Good afternoon, and thank you for joining Landec's fiscal 2022 second quarter earnings call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, I will provide instructions on how to ask your question. Now I would like to turn the call over to Jeff Sonnek, Investor Relations at ICR. Good afternoon, and thank you for joining us today to discuss Landec Corporation's second quarter fiscal 2022 earnings results. On the call today from the company are Dr. Albert Bolles, President and Chief Executive Officer, John Morberg, Chief Financial Officer, and Jim Hall, President of Lifecore. By now, everyone should have access to the press release, which went out today just after 1:00 P.M. Pacific or 4:00 P.M. Eastern. If you've not received the release, it's available on the investor relations portion of Landec's website at ir.landec.com. Before we begin today, we'd like to remind everyone of the safe harbor statement. Certain statements made in the course of this conference call contain forward-looking statements. It's important to note that the company's actual results could differ materially from those projected in such forward-looking statements. Additional information concerning risk factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the company's filings with the SEC, including, but not limited to, the company's Form 10-K for fiscal year 2021. Copies of these filings may be obtained from the company's website. With that, I'd like to turn the call over to Albert. Thanks, Jeff. Good afternoon, everyone, and thank you for joining us today. On today's call, I will provide an update on our progress with Project SWIFT. Jim Hall will then review recent developments at Lifecore, and then John Morberg will discuss our financial results and updated fiscal 2022 outlook. We will then open the call for your questions. We've been quite busy since we last spoke to you in September. As you can now see, our focus has been on executing the sale of our Eat Smart fresh packaged salad and vegetables business, which closed on December thirteenth for $73.5 million in cash. This asset sale marked an important milestone in Project SWIFT and demonstrates ongoing efforts to extract value from our non-core assets within our Curation Foods business and reorient the company around our rapidly growing Lifecore Biomedical business. We have already utilized the net proceeds from the transaction to pay down debt, which instantly reduced our balance sheet leverage. This puts the business back on a firm foundation and allows us the flexibility to channel our resources to more fully support the growth and expansion of the Lifecore business. With the divestment of Eat Smart, and while there's more work to do, management is laser-focused on the Lifecore business and the remaining Curation assets that are growing at a higher rate, produce more attractive margins, and have value that we believe is presently underappreciated. As such, we will be focusing most of our attention and discussion going forward during our quarterly updates on Lifecore, which is generating the vast majority of our consolidated adjusted EBITDA and has provided Landec with a consistent and growing source of high-margin revenue since our acquisition of the business in 2010. In fact, Lifecore's revenue has grown at a compound annual rate of 15.4% since then, which is really impressive performance. Before I pass the call over to Jim for a review of Lifecore, I also want to take a moment to characterize our financial reporting for the fiscal second quarter, as well as our guidance for the balance of the fiscal year. Since the Eat Smart sale occurred subsequent to fiscal second quarter end, we are providing you with a pro forma look at the Curation Foods segment for the first half of fiscal 2022, as well as the full year of fiscal 2021 to aid in your modeling of the go-forward business. John will share some greater insights on the financials and related guidance, but I want to recognize the great performance at Lifecore. Revenue growth accelerated to a 7% increase in second quarter, which understates the accomplishment given some of the channel inventory headway we were working through in fiscal first half. Adjusted EBITDA growth was 26%. Lifecore continues to perform well. We are excited for a strong fiscal second half of the year, and we couldn't be more excited about what lies ahead. With that, I'll pass the call over to Jim for a deeper review of the Lifecore business. Thank you, Albert. We operate in the amazing CDMO industry with strong fundamentals, and Lifecore is perfectly positioned to take advantage of the growing CDMO opportunities to deliver attractive financial returns to all of our stakeholders. We are a beneficiary of the significant industry trends towards outsourcing of new drug development, and our syringe and vial filling capabilities align perfectly with the powerful trends in new injectable drug applications that are utilizing these capabilities. In fact, approximately 55% of all new drug applications are injectables, and prefilled syringe demand is growing at a 13% compound annual rate. Coupled this backdrop with limited injectable drug manufacturing capacity, and Lifecore is presented with