Landec Corp/CA – ‘10-K’ for 10/29/00

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Annual Report   —   Form 10-K
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Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                         60    355K 
 2: EX-10.28    Material Contract                                     15     64K 
 3: EX-10.29    Material Contract                                     59    183K 
 4: EX-10.30    Material Contract                                     10     40K 
 5: EX-23.1     Consent of Experts or Counsel                          1      6K 

10-K   —   Annual Report
Document Table of Contents

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 FORM 10-K

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE   
ACT OF 1934                                                           

FOR THE FISCAL YEAR ENDED OCTOBER 29, 2000, OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES        
EXCHANGE ACT OF 1934                                                  

For the Transition period from _____ to _________.

 Commission file number: 0-27446

LANDEC CORPORATION
(Exact name of registrant as specified in its charter)

 CALIFORNIA                                   94-3025618
(State or other jurisdiction of                       (IRS Employer       
incorporation or organization)                    Identification Number)  

 3603 HAVEN AVENUE
MENLO PARK, CALIFORNIA 94025
(Address of principal executive offices)

Registrant's telephone number, including area code:   
(650) 306-1650

 Securities registered pursuant to Section 12(b) of the Act:

Title of each class                   Name of each exchange on which registered 
-------------------                   ----------------------------------------- 
None                                               None             

 Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001 per share
(Title of Class)

 Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of   
1934 during the preceding 12 months (or for such shorter period that the        
registrant was required to file such reports), and (2) has been subject to such 
filing requirements for the past 90 days.                                       

 Yes X  No
       ---   ---

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements   
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]                                                                  

  The aggregate market value of voting stock held by non-affiliates of the
Registrant was approximately $46,050,000 as of January 5, 2001, based upon the  
closing sales price on the NASDAQ National Market reported for such date. Shares
of Common Stock and Convertible Preferred Stock held by each officer and        
director and by each person who owns 10% or more of the outstanding Common Stock
and Convertible Preferred Stock have been excluded from such calculation in that
such persons may be deemed to be affiliates. This determination of affiliate    
status is not necessarily a conclusive determination for other purposes.        

 As of January 5, 2001, there were 16,149,086 shares of Common Stock and
166,667 shares of Convertible Preferred Stock, convertible into ten shares of   
Common Stock for each share of Preferred Stock, par value $0.001 per share,     
outstanding.                                                                    

DOCUMENTS INCORPORATED BY REFERENCE                                             

 Portions of the registrant's definitive proxy statement relating to its
2001 Annual Meeting of Shareholders, which statement will be filed not later    
than 120 days after the end of the fiscal year covered by this report, are      
incorporated by reference in Part III hereof.                                   

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LANDEC CORPORATION
ANNUAL REPORT ON FORM 10-K

 TABLE OF CONTENTS

                                                        [Enlarge/Download Table]

ITEM NO.                                                                                     PAGE
-------                                                                                      ----
                                                                                                 
 Part I                                                                                          

   1.     Business..........................................................................    3

   2.     Properties........................................................................   16

   3.     Legal Proceedings.................................................................   16

   4.     Submission of Matters to a Vote of Security Holders...............................   16

 Part II                                                                                         

   5.     Market for Registrant's Common Equity and Related Stockholder Matters.............   17

   6.     Selected Consolidated Financial Data..............................................   18

   7.     Management's Discussion and Analysis of Financial Condition and Results of             
          Operations........................................................................   20

   7A.    Quantitative and Qualitative Disclosures about Market Risk........................   30

   8.     Financial Statements and Supplementary Data.......................................   30

   9.     Changes in and Disagreements with Accountants on Accounting and Financial              
          Disclosure........................................................................   30

Part III                                                                                         

   10.    Directors and Executive Officers of the Registrant................................   31

   11.    Executive Compensation............................................................   31

   12.    Security Ownership of Certain Beneficial Owners and Management....................   31

   13.    Certain Relationships and Related Transactions....................................   31

 Part IV                                                                                         

   14.    Exhibits, Financial Statement Schedules, and Reports on Form 8-K..................   32

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PART I
ITEM 1.  BUSINESS                                                               

     Except for the historical information contained herein, the matters
discussed in this report are forward-looking statements that involve certain    
risks and uncertainties that could cause actual results to differ materially    
from those in the forward-looking statements. Potential risks and uncertainties 
include, without limitation, those mentioned in this Report and, in particular, 
the factors described in Item 7 under "Additional Factors That May Affect Future
Results."                                                                       

GENERAL                                                                         

     Landec Corporation and its subsidiaries ("Landec" or the "Company")
design, develop, manufacture and sell temperature-activated and other specialty 
polymer products for a variety of food products, agricultural products,         
specialty industrial and medical applications. This proprietary polymer         
technology is the foundation, and a key differentiating advantage, upon which   
the Company has built its business.                                             

         Landec's Food Products Technology business, operated through its wholly
owned subsidiary Apio, combines Landec's proprietary food packaging technology  
with the capabilities of a large national food supplier and value-added produce 
processor. This combination was consummated in December 1999 when the Company   
acquired Apio, Inc. and certain related entities (collectively "Apio").         

       The Company's Agricultural Seed Technology business, operated through
its wholly owned subsidiary Landec Ag, Inc. ( "Landec Ag", formerly Intellicoat 
Corporation), combines Landec's proprietary Intellicoat-Registered Trademark-   
seed coating technology with its unique eDC-TM- -- e-commerce, Direct marketing 
and Consultative selling -- capabilities which it obtained with its acquisition 
of Fielder's Choice Direct, a direct marketer of hybrid seed corn, in September 
1997.                                                                           

     In addition to its two core businesses, the Company also operates a
Technology Licensing/Research and Development business which licenses products  
outside of Landec's core businesses to industry leaders such as Alcon           
Laboratories, Inc. ("Alcon") and Hitachi Chemical. It also engages in research  
and development activities with companies such as ConvaTec, a division of       
Bristol-Myers Squibb and UCB Chemicals, a subsidiary of UCB S.A. of Belgium. For
segment disclosure purposes, the Technology Licensing/Research and Development  
business is included in Corporate and Other (see Note 13 to the Consolidated    
Financial Statements).                                                          

    To support the polymer manufacturing needs of the core businesses,
Landec has developed and acquired lab scale and pilot plant capabilities in     
Menlo Park, California and scale-up and commercial manufacturing capabilities at
its Dock Resins Corporation subsidiary ("Dock Resins") in Linden, New Jersey. In
April 1997, Landec acquired Dock Resins, a manufacturer and marketer of         
specialty acrylic and other polymers. In addition, Dock Resins sells industrial 
specialty products under the Doresco-Registered Trademark- trademark that are   
used by more than 300 customers throughout the United States in the coatings,   
printing inks, laminating and adhesives markets. For segment disclosure         
purposes, Dock Resins is included in Corporate and Other (see Note 13 to the    
Consolidated Financial Statements).                                             

The Company's core polymer products are based on its patented 
proprietary Intelimer-Registered Trademark- polymers, which differ from other   
polymers in that they can be customized to abruptly change their physical       
characteristics when heated or cooled through a pre-set temperature switch. For 
instance, Intelimer polymers can change within the range of one or two degrees  
Celsius from a slick, non-adhesive state to a highly tacky, adhesive state; from
an impermeable state to a highly permeable state; or from a solid state to a    
viscous state. These abrupt changes are repeatedly reversible and can be        
tailored by Landec to occur at specific temperatures, thereby offering          
substantial competitive advantages in the Company's target markets.             

       The principal products and services offered by the Company in its two
core businesses -- Food Products Technology and Agricultural Seed Technology -- 
and in the Technology Licensing/Research and Development business are described 
below. Financial information concerning the industry segments for which the     
Company reported its operations during fiscal years 1998 through 2000 is        
summarized in Note 13 to the Consolidated Financial Statements.                 

     The Company was incorporated in California on October 31, 1986. The
Company completed its initial public offering in 1996 and is listed on the      
Nasdaq National Market under the symbol "LNDC."                                 

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TECHNOLOGY OVERVIEW                                                             

     Polymers are important and versatile materials found in many of the
products of modern life. Certain polymers, such as cellulose and natural rubber,
occur in nature. Man-made polymers include nylon fibers used in carpeting and   
clothing, coatings used in paints and finishes, plastics such as polyethylene,  
and elastomers used in automobile tires and latex gloves. Historically,         
synthetic polymers have been designed and developed primarily for improved      
mechanical and thermal properties, such as strength and the ability to withstand
high temperatures. Improvements in these and other properties and the ease of   
manufacturing of synthetic polymers have allowed these materials to replace     
wood, metal and natural fibers in many applications over the last 40 years. More
recently, scientists have focused their efforts on identifying and developing   
sophisticated polymers with novel properties for a variety of commercial        
applications.                                                                   

  Landec's Intelimer polymers are a proprietary class of synthetic
polymeric materials that respond to temperature changes in a controllable,      
predictable way. Typically, polymers gradually change in adhesion,              
permeability and viscosity over broad temperature ranges. Landec's Intelimer    
materials, in contrast, can be designed to exhibit abrupt changes in            
permeability, adhesion and/or viscosity over temperature ranges as narrow as    
1 DEG. C to 2 DEG. C. These changes can be designed to occur at relatively      
low temperatures (0 DEG. C to 100 DEG. C) that are relatively easy to           
maintain in industrial and commercial environments. FIGURE 1 illustrates the    
effect of temperature on Intelimer materials as compared to typical polymers.   

[TEMPERATURE GRAPHIC] 

   Landec's proprietary polymer technology is based on the structure
and phase behavior of Intelimer materials. The abrupt thermal transitions of    
specific Intelimer materials are achieved through the use of chemically         
precise hydrocarbon side chains that are attached to a polymer backbone.        
Below a pre-determined switch temperature, the polymer's side chains align      
through weak hydrophobic interactions resulting in a crystalline structure.     
When this side chain crystallizable polymer is heated to, or above, this        
switch temperature, these interactions are disrupted and the polymer is         
transformed into an amorphous, viscous state. Because this transformation       
involves a physical and not a chemical change, this process is repeatedly       
reversible. Landec can set the polymer switch temperature anywhere between 0    
DEG. C to 100 DEG. C by varying the length of the side chains. The reversible   
transitions between crystalline and amorphous states are illustrated in         
FIGURE 2 below.                                                                 

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 [CRYSTALLINE AMORPHOUS GRAPHIC]

      Side chain crystallizable polymers were first discovered by academic
researchers in the mid-1950's. These polymers were initially considered to be   
merely of scientific curiosity from a polymer physics perspective, and, to the  
Company's knowledge, no significant commercial applications were pursued. In the
mid-1980's, Dr. Ray Stewart, the Company's founder, became interested in the    
idea of using the temperature-activated permeability properties of these        
polymers to deliver various materials such as drugs and pesticides. After       
forming Landec in 1986, Dr. Stewart subsequently discovered broader utility for 
these polymers. After several years of basic research, commercial development   
efforts began in the early 1990's, resulting in initial products in mid-1994.   

  Landec's Intelimer materials are generally synthesized from long
side-chain acrylic monomers that are derived primarily from natural materials   
such as soybean and corn oils, that are highly purifiable and designed to be    
manufactured economically through known synthesis processes. These side-chain   
raw materials are then polymerized by Landec leading to many different          
side-chain crystallizable polymers whose properties vary depending upon the     
initial materials and the synthesis process. Intelimer materials can be made    
into many different forms, including films, coatings, microcapsules and discrete
forms.                                                                          

DESCRIPTION OF CORE BUSINESS                                                    

The Company participates in two core segments -- Food Products
Technology and Agricultural Seed Technology. In addition to these two core      
segments, Landec will license technology and conduct on going research and      
development through its Technology Licensing/Research & Development Business.   

[LANDEC FLOWCHART]

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FOOD PRODUCTS TECHNOLOGY BUSINESS                             

     Landec began marketing in late 1995 its proprietary Intelimer-based
breathable membranes for use in the fresh-cut produce packaging market, the     
fastest growing segment in the food market. Landec's unique technology enabled  
Landec's customers to enter into and develop new businesses in this fresh-cut   
produce market (also known as the "value-added" market). In December 1999,      
Landec acquired Apio, Landec's largest customer in the Food Products Technology 
business and who the Company believes is the nation's leading marketer and      
packer of produce and specialty packaged fresh-cut vegetables. Apio provides    
year-round access to produce, utilizes state-of-the-art fresh-cut produce       
processing technology and distributes to all 10 of the top U.S. retail grocery  
chains and major club stores and has recently begun expanding its product       
offerings to the foodservice industry. Landec's proprietary Intelimer-based     
packaging business has been combined with Apio into a wholly owned subsidiary   
that retains the Apio, Inc. name. This vertical integration within the Food     
Products Technology business places Landec in the unique position of providing  
the fresh-cut and whole produce market with both technology and access to larger
and broader markets.                                                            

INTELLIPAC-Registered Trademark- BREATHABLE MEMBRANES         

       Certain types of fresh-cut produce can spoil or discolor rapidly when
packaged in conventional packaging materials and are therefore limited in their 
ability to be distributed broadly to markets. The Company's Intellipac          
breathable membranes extend the shelf life and quality of fresh-cut produce.    

     Fresh-cut produce is pre-washed, cut and packaged in a form that is
ready to use by the consumer and is thus typically sold at premium price levels.
According to the International Fresh Cut Produce Association ("IFPA"), in 1999, 
the total U.S. fresh produce market exceeded $100 billion. Of this, U.S. retail 
sales of fresh-cut produce grew to an estimated $10 billion. The Company        
believes that the growth of this market has been driven by consumer demand and  
the willingness to pay for convenience, labor savings and uniform quality       
relative to produce prepared at the point of sale. The IFPA estimates that by   
2005, U.S. retail sales of fresh-cut produce could more than double.            

    Although fresh-cut produce companies have had success in the salad
market, the industry has been slow to diversify into other fresh-cut vegetables 
or fruits due primarily to limitations in film materials used to package the    
fresh-cut produce. After harvesting, vegetables and fruits continue to respire, 
consuming oxygen and releasing carbon dioxide. Too much or too little oxygen can
result in premature spoilage and decay and promote the growth of contaminants   
and microorganisms that jeopardize inherent food safety. Conventional packaging 
films used today, such as polyethylene and polypropylene, can be made with      
modest permeability to oxygen and carbon dioxide, but often do not provide the  
optimal atmosphere for the produce packaged. Shortcomings of conventional       
packaging materials have not significantly hindered the growth in the fresh-cut 
salad market because lettuce, unlike many vegetables and fruits, has low        
respiration requirements.                                                       

The respiration rate of fresh-cut produce varies from         
vegetable-to-vegetable and from fruit-to-fruit. The challenge facing the        
industry is to develop packaging for the high respiring, high value and shelf   
life sensitive fresh-cut vegetable and fruit markets. The Company believes that 
today's conventional packaging films face numerous challenges in adapting to    
meet the diversification of pre-cut vegetables and fruits evolving in the       
industry without compromising shelf life and produce quality. To mirror the     
growth experienced in the fresh-cut salad market, the markets for high respiring
vegetables and fruits such as broccoli, cauliflower, bananas, berries and stone 
fruit (e.g. peaches, apricots, nectarines) will require a more versatile and    
sophisticated packaging solution for which the Company's Intellipac breathable  
membranes were developed.                                                       

The respiration rate of fresh-cut produce also varies with  
temperature. As temperature increases, fresh-cut produce generally respires at a
higher rate, which speeds up the aging process, resulting in shortened shelf    
life and increased potential for decay, spoilage, loss of texture and           
dehydration. As fresh-cut produce is transported from the processing plant      
through the refrigerated distribution chain to foodservice locations, retail    
grocery stores and club stores, and finally to the ultimate consumer,           
temperatures can fluctuate significantly. Therefore, temperature control is a   
constant challenge in preserving the quality of fresh-cut produce -- a challenge
few current packaging films can fulfill. The Company believes that its          
temperature-responsive Intellipac technology is well suited to the challenges of
the fresh-cut distribution process.                                             

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 Using its Intelimer technology, Landec has developed Intellipac
breathable membranes that it believes address many of the shortcomings of       
conventional materials. A membrane is applied over a small cutout section or an 
aperture of a flexible film bag. This highly permeable "window" acts as the     
mechanism to provide the majority of the gas transmission requirements for the  
entire package. These membranes are designed to provide three principal         
benefits:                                                                       

-    HIGH PERMEABILITY. Landec's Intellipac breathable membranes are    
     designed to permit transmission of oxygen and carbon dioxide at 300
      times the rate of conventional packaging films. The Company believes
     that these higher permeability levels will facilitate the packaging
diversity required to market many types of fresh-cut produce. 

   -    ABILITY TO ADJUST OXYGEN AND CARBON DIOXIDE PERMEABILITY. Conventional
         packaging films diffuse gas transfer in and out of packages at an equal
      rate or fixed ratio of 1.0. Intellipac packages can be tailored with
       carbon dioxide to oxygen transfer ratios ranging from 1.0 to 12.0 and
    selectively transmit oxygen and carbon dioxide at optimum rates to
sustain the quality and shelf life of produce.                

  -    TEMPERATURE RESPONSIVENESS. Landec has developed breathable membranes
 that can be designed to increase or decrease in permeability in
response to environmental temperature changes. The Company has
    developed packaging that responds to higher oxygen requirements at
  elevated temperatures but is also reversible, and returns to its
        original state as temperatures decline. The temperature responsiveness
   of these membranes allows ice to be removed from the distribution
         system which results in numerous benefits. These benefits include (1) a
        substantial decrease in freight cost, (2) reduced risk of contaminated
produce because ice is a carrier of micro organisms, (3) the  
         elimination of expensive waxed cartons that cannot be recycled, and (4)
     the potential decrease in work related accidents due to melted ice.

   Landec believes that growth of the overall produce market will be
driven by the increasing demand for the convenience of fresh-cut produce. This  
demand will in turn require packaging that facilitates the quality and shelf    
life of produce transported to fresh-cut distributors in bulk and pallet        
quantities. The Company believes that in the future its Intellipac breathable   
membranes will be useful for packaging a diverse variety of fresh-cut produce   
products. Potential opportunities for using Landec's technology outside of the  
fresh-cut produce market exist in cut flowers and in other food products.       

         Landec is working with leaders in the fresh-cut foodservice, club store
and retail grocery markets. The Company believes it will have growth            
opportunities for the next several years through new customers and products in  
the United States, expansion of its existing customer relationships, and through
export and shipments of specialty packaged produce.                             

       Landec manufactures its Intellipac breathable membrane packaging both
internally and through selected qualified contract manufacturers and markets and
sells Intellipac breathable membranes packaging directly to food distributors.  

APIO, INC.                                                    

In December 1999, Landec completed the acquisition of Apio and
certain related entities. Landec paid $21.0 million in cash and Landec Common   
Stock, before expenses, at close and $1.1 million in January 2001 with          
another $4.1 million due to be paid in March 2001. An additional $11.4          
million in future payments over the next four years may be paid, $5.9 million   
of which is based on Apio achieving certain performance milestones in fiscal    
year 2001. Apio had revenues of approximately $179 million in the               
eleven-month period ended October 29, 2000.                                     

