NEW YORK, NY / ACCESSWIRE / September 21, 2024 / Pomerantz LLP announces that a class action lawsuit has been filed against Lifecore Biomedical, Inc. ("Lifecore" or the "Company") (NASDAQ:LFCR) and certain officers. The class action, filed in the United States District Court for the District of Minnesota, and docketed under 24-cv-03028, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Lifecore securities between October 7, 2020, and March 19, 2024, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased or otherwise acquired Lifecore securities during the Class Period, you have until September 27, 2024 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Danielle Peyton at newaction@pomlaw.com or 646-581-9980 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
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Lifecore, together with its subsidiaries, operates as an integrated contract development and manufacturing organization in the United States ("U.S.") and internationally. The Company purportedly designs, develops, manufactures, and sells differentiated products for biomaterials markets, and license technology applications to partners.
Lifecore’s securities trade on the Nasdaq Global Select Market ("NASDAQ") and, as such, the Company is required to comply with NASDAQ’s "listing" rules, or the set of conditions which a company must meet in order to list its securities on the exchange. In relevant part, NASDAQ Listing Rule 5250(c)(1) requires Lifecore to timely file all required periodic financial reports with the U.S. Securities and Exchange Commission ("SEC"). As a "non-accelerated filed"-i.e., a company that has a public float of less than $75 million as of the last business day of its most recently completed second fiscal quarter-Lifecore must file quarterly reports with the SEC no more than 45 days after fiscal quarter-end and annual reports no more than 90 days after fiscal year-end.
The Complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Lifecore maintained deficient internal controls over financial reporting; (ii) as a result, the Company issued several financial statements that were inaccurate and would need to be restated; (iii) Lifecore’s purported remediation efforts with respect to the foregoing deficiencies were ineffective; (iv) all of the foregoing impaired Lifecore’s ability to timely file periodic reports with the SEC in compliance with NASDAQ listing requirements; (v) accordingly, the Company’s financial position and/or prospects were materially overstated; and (vi) as a result, the Company’s public statements were materially false and misleading at all relevant times.
In September 2022, Lifecore began reporting various issues concerning the internal controls over its financial reporting. On September 14, 2022, in the first of what would ultimately be a series of 16 such disclosures over approximately an 18-month period, Lifecore filed an Annual Report on Form 10-K with the SEC for the fiscal year ended May 29, 2022 (the "2022 10-K") which revealed, in relevant part, that "due to a material weakness in our internal control over financial reporting [. . .] our disclosure controls and procedures were not effective as of May 29, 2022[,]" and that the Company was restating several previously issued financial statements. Despite the foregoing, Lifecore represented to investors that the Company was undertaking efforts to address the material weaknesses and restate the financial statements in a timely manner. For example, Lifecore stated in the 2022 10-K that the Company was purportedly "evaluating remediation activities related to [its] non-standard transaction processes" including "(i) enhancing and developing a more comprehensive review process and monitoring controls related to non-standard transactions and (ii) continuing to provide training and development to [Lifecore’s] accounting team related to non-standard transactions, including discontinued operations and restructuring activity."
Then, on October 7, 2022, Lifecore filed a Quarterly Report on Form 10-Q with the SEC for the fiscal quarter ended August 28, 2022 (the "Q1 2023 10-Q") which stated that the Company’s "disclosure controls and procedures were not effective as of August 28, 2022, due to the material weakness in internal control over financial reporting that was disclosed in the [2022 10-K]."
On this news, Lifecore’s stock price fell $0.19 per share, or 2.31%, to close at $8.05 per share on October 10, 2022. Nonetheless, Lifecore reiterated in the Q1 2023 10-Q that the Company was implementing a remediation plan to address the foregoing material weaknesses.
On January 9, 2023, Lifecore revealed in a filing with the SEC that the Company was "unable to file, without unreasonable effort and expense, its Quarterly Report on Form 10-Q for the period ended November 27, 2022 (the ‘Second Quarter Form 10-Q’) in a timely manner" because "[t]he Company experienced an unexpected delay in finalizing the financial statements relating to the assessment of certain asset impairments and subsequent events in the Second Quarter Form 10-Q."
On January 11, 2023, Lifecore issued a press release announcing receipt of a notification letter from the Listing Qualifications Department of NASDAQ indicating that, "as a result of the Company’s delay in filing its Quarterly Report on Form 10-Q for the period ended November 27, 2022 [] with the [SEC], the Company [was] not in compliance with the requirements for continued listing under Nasdaq Listing Rule 5250(c)(1)[.]"
On this news, Lifecore’s stock price fell $0.12 per share, or 1.65%, to close at $7.14 per share on January 12, 2023.
