes in the fair value of derivative instruments are recorded in earnings in the period in which the changes occur as a component of other income or expense in the Company’s consolidated statements of operations. The Company has bifurcated certain features of its Term Loan Credit Facility (as defined in note 10) as a derivative instrument, which is presented as the debt derivative liability, related party, on the consolidated balance sheets.
Fair value measurements	Fair value measurements The Company uses fair value measurement accounting as required for presentation and disclosure of certain financial instruments. The Company has not elected the fair value option for any of its eligible financial instruments. The Company follows a three-tier hierarchy for classifying fair value measurements based upon the inputs used in measuring fair value: •Level 1 – observable inputs such as quoted prices for identical instruments in active markets. •Level 2 – inputs other than quoted prices in active markets that are observable either directly or indirectly through corroboration with observable market data. •Level 3 – unobservable inputs in which there is little or no market data, which would require the Company to develop its own assumptions.
Leases	Leases The Company determines if an arrangement is a lease or contains a lease at inception. The arrangement is a lease if it conveys the right to the Company to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. Right-of-use assets are initially measured at cost and subsequently amortized over the lease term. Lease liabilities are initially recognized and subsequently measured based on the present value of the remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is a quoted rate based on the understanding of what the Company’s credit rating would be. Options to extend the lease are included in the lease term if the options are reasonably certain to be exercised. The Company’s lease agreements do not contain any material residual value guarantees. The Company’s lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. The Company combines fixed payments for non-lease components with lease payments and accounts for them together as a single lease component which increases the amount of lease assets and liabilities. Payments under lease arrangements are primarily fixed; however, certain lease agreements contain variable payments, which are expensed as incurred and are not included in the operating lease assets and liabilities. These amounts primarily include payments affected by changes in price indices. In a sale-leaseback transaction, the Company determines if it relinquished control of the assets to the buyer-lessor. If control is not relinquished, it does not derecognize the asset and does not apply the lease accounting model. Operating lease assets are included in other assets, and operating lease liabilities are presented in accrued expenses and other current liabilities and other liabilities on the consolidated balance sheets. Finance lease assets are included in property, plant and equipment, and finance lease liabilities are classified as debt.
Recent accounting pronouncements	Recent accounting pronouncements In December 2023, accounting standards update 2023-09 was issued to improve income tax disclosures. This update includes disclosure of disaggregated information about both the effective tax rate reconciliation and income taxes paid. This update was effective for the transition period ended December 31, 2025. The Company has prospectively updated its effective tax rate reconciliation as presented in note 14 and determined that the disaggregation of income taxes paid was not material. In November 2024, accounting standards update 2024-03, which was subsequently clarified by accounting standards update 2025-01, was issued to require more detailed disclosures related to certain costs and expenses. The guidance requires entities to disclose amounts of certain expense categories included in expense captions presented on the face of the income statement, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization. This guidance is effective for public entities for annual periods beginning after December 15, 2026, which for Lifecore begins with the year ending December 31, 2027, and for interim reporting periods following that year. Management is currently evaluating the impact that the adoption of this update will have on its financial statements. In September 2025, accounting standards update 2025-06 was issued to modernize the recognition and disclosure framework for internal-use software costs, removing the previous “development stage” model and introducing a more judgment-based approach. This guidance is effective for annual periods beginning after December 15, 2027, which for Lifecore begins with the year ending December 31, 2028, and interim periods therein. Early adoption is permitted as of the beginning of an annual reporting period. Management is currently evaluating the impact that the adoption of this update may have on its financial statements. Management has evaluated recently issued accounting pronouncements outside of those mentioned above and does not believe that any of these pronouncements will have a significant impact on the Company’s consolidated financial statements and related disclosures.