an incredible opportunity to fill unmet demand with our existing capacity that we've been investing in over the past few years. Activity within our pipeline remains strong. In the fiscal second quarter, we initiated work on two new projects that we established development agreements for late in the first quarter. This maintains our development pipeline at 23 projects with 19 different customers, which are spread across early phase clinical development with five projects, phase I and II clinical development with eight projects, and phase III clinical development and scale-up commercial validation activity with 10 projects. Moving forward, as we continue to build and prepare the organization to advance and expand our development pipeline, activity remains strong, and we are in active discussions with many potential new project candidates to continue to expand our pipeline. In addition, development activity for the existing pipeline continues to advance with several new statements of work being initiated in the first half of this fiscal year to continue advancing the projects through their development cycle. Lifecore also received three key FDA approvals during our fiscal second quarter. First, Lifecore was approved to manufacture a key product in one of our existing commercial customers' product portfolios. Second, Lifecore received FDA approval for a new manufacturing process that we designed and validated to support commercial scale manufacturing for one of our customers' recently approved drug products. Finally, we received FDA registration for our new state-of-the-art raw material warehouse to support increased raw material requirements and volumes as we continue to grow. All of these approvals were key components to support our future growth and provide continued validation of Lifecore's world-class quality management system. We also see an opportunity for Lifecore to grow and extend our reach through investments in new capabilities to meet the industry's ever-growing needs. Our expertise in viscous materials and our world-class quality management system that supports drugs, biologics, medical devices, and combination products enables us to stand out as a specialized leader in the CDMO industry. We are preparing for this through operational and capital investments. The $1.6 million investment in the P&L this fiscal year is focused on sales, marketing, and development resources to expand our reach with new customers and to increase our development services, which ultimately allow us to continue to expand our pipeline and open new sales channels that expand and complement our existing capabilities. From a capital investment perspective, we are focused on maximizing the revenue-generating capacity within our current infrastructure and looking to the future to source and qualify the necessary equipment to keep up with growth and expected capacity needs. We continue to expect capital investments in fiscal 2022 of approximately $32 million towards expanding our operational filling capacity beyond our current 10 million units to reach full utilization of the 22 million units of theoretical capacity that we built the infrastructure around. More specifically, it is this enhancement in capacity utilization that will allow us to drive continued growth in the years ahead. In summary, we are excited about the excellent position that we're in today. We are benefiting from the strong industry trends, and our investments in capacity will allow us to continue to generate strong, sustainable growth in the years ahead. Now I would like to turn the call to John. Thank you, Jim. Lifecore had a great fiscal second quarter. The business realized total revenues of $24.9 million or a 7.4% increase versus the prior year period, driven by a 17% increase in its CDMO business, partially offset by a 27.8% decrease in its fermentation business, which was a result of timing of shipments within the fiscal year. Additionally, consider that we face headwind from excess channel inventory in the fiscal first half of the year, which we've largely moved through here early in the fiscal third quarter. Gross profit margin improved by approximately 185 basis points versus the prior year to 47%, largely due to improved revenue mix. Segment EBITDA totaled $9.1 million for the quarter, a 25.6% increase over the prior year, with an EBITDA margin of 36.6%. The Lifecore business is on track for a strong step-up in growth in the fiscal second half of this year as we move past the excess channel inventory, and we are supporting that with a reiteration of our Lifecore segment guidance on both the top line and EBITDA. We are guiding Lifecore revenues to a range of $105 million-$108 million, representing growth of approximately 7%-10%, and adjusted EBITDA in the range of $26 million-$27 million, representing an increase of approximately 6%-10%. As a reminder, the difference in growth rates this year where EBITDA lags revenue is entirely due to the $1.6 million of P&L investment that we are utilizing as we prepare for our next phase of growth. Let's now shift to Curation Foods and related financials. We've recast our Curation segment results and have provided pro forma results for the first