22NW Fund Files Fraud and Breach of Contract Lawsuit Against Lifecore Biomedical (LFCR)
Key Summary: On May 16, 2024, 22NW Fund (12.5%) nominated six individuals for the Board of Directors. The company's 2023 AGM is on August 15, 2024. The company informed 22NW Fund that only Class II Directors will be elected. Thus, only Class II nominees will be up for election. 22NW Fund can reassign the nominees' classes for the election. On July 1, 2024, 22NW Fund, LP (12.4%) entered into a Cooperation Agreement with the company. Legion Partners Asset Management, LLC, and Wynnefield Capital, Inc., and their respective affiliates entered into similar support agreements. On December 23, 2024, 22NW Fund sued the company and its directors in New York, alleging fraud and contract breaches tied to a January 2023 Securities Purchase Agreement.
Market Cap: $275 million | Lifecore Biomedical, Inc., together with its subsidiaries, operates as an integrated contract development and manufacturing organization in the United States and internationally.
- On May 16, 2024, 22NW Fund (12.5%) sent a letter to the company nominating six individuals for the Board of Directors: Jason Aryeh and Richard Cunningham as Class I Directors, and Nathaniel Calloway, Ph.D., Matthew Korenberg, Elaine Thibodeau, and Beau Garrett as Class II Directors. The company's 2023 AGM is scheduled for August 15, 2024. The company informed 22NW Fund that only Class II Directors will be elected at this meeting. Consequently, only the nominees for Class II Directors will be up for election. 22NW Fund retains the option to reassign the nominated directors' classes for the election. Source
- On June 11, 2024, 22NW Fund sent a letter to the company demanding a special shareholder meeting on August 14, 2024. The meeting aims to address two proposals: first, to declassify the Board for annual director elections starting from the 2023 Annual Meeting, without affecting current directors' terms; and second, to postpone the 2023 Annual Meeting, convene a Joint Annual Meeting with the 2024 meeting by November 30, 2024, and approve an amendment for Declassification before the Joint Annual Meeting. Source
- On June 28, 2024, the company entered into a Cooperation Agreement with Wynnefield Partners (16%) and pursuant to it, the Board agreed to nominate Mr. Obus to the Board as a Class 1 director at the company’s 2024 AGM. Source
- On July 1, 2024, 22NW Fund, LP (12.4%) entered into a Cooperation Agreement with the company. Pursuant to it, the company added 22NW nominees Jason Aryeh and Matthew Korenberg, as well as Humberto Antunes and Paul Johnson, to the Board. Additionally, 22NW withdrew its nomination notice and its demand for a special meeting of stockholders to vote on an advisory proposal to declassify the Board. Legion Partners Asset Management, LLC, and Wynnefield Capital, Inc., and their respective affiliates entered into similar support agreements.
- On December 23, 2024, 22NW Fund filed a complaint in New York's Supreme Court against the company and several directors and officers, alleging securities fraud, common law fraud, negligent misrepresentation, and breach of contract related to a Securities Purchase Agreement from January 2023. The lawsuit seeks damages, reformation of the agreement to adjust the conversion price for Series A Preferred Stock, and specific performance requiring the company to hold a shareholder meeting and issue common stock as required under the agreement. Source
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