Organization, basis of presentation, and summary of significant accounting policies (Policies)

7 Months Ended

Dec. 31, 2025

On August 1, 2025, the Company’s Board of Directors approved a change in the Company’s fiscal year from a fiscal year ending on the last Sunday of May to a calendar year (the “Fiscal Year Change”). As a result, these financial statements include the presentation of a transition period from May 26, 2025 to December 31, 2025.

Basis of consolidation

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated.

Use of estimates

The preparation of financial statements and the notes to the financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect the amounts reported. The accounting estimates that require management’s most significant and subjective judgments include revenue recognition; recognition and measurement of current and deferred income tax assets and liabilities; evaluating assets for reserves and potential impairment; the valuation and recognition of stock-based compensation; and the valuation of the debt derivative liability. Actual results may differ from management’s estimates.

Discontinued operations

The Company previously operated a food business through its wholly-owned subsidiary, Curation Foods, Inc. (“Curation Foods”). The Company completed the sale or disposition of all Curation Foods subsidiaries during the fiscal year ended May 26, 2024. Upon completion of the dispositions, it ceased to operate the Curation Foods business. Interest and income tax expense were not allocated to discontinued operations due to their immateriality.

During the fiscal year ended May 26, 2024, the Company reached settlement agreements related to the Curation Foods business that resulted in the receipt of cash payments totaling $2,682, which were recognized as income from discontinued operations in the fiscal year ended May 26, 2024. The $2,682 cash received is included in net cash from operating activities on the consolidated statements of cash flows.

Income or loss per share

Net loss per common share is computed using the two-class method required due to the participating nature of the Series A Convertible Preferred Stock, which is redeemable under certain circumstances either by the Company or by the holder thereof (the “Redeemable Convertible Preferred Stock”) (see note 11) given the rights to participate in dividends if declared on common stock. The two-class method is an earnings allocation formula that treats participating securities as having rights to earnings that would otherwise have been available to common stockholders. In addition, as these securities are participating securities, the Company is required to calculate diluted net income or loss per share under the if-converted and treasury stock method in addition to the two-class method and utilize the most dilutive result. In periods where there is a net loss, no allocation of undistributed net loss to the Series A Convertible Preferred stockholders is performed as the holders of these securities are not contractually obligated to participate in the Company’s losses.

Basic income or loss per share is computed using the weighted average number of common shares outstanding during the reporting period. Diluted income or loss per share reflects the potential dilution as if securities or other contracts to issue the Company’s common stock, par value $0.001 per share (“Common Stock”) were exercised or converted into Common Stock. The Company’s diluted common equivalent shares consist of Redeemable Convertible Preferred Stock, stock options, restricted stock units (“RSUs”) and performance share units (“PSUs”). Dilution related to stock options, RSUs and PSUs is calculated using the treasury stock method, which includes the assumed repurchase of common shares from cash received upon stock option exercises, and unrecognized compensation expense. The potential dilutive effect of the Redeemable Convertible Preferred Stock is calculated using the if-converted method assuming the conversion as of the earliest period reported or at the date of issuance, if later, but are excluded if their effect is anti-dilutive.

Reportable segments

The Company’s Chief Operating Decision Maker (“CODM”), the President and Chief Executive Officer, manages CDMO and HA (defined below) manufacturing operations on the basis of a single, integrated segment. The CODM's review of financial results includes the consolidated financial statements of the Company, which the Company used to aid its determination that net income or loss is the measure of single-segment performance. Asset information is not separately identified nor internally reported to the Company’s CODM.

Entity-wide disclosures of revenue by geographic area are presented based on the customer location.

Concentrations of risk

Cash and accounts receivable are financial assets that potentially subject the Company to concentrations of credit risk. Company policy limits, among other things, the amount of credit exposure to any one issuer and to any one type of investment, other than securities issued or guaranteed by the U.S. government. The Company maintains cash in U.S. bank accounts, the balances of which generally exceed the federally insured limit. A significant portion of accounts receivable is concentrated with a few large customers as described further in note 4.