half of fiscal 2022 and full year fiscal 2021. Our hope is that this will provide the necessary basis to understand the go-forward segment, which is now comprised of our avocado products business, our O Olive Oil and Vinegar business, and BreatheWay. Together, this represents approximately $75.5 million of annual revenue at the midpoint of our new segment guidance, with avocado products representing approximately 85% of the mix. With that foundation, I'll make just a few comments on the pro forma Curation Foods segment results versus the comparable pro forma prior year period. First, revenue increased 10.6% in fiscal second quarter, comprised of a 4.5% increase in avocado products to $15.4 million, with the balance representing O Olive sales. Note that O Olive has historically been included in the fresh packaged salads and vegetables business categorization that we used prior to the sale of Eat Smart. Curation Foods generated a pro forma adjusted EBITDA loss of $0.4 million, which compares to a loss of $0.2 million in the prior year period. However, as you think about adjusted EBITDA production from the remaining business and on a pro forma basis, please consider that we are in the midst of a reverse integration. The separation of the Eat Smart business will require us to rightsize our go-forward infrastructure with a smaller revenue base. This work commenced with the sale but will take six to nine months to fully execute. As we work through the transition services agreement with the buyer of Eat Smart and our reverse integration efforts, there will be stranded corporate costs that weigh on the segment margin in the near term, which could amount to approximately $2 million in annual savings. As it pertains to the updated outlook for fiscal 2022, we are providing you figures on a reported basis and a pro forma basis to help clear up some of these nuances brought about by the sale of Eat Smart. The bottom line message here is that we are not materially changing the key underlying assumptions for the remaining business, Avocado Products, O Olive, and BreatheWay. The primary change in revenue guidance on a like-for-like basis is the second quarter underperformance of the now sold Eat Smart business, as well as the anticipated lost contribution of that business in the fiscal second half. Additionally, I point out that we have reallocated approximately $3.5 million in corporate expense allocation from the sold business back to our corporate other segment. Once again, we will be working through a rightsizing of our corporate structure over the next six to nine months and expect some additional savings and time. The Eat Smart sale has significant impacts on our balance sheet as well. Net bank debt on a reported basis for fiscal second quarter as of November 29, 2021 was $165.1 million. However, on a pro forma basis, adjusting for the utilization of the Eat Smart sale net proceeds of $67.9 million, net debt would have been approximately $97 million. This compares to net bank debt at the end of fiscal 2021 of $192.6 million, an improvement of nearly 50% or $100 million in the year-to-date period, which reflects the sale of our Windset investment in the first quarter and the Eat Smart disposition in December. We still have some more work to do, but our cash flows are significantly more stable, our margin structure is significantly more attractive, and our growth profile is greatly improved. We believe this set of attributes provides a solid foundation for our team to begin demonstrating consistent operating results that could be better appreciated by the investment community as we work to deliver shareholder value. With that, operator, please open the call for questions. At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your headset before pressing the star keys. One moment please while we poll for questions. Our first question is from Gerry Sweeney with Roth Capital. Please proceed with your question. Good afternoon, Albert, John, and Jim. Thanks for taking my call. Yeah. Hi, Gerry. Hi, Gerry. Wanted to start on, you know, obviously, Lifecore, because that's the focus and, you know, congratulations again on, you know, the Eat Smart sale. Curious if this sale actually... How do we say this? Just curious maybe if Lifecore—obviously, there's a lot of capital intensive. You know, and there may have been some constraints on the capital side, but also curious if this also constrained maybe some customer acquisition opportunities. A lot of these potential opportunities are, you know, not written in, but are part of the phase III trials, et cetera. Will this open up more customer opportunities? Which, in other words, I think some customers look at, you know, the food business as a, you know, a drag and cause a little bit of caution in coming to Lifecore for opportunities. Yeah. Gerry, let me just start out here by saying, you know, this year, we have mentioned that it's an investment year at Lifecore. We have, you know, plans. We've already implemented some capital close to $30 million in capital investments to grow those future opportunities. As Jim mentioned, you know, we've invested $1.6 million more in the new business development pipeline to attract