As filed with the Securities and Exchange Commission on August 3, 2004October 16, 2015.
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington,
WASHINGTON, D.C. 20549
______________________
FORM S-3
REGISTRATION STATEMENTUNDER
Under
THE SECURITIES ACT OF 1933
______________________
LANDEC CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or Other Jurisdiction of
Incorporation or Organization)
94-3025618
(I.R.S. Employer
Identification No.)
3603 Haven Avenue
Menlo Park, California 94025-1010
94025
(650) 306-1630
306-1650
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant'sRegistrant’s Principal Executive Offices)
Gregory S. Skinner
Gary T. Steele
Chief Financial Officer and Vice President of Finance and Chief Executive Officer
Administration
Landec Corporation
3603 Haven AvenueMenlo Park, California 94025-1010(650) 306-1650(Name, Address Including Zip Code, andTelephone Number Including Area Code, of Agent for Service)
COPIES TO:
Geoffrey P. LeonardOrrick, Herrington & Sutcliffe LLP1020 Marsh Road
Menlo Park, California 94025
(650) 614-7400306-1650
With a copy to:
C.J. Wauters
Godfrey & Kahn, S.C.
780 N. Water Street
Milwaukee, Wisconsin 53202
(414) 273-3500
______________________
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statementregistration statement.
______________________
If the only securities being registered on this formForm are being offered pursuant to dividend or interest reinvestment plans, please check the following box. o☐
If any of the securities being registered on this formForm are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ý☒
If this formForm is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement forfrom the same offering. o☐
If this formForm is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o☐
If delivery ofthis Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment there to that shall become effective upon filing with the prospectus is expected to be madeCommission pursuant to Rule 434, please462(e) under the Securities Act, check the following box. o☐
CALCULATION OF REGISTRATION FEE
| Title of Each Class of Securities to Be Registered | Amount to Be Registered | Proposed Maximum Offering Price Per Unit(1) | Proposed Maximum Aggregate Offering Price(1) | Amount of Registration Fee | ||||
|---|---|---|---|---|---|---|---|---|
| Common Stock, par value $0.001 | 1,744,102 | $5.33 | $9,296,064 | $1,177.81 | ||||
If this Form is a post-effective amendment to a registration Statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of calculating the registration fee in accordance withsecurities pursuant to Rule 457(c)413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or smaller reporting company. See the definitions of 1933. Based on the average“large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the high and low prices per share of Common Stock of the registrant as reported on the Nasdaq National Market on July 29, 2004.
Large accelerated filer ☐ | Accelerated filer ☒ |
Non-accelerated filer ☐ (Do not check if a smaller reporting company) | Smaller reporting company ☐ |
CALCULATION OF REGISTRATION FEE
Title of each class of securities to be registered | Amount to be registered | Proposed maximum offering price per unit | Proposed maximum aggregate offering price(3) | Amount of |
Common Stock ($0.001 par value per share) | (1) | (2) | $100,000,000 | $10,070 |
The registrantRegistrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrantRegistrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission acting pursuant to said Section 8(a), may determine.
(1) | There is being registered hereunder an indeterminate number of shares of our common stock as may from time to time be sold hereunder. |
(2) | The proposed maximum offering price will be determined from time to time by the registrant in connection with, and at the time of, the issuance of the shares of common stock registered hereunder. |
(3) | The shares of common stock registered hereunder shall have an aggregate initial offering price not to exceed $100,000,000. The proposed maximum aggregate offering price has been estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. |
The information contained in this prospectus is not complete and may be changed. The selling shareholdersWe may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is declareddeclares our registration statement effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
PROSPECTUS Subject to Completion, Dated August 3, 2004dated October 16, 2015
LANDEC CORPORATION
$100,000,000
Common Stock
We may offer and sell from time to time shares of our common stock, $0.001 par value, at prices and on terms that we determine at the time of the offering, with an aggregate initial offering price of up to $100,000,000. Each time we offer securities, we will provide a prospectus supplement containing more information about the particular offering together with this prospectus. The prospectus supplement also may add, update or change information contained in this prospectus. This prospectus may not be used to offer and sell securities without a prospectus supplement.
The common stock may be sold directly by us to investors, through agents designated from time to time or to or through underwriters or dealers. For additional information on the methods of sale, you should refer to the section entitled “Plan of Distribution” in this prospectus. If any agents or underwriters are involved in the sale of any securities under this prospectus, the names of such agents or underwriters and any applicable fees, commissions, discounts and over-allotment options will be set forth in the applicable prospectus supplement.
The information in this prospectus is not complete and may be changed. We may not sell the securities until the Securities and Exchange Commission declares our registration statement effective. This prospectus is not an offer to sell the securities and is not soliciting an offer to buy the securities in any state where the offer or sale is not permitted.
Our common stock is traded on The NASDAQ Global Select Stock Market under the symbol “LNDC.”
Investing in these securities involves significant risks. We strongly recommend that you read carefully the risks we describe in this prospectus as well as in any accompanying prospectus supplement and the risk factors that are incorporated by reference in this prospectus from our filings made with the Securities and Exchange Commission. See “Risk Factors” beginning on page 4.
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ProspectusNeither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
________________
This prospectus is dated , 2015.
1,744,102 SharesTable of Contents
LANDEC CORPORATIONPage
ABOUT THIS PROSPECTUS | 1 |
ABOUT LANDEC CORPORATION | 1 |
RISK FACTORS | 2 |
NOTE REGARDING FORWARD-LOOKING STATEMENTS | 10 |
USE OF PROCEEDS | 10 |
DESCRIPTION OF CAPITAL STOCK | 10 |
PLAN OF DISTRIBUTION | 11 |
LEGAL MATTERS | 13 |
EXPERTS | 13 |
WHERE YOU CAN FIND ADDITIONAL INFORMATION | 14 |
INCORPORATION BY REFERENCE | 14 |
Common StockABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that covers 1,744,102we filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. Under this shelf registration process, we may offer from time to time shares of our common stock, $0.001 par value, with an aggregate initial offering price of up to $100,000,000. This prospectus provides you with a general description of our common stock. These shares ofEach time we offer common stock under this prospectus, we will provide a prospectus supplement that describes the terms of the offering. The prospectus supplement also may be offeredadd, update or change information contained in this prospectus. Before making an investment decision, you should read carefully both this prospectus and sold from time to timeany prospectus supplement together with the documents incorporated by the selling shareholders listedreference into this prospectus as described below under the section entitled "Selling Shareholders"heading “Incorporation by Reference.”
The registration statement that contains this prospectus, including the exhibits to the registration statement and their transferees. The selling shareholdersthe information incorporated by reference, provides additional information about the securities. That registration statement can be read at the SEC website (www.sec.gov) or at the SEC public reference room as discussed below under the heading “Where You Can Find Additional Information.”
You should rely only on the information provided in the registration statement, this prospectus and in any prospectus supplement, including the information incorporated by reference. We have not authorized anyone to provide you with different information. You should not assume that the information in this prospectus or any supplement to this prospectus is accurate at any date other than the date indicated on the cover page of these documents. We are not making an offer to sell the securities in any jurisdiction where the offer or sale is not permitted.
We may sell the securities to or through underwriters, dealers or agents or directly to purchasers. We and our agents reserve the sole right to accept or reject in whole or in part any proposed purchase of our common stock. The prospectus supplement, which we will provide each time we offer the common stock, from time to time onwill set forth the Nasdaq National Market in regular brokerage transactions, in transactions directly with market makers or in privately negotiated transactions. The selling shareholders andnames of any underwriters, dealers or agents who participateinvolved in the distribution of the common stock may be deemed to be "underwriters" under the Securities Act of 1933. See "Plan of Distribution."
We will not receive any proceeds from the sale of the common stock by the selling shareholders. We will bear the costs and expenses of registering the common stock offered by the selling shareholders. Selling commissions, brokerage feessecurities, and any applicable stock transfer taxes are payable byrelated fee, commission or discount arrangements. See “Plan of Distribution.”
ABOUT LANDEC CORPORATION
In this prospectus, the selling shareholders.terms “Landec,” “the Company,” “we,” “us,” and “our” refer to Landec Corporation.
Our common stock
Landec designs, develops, manufactures and sells differentiated products for food and biomaterials markets and license technology applications to partners. The Company is tradedfocused on the Nasdaq National Market under the symbol "LNDC." On August 2, 2004, the last sale price of Landec's common stock on the Nasdaq National Market was $5.50 per share.
Investing In Our Common Stock Involves A High Degree Of Risk.See "Risk Factors" Beginning On Page 3.
These Securities Have Not Been Approved Or Disapproved By The SecuritiesAnd Exchange Commission Or Any State Securities Commission NorHas The Securities And Exchange Commission Or Any State SecuritiesCommission Passed Upon The Accuracy Or Adequacy Of This Prospectus.Any Representation To The Contrary Is A Criminal Offense.
The date of this Prospectus is , 2004
This prospectus contains so-called forward-looking statementshealth and wellness solutions and applications within the meaning of Section 27A of the Securities Act of 1933packaged food and these forward-looking statementsbiomaterial markets. In our Apio, Inc. (“Apio”) food business, we are made subjectcommitted to the safe harbor provisions of Section 27A of the Securities Act of 1933. These include statements aboutoffering healthy, fresh produce products conveniently packaged to consumers. Apio also exports whole fruit and vegetables, predominantly to Asia through its subsidiary, Cal Ex Trading Company (“Cal-Ex”). In our expectations, beliefs, intentions or strategies for the future, whichLifecore Biomedical, Inc. (“Lifecore”) biomaterials business, we indicate by words or phrases suchcommercialize products that enable people to stay more active as "anticipate," "expect," "intend," "plan," "will," "we believe," "management believes"they grow older.
Landec’s food and similar language. All forward-looking statements are based on our current expectations and are subject to risks, uncertainties and assumptions, including those set forth under "Risk Factors." Our actual results may differ materially from results anticipated in these forward-looking statements. We base our forward-looking statements on information currently available to us, and we assume no obligation to update them.