       Based in Guadalupe, California, Apio consists of two major businesses
-- traditional whole produce harvesting, packing and marketing and specialty    
packaged fresh-cut value-added processed products that are pre-cut, washed and  
packaged in Landec's Intellipac packaging. The traditional produce service      
business includes harvesting, packing, cooling and marketing of vegetables and  
fruits on a contract basis for growers in California's Santa Maria, San Joaquin 
and Imperial Valleys and in Arizona and Mexico. Apio currently has approximately
16,000 acres under contract, including access to approximately 20 percent of the
farmable land in the Santa Maria Valley. The fresh-cut value-added processing   
products business, developed within the last 5 years, sources a variety of      
fresh-cut vegetables to the top retail grocery chains representing over 6,900   
retail stores and to over 600 club stores. During the eleven month period ended 
October 29, 2000, Apio shipped more than 23 million cartons of produce to some  
700 customers including leading supermarket retailers, wholesalers, foodservice 
suppliers and club stores throughout the United States and internationally,     
primarily in Asia.                                                              

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       In September 2000, due to disappointing financial results, management
of Landec decided to discontinue processing fruit at its Reedley facility. The  
Company has put the facility and the packing and cold storage assets up for     
sale. The Company will continue to provide field support and sales and marketing
services to current contracted growers through Apio's existing staff and will   
outsource all remaining services to third parties. As a result of the shutdown  
of the Reedley facility, the Company recorded a $525,000 charge during the      
fourth quarter of fiscal year 2000, primarily for severance and payroll related 
costs. The sale is expected to result in a gain. The current net book value of  
the assets is $3.0 million. The Company anticipates closing a sale during the   
second fiscal quarter of 2001.                                                  

  There are five major distinguishing characteristics of Apio that
provide it a competitive advantage in the Food Products Technology market:      

-   Apio has structured its business as a full service provider of    
         vegetables, fruits, and fresh-cut value-added produce. It is focused on
  developing its Eat Smart-TM- brand name for all of its fresh-cut
value-added products. As retail grocery and club store chains 
    consolidate, Apio is well positioned as a single source of a broad
range of products.                                            

-   Apio is unique in that it takes on less farming risk than its     
       competitors. Apio reduces its farming risk by not taking ownership of
   farmland, and instead, will contract with growers for produce and
 charge for services that include packing, cooling, shipping and
   marketing. Generally, Apio does not take title to the produce but
     receives a margin for services rendered. The year-round sourcing of
        produce is a key component to both the traditional produce business as
well as the fresh-cut value-added processing business.        

-   Apio strategically invested in the rapidly growing fresh-cut      
       value-added business. Apio's new 35,000 square foot value-added plant
        packed more than 59 million pounds in the past twelve months. Apio has
   one of the very few temperature controlled value-added processing
  plants in the U.S. Ninety percent of Apio's value-added products
utilize Landec's proprietary Intellipac membrane technology.  

    -   Apio is uniquely positioned to benefit from the growth in export sales
   to Asia and Europe over the next decade with its export business,
 CalEx. Through CalEx, Apio is currently one of the largest U.S.
exporters of broccoli to Asia.                                

     -   Apio, through the use of Landec's Intellipac membrane technology, is in
        the early stages of changing selective categories of the whole produce
       business. Its introduction of iceless broccoli crowns in October 2000
   is the beginning of a conversion from the traditional packing and
    shipping of whole produce, which relied heavily on ice, to iceless
products utilizing the Intellipac technology.                 

AGRICULTURAL SEED TECHNOLOGY BUSINESS                         

Landec formed its Landec Ag (formerly Intellicoat Corporation)
subsidiary in 1995. Landec Ag's strategy is to build a vertically integrated    
seed technology company based on the proprietary Intellicoat-Registered         
Trademark- seed coating technology and its eDC -- e-commerce, direct marketing  
and consultative selling -- capabilities.                                       

INTELLICOAT SEED COATINGS                                     

         Landec has developed and, through Landec Ag, is conducting field trials
of its Intellicoat seed coatings, an Intelimer-based agricultural material      
designed to control seed germination timing, increase crop yields and extend the
crop planting windows. These coatings are initially being applied to corn,      
soybean, and canola seeds. According to the U.S. Agricultural Statistics Board, 
the total planted acreage in 1999 in North America for corn, soybean, and canola
seed exceeded 77.6 million, 77.2 million, and 1.1 million, respectively.        

        Currently, farmers must predict the proper time to plant seeds. If the
seeds are planted too early, they may rot or suffer chilling injury due to the  
absorption of water at cold soil temperatures. If they are planted too late, the
growing season may end prior to the crop reaching full maturity. In either case,
the resulting crop yields are sub-optimal. Moreover, the planting window can be 
fairly brief, requiring the farmer to focus almost exclusively on planting      
during this time. Seeds also germinate at different times due to variations in  
absorption of water, thus providing for variations in the growth rate of the    
crops.                                                                          

    The Company's Intellicoat seed coating prevents planted seeds from
absorbing water when the ground temperature is below the coating's pre-set      
temperature switch. Intellicoat seed coatings are designed to enable coated     
seeds to be planted early without risk of chilling damage caused by the         
absorption of water at cold soil                                                

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temperatures. As spring advances and soil temperatures rise to the              
pre-determined switch temperature, the polymer's permeability increases and the 
coated seeds absorb water and begin to germinate. The Company believes that     
Intellicoat seed coatings provide the following advantages: more flexible timing
for planting, avoidance of chilling injury, more uniform germination and crop   
growth, and protection against harmful fungi. As a result, the Company believes 
that Intellicoat seed coatings offer the potential for significant improvements 
in crop yields.                                                                 

  In fiscal year 2000, the Company successfully launched its first
commercial product, Pollinator Plus-TM- coatings for inbred corn seed products. 
As a result of the success realized in fiscal year 2000, the Company will be    
expanding its sales of inbred corn seed coating products in fiscal year 2001 to 
regional and national seed companies in the United States. This application is  
targeted to approximately 640,000 acres of farmland in ten states. In addition, 
based on the successful field trial results during 2000 for its Relay Crop-TM-  
System for wheat and coated soybeans and its Early Plant-TM- hybrid coated corn,
the Company will be expanding its sales of each product. The Company's Relay    
Crop System will allow farmers to plant and harvest two crops during the year on
the same acre of land, providing significant financial benefit for the farmer.  
Early Plant hybrid corn will allow the farmer to plant 2 to 4 weeks earlier than
typically possible due to cold soil temperatures. By allowing the farmer to     
plant earlier than normal Early Plant hybrid corn will enable large farmers to  
utilize staff and equipment more efficiently and provide flexibility during the 
critical planting period. Future crops under consideration include cotton,      
canola, sugar beets and other vegetables.                                       

FIELDER'S CHOICE DIRECT (THE EDC COMPANY)                     

     In September 1997, Landec Ag completed the acquisition of Fielder's
Choice, a direct marketer of hybrid seed corn to farmers. Landec paid           
approximately $3.6 million in cash and direct acquisition costs and $5.2 million
in Landec Common Stock for Fielder's Choice. Terms of the agreement include a   
cash earn-out of $2.4 million based on future sales of Fielder's Choice         
Direct-Registered Trademark- hybrid seed corn. As of October 29, 2000, $1.2     
million of the earn-out had been earned and paid. Fielder's Choice had sales of 
approximately $13.3 million and $15.2 million in the twelve months ended October
31, 1998 and 1999, respectively, and $17.2 million for the twelve months ended  
October 29, 2000.                                                               

       Based in Monticello, Indiana, Fielder's Choice offers a comprehensive
line of corn hybrids to more than 16,000 producer seed customers in over forty  
states through direct marketing programs. The success of Fielder's Choice comes,
in part, from its expertise in selling directly to the farmer producer,         
bypassing the traditional and costly farmer-dealer system. The Company believes 
that this direct channel of distribution provides a 35% cost advantage to its   
farmer producers.                                                               

         In order to support its direct marketing programs, Fielder's Choice has
developed proprietary e-commerce direct marketing, and consultative selling     
information technology, called "eDC", that enables state-of-the-art methods for 
communicating with a broad array of farmers. This proprietary direct marketing  
information technology includes a current database of over 80,000 farmers. In   
August 1999, the Company launched the seed industry's first comprehensive       
e-commerce website. This new website furthers the Company's ability to provide a
high level of consultation to Fielder's Choice customers, backed by a six day a 
week call center capability that enables the Company to use the internet as a   
natural extension of its direct marketing strategy.                             

  The acquisition of Fielder's Choice was strategic in providing a
cost-effective vehicle for marketing Intellicoat seed coating products. The     
Company believes that the combination of a direct channel of distribution,      
telephonic and electronic commerce capabilities will enable Intellicoat to more 
quickly achieve meaningful market penetration.                                  

TECHNOLOGY LICENSING/RESEARCH & DEVELOPMENT BUSINESSES        

        The Company believes its technology has commercial potential in a wide
range of industrial, consumer and medical applications beyond those identified  
in its core businesses. In order to exploit these opportunities, the Company has
entered into licensing and collaborative corporate agreements for product       
development and/or distribution in certain fields.                              

INDUSTRIAL MATERIALS AND ADHESIVES                            

  Landec's industrial products development strategy is to focus on
catalysts, resins, and adhesives in the polymer materials market. During the    
product development stage, the Company identifies corporate partners to support 
the ongoing development and testing of these products, with the ultimate goal of
licensing the applications at the appropriate time.                             

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 INTELIMER POLYMER SYSTEMS. The Company is developing catalysts,
curative, and curing agent systems based on its Intelimer technology for use in 
one-package thermoset products. These systems can incorporate catalysts,        
curatives and curing agents in a unique polymer envelope that prevents          
interaction by these agents with the resin when the polymer envelope is in its  
impermeable state. This characteristic allows all components of the thermoset   
product to be pre-mixed and stored at room temperature, and provides longer     
shelf life. Landec's unique polymer envelope system can be designed with a      
pre-set opening temperature switch to correspond with elevated temperatures used
during standard manufacturing processes. When the thermoset system is exposed to
the pre-set switch temperature, the Intelimer polymer abruptly changes to its   
permeable state, exposing the catalyst to the resin and initiating the curing   
process. In addition, the Intelimer polymer can be designed to change state over
a predetermined temperature range in order to achieve a desired reaction time.  

      Thermoset catalyst systems can eliminate the need for costly on-site
mixing equipment and because thermosets can be pre-mixed by the manufacturer,   
will minimize sub-optimal product performance due to incorrect component mixing 
ratios. Furthermore, since the thermosets will not cure until exposed to        
elevated temperatures, pot life should be extended, resulting in significantly  
reduced waste and labor expense. The Company believes that the ability to       
control reaction time also provides advantages over existing thermoset systems  
and can enhance the throughput of targeted manufacturing customers. Landec      
received the R&D 100 Award from R&D Magazine for its Intelimer Polymer Systems  
product line in 1997 in recognition of the unique capabilities of this          
technology. Certain Intelimer Polymer Systems products are currently being sold 
in the U.S. and Europe while others are in developmental stages.                

      DOCK RESINS. In April 1997, Landec completed the acquisition of Dock
Resins, a privately-held manufacturer and marketer of specialty acrylic and     
other polymers based in Linden, New Jersey. Landec paid approximately $13.7     
million in cash, a promissory note and direct acquisition costs and $2.1 million
in Landec Common Stock to acquire Dock Resins. The acquisition of Dock Resins   
provided the Company with immediate access to large-scale polymer manufacturing 
as well as a built-in customer base and national distribution network.          

       Dock Resins also sells products under the Doresco trademark which are
used by more than 300 customers throughout the United States and other countries
in the coatings, printing inks, laminating and adhesives markets. Dock Resins is
a supplier of proprietary polymers including acrylic, methacrylic, alkyd,       
polyester, urethane and polyamide polymers to film converters engaged in hot    
stamping, decorative wood grain, automotive interiors, holograms, and metal foil
applications. Dock Resins also supplies products to a number of other markets   
such as graphic arts, automotive refinishing, construction, pressure-sensitive  
adhesives, paper coatings, caulks, concrete curing compounds and sealers. Dock  
Resins had sales of approximately $15.4 million and $14.0 million in the twelve 
months ended October 31, 1998 and 1999, respectively and $12.4 for the twelve   
months ended October 29, 2000.                                                  

        HITACHI CHEMICAL. The Company entered into two separate collaborations
with Hitachi Chemical ("Hitachi") in the areas of industrial adhesives and      
Intelimer Polymer Systems. On October 1, 1994, the Company entered into a       
non-exclusive license agreement with Hitachi in the industrial adhesives area.  
The agreement provides Hitachi with a non-exclusive license to manufacture and  
sell products using Landec's Intelimer materials in certain Asian countries.    
Landec received up-front license fees upon signing the agreement and is entitled
to future royalties based on net sales by Hitachi of the licensed products. This
agreement on industrial adhesives has terminated. Any fees paid to the Company  
are non-refundable.                                                             

       On August 10, 1995, the Company entered into the second collaboration
with Hitachi in the Intelimer Polymer Systems area. The agreement provided      
Hitachi with an exclusive license to use and sell Landec's Intelimer Polymer    
Systems in industrial latent curing products in certain Asian countries. Landec 
is entitled to be the exclusive supplier of Intelimer Polymer Systems to Hitachi
for at least seven years after commercialization which began in February 2000.  
Landec received an up-front license payment upon signing this agreement and     
research and development funding over three years and is entitled to receive    
future royalties based on net sales by Hitachi of the licensed products. Any    
fees paid to the Company are non-refundable. This agreement has been converted  
to a non-exclusive agreement except for one application field.                  

  NITTA CORPORATION. On March 14, 1995, the Company entered into a
license agreement with Nitta Corporation ("Nitta") in the industrial adhesives  
area. The agreement provides Nitta with a co-exclusive license to manufacture   
and sell products using Landec's Intelimer materials in certain Asian countries.
Landec received up-front license fees upon signing the agreement and is entitled
to future royalties based on net sales by Nitta of the licensed products. Any   
fees paid to the Company are non-refundable. This agreement is terminable at    
Nitta's option. Nitta and the Company entered into an additional exclusive      
license arrangement in February 1996 covering Landec's medical adhesives        
technology for use in Asia. The Company received up-front license fees upon     
execution of the agreement and research and development payments and is entitled
to receive future royalties under this agreement. Any fees paid to the Company  

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are non-refundable. Nitta and the Company also entered into another worldwide   
exclusive agreement on January 1, 1998 in the area of industrial adhesives      
specific to one field of electronic polishing adhesives. The Company received   
research and development payments as a part of this agreement. As of January    
1999, the Company had no future obligations under any of the aforementioned     
agreements with Nitta.                                                          

        UCB CHEMICALS CORPORATION. On April 10, 2000, the Company entered into
a one-year research and development agreement with UCB Chemicals Corporation    
("UCB"), an operating entity of UCB S.A., a major pharmaceutical and chemical   
company located in Belgium. UCB's chemical business is a major supplier of      
radiation curing and powder coating resins. Under this agreement, the Company   
will explore polymer systems for evaluation in several industrial product       
applications. The program is exploratory in nature and, if successful, could    
lead to a supply agreement for additive materials for UCB products.             

MEDICAL APPLICATIONS                                          

 PORT-TM- OPHTHALMIC DEVICES. Landec developed the PORT (Punctal
Occluder for the Retention of Tears) ophthalmic device initially to address a   
common, yet poorly diagnosed condition known as dry eye that is estimated to    
affect 30 million Americans annually. The device consists of a physician-applied
applicator containing solid Intelimer material that transforms into a flowable, 
viscous state when heated slightly above body temperature. After inserting the  
Intelimer material into the lacrimal drainage duct, it quickly solidifies into a
form-fitting, solid plug. Occlusion of the lacrimal drainage duct allows the    
patient to retain tear fluid and thereby provides relief and therapy to the dry 
eye patient.                                                                    

         The PORT product is currently in final stages of human clinical trials.
Landec and its partner, Alcon, a wholly-owned subsidiary of Nestle S.A., believe
that PORT plugs will have additional ophthalmic applications beyond the dry eye 
market. This would include applications for people who cannot wear contact      
lenses due to limited tear fluid retention and patients receiving therapeutic   
drugs via eye drops that require longer retention in the eye.                   

In December 1997, Landec licensed the rights to worldwide     
manufacturing, marketing and distribution of its PORT ophthalmic device to      
Alcon. Under the terms of the transaction, Landec received an up-front cash     
payment of $500,000, a $750,000 milestone payment in November 1998, research and
development funding and will receive ongoing royalties of 11.5% on product sales
of each PORT device over an approximately 15-year period. Any fees paid to the  
Company are non-refundable. In September 1999, Alcon submitted a 510K           
application to the FDA seeking approval to commercially sell the PORT device.   
Landec will continue to provide development support on a contract basis through 
the FDA approval process and product launch. Landec also provides the Intelimer 
polymer to Alcon which is used in the PORT device.                              

 CONVATEC. On October 11, 1999, the Company entered into a joint
development agreement with ConvaTec, a division of Bristol-Myers Squibb, under  
which Landec will develop adhesive film products for selected ConvaTec medical  
products. Landec is receiving support funding for this program. Upon completion 
of this agreement, the companies have the option to consider a license and      
supply agreement where Landec would supply materials to ConvaTec for use in     
specific medical devices.                                                       

AGRICULTURAL APPLICATIONS                                     

  CELPRIL. On September 12, 2000, the Company entered into a joint
development agreement with CelPril, a subsidiary of Aventis CropScience, under  
which Landec will develop seed coatings for fall and spring planted canola and  
assist CelPril in conducting field trials. Landec is receiving support funding  
for this program. Upon completion of this agreement, the companies have the     
option to consider additional support funding and a license and supply agreement
where Landec would supply materials to CelPril for use in specific canola seed  
coating applications.                                                           

SALES AND MARKETING                                                             

        Each of the Company's core businesses are supported by dedicated sales
and marketing resources. The Company intends to develop its internal sales      
capacity as more products progress toward commercialization and as business     
volume expands geographically.                                                  

FOOD PRODUCTS TECHNOLOGY BUSINESS                             

  Apio has over 22 sales people, located in central California and
throughout the U.S., supporting both the traditional produce marketing business 
and the specialty packaged value-added produce business.                        

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AGRICULTURAL SEED TECHNOLOGY BUSINESS                         

       In preparation for the launch of Early Plant-TM- hybrid corn seed and
Relay Crop-TM- wheat/soybean products, Landec Ag has identified a small internal
sales force to target a very focused group of seed customers. For future coated 
seed products that are sold directly to farmers, the Company will utilize over  
50 direct seed sales consultants and associates located in Monticello, Indiana. 
These consultants and associates also support Fielder's Choice in its direct    
marketing of corn seed. Customer contacts are made based on direct responses and
inquiries from customers.                                                       

OTHER                                                         

      Dock Resins sales are carried out through a small direct sales group
and network of existing manufacturers' representatives and distributed through  
public warehouses. Sales are supported by internal sales and technical service  
resources at Dock Resins. Intelimer Polymer Systems sales are made through Dock 
Resins in the U.S. and in Europe through Akzo Nobel, an international           
distributor.                                                                    

MANUFACTURING AND PROCESSING                                                    

 Landec intends to control the manufacturing of its own products
whenever possible, as it believes that there is considerable manufacturing      
margin opportunity in its products. In addition, the Company believes that      
know-how and trade secrets can be better maintained by Landec retaining         
manufacturing capability in-house.                                              

POLYMER MANUFACTURING - DOCK RESINS CORPORATION               

Dock Resins has manufacturing facilities that are flexible and
adaptable to a wide range of processes. Its capabilities include various        
polymerization processes, grafting, dispersing, blending, pilot plant scale-ups 
and general synthesis. The Company has increased the capacity of these          
facilities in 1998 and 1999 in order to offer new products to new and existing  
customers and to supply polymer products to Landec's other businesses. Dock     
Resins' policy is to be a leader in safety, health and environmental protection.
In 1998 and 1999, in order to offer new products to new and existing customers  
and to supply polymer products to Landec's other businesses. Dock Resins passed 
a voluntary comprehensive health and safety evaluation by the United States     
Occupational Safety and Health Administration (OSHA). As a result, OSHA awarded 
recognition to Dock Resins as a Merit Site in 1998 and a Star Site in 1999 in   
OSHA's Voluntary Protection Program.                                            

FOOD PRODUCTS TECHNOLOGY BUSINESS                             

   The manufacturing process for the Company's Intellipac breathable
membrane products is comprised of polymer manufacturing, membrane manufacturing 
and label conversion. Dock Resins manufactures virtually all of the polymers for
the Intellipac breathable membranes. Select outside contractors currently       
manufacture the breathable membranes and Landec has recently transitioned most  
of the label conversion manufacturing to its Menlo Park facility to meet the    
increasing product demand and provide additional developmental capabilities.    