more customers. We've invested not only money, but we have added resources at Lifecore to bring in some new talent to really continue to drive that investment pipeline and bring more customers on board in the future. Jim, anything more you'd like to add to that, or John? Yeah, sure. Hi, Gerry, this is Jim. To directly answer your question, I don't think it's gonna have an impact one way or another. I think we're really happy and confident at where things are heading with Lifecore. The activity in our development pipeline remains strong. Every aspect of our development pipeline continues to transfer and transition through the development phases, which ultimately, you know, turn into commercial opportunities for us. The work we've done to expand that pipeline with our investment and how we go out and target opportunities is on track. We've hired 10 out of 11 key positions that we had identified to build up not only the development resources to accelerate the development pipeline, but I've also brought in a new VP of corporate strategy from the CDMO world to help us expand that. Darren Hieber is his name, and he's on board now and digging in and really helping us look differently at how we go out and target opportunities. The knocks on the door are still really frequent. There's a lot of things we're in discussion with that hopefully will onboard soon. More to come on that front, but we're very happy where things are at. We spent a lot of time over the last quarter trying to balance out the quarters and when we're doing development work and the development activity, and the investment has allowed us to do that as you see the performance in the second quarter and projections for the rest of the year. We're very comfortable with where Lifecore's at right now and where we're headed. Suffice to say that $1.6 million in business development is increasing the pipeline base or opportunity, I guess is the way to say. It's allowing us to react quicker and go after more. Our intent was to have that start impacting the back half of this fiscal or later in the second half of this fiscal year, but really start kicking in FY 2023 and beyond. Yeah, we're very happy with where we're at. What is the capacity? I mean, obviously, 23 projects in the pipeline and, you know, some of those may filter out, you know, depending on how some of the trials go and et cetera. How much capacity do you have? And the other, I guess, the follow on is, I think you're at 10,000 or what was it, 10 million units- You're going to $22 million. To hit that $22 million, you know, what does that pipeline have to look like? I know it's like a multi-year process, but just trying to get an idea of how that sort of all plays out over the next couple of years. Yeah, really, I mean, it's ultimately our goal to have that pipeline continue to build, and we add resources to support that when needed. We still have room to expand and grow the pipeline with what we're adding now. To give you a specific number of projects is tough just because it depends on the workload and where things are at. Sure. how long they take to go through. As an example, you know, one of the projects that are in our late phase here is going very well, and I just signed the 43rd statement of work for that project. You can see how long. How long it takes, yeah. They take to develop in various stages. Overall capacity to drive to $22 million, the things that really drive that are already in our pipeline. Okay The investments focus to fill that out and we're also, as you know, 'cause that we've talked about in the past, looking at beyond that and starting to get the fill lines in to go beyond the $22 million. Got it. Really helpful. Well, again, congratulations on the Eat Smart and look forward to, you know, seeing Lifecore grow faster or further, I should say. Thank you. Yeah. Yeah. Thank you, Gerry. Our next question is from Mark Smith with Lake Street Capital Markets. Please proceed with your question. Hi, guys. First question for me is, can you just walk through any remaining headwinds within Lifecore and kind of as you move through those, anything that's remaining? Any headwinds in Lifecore? Yeah, just as you talked a little bit about the industry, some of the things that slowed some of the growth this year, kind of how you're working through those and kind of your outlook. Yeah. Well, our growth was impacted once again by the $1.6 million in investment in building a more robust pipeline for us that we went through. You know, the other impact was we were sitting on a high degree of inventory late in Q4 and Q1 of HA. That was primarily driven by our customers, primarily international and COVID. We have moved through that more rapidly than what we had planned for. You know, we don't see any slowdown with the last phase here or the next phase of COVID. Those are the two headwinds that we had that I think we are pretty comfortable with, and we're moving forward. Jim, anything you wanna add to that? Yeah. Hey, Mark. Albert covered it pretty well. You know, we went into the year, especially in the ophthalmic side of our business, with heavier inventories because of the slowdown due to COVID. We implemented a very frequent meetings