Landec Corporation and its subsidiaries ("Landec" or the "Company") design, develop, manufacture and sell temperature-activated and other specialtybiomaterials businesses utilize polymer products for a variety of food products, agricultural products, and licensed partner applications. This proprietary polymerchemistry technology, is the foundation, and a key differentiating advantage, upon which we have builtfactor. Both core businesses focus on business-to-business selling such as selling directly to retail grocery store chains and club stores for Apio and directly to large ophthalmic suppliers for Lifecore. Both core businesses also benefit from the momentum that underlies consumer interest in healthy living – eating better and staying active.
Within our business.
two core businesses, Landec has two core businesses—three operating segments – Packaged Fresh Vegetables, Food Products TechnologyExport and Agricultural Seed Technology, in addition to our Technology Licensing/Research and Development business.Biomaterials.
Our Food Products Technology
Apio operates our Packaged Fresh Vegetables business, is operated through a subsidiary, Apio, Inc., andwhich combines our proprietary BreatheWay® food packaging technology with the capabilities of a large national food supplier and value-added produce processor. This combination was consummatedprocessor which sells products under the Eat Smart® and GreenLine® brands and under private labels. In Apio’s Packaged Fresh Vegetables operations, produce is processed by trimming, washing, mixing, and packaging in December 1999 whenbags and trays that in most cases incorporate Landec’s BreatheWay membrane technology. The BreatheWay membrane increases shelf life and reduces shrink (waste) for retailers and helps ensure that consumers receive fresh produce by the Company acquiredtime the product makes its way through the supply chain. Apio also licenses the BreatheWay technology to partners such as ChiquitaBrands International, Inc. for packaging and certain related entities (collectively, "Apio").
Our Agricultural Seed Technology business is operated through a subsidiary, Landec Ag, Inc. ("Landec Ag"),distribution of bananas and combines our proprietary Intellicoat® seed coating technology with our unique eDC™—e-commerce, direct marketing and consultative selling—capabilities which we obtained when we acquired Fielder's Choice Direct ("Fielder's Choice")to Windset Holding 2010 Ltd., a direct marketerCanadian corporation (“Windset”), for packaging of hybrid seed corn,greenhouse grown cucumbers and peppers.
Apio also operates the Food Export business. The Food Export business purchases and sells whole fruit and vegetable products predominantly to Asian markets.
Lifecore operates our Biomaterials business and is principally involved in September 1997.
In addition to our two core businesses,the manufacture of pharmaceutical-grade sodium hyaluronate (HA) products. Sodium hyaluronate is a naturally occurring polysaccharide that is widely distributed in the extracellular matrix in animals and humans. Based upon Lifecore’s expertise working with highly viscous HA, the Company also operatesspecializes in aseptic filling services, as a Technology Licensing/Researchcontract development and Development business that licensesmanufacturing organization (CDMO), for difficult to handle (viscous) medicines filled in finished dose syringes.
More information about Landec is available through our website at http://www.landec.com. The information on our website is not a part of or supplies products outside of our core businesses to industry leaders such as Alcon, Inc. and L'Oreal of Paris.
Landec was incorporated in California on October 31, 1986. We completed our initial public offering in 1996 and our common stock is listed on the Nasdaq National Market under the symbol "LNDC."by reference into this prospectus or any accompanying prospectus supplement. Our principal executive offices are located at 3603 Haven Avenue, Menlo Park, California 94025 and our telephone number is (650) 306-1650.94025.
In this prospectus, the terms "Landec," "we," "us" and "our" includes Landec Corporation and its subsidiaries.
You
Investing in our securities involves significant risks. Before making an investment decision, you should carefully consider the following risk factors described below, and, all other information containedif applicable, in thisany accompanying prospectus before purchasingsupplement used in connection with an offering of the securities. Our business, financial condition or results of operations could be materially and adversely affected by any of these risks. The trading price of our common stock.stock could decline due to any of these risks, and you may lose all or part of your investment.
Adverse Weather Conditions and Other Acts of God May Cause Substantial Decreases in Our business and financial condition have been, andSales and/or Increases in the future may be, affected by the factors we describe below or those incorporated by reference in this prospectus.
We Have a History of Losses Which May ContinueOur Costs
Our Packaged Fresh Vegetables business is subject to weather conditions that affect commodity prices, crop quality and yields, and decisions by growers regarding crops to be planted. Crop diseases and severe conditions, particularly weather conditions such as unexpected or excessive rain or other precipitation, unseasonable temperature fluctuations, floods, droughts, frosts, windstorms, earthquakes and hurricanes, may adversely affect the supply of vegetables and fruits used in our business, which could reduce the sales volumes and/or increase the unit production costs. Because a significant portion of the costs are fixed and contracted in advance of each operating year, volume declines reflecting production interruptions or other factors could result in increases in unit production costs which could result in substantial losses and weaken our financial condition.
We Depend on Our Infrastructure to Have Sufficient Capacity to Handle Our On-Going Production Needs
We have incurred net losses in each fiscal year sincean infrastructure that has sufficient capacity for our inception, except for the fiscal year ended May 30, 2004 and the seven-month period ended May 25, 2003. Our accumulated deficit as of May 30, 2004 totaled $55.3 million. Weon-going production needs, but if we lose machinery or facilities due to natural disasters or mechanical failure, we may incur additional losses in the future. The amount of future net profits, if any, is highly uncertain and there can be no assurance that the Company willnot be able to sustain profitability in future years.
Our Indebtedness Could Limit Our Financial and Operating Flexibility
At May 30, 2004, our total debt, including current maturities and capital lease obligations, was approximately $9.0 million and the total debt to equity ratio was approximately 15%. Of this debt, approximately $5.3 million is comprised of revolving lines of credit and approximately $3.7 million is comprised of term debt and capital lease obligations. In August 2003, Apio entered intooperate at a new $12 million working capital line and a $3 million equipment line with Wells Fargo Business Credit, Inc. ("Wells Fargo"). All amounts outstanding under Apio's previous line of credit with Bank of America were paid off using the new Wells Fargo working capital line (the "Credit Facility"). The amount of debt outstanding under the Apio and Landec Ag lines of credit fluctuate over time, and the agreements contain restrictive covenants that require each companysufficient capacity to meet certain financial tests including maximum levelsour production needs. This could have a material adverse effect on our business, which could impact our results of net income, minimum debt coverage ratio, minimum net worthoperations and maximum capital expenditures. The Credit Facility limits the ability of Apio to make cash payments to Landec if certain conditions, as defined in the agreements, are not met. Landec has pledged substantially all of the assets of Apio and Landec Ag to secure their bank debt. Of our non-revolving debt, approximately $1.5 million, $189,000 and $156,000 become due over the next three fiscal years, respectively. This level of indebtedness limits our financial and operating flexibility in the following ways:
In connection with the Apio acquisition, we may be obligated to make future payments to the former shareholders of Apio of up to $1.2 million for the future supply of produce. This amount is scheduled to be paid during the third quarter of fiscal year 2005.condition.
Our ability to service this indebtedness and these future payments will depend on our future performance, which will be affected by prevailing economic conditions and financial, business and other factors, some of which are beyond our control. If we are unable to service this debt, we would be forced to pursue one or more alternative strategies such as selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital, which might not be successful and which could substantially dilute the ownership interest of existing shareholders.
We Have Violated Restrictions in Our Loan Agreements and May Have to Pursue New Financings if We Are Unable to Comply with These Provisions in the Future
Apio is subject to various financial and operating covenants under the Credit Facility, including minimum fixed charge coverage ratio, minimum adjusted net worth and minimum net income. The
Credit Facility limits the ability of Apio to make cash payments to Landec. On April 27, 2003, Apio was in technical violation of the minimum net worth covenant under its previous line of credit with Bank of America. Subsequently, Bank of America provided a written waiver of this violation as of April 27, 2003. All amounts outstanding under the line of credit with Bank of America were paid off using the Credit Facility. If we violate any obligations in the future we could trigger an event of default, which, if not cured or waived, would permit acceleration of our obligation to repay the indebtedness due under the Credit Facility. If the indebtedness due under the Credit Facility were accelerated, we would be forced to pursue one or more alternative strategies such as selling assets, seeking new debt financing from another lender or seeking additional equity capital, which might not be achievable or available on attractive terms, if at all, and which could substantially dilute the ownership interest of existing shareholders.
Our Future Operating Results Are Likely to Fluctuate Which May Cause Our Stock Price to Decline
In the past, our results of operations have fluctuated significantly from quarter to quarter and are expected to continue to fluctuate in the future. Historically, our direct marketer of hybrid corn seed, Landec Ag, has been the primary source of these fluctuations, as its revenues and profits are concentrated over a few months during the spring planting season (generally during our third and fourth fiscal quarters). In addition, Apio can be heavily affected by seasonal and weather factors which have impacted quarterlyour financial results such asin the high cost of sourcing product in December 2003 and January 2004past due to a shortageshortages of essential value-added produce items which haditems. In addition, the quarterly fair market value change in our Windset investment can fluctuate substantially quarter to be purchased at inflated prices on the open market.quarter. Our earnings may also fluctuate based on our ability to collect accounts receivablesreceivable from customers and note receivablesnotes receivable from growers. Our earnings from our Food Products Technology business are sensitive togrowers and on price fluctuations in the fresh vegetablesvegetable and fruitsfruit markets. Excess supplies can cause intense price competition. Other factors that affect our food and/or agricultural operations include:
● | our ability and our growers ability to obtain an adequate supply of labor, |
● | our growers ability to obtain an adequate supply of water, |
● | the seasonality and availability of our supplies, |
● | our ability to process produce during critical harvest periods, |
● | the timing and effects of ripening, |
● | the degree of perishability, |
● | the effectiveness of worldwide distribution systems, |
● | total worldwide industry volumes, |
● | the seasonality and timing of consumer demand, |
● | foreign currency fluctuations, and |
● | foreign importation restrictions and foreign political risks. |
As a result of these and other factors, we expect to continue to experience fluctuations in quarterly operating results.