Cash and cash equivalents

The Company records all highly liquid securities with original maturities of three months or less when acquired as cash equivalents. Cash equivalents consist mainly of money market funds. The market value of cash equivalents approximates their historical cost given their short-term nature.

Accounts receivable, net of allowance for credit losses

Accounts receivable generally represent amounts billed for services provided under customer contracts and are recorded at the invoiced amount net of an allowance for credit losses, if necessary. Management applies judgment in assessing the ultimate realization of its receivables and estimates an allowance for credit losses based on various factors, such as the aging of receivables, historical collection experience, current and future economic market conditions, and the financial condition of customers.

Inventory

Inventory consists of raw materials, work in process and finished goods related to sterile injectable pharmaceutical products in syringes, vials and cartridges. This includes premium, pharmaceutical-grade hyaluronic acid (“HA”) in bulk form as well as formulated and filled syringes, vials and cartridges for injectable products.

Inventory is stated at the lower of cost (using the first-in, first-out method) or net realizable value. Work in process and finished goods cost includes the purchase price of applied raw materials, direct labor costs and allocated overhead primarily in the form of indirect labor and property, plant and equipment costs.

The Company adjusts inventory to remove the value of excess and obsolete items. Factors influencing inventory obsolescence include changes in demand, product life cycle, product pricing, physical deterioration, and quality concerns.

Goodwill and intangible assets

Goodwill represents the excess of the purchase price over the fair value of net assets acquired by the Company in a business combination, while intangible assets are acquired in a business combination. Neither goodwill nor indefinite-lived intangible assets are amortized but instead are each assessed for impairment on an annual basis or more frequently if impairment indicators exist. The impairment analyses each consist of an optional qualitative assessment, potentially followed by a quantitative analysis. If the Company determines that the carrying value of a reporting unit or indefinite-lived intangible asset exceeds its fair value, an impairment charge is recorded for the excess.

The Company performs its annual impairment testing as of the first day of its fourth fiscal quarter or whenever an event or change in circumstances occurs that would require a reassessment of impairment. In performing the evaluation, the Company assesses qualitative factors such as overall financial performance, actual and anticipated changes in industry and market conditions, and competitive environments. As a result of the most recent annual impairment testing, the Company determined that there were no impairments. Definite-lived intangible assets are amortized on a straight-line basis over their estimated useful life. The Company reviews the carrying value of definite-lived intangible assets for recoverability whenever events occur or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.

Property, plant and equipment, net

Property, plant and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are as follows: five to ten years for furniture and fixtures; three to ten years for computer equipment; seven to twenty-five years for machinery and equipment; seven to forty years for buildings and building improvements; and the shorter of the lease term or useful life for leasehold improvements. Repairs and maintenance costs are expensed as incurred. Depreciation expense for these assets is recorded either in cost of sales or selling, general and administrative expenses in the consolidated statements of operations, depending on the asset and its intended use.

The Company capitalizes interest on construction in process projects. To determine the capitalization rate, management uses judgment with the objective of achieving a reasonable measure of the cost of financing those projects that theoretically could have been avoided if funding for the project had instead been used to repay debt.

The Company reviews the carrying value of property and equipment for recoverability whenever events occur or changes in circumstances indicate that the carrying amount of individual assets or asset groups may not be recoverable. The Company conducts a quarterly review to determine if construction in process activities have gone idle and, if so, ceases to capitalize interest on idle projects.

The Company capitalizes software development costs for internal use. Capitalization of software development costs begins in the application development stage and ends when the asset is placed into service. The Company depreciates such costs on a straight-line basis over estimated useful lives of three to seven years, and the depreciation expense is recorded either in cost of sales or selling, general and administrative expenses in the consolidated statements of operations, depending on the asset and its intended use.