      Apio processes all of its fresh-cut value-added products in a 35,000
square foot, state-of-the-art processing facility located in Guadalupe,         
California. The Company is currently running two shifts per day, seven days a   
week, and utilizes contract laborers from a third party contact labor supplier. 
Cooling of produce is done through third parties and Apio Cooling, a separate   
company of which Apio has a 60% ownership interest and is the general partner.  

AGRICULTURAL SEED TECHNOLOGY BUSINESS                         

        During fiscal year 2000, the Company completed construction of a pilot
manufacturing facility in Indiana to support the commercialization of its Relay 
Crop System for wheat/coated soybean products and for Early Plant hybrid corn.  
The new facility will utilize a new continuous coating process that has         
increased seed coating capabilities by tenfold compared to the previous system  
using batch coaters. Fielder's Choice purchases its hybrid seed corn from an    
established producer under an exclusive purchase agreement.                     

GENERAL                                                       

Many of the raw materials used in manufacturing certain of the
Company's products are currently purchased from a single source, including      
certain monomers used to synthesize Intelimer polymers and substrate materials  
for the Company's breathable membrane products. In addition, virtually all of   
the hybrid corn varieties sold by Fielder's Choice are purchased from a single  
source. Upon manufacturing scale-up and as hybrid corn sales                    

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increase, the Company may enter into alternative supply arrangements. Although  
to date the Company has not experienced difficulty acquiring materials for the  
manufacture of its products nor has Fielder's Choice experienced difficulty in  
acquiring hybrid corn varieties, no assurance can be given that interruptions in
supplies will not occur in the future, that the Company will be able to obtain  
substitute vendors, or that the Company will be able to procure comparable      
materials or hybrid corn varieties at similar prices and terms within a         
reasonable time. Any such interruption of supply could have a material adverse  
effect on the Company's ability to manufacture and distribute its products and, 
consequently, could materially and adversely affect the Company's business,     
operating results and financial condition.                                      

      Landec has historically relied on the guidance of Good Manufacturing
Practices ("GMP") in developing standardized research and manufacturing         
processes and procedures. Having entered into licensing agreements for the PORT 
device, the Company is no longer required to adhere to GMPs. The Company desires
to maintain an externally audited quality system and has achieved ISO 9001      
registration for the Menlo Park research and development site in fiscal year    
1999 and for both the Menlo Park research and development and manufacturing     
sites in fiscal year 2000. Such registration is required in order for the       
Company to sell product to certain potential customers, primarily in Europe.    

RESEARCH AND DEVELOPMENT                                                        

   Landec is focusing its research and development resources on both
existing and new applications of its Intelimer technology. Expenditures for     
research and development in fiscal year 2000 were $4.7 million, compared with   
$5.8 million in fiscal year 1999 and $5.7 million in fiscal year 1998. In fiscal
year 2000, research and development expenditures funded by corporate partners   
were $539,000 compared with $770,000 in fiscal year 1999 and $1.4 million in    
fiscal year 1998. The Company may continue to seek funds for applied materials  
research programs from U.S. government agencies as well as from commercial      
entities. The Company anticipates that it will continue to have significant     
research and development expenditures in order to maintain its competitive      
position with a continuing flow of innovative, high-quality products and        
services. As of October 29, 2000, Landec had 27 employees, including 7 with     
Ph.D.'s, engaged in research and development with experience in polymer and     
analytical chemistry, product application, product formulation, mechanical and  
chemical engineering.                                                           

COMPETITION                                                                     

         The Company operates in highly competitive and rapidly evolving fields,
and new developments are expected to continue at a rapid pace. Competition from 
large food packaging and agricultural companies is expected to be intense. In   
addition, the nature of the Company's collaborative arrangements and its        
technology licensing business may result in its corporate partners and licensees
becoming competitors of the Company. Many of these competitors have             
substantially greater financial and technical resources and production and      
marketing capabilities than the Company, and many have substantially greater    
experience in conducting field trials, obtaining regulatory approvals and       
manufacturing and marketing commercial products. There can be no assurance that 
these competitors will not 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 the Company or that would render the  
Company's technology and products obsolete and non-competitive.                 

PATENTS AND PROPRIETARY RIGHTS                                                  

      The Company's success depends in large part on its ability to obtain
patents, maintain trade secret protection and operate without infringing on the 
proprietary rights of third parties. The Company has been granted sixteen U.S.  
patents with expiration dates ranging from 2006 to 2018 and has filed           
applications for additional U.S. patents, as well as certain corresponding      
patent applications outside the United States, relating to the Company's        
technology. The Company's issued patents include claims relating to             
compositions, devices and use of a class of temperature sensitive polymers that 
exhibit distinctive properties of permeability, adhesion and viscosity. There   
can be no assurance that any of the pending patent applications will be         
approved, that the Company will develop additional proprietary products that are
patentable, that any patents issued to the Company will provide the Company with
competitive advantages or will not be challenged by any third parties or that   
the patents of others will not prevent the commercialization of products        
incorporating the Company's technology. Furthermore, there can be no assurance  
that others will not independently develop similar products, duplicate any of   
the Company's products or design around the Company's patents. Any of the       
foregoing results could have a material adverse effect on the Company's         
business, operating results and financial condition.                            

         The commercial success of the Company will also depend, in part, on its
ability to avoid infringing patents issued to others. The Company has received, 
and may in the future receive, from third parties, including some of its        

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competitors, notices claiming that it is infringing third party patents or other
proprietary rights. If the Company were determined to be infringing any         
third-party patent, the Company could be required to pay damages, alter its     
products or processes, obtain licenses or cease certain activities. In addition,
if patents are issued to others which contain claims that compete or conflict   
with those of the Company and such competing or conflicting claims are          
ultimately determined to be valid, the Company may be required to pay damages,  
to obtain licenses to these patents, to develop or obtain alternative technology
or to cease using such technology. If the Company is required to obtain any     
licenses, there can be no assurance that the Company will be able to do so on   
commercially favorable terms, if at all. The Company's failure to obtain a      
license to any technology that it may require to commercialize its products     
could have a material adverse impact on the Company's business, operating       
results and financial condition.                                                

         Litigation, which could result in substantial costs to the Company, may
also be necessary to enforce any patents issued or licensed to the Company or to
determine the scope and validity of third-party proprietary rights. If          
competitors of the Company prepare and file patent applications in the United   
States that claim technology also claimed by the Company, the Company may have  
to participate in interference proceedings declared by the U.S. Patent and      
Trademark Office to determine priority of invention, which could result in      
substantial cost to and diversion of effort by the Company, even if the eventual
outcome is favorable to the Company. Any such litigation or interference        
proceeding, regardless of outcome, could be expensive and time consuming and    
could subject the Company to significant liabilities to third parties, require  
disputed rights to be licensed from third parties or require the Company to     
cease using such technology and consequently, could have a material adverse     
effect on the Company's business, operating results and financial condition.    

    In addition to patent protection, the Company also relies on trade
secrets, proprietary know-how and technological advances which the Company seeks
to protect, in part, by confidentiality agreements with its collaborators,      
employees and consultants. There can be no assurance that these agreements will 
not be breached, that the Company will have adequate remedies for any breach, or
that the Company's trade secrets and proprietary know-how will not otherwise    
become known or be independently discovered by others.                          

GOVERNMENT REGULATIONS                                                          

        The Company's products and operations are subject to regulation in the
United States and foreign countries.                                            

FOOD PRODUCTS TECHNOLOGY BUSINESS                             

       The Company's food packaging products are subject to regulation under
the Food, Drug and Cosmetic Act ("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 additives may be substances added directly to food, such as          
preservatives, or substances that could indirectly become a component of food,  
such as waxes, adhesives and packaging materials.                               

   A food additive, whether direct or indirect, must be covered by a
specific food additive regulation issued by the FDA. The Company believes its   
Intellipac breathable membrane products are not subject to regulation as food   
additives because these products are not expected to become a component of food 
under their expected conditions of use. If the FDA were to determine that the   
Company's Intellipac breathable membrane products are food additives, the       
Company may be required to submit a food additive petition. 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 the Company's business, operating results and financial condition.           

   The Company's 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 conducted by 
the Company, and there can be no assurance that the cost of compliance with     
environmental laws and regulations will not be material. Moreover, it is        
possible that future developments, such as increasingly strict environmental    
laws and enforcement policies thereunder, and further restrictions on the use of
manufacturing chemicals could result in increased compliance costs.             

     As a result of the Apio acquisition, the Company is subject to USDA
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,                                                   

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civil penalties, suspensions or withdrawal of regulatory approvals, product     
recalls, product seizures, including cessation of manufacturing and sales,      
operating restrictions and criminal prosecution.                                

AGRICULTURAL SEED TECHNOLOGY BUSINESS                         

       The Company's agricultural products are subject to regulations of the
United States Department of Agriculture ("USDA") and the EPA. The Company       
believes its current Intellicoat seed coatings are not pesticides as defined in 
the Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA") and are not    
subject to pesticide regulation requirements. The process of meeting pesticide  
registration requirements is lengthy, expensive and uncertain, and may require  
additional studies by the Company. There can be no assurance that future        
products will not be regulated as pesticides. In addition, the Company believes 
that its Intellicoat seed coatings will not become a component of the           
agricultural products which are produced from the seeds to which the coatings   
are applied and therefore are not subject to regulation by the FDA as a food    
additive. While the Company believes that it will be able to obtain approval    
from such agencies to distribute its products, there can be no assurance that   
the Company will obtain necessary approvals without substantial expense or      
delay, if at all.                                                               

POLYMER MANUFACTURE                                           

       The Company's manufacture of polymers is subject to regulation by the
EPA under the Toxic Substances Control Act ("TSCA"). Pursuant to TSCA,          
manufacturers of new chemical substances are required to provide a              
Pre-Manufacturing Notice ("PMN") prior to manufacturing the new chemical        
substance. After review of the PMN, the EPA may require more extensive testing  
to establish the safety of the chemical, or limit or prohibit the manufacture or
use of the chemical. To date, PMNs submitted by the Company have been approved  
by the EPA without any additional testing requirements or limitation on         
manufacturing or use. In addition, the ongoing manufacture of Dock Resins'      
existing product line is subject to state and federal environmental and safety  
regulations. No assurance can be given that the EPA will grant similar approval 
for future PMNs submitted by the Company.                                       

OTHER                                                         

       The Company and its products under development may also be subject to
other federal, state and local laws, regulations and recommendations. Although  
Landec believes that it will be able to comply with all applicable regulations  
regarding the manufacture and sale of its products and polymer materials, such  
regulations are always subject to change and depend heavily on administrative   
interpretations and the country in which the products are sold. There can be no 
assurance that future changes in regulations or interpretations made by the FDA,
EPA or other regulatory bodies, with possible retroactive effect, relating to   
such matters as safe working conditions, laboratory and manufacturing practices,
environmental controls, fire hazard control, and disposal of hazardous or       
potentially hazardous substances will not adversely affect the Company's        
business. There can also be no assurance that the Company will not be required  
to incur significant costs to comply with such laws and regulations in the      
future, or that such laws or regulations will not have a material adverse effect
upon the Company's ability to do business. Furthermore, the introduction of the 
Company's products in foreign markets may require obtaining foreign regulatory  
clearances. There can be no assurance that the Company will be able to obtain   
regulatory clearances for its products in such foreign markets.                 

EMPLOYEES                                                                       

         As of October 29, 2000, Landec had 460 full-time employees, of whom 233
were dedicated to research, development, manufacturing, quality control and     
regulatory affairs and 227 were dedicated to sales, marketing and administrative
activities. Landec intends to recruit additional personnel in connection with   
the development, manufacturing and marketing of its products. None of Landec's  
employees is represented by a union, and Landec believes relationships with its 
employees are good.                                                             

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ITEM 2.  PROPERTIES                                                             

The Company has offices in Menlo Park, Guadalupe and Reedley, 
California, Linden, New Jersey and Monticello, Indiana. During fiscal year 2000,
Landec constructed a 4,000 square foot facility in West Lebanon, Indiana to     
support the seed coating efforts of the Intellicoat seed coating business. The  
Reedley facility is currently for sale with an offer pending.                   

These properties are described below:                                           

                                                        [Enlarge/Download Table]

                                                                               Acres              
                    Business                                                    of       Lease    
  Location           Segment     Ownership             Facilities              Land    Expiration 
--------------      --------     ---------   --------------------------------  -----  ------------
                                                                                                  
Menlo Park, CA         All          Leased   21,000 square feet of office and    --    12/31/01(1)
                                             laboratory space                                     

Menlo Park, CA         All        Subleased  11,000 square feet of warehouse     --     7/31/02(1)
                                             and manufacturing space                              

Linden, NJ          Industrial      Owned    22,000 square feet of office,       2.1      --      
                       High                  laboratory, production,                              
                   Performance               warehouse, and ancillary space                       
                    Materials                                                                     

Monticello, IN     Agricultural     Owned    19,400 square feet of office        0.5      --      
                       Seed                  space                                                
                    Technology                                                                    

West Lebanon, IN   Agricultural     Owned    4,000 square feet of warehouse      --       --      
                       Seed                  and manufacturing space                              
                    Technology                                                                    

Guadalupe, CA     Food Products     Owned    94,000 square feet of office       11.6      --      
                    Technology               space, manufacturing and cold                        
                                             storage                                              

Reedley, CA(2)    Food Products     Owned    152,600 square feet of office      19.3      --      
                    Technology               space, manufacturing and cold                        
                                             storage                                              

(1)      Lease contains one two-year renewal option.                            
(2)      Currently for sale.                                                    

ITEM 3.  LEGAL PROCEEDINGS                                                      

         The Company is currently not a party to any material legal proceedings.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                    

      There were no matters submitted to a vote of security holders during
the fourth quarter of the Company's fiscal year ending October 29, 2000.        

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 PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS  

    The Common Stock is traded on the Nasdaq National Market under the
symbol "LNDC". The following table sets forth for each period indicated the high
and low sales prices for the Common Stock as reported on the Nasdaq National    
Market.                                                                         

                                                        [Enlarge/Download Table]

FISCAL YEAR 2000                                                                               
----------------                                                                               
                                                                                   HIGH   LOW  
                                                                                   ----   ---  
                                                                                               
         4th Quarter ending October 29, 2000.......................................$6.63  $4.13

         3rd Quarter ending July 30, 2000..........................................$6.75  $4.00

         2nd Quarter ending April 30, 2000.........................................$7.50  $5.06

         1st Quarter ending January 30, 2000.......................................$8.81  $4.56

FISCAL YEAR 1999                                                                               
----------------                                                                               
                                                                                   HIGH   LOW  
                                                                                   ----   ---  
         4th Quarter ending October 31, 1999.......................................$8.41  $2.63

         3rd Quarter ending July 31, 1999..........................................$4.06  $3.00

         2nd Quarter ending April 30, 1999.........................................$5.13  $3.38

         1st Quarter ending January 31, 1999.......................................$6.00  $4.00

        There were approximately 164 holders of record of 16,149,086 shares of
outstanding Common Stock as of January 5, 2001. Since holders are listed under  
their brokerage firm's names, the actual number of shareholders is higher. The  
Company has not paid any dividends on the Common Stock since its inception. The 
Company presently intends to retain all future earnings, if any, for its        
business and does not anticipate paying cash dividends on its Common Stock in   
the foreseeable future.                                                         

       In connection with the sale of Series D Preferred Stock in July 1993,
the Company issued warrants to purchase 186,349 shares of Common Stock at an    
exercise price of $4.31 per share for $5,357 in cash. In a cashless exercise    
during fiscal year 1998, 46,587 shares were issued in exchange for the warrants.

In October 1998, certain directors and officers of the Company
purchased 200,425 shares of Common Stock for between $3.75 and $3.94 per share  
for $776,000.                                                                   

Pursuant to a Series A Preferred Stock Purchase Agreement (the
"Purchase Agreement") dated November 19, 1999, by and among the Company and     
Frederick Frank, the Company completed a financing that raised approximately    
$10.0 million through a private placement of its Series A-1 Preferred Stock and 
Series A-2 Preferred Stock (the "Preferred Stock"). Pursuant to the Purchase    
Agreement, the Company issued 166,667 shares of Preferred Stock of the Company  
at $60.00 per share (representing 1,666,670 shares of Common Stock on a         
converted basis). Frederick Frank was elected as a director of the Company in   
December 1999.                                                                  

        In connection with the Company's acquisition of Apio, Inc. on December
2, 1999, the prior owners of Apio received 2.5 million shares of Common Stock.  
As compensation for services rendered by Lehman Brothers Inc. in connection with
the closing of the Apio acquisition, the Company issued 62,500 shares of Common 
Stock to Lehman Brothers, Inc. at $6.00 per share.                              

        The issuance of securities in this Item 5 was deemed to be exempt from
registration under the Securities Act of 1933, as amended (the "Act"), in       
reliance on Section 4(2) of the Act as a transaction by an issuer not involving 
any public offering. The recipients of the securities in such transaction       
represented their intention to acquire the securities for investment only and   
not with a view to or for sale in connection with any distribution thereof and  
appropriate legends were affixed to the securities issued in such transaction.  
The recipients were given adequate access to information about the Company.     