and planning meetings with supply chain groups from both our customers and Lifecore, so we're getting a lot more real-time data. We're happy to say that, you know, we have worked through the heavier inventories. Orders have picked back up. Demand's picking back up, not in all markets, but generally and overall picking back up. Haven't seen any impacts related to this latest phase of COVID, and if we do, we'll be all over it since we talk very frequently with our customers on the inventory planning side of things. It's worked through. You should start seeing the HA side of the business start picking back up in the second half. We're happy with where that's headed and you know, things are on track as we laid out the fiscal year. Perfect. Then you guys gave a lot of info on the pipeline. You know, it sounds like it remains very strong. You know, maybe just big picture, walk us through how selective you can be in deals and new partnerships, you know, and how much of this is really, you know, people knocking on your door versus having to go out and work for these new partnerships. Yeah. I mean, we're fairly selective in that we wanna make sure we're partnering with people that we can provide value to. Typically we look at Lifecore's niche is in the complex type formulation products, whether they're viscous, whether they're complex to formulate, or synthesize, those are things we look at. We wanna make sure we add value. We wanna make sure we're working with people that have experience and have a product with a market that we can support. Really, we're agnostic. If it's something we can provide value to and we can partner with, we do it. Historically, Lifecore's primary driver was our performance. Our project pipeline, as you can see, is 23 projects with 19 different customers. We have a lot of repeat customers, and we have some customers in that pipeline that are, you know, referred to us from people we've worked with. What the investments tended to do is start focusing more of a hunting style for us to go out and actually find things that are in development and be more aggressive in going after them. We think that's gonna be a key part to expanding the pipeline beyond where it is today. Yeah. Mark- Go ahead. Based on our activity and our track record of, you know, high quality facilities, the work and how well we execute at Lifecore and our relationships with FDA, we have a pretty high hit rate of folks that get in our pipeline that we end up keeping their business. Perfect. That leads really to my next question. Just as we look at, you know, projects and commercialization, any update there? You know, it sounds like we've seen good things out of this Heron project. You know, any updates there on those that have really advanced through approval and now in commercialization? Yeah. I mean, the things that are in late phase III, I mean, I can't report on data or anything like that, but I can tell you they are progressing well and on the timelines that we have laid out in our projections internally. You also heard me talk about three key FDA approvals. The first of those was for an ophthalmic product in one of our customers, commercial customers', product portfolios. It was the only one we were not approved to manufacture yet, but that approval will be key for us to continue to expand business with them moving forward. The process approval was a key approval for not only Lifecore, but for our customer, and that allows us to really scale up to feed not only their U.S. launch, but OUS launch as well. The other key approval is our warehouse. We needed the additional space, temperature-controlled space to handle the increase in raw materials with the increase in our manufacturing capacity. All three of those support where Lifecore is heading longer term and were key approvals for us as we continue to grow. Yeah. Last question for me, just wanted to ask once on the remaining piece of Curation. You know, those businesses look pretty solid. Can you just talk a little bit more any about the outlook and maybe insight into the timing or expectation on disposal of some of those assets? Yeah. Let me talk a bit about Avocado Products. You know, Mark, we launched this test market in Cincinnati on Guacamole Now. We got very, very strong results. We doubled our velocities. 54% of households that purchased the product came back, so we have a very high repeat rate of 20%. You know, the gain of, you know, 54% of households that had not ever tried the product. Our key issue has always been trial, and once we get trial, we have very strong repeat. We're very excited about the Guacamole Now product, and we're looking at converting that nationally in March right to be completed before Cinco de Mayo. We also launched a new product called Only Avocado. It's just avocado without all the spices in it. We were pleasantly surprised that we increased incremental sales by 60%. We brought a lot of new buyers into the category, and we are looking at extending that nationally here in the beginning of or the end of January, early February. We're excited about the things that we're doing on the Avocado Products business. You know, part of Project SWIFT has been for us to you know look