We May Not Be Able to Achieve Acceptance of Our New Products in the Marketplace
Our success in generating significant sales of our products will dependdepends in part on theour ability and that of us and our partners and licensees to achieve market acceptance of our new products and technology. The extent to which, and rate at which, we achieve market acceptance and penetration of our current and future products is a function of many variables including, but not limited to:
● | price, |
● | safety, |
● | efficacy, |
● | reliability, |
● | conversion costs, |
● | regulatory approvals, |
● | marketing and sales efforts, and |
● | general economic conditions affecting purchasing patterns. |
We may not be able to develop and introduce new products and technologies in a timely manner or new products and technologies may not gain market acceptance. We or our partners/customers are in the early stage of product commercialization of certain Intelimer-based specialty packaging, Intellicoat seed coatingHA-based products and other IntelimerIntelimer® polymer products and many of our potential products are in development.products. We believeexpect that our future growth will depend in large part on our or our partners’/customers’ ability to develop and market new products in our target markets and in new markets. In particular, we expect that our ability to compete effectively with existing food products agricultural, industrial and medical companies will depend substantially on successfully developing, commercializing, achieving market acceptance of and reducing the cost of producing our products. In addition, commercial applications of our temperature switch polymer technology are relatively new and evolving. Our failure to develop new products or the failure of our new products to achieve market acceptance would have a material adverse effect on our business, results of operations and financial condition.
We Face Strong Competition in the Marketplace
Competitors may succeed in developing alternative technologies and products that are more effective, easier to use or less expensive than those which have been or are being developed by us or that would render our technology and products obsolete and non-competitive. We operate in highly competitive and rapidly evolving fields, and new developments are expected to continue at a rapid pace. Competition from large food products, agricultural, industrial, medical and medicalpharmaceutical companies is expected to be intense. In addition, the nature of our collaborative arrangements may result in our corporate partners and licensees becoming our competitors. Many of these competitors have substantially greater financial and technical resources and production and marketing capabilities than we do, and may have substantially greater experience in conducting clinical and field trials, obtaining regulatory approvals and manufacturing and marketing commercial products.
We Have a Concentration of Manufacturing in One Location for Apio and Lifecore and May Have to Depend on Third Parties to Manufacture Our Products
Any disruptions in our primary manufacturing operation at Apio’s facilities in Guadalupe, California or Bowling Green, Ohio or Lifecore’s facility in Chaska, Minnesota would reduce our ability to sell our products and would have a material adverse effect on our financial results. Additionally, we may need to consider seeking collaborative arrangements with other companies to manufacture our products. If we become dependent upon third parties for the manufacture of our products, our profit margins and our ability to develop and deliver those products on a timely basis may be adversely affected. Failures by third parties may impair our ability to deliver products on a timely basis and impair our competitive position. We may not be able to continue to successfully operate our manufacturing operations at acceptable costs, with acceptable yields, and retain adequately trained personnel.
Our Dependence on Single-Source Suppliers and Service Providers May Cause Disruption in Our Operations Should Any Supplier Fail to Deliver Materials
We may experience difficulty acquiring materials or services for the manufacture of our products or we may not be able to obtain substitute vendors. WeIn addition, we may not be able to procure comparable materials or hybrid corn varieties at similar prices and terms within a reasonable time. Several services that are provided to Apio are obtained from a single provider. Several of the raw materials we use to manufacture our products are currently purchased from a single source, including some monomers used to synthesize Intelimer polymers, and substrate materials for our breathable membrane products and raw materials for our HA products. In addition, virtually all of the hybrid corn varieties sold by Landec Ag are grown under contract by a single seed producer. Any interruption of our relationship with single-source suppliers or service providers could delay product shipments and materially harm our business.
Any New Business Acquisition Will Involve Uncertainty Relating to Integration
We have acquired other businesses in the past and may make additional acquisitions in the future. The successful integration of new business acquisitions may require substantial effort from the Company's management. The diversion of the attention of management and any difficulties encountered in the transition process could have a material adverse effect on the Company's ability to realize the anticipated benefits of the acquisitions. The successful combination of new businesses also requires coordination of research and development activities, manufacturing, sales and marketing efforts. In addition, the process of combining organizations located in different geographic regions could cause the interruption of, or a loss of momentum in, the Company's activities. There can be no assurance that the Company will be able to retain key management, technical, sales and customer support personnel, or that the Company will realize the anticipated benefits of any acquisitions, and the failure to do so would have a material adverse effect on the Company's business, results of operations and financial condition.
We May Be Unable to Adequately Protect Our Intellectual Property Rights or May Infringe Intellectual Property Rights of Others
We may receive notices from third parties, including some of our competitors, claiming infringement by our products of their patent and other proprietary rights. Regardless of their merit, responding to any such claim could be time-consuming, result in costly litigation and require us to enter royalty and licensing agreements which may not be offered or available on terms acceptable to us. If a successful claim is made against us and we fail to develop or license a substitute technology, we could be required to alter our products or processes and our business, results of operations or financial position could be materially adversely affected. Our success depends in large part on our ability to obtain patents, maintain trade secret protection and operate without infringing on the proprietary rights of third parties. Any pending patent applications we file may not be approved and we may not be able to develop additional proprietary products that are patentable. Any patents issued to us may not provide us with competitive advantages or may be challenged by third parties. Patents held by others may prevent the commercialization of products incorporating our technology. Furthermore, others may independently develop similar products, duplicate our products or design around our patents.
Our Operations Are Subject to Regulations that Directly Impact Our Business
Our food packaging products are subject to regulation under the FDC Act. Under the FDC Act, any substance that when used as intended may reasonably be expected to become, directly or indirectly, a component or otherwise affect the characteristics of any food may be regulated as a food additive unless the substance is generally recognized as safe. We believe that food packaging materials are generally not considered food additives by the FDA because these products are not expected to become components of food under their expected conditions of use. We consider our breathable membrane product to be a food packaging material not subject to regulation or approval by the FDA. We have not received any communication from the FDA concerning our breathable membrane product. If the FDA were to determine that our breathable membrane products are food additives, we may be required to submit a food additive petition for approval by the FDA. The food additive petition process is lengthy, expensive and uncertain. A determination by the FDA that a food additive petition is necessary would have a material adverse effect on our business, operating results and financial condition.
Federal, state and local regulations impose various environmental controls on the use, storage, discharge or disposal of toxic, volatile or otherwise hazardous chemicals and gases used in some of the manufacturing processes. Our failure to control the use of, or to restrict adequately the discharge of, hazardous substances under present or future regulations could subject us to substantial liability or could cause our manufacturing operations to be suspended and changes in environmental regulations may impose the need for additional capital equipment or other requirements.
Our agricultural operations are subject to a variety of environmental laws including, the Food Quality Protection Act of 1966, the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Federal Insecticide, Fungicide and Rodenticide Act, and the Comprehensive Environmental Response, Compensation and Liability Act. Compliance with these laws and related regulations is an ongoing process. Environmental concerns are, however, inherent in most agricultural operations, including those we conduct. Moreover, it is possible that future developments, such as increasingly strict environmental laws and enforcement policies could result in increased compliance costs.
The Company is subject to the Perishable Agricultural Commodities Act ("PACA") law. PACA regulates fair trade standards in the fresh produce industry and governs all the product sold by Apio. Our failure to comply with the PACA requirements could among other things, result in civil penalties, suspension or revocation of a license to sell produce, and in the most egregious cases, criminal prosecution, which could have a material adverse affect on our business.
Adverse Weather Conditions and Other Acts of God May Cause Substantial Decreases in Our Sales and/or Increases in Our Costs
Our Food Products and Agricultural Seed Technology businesses are subject to weather conditions that affect commodity prices, crop yields, and decisions by growers regarding crops to be planted. Crop diseases and severe conditions, particularly weather conditions such as floods, droughts, frosts, windstorms, earthquakes and hurricanes, may adversely affect the supply of vegetables and fruits used in our business, which could reduce the sales volumes and/or increase the unit production costs. Because a significant portion of the costs are fixed and contracted in advance of each operating year, volume declines due to production interruptions or other factors could result in increases in unit production costs which could result in substantial losses and weaken our financial condition.
We Depend on Strategic Partners and Licenses for Future Development
Our strategy for development, clinical and field testing, manufacture, commercialization and marketing for some of our current and future products includes entering into various collaborations with corporate partners, licensees and others. We are dependent on our corporate partners to develop, test, manufacture and/or market some of our products. Although we believe that our partners in these collaborations have an economic motivation to succeed in performing their contractual responsibilities, the amount and timing of resources to be devoted to these activities are not within our control. Our partners may not perform their obligations as expected or we may not derive any additional revenue from the arrangements. Our partners may not pay any additional option or license fees to us or may not develop, market or pay any royalty fees related to products under the agreements. Moreover, some of the collaborative agreements provide that they may be terminated at the discretion of the corporate partner, and some of the collaborative agreements provide for termination under other circumstances. In addition, we may not receive any royalties on future sales of QuickCast™ and PORT™ products because we no longer have control over the sales of those products. Our partners may pursue existing or alternative technologies in preference to our technology. Furthermore, we may not be able to negotiate additional collaborative arrangements in the future on acceptable terms, if at all, and our collaborative arrangements may not be successful.
Both Domestic and Foreign Government Regulations Can Have an Adverse Effect on Our Business Operations
Our products and operations are subject to governmental regulation in the United States and foreign countries. The manufacture of our products is subject to periodic inspection by regulatory authorities. We may not be able to obtain necessary regulatory approvals on a timely basis or at all. Delays in receipt of or failure to receive approvals or loss of previously received approvals would have a material adverse effect on our business, financial condition and results of operations. Although we have no reason to believe that we will not be able to comply with all applicable regulations regarding the manufacture and sale of our products and polymer materials, regulations are always subject to change and depend heavily on administrative interpretations and the country in which the products are sold. Future changes in regulations or interpretations relating to matters such as safe working conditions, laboratory and manufacturing practices, environmental controls, and disposal of hazardous or potentially hazardous substances may adversely affect our business.
We are subject to USDAFood and Drug Administration (“FDA”) rules and regulations concerning the safety of the food products handled and sold by Apio, and the facilities in which they are packed and processed. Failure to comply with the applicable regulatory requirements can, among other things, result in:
● | fines, injunctions, civil penalties, and suspensions, |
● | withdrawal of regulatory approvals, |
● | product recalls and product seizures, including cessation of manufacturing and sales, |
● | operating restrictions, and |
● | criminal prosecution. |
We may be required to incur significant costs to comply with the laws and regulations in the future which may have a material adverse effect on our business, operating results and financial condition.