Impairment of long-lived assets

Long-lived assets or asset groups are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of assets or asset groups is measured by comparison of the carrying amount of the asset to the net undiscounted future cash flow expected to be generated from the asset or asset group. If the future undiscounted cash flows are not sufficient to recover the carrying value of the assets or asset group, its carrying value is adjusted to fair value. The Company regularly evaluates its long-lived assets for indicators of possible impairment.

Debt

The Company capitalizes debt issuance costs related to term debt as an offset to the carrying value of the debt and amortizes these costs over the term of the agreement using the effective interest method. The Company capitalizes debt issuance costs related to revolving credit lines as other assets on the balance sheet and amortizes the costs over the life of the credit line using the straight-line method, as the effective interest method cannot be applied to the variable borrowings under these instruments. Amortization of deferred issuance costs is included as a component of interest expense in the consolidated statements of operations.

Revenue recognition

The Company follows a five-step, principles-based model to recognize revenue upon the transfer of promised goods or services to customers at an amount that reflects the consideration for which the Company expects to be entitled in exchange for those goods or services. Revenue is recognized when or as the Company satisfies its performance obligations under a contract and control of the product is transferred to the customer. Standard terms of sale are generally included in contracts and purchase orders. Lifecore’s standard payment terms with its customers generally range from 30 days to 60 days.

As a result of differences between the timing of performance obligations and customer payments, the Company may recognize contract assets or contract liabilities. Contract assets represent the Company’s right to consideration for goods or services transferred to customers when that right is conditional on something other than the passage of time, such as the completion of additional performance obligations. Contract liabilities represent the Company’s obligation to transfer goods or services to customers for which consideration has been received or is due in advance of performance.

The Company evaluates contracts to determine whether they contain a significant financing component. A significant financing component may exist when the timing of payments agreed to by the parties provides the customer or the Company with a significant benefit of financing the transfer of goods or services. When a significant financing component is identified, the Company adjusts the promised amount of consideration for the effects of the time value of money so that revenue reflects the cash selling price of the promised goods or services at the time control transfers, and recognizes the related interest income or interest expense separately from revenue over the financing period. In making this assessment, the Company considers the expected length of time between transfer of the promised goods or services and payment, prevailing market interest rates, and whether the difference between promised consideration and the cash selling price arises for reasons other than financing. The Company follows the practical expedient available in U.S. GAAP that permits it to disregard these requirements when, at contract inception, the period between payment and transfer of the promised goods or services is expected to be one year or less.

The Company accounts for shipping and handling as a fulfillment activity, and not as a separate performance obligation. Shipping and other transportation costs charged to customers are recorded in both revenue and cost of goods sold. Amounts billed to third-party customers for shipping and handling are included as a component of revenues. Shipping and handling costs incurred are included as a component of cost of products sold.

The following sections provide additional details about the Company’s revenue recognition policies:

CDMO

Lifecore provides aseptic formulation and filling of syringes, vials and cartridges for injectable products used for medical purposes. In instances where the customer contracts with the Company for aseptic filling, the filled goods are distinct in the context of the contract. Lifecore generally recognizes revenue for these products when the product is released through the completion of the certificate of analysis.

Lifecore provides product development services to assist its customers in obtaining regulatory approval for the commercial sale of their device or drug product. These services include analytical method development and validation, formulation development, sterile filtration, process scale-up, pilot studies, stability studies, process validation and production of materials for clinical studies. The promised services are not individually distinct in the context of the contract; rather, they are highly interdependent such that Lifecore would not be able to fulfill its promise by transferring any of the goods or services independently. Revenues generated from product development services are recognized over time, as Lifecore is creating an asset unique to each customer without alternative use and has an enforceable right to payment, including a reasonable profit margin, for performance completed to-date. The Company determined that labor hours, the primary input to such arrangements, are the best and most accurate measure of progress and measures that progress as a proportion of total estimated hours for an individual arrangement.

