Lifecore Biomedical Completes Incremental Liquidity Initiatives

Recent Initiatives Provide Approximately $8 Million of Non-Dilutive, Incremental Liquidity through Various Amendments with Lenders

CHASKA, Minn., May 16, 2024 (GLOBE NEWSWIRE) -- Lifecore Biomedical, Inc. (NASDAQ: LFCR) (“Lifecore” or the “Company”), a fully integrated contract development and manufacturing organization (“CDMO”), announced certain incremental liquidity measures and housekeeping matters related to divested businesses through a series of 8-K filings over the past week.

James G. Hall, President and Chief Executive Officer of Lifecore, commented, “We believe these incremental liquidity improvements will provide Lifecore with additional financial resources to continue to achieve its business objectives. During fiscal year 2024, and with the approximately $8 million of incremental liquidity improvements recently announced, we have now added up to approximately $18.5 million in non-dilutive incremental liquidity. We are excited about working with our new independent auditor, BDO, as we seek to get current on our public filings as promptly as possible, and successfully closing out our fiscal year at the end of May.”

Lender Updates
On May 2, 2024, the Company entered into an amendment related to its contract manufacturing agreement with its term lender and customer, in which the lender made a prepayment in the amount of $5.5 million in cash as an advance on future purchases. Under the terms, the lender is entitled to apply the prepayment towards invoices issued by the Company within the scope of the agreement during calendar year 2026.

On May 10, 2024, the Company also entered into the Seventh Amendment to the ABL Loan Agreement with its ABL lender to execute a “first-in, last-out” tranche of revolving loans under the ABL Loan Agreement (the “FILO Amendment”). While not increasing the overall revolver commitment of $40 million, the FILO Amendment provides for up to approximately $2.5 million of incremental revolving loan capacity to the Company, subject to a variable cap, without changing the collateral. In connection with the FILO Amendment, the margin rate applicable to the borrowings pursuant to the FILO Amendment was increased to SOFR plus 4.25%, which is expected to increase annual cash interest expense by approximately $44,000 assuming $2.5 million in FILO tranche borrowings thereunder. The maximum capacity of permitted borrowings pursuant to the FILO Amendment will be reduced on a monthly basis commencing October 1, 2025.