Our food packaging products are subject to regulation under the Federal Food, Drug, and Cosmetic Act (the “FDC Act”). Under the FDC Act, any substance that when used as intended may reasonably be expected to become, directly or indirectly, a component or otherwise affect the characteristics of any food may be regulated as a food additive unless the substance is generally recognized as safe. Food packaging materials are generally not considered food additives by the FDA because these products are not expected to become components of food under their expected conditions of use. We consider our breathable membrane product to be a food packaging material not subject to regulation or approval by the FDA. We have not received any communication from the FDA concerning our breathable membrane product. If the FDA were to determine that our breathable membrane products are food additives, we may be required to submit a food additive petition for approval by the FDA. The food additive petition process is lengthy, expensive and uncertain. A determination by the FDA that a food additive petition is necessary would have a material adverse effect on our business, operating results and financial condition.
Our Food Products Technology business is subject to the Perishable Agricultural Commodities Act (“PACA”). PACA regulates fair trade standards in the fresh produce industry and governs all the products sold by Apio. Our failure to comply with the PACA requirements could among other things, result in civil penalties, suspension or revocation of a license to sell produce, and in the most egregious cases, criminal prosecution, which could have a material adverse effect on our business.
Lifecore’s existing products and its products under development are considered to be medical devices and therefore, require clearance or approval by the FDA before commercial sales can be made in the United States. The products also require the approval of foreign government agencies before sales may be made in many other countries. The process of obtaining these clearances or approvals varies according to the nature and use of the product. It can involve lengthy and detailed safety, efficacy and clinical studies, as well as extensive site inspections and lengthy regulatory agency reviews. There can be no assurance that any of the Company’s clinical studies will show safety or effectiveness; that any of the Company’s products that require FDA clearance or approval will obtain such clearance or approval on a timely basis, on terms acceptable to the Company for the purpose of actually marketing the products, or at all; or that following any such clearance or approval previously unknown problems will not result in restrictions on the marketing of the products or withdrawal of clearance or approval.
In addition, most of the existing products being sold by Lifecore and its customers are subject to continued regulation by the FDA, various state agencies and foreign regulatory agencies which regulate manufacturing, labeling and record keeping procedures for such products. Marketing clearances or approvals by these agencies can be withdrawn due to failure to comply with regulatory standards or the occurrence of unforeseen problems following initial clearance or approval. These agencies can also limit or prevent the manufacture or distribution of Lifecore’s products. A determination that Lifecore is in violation of such regulations could lead to the imposition of civil penalties, including fines, product recalls or product seizures, injunctions, and, in extreme cases, criminal sanctions.
Federal, state and local regulations impose various environmental controls on the use, storage, discharge or disposal of toxic, volatile or otherwise hazardous chemicals and gases used in some of our manufacturing processes. Our failure to control the use of, or to restrict adequately the discharge of, hazardous substances under present or future regulations could subject us to substantial liability or could cause our manufacturing operations to be suspended and changes in environmental regulations may impose the need for additional capital equipment or other requirements.
We Depend on Strategic Partners and Licenses for Future Development
Our strategy for development, clinical and field testing, manufacture, commercialization and marketing for some of our current and future products includes entering into various collaborations with corporate partners, licensees and others. We are dependent on our corporate partners to develop, test, manufacture and/or market some of our products. Although we believe that our partners in these collaborations have an economic motivation to succeed in performing their contractual responsibilities, the amount and timing of resources to be devoted to these activities are not within our control. Our partners may not perform their obligations as expected or we may not derive any additional revenue from the arrangements. Our partners may not pay any additional option or license fees to us or may not develop, market or pay any royalty fees related to products under such agreements. Moreover, some of the collaborative agreements provide that they may be terminated at the discretion of the corporate partner, and some of the collaborative agreements provide for termination under other circumstances. Our partners may pursue existing or alternative technologies in preference to our technology. Furthermore, we may not be able to negotiate additional collaborative arrangements in the future on acceptable terms, if at all, and our collaborative arrangements may not be successful.
Our Reputation and Business May Be Harmed if Our Computer Network Security or Any of the Databases Containing Our Trade Secrets, Proprietary Information or the Personal Information of Our Employees Are Compromised, Which Could Cause a Material Adverse Effect on Our Results of Operations
Cyber attacks or security breaches could compromise our confidential business information, cause a disruption in the Company’s operations or harm our reputation. We maintain numerous information assets, including intellectual property, trade secrets, confidential financial information, bank system access information and other sensitive information critical to the operation and success of our business on computer networks, and such information may be compromised in the event that the security of such networks is breached. We also maintain confidential information regarding our employees and job applicants, including personal identification information. The protection of employee and company data in the information technology systems we utilize (including those maintained by third-party providers) is critical. Despite the efforts by us to secure computer networks utilized for our business, security could be compromised, confidential information, such as Company information assets and personally identifiable employee information, could be misappropriated or system disruptions could occur.
In addition, we may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyber attacks. Attacks may be targeted at us, our customers or others who have entrusted us with information. Actual or anticipated attacks may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants. Advances in computer capabilities, new technological discoveries or other developments may result in the technology used by us to protect sensitive Company data being breached or compromised. Furthermore, actual or anticipated cyber attacks or data breaches may cause significant disruptions to our network operations, which may impact our ability to deliver shipments or respond to customer needs in a timely or efficient manner.
Data and security breaches could also occur as a result of non-technical issues, including an intentional or inadvertent breach by our employees or by persons with whom we have commercial relationships that result in the unauthorized release of confidential information related to our business or personal information of our employees. Any compromise or breach of our computer network security could result in a violation of applicable privacy and other laws, costly investigations and litigation and potential regulatory or other actions by governmental agencies. As a result of any of the foregoing, we could experience adverse publicity, the compromise of valuable information assets, loss of sales, the cost of remedial measures and/or significant expenditures to reimburse third parties for resulting damages, any of which could adversely impact our brand, our business and our results of operations.
The Global Economy is Experiencing Continued Volatility, Which May Have anAdverse Effect on Our Business
In recent years, the U.S. and international economy and financial markets experienced a significant slowdown and volatility due to uncertainties related to the availability of credit, energy prices, difficulties in the banking and financial services sectors, softness in the housing market, diminished market liquidity, geopolitical conflicts, falling consumer confidence and high unemployment rates. Ongoing volatility in the economy and financial markets could further lead to reduced demand for our products, which in turn, would reduce our revenues and adversely affect our business, financial condition and results of operations. In particular, volatility in the global markets have resulted in softer demand and more conservative purchasing decisions by customers, including a tendency toward lower-priced products, which could negatively impact our revenues, gross margins and results of operations. In addition to a reduction in sales, our profitability may decrease because we may not be able to reduce costs at the same rate as our sales decline. We cannot predict the ultimate severity or length of the current period of volatility, whether the recent signs of economic recovery will prove sustainable, or the timing or severity of future economic or industry downturns.
Given the current uncertain economic environment, our customers, suppliers and partners may have difficulties obtaining capital at adequate or historical levels to finance their ongoing business and operations, which could impair their ability to make timely payments to us. This may result in lower sales and/or inventory that may not be saleable or bad debt expense for Landec. In addition to the impact of the current market uncertainty on our customers, some of our vendors and growers may experience a reduction in their availability of funds and cash flows, which could negatively impact their business as well as ours. A further worsening of the economic environment or continued or increased volatility of the U.S. economy, including increased volatility in the credit markets, could adversely impact our customers’ and vendors’ ability or willingness to conduct business with us on the same terms or at the same levels as they have historically. Further, this economic volatility and uncertainty about future economic conditions makes it challenging for Landec to forecast its operating results, make business decisions, and identify the risks that may affect its business, sources and uses of cash, financial condition and results of operations.
Our International Operations and Sales May Expose Our Business to Additional Risks
For fiscal year 2004,2015, approximately 25%30% of our total revenues were derived from product sales to international customers. A number of risks are inherent in international transactions. International sales and operations may be limited or disrupted by any of the following:
● | regulatory approval process, |
● | government controls, |
● | export license requirements, |
● | political instability, |
● | price controls, |
● | trade restrictions, |
● | changes in tariffs, or |
● | difficulties in staffing and managing international operations. |
Foreign regulatory agencies have or may establish product standards different from those in the United States, and any inability on our part to obtain foreign regulatory approvals on a timely basis could have a material adverse effect on our international business, and our financial condition and results of operations. While our foreign sales are currently priced in dollars, fluctuations in currency exchange rates may reduce the demand for our products by increasing the price of our products in the currency of the countries toin which the products are sold. Regulatory, geopolitical and other factors may adversely impact our operations in the future or require us to modify our current business practices.
Cancellations or Delays of Orders by Our Customers May Adversely Affect Our Business
During fiscal year 2004,2015, sales to our top five customers accounted for approximately 40%46% of our revenues, with our two largest customers Sam's Clubfrom our Packaged Fresh Vegetables segment, Costco and Costco Wholesale Corp., eachWal-Mart accounting for approximately 12%21% and 11%, respectively, of our revenues. We expect that, for the foreseeable future, a limited number of customers may continue to account for a substantial portion of our net revenues. We may experience changes in the composition of our customer base as Apio and Landec Agwe have experienced in the past. We do not have long-term purchase agreements with any of our customers. The reduction, delay or cancellation of orders from one or more major customers for any reason or the loss of one or more of our major customers could materially and adversely affect our business, operating results and financial condition. In addition, since some of the products processed by Apio at its Guadalupe, California facilityand Lifecore are often sole sourced to its customers, our operating results could be adversely affected if one or more of our major customers were to develop other sources of supply. Our current customers may not continue to place orders, orders by existing customers may be canceled or may not continue at the levels of previous periods or we may not be able to obtain orders from new customers.
Our Sale of Some Products May Increase Our ExposureExpose Us to Product Liability Claims
The testing, manufacturing, marketing, and sale of the products we develop involvesinvolve an inherent risk of allegations of product liability. If any of our products were determined or alleged to be contaminated or defective or to have caused a harmful accident to an end-customer, we could incur
substantial costs in responding to complaints or litigation regarding our products and our product brand image could be materially damaged. Either eventSuch events may have a material adverse effect on our business, operating results and financial condition. Although we have taken and intend to continue to take what we believe areconsider to be appropriate precautions to minimize exposure to product liability claims, we may not be able to avoid significant liability. We currently maintain product liability insuranceinsurance. While we think the coverage and limits are consistent with limits in the amount of $41.0 million per occurrence and $42.0 million in the annual aggregate. Ourindustry standards, our coverage may not be adequate or may not continue to be available at an acceptable cost, if at all. A product liability claim, product recall or other claim with respect to uninsured liabilities or in excess of insured liabilities could have a material adverse effect on our business, operating results and financial condition.
