Lifecore Biomedical Announces Pending Change of Auditor and Provides Expectation for Business Update

Rhea-AI Summary

Lifecore Biomedical, Inc. (LFCR) announced Ernst & Young LLP's decision not to stand for reappointment as the Company's independent registered public accounting firm for the fiscal year ending May 26, 2024. The board of directors has started a search for a replacement. Lifecore also plans to provide a business update on April 1, 2024, including financial data for fiscal year 2024 and commercial business updates.

Financial Analyst

The departure of Ernst & Young LLP as the independent auditor for Lifecore Biomedical is a significant event that can raise questions among investors regarding the integrity and reliability of the company's financial reporting. The role of an independent auditor is to provide assurance that a company's financial statements are free from material misstatement, whether due to fraud or error. A change in auditors can sometimes be associated with disagreements on accounting practices or concerns raised by the outgoing auditor.

In assessing the potential impact on Lifecore's stock, one would consider the timing and reasons for the auditor's decision not to stand for reappointment. The lack of explicit reasoning provided could lead to speculation and uncertainty. Investors should monitor the company's efforts to appoint a new auditor and any subsequent communications that clarify the change. The forthcoming business update could be pivotal in providing reassurance to the market, especially if it includes positive financial data and commercial progress.

Market Research Analyst

From a market perspective, Lifecore Biomedical's announcement may influence investor perception, potentially affecting the company's share price. The CDMO industry is highly competitive and trust in a company's financial health is paramount. The market will look for signals of stability in the upcoming business update. If the provided financial data and commercial business matters reflect growth or stability, it may mitigate concerns over the auditor change.

However, if the market perceives the auditor change as a red flag, this could lead to increased stock volatility. Investors and analysts will likely scrutinize the company's selection process for a new auditor and the transparency of their future financial disclosures. The quality and reputation of the replacement auditor will also be under observation, as it can influence the perceived credibility of Lifecore's financial reporting.

Corporate Governance Expert

Changes in a company's auditor are closely linked to corporate governance practices. While it is not uncommon for companies to change auditors, the context and communication around the change are critical. Lifecore Biomedical must ensure that the transition is seamless and that the new auditor is capable of upholding the highest standards of independence and scrutiny.

Good corporate governance would dictate that Lifecore addresses investor concerns proactively, providing clear and comprehensive reasons for Ernst & Young's departure. This transparency will be important in maintaining shareholder trust. Additionally, the company's board of directors should demonstrate due diligence in the selection of a new auditor, ensuring that the chosen firm has a strong track record in the industry. The effectiveness of the board in handling this situation will be reflected in investor confidence and, ultimately, in the company's market performance.

CHASKA, Minn., March 26, 2024 (GLOBE NEWSWIRE) --  Lifecore Biomedical, Inc. (NASDAQ: LFCR) (“Lifecore” or the “Company”), a fully integrated contract development and manufacturing organization (“CDMO”), announced today that Ernst & Young LLP, the Company’s independent registered public accounting firm for the fiscal year ended May 28, 2023, determined that it declined to stand for reappointment as the Company’s independent registered public accounting firm for the Company’s fiscal year ending May 26, 2024 following the filing of the Company’s Annual Report on Form 10-K. Lifecore’s board of directors has initiated a search for a replacement.

In addition, the Company expects to provide a business update on Monday, April 1, 2024, which is expected to include certain select financial data for fiscal year 2024 and an update on commercial business matters.

About Lifecore Biomedical

Lifecore Biomedical, Inc. is a fully integrated contract development and manufacturing organization (CDMO) that offers highly differentiated capabilities in the development, fill and finish of complex sterile injectable pharmaceutical products in syringes and vials. As a leading manufacturer of premium, injectable grade Hyaluronic Acid, Lifecore brings more than 40 years of expertise as a partner for global and emerging biopharmaceutical and biotechnology companies across multiple therapeutic categories to bring their innovations to market. For more information about the Company, visit Lifecore’s website at www.lifecore.com.

Important Cautions Regarding Forward-Looking Statements
This press release contains forward-looking statements regarding future events and our future results that are subject to the safe harbor created under the Private Securities Litigation Reform Act of 1995 and other safe harbors under the Securities Act of 1933 and the Securities Exchange Act of 1934. Words such as “anticipate”, “estimate”, “expect”, “project”, “plan”, “intend”, “believe”, “may”, “might”, “will”, “should”, “can have”, “likely” and similar expressions are used to identify forward-looking statements. All forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially, including such factors among others, as the outcome of any evaluation of the Company’s strategic alternatives or any discussions with any potential bidders related thereto, the Company’s ability to become current with its reports with the Securities and Exchange Commission (the “SEC”), and the timing thereof, the Company’s ability to regain compliance with applicable listing standards under Nasdaq, and its ability expand its relationship with its existing customers. For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to our filings with the SEC, including the risk factors contained in our most recent Annual Report on Form 10-K. Forward-looking statements represent management’s current expectations and are inherently uncertain. Except as required by law, we do not undertake any obligation to update forward-looking statements made by us to reflect subsequent events or circumstances.

Lifecore Biomedical, Inc. Contact Information:
Jeff Sonnek
(646) 277-1263
jeff.sonnek@icrinc.com

Why did Ernst & Young LLP decline to stand for reappointment as Lifecore's independent registered public accounting firm?

Ernst & Young LLP decided not to stand for reappointment after the filing of Lifecore's Annual Report on Form 10-K for the fiscal year ended May 28, 2023.

When is Lifecore expected to provide a business update?

Lifecore plans to provide a business update on Monday, April 1, 2024.

What will the business update include?

The business update is expected to include certain select financial data for fiscal year 2024 and updates on commercial business matters.