HA manufacturing

Lifecore manufactures and sells pharmaceutical-grade, non-animal-sourced HA using a proprietary, fermentation-based HA process in bulk form as well as for use in formulated and filled syringes and vials for customers’ injectable products used in treating a broad spectrum of medical conditions and procedures. The HA produced is distinct as customers are able to utilize the product provided under HA supply contracts when they obtain control. Lifecore recognizes revenue for these products at the point in time when legal title to the product is transferred to the customer, which is either (i) at the time shipment is made; or (ii) when the product is stored at the customer’s instruction for substantive reason, identified as belonging to the customer, ready for physical transfer to the customer and unable to be used or directed to another customer.

Defined contribution plan

The Company sponsors a defined contribution 401(k) plan which is available to all full-time Lifecore employees. The Company matches 100% of the first 3%, and 50% of the next 2%, that is contributed by an employee. Employee and Company contributions are fully vested at the time of the contributions. The Company retains the right, by action of the Board of Directors, to amend, modify, or terminate the plan.

Stock-based compensation

The Company issues stock-based awards to employees and non-employee directors in the form of stock options, RSUs and PSUs. The Company recognizes compensation expense for stock options and RSUs awards based on their estimated fair value on the date of grant on a straight-line basis over the single vesting period of the award as a whole. The Company recognizes compensation expense for PSUs based on the estimated fair value on the date of grant of each individual tranche over the vesting periods of each tranche of the award, resulting in a more accelerated expense pattern at the whole-award level as compared to the stock options and RSUs. The Company accounts for forfeitures as they occur. Stock options are exercisable generally for a period of seven years from the date of grant and generally vest over four years. RSUs generally vest over one to five years. PSUs vest based on achieving specified performance targets. All vesting is subject to continued service.

The grant date fair value of stock options is estimated using the Black-Scholes option pricing model which relies upon management’s estimates and assumptions of the expected stock price volatility, the life of the award and the risk-free interest rate. RSUs are valued at the closing market price of the Common Stock on the date of grant. PSUs are valued on the grant date through the use of a Monte Carlo simulation model which relies upon management’s estimates and assumptions of the expected stock price volatility, the life of the award and the risk-free interest rate. For all awards, the Company estimates volatility using its historical stock price performance over a look-back period equal to the expected future life of the award.

Income taxes

The Company measures deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. The Company maintains valuation allowances when it is likely that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the Company’s income tax provision in the period of change. In determining whether a valuation allowance is warranted, the Company considers such factors as prior earnings history, expected future earnings, unsettled circumstances that, if unfavorably resolved, would adversely affect utilization of a deferred tax asset, carryback and carryforward periods and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset.

In addition to valuation allowances, the Company establishes accruals for uncertain tax positions. The tax-contingency accruals are adjusted in light of changing facts and circumstances, such as the progress of tax audits, case law and emerging legislation. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. The Company’s effective tax rate includes the impact of tax-contingency accruals as considered appropriate by management.

A number of years may elapse before a particular matter, for which the Company has accrued, is audited and finally resolved. The number of years with open tax audits varies by jurisdiction. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, the Company believes its tax-contingency accruals are adequate to address known tax contingencies. Favorable resolution of such matters could be recognized as a reduction to the Company’s effective tax rate in the year of resolution. Unfavorable settlement of any particular issue could increase the Company’s effective tax rate in the year of resolution. Any resolution of a tax issue may require the use of cash in the year of resolution. The Company’s tax-contingency accruals are recorded in other accrued liabilities in the accompanying consolidated balance sheets.

Derivative financial instruments

The Company evaluates contracts to determine whether they contain features that meet the definition of an embedded derivative. When present, the Company bifurcates embedded derivatives from host instruments and accounts for them as free standing derivative financial instruments when (i) the economic characteristics and risks of the embedded derivative are not clearly and closely related to those of the host contract, (ii) the hybrid instrument is not remeasured at fair value with changes in fair value recognized in earnings, and (iii) a separate instrument with the same terms as the embedded feature would meet the definition of a derivative instrument. The Company has not entered into any derivative instruments for trading purposes nor has it designated any derivative instruments as hedging instruments.