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ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA                                   

      The information set forth below is not necessarily indicative of the
results of future operations and should be read in conjunction with the         
information contained in Item 7 -- Management's Discussion and Analysis of      
Financial Condition and Results of Operations and the Consolidated Financial    
Statements and Notes to Consolidated Financial Statements contained in Item 8 of
this report.                                                                    

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                                                          YEAR ENDED                                                  
                                                          OCTOBER 29,               YEAR ENDED OCTOBER 31,            
                                                          -----------    -------------------------------------------- 
STATEMENT OF OPERATIONS DATA:                                2000           1999         1998        1997         1996
                                                                     (in thousands, except per share data)            
                                                                                                                      
Revenues:                                                                                                             
   Product sales.........................................    $ 135,412    $ 33,927    $ 31,664    $  8,653    $   371 
   Services revenue ......................................      71,280          --          --          --         -- 
   Services revenue, related party .......................       1,898          --          --          --         -- 
   Research, development and royalty revenues ............         586         770       1,352         863      1,096 
   License fees ..........................................         374         750         500          --        600 
                                                             ---------    --------    --------    --------    ------- 
      Total revenues .....................................     209,550      35,447      33,516       9,516      2,067 

Cost of revenue:                                                                                                      
   Cost of product sales .................................     113,113      21,476      20,308       6,215        422 
   Cost of services revenue ..............................      63,075          --          --          --         -- 
                                                             ---------    --------    --------    --------    ------- 
Total cost of revenue ....................................     176,188      21,476      20,308       6,215        422 

Gross profit .............................................      33,362      13,971      13,208       3,301      1,645 

Operating costs and expenses:                                                                                         
   Research and development ..............................       4,696       5,758       5,713       4,608      3,588 
   Selling, general and administrative ...................      28,879      11,192      10,835       4,664      2,367 
   Exit of fruit processing business .....................         525          --          --          --         -- 
   Purchased in-process research and development .........          --          --          --       3,022         -- 
                                                             ---------    --------    --------    --------    ------- 
      Total operating costs and expenses .................      34,100      16,950      16,548      12,294      5,955 
                                                             ---------    --------    --------    --------    ------- 

Operating loss ...........................................        (738)     (2,979)     (3,340)     (8,993)    (4,310)

Interest income ..........................................         877         363         737       1,726      1,546 
Interest expense .........................................      (2,335)        (99)       (137)       (319)       (59)
Other income .............................................          70          --          --          --         -- 
                                                             ---------    --------    --------    --------    ------- 
Loss from continuing operations before income taxes ......      (2,126)     (2,715)     (2,740)     (7,586)    (2,823)
Provision for income taxes ...............................          42         (54)       (150)         --         -- 
                                                             ---------    --------    --------    --------    ------- 
Loss from continuing operations ..........................      (2,084)     (2,769)     (2,890)     (7,586)    (2,823)

Discontinued Operations:                                                                                              
   Loss from discontinued QuickCast operations ...........          --          --          --      (1,059)    (1,377)
   Gain on disposal of QuickCast operations ..............          --          --          --          70         -- 
                                                             ---------    --------    --------    --------    ------- 
Loss from discontinued operations ........................          --          --          --        (989)    (1,377)
                                                             ---------    --------    --------    --------    ------- 
Net loss before cumulative effect of accounting change ...      (2,084)     (2,769)     (2,890)     (8,575)    (4,200)

Cumulative effect of change in accounting for upfront                                                                 
   license fee revenue ...................................      (1,914)         --          --          --         -- 
                                                             ---------    --------    --------    --------    ------- 
Net Loss .................................................   $  (3,998)   $ (2,769)   $ (2,890)   $ (8,575)   $(4,200)
                                                             =========    ========    ========    ========    ======= 
Basic and diluted net loss per share:                                                                                 
   Continuing operations .................................   $    (.13)   $   (.21)   $   (.23)   $   (.68)   $  (.37)
   Discontinued operations ...............................          --          --          --        (.09)      (.18)
   Cumulative effect of change in accounting .............        (.12)         --          --          --         -- 
                                                             ---------    --------    --------    --------    ------- 
Basic and diluted net loss per share .....................   $    (.25)   $   (.21)   $   (.23)   $   (.77)   $  (.55)
                                                             =========    ========    ========    ========    ======= 
Pro forma amounts assuming the accounting change is                                                                   
   applied retroactively:                                                                                             
    Net loss .............................................   $  (2,084)   $ (3,145)   $ (3,070)   $ (8,289)   $(3,914)
                                                             =========    ========    ========    ========    ======= 
    Net loss per share ...................................   $    (.13)   $   (.24)   $   (.24)   $   (.74)   $  (.51)
                                                             =========    ========    ========    ========    ======= 

Shares used in computing basic and diluted net loss                                                                   
   per share .............................................      15,796      13,273      12,773      11,144      7,699 
                                                             =========    ========    ========    ========    ======= 

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                                                     OCTOBER 29,                       OCTOBER 31,                  
                                                     -----------  ------------------------------------------------- 
                                                        2000       1999            1998        1997         1996    
                                                     -----------  --------        --------    ---------    -------- 
BALANCE SHEET DATA:                                                         (IN THOUSANDS)                          

                                                                                                                    
Cash and cash equivalents..........................  $   9,589    $  3,203        $ 10,177     $ 14,669    $ 36,510 
Total assets .......................................   133,252      40,708          42,356       50,160      38,358 
Debt ...............................................    29,824       2,762           2,811           32          -- 
Convertible preferred stock ........................     9,149          --              --           --          -- 
Accumulated deficit ................................   (49,526)    (45,528)        (42,756)     (39,858)    (31,278)
Total shareholders' equity.........................  $  52,178    $ 31,761        $ 33,688     $ 35,615    $ 36,640 

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND        
RESULTS OF OPERATIONS                                         

 The following discussion should be read in conjunction with the
Company's Consolidated Financial Statements contained in Item 8 of this report. 
Except for the historical information contained herein, the matters discussed in
this report are forward-looking statements that involve certain risks and       
uncertainties that could cause actual results to differ materially from those in
the forward-looking statements. Potential risks and uncertainties include,      
without limitation, those mentioned in this report and, in particular, the      
factors described below under "Additional Factors That May Affect Future        
Results".                                                                       

OVERVIEW                                                                        

     Since its inception in October 1986, the Company has been primarily
engaged in the research and development of its Intelimer technology and related 
products. The Company has launched four product lines from this core development
- QuickCast-TM- splints and casts, in April 1994, which was subsequently sold to
Bissell Healthcare Corporation in August 1997; Intellipac breathable membranes  
for the fresh-cut produce packaging market, in September 1995; Intelimer Polymer
Systems for the industrial specialties market in June 1997; and Intellicoat     
coated inbred corn seeds in the Fall of 1999.                                   

        Revenues related to research contracts are recognized ratably over the
related funding periods for each contract, which is generally as research is    
performed. Product sales are recognized upon shipment except for shipments sent 
FOB destination in which revenue is recognized upon receipt by the customer.    
Services revenue is recognized when the service is rendered.                    

         The Company previously recognized noncancellable, nonrefundable license
fees as revenue when received and when all significant contractual obligations  
of the company relating to the fees had been met. Effective November 1, 1999,   
the Company changed its method of accounting for noncancellable, nonrefundable  
license fees to recognize such fees over the research and development period of 
the agreement, as well as the term of any related supply agreement entered into 
concurrently with the license when the risk associated with commercialization of
a product is non-substantive at the outset of the arrangement. The Company      
believes the change in accounting principle is preferable based on guidance     
provided in SEC Staff Accounting Bulletin No. 101 - REVENUE RECOGNITION IN      
FINANCIAL STATEMENTS. The $1.9 million cumulative effect of the change in       
accounting principle, calculated as of November 1, 1999, was reported as a      
charge in the year ended October 29, 2000.                                      

         On December 2, 1999, the Company acquired Apio, Inc and certain related
entities ("Apio"). Apio is a leading marketer and packer of produce and         
specialty packaged fresh-cut vegetables. See "Business - Description of Core    
Business: Food Products Technology Business - Apio, Inc."                       

During fiscal years 1998 through 1999, the Company managed its
operations in three business segments - Food Products Technology, Agricultural  
Seed Technology and Industrial High Performance Materials.                      

        With the acquisition of Apio, the Company will be focusing on two core
businesses - Food Products Technology and Agricultural Seed Technology. The Food
Products Technology segment combines the Company's Intellipac breathable        
membrane technology with Apio's fresh-cut produce business. The Agricultural    
Seed Technology segment integrates the Intellicoat seed coating technology with 
Fielder's Choice's direct marketing, telephone sales and e-commerce distribution
capabilities. The Company also operates a Technology Licensing/Research and     
Development business which develops products to be licensed outside of the      
Company's core businesses.                                                      

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      Dock Resins, the Company's polymer manufacturer supports the polymer
needs of these core businesses and manufactures products for the specialty      
polymer industry and Intelimer Polymer Systems customers. Dock Resins is        
included in the Corporate and Other segment.                                    

     The Company has been unprofitable during each fiscal year since its
inception. From inception through October 29, 2000, the Company's accumulated   
deficit was $49.5 million. The Company 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 will be able to reach or sustain           
profitability for an entire fiscal year.                                        

RESULTS OF OPERATIONS                                                           

  FISCAL YEAR ENDED OCTOBER 29, 2000 COMPARED TO FISCAL YEAR ENDED
OCTOBER 31, 1999                                              

      Total revenues were $209.6 million for fiscal year 2000, compared to
$35.4 million for fiscal year 1999. Revenues from product sales and services    
increased to $208.6 million in fiscal year 2000 from $33.9 million in fiscal    
year 1999. The increase in product sales and service revenues was primarily due 
to $177.0 million in revenues from Apio, which was acquired effective November  
29, 1999 and from increased product sales from Landec Ag. Landec Ag product     
sales increased to $17.2 million in fiscal year 2000 from $15.2 million during  
fiscal year 1999 due to an increase in the volume of hybrid corn seed sold and  
revenue from the introduction of Intellicoat seed coated products. These        
increases were partially offset by a decrease in Dock Resins product sales from 
$14.0 million in fiscal year 1999 to $12.4 million in fiscal year 2000. This    
decrease was a result of the continued weakness in the chemical industry during 
fiscal year 2000. Revenues from research and development funding and from       
royalties decreased to $586,000 in fiscal year 2000 from $770,000 during fiscal 
year 1999. The decrease in research, development and royalty revenues was       
primarily due to the expiration of the research and development agreement with  
Alcon Laboratories, Inc. ("Alcon") related to the PORT-TM- ophthalmic devices,  
partially offset by new research and development contracts with ConvaTec, a     
division of Bristol Myers Squibb, in the area of medical adhesives, and UCB     
Chemicals Corporation in the area of industrial applications. Revenues from     
licensing fees for fiscal year 2000 were attributable to the Company's adoption 
of SEC Staff Accounting Bulletin No. 101 - Revenue Recognition in Financial     
Statements (SAB 101). Effective November 1, 1999, the Company changed its method
of accounting for noncancellable, nonrefundable license fees to recognize such  
fees over the research and development period of the agreement, as well as the  
term of any related supply agreement entered into concurrently with the license 
when the risk associated with commercialization of a product is non-substantive 
at the outset of the arrangement. The adoption of SAB 101 resulted in a         
cumulative effect adjustment that increased the reported net loss for fiscal    
year 2000 by $1.9 million related to upfront license fees received from the 1995
Hitachi agreement and the 1997 Alcon agreement (see Note 1 to the Consolidated  
Financial Statements). The cumulative effect adjustment was initially recorded  
as deferred revenue, and $374,000 of this deferred amount was "recycled" into   
revenue in fiscal year 2000. The $750,000 license fee revenues for fiscal year  
1999 represent a milestone payment from Alcon related to the PORT ophthalmic    
devices during the first quarter, which was recorded in accordance with the     
Company's historical accounting practice.                                       

   Cost of revenue consists of material, labor and overhead. Cost of
revenue was $176.2 million for fiscal year 2000 compared to $21.5 million for   
fiscal year 1999. Gross profit from product sales and services as a percentage  
of revenue from product sales and services decreased from 37% in fiscal year    
1999 to 16% in fiscal year 2000. The decrease in gross profit percentage was    
primarily the result of Apio's mix of products having a lower gross margin than 
Landec's other businesses coupled with disappointing results in Apio's stone    
fruit business during fiscal year 2000, and Apio's higher costs associated with 
sourcing crops during the winter months. In addition, during fiscal year 2000,  
Landec incurred startup costs associated with Apio's new value-added food       
processing plant and establishing a new manufacturing facility in Menlo Park for
Intellipac breathable membrane products. Overall gross profit increased from    
$14.0 million in fiscal year 1999 to $33.4 million during fiscal year 2000, an  
increase of 139%. This increase is primarily due to gross profit from Apio of   
$19.8 million partially offset by lower license fee gross profits in fiscal year
2000 compared to fiscal year 1999.                                              

     Research and development expenses were $4.7 million for fiscal year
2000 compared to $5.8 million for fiscal year 1999, a decrease of 18%. Landec's 
research and development expenses consist primarily of expenses involved in the 
development of, process scale-up of, and efforts to protect intellectual        
property content of Landec's enabling side chain crystallizable polymer         
technology and research and development expenses related to Dock Resins'        
products. The decrease in research and development expenses during fiscal year  
2000 compared to fiscal year 1999 were primarily due to substantially reduced   
PORT research and development activities and the shift in Intellicoat seed      
coating to less research and development and greater production efforts.        

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     Selling, general and administrative expenses were $28.9 million for
fiscal year 2000 compared to $11.2 million for fiscal year 1999, an increase of 
158%. Selling, general and administrative expenses consist primarily of sales   
and marketing expenses associated with Landec's product sales and services,     
business development expenses, and staff and administrative expenses. Selling,  
general and administrative expenses increased during fiscal year 2000 as        
compared to fiscal year 1999 primarily as a result of expenses from Apio of     
$15.6 million, and increased sales and marketing expenses associated with       
marketing efforts at Landec Ag. Specifically, sales and marketing expenses      
increased to $13.6 million during fiscal year 2000 from $6.2 million for fiscal 
year 1999. Landec expects that total selling, general and administrative        
spending for existing and newly acquired products will continue to increase in  
absolute dollars in future periods, although it may vary as a percentage of     
total revenues.                                                                 

       In September 2000, due to disappointing financial results, management
of Landec decided to discontinue processing fruit at its Reedley facility. The  
Company has put the facility and the packing and cold storage assets up for     
sale. The Company will continue to provide field support and sales and marketing
services to current contracted growers through Apio's existing staff and will   
outsource all remaining services to third parties. As a result of the shutdown  
of the Reedley facility, the Company recorded a $525,000 charge during the      
fourth quarter of fiscal year 2000, primarily for severance and payroll related 
costs. The sale is expected to result in a gain. The current net book value of  
the assets is $3.0 million. The Company anticipates closing a sale during the   
second fiscal quarter of 2001.                                                  

        Interest income for fiscal year 2000 was $877,000 compared to $363,000
for fiscal year 1999. This increase in interest income was due principally to   
interest earned on Apio's notes receivable. Interest expense for fiscal year    
2000 was $2.3 million, compared to $99,000 for fiscal year 1999. This increase  
was primarily due to the increase in debt from the acquisition of Apio.         

  FISCAL YEAR ENDED OCTOBER 31, 1999 COMPARED TO FISCAL YEAR ENDED
OCTOBER 31, 1998                                              

    Total revenues were $35.4 million for fiscal year 1999 compared to
$33.5 million for fiscal year 1998. Revenues from product sales increased to    
$33.9 million in fiscal year 1999 from $31.7 million in fiscal year 1998        
primarily due to increased product sales from Landec Ag and Intellipac          
breathable membrane products which increased from $13.3 million and $2.9        
million, respectively, in fiscal year 1998 to $15.2 million and $4.5 million,   
respectively, during fiscal year 1999. The increase in Landec Ag revenues was   
primarily due to increased per unit sales prices, and the increase in Intellipac
breathable membrane revenues was primarily due to the introduction of various   
new products and increased volumes for existing products. These increases were  
partially offset by a decrease in Dock Resins product sales from $15.4 million  
during fiscal year 1998 to $14.0 million during fiscal year 1999. This decrease 
was a result of the overall weakness in the chemical industry during fiscal year
1999. Revenues from research and development funding were $770,000 for fiscal   
year 1999 compared to $1.4 million for fiscal year 1998. The decrease in        
research and development revenues was primarily due to the completion of        
research and development arrangements with Hitachi Chemical and Nitta           
Corporation in fiscal year 1998. Revenues from license fees during fiscal year  
1999 were $750,000 compared to $500,000 during fiscal year 1998. The increase in
revenues from license fees was due to a payment received from Alcon in fiscal   
year 1999 upon meeting a certain milestone related to the licensing agreement   
for the PORT ophthalmic devices.                                                

       Cost of product sales was $21.5 million for fiscal year 1999 compared
to $20.3 million for fiscal year 1998. Gross profit from product sales as a     
percentage of product sales increased to 37% in fiscal year 1999 from 36% in    
fiscal year 1998. The increase in gross profit from product sales as a          
percentage of product sales in fiscal year 1999 as compared to fiscal year 1998 
was primarily the result of higher average selling prices of Landec Ag products,
partially offset by start-up costs associated with establishing a new           
manufacturing facility in Menlo Park for Intellipac breathable membrane products
late in fiscal year 1999.                                                       

     Research and development expenses were $5.8 million for fiscal year
1999 compared to $5.7 million for fiscal year 1998. The increase in research and
development expenses in fiscal year 1999 compared to fiscal year 1998 was       
primarily due to increased development costs for the Company's Intellicoat seed 
coating products.                                                               

     Selling, general and administrative expenses were $11.2 million for
fiscal year 1999 compared to $10.8 million for fiscal year 1998, an increase of 
3%. Specifically, sales and marketing expenses increased to $6.2 million for    
fiscal year 1999, from $5.9 million for fiscal year 1998.                       

   Net interest income was $264,000 for fiscal year 1999 compared to
$600,000 for fiscal year 1998. The decrease during fiscal year 1999 as compared 
to fiscal year 1998 was due principally to less cash being available for        
investing.                                                                      

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LIQUIDITY AND CAPITAL RESOURCES                                                 

      As of October 29, 2000, Landec had cash and cash equivalents of $9.6
million, a net increase of $6.4 million from $3.2 million as of October 31,     
1999. This increase was primarily due to: (a) net borrowings under Landec's     
lines of credit of $9.6 million; (b) cash acquired in the acquisition of Apio of
$3.3 million; (c) cash from operations of $5.0 million; (d) cash from the sale  
of common stock of $0.7 million; partially offset by (e) the purchase of $5.3   
million of property, plant and equipment; (f) advances to growers of $3.8       
million; (g) payments on long term debt of $2.3 million; and (h) acquisition    
related costs of $1.0 million.                                                  

    During fiscal year 2000, Landec purchased equipment to support the
development of Intellipac and Intellicoat products, incurred building           
improvement and equipment upgrade expenditures at Dock Resins and Apio to expand
capacity, and constructed a new pilot facility for Intellicoat seed coating     
products in Indiana. These expenditures represented the majority of the $5.3    
million of property and equipment purchased during fiscal year 2000.            