at everything and we were really pleased. The board was very pleased with the sale and the price we got at $73.5 million on the Eat Smart business. That really helped us in the last six months to really get our balance sheet in a much better spot by taking down $100 million in debt. You know, we continue to work. It's a process that we continue to work. Perfect. Thank you, guys. Our next question is from Mitch Pinheiro with Sturdivant & Co., Inc. Please proceed with your question. Hi, good afternoon. Hi, Mitch. Hey, I have a bunch of questions, but sort of follow-up to what Gerry was asking, I guess to Jim regarding capacity. You know, you are currently at 10 million, going to 22. Does that capacity, is it kinda go up linearly, or does it go up based on how your project pipeline. And when does the capacity actually, you know, Can you give us some timeline on that? And then also, of the 10 million, what are you currently running? Are you at 50% of that 10 million or higher? Any color would be helpful there. Yeah. Jim, you wanna take that for Mitch? Sure. Hey, Mitch. Break down your question here. Currently, we're staffed and ancillary equipment to handle 10 million units. We typically try to keep our capacity ahead of demand and don't like demand ever to reach more than 80% of capacity if we can help it to handle fluctuations in demand, especially on the upside. This fiscal year, with everything we got running through from a commercial standpoint and later phase development fills, we're doing approximately 8 million units, maybe a little bit more than that. As far as fill rates from the capacity, it's not linear. It just depends on the approval rate and the demand of those approvals. It's our goal to fill that capacity as fast as we can. We haven't provided any forward-looking guidance yet on how fast that gets filled. The one thing I have talked about in the past that you know you've heard is that we're already investing in capacity beyond the filling capacity and the filling equipment beyond 22 million units. We have two fill lines on order now. It takes three to four years to get those in place. That should give you some guidance in where we see and how fast we think we're gonna need the additional capacity beyond 22 million units. The $32 million that you're spending this year, that doesn't take you to the $22 million, does it? Part of that is to fill out the 22 million units. Part of it is to go beyond, you know, for some of the longer lead time filling equipment. It's a relatively pretty even breakout from about 35% or so of our capital spend this year fills out the 22 million units. We'll need to continue to spend capital over the next few years to continue to fill that out, like I talked about. If lead times on equipment like lab equipment or mixers or filters or things like that are a lot shorter lead time, so we don't spend the money till we need it and always keep our capacity to handle the 80% demand equation I talked about earlier. The other parts of it are to go beyond 22 million units. We also spent capital this year to expand our development capabilities and expand our equipment offering there. The rest of the capital is just what we refer to as base or maintenance CapEx. It's kind of broken out in those four buckets. Do you think, I know you're not giving forward guidance, but from a CapEx spending perspective, is next year going to be lower than the $32 million spend this year? John, do you wanna cover capital at all? Yeah, sure. Hey, Mitch. Yeah, as Jim said, you know, we haven't yet given out, you know, guidance on our forward plans. We're still looking at those. I think we've said in the past, our capital is gonna be somewhat chunky, you know, depending on the year and depending on the needs, depending on the lead times. You know, we're still kind of working on that. You know, we plan to have and be speaking towards that very soon, though. Back to Jim. You know, we have 23 projects in the pipeline. That was the same number as in Q1. The two new projects that you added, does that imply that two of the other projects moved into commercial production? Yeah. We had one move into commercial production. We had one preclinical product that is, we don't consider active right now, so we took that off the list. Okay. It's not going away. It's just in a phase where we're not spending any time on it. The two new ones that we added, we basically signed the agreements right towards the end of our first quarter, and work really began this fiscal year. Yeah, the number's the same as I reported in Q1, but the activity is a lot higher now because of the work actually started. Okay. You know, when it comes to HA, and not in the fermentation side, but you know, sort of as a strategic competency, you know, core competency that you have, you'd mentioned that a year ago or so that about 60% of your pipeline was HA-related. That to me just you know, as I read up on HA, it seems like that would be you know, a big strategic advantage and a large element of your pipeline build, having the expertise you know, with HA being you know, a drug delivery system. Is that where a lot of the activity you see coming from, the HA part? Or you know, is your