Derivative instruments that are not designated as hedges are presented on the consolidated balance sheets at fair value. Changes in the fair value of derivative instruments are recorded in earnings in the period in which the changes occur as a component of other income or expense in the Company’s consolidated statements of operations.

The Company has bifurcated certain features of its Term Loan Credit Facility (as defined in note 10) as a derivative instrument, which is presented as the debt derivative liability, related party, on the consolidated balance sheets.

Fair value measurements

The Company uses fair value measurement accounting as required for presentation and disclosure of certain financial instruments. The Company has not elected the fair value option for any of its eligible financial instruments.

The Company follows a three-tier hierarchy for classifying fair value measurements based upon the inputs used in measuring fair value:

•Level 1 – observable inputs such as quoted prices for identical instruments in active markets.

•Level 2 – inputs other than quoted prices in active markets that are observable either directly or indirectly through corroboration with observable market data.

•Level 3 – unobservable inputs in which there is little or no market data, which would require the Company to develop its own assumptions.

Leases

The Company determines if an arrangement is a lease or contains a lease at inception. The arrangement is a lease if it conveys the right to the Company to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. Right-of-use assets are initially measured at cost and subsequently amortized over the lease term. Lease liabilities are initially recognized and subsequently measured based on the present value of the remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is a quoted rate based on the understanding of what the Company’s credit rating would be. Options to extend the lease are included in the lease term if the options are reasonably certain to be exercised. The Company’s lease agreements do not contain any material residual value guarantees.

The Company’s lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. The Company combines fixed payments for non-lease components with lease payments and accounts for them together as a single lease component which increases the amount of lease assets and liabilities.

Payments under lease arrangements are primarily fixed; however, certain lease agreements contain variable payments, which are expensed as incurred and are not included in the operating lease assets and liabilities. These amounts primarily include payments affected by changes in price indices.

In a sale-leaseback transaction, the Company determines if it relinquished control of the assets to the buyer-lessor. If control is not relinquished, it does not derecognize the asset and does not apply the lease accounting model.

Operating lease assets are included in other assets, and operating lease liabilities are presented in accrued expenses and other current liabilities and other liabilities on the consolidated balance sheets. Finance lease assets are included in property, plant and equipment, and finance lease liabilities are classified as debt.

Recent accounting pronouncements

In December 2023, accounting standards update 2023-09 was issued to improve income tax disclosures. This update includes disclosure of disaggregated information about both the effective tax rate reconciliation and income taxes paid. This update was effective for the transition period ended December 31, 2025. The Company has prospectively updated its effective tax rate reconciliation as presented in note 14 and determined that the disaggregation of income taxes paid was not material.

In November 2024, accounting standards update 2024-03, which was subsequently clarified by accounting standards update 2025-01, was issued to require more detailed disclosures related to certain costs and expenses. The guidance requires entities to disclose amounts of certain expense categories included in expense captions presented on the face of the income statement, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization. This guidance is effective for public entities for annual periods beginning after December 15, 2026, which for Lifecore begins with the year ending December 31, 2027, and for interim reporting periods following that year. Management is currently evaluating the impact that the adoption of this update will have on its financial statements.

In September 2025, accounting standards update 2025-06 was issued to modernize the recognition and disclosure framework for internal-use software costs, removing the previous “development stage” model and introducing a more judgment-based approach. This guidance is effective for annual periods beginning after December 15, 2027, which for Lifecore begins with the year ending December 31, 2028, and interim periods therein. Early adoption is permitted as of the beginning of an annual reporting period. Management is currently evaluating the impact that the adoption of this update may have on its financial statements.

Management has evaluated recently issued accounting pronouncements outside of those mentioned above and does not believe that any of these pronouncements will have a significant impact on the Company’s consolidated financial statements and related disclosures.