  In November 1999 the Company raised $10 million upon the sale of
Preferred Stock ($9.1 million net of issuance costs). In December, 1999, in     
conjunction with the acquisition of Apio, the Company secured $11.25 million of 
term debt and a $12 million line of credit with Bank of America. The term debt  
and line of credit agreements ("Loan Agreement") contain restrictive covenants  
that require Apio to meet certain financial tests, including minimum levels of  
EBITDA (as defined in the Loan Agreement), minimum fixed charge coverage ratio, 
minimum current ratio, minimum adjusted net worth and maximum leverage ratios.  
These requirements and ratios generally become more restrictive over time. The  
Loan Agreement, through restricted payment covenants, limits the ability of Apio
to make cash payments to Landec, until the outstanding balance is reduced to an 
amount specified in the loan agreement. In June 2000, Landec Ag established a   
$3.0 million bank line of credit for working capital needs and a $1.0 million   
equipment line of credit to be used to fund the expansion of the manufacturing  
capabilities of Intellicoat seed coating products. Landec believes that these   
new facilities, along with existing cash, cash equivalents and existing         
borrowing capacities will be sufficient to finance its operational and capital  
requirements through at least the next twelve months. Borrowings on Landec's    
lines of credit are expected to vary with seasonal requirements of the Company's
businesses. The Company may, however, raise additional funds during the next    
twelve months through another debt financing or an equity financing. If an      
equity financing occurs it will have a dilutive effect on current shareholders. 
Landec's future capital requirements, however, will depend on numerous factors, 
including the progress of its research and development programs; the development
of commercial scale manufacturing capabilities; the development of marketing,   
sales and distribution capabilities; the ability of Landec to establish and     
maintain new collaborative and licensing arrangements; the continued            
assimilation and integration of Apio into Landec; any decision to pursue        
additional acquisition opportunities; adverse weather conditions that can affect
the supply and price of produce, the timing and amount, if any, of payments     
received under licensing and research and development agreements; the costs     
involved in preparing, filing, prosecuting, defending and enforcing intellectual
property rights; the ability to comply with regulatory requirements; the        
emergence of competitive technology and market forces; the effectiveness of     
product commercialization activities and arrangements; the amount of future     
earn-out payments; and other factors. If Landec's currently available funds,    
together with the internally generated cash flow from operations are not        
sufficient to satisfy its financing needs, Landec would be required to seek     
additional funding through other arrangements with collaborative partners,      
additional bank borrowings and public or private sales of its securities. There 
can be no assurance that additional funds, if required, will be available to    
Landec on favorable terms if at all.                                            

ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS                               

         Landec desires to take advantage of the "Safe Harbor" provisions of the
Private Securities Litigation Reform Act of 1995 and of Section 21E and Rule    
3b-6 under the Securities Exchange Act of 1934. Specifically, Landec wishes to  
alert readers that the following important factors, as well as other factors    
including, without limitation, those described elsewhere in this report, could  
in the future affect, and in the past have affected, Landec's actual results and
could cause Landec's results for future periods to differ materially from those 
expressed in any forward-looking statements made by or on behalf of Landec.     
Landec assumes no obligation to update such forward-looking statements.         

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WE HAVE A HISTORY OF LOSSES WHICH MAY CONTINUE                                  

         Landec has incurred net losses in each fiscal year since its inception.
Landec's accumulated deficit as of October 29, 2000 totaled $49.5 million.      
Landec 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 Landec  
will be able to reach or sustain profitability for an entire fiscal year.       

OUR SUBSTANTIAL INDEBTEDNESS COULD LIMIT OUR FINANCIAL AND OPERATING FLEXIBILITY

        At October 29, 2000, Landec's total debt, including current maturities
and capital lease obligations, was approximately $29.8 million and the total    
debt to equity ratio was approximately 57%. This level of indebtedness could    
have significant consequences because a substantial portion of Landec's net cash
flow from operations must be dedicated to debt service and will not be available
for other purposes, Landec's ability to obtain additional debt financing in the 
future for working capital, capital expenditures or acquisitions may be limited,
and Landec's level of indebtedness may limit its flexibility in reacting to     
changes in the industry and economic conditions generally.                      

     In connection with the Apio acquisition, Landec may be obligated to
make future payments to the former stockholders of Apio of up to $16.55 million.
Of this amount, $1.1 million was paid in January 2001 and $4.1 is due to be paid
in March 2001.                                                                  

        Landec's ability to service its indebtedness will depend on its future
performance, which will be affected by prevailing economic conditions and       
financial, business and other factors, some of which are beyond Landec's        
control. If Landec were unable to service its debt, it would be forced to pursue
one or more alternative strategies such as selling assets, restructuring or     
refinancing its indebtedness or seeking additional equity capital, which might  
not be successful and which could substantially dilute the ownership interest of
existing shareholders.                                                          

        Apio is subject to various financial and operating covenants under its
term debt and line of credit facilities, including minimum levels of EBITDA (as 
defined in the Loan Agreement), minimum fixed charge coverage ratio, minimum    
current ratio, minimum adjusted net worth and maximum leverage ratios. These    
requirements and ratios generally become more restrictive over time. The Loan   
Agreement limits the ability of Apio to make cash payments to Landec until the  
outstanding balance is reduced to an amount specified in the Loan Agreement.    
Landec Ag and Dock Resins are subject to certain restrictive covenants such as  
the ability of Landec to receive payments on debt owed to Landec. Landec has    
pledged substantially all of Apio's, Landec Ag's and Dock Resins' assets to     
secure their bank debt. Landec's failure to comply with the obligations under   
the loan agreement, including maintenance of financial ratios, could result in  
an event of default, which, if not cured or waived, would permit acceleration of
the indebtedness due under the loan agreement.                                  

OUR FUTURE OPERATING RESULTS ARE LIKELY TO FLUCTUATE WHICH MAY CAUSE OUR STOCK  
PRICE TO DECLINE                                                                

In the past, Landec's results of operations have fluctuated   
significantly from quarter to quarter and are expected to continue in the       
future. Historically, Landec's direct marketer of hybrid corn seed, Intellicoat,
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 Landec's second quarter). In addition, Apio can be heavily affected by   
seasonal and weather factors which could impact quarterly results, such as the  
lower than expected volumes and poor yields experienced in the stone fruit      
business during the third quarter of fiscal year 2000. Landec's earnings in its 
Food Products Technology business will be sensitive to price fluctuations in the
fresh vegetables and fruits markets. Excess supplies can cause intense price    
competition. Other factors affecting Landec's food and/or agricultural          
operations include the seasonality of its supplies, the ability to process      
produce during critical harvest periods, the timing and effects of ripening, the
degree of perishability, the effectiveness of worldwide distribution systems,   
the terms of various federal and state marketing orders, total worldwide        
industry volumes, the seasonality of consumer demand, foreign currency          
fluctuations, foreign importation restrictions and foreign political risks. As a
result of these and other factors, Landec expects to continue to experience     
fluctuations in quarterly operating results, and there can be no assurance that 
Landec will be able to reach or sustain profitability for an entire fiscal year.

WE MAY EXPERIENCE DIFFICULTIES IN INTEGRATING APIO AND OTHER NEW BUSINESS       
ACQUISITIONS                                                                    

 Landec's acquisition of Apio involves the integration of Apio's
operations into Landec. The integration will require the dedication of          
management resources in order to achieve the anticipated operating efficiencies 
of the acquisition. No assurance can be given that difficulties encountered in  
integrating the operations of Apio into Landec will be overcome or that the     
benefits expected from integration will be realized. The difficulties in        
combining Apio and Landec's operations are exacerbated by the necessity of      
coordinating geographically separate organizations, integrating                 

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personnel with disparate business backgrounds and combining different corporate 
cultures. The process of integrating operations could cause an interruption of, 
or loss of momentum in, the activities of the combined companies' business.     

   The successful integration of other new business acquisitions may
require substantial effort from Landec's management. The diversion of the       
attention of management and any difficulties encountered in the transition      
process could have a material adverse effect on Landec'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, and sales and marketing efforts. In addition, the process of     
combining organizations could cause the interruption of, or a loss of momentum  
in, Landec's activities. There can be no assurance that Landec will be able to  
retain key management, technical, sales and customer support personnel, or that 
Landec will realize the anticipated benefits of the acquisitions.               

WE MAY NOT BE ABLE TO ACHIEVE ACCEPTANCE OF OUR NEW PRODUCTS IN THE MARKETPLACE 

       The success of Landec in generating significant sales of its products
will depend in part on the ability of Landec and its partners and licensees to  
achieve market acceptance of Landec's new products and technology. The extent to
which, and rate at which, market acceptance and penetration are achieved by     
Landec's current and future products are a function of many variables including,
but not limited to, price, safety, efficacy, reliability, conversion costs and  
marketing and sales efforts, as well as general economic conditions affecting   
purchasing patterns. There can be no assurance that markets for Landec's new    
products will develop or that Landec's new products and technology will be      
accepted and adopted. The failure of Landec's new products to achieve market    
acceptance would have a material adverse effect on Landec's business, results of
operations and financial condition.                                             

    There can be no assurance that Landec will be able to successfully
develop, commercialize, achieve market acceptance of or reduce the costs of     
producing Landec's new products, or that Landec's competitors will not develop  
competing technologies that are less expensive or otherwise superior to those of
Landec. There can be no assurance that Landec will be able to develop and       
introduce new products and technologies in a timely manner or that new products 
and technologies will gain market acceptance. Landec is in the early stage of   
product commercialization of Intellipac breathable membrane, Intellicoat seed   
coating and Intelimer polymer systems products and many of its potential        
products are in development. Landec believes that its future growth will depend 
in large part on its ability to develop and market new products in its target   
markets and in new markets. In particular, Landec expects that its 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 Landec's products. In addition, commercial applications of Landec's   
temperature switch polymer technology are relatively new and evolving.          

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 Landec or that would render Landec's  
technology and products obsolete and non-competitive. Landec operates 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 and medical companies is expected to be intense. In addition, the    
nature of Landec's collaborative arrangements may result in its corporate       
partners and licensees becoming competitors of Landec. Many of these competitors
have substantially greater financial and technical resources and production and 
marketing capabilities than Landec, and may have substantially greater          
experience in conducting clinical and field trials, obtaining regulatory        
approvals and manufacturing and marketing commercial products.                  

WE HAVE LIMITED MANUFACTURING EXPERIENCE AND MAY HAVE TO DEPEND ON THIRD PARTIES
TO MANUFACTURE OUR PRODUCTS                                                     

     Landec may need to consider seeking collaborative arrangements with
other companies to manufacture some of its products. If Landec becomes dependent
upon third parties for the manufacture of its products, then Landec's profit    
margins and its ability to develop and deliver those products on a timely basis 
may be affected. Failures by third parties may impair Landec's ability to       
deliver products on a timely basis, impair Landec's competitive position, or may
delay the submission of products for regulatory approval. In late fiscal 1999,  
in an effort to reduce reliance on third party manufacturers, Landec began the  
set up of a manufacturing operation at its facility in Menlo Park, California,  
for the production of Intellipac breathable membrane packaging products. There  
can be no assurance that Landec can successfully operate a manufacturing        
operation at acceptable costs, with acceptable yields, and retain adequately    
trained personnel.                                                              

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         Although Landec believes Dock Resins will provide Landec with practical
knowledge in the scale-up of Intelimer polymer products, production in          
commercial-scale quantities may involve technical challenges for Landec. Landec 
anticipates that a portion of its products will be manufactured in the Linden,  
New Jersey facility acquired in the purchase of Dock Resins. Landec's reliance  
on this facility involves a number of potential risks, including the            
unavailability of, or interruption in access to, some process technologies and  
reduced control over delivery schedules, and low manufacturing yields and high  
manufacturing costs. In February 2000, Dock Resins had a fire in its research   
and development laboratory in Linden, New Jersey which interrupted its ability  
to develop new products and samples for potential and existing customers.       

OUR DEPENDENCE ON SINGLE SUPPLIERS MAY CAUSE DISRUPTION IN OUR OPERATIONS SHOULD
ANY SUPPLIER FAIL TO DELIVER MATERIALS                                          

         No assurance can be given that Landec will not experience difficulty is
acquiring materials for the manufacture of its products or that Landec will be  
able to obtain substitute vendors, or that Landec will be able to procure       
comparable materials or hybrid corn varieties at similar prices and terms within
a reasonable time. Many of the raw materials used in manufacturing Landec's     
products are currently purchased from a single source, including some monomers  
used to synthesize Intelimer polymers and substrate materials for Landec's      
breathable membrane products. In addition, virtually all of the hybrid corn     
varieties sold by Fielder's Choice are purchased from a single source. Any      
interruption of supply could delay product shipments and materially harm our    
business.                                                                       

WE MAY BE UNABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS         

         Landec has received, and may in the future receive, from third parties,
including some of its competitors, notices claiming that it is infringing third 
party patents or other proprietary rights. If Landec were determined to be      
infringing any third-party patent, Landec could be required to pay damages,     
alter its products or processes, obtain licenses or cease the infringing        
activities. If Landec is required to obtain any licenses, there can be no       
assurance that Landec will be able to do so on commercially favorable terms, if 
at all. Litigation, which could result in substantial costs to and diversion of 
effort by Landec, may also be necessary to enforce any patents issued or        
licensed to Landec or to determine the scope and validity of third-party        
proprietary rights. Any litigation or interference proceeding, regardless of    
outcome, could be expensive and time consuming and could subject Landec to      
significant liabilities to third parties, require disputed rights to be licensed
from third parties or require Landec to cease using that technology. Landec's   
success depends in large part on its ability to obtain patents, maintain trade  
secret protection and operate without infringing on the proprietary rights of   
third parties. There can be no assurance that any pending patent applications   
will be approved, that Landec will develop additional proprietary products that 
are patentable, that any patents issued to Landec will provide Landec with      
competitive advantages or will not be challenged by any third parties or that   
the patents of others will not prevent the commercialization of products        
incorporating Landec's technology. Furthermore, there can be no assurance that  
others will not independently develop similar products, duplicate any of        
Landec's products or design around Landec's patents.                            

OUR OPERATIONS ARE SUBJECT TO ENVIRONMENTAL REGULATIONS THAT DIRECTLY IMPACT OUR
BUSINESS                                                                        

   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, including those utilized by Dock Resins. As a result of historic     
off-site disposal practices, Dock Resins was involved in two actions seeking to 
compel the generators of hazardous waste to remediate hazardous waste sites.    
Dock Resins has been informed by its counsel that it was a DE MINIMIS generator 
to these sites, and these actions have been settled without the payment of any  
material amount by Landec. In addition, the New Jersey Industrial Site Recovery 
Act ("ISRA") requires an investigation and remediation of any industrial        
establishment, like Dock Resins, which changes ownership. This statute was      
activated by Landec's acquisition of Dock Resins. Dock Resins has completed its 
investigation of the site, delineated the limited areas of concern on the site, 
and completed the bulk of the active remediation required under the statute. The
costs associated with this effort are being borne by the former owner of Dock   
Resins, and counsel has advised Dock Resins and Landec that funds of the former 
owner required by ISRA to be set aside for this effort are sufficient to pay for
the successful completion of remedial activities at the site. In most cases,    
Landec believes its liability will be limited to sharing clean-up or other      
remedial costs with other potentially responsible parties. Any failure by Landec
to control the use of, or to restrict adequately the discharge of, hazardous    
substances under present or future regulations could subject it to substantial  
liability or could cause its manufacturing operations to be suspended and       
changes in environmental regulations may impose the need for additional capital 
equipment or other requirements.                                                

Landec's 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   

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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 conducted by 
Landec, and there can be no assurance that the cost of compliance with          
environmental laws and regulations will not be material. Moreover, it is        
possible that future developments, such as increasingly strict environmental    
laws and enforcement policies and further restrictions on the use of            
manufacturing chemicals could result in increased compliance costs.             

ADVERSE WEATHER CONDITIONS CAN CAUSE SUBSTANTIAL DECREASES IN OUR SALES AND/OR  
INCREASES IN OUR COSTS                                                          

        Landec's 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 and hurricanes may adversely affect the supply of vegetables and     
fruits used in Landec's business, which could reduce the sales volumes and/or   
increase the unit production costs. In early fiscal year 2000, optimal weather  
conditions resulted in an over supply of certain crops in which the Company had 
an invested interest. The over supply resulted in reduced prices for these crops
which caused the Company to report a loss on its investment. 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 Landec's financial condition.                     

WE HAVE LIMITED SALES AND MARKETING EXPERIENCE WITH OUR INTELIMER POLYMER       
PRODUCTS                                                                        

        Landec has only limited experience marketing and selling its Intelimer
polymer products. While Dock Resins will provide consultation and in some cases 
direct marketing support for Landec's Intelimer polymer products, establishing  
sufficient marketing and sales capability will require significant resources.   
Landec intends to distribute some of its products through its corporate partners
and other distributors and to sell other products through a direct sales force. 
There can be no assurance that Landec will be able to recruit and retain skilled
sales management, direct salespersons or distributors, or that Landec's sales   
and marketing efforts will be successful. To the extent that Landec has entered 
into or will enter into distribution or other collaborative arrangements for the
sale of its products, Landec will be dependent on the efforts of third parties. 

WE DEPEND ON STRATEGIC PARTNERS AND LICENSES FOR FUTURE DEVELOPMENT             

    For some of its current and future products, Landec's strategy for
development, clinical and field testing, manufacture, commercialization and     
marketing includes entering into various collaborations with corporate partners,
licensees and others. Landec is dependent on its corporate partners to develop, 
test, manufacture and/or market some of its products. Although Landec believes  
that its 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 the control of       
Landec. There can be no assurance that those partners will perform their        
obligations as expected or that Landec will derive any additional revenue from  
the arrangements. There can be no assurance that Landec's partners will pay any 
additional option or license fees to Landec or that they will 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, there can be no 
assurance as to the amount of royalties, if any, on future sales of QuickCast   
and PORT products as Landec no longer has control over the sales of those       
products since the sale of QuickCast and the license of the PORT product lines. 
There can be no assurance that Landec's partners will not pursue existing or    
alternative technologies in preference to Landec's technology. Furthermore,     
there can be no assurance that Landec will be able to negotiate additional      
collaborative arrangements in the future on acceptable terms, if at all, or that
the collaborative arrangements will be successful.                              

BOTH DOMESTIC AND FOREIGN GOVERNMENT REGULATIONS CAN HAVE AN ADVERSE EFFECT ON  
OUR BUSINESS OPERATIONS                                                         

         Landec's products and operations are subject to governmental regulation
in the United States and foreign countries. The manufacture of Landec's products
is subject to periodic inspection by regulatory authorities. There can be no    
assurance that Landec will 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   
Landec's business, financial condition and results of operations. Although      
Landec has no reason to believe that it will not be able to comply with all     
applicable regulations regarding the manufacture and sale of its 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. There can be no assurance that future changes in regulations or           

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interpretations relating to matters such as safe working conditions, laboratory 
and manufacturing practices, environmental controls, and disposal of hazardous  
or potentially hazardous substances will not adversely affect Landec's business.
There can be no assurance that Landec will not be required to incur significant 
costs to comply with the laws and regulations in the future, or that the laws or
regulations will not have a material adverse effect on Landec's business,       
operating results and financial condition. As a result of the Apio acquisition, 
Landec is subject to USDA 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, suspensions or withdrawal of regulatory approvals, product recalls,  
product seizures, including cessation of manufacturing and sales, operating     
restrictions and criminal prosecution.                                          

OUR INTERNATIONAL OPERATIONS AND SALES MAY EXPOSE OUR BUSINESS TO ADDITIONAL    
RISKS                                                                           

       During fiscal year 2000, approximately 17% of Landec's total revenues
were derived from product sales to and collaborative agreements with            
international customers. Landec expects that with the acquisition of Apio and   
its export business, international revenues will become an important component  
of its total revenues. A number of risks are inherent in international          
transactions. International sales and operations may be limited or disrupted by 
the 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 to obtain foreign regulatory 
approvals on a timely basis could have a material adverse effect on Landec's    
international business and its financial condition and results of operations.   
While Landec's foreign sales are currently priced in dollars, fluctuations in   
currency exchange rates, such as those recently experienced in many Asian       
countries, may reduce the demand for Landec's products by increasing the price  
of Landec's products in the currency of the countries to which the products are 
sold. There can be no assurance that regulatory, geopolitical and other factors 
will not adversely impact Landec's operations in the future or require Landec to
modify its current business practices.                                          

CANCELLATIONS OR DELAYS OF ORDERS BY OUR CUSTOMERS MAY ADVERSELY AFFECT OUR     
BUSINESS                                                                        

         During fiscal year 2000, sales to Landec's top five customers accounted
for approximately 28% of Landec's revenues, with the top customer accounting for
7% of Landec's revenues. Landec expects that for the foreseeable future a       
limited number of customers may continue to account for a substantial portion of
its net revenues. Landec may experience changes in the composition of its       
customer base, as Apio, Dock Resins and Intellicoat have experienced in the     
past. Landec does not have long-term purchase agreements with any of its        
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 the major customers could
materially and adversely affect Landec's business, operating results and        
financial condition. In addition, since some of the products manufactured in the
Linden, New Jersey facility or processed by Apio at its Guadalupe, California   
facility are often sole sourced to its customers, Landec's operating results    
could be adversely affected if one or more of its major customers were to       
develop other sources of supply. There can be no assurance that Landec's current
customers will continue to place orders, that orders by existing customers will 
not be canceled or will continue at the levels of previous periods or that      
Landec will be able to obtain orders from new customers.                        