pipeline going forward gonna significantly diversify away from HA and related derivatives? Yeah. Actually, with the current product mix in our pipeline, 70% of them utilize HA. It's a strong tool for us, and really, you know, what really has built our capabilities and our niche, and always gonna be very important. I know, in the several things we're talking with as potential projects, a good percentage of those, kind of in that same neighborhood as what we're actively working on are HA. We want people that are developing products with, you know, pharmaceutical injectable grade HA to come to Lifecore. The things we're working on, obviously, Lifecore is the major player in the HA world in the ophthalmic market for viscoelastics. We have several things in that pipeline, from the ophthalmic realm. Age-related macular degeneration, dry eye, advancement in viscoelastic formulations, those are things we're working on. There are also quite a few things in, you know, wound management and general surgery, drug delivery, things like that utilize HA that are expanding beyond our historical ophthalmic focus. A few things in orthopedics, cancer tumor therapy, things like that, so from a drug delivery standpoint. It is a focus. You've heard me talk that we sell research HA to the research community to several hundred different researchers annually. That kind of seeds the future development in the HA world. Sometimes that takes several years before something materializes into a product. We're still happy with where things are going in our pipeline. I think longer term, more non-HA-based products will be joining that pipeline. Not taking anything away from the HA, but there's just so much being developed in several applications that don't utilize HA but utilize our skill set. I think it'll start balancing out in the coming years. Thank you. Just one more question, probably for John and Albert, perhaps. When it comes to the corporate overhead, and you talked about stranded costs and you're rightsizing the corporate, you know, structure. You know, right now, Lifecore absorbs about $5 million of your overhead. Is that. So when you think of it, when you're. When all is said and done, we're nine months into the process as you get through some of the Curation expenses. I mean, where. What does that $5 million look like? It's gonna grow, you know, obviously there's corporate expenses, but of your sort of other corporate expenses, where. How much can you take that down? You mentioned a $2 million number in annualized savings. I wasn't sure how that fit in. If you could, just talk a little bit about that, it'd be helpful. Yeah. Let me give you a high level, and I'll let John Morberg get into the details with you. You know, we just closed the Eat Smart business, you know, here in December. We're working through a reverse integration process right now, Mitch, where we're you know, looking at rightsizing the corporate overhead, rightsizing the avocado business as we go forward. That's gonna be a process that, as we stated, you know, it's gonna take six to nine months. You know, we've estimated around $2 million in stranded costs. Right now we're really just working through the reverse integration. We have a TSA with the buyer that, you know, we're working through to make sure that we have a smooth, orderly transition of the business to them with no customer interruptions, no quality issues. We're in the midst of evaluating all of those costs right now, Mitch. John, anything you wanna add there? Yeah. I think you handled it pretty well there. Mitch, you know, we've also had this corporate structure. We've been operating basically a holding company with two different companies working underneath it. For one point on Lifecore, you know, we don't see changing that management fee or that allocation certainly for the rest of this fiscal year. That's not impacting them. Instead, we'll see costs in the integration, reverse integration costs on the corporate line structure. We see an opportunity there as we reverse integrate to make that structure fit within the, you know, the platform that we have. We'll also see on the Curation side, those stranded costs also be reverse integrated. There's really kind of two buckets of potential savings here that we'll be working through over the next you know two to three quarters. Okay. Helpful. That actually prompted one more question. We have, you know, right now about $97 million of debt. You know, obviously, you know, you're gonna generate cash. You still have another, you know, $15-$20 million of capital spending to do, based on your six-month spend so far. When we get done this fiscal year, how do you think debt's gonna look, considering, you know, the, you know, meeting your TSA, and things like that? Are we gonna see, sort of a, like a cash flow break even for Curation for the rest of the year? Let me first tell you about where I think debt's gonna end up. You know, the $97 million will obviously go up from there with the CapEx spend. If you think about it, we're spending $32 million at Lifecore. We said we would spend up to $7 million at Curation. That number's now down to about $1 million, obviously with the sale. If you add that, we're