Our Stock Price May Fluctuate in Accordance with MarketResponse to Various Conditions, Many of Which Are Beyond Our Control
Over the past several years the stock market has experienced extreme price and volume fluctuations.
The following events may cause the market price of our common stock may fluctuate significantly in response to fluctuate significantly:
● | technological innovations applicable to our products, |
● | our attainment of (or failure to attain) milestones in the commercialization of our technology, |
● | our development of new products or the development of new products by our competitors, |
● | new patents or changes in existing patents applicable to our products, |
● | our acquisition of new businesses or the sale or disposal of a part of our businesses, |
● | development of new collaborative arrangements by us, our competitors or other parties, |
● | changes in government regulations applicable to our business, |
● | changes in investor perception of our business, |
● | fluctuations in our operating results, and |
● | changes in the general market conditions in our industry. |
Fluctuations in our operatingquarterly results and
These broad fluctuations may adversely affect the market priceanalysts or investors changing their valuation of our common stock.
Since We Order CartonsLapses in Disclosure Controls and Film for Our Products from Suppliers in Advance of Receipt of Customer Orders for Such Products, WeProcedures or Internal Control Over Financial Reporting Could Face a Material Inventory RiskMaterially and Adversely Affect the Company’s Operations, Profitability or Reputation
As part
We are committed to maintaining high standards of internal control over financial reporting and disclosure controls and procedures. Nevertheless, lapses or deficiencies in disclosure controls and procedures or in our inventory planning,internal control over financial reporting may occur from time to time. On January 2, 2013, we enter into negotiated orders with vendors of cartonsreported that our audit committee reached a determination to restate our previously-filed interim financial statements for the quarter ended August 26, 2012 and film usedthat our previously-filed interim financial statements for packingthe quarter ended August 26, 2012 should not be relied upon. We also reported management’s determination that a material weakness existed in our products in advance of receiving customer orders for such products. Accordingly, we face the risk of ordering too many cartons and film since orders are generally based on forecasts of customer orders rather than actual orders. If we cannot change or be released from the orders, we may incur costs asinternal control over financial reporting at August 26, 2012. As a result of inadequately predicting cartonsthe material weakness, management also concluded that our disclosure controls and film ordersprocedures were not effective at August 26, 2012.
There can be no assurance that our disclosure controls and procedures will be effective in advance of customer orders. Because of this, wepreventing a material weakness or significant deficiency in internal control over financial reporting from occurring in the future. Any such lapses or deficiencies may currently have an oversupply of cartons and film and face the risk of not being able to sell such inventory and our anticipated reserves for losses may be inadequate if we have misjudged the demand for our products. Our business and operating results could be adversely affected as a result of these increased costs.
Our Seed Products May Fail to Germinate Properly and We May Be Subject to Claims for Reimbursement or Damages for Losses from Customers Who Use Such Products
Farmers plant seed products sold by Landec Ag with the expectation that they will germinate under normal growing conditions. If our seed products do not germinate at the appropriate time or fail to germinate at all, our customers may incur significant crop losses and seek reimbursement or bring claims against us for such damages. Although insurance is generally available to cover such claims, the
costs for premiums of such policies are prohibitively expensive and we currently do not maintain such insurance. Any claims brought for failure of our seed products to properly germinate could materially and adversely affect our operatingbusiness and results of operations or financial results.
Recently Enacted Changes in Securities Laws and Regulations Are Likelycondition, restrict our ability to Increase Our Costs
The Sarbanes-Oxley Act of 2002 (the "Act") that became law in July 2002 requires changes in some of our corporate governance, public disclosure and compliance practices. In addition, Nasdaq has made revisions to its requirements for companies, such as Landec, that are listed onaccess the NASDAQ. We expect these developments to increase our legal and financial compliance costs. We expect these changes to make it more difficult and more expensive forcapital markets, require us to obtain director and officer liability insurance, and we may be requiredexpend resources to accept reduced coveragecorrect the lapses or incur substantially higher costs to obtain coverage. These developments could make it more difficult fordeficiencies, expose us to attract and retain qualified members forregulatory or legal proceedings, harm our board of directors, particularly to serve on our audit committee. We are presently evaluating and monitoring regulatory developments and cannot estimate the timingreputation, or magnitude of additional costs we may incur asotherwise cause a result of the Act.decline in investor confidence.
Our Controlling Shareholders Exert Significant Influence over Corporate Events that May Conflict with the Interests of Other Shareholders
Our executive officers and directors and their affiliates own or control approximately 24% of our common stock (including options exercisable within 60 days). Accordingly, these officers, directors and shareholders may have the ability to exert significant influence over the election of our Board of Directors, the approval of amendments to our articles and bylaws and the approval of mergers or other business combination transactions requiring shareholder approval. This concentration of ownership may have the effect of delaying or preventing a merger or other business combination transaction, even if the transaction or amendments would be beneficial to our other shareholders. In addition, our controlling shareholders may approve amendments to our articles or bylaws to implement anti-takeover or management friendly provisions that may not be beneficial to our other shareholders.
Terrorist Attacks and Risk of Contamination May Negatively Impact All Aspects of Our Operations, Revenues, Costs and Stock Price
The September 2001 terrorist attacks in the United States, as well as future events occurring in response or connection to them, including, future terrorist attacks against United States targets, rumors or threats of war, actual conflicts involving the United States or its allies, or trade disruptions impacting our domestic suppliers or our customers, may impact our operations and may, among other things, cause decreased sales of our products. More generally, these events have affected, and are expected to continue to affect, the general economy and customer demand for our products. While we do not believe that our employees, facilities, or products are a target for terrorists, there is a remote risk that terrorist activities could result in contamination or adulteration of our products. Although we have systems and procedures in place that are designed to prevent contamination and adulteration of our products, a disgruntled employee or third party could introduce an infectious substance into packages of our products, either at our manufacturing plants or during shipment of our products. Were our products to be tampered with, we could experience a material adverse effect in our business, operations and financial condition.
We May Be Exposed to Employment RelatedEmployment-Related Claims and Costs that Could Materially Adversely Affect Our Business
We have been subject in the past, and may be in the future, to claims by employees based on allegations of discrimination, negligence, harassment and inadvertent employment of illegal aliensundocumented workers or unlicensed personnel, and we may be subject to payment of workers' compensation claims and other
similar claims. We could incur substantial costs and our management could spend a significant amount of time responding to such complaints or litigation regarding employee claims, which may have a material adverse effect on our business, operating results and financial condition.
We Are Dependent on Our Key Employees and if One or More of Them Were to Leave, We Could Experience Difficulties in Replacing Them, Efficiently or Effectively Transitioning Their Replacements and Our Operating Results Could Suffer
The success of our business depends to a significant extent uponon the continued service and performance of a relatively small number of key senior management, technical, sales, and marketing personnel. It has been announced that in October 2015 Molly Hemmeter, Landec’s current COO, will become the new CEO of the Company, succeeding Gary Steele, who has served as the Company’s CEO since September 1991 and is retiring as CEO, but will remain on the Company’s Board of Directors. The loss of any of our key personnel for an extended period would likely harm our business. In addition, competition for senior level personnel with knowledge and experience in our different linelines of business is intense. If any of our key personnel were to leave, we would need to devote substantial resources and management attention to replace them. As a result, management attention may be diverted from managing our business, and we may need to pay higher compensation to replace these employees.
We May Issue Preferred Stock with Preferential Rights that Could Affect Your Rights
Our Board of Directors has the authority, without further approval of our shareholders, to fix the rights and preferences, and to issue shares, of preferred stock. In November 1999, we issued and sold shares of Series A Convertible Preferred Stock and in October 2001 we issued and sold shares of Series B Convertible Preferred Stock.
The Series A Convertible Preferred Stock was converted into 1,666,670 shares of Common Stock on November 19, 2002 and the Series B Preferred Stock was converted into 1,744,102 shares of Common Stock on May 7, 2004.
The issuance of additional shares of preferred stock could have the effect of making it more difficult for a third party to acquire a majority of our outstanding stock, and the holders of such preferred stock could have voting, dividend, liquidation and other rights superior to those of holders of our Common Stock.common stock.
We Have Never Paid any Dividends on Our Common Stock
We have not paid any cash dividends on our Common Stockcommon stock since inception and do not expect to do so in the foreseeable future. Any dividends may be subject to preferential dividends payable on any preferred stock we may issue.
The Reporting of Our Profitability Could Be Materially Andand Adversely Affected if it Is Determined that the Book Value of Goodwill is Higher than Fair Value
Our balance sheet includes an amount designated as "goodwill"“goodwill” that represents a portion of our assets and our stockholders'stockholders’ equity. Goodwill arises when an acquirer pays more for a business than the fair value of the tangible and separately measurable intangible net assets. Under a newly issuedIn accordance with accounting pronouncement, Statement of Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets", beginning in fiscal year 2002, the amortization ofguidance, goodwill has been replaced with an "impairment test" which requires that we compare the fair value of goodwill to its book valueis tested for impairment at least annually and more frequently if circumstances indicate a possible impairment. If we determine at any time in the future that the book value of goodwill is higher than fair value then the difference must be written-off,written off, which could materially and adversely affect our reported profitability.
USE OF PROCEEDS
NOTE REGARDING FORWARD-LOOKING STATEMENTS
We will not receive
This prospectus, any proceeds fromprospectus supplement and the sale of the common stock by the selling shareholders in the offering; all net proceeds will go to the selling shareholders.
We are registering the shares covered by this prospectus on behalf of the selling shareholders named in the table below. We originally issued shares of Series B Preferred Stock of the Company to the selling shareholders in a private placement transaction. On May 7, 2004, the selling shareholders converted all of the outstanding shares of Series B Preferred Stock into the shares of common stock covered by this prospectus. We provided the selling shareholders with registration rights with respect to the common stock issued upon conversion of the Series B Preferred Stock and are fulfilling our obligation to such selling shareholders by registering the shares of common stock covered by this prospectus. We are registering the shares to permit the selling shareholders and their pledgees, donees, transferees or other successors-in-interest that receive their shares from a selling shareholder as a gift, partnership distribution or other transfer after the date of this prospectus to resell the shares.