OUR SALE OF SOME PRODUCTS MAY INCREASE OUR EXPOSURE TO PRODUCT LIABILITY CLAIMS 

       The testing, manufacturing, marketing, and sale of the products being
developed by Landec involve an inherent risk of allegations of product          
liability. While no product liability claims have been made against Landec to   
date, if any product liability claims were made and adverse judgments obtained, 
they could have a material adverse effect on Landec's business, operating       
results and financial condition. Although Landec has taken and intends to       
continue to take what it believes are appropriate precautions to minimize       
exposure to product liability claims, there can be no assurance that it will    
avoid significant liability. Landec currently maintains medical and non-medical 
product liability insurance with limits in the amount of $4.0 million per       
occurrence and $5.0 million in the annual aggregate. In addition, Apio has      
product liability insurance with limits in the amount of $41.0 million per      
occurrence and $42.0 million in the annual aggregate. There can be no assurance 
that the coverage is adequate or will 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 Landec's business, operating results and financial 
condition.                                                                      

OUR STOCK PRICE MAY FLUCTUATE IN ACCORDANCE WITH MARKET CONDITIONS              

 Factors such as announcements of technological innovations, the
attainment of (or failure to attain) milestones in the commercialization of     
Landec's technology, new products, new patents or changes in existing patents,  
the acquisition of new businesses or the sale or disposal of a part of Landec's 
businesses, or development of new                                               

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collaborative arrangements by Landec, its competitors or other parties, as well 
as government regulations, investor perception of Landec, fluctuations in       
Landec's operating results and general market conditions in the industry may    
cause the market price of Landec's common stock to fluctuate significantly. In  
addition, the stock market in general has recently experienced extreme price and
volume fluctuations, which have particularly affected the market prices of      
technology companies and which have been unrelated to the operating performance 
of technology companies. These broad fluctuations may adversely affect the      
market price of Landec's common stock.                                          

THE IMPLEMENTATION OF FINANCIAL AND ACCOUNTING CHANGES MAY CAUSE AN INCREASE IN 
COSTS AND DELAYS                                                                

   In order to address deficiencies in Apio's management information
systems and accounting systems, Apio has restructured its financial and         
accounting department, including hiring a chief financial officer and a new     
controller, and retained consultants who have worked with Apio to improve       
accounting processes and procedures. Apio management believes that those changes
will improve its managing of operations, including delivering complete and      
accurate financial statements to Landec's corporate offices in a more timely    
manner. However, Landec can give no assurances that it will be able to effect   
those changes in the management information systems and accounting systems in a 
timely manner or sustain the process improvements over time.                    

THE EURO CURRENCY MAY CAUSE SOME DISRUPTIONS IN BUSINESS                        

 On January 1, 1999, some member states of the European Economic
Community fixed their respective currencies to a new currency, commonly known as
the "Euro". During the three years beginning on January 1, 1999, business in    
these countries will be conducted both in the existing national currency, as    
well as the Euro. Companies operating in or conducting business in these        
countries will need to ensure that their financial and other software systems   
are capable of processing transactions and properly handling the existing       
currencies and the Euro. Based on the current level of direct European business 
conducted by Landec, and also because Landec expects that any transactions in   
Europe in the near future will be priced in U.S. dollars, Landec does not expect
that introduction and use of the Euro will materially affect Landec's business. 
Landec will continue to evaluate the impact over time of the introduction of the
Euro. However, if Landec encounters unexpected opportunities or difficulties in 
Europe, Landec's business could be adversely affected, including the inability  
to bill customers and to pay suppliers for transactions denominated in the Euro 
and the inability to properly record transactions denominated in the Euro in    
Landec's financial statements.                                                  

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ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK            

   The following table presents information about the Company's debt
obligations and derivative financial instrument that are sensitive to changes in
interest rates. The table presents principal amounts and related weighted       
average interest rates by year of expected maturity for the Company's debt      
obligations. For obligations with variable interest rates, the table sets forth 
interest rates that are based on current rates and principal amounts due and    
does not attempt to project future interest rates. For the interest rate swap,  
the table presents notional amounts and interest rates by contractual maturity  
date. Notional amounts are used to calculate the contractual cash flows to be   
exchanged under the contract. This table should be read in connection with Note 
10 to the Consolidated Financial Statements. Comparative information has not    
been provided as the majority of the financial instruments giving rise to       
interest rate risk were entered into or assumed by the Company in fiscal year   
2000.                                                                           

                                                        [Enlarge/Download Table]

In (000's)                                                                  There-               Fair 
                          2001      2002      2003       2004      2005     after     Total     Value 
-----------------------  --------  -------  -------   ---------  --------  --------  -------   -------
     LIABILITIES                                                                                      
                                                                                                      
Lines of Credit          9,609                                                         9,609     9,609
                          9.90%                                                         9.90%         
Long term debt,                                                                                       
including current                                                                                     
portion                                                                                               
  Fixed Rate               834      1,073     1,045     1,118      1,833     4,062     9,965     9,965
  Avg.Int. Rate           8.50%      8.50%     8.50%     8.50%      8.50%     8.50%     8.50%         

  Variable Rate          2,188      2,437     2,500     2,500        625              10,250    10,250
   Avg. Int. Rate         9.21%      9.21%     9.21%     9.21%      9.21%               9.21%         

INTEREST RATE                                                                                         
DERIVATIVE FINANCIAL                                                                                  
INSTRUMENTS RELATED                                                                                   
TO DEBT                                                                                               
Interest Rate Swap                                                                                    
  Pay Fixed/                                                                                          
     Rec.Var                        5,250                                              5,250        25
  Avg. Pay Rate           7.02%      7.02%                                              7.02%         
  Avg. Rec. Rate          6.71%      6.71%                                              6.71%         

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                           

See Item 14 of Part IV of this report.                      

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND       
FINANCIAL DISCLOSURE                                        

Not applicable.                                             

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PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                    

This information required by this item is contained in the  
     Registrant's definitive proxy statement which the Registrant will
      file with the Commission no later than February 26, 2001 (120 days
      after the Registrant's fiscal year end covered by this Report) and
is incorporated herein by reference.                        

ITEM 11.  EXECUTIVE COMPENSATION                                                

This information required by this item is contained in the  
     Registrant's definitive proxy statement which the Registrant will
      file with the Commission no later than February 26, 2001 (120 days
      after the Registrant's fiscal year end covered by this Report) and
is incorporated herein by reference.                        

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT        

This information required by this item is contained in the  
     Registrant's definitive proxy statement which the Registrant will
      file with the Commission no later than February 26, 2001 (120 days
      after the Registrant's fiscal year end covered by this Report) and
is incorporated herein by reference.                        

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                        

This information required by this item is contained in the  
     Registrant's definitive proxy statement which the Registrant will
      file with the Commission no later than February 26, 2001 (120 days
      after the Registrant's fiscal year end covered by this Report) and
is incorporated herein by reference.                        

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 PART IV

ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K    

(a)  1.       Consolidated Financial Statements of Landec Corporation           

                                                        [Enlarge/Download Table]

                                                                                        PAGE
                                                                                        ----
                                                                                            
        Report of Ernst & Young LLP, Independent Auditors............................... 33 

        Consolidated Balance Sheets at October 29, 2000 and October 31, 1999............ 34 

        Consolidated  Statement  of  Operations  for the Years Ended  October 29,           
        2000 and October 31, 1999 and 1998.............................................. 35 

        Consolidated  Statement of Changes in Shareholders'  Equity for the Years           
        Ended October 29, 2000 and October 31, 1999 and 1998............................ 36 

        Consolidated  Statement  of Cash Flows for the Years  Ended  October  29,           
        2000 and October 31, 1999 and 1998.............................................. 37 

        Notes to Consolidated Financial Statements...................................... 38 

     2. Schedule II:                                                                        

        Valuation and Qualifying  Accounts for the Years Ended October 29, 2000             
        and October 31, 1999 and 1998................................................... 56 

        All other schedules provided for in the applicable accounting                       
        regulation of the Securities and Exchange Commission pertain to                     
        items which do not appear in the financial statements of Landec                     
        Corporation and its subsidiaries or to items which are not                          
        significant or to items as to which the required disclosures                        
        have been made elsewhere in the financial statements and                            
        supplementary notes and such schedules have therefore been                          
        omitted.                                                                            

(b)     Reports on Form 8-K............................................................. 57 

(c)     Index of Exhibits............................................................... 57 

               The exhibits listed in the accompanying index to exhibits are
            filed or incorporated by reference as part of this report.

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 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Board of Directors and Shareholders                                             
Landec Corporation                                                              

        We have audited the accompanying consolidated balance sheets of Landec
Corporation as of October 29, 2000 and October 31, 1999 and the related         
consolidated statements of operations, changes in shareholders' equity and cash 
flows for each of the three years in the period ended October 29, 2000. Our     
audits also included the financial statement schedule listed in the index at    
Item 14(a). These financial statements and schedule are the responsibility of   
the Company's management. Our responsibility is to express an opinion on these  
financial statements and schedule based on our audits.                          

         We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform 
the audit to obtain reasonable assurance about whether the financial statements 
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An 
audit also includes assessing the accounting principles used and significant    
estimates made by management, as well as evaluating the overall financial       
statement presentation. We believe that our audits provide a reasonable basis   
for our opinion.                                                                

    In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Landec 
Corporation at October 29, 2000 and October 31, 1999 and the consolidated       
results of its operations and its cash flows for each of the three years in the 
period ended October 29, 2000 in conformity with accounting principles generally
accepted in the United States. Also, in our opinion, the related financial      
statement schedule, when considered in relation to the basic financial          
statements taken as a whole, presents fairly in all material respects the       
information set forth therein.                                                  

         As discussed in Note 1 to the financial statements, in fiscal year 2000
the Company changed its method of accounting for revenue recognition in         
accordance with guidance provided in Securities and Exchange Commission Staff   
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements."     

                                                               ERNST & YOUNG LLP

San Francisco, California                                                       
December 22, 2000                                                               

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LANDEC CORPORATION
 CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

                                                        [Enlarge/Download Table]

                                                                       OCTOBER 29,  OCTOBER 31,
                                                                           2000       1999     
                                                                       -----------  -----------
                                                                                               
                                 ASSETS                                                        

 Current assets:                                                                               
   Cash and cash equivalents ........................................  $   9,589    $  3,203   
   Accounts receivable, less allowance for doubtful accounts of $627                           
      and $45 at October 29, 2000 and October 31, 1999 ..............     22,725       2,952   
   Inventory ........................................................     14,501       7,641   
   Investment in farming activities .................................      2,672          --   
   Notes and advances receivable ....................................      8,519          --   
   Notes receivable, related party ..................................        151         138   
   Prepaid expenses and other current assets ........................      1,958       2,233   
   Assets held for sale .............................................      2,963          --   
                                                                       ---------    --------   
       Total current assets .........................................     63,078      16,167   

Property and equipment, net .........................................     24,437      11,002   
Goodwill, net .......................................................     21,672       2,284   
Trademarks, net......................................................     12,873       4,439   
Other intangibles, net...............................................      8,841       6,783   
Notes receivable ....................................................        720          --   
Other assets ........................................................      1,631          33   
                                                                       ---------    --------   
                                                                       $ 133,252    $ 40,708   
                                                                       =========    ========   

                                 LIABILITIES AND SHAREHOLDERS' EQUITY                          

Current liabilities:                                                                           
   Accounts payable .................................................  $  19,374    $  1,687   
   Grower payables ..................................................     13,651          --   
   Related party payables ...........................................        262          --   
   Accrued compensation .............................................      2,470       1,036   
   Other accrued liabilities ........................................      9,522       1,327   
   Deferred revenue .................................................      2,265       2,135   
   Lines of credit ..................................................      9,609          --   
   Current maturities of long term debt .............................      3,584         125   
                                                                       ---------    --------   
     Total current liabilities ......................................     60,737       6,310   

Long term debt, less current maturities .............................     16,631       2,637   
Other liabilities ...................................................      2,442          --   
Minority  interest ..................................................      1,264          --   
                                                                       ---------    --------   
     Total liabilities ..............................................     81,074       8,947   
Shareholders' equity:                                                                          
   Preferred stock, $0.001 par value; 2,000,000 shares authorized;                             
      166,667 and zero shares issued and outstanding at October 29,                            
      2000 and October 31, 1999, respectively .......................      9,149          --   

   Common stock, $0.001 par value; 50,000,000 shares authorized;                               
      16,117,891, 667 and 13,353,352 shares issued and outstanding at                          
      October 29, 2000 and October 31, 1999, respectively ...........     92,555      77,289   
   Accumulated deficit ..............................................    (49,526)    (45,528)  
                                                                       ---------    --------   
     Total shareholders' equity .....................................     52,178      31,761   
                                                                       ---------    --------   
                                                                       $ 133,252    $ 40,708   
                                                                       =========    ========   

SEE ACCOMPANYING NOTES  

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LANDEC CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                        [Enlarge/Download Table]

                                                         2000        1999       1998   
                                                       ---------   --------   -------- 
                                                                                       
 Revenues:                                                                             
   Product sales ....................................  $ 135,412   $ 33,927   $ 31,664 
   Services revenue .................................     71,280         --         -- 
   Services revenue, related party ..................      1,898         --         -- 
   Research, development and royalty revenues .......        586        770      1,352 
   License fees .....................................        374        750        500 
                                                       ---------   --------   -------- 
      Total revenues ................................    209,550     35,447     33,516 

Cost of revenue:                                                                       
   Cost of product sales ............................    113,113     21,476     20,308 
   Cost of services revenue .........................     63,075         --         -- 
                                                       ---------   --------   -------- 
          Total cost of revenue ......................   176,188     21,476     20,308 

Gross profit ........................................     33,362     13,971     13,208 

Operating costs and expenses:                                                          
   Research and development .........................      4,696      5,758      5,713 
   Selling, general and administrative ..............     28,879     11,192     10,835 
     Exit of fruit processing business ..............        525         --         -- 
                                                       ---------   --------   -------- 
       Total operating costs and expenses ............    34,100     16,950     16,548 
                                                       ---------   --------   -------- 

   Operating loss ...................................       (738)    (2,979)    (3,340)

   Interest income ..................................        877        363        737 
   Interest expense .................................     (2,335)       (99)      (137)
   Other income .....................................         70         --         -- 
                                                       ---------   --------   -------- 
Loss before income taxes and cumulative effect of                                      
   accounting change ................................     (2,126)    (2,715)    (2,740)
   Provision for income taxes .......................         42        (54)      (150)
                                                       ---------   --------   -------- 
Net loss before cumulative effect of accounting                                        
    change ..........................................     (2,084)    (2,769)    (2,890)

Cumulative effect of change in accounting for upfront                                  
   license fee revenue ..............................     (1,914)        --         -- 
                                                       ---------   --------   -------- 
Net loss ............................................  $  (3,998)  $ (2,769)  $ (2,890)
                                                       =========   ========   ======== 
Basic and diluted net loss per share:                                                  
   Before cumulative effect of change in accounting .  $    (.13)  $   (.21)  $   (.23)
   Cumulative effect of change in accounting ........       (.12)        --         -- 
                                                       ---------   --------   -------- 
Basic and diluted net loss per share ................  $    (.25)  $   (.21)  $   (.23)
                                                       =========   ========   ======== 
Proforma amounts assuming the accounting change                                        
   is applied retroactively:                                                           
   Net loss .........................................  $  (2,084)  $ (3,145)  $ (3,070)
                                                       =========   ========   ======== 
   Net loss per share ...............................  $    (.13)  $   (.24)  $   (.24)
                                                       =========   ========   ======== 
Shares used in computing basic and diluted net loss                                    
   per share ........................................     15,796     13,273     12,773 
                                                       =========   ========   ======== 

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LANDEC CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN
SHAREHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

                                                        [Enlarge/Download Table]

                                                                                 SHAREHOLDERS' EQUITY                          
                                                                  ----------------------------------------------------         
                                                                     PREFERRED STOCK            COMMON STOCK                   
                                                                  ----------------------------------------------------         
                                                                    SHARES     AMOUNT      SHARES        AMOUNT                
                                                                   -------     ------     ----------     -------               
                                                                                                                               
Balance at October 31, 1997 ...................................         --     $   --     12,687,416     $75,679               

     Issuance of common stock at $0.58 to $7.00 per share .....         --         --        425,885       1,142               
     Exercise of warrants .....................................         --         --         46,587          --               
     Net increase in notes receivable from shareholders .......         --         --             --          --               
     Amortization of deferred compensation ....................         --         --             --          --               
     Change in unrealized gain on available-for-sale securities         --         --             --          --               
     Net loss .................................................         --         --             --          --               
                                                                   -------     ------     ----------     -------               
Balance at October 31, 1998 ...................................         --     $   --     13,159,888     $76,821               
                                                                   =======     ======     ==========     =======               
     Issuance of common stock at $0.58 to $5.56 per share .....         --         --        193,464         468               
     Net decrease in notes receivable from shareholders .......         --         --             --          --               
     Amortization of deferred compensation ....................         --         --             --          --               
     Change in unrealized gain on available-for-sale securities         --         --             --          --               
     Net loss .................................................         --         --             --          --               
                                                                   -------     ------     ----------     -------               
Balance at October 31, 1999 ...................................         --     $   --     13,353,352     $77,289               
                                                                   =======     ======     ==========     =======               
     Issuance of preferred stock ..............................    166,667      9,149             --          --               
     Issuance of common stock for acquired businesses .........         --         --      2,562,500      14,559               
     Issuance of common stock at $0.58 to $7.00 per share .....         --         --        202,039         707               
     Net loss .................................................         --         --             --          --               
                                                                   -------     ------     ----------     -------               
Balance at October 29, 2000 ...................................    166,667     $9,149     16,117,891     $92,555               
                                                                   =======     ======     ==========     =======               


                                                                                    SHAREHOLDERS' EQUITY                       
                                                                 -------------------------------------------------             
                                                                     NOTES                                                     
                                                                  RECEIVABLE                                          TOTAL    
                                                                     FROM          DEFERRED       ACCUMULATED     SHAREHOLDERS'
                                                                 SHAREHOLDERS    COMPENSATION       DEFICIT           EQUITY   
                                                                 ------------    ------------     -----------     -------------
                                                                                                                               
Balance at October 31, 1997 ...................................    $  (8)          $(198)          $(39,858)          $ 35,615 

     Issuance of common stock at $0.58 to $7.00 per share .....       --              --                 --              1,142 
     Exercise of warrants .....................................       --              --                 --                 -- 
     Net increase in notes receivable from shareholders .......     (283)             --                 --               (283)
     Amortization of deferred compensation ....................       --             112                 --                112 
     Change in unrealized gain on available-for-sale securities       --              --                 (8)                (8)
     Net loss .................................................       --              --             (2,890)            (2,890)
                                                                 ------------    ------------     -----------      ------------
Balance at October 31, 1998 ...................................    $(291)          $ (86)          $(42,756)          $ 33,688 
                                                                 ============    ============     ===========      ============