On February 1, 2023, Lifecore revealed in a filing with the SEC that "the Company’s previously issued (i) consolidated financial statements as of and for the year ended May 29, 2022 and (ii) unaudited consolidated financial statements as of and for the three months ended August 28, 2022" should no longer be relied upon. Specifically, Lifecore indicated that "[t]his determination resulted from the identification of errors [. . .] identified by the Company related to certain non-cash impairment charges" related to a particular segment of the Company and that the financial statements for these periods would need to be restated.
On this news, Lifecore’s stock price fell $0.11 per share, or 1.75%, to close at $6.17 per share on February 2, 2023.
On March 16, 2023, Lifecore filed a Quarterly Report on Form 10-Q with the SEC for the fiscal quarter ended November 27, 2022 (the "Q2 2023 10-Q") which stated, in relevant part, that the Company’s "disclosure controls and procedures were not effective as of November 27, 2022, due to the material weaknesses in internal control over financial reporting that were disclosed in [the 2022 10-K]."
On this news, Lifecore’s stock price fell $1.03 per share, or 3.33%, to close at $29.86 per share on March 17, 2023. Nonetheless, Lifecore reiterated in the Q2 2023 10-Q that the Company was implementing a remediation plan to address the foregoing material weaknesses.
On April 10, 2023, Lifecore revealed in a filing with the SEC that the Company "could not complete the filing of its Quarterly Report on Form 10-Q for the period ended February 26, 2023 (the ‘Third Quarter Form 10-Q’) in a timely manner due to a delay in obtaining and compiling information required to be included in its Third Quarter Form 10-Q, which delay could not be eliminated by the Company without unreasonable effort and expense."
On June 2, 2023, Lifecore filed a Quarterly Report on Form 10-Q with the SEC for the fiscal quarter ended February 26, 2023 (the "Q3 2023 10-Q"), which stated, in relevant part, that the Company’s "disclosure controls and procedures were not effective as of February 26, 2023, due to the material weaknesses in internal control over financial reporting that were disclosed in [the 2022 10-K]." Nonetheless, Lifecore reiterated in the Q3 2023 10-Q again that the Company was implementing a remediation plan to address the foregoing material weaknesses.
On August 14, 2023, Lifecore revealed in a filing with the SEC that the Company "could not complete the filing of its Annual Report on Form 10-K for the fiscal year ended May 28, 2023 (the ‘2023 Form 10-K’) in a timely manner due to an unexpected delay in obtaining and compiling information required to be included in the 2023 Form 10- K, which delay could not be eliminated by the Company without unreasonable effort and expense" and that "[t]he Company experienced unexpected delays in compiling and analyzing supporting documentation related to the accounting for certain recent non- routine corporate transactions occurring during the fourth quarter 2023, and thus will require additional time to complete the preparation and review processes in support of the 2023 Form 10-K."
On this news, Lifecore’s stock price fell $2.00 per share, or 4.87%, to close at $39.06 per share on August 15, 2023.
On August 22, 2023, Lifecore issued a press release announcing that the Company received a notification letter from the Listing Qualifications Department of NASDAQ indicating that, "as a result of the Company’s delay in filing its Annual Report on Form 10-K for the period ended May 28, 2023 [] with the [SEC], the Company [was] not in compliance with the requirements for continued listing under Nasdaq Listing Rule 5250(c)(1)[.]"
On this news, Lifecore’s stock price fell $0.45 per share, or 5%, to close at $8.55 per share on August 23, 2023.
On October 10, 2023, Lifecore revealed in a filing with the SEC that the Company could not complete the filing of its Quarterly Report on Form 10-Q for the period ended August 27, 2023 as Lifecore continued to finalize the compiling and analyzing of supporting documentation related to the accounting for certain non-routine corporate transactions occurring during the fourth quarter 2023 and the preparation and review processes in support of the Annual Report on Form 10-K for the fiscal year ended May 28, 2023, "which delay could not be eliminated by the Company without unreasonable effort and expense."
On this news, Lifecore’s stock price fell $1.04 per share, or 3.58%, to close at $27.99 per share on October 11, 2023.
On October 31, 2023, Lifecore revealed in a filing with the SEC that the Company’s previously issued consolidated financial statements as of and for the fiscal years ended May 29, 2022 and May 30, 2021 and the Company’s unaudited consolidated financial statements as of and for the periods ending August 30, 2020, November 29, 2020, February 28, 2020, August 29, 2021, November 28, 2021, February 27, 2022, August 28, 2022, November 27, 2022 and February 26, 2023 should no longer be relied upon. Specifically, Lifecore indicated that "[t]his determination resulted from the Company’s identification of errors [. . .] related to certain adjustments [. . .] involving the calculation of capitalized interest, valuation of inventories, and certain adjustments related to previously divested businesses" and that the financial statements for the these periods would need to be restated.