The following table contains information as of August 2, 2004 with respect to the selling shareholders. The following table assumes that the selling shareholders sell all of the shares offered by this prospectus. We are unable to determine the exact number of shares that actually will be sold.
The number and percentage of shares of common stock beneficially owned is based on 23,184,520 of common stock issued and outstanding at August 2, 2004 determined in accordance with Rule 13d-3 of the Exchange Act. The information is not necessarily indicative of beneficial ownership for any other purpose. Under Rule 13d-3, beneficial ownership includes any shares of common stock as to which an individual has sole or shared voting power or investment power, and also includes shares of common stock which an individual has the right to acquire within 60 days of August 2, 2004 through the exercise of any stock option, convertible security or other right. Unless otherwise indicated in the footnotes, each person has sole voting and investment power (or shares the voting and investment powers with his or her spouse) with respect to the shares shown as beneficially owned.
| | Common Shares Beneficially Owned Prior to Offering | | Common Shares Beneficially Owned After Offering | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| | Number of Common Shares Being Offered | ||||||||||
| Beneficial Owners | |||||||||||
| Number | Percentage | Number | Percentage | ||||||||
| Seahawk Ranch Irrevocable Trust II(1)(2) | 2,270,594 | 9.8 | % | 1,744,102 | 526,492 | 2.3 | % | ||||
The selling shareholders may sell the shares from time to time. As used herein "selling shareholder" includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock received after the date of this prospectus from a selling shareholder as a gift, pledge, partnership distribution or other transfer. The selling shareholders will act independently of us in making decisions regarding the timing, manner and size of each sale. The sales may be made on the Nasdaq National Market, one or more exchanges, in the over-the-counter market or otherwise, at prices and at terms then prevailing or at prices related to the then current market price, or in privately negotiated transactions. The selling shareholders may effect these transactions by selling the shares to or through broker-dealers. The selling shareholders may sell their shares in one or more of, or a combination of:
To the extent required, this prospectus may be amended or supplemented from time to time to describe a specific plan of distribution. If the plan of distribution involves an arrangement with a broker-dealer for the sale of shares through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, the amendment or supplement will disclose:
The number of shares of common stock beneficially owned by a selling shareholder will decrease as and when it takes such actions. The plan of distribution for the selling shareholders' shares of common stock sold under this prospectus will otherwise remain unchanged, except that the transferees, pledgees, donees or other successors will be selling shareholders hereunder.
The selling shareholders may enter into hedging transactions with broker-dealers in connection with distributions of the shares or otherwise. In these transactions, broker-dealers may engage in short sales of the shares in the course of hedging the positions they assume with selling shareholders. The selling shareholders also may sell shares short and redeliver the shares to close out short positions. The
selling shareholders may enter into option or other transactions with broker-dealers which require the delivery to the broker-dealer of the shares. The broker-dealer may then resell or otherwise transfer the shares under this prospectus. The selling shareholders also may loan or pledge the shares to a broker-dealer. The broker-dealer may sell the loaned shares, or upon a default the broker-dealer may sell the pledged shares under this prospectus.
In effecting sales, broker-dealers engaged by the selling shareholders may arrange for other broker-dealers to participate in the resales. Broker-dealers or agents may receive compensation in the form of commissions, discounts or concessions from selling shareholders. Broker-dealers or agents may also receive compensation from the purchasers of the shares for whom they act as agents or to whom they sell as principals, or both. Compensation as to a particular broker-dealer might be in excess of customary commissions and will be in amounts to be negotiated in connection with the sale. Broker-dealers or agents and any other participating broker-dealers or the selling shareholders may be deemed to be "underwriters"herein contain forward-looking statements, within the meaning of Section 2(11)ofSection 27A of the Securities Act of 1933, as amended in connection with sales(the “Securities Act”), and Section 21E of the shares. Accordingly, any commission, discount or concession received by them and any profit on the resale of the shares purchased by them may be deemed to be underwriting discounts or commissions under the Securities Act. Because selling shareholders may be deemed to be "underwriters" within the meaning of Section 2(11) of the Securities Act, the selling shareholders will be subject to the prospectus delivery requirements of the Securities Act. In addition, any securities covered by this prospectus that qualify for sale under Rule 144 promulgated under the Securities Act may be sold under Rule 144 rather than under this prospectus. The selling shareholders have advised that they have purchased their securities in the ordinary course of business and have not entered into any agreements, understandings or arrangements with any persons, including underwriters or broker- dealers, regarding the sale or transfer of their securities. There is no underwriter or coordinating broker acting in connection with the proposed sale of shares by the selling shareholders.
The shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in some states the shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Words such as “projected,” “expects,” “believes,” “intends,” “assumes” and similar expressions are used to identify forward-looking statements. These statements are made based upon current expectations and projections about our business and assumptions made by our management and are not guarantees of future performance, nor do we assume any person engagedobligation to update such forward-looking statements after the date this report is filed. Our actual results could differ materially from those projected in the distributionforward-looking statements for many reasons, including the factors referred to above under the caption “Risk Factors” and the factors that we identify in the documents we incorporate by reference in this prospectus. You should read these factors and the other cautionary statements made in this prospectus, any prospectus supplement and the documents we incorporate by reference as being applicable to all related forward-looking statements wherever they appear in this prospectus, any prospectus supplement and in the documents incorporated by reference. We do not assume any obligation to update any forward-looking statements we make.
USE OF PROCEEDS
Unless we specify another use in the applicable prospectus supplement, we will use the net proceeds from the sale of the securities offered by us for general corporate purposes, which may include working capital and/or capital expenditures. We may also use such proceeds to fund acquisitions of businesses, technologies or product lines that complement our current business. However, we currently have no commitments or agreements for any specific acquisitions. We may set forth additional information on the use of net proceeds from the sale of the securities we offer under this prospectus in a prospectus supplement related to a specific offering.
DESCRIPTION OF CAPITAL STOCK
Our certificate of incorporation authorizes the Company to issue two classes of stock to be designated, respectively, “common stock” and “preferred stock.” The total number of shares may not simultaneously engage in market making activitiesthat the Company is authorized to issue is 52,000,000, each with respect to oura par value of $0.001 per share. The number of shares of common stock for a periodauthorized to be issued is 50,000,000, and the number of two business days priorshares of preferred stock authorized to the commencementbe issued is 2,000,000.
Subject to any preferential rights of the distribution. In addition, each selling shareholder will be subject to applicable provisions of the Exchange Act and the associated rules and regulations under the Exchange Act, including Regulation M, which provisions may limit the timing of purchases and salespreferred stock, holders of shares of our common stock are entitled to receive dividends on that stock out of assets legally available for distribution when, as and if authorized and declared by the selling shareholders.Board of Directors and to share ratably in assets legally available for distribution to our stockholders in the event of our liquidation, dissolution or winding-up. We willmay not pay any dividend or make copiesany distribution of this prospectus availableassets on shares of common stock until cumulative dividends on shares of preferred stock then outstanding, if any, having dividend or distribution rights senior to the selling shareholderscommon stock have been paid. We have not paid any dividends on our common stock since inception and have informed themdo not expect to in the foreseeable future.
Holders of common stock are entitled to one vote per share on all matters voted on generally by our stockholders, including the election of directors. In addition, the holders of common stock possess all voting power except as otherwise required by law or except as provided for by any series of preferred stock. Our certificate of incorporation provides for the classification of our Board of Directors into two classes serving staggered two-year terms, and does not provide for cumulative voting for the election of directors.
No preemptive, conversion or redemption rights or sinking funds provisions are applicable to our common stock.
Under our certificate of incorporation, the Company may issue preferred stock from time to time in one or more series. The Board of Directors is authorized, by filing a certificate pursuant to the applicable law of the needState of Delaware and within the limitations and restrictions stated in our certificate of incorporation, to deliver copiesdetermine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of this prospectuspreferred stock and the number of shares constituting any such series and the designation thereof, or any of them; and to purchasers atincrease or decrease the number of shares of any series subsequent to the issuance of shares of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any series shall be so decreased, the shares constituting such decrease will resume the status which they had prior to the time of any saleadoption of the shares.resolution originally fixing the number of shares of such series.
We
The transfer agent and registrar for our common stock is Broadridge Corporate Issuers Solutions, Inc.
PLAN OF DISTRIBUTION
Each prospectus supplement will bear all costs, expenses and fees in connection withdescribe the registrationmethod of the shares. The selling shareholders will bear all commissions and discounts, if any, attributable to the sales of the shares. The selling shareholders may agree to indemnify any broker-dealer or agent that participates in transactions involving sales of the shares against specific liabilities, including liabilities arising under the Securities Act. The selling shareholders have agreed to indemnify the Company against specific liabilities in connection with the offering of the shares, including specified liabilities under the Securities Act. We have agreed to indemnify the selling shareholders against specified liabilities in connection with the offering of the shares, including specified liabilities under the Securities Act
We have agreed to maintain the effectiveness of this registration statement until the earlier of (i) such date as the selling shareholders have sold alldistribution of the common stock offered by them pursuant to thisthe prospectus or (ii) such date as the selling shareholders are able to sell all of the common stocksupplement.
held by them pursuant to Rule 144 of the Securities Act during any ninety day period. No sales may be made based on this prospectus after the expiration date unless we amend or supplement this prospectus to indicate that we have agreed to extend the period of effectiveness. The selling shareholders
We may sell all, some or none of the shares offered by this prospectus.
The validity of the issuance of the common stock offered by this prospectus in one or more of the following ways from time to time:
● | to or through underwriters or dealers, |
● | directly to purchasers, including our affiliates, |
● | through agents, |
● | through a block trade in which the broker or dealer engaged to handle the block will attempt to sell the securities as agent, but may position and resell a portion of the block as principal to facilitate the transaction, or |
● | through a combination of any of these methods of sale. |
We may distribute the common stock from time to time in one or more transactions at a fixed price or prices, which may be changed from time to time, at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices. We may engage in “at the market” offerings of our common stock. An “at the market” offering is an offering of our common stock at other than a fixed price to or through a market maker.