     Issuance of common stock at $0.58 to $5.56 per share .....       --              --                 --                468 
     Net decrease in notes receivable from shareholders .......      291              --                 --                291 
     Amortization of deferred compensation ....................       --              86                 --                 86 
     Change in unrealized gain on available-for-sale securities       --              --                 (3)                (3)
     Net loss .................................................       --              --             (2,769)            (2,769)
                                                                 ------------    ------------     -----------      ------------
Balance at October 31, 1999 ...................................    $  --           $  --           $(45,528)          $ 31,761 
                                                                 ============    ============     ===========      ============

     Issuance of preferred stock ..............................       --              --                 --              9,149 
     Issuance of common stock for acquired businesses .........       --              --                 --             14,559 
     Issuance of common stock at $0.58 to $7.00 per share .....       --              --                 --                707 
     Net loss .................................................       --              --             (3,998)            (3,998)
                                                                 ------------    ------------     -----------      ------------
Balance at October 29, 2000 ...................................    $  --           $  --           $(49,526)          $ 52,178 
                                                                 ============    ============     ===========      ============

 SEE ACCOMPANYING NOTE

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LANDEC CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                                            YEAR ENDED               
                                                                               --------------------------------------
                                                                               OCTOBER 29,          OCTOBER 31,      
                                                                               -----------  -------------------------
                                                                                  2000         1999          1998    
                                                                               -----------  -----------   -----------
                                                                                                                     
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                     
Cash flows from operating activities:                                                                                
   Net loss from continuing operations ......................................    $ (3,998)     $(2,769)     $(2,890) 
   Adjustments to reconcile net loss to net cash provided by (used in)                                               
 operating activities:                                                                                               
      Depreciation and amortization .........................................       6,066        2,214        2,075  
      Cumulative effect of accounting change ................................       1,914           --           --  
      Disposal of property and equipment ....................................         577           --           --  
      Exit of fruit processing business .....................................         525           --           --  
      Changes in assets and liabilities, net of effects from acquisitions and                                        
       discontinued operations:                                                                                      
        Accounts receivable, net ............................................      (4,486)        (144)        (646) 
        Inventory ...........................................................      (2,387)      (2,965)      (2,024) 
        Investment in farming activities ....................................        (642)          --           --  
        Notes receivable, related parties ...................................         (13)         362         (500) 
        Prepaid expenses and other current assets ...........................       1,334         (611)          98  
        Accounts payable ....................................................       3,535          288          757  
        Grower payables .....................................................       6,930           --           --  
        Related party payables ..............................................         262           --           --  
        Accrued compensation ................................................         298           19          181  
        Other accrued liabilities ...........................................      (4,290)         385         (578) 
        Deferred revenue ....................................................        (617)        (364)         173  
                                                                                 --------      -------      -------  
 Net cash provided by (used in) operating activities ........................       5,008       (3,585)      (3,354) 
                                                                                 --------      -------      -------  
 Cash flows from investing activities:                                                                               
   Purchases of property and equipment ......................................      (5,338)      (3,708)      (4,100) 
   Decrease in other assets and liabilities .................................         278            5           74  
   Increase in notes receivable and advances ................................      (3,770)          --           --  
   Acquisition of businesses, net of cash acquired ..........................      (6,793)        (393)        (390) 
   Purchases of available-for-sale securities ...............................          --           --       (5,033) 
   Sale of available-for-sale  securities ...................................          --           --        4,805  
   Maturities of available-for-sale securities ..............................          --          989        8,734  
                                                                                 --------      -------      -------  
 Net cash (used in) provided by investing activities ........................     (15,623)      (3,107)       4,090  
                                                                                 --------      -------      -------  
 Cash flows from financing activities:                                                                               
   Proceeds from sale of preferred stock, net of issuance costs .............       9,149           --           --  
   Proceeds from sale of common stock, net of repurchases ...................         708          468        1,142  
   Decrease (increase) in  repayment of notes receivable from shareholders ..          --          291         (283) 
   Borrowings on lines of credit ............................................      21,984           --           --  
   Payments on lines of credit ..............................................     (12,375)          --           --  
   Payments on long term debt ...............................................      (2,327)         (90)         (10) 
   Proceeds from issuance of long term debt .................................          --           41        2,789  
   Proceeds from sale of restricted investment ..............................          --           --        8,837  
   Payment of payable related to the acquisition of Dock Resins Corporation .          --           --       (9,189) 
   Increase in minority interest liability ..................................         105           --           --  
   Payments to minority interest ............................................        (243)          --           --  
                                                                                 --------      -------      -------  
 Net cash provided by financing activities ..................................      17,001          710        3,286  
                                                                                 --------      -------      -------  
 Net increase (decrease) in cash and cash equivalents .......................       6,386       (5,982)       4,022  
 Cash and cash equivalents at beginning of year .............................       3,203        9,185        5,163  
                                                                                 --------      -------      -------  
 Cash and cash equivalents at end of year ...................................    $  9,589      $ 3,203      $ 9,185  
                                                                                 ========      =======      =======  
 Supplemental disclosure of cash flows information:                                                                  
   Cash paid during the period for interest .................................    $  1,676      $    76      $   383  
                                                                                 ========      =======      =======  
   Cash paid during the period for income taxes .............................    $    104      $    33      $    38  
                                                                                 ========      =======      =======  
 Supplemental schedule of noncash investing and financing activities:                                                
   Common stock issued in the acquisition of businesses .....................    $ 14,559      $    --      $    --  
                                                                                 ========      =======      =======  

 SEE ACCOMPANYING NOTES.

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LANDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES            

ORGANIZATION                                                                    

     Landec Corporation and its subsidiaries ("Landec" or the "Company")
design, develop, manufacture, and sell temperature-activated and other specialty
polymer products for a variety of food product, agricultural products, specialty
industrial and medical applications. In addition, the Company markets and       
distributes hybrid corn seed to farmers and produce and specialty packaged      
fresh-cut vegetables to retailers and foodservice companies.                    

BASIS OF CONSOLIDATION                                                          

       The consolidated financial statements comprise the accounts of Landec
Corporation and its wholly owned subsidiaries, Apio, Inc. ("Apio"), Landec Ag   
(formerly Intellicoat Corporation) and Dock Resins Corporation ("Dock Resins"). 
All material intercompany transactions and balances have been eliminated.       
Effective fiscal year 2000, the Company changed its fiscal year end from October
31 to a fiscal year that includes 52 or 53 weeks ending on the last Sunday in   
October.                                                                        

CONCENTRATIONS OF CREDIT RISK                                                   

       Cash and cash equivalents, trade accounts receivable, grower advances
and notes receivable are financial instruments that potentially subject the     
Company to concentrations of risk. Corporate policy limits, among other things, 
the amount of credit exposure to any one issuer and to any one type of          
investment, other than securities issued or guaranteed by the U.S. government.  
The Company routinely assesses the financial strength of customers and growers  
and, as a consequence, believes that trade receivables, grower advances and     
notes receivable credit risk exposure is limited. Credit losses for bad debt are
provided for in the Consolidated Financial Statements through a charge to       
operations. A valuation allowance is provided for known and anticipated credit  
losses.                                                                         

CASH AND CASH EQUIVALENTS                                                       

       The Company records all highly liquid securities with three months or
less from date of purchase to maturity as cash equivalents.                     

INVENTORIES                                                                     

  Inventories are stated at the lower of cost (using the first-in,
first-out method) or market. As of October 29, 2000 and October 31, 1999        
inventories consisted of (in thousands):                                        

                                                                [Download Table]

                                 OCTOBER 29   OCTOBER 31,
                                    2000         1999    
                                 ----------   -----------
                                                         
Raw materials ................     $ 7,661     $1,015    
Finished goods ...............       5,889      6,169    
Work in process ..............         951        457    
                                   -------     ------    
                                   $14,501     $7,641    
                                   =======     ======    

DEFERRED ADVERTISING                                                            

         The Company defers certain costs related to direct-response advertising
of Landec Ag's hybrid corn seeds. Such costs are amortized over periods (less   
than one year) that correspond to the estimated revenue stream of the           
advertising activity. Advertising expenditures that are not direct-response     
advertisements are expensed as incurred. The advertising expense for Landec Ag  
for fiscal years 2000, 1999 and 1998 was $1.1 million, $1.3 million and $1.2    
million, respectively. The amount of deferred advertising included in prepaid   
expenses and other current assets at October 29, 2000 and October 31, 1999 was  
$400,000 and $522,000, respectively.                                            

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1.       ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RELATED PARTY TRANSACTIONS                                    

      Apio provides harvesting, packing, cooling and distributing services
for a member of management and purchases produce from that individual. Revenues,
cost of product sales and the resulting payable are shown separately in the     
accompanying financial statements as of October 29, 2000 and for the period then
ended.                                                                          

         In October 1998, the Company loaned an officer of Landec Ag $500,000 in
cash in exchange for a promissory note. Interest accrues at 7.50% per annum,    
compounded annually. On July 31, 1999 the balance of principal and accrued      
interest were offset by the amount earned during 1999 under the earn-out        
provision related to the acquisition of Fielder's Choice by the Company. The    
remaining principal and accrued interest balance of $151,000 is due and payable 
on July 31, 2001 and is shown separately in the accompanying financial          
statements.                                                                     

INVESTMENT IN FARMING ACTIVITIES                                                

 Landec, through its Apio subsidiary, invests in certain farming
activities. The investments consist of cash advances to growers for expenses to 
be incurred during the growing season, in exchange for a percentage ownership in
the crops. Net income or loss is generally recognized on these investments based
on Landec's percentage ownership of the net proceeds of the crops as fields are 
harvested and settled. Additionally, certain farming agreements contain         
provisions wherein Landec bears the risk of loss if the net proceeds from the   
crops are not sufficient to cover the expense incurred. For fiscal year 2000 net
losses of approximately $900,000 were recognized and included in the cost of    
product sales in the consolidated statement of operations.                      

PROPERTY AND EQUIPMENT                                                          

   Property and equipment are stated at cost. Expenditures for major
improvements are capitalized while repairs and maintenance are charged to       
expense. Depreciation is expensed on a straight-line basis over the estimated   
useful lives of the respective assets, generally twenty to thirty-one years for 
buildings and improvements and three to ten years for furniture, computers,     
machinery and equipment. Leasehold improvements are amortized over the lesser of
the economic life of the improvement or the life of the lease on a straight-line
basis.                                                                          

INTANGIBLE ASSETS                                                               

      Intangible assets represent the excess of acquisition costs over the
estimated fair value of net assets acquired and consist of covenants not to     
compete, customer bases, work forces in place, trademarks, developed technology 
and goodwill. These assets are amortized on a straight-line basis over periods  
ranging from five to twenty years based on their estimated useful lives.        

GROWER PAYABLE                                                                  

         Landec, through its Apio subsidiary, contracts with growers to harvest,
pack, cool and distribute their products. The grower payable is the net of the  
market value of the products received from the growers and the corresponding    
charges by Landec for services rendered on behalf of the growers.               

DEFERRED REVENUE                                                                

      Cash received in advance of services performed (principally revenues
related to upfront license fees) or shipment of products (primarily hybrid corn 
seed) are recognized as a liability and recorded as deferred revenue. At October
29, 2000 approximately $1.9 million has been recognized as a liability for      
advances on future hybrid corn seed shipments, and $1.6 million as a liability  
for deferred license fee revenues. Of this amount, approximately $1.2 million   
will be recognized subsequent to fiscal 2001 and has been included in other     
liabilities.                                                                    

MINORITY INTEREST                                                               

        In connection with the acquisition of Apio, Landec acquired Apio's 60%
general partner interest in Apio Cooling, a California limited partnership. Apio
Cooling is included in the consolidated financial statements of Landec at       
October 29, 2000. The minority interest balance of $1.3 million at October 29,  
2000 represents the limited partners' interest in Apio Cooling.                 

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1.       ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PER SHARE INFORMATION                                                           

        In 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings Per Share" (SFAS No. 128). SFAS No. 128 replaced the calculation 
of primary and fully diluted earnings per share with basic and diluted earnings 
per share. Unlike primary earnings per share, basic earnings per share excludes 
any dilutive effects of options, warrants and convertible securities. Diluted   
earnings per share is very similar to the previously reported fully diluted     
earnings per share. Due to the Company's net loss in all periods presented, net 
loss per share includes only weighted average shares outstanding. All earnings  
per share amounts for all periods have been presented in accordance with SFAS   
No. 128 requirements.                                                           

REVENUE RECOGNITION                                                             

        Revenues related to research contracts are recognized ratably over the
related funding periods for each contract, which is generally as research is    
performed. Product sales are recognized upon shipment except for shipments sent 
FOB destination in which revenue is recognized upon receipt by the customer.    
Services revenue is recognized when the service is rendered.                    

         The Company previously recognized noncancellable, nonrefundable license
fees as revenue when received and when all significant contractual obligations  
of the Company relating to the fees had been met. Effective November 1, 1999,   
the Company changed its method of accounting for noncancellable, nonrefundable  
license fees to recognize such fees over the research and development period of 
the agreement, as well as the term of any related supply agreement entered into 
concurrently with the license when the risk associated with commercialization of
a product is non-substantive at the outset of the arrangement. The Company      
believes the change in accounting principle is preferable based on guidance     
provided in SEC Staff Accounting Bulletin No. 101 - REVENUE RECOGNITION IN      
FINANCIAL STATEMENTS. The $1.9 million cumulative effect of the change in       
accounting principle, calculated as of November 1, 1999, was reported as a      
charge in the year ended October 29, 2000. The cumulative effect was initially  
recorded as deferred revenue and is being recognized as revenue over the        
research and development period or supply period commitment of the agreement.   
During the year ended October 29, 2000 the impact of the change in accounting   
was to increase net loss by approximately $1.5 million, or $0.10 per share,     
comprised of the $1.9 million cumulative effect of the change as described above
($0.12 per share), net of $374,000 of the related deferred revenue which was    
recognized as "recycled" revenue during 2000 ($0.02 per share). The remainder of
the related deferred revenue will be recognized as revenue per fiscal year as   
follows: $374,000 in 2001, $302,000 in 2002, $88,000 in 2003 - 2011, and $73,000
in 2012. The pro forma amounts presented in the consolidated statement of       
operations were calculated assuming the accounting change was made retroactive  
to prior periods.                                                               

        Amounts received in advance are recorded as deferred revenue until the
related revenue is recognized.                                                  

RESEARCH AND DEVELOPMENT EXPENSES                                               

         Costs related to both research contracts and Company-funded research is
included in research and development expenses. Costs to fulfill research        
contracts generally approximate the corresponding revenue.                      

ACCOUNTING FOR STOCK-BASED COMPENSATION                                         

        The Company accounts for its stock option plans and its employee stock
purchase plans in accordance with the provisions of the Accounting Principles   
Board Opinion No. 25 (APB 25) "Accounting for Stock Issued to Employees."       

USE OF ESTIMATES                                                                

      The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and        
assumptions that affect the amounts reported in the financial statements and    
accompanying notes. Actual results could differ from those estimates.           

IMPAIRMENT OF LONG LIVED ASSETS                                                 

The Company has adopted SFAS No. 121, "Accounting for the Impairment of         
Long-Lived Assets and for Long-Lived Assets to be Disposed Of". The Company     
records impairment losses on long-lived assets used in operations or            

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expected to be disposed when events and circumstances indicate that the assets  
are less than the carrying amounts of those assets. No such event and           
circumstances have occurred.                                                    

FAIR VALUES OF FINANCIAL INSTRUMENTS                                            

The Company's financial instruments, subject to the fair value
disclosure requirements of Financial Accounting Standards Board Statement No.   
107, "Disclosures about Fair Value of Financial Statements," consist of cash,   
cash equivalents, notes and advances receivable, debt, capital lease            
obligations, and an interest rate swap agreement (see Note 10). The recorded    
value of the financial instruments approximates their fair value.               

ADOPTION OF SFAS NO. 133, "ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING    
ACTIVITIES"                                                                     

         In June 1998, the Financial Accounting Standards Board issued Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities," which  
is required to be adopted in years beginning after June 15, 2000. Because of the
Company's minimal use of derivatives, adoption of the new Statement will not    
have a significant effect on earnings or the financial position of the Company. 

RECLASSIFICATIONS                                                               

    Certain reclassifications have been made to prior period financial
statements to conform to the current year presentation.                         

2.       BUSINESS ACQUISITIONS                                                  

     On December 2, 1999, Landec acquired Apio, Inc. and certain related
entities ("Apio"), located in Guadalupe, California, one of the nation's leading
marketers and packers of produce and specialty packaged fresh-cut vegetables.   
Upon closing, Landec paid $21.0 million in cash and stock, before expenses, for 
Apio, which will operate as a wholly owned subsidiary of Landec. In addition,   
the agreement provides for future payments to the former owners of Apio of up to
$16.55 million at October 29, 2000. These payments consist of a) up to $10      
million in earn-out payments to a former owner and current CEO of Apio which are
based on pre-established earnings targets, $4.1 million of which was earned in  
fiscal year 2000 based on Apio's results and is payable in March 2001 and was   
added to the purchase price in the fourth quarter. An additional $5.9 million   
may be paid under this earn-out if Apio exceeds the specified earnings targets  
for fiscal year 2001, b) $5.3 million non-interest bearing notes to the sellers 
which will be paid in equal annual installments over the next five years        
(recorded at $4.1 million on a discounted basis). The first payment of $1.1     
million was made in January 2001 and, c) up to $1.25 million to the sellers if  
Landec's Common Stock is trading at an average price below $6.00 per share      
during the last twenty trading days of June 2001. The twenty-day period had     
originally been designated for August 2000, however, in September 2000, the     
purchase price agreement was amended to reflect the revised terms. The          
transaction was accounted for as a purchase. The purchase price has been        
allocated to the acquired assets and liabilities based on their relative fair   
market values, subject to final adjustments. These allocations are based on     
independent valuations and other studies. Certain adjustments have been made to 
the purchase price allocation originally reported by the Company, including the 
addition of $4.1 million in the fourth quarter of fiscal year 2000 due to the   
earn-out previously discussed, as well as the recording of an additional        
$500,000 of transaction related costs. In addition, the purchase price was      
increased in the second quarter of fiscal year 2000 by $2.1 million to reflect a
change in the estimated value of Landec Common Stock issued at close.           

 The following is a summary of the purchase price allocation (in
thousands):                                                                     

                                                                [Download Table]
                                      
Net assets and liabilities     $ 2,014
Customer base                    1,821
Work force in place              1,395
Trademark                        9,100
Goodwill                        19,518
                               -------
                               $33,848
                               =======

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2.       BUSINESS ACQUISITIONS (CONTINUED)                                      

        The acquisition by Landec of all the outstanding capital stock of Apio
was exchanged for the following:                                                

                                                                [Download Table]
                                                       
Landec common stock                             $14,217
Contractual deferred obligations                  4,092
Cash paid or set aside as a liability            13,192
                                                -------
    Purchase price before acquisition costs      31,501
Acquisition costs                                 2,347
                                                -------
    Total purchase price                        $33,848
                                                =======

     To fund the transaction, Landec issued 2.5 million shares of common
stock to the prior owners of Apio. Apio replaced a portion of its existing bank 
debt with a $11.25 million term note and entered into a new $12 million line of 
credit agreement with a bank. Existing debt of $3.7 million was assumed in the  
transaction. In a separate transaction, Landec sold $10 million ($9.1 million   
net of issuance costs) of convertible preferred stock (convertible into         
1,666,670 shares of Common Stock) to a private, long-term, investor at a $6.00  
per share equivalent price.                                                     

       The results of operations and cash flows for fiscal year 2000 include
the results of Apio from November 29, 1999 through October 29, 2000.            