On January 10, 2024, Lifecore revealed in a filing with the SEC that the Company could not complete the filing of its Quarterly Report on Form 10-Q for the period ended November 26, 2023, as it continued to finalize the restatement of certain previously issued consolidated financial statements "and the preparation and review processes in support of the Annual Report on Form 10-K for the fiscal year ended May 28, 2023 [] and of the Quarterly Report on Form 10-Q for the period ended August 27, 2023 [], which delay could not be eliminated by the Company without unreasonable effort and expense."
On this news, Lifecore’s stock price fell $0.75 per share, or 3.41%, to close at $21.19 per share on January 11, 2024.
On January 12, 2024, Lifecore issued a press release announcing that the Company received a notification letter from the Listing Qualifications Department of NASDAQ indicating that "as a result of the Company’s delay in filing its Quarterly Report on Form 10-Q for the fiscal quarter ended November 29, 2023 [] and its continued delay in filing its Annual Report on Form 10-K for the period ended May 28, 2023 [] and its Quarterly Report on Form 10-Q for the fiscal quarter ended August 27, 2023 [] with the [SEC]" the Company was not in compliance with the requirements for continued listing under Nasdaq Listing Rule 5250(c)(1).
On this news, Lifecore’s stock price fell $0.11 per share, or 1.6%, to close at $6.76 per share on January 16, 2024.
On February 16, 2024, Lifecore issued a press release announcing that the Company received a Staff Delisting Determination from the Listing Qualifications Department of NASDAQ "notifying the Company that [NASDAQ] has initiated a process which could result in the delisting of the Company’s securities from [NASDAQ] as a result of the Company not being in compliance with Nasdaq Listing Rule 5250(c)(1)." Specifically, Lifecore stated that the Staff Determination was issued "because the Company has not filed its Annual Report on Form 10-K for the fiscal year ended May 28, 2023 [] or its Quarterly Reports on Form 10-Q for the quarterly periods ended August 27, 2023 [] and November 29, 2023 [] by the Extension Deadline."
On this news, Lifecore’s stock price fell $0.16 per share, or 1.95%, to close at $8.03 per share on February 20, 2024. Nonetheless, Lifecore reiterated in the same press release that the Company intended to appeal the Staff Determination and was "working diligently to file the delinquent periodic reports as soon as possible to regain compliance with the Listing Rule."
Finally, on March 20, 2024, Lifecore filed its Annual Report on Form 10-K for the fiscal year ended May 28, 2023 with the SEC (the "2023 10-K"). Specifically, the 2023 10-K revealed that, despite Lifecore’s previous restatements and purported implementation of a remediation plan, the Company’s Audit Committee had concluded that Lifecore’s previously issued consolidated financial statements as of and for the fiscal years ended May 29, 2022 and May 30, 2021, the Company’s unaudited consolidated financial statements as of and for the periods ending August 30, 2020, November 29, 2020, February 28, 2021, August 29, 2021, November 28, 2021, February 27, 2022, August 28, 2022, November 27, 2022 and February 26, 2023 (collectively, the "Prior Financial Statements"), should no longer be relied upon and that the Company needed to restate the Prior Financial Statements. Further, the 2023 10-K stated that the determination resulted from the identification of errors in the Prior Financial Statements related to adjustments involving the calculation of capitalized interest, valuation of inventories, and certain other adjustments related to previously divested businesses reflected in the Prior Financial Statements. In addition, the Company adjusted certain other items that were previously identified in the Prior Financial Statements and concluded as immaterial, individually and in the aggregate, to the Prior Financial Statements.
On this news, Lifecore’s stock price fell $2.18 per share, or 30.32%, to close at $5.01 per share on March 20, 2024.
The issues concerning Lifecore’s internal control over financial reporting persisted after the end of the Class Period. On April 8, 2024, Lifecore revealed in a filing with the SEC that, as a result of the requirement to restate the Prior Financial Statements, it "could not complete the filing of its Quarterly Report on Form 10-Q for the period ended February 25, 2024[,]" and on April 19, 2024, Lifecore issued a press release announcing that the Company had received a notice from NASDAQ stating that "the Nasdaq Hearings Panel would consider the delinquency in the filing of the Q3 Form 10-Q in rendering its determination regarding the Company’s continued listing on Nasdaq Global Select Market."
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SOURCE: Pomerantz LLP
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