We will set forth in a prospectus supplement the terms of the offering of our securities, including some or all of the following:
● | the amount of common stock we are offering, |
● | the purchase price of the common stock being offered and the net proceeds we will receive from the sale, |
● | the method of distribution of the common stock we are offering, |
● | the name or names of any agents, underwriters or dealers, |
● | any over-allotment options under which underwriters may purchase additional shares of common stock from us, |
● | any underwriting discounts and commissions or agency fees and commissions and other items constituting underwriters’ or agents’ compensation, and |
● | any discounts or concessions allowed or reallowed or paid to dealers. |
Sale Through Underwriters or Dealers
If we use an underwriter or underwriters in the sale of common stock offered by this prospectus, the underwriters will acquire the common stock for their own account, including through underwriting, purchase, security lending or repurchase agreements with us. The underwriters may resell the common stock from time to time in one or more transactions, including negotiated transactions. Underwriters may sell the securities in order to facilitate transactions in any of our other securities, including other public or private transactions and short sales. Underwriters may offer the common stock to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. Unless otherwise indicated in the prospectus supplement, the obligations of the underwriters to purchase the shares of common stock will be subject to certain conditions, and the underwriters will be obligated to purchase all the offered shares of common stock if they purchase any of them. The underwriters may change from time to time any public offering price and any discounts or concessions allowed or reallowed or paid to dealers.
If we use an underwriter or underwriters in the sale of the common stock, we will execute an underwriting agreement with the underwriter or underwriters at the time we reach an agreement for sale. We will set forth in the applicable prospectus supplement the names of the specific managing underwriter or underwriters, as well as any other underwriters, and the terms of the transactions, including compensation of the underwriters and dealers. This compensation may be in the form of discounts, concessions or commissions.
We may grant to the underwriters options to purchase additional shares of common stock to cover over-allotments, if any, at the public offering price with additional underwriting discounts or commissions. If we grant any over-allotment option, the terms of any over-allotment option will be set forth in the prospectus supplement relating to those shares of common stock.
Sale Through Dealers
If we use dealers in the sale of common stock offered by this prospectus, we or an underwriter will sell the shares to them as principals. The dealers may then resell the shares of common stock to the public at varying prices to be determined by the dealers at the time of resale. The applicable prospectus supplement will set forth the names of the dealers and the terms of the transactions.
Direct Sales
We may directly solicit offers to purchase securities offered by this prospectus. In this case, no underwriters or agents would be involved. We may sell securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any sale of securities. The terms of any such sales will be described in the prospectus supplement.
Sales Through Agents
Securities also may be offered and sold through agents designated from time to time. The prospectus supplement will name any agent involved in the offer or sale of securities and will describe any commissions payable to the agent. Unless otherwise indicated in the applicable prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment. Any agent may be deemed to be an underwriter within the meaning of the Securities Act with respect to any sale of securities.
Delayed Delivery Contracts
If the applicable prospectus supplement indicates, we may authorize agents, underwriters or dealers to solicit offers from institutions to purchase securities at the public offering price under delayed delivery contracts. These contracts would provide for payment and delivery on a specified date in the future. Institutions with which contracts of this type may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions, but in all cases those institutions must be approved by us. The obligations of any purchaser under any contract of this type will be subject to the condition that the purchase of securities may not at the time of delivery be prohibited under the laws of the jurisdiction to which the purchaser is subject. The applicable prospectus supplement will describe the commission payable for solicitation of those contracts.
Market Making, Stabilization and Other Transactions
Our common stock is listed on NASDAQ. Any common stock sold pursuant to a prospectus supplement to this prospectus will be eligible for listing and trading on NASDAQ, subject to official notice of issuance.
Any underwriters that we use in the sale of offered securities also may engage in stabilizing transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Stabilizing transactions involve bids to purchase the underlying security in the open market for the purpose of pegging, fixing or maintaining the price of the securities. Syndicate covering transactions involve purchases of the securities in the open market after the distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the securities originally sold by the syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions. Stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the securities to be higher than it would be in the absence of the transactions. The underwriters may, if they commence these transactions, discontinue them at any time.
Derivative Transactions and Hedging
The underwriters or other agents may engage in derivative transactions involving the securities. These derivatives may consist of short sale transactions and other hedging activities. The underwriters or agents may acquire a long or short position in the securities, hold or resell securities acquired and purchase options or futures on the securities and other derivative instruments with returns linked to or related to changes in the price of the securities. In order to facilitate these derivative transactions, we may enter into security lending or repurchase agreements with the underwriters or agents. The underwriters or agents may effect the derivative transactions through sales of the securities to the public, including short sales, or by lending the securities in order to facilitate short sale transactions by others. The underwriters or agents also may use the securities purchased or borrowed from us or others (or, in the case of derivatives, securities received from us in settlement of those derivatives) to directly or indirectly settle sales of the securities or close out any related open borrowings of the securities.
General Information
Agents, underwriters, and dealers may be entitled, under agreements entered into with us, to indemnification by us against specified liabilities, including liabilities under the Securities Act, or to contribution by us to payments they may be required to make in respect to such liabilities. The applicable prospectus supplement will describe the terms and conditions of indemnification or contribution. Some of our agents, underwriters, and dealers, or their affiliates, may be customers of, engage in transactions with or perform services for us, in the ordinary course of business. We will describe in the prospectus supplement the nature of any such relationship and the name of the parties involved. Any lockup arrangements will be set forth in the applicable prospectus supplement.
LEGAL MATTERS
The validity of the securities offered pursuant to this prospectus will be passed upon for us by Orrick, HerringtonGodfrey & Sutcliffe LLP, Menlo Park, California.Kahn, S.C., Milwaukee, Wisconsin.
The consolidated financial statements of the Company appearing in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2015, and the effectiveness of the Company’s internal control over financial reporting as of May 31, 2015, have been audited by Ernst & Young LLP, independent registered public accounting firm, have audited our consolidated financial statements and schedules included in our Annual Report on Form 10-K for the year ended May 30, 2004, as set forth in their report, which isreports thereon, included therein, and incorporated herein by reference in this prospectus and elsewhere in the registration statement. Ourreference. Such financial statements and schedules are incorporatedaudited by referenceErnst & Young LLP have been included in reliance on Ernst & Young LLP's report,their reports given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MOREADDITIONAL INFORMATION
We file annual, quarterly and special reports and other information with the U.S. Securities and Exchange Commission (the "SEC"). Our commission file number is 0-27446. You may read and copy any document that we have filed at the SEC's public reference rooms located at 450 Fifth Street N.W., Room 1024, Washington, D.C. 20549, and at the SEC's regional offices located at 233 Broadway, New York, New York 10279 and at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Please call the SEC at 1-800-732-0330 for more information about the Public Reference Room facilities. Our SEC filings are also available to you free of charge at the SEC's website atwww.sec.gov.
Our common stock is quoted on the Nasdaq National Market under the symbol "LNDC." Copies of publicly available documents that have been filed with the SEC can be inspected and copied at the offices of the National Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
We have filed a registration statement on Form S-3 with the SEC that coversrelating to the securities offered by this prospectus. This prospectus is part of the registration statement, however, the prospectus does not includecontain all of the information includedset forth in the registration statement and its exhibits. As a result, you should refer tothe exhibits and schedules thereto. We have omitted parts of the registration statement, for additional information about usas permitted by the rules and regulations of the common stock offered under this prospectus.SEC. Statements that we makecontained in this prospectus relatingas to the contents of any documentsdocument referred to are not necessarily complete and in each instance reference is made to the copy of such document filed as an exhibit to the registration statement, or any document incorporatedeach such statement being qualified in all respects by such reference. For further information with respect to us and the securities offered hereby, reference into theis made to such registration statement, are not necessarily completeexhibits and you should review the referenced document itself for a complete understanding of its terms.schedules.
We also file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings may be inspected by anyone without charge and copies of these materials may be obtained upon the payment of the fees prescribed by the SEC, at the Public Reference Room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available through the Internet website maintained by the SEC at the following address: http://www.sec.gov.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate“incorporate by reference" thereference” information we file with them, whichinto this prospectus. This means that we can disclose important information to you by referring you to those documents.another document filed separately with the SEC. The information incorporated by reference is considered to be part of this prospectus, and later information that we file later with the SEC will automatically update and supersede previously filed information, including information contained in this document.
information. We incorporate by reference the following documents listed below and(excluding any future filingsportions of such documents that have been “furnished” but not “filed” for purposes of the Exchange Act):
● | our Annual Report on Form 10-K for the fiscal year ended May 31, 2015; |
● | our Current Reports on Form 8-K filed with the SEC on June 3, 2015, July 28, 2015 and October 2, 2015; |
● | our definitive proxy statement on Schedule 14A filed with the SEC on August 24, 2015; |
● | our Quarterly Report on Form 10-Q for the three months ended August 30, 2015; and |
● | the description of our common stock contained in our Registration Statement on Form 8-A filed with the SEC on December 21, 1995. |
We incorporate by reference any additional documents that we will makemay file with the SEC under SectionsSection 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act (excluding any portion of 1934 until this offering has been completed.
All documents subsequently filed by Landec under Sections 13(a), 13(c), 14 and 15(d)purposes of the Exchange Act, prior toAct), including reports filed after the terminationdate of the offering, shall be deemedinitial filing of the registration statement and before the effectiveness of the registration statement, until we sell all of the securities offered by this prospectus or terminate this offering.
You may request a copy of any of the documents referred to beabove, other than an exhibit to a filing unless the exhibit is specifically incorporated by reference in this registration statement from the date ofinto that filing, the documents.
You may request free copies of these filingsat no cost, by contacting us in writing or telephoning us at the following address: by telephone at:
Gregory S. Skinner
Chief Financial Officer Landec Corporation, and Vice President of Finance and Administration
3603 Haven Avenue
Menlo Park, California 94025-1010 94025
(650) 306-1650.306-1650
LANDEC CORPORATION
No person has been authorized to give any information or to make any representations other than those contained in$100,000,000
Common Stock
Prospectus
, 2015
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expense of Issuance and Distribution.
The following table sets forth the Prospectusexpenses incurred by Landec in connection with the offeroffering of the securities being registered. All of the amounts shown are estimates except for the SEC registration fee.