also at a period of time where we're investing in our working capital, and it's on the Curation side primarily. On the avocado product seasonally, this is where we're buying, picking, and creating our guacamole. The same on the olive side. We're now into the picking and the crush season. Obviously, we use that working capital over the summer months and into next year. Right now, we see our debt somewhere around $130 million by the end of our fiscal year at the end of May. From a cash flow perspective, you're right. On the Curation side, we see that being essentially flat. Okay. Our use of debt in the end is really, at this point, CapEx and working capital for the balance of this fiscal year. of that move, that 30. You know, if you get up to $130 million of debt, is that $33 million, that incremental $33 million, like basically half the capital spending and half working capital increase? Yeah, that's about right. Okay. If you recall, we thought we would be, you know, closer to $180 million per our last conference call for a year-end, you know, debt figure. Certainly, the balance sheet is getting a lot better. Okay. All right. Thank you very much. Appreciate the questions. Thank you, Mitch. In the interest of time, we ask that you please ask one question followed by one follow-up question. Our next question is from Anthony Vendetti with Maxim Group. Please proceed with your question. Okay, thanks. Yeah, I just have... Most of the question's been asked, but just a couple quick follow-ups. Just, on the strategy officer, I guess, Jim, is that the only hire you're intending to make, or, is this the first hire in an effort to expand the sales force, expand the marketing to try to drive, you know, even more projects into that funnel? Yeah. Hi, Anthony. Go ahead, Jim. This is the first, obviously, the strategic hire. I wanted just somebody to come in who could then do an assessment and work with the rest of my executive team and me to look at what our strategy is, where we're going, where we wanna go, and then what kind of gaps we have within the organization across the board, right? With project management, development services, and then marketing and sales to support you know an expanded effort to bring more and targeted opportunities in here. We're actively putting that together. There will be more and we have that planned for later this fiscal year and early next year. The first step was to get that position filled. We've done that and are running full speed ahead. Okay. Just before I have a quick question on the gross margin. Do you have a number of people that you're targeting to hire? Is it a couple more? Is it 10 more? Any range, or is that process still ongoing to determine? Yeah, the process is still ongoing to determine. We've made some estimates that I don't wanna talk about yet until we actually finish the analysis. It's been taken into account for our operating plans moving forward and will for future fiscal years as well. Yeah, Anthony, we also- Okay. -added a- Sure, go ahead. Anthony, we also added a head of HR who brought in a real talented people pro. You know, it's helping Jim build out the team more. As you said, he's working through that process right now and, you know, more to come later. Those were the two big hires. Okay, great. Okay, excellent. Just lastly on the gross margin, you know, a little bit better than we were expecting. Should that be considered the new base as sort of a low- to mid-30s% or mid-30% combined, I guess, corporate gross margin? Is that how we should look at the combined business at this point? Yeah. John, you wanna take that? Yeah. I mean, look, on the gross margin side, obviously had a great quarter, and so much of that had to do with the revenue mix for the quarter. You know, we had very strong development services revenue that really drove the, you know, the gross margin story in the quarter. And I think one of the interesting things that, and Jim could speak to, is what he's trying to do in balancing out the revenues for the year with a lot of our customers that would help generate kind of a more consistent profile, you know, in the gross margin and in the EBITDA margin side as well. I don't know, Jim, you wanna speak to that? Yeah. I mean, in general, we had a strong margin performance in Q2 related to shifting of some of the development work into that quarter. Overall, we still manage the overall blend of the business and the margins to be in the upper 30s, where we've historically done, and that's where we should come out this fiscal year as well. Okay, great. Thanks very much. I'll hop back into queue. Appreciate it. We have reached the end of the question and answer session, and I will now turn the call over to Dr. Bolles for closing remarks. Yeah. We are really looking forward to the new business here as we look forward to higher margin, more profitable, and a far more stable high-growth business. We're very excited about the future here at Landec. Thank you again for your interest in Landec Corporation and your participation on the call today. We look forward to talking to you once again when we release our fiscal third quarter results. Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.