Lifecore $3.75M Securities Class Action Settlement

Investors who purchased or otherwise acquired Lifecore Biomedical Inc. securities between Oct. 7, 2020, and March 19, 2024, and suffered damages as a result may be eligible to claim a cash payment from a class action settlement.

Lifecore Biomedical Inc. and certain executives agreed to pay $3.75 million to settle a securities class action lawsuit alleging they made materially false and misleading statements about the company's internal financial reporting controls, the accuracy of its financial statements and its compliance with Nasdaq listing requirements.

Who can file a claim?

The settlement includes all persons and entities who purchased or otherwise acquired Lifecore Biomedical Inc. securities between Oct. 7, 2020, and March 19, 2024, inclusive, and suffered damages as a result.

Additional details

• Both individuals and entities can be class members.
• Eligible securities include Lifecore common stock (formerly Landec Corp., ticker LNDC, now LFCR), purchased call options and sold (written) put options with Lifecore common stock as the underlying security.
• Each separate legal entity must submit a separate claim.
• All joint owners must sign the claim form.
• Executors, administrators, guardians, conservators and trustees may submit claims on behalf of others and must provide proof of authority.
• Investors who held Lifecore securities only through a mutual fund are not class members, but the mutual fund may be.

How much can class members get?

The total settlement fund is $3,750,000. The amount each class member will receive depends on several factors:

• The number of valid claims submitted
• The number of Lifecore securities purchased or acquired during the class period
• The timing of each purchase, sale and holding
• The total recognized losses of all claimants

The settlement administrator will distribute payments on a pro rata basis according to the court-approved plan of allocation:

• The estimated average recovery is approximately $0.20 per allegedly damaged share before deductions for attorneys' fees, expenses and awards to lead plaintiffs. After these deductions, the estimated average recovery is approximately $0.12 per allegedly damaged share.
• Actual payments may be higher or lower depending on individual claims and the total number of valid claims.
• The settlement administrator will calculate each class member's payment based on the recognized loss amount assigned to each transaction.
• Recognized loss amounts depend on purchase and sale timing. The settlement administrator will calculate them using the court-approved plan of allocation, which uses an artificial inflation table to measure alleged price inflation on each trading day during the class period (Page 16 of the class notice).
• The settlement administrator will apply different formulas depending on when class members purchased and sold their securities:
• For shares sold before Oct. 10, 2022, the recognized loss is $0.
• For shares sold from Oct. 10, 2022, through March 19, 2024, the recognized loss is the artificial inflation on the date of purchase minus the artificial inflation on the date of sale.
• For shares sold from March 20, 2024, through June 17, 2024 (the 90-day lookback period), the recognized loss is the lesser of the artificial inflation on the date of purchase or the purchase price minus the 90-day lookback value on the date of sale (Page 16 of the class notice).
• For shares held as of the close of trading on June 17, 2024, the recognized loss is the lesser of the artificial inflation on the date of purchase or the purchase price minus $5.96 (the average closing price during the 90-day lookback period).

• The settlement caps claims for Lifecore call and put options at 1% of the net settlement fund.
• The settlement administrator will set any recognized loss that calculates to a negative number to $0.
• If total recognized losses exceed the net settlement fund, the settlement administrator will reduce payments on a pro rata basis.
• Class members whose payment would be less than $10 will not receive a payout.

How to claim a Lifecore securities class action settlement payment

Class members may file a claim online or download, print and complete the PDF claim form and mail it to the settlement administrator. The claim deadline is July 7, 2026.

Settlement administrator's mailing address: Carew v. Lifecore Biomedical Inc., et al., c/o Strategic Claims Services, P.O. Box 230, 600 N. Jackson St., Suite 205, Media, PA 19063

Proof or documentation required to submit a claim

All class members must provide the last four digits of their Social Security number or taxpayer identification number. They must also provide holdings, purchase, acquisition and sale information, including:

• Holdings of Lifecore common stock as of the close of trading on Oct. 6, 2020
• Purchases and acquisitions of Lifecore common stock from Oct. 7, 2020, through June 17, 2024
• Sales of Lifecore common stock from Oct. 7, 2020, through June 17, 2024
• Holdings of Lifecore common stock as of the close of trading on June 17, 2024

Class members must also provide documentation to support their transactions in Lifecore securities. Acceptable proof includes:

• Broker confirmation slips
• Monthly broker account statements
• Authorized statements from a broker containing the transactional and holding information found in a confirmation slip or account statement

$3.75 million settlement fund

The $3,750,000 settlement fund includes:

• Settlement administration costs: To be determined
• Attorneys' fees: Up to $1,250,000
• Attorneys' expenses: Up to $175,000
• Service awards to lead plaintiffs: Up to $4,000 total
• Payments to eligible class members: Remainder of the fund

Important dates

• Opt-out deadline: July 7, 2026
• Deadline to file a claim: July 7, 2026
• Fairness hearing: July 28, 2026

When is the Lifecore securities class action settlement payout date?

The settlement administrator will issue payments after it processes all claims and the court resolves any appeals and grants final approval of the settlement.

Why is there a class action settlement?

The class action lawsuit alleged Lifecore Biomedical and certain executives made false and misleading statements about the company's internal controls over financial reporting, the accuracy of its financial statements and its compliance with Nasdaq listing requirements. The plaintiffs claimed these misrepresentations artificially inflated the price of Lifecore securities and caused investor losses when the company issued corrective information to the market through a series of disclosures.

Lifecore denied all allegations of wrongdoing but agreed to settle to avoid the costs, risks and delays of continued litigation.

Sources

1. Class notice
2. Claim form