SEC registration fee | $ | 10,070 | ||
Legal fees and expenses | * | |||
Accounting fees and expenses | * | |||
Transfer agent fees | * | |||
Miscellaneous expenses | * | |||
Total | $ | * |
________
* | The applicable prospectus supplement will set forth the estimated aggregate amount of expenses payable with respect to any offering of common stock registered hereunder. |
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the “DGCL”) provides that a corporation may indemnify any person, including an officer or director, who was or is, or is threatened to be made, a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by this Prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by Landec or by any selling shareholder. Neither the delivery of this Prospectus nor any sale made based on this Prospectus shall under any circumstances create an implication that there has been no change in the affairsright of Landecsuch corporation), by reason of the fact that such person is or was a director, officer, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of this date. This Prospectus does not constitute an offeranother corporation, partnership, joint venture, trust or solicitationother enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by anyone in any state in which an offer or solicitation is not authorized or in which thesuch person making the offer or solicitation is not qualified to do so to anyone to whom it is unlawful to make an offer or solicitation.
1,744,102 Shares
Landec Corporation
Common Stock
PROSPECTUS
August 3, 2004
PART IIINFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses Of Issuance And Distribution
The following table contains the costs and expenses payable by the Registrant in connection with such action, suit or proceeding, provided such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the distributionbest interests of such corporation, and, with respect to any criminal actions and proceedings, had no reasonable cause to believe that his or her conduct was unlawful. A Delaware corporation may indemnify any person, including an officer or director, who was or is, or is threatened to be made, a party to any threatened, pending or contemplated action or suit by or in the right of such corporation, under the same conditions, except that such indemnification is limited to expenses (including attorneys’ fees) actually and reasonably incurred by such person, and except that no indemnification is permitted without judicial approval if such person is adjudged to be liable to such corporation. Where an officer or director of a corporation is successful, on the merits or otherwise, in the defense of any action, suit or proceeding referred to above, or any claim, issue or matter therein, the corporation must indemnify that person against the expenses (including attorneys’ fees) that such officer or director actually and reasonably incurred in connection therewith.
Section 145 of the Common Stock being registered. AllDGCL further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his or her status as such, whether or not the corporation would otherwise have the power to indemnify him under Section 145.
The rights provided in Section 145 of the DGCL are not exclusive, and a corporation may also provide for indemnification under bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
Article XIV of the registrant’s certificate of incorporation authorizes the registrant, to the fullest extent permitted by applicable law, to provide indemnification of (and advancement of expenses to) such agents (and any other persons to which Delaware law permits the registrant to provide indemnification) through bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the DGCL, subject only to limits created by applicable Delaware law (statutory or non-statutory), with respect to actions for breach of duty to a corporation, its stockholders, and others. Section 6.1 of Article 6 of the registrant’s amended and restated bylaws requires the registrant, to the maximum extent and in the manner permitted by the DGCL, to indemnify each of its directors and officers against expenses (including attorneys’ fees), judgments, fines, settlements and other amounts are estimated, exceptactually and reasonably incurred in connection with any proceeding, arising by reason of the SEC registration fee:
| SEC registration fee | $ | 1,177.81 | |
| Accounting fees and expenses | $ | 10,000.00 | |
| Legal fees and expenses | $ | 20,000.00 | |
| Miscellaneous | $ | ||
| Total | $ | 31,177.81 | |
Item 15. Indemnification Of Directors And Officers
The Registrant's Articlesfact that such person is or was an agent of Incorporation reduce the liabilityregistrant. For purposes of this provision, a “director” or “officer” of the registrant includes any person (a) who is or was a director of the registrant, (b) who is or was serving at the request of the registrant as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, or (c) who was a director or officer of a corporation that was a predecessor corporation of the registrant or of another enterprise at the request of such predecessor corporation.
The registrant has purchased liability insurance applicable to its directors and certain officers as permitted by Section 145 of the DGCL.
Section 102(b)(7) of the DGCL permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its shareholdersstockholders for monetary damages for breachesbreach of his or her fiduciary duty as a director, except for liability for (i) any breach of carethe director’s duty of loyalty to the fullest extent permissible under California law (the "California Law"). Under the California Law, a director's liability to a companycorporation or its shareholders may not be limited with respect to the following items: (i)stockholders, (ii) acts or omissions not in good faith or that involve intentional misconduct or a knowing and culpable violation of law, (ii) acts(iii) payments of unlawful dividends or omissions that a director believes to be contrary to the best interests of the companyunlawful stock repurchases or its shareholdersredemptions, or that involve the absence of good faith on the part of the director, (iii)(iv) for any transaction from which athe director derived an improper personal benefit, (iv) acts or omissionsbenefit.
Article XIII of the registrant’s certificate of incorporation provides that, show a reckless disregard for the director's duty to the company or its shareholders in circumstances in whichfullest extent permitted by the director was aware, or should have been aware, in the ordinary course of performing a director's duties, of a risk of a serious injury to the company or its shareholders, (vi) contracts or transactions between the company and a director within the scope of Section 310 of the California Law or (vii) improper dividends, loans and guarantees under Section 316 of the California Law. The limitation of liability does not affect the availability of injunctions and other equitable remedies available to the Registrant's shareholders for any violation byDGCL, a director of the director'sregistrant shall not be personally liable to the registrant or its stockholders for monetary damages for breach of fiduciary duty to the Registrant or its shareholders.as a director.
The Bylaws of the Registrant further provide for indemnification of corporate agents to the maximum extent permitted by the California Law. In addition, the Registrant has entered into Indemnification Agreements with certain of its officers and directors. The Indemnification Agreements provide that the Registrant shall provide the maximum indemnification allowable under the current or future law, regardless of anything contained (or which may in the future be contained) in the Registrant's Articles or Bylaws, or in other sections of the Indemnification Agreement (which have been designed to track current law) against any damages incurred by such officers and directors in connection with their actions as officers or directors of the Registrant. The Indemnification Agreements also set forth the procedural mechanics for the parties to observe in case indemnification becomes necessary. In addition, the Indemnification Agreements provide that, if the Registrant refuses to indemnify the officer or director pursuant to the agreement, it must pay the expenses of an action brought by the officer or director to enforce the agreement (unless the action is frivolous or in bad faith). The Indemnification Agreements require the Registrant to periodically determine whether or not to obtain directors' and officers' liability insurance and (if it obtains such insurance) to include the indemnitee under its coverage. The Indemnification Agreements require approval of the Registrant of any settlement which is the subject of indemnification.
II-1
Exhibit |
| |||
1.1* | Form of Underwriting Agreement, if any | |||
4.1 | Certificate of Incorporation of Registrant, incorporated herein by reference to Exhibit | |||
4.2 | Amended and Restated Bylaws of Registrant, incorporated herein by reference to Exhibit 3.1 to the | |||
5.1 | Opinion of | |||
23.1 | Consent of Ernst & Young | |||
23.2 | Consent of | |||
24.1 | Powers of Attorney |
_____________
* | To be filed by an amendment to the registration statement or as an exhibit to a Current Report on Form 8-K under the Exchange Act, subsequent to effectiveness, if necessary. |
Item 17. Undertakings
Undertakings.
a. The undersigned Registrantregistrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
(i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement;
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to the information in the registration statement;
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
provided, however,, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(ii)(iii) do not apply if the information required to be included in a post-effective amendment toby those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrantregistrants pursuant to sectionSection 13 or sectionSection 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purposepurposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities
II-2
offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDEbona fide offering at that time.thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of securities, in a primary offering of the securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
b. The undersigned Registrantregistrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant'sregistrant’s annual report pursuant to sectionSection 13(a) or sectionSection 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statementregistration statement shall be deemed to be a new Registration Statementregistration statement relating to the securities offering in the Registration Statement,offered therein, and the offering of such securities at thatthe time shall be deemed to be the initial BONA FIDEbona fide offering at that time.thereof.
c.Insofar as indemnification for liabilities arising under the Securities Act of 1933 as amended, may be permitted to directors, officers and controlling persons of the Registrantregistrant pursuant to the foregoing provisions, described in Item 15 above, or otherwise, the Registrantregistrant has been advised that in the opinion of the Securities and Exchange Commission thesuch indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrantregistrant of expenses incurred or paid by a director, officer or controlling person of the Registrantregistrant in the successful defense of any action, suit or proceeding) is asserted by thesuch director, officer or controlling person in connection with the securities being registered, the Registrantregistrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether thesuch indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of thesuch issue.
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d. The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrantregistrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statementregistration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Menlo Park, State of California, on this 3rd day of August, 2004.October 16, 2015.
LANDEC CORPORATION | ||
(Registrant) | ||
| By: | /s/ Gregory S. Skinner | |
Gregory S. Skinner Chief | ||
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gary T. Steele and Gregory S. Skinner, and each of them, his attorney-in-fact, with the power of substitution, to sign any amendments to this Registration Statement (including post-effective amendments), and to file same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.indicated:
/s/ Molly A. Hemmeter | Date: October 16, 2015 | |||
Molly A. Hemmeter President and Chief Executive Officer (Principal Executive Officer) | ||||
/s/ Gregory S. Skinner | Date: October 16, 2015 | |||
Gregory S. Skinner Chief Financial Officer and |
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Directors: | Gary T. Steele; Nicholas Tompkins; Robert Tobin; Albert D. Bolles, Ph.D; Frederick Frank; Steven Goldby; Catherine A. Sohn; and Tonia Pankopf |
| By: | /s/ | Date: October 16, 2015 | |||
Gregory S. Skinner, As Attorney-in-Fact* *Pursuant to authority granted by powers of attorney. | |||||
Exhibit Index
Exhibit No. | Description | |||
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1.1* | Form of Underwriting Agreement, if any | |
4.1 | Certificate of Incorporation of Registrant, incorporated herein by reference to Exhibit | |
4.2 | Amended and Restated Bylaws of Registrant, incorporated herein by reference to Exhibit 3.1 to the | |
5.1 | Opinion of | |
23.1 | Consent of Ernst & Young | |
23.2 | Consent of | |
24.1 | Powers of Attorney of the directors of the Company | |
_____________
* | To be filed by an amendment to the registration statement or as an exhibit to a Current Report on Form 8-K under the Exchange Act, subsequent to effectiveness, if necessary. |
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