        The following pro forma summary of consolidated revenues, net loss and
net loss per share for fiscal years 2000 and 1999 assumes the acquisition       
occurred on November 1, 1998. These pro forma results have been prepared for    
comparative purposes only and are not necessarily indicative of Landec's        
financial results if the acquisition had taken place at the beginning of fiscal 
year 1999 or of future results, and do not include the cumulative effect of the 
change in accounting principle (Note 1) (in thousands, except per share         
amounts).                                                                       

                                                                [Download Table]

                             Fiscal Year        
                       ------------------------ 
                         2000            1999   
                       ---------      --------- 
                                                
Revenue                $ 224,671      $ 197,031 
Net loss               $  (2,179)     $  (4,015)
Net loss per share     $   (0.14)     $   (0.25)

3.       EXIT OF FRUIT PROCESSING BUSINESS                                      

       In September 2000, due to disappointing financial results, management
of Landec decided to discontinue processing fruit at its Reedley facility, part 
of the Food Products Technology segment. At that time, Landec's management      
determined that all fruit processing personnel and the majority of the          
administrative staff at the facility would be terminated. The plan, including   
termination benefits, was approved by management and communicated to the        
affected employees during fiscal year 2000, and the facility was shut down in   
January 2001. The Company's current plans are to sell the facility and the      
packing and cold-storage assets in Reedley and relocate a few sales, field and  
administrative staff to a leased facility in the Reedley area. The Company will 
continue to provide field support and sales and marketing services to current   
contracted growers through Apio's existing staff, and will outsource all        
remaining services to third parties. The Company intends to enter into          
contractual arrangements with one or more commercial packing and cold storage   
operators to provide the necessary packing and cold storage services previously 
provided to the growers through the Reedley facility.                           

        The Company has recorded a charge of $525,000, primarily for severance
and payroll related costs, in the accompanying consolidated statement of        
operations. This amount is expected to be fully paid in fiscal 2001. An offer to
purchase the facility is currently pending with the closing projected in the    
Company's second fiscal quarter. The sale is expected to result in a gain. The  
current net book value of the assets is $3.0 million, which is recorded as      
assets held for sale in the accompanying consolidated balance sheets as of      
October 29, 2000.                                                               

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4.       NOTES RECEIVABLE AND ADVANCES                                          

Notes receivable and advances at October 29, 2000 consisted of the following (in
thousands):                                                                     

                                                        [Enlarge/Download Table]
                                                                                                              
Various notes receivable from growers, with principal and interest ranging from the prime rate to  $    7,189 
    the prime rate plus 3% to a maximum of 10%, payments to be withheld from proceeds derived                 
    from crop sales, due through October 2001, secured by crops                                               

Note receivable due from grower in annual installments of $60,714 plus interest at prime rate             304 
    plus 1.0% with final payment due November 1, 2004, secured by crops                                       

Note receivable due from grower in annual installments of $20,000 plus interest at prime rate             577 
    plus 1.0% with final payment due January 31, 2005, secured by crops                                       

Note receivable due from grower plus interest based on Apio's cost to borrow funds. Note to be            129 
paid in full by May 1, 2003                                                                                   

Unsecured note receivable due from a related party with interest at 7.5%, due July 31, 2001               151 

Short term non-interest bearing note due from grower, secured by real property                            850 

Short term advances and other                                                                           1,221 
                                                                                                   ---------- 
                                                                                                       10,421 
Less allowance for doubtful notes                                                                      (1,031)
                                                                                                   ---------- 
                                                                                                        9,390 
Less current portion of notes receivable, including related party note                                 (8,670)
                                                                                                   ---------- 
Non-current portion of notes receivable                                                            $      720 
                                                                                                   ========== 

       Landec is obligated to make additional loans to growers under certain
of these note receivable agreements. At October 29, 2000, Landec had outstanding
commitments to fund up to an additional $1.3 million to growers under these     
existing note receivable agreements.                                            

5.       PROPERTY AND EQUIPMENT                                                 

  Property and equipment consists of the following (in thousands):

                                                        [Enlarge/Download Table]

                                                            OCTOBER 29,    OCTOBER 31,    
                                                           -------------------------------
                                                                2000           1999       
                                                           -------------------------------
                                                                                          
Land and buildings.........................................$   11,549     $    3,945      
Leasehold improvements.....................................     1,785          1,372      
Computer, machinery, equipment and autos...................    15,529          8,155      
Furniture and fixtures.....................................     1,915            592      
Construction in process....................................     1,218          1,173      
                                                           ------------------------------ 
                                                               31,996         15,237      
Less accumulated depreciation and amortization.............    (7,559)        (4,235)     
                                                           ------------------------------ 
                                                           $   24,437     $   11,002      
                                                           ============================== 

Depreciation expense for fiscal years 2000, 1999 and 1998 was 
$3,283,000, $986,000 and $843,000, respectively. Equipment under capital leases,
which totals approximately $80,000 at October 29, 2000, is security for the     
related lease obligations. The related accumulated amortization is $ 21,000.    

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6.            INTANGIBLE ASSETS                                                 

Intangible assets consist of the following (in thousands):    

                                                                [Download Table]

                                             OCTOBER 29,  OCTOBER 31,
                                                2000         1999    
                                           -------------  -----------
                                                                     
Developed technology...................... $      5,036    $   5,036 
Trademark.................................       14,075        4,975 
Customer base.............................        4,217        2,396 
Workforce in place........................        2,305          910 
Covenants not to compete..................          277          277 
Goodwill..................................       22,835        2,509 
                                           -------------  -----------
                                                 48,745       16,103 
Less accumulated amortization.............       (5,359)      (2,597)
                                           -------------  -----------
                                           $     43,386    $  13,506 
                                           =============  ===========

Amortization expense for fiscal years 2000, 1999 and 1998 was 
$2,762,000, $1,142,000 and $1,120,000, respectively.                            

7.       WARRANTS                                                               

       In connection with the sale of Series D preferred stock in July 1993,
the Company issued warrants to purchase 186,349 shares of common stock at an    
exercise price of $4.31 per share for $5,357 in cash. In a cashless exercise    
during fiscal year 1998, 46,587 shares were issued in exchange for the warrants.

8.       SHAREHOLDERS' EQUITY                                                   

CONVERTIBLE PREFERRED STOCK                                   

       The Company has authorized two million shares of preferred stock, and
has issued 50,000 shares in Series A-1 and 116,667 shares in Series A-2.        

   Each share of the Series A convertible preferred stock is, at the
option of the holder, convertible into shares of common stock, subject to       
certain antidilution adjustments, in accordance with the conversion formula     
provided in the Company's Articles of Incorporation (currently a 10:1 ratio).   
Outstanding preferred shares automatically convert into common stock either on  
November 29, 2003 or on an earlier date specified by written consent or         
agreement of the holders of at least a majority of the then outstanding shares  
of Series A convertible preferred stock.                                        

        Each share of convertible preferred stock is entitled to the number of
votes equal to the number of shares of common stock into which such shares could
be converted and have the voting rights and powers of the common stock, voting  
together as a single class.                                                     

   Upon liquidation, Series A preferred stockholders shall receive a
return equal to the original issue price of the shares plus any declared but    
unpaid dividends.                                                               

COMMON STOCK, STOCK PURCHASE PLANS AND STOCK OPTION PLANS     

In October 1998, certain directors and officers of the Company
purchased 200,425 shares of common stock for between $3.75 and $3.94 per share  
for $776,000. At October 31, 1998, certain directors and officers of the Company
were obligated to the Company for $291,000 relating to this issuance. This      
amount was recorded to shareholders' equity at October 31, 1998. The outstanding
balances were paid in full by December 1998.                                    

      The Company has 5,501,466 common shares reserved for future issuance
under Landec Corporation stock option plans and employee stock purchase plans.  

      The Company terminated its 1988 Stock Option Plan during fiscal year
1998 and canceled all stock options available for grant.                        

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8.       SHAREHOLDERS' EQUITY (CONTINUED)                                       

        The 1995 Directors' Stock Option Plan (the "Directors' Plan") provides
that each person who becomes a nonemployee director of the Company, who has not 
received a previous grant, shall be granted a nonstatutory stock option to      
purchase 20,000 shares of common stock on the date on which the optionee first  
becomes a nonemployee director of the Company. Thereafter, on the date of each  
annual meeting of the shareholders each non-employee director shall be granted  
an additional option to purchase 10,000 shares of common stock if, on such date,
he or she shall have served on the Company's Board of Directors for at least six
months prior to the date of such annual meeting. The exercise price of the      
options is the fair market value of the Company's common stock on the date the  
options are granted. The Directors' Plan, as amended in 1998, authorizes the    
issuance of 400,000 shares under the plan. Options granted under this plan are  
exerciseable and vest upon grant. All directors' stock option grants outstanding
on December 4, 1997 with an exercise price greater than $6.75, were repriced to 
$6.75 per share, the fair market value of the Company's common stock on April   
15, 1998, the date of the annual shareholders' meeting.                         

  The 1996 Non-Executive Stock Option Plan authorizes the Board of
Directors to grant non-qualified stock options to employees and outside         
consultants who are not officers or directors of the Company. The exercise price
of the options will be equal to the fair market value of the Company's common   
stock on the date the options are granted. As amended in 1999, 1,500,000 shares 
are authorized to be issued under this plan. Options are exercisable upon       
vesting and generally vest ratably over four years and are subject to repurchase
if exercised before being vested.                                               

      In November 1996, the Company's Board of Directors approved the 1996
Stock Option Plan. Under this plan, the Board of Directors of Landec may grant  
stock purchase rights, incentive stock options or non-statutory stock options to
Landec executives. The exercise price of the stock purchase rights, incentive   
stock options and non-statutory stock options may be no less than 100% of the   
fair market value of Landec's common stock on the date the options are granted. 
The plan, as amended, authorizes the issuance of 1,500,000 shares of Landec     
common stock under the plan. Options are exercisable upon vesting and generally 
vest ratably over four years and are subject to repurchase if exercised before  
being vested.                                                                   

    In October 2000, the Company's Board of Directors approved the New
Executive Stock Option Plan. Under this plan, the Board of Directors may grant  
non-statutory stock options to officers of Landec or officers of Apio or Landec 
Ag whose employment with each of those companies began after October 24, 2000.  
The exercise price of the non-statutory stock options may be no less than 100%  
and 85%, for named executives and non-named executives, respectively, of the    
fair market value of Landec's common stock on the date the options are granted. 
Options are exercisable upon vesting and generally vest ratably over four years 
and are subject to repurchase if exercised before being vested, 210,000 shares  
are authorized to be issued under this plan.                                    

   In November 1999, the Company's Board of Directors granted to the
CEO of Apio a non-statutory stock option to purchase 790,000 shares of          
Landec's common stock. The exercise price of the grant was the fair market      
value of Landec's common stock on the date of grant. The option vests over      
two years.                                                                      

        In December 1999, the Company granted 200,000 performance options to a
member of management under the 1996 Stock Option Plan. The options have an      
exercise price of $6.25 per share, and vest in three equal amounts if the stock 
price reaches an average of $10, $20, and $30, respectively, for a twenty       
consecutive day trading period prior to December 2003. At October 29, 2000, none
of the options had vested.                                                      

      In January 1997, the company effected an option repricing program to
allow non-officer employees and outside consultants who were issued options     
under the 1988 Stock Option Plan at an exercise price above $14.50 per share to 
exchange their out-of-money stock options for the same number of options at a   
more favorable exercise price. Under this repricing program, one new option     
could be obtained for every option cancelled. The exercise price of the new     
option was based on the fair market value of the Company's common stock on the  
date the old options were exchanged. The new options vest ratably over four     
years (commencing one year from January 7, 1997, the repricing date) and are    
subject to repurchase if exercised before being vested. As a result of this     
repricing program, options to purchase 58,250 shares were repriced.             

        In January 1998, the Company effected another option repricing program
to allow employees, directors and officers who were issued options under the    
1988 Stock Option Plan, the Directors' Plan and 1996 Non-Executive Stock Option 
Plan and 1996 Stock Option Plan at an exercise price above $5.00 per share to   
exchange their out-of-money stock options for the same number of options at a   
more favorable exercise price. The officers and directors repricing was approved
at the April 15, 1998 shareholders' meeting. Under this repricing program, one  
new option could be obtained for every option cancelled. The exercise price of  
the new option was based on the higher of fair market value of the Company's    
common stock on the date the old options were exchanged, or $5.00 per share. The
new options vest ratably over four years (commencing                            

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8.       SHAREHOLDERS' EQUITY (CONTINUED)                                       

December 4, 1997, the repricing date) and are subject to repurchase if exercised
before being vested. As a result of this repricing program and the repricing of 
the options issued under the 1995 Directors' Plan, options to purchase 753,100  
shares were repriced.                                                           

 The various repricings effected by the Company do not result in
variable accounting under FASB Interpretation No. 44, "Accounting for Certain   
Transactions Involving Stock Compensation," since they were effected prior to   
December 15, 1998.                                                              

Activity under all Landec Stock Option Plans is as follows:   

                                                        [Enlarge/Download Table]

                                                                  Outstanding Options          
                                                          -------------------------------------
                                           Options                                Weighted     
                                          Available            Number             Average      
                                          for Grant           of Shares        Exercise Price  
------------------------------------- ------------------- ------------------ ------------------
                                                                                               
Balance at October 31, 1997              1,073,851           1,936,422              $5.11      

Additional shares reserved                 950,000                  --                 --      
Options granted                         (1,584,828)          1,584,828              $5.12      
Options exercised                               --            (163,394)             $0.69      
Options forfeited                          123,851            (123,851)             $6.46      
Options canceled                           753,100            (753,100)             $9.84      
Expired in 1988 Plan                       (60,633)                 --                 --      
------------------------------------- ------------------- ------------------                   
Balance at October 31, 1998              1,255,341           2,480,905              $3.90      

Additional shares reserved                 750,000                  --                 --      
Options granted                           (663,300)            663,300              $4.79      
Options exercised                               --            (100,265)             $1.52      
Options forfeited                          108,220            (108,220)             $5.20      
Expired in 1988 Plan                        (2,977)                 --                 --      
------------------------------------- ------------------- ------------------                   
Balance at October 31, 1999              1,447,284           2,935,720              $4.14      

Additional shares reserved               1,000,000                  --                 --      
Options granted                         (1,614,150)          1,614,150              $6.27      
Options exercised                               --             (94,002)             $3.42      
Options forfeited                          141,029            (141,029)             $5.19      
Expired in 1988 Plan                        (4,078)                 --                 --      
------------------------------------- ------------------- ------------------                   
Balance at October 29, 2000                970,085           4,314,839              $4.92      

        At October 29, 2000 and October 31, 1999 and 1998, options to purchase
1,974,146, 1,494,662 and 1,101,387 of Landec's common stock were vested,        
respectively. No options have been exercised prior to being vested.             

 Total deferred compensation expense recognized in the Company's
financial statements for stock-option awards under APB 25 for fiscal years 2000,
1999 and 1998 was $0, $86,000 and $112,000 respectively.                        

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8.       SHAREHOLDERS' EQUITY (CONTINUED)                                       

The following tables summarize information about Landec options outstanding and 
exercisable at October 29, 2000.                                                

                                                                [Download Table]

                            OPTIONS OUTSTANDING                         
-------------------------------------------------------------------     
                                             Weighted                   
                                              Average        Weighted   
                                            Contractual      Average    
        Range of              Number           Life          Exercise   
    Exercise Prices         of Shares       (in years)        Price     
------------------------- --------------- ---------------- -------------
                                                                        
   $0.5800 - $0.8600          489,800          2.40             $0.66   
   $1.4400 - $4.8750          270,879          6.81             $2.70   
   $4.9380 - $4.9380          441,551          8.29             $4.94   
   $5.0000 - $5.0000        1,221,542          7.16             $5.00   
   $5.0630 - $6.1250          496,317          6.11             $5.79   
   $6.2500 - $6.2500          877,000          5.15             $6.25   
   $6.3130 - $9.3400          517,750          8.52             $6.78   
                          ---------------                               
   $0.5800 - $9.3400        4,314,839          6.35             $4.92   

                                                                [Download Table]

                       OPTIONS EXERCISEABLE                        
-------------------------------------------------------------------

                                                    Weighted       
         Range of                 Number             Average       
      Exercise Prices           of Shares        Exercise Price    
---------------------------- ----------------- --------------------
                                                                   
     $0.5800 - $0.8600             489,078            $0.66        
     $1.4400 - $4.8750             199,431            $2.06        
     $4.9380 - $4.9380             194,547            $4.94        
     $5.0000 - $5.0000             656,645            $5.00        
     $5.0630 - $6.1250             180,622            $5.48        
     $6.2500 - $6.2500              20,000            $6.25        
     $6.3130 - $9.3400             233,823            $6.87        
                             -----------------                     
     $0.5800 - $9.3400           1,974,146            $3.90        

 EMPLOYEE STOCK PURCHASE PLAN. The Company has an employee stock
purchase plan which permits eligible employees to purchase common stock, which  
may not exceed 10% of an employee's compensation, at a price equal to the lower 
of 85% of the fair market value of the Company's common stock at the beginning  
of the offering period or on the purchase date. As of October 29, 2000, 283,457 
shares have been issued under the Purchase Plan.                                

         LANDEC AG STOCK PLAN. Under the 1996 Landec Ag Stock Plan, the Board of
Directors of Landec Ag may grant stock purchase rights, incentive stock options 
or non-statutory stock options to employees and outside consultants. The        
exercise price of the stock purchase rights, incentive stock options and        
non-statutory stock options may be no less than 85%, 100% and 85%, respectively,
of the fair market value of Landec Ag's common stock as determined by Landec    
Ag's Board of Directors. 2,000,000 shares are authorized to be issued under this
plan. Options are exercisable upon vesting and generally vest ratably over four 
years and are subject to repurchase if exercised before being vested.           

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8.       SHAREHOLDERS' EQUITY (CONTINUED)                                       

   The following table summarizes activity under the Landec Ag Stock
Option Plan.                                                                    

                                                        [Enlarge/Download Table]

                                                          Outstanding Options            
                                               ------------------------------------------
                                  Options                            Weighted Average    
                                 Available     Number of Shares       Exercise Price     
                             ----------------  -----------------   ----------------------
                                                                                         
Balance at October 31, 1997       764,000          1,236,000               $0.12         

Options granted                   (59,900)            59,900               $0.20         
Options forfeited                  11,800            (11,800)              $0.20         
                             ----------------  -----------------                         
Balance at October 31, 1998       715,900          1,284,100               $0.12         

Options granted                  (248,800)           248,800               $0.83         
Options exercised                   --                  (534)              $0.20         
Options forfeited                   9,591             (9,591)              $0.20         
                             ----------------  -----------------                         
Balance at October 31, 1999       476,691          1,522,775               $0.24         

Options granted                  (211,900)           211,900               $1.00         
Options exercised                   --               (18,215)              $0.21         
Options forfeited                  10,360            (10,360)              $0.37         
                             ----------------  -----------------                         
Balance at October 29, 2000       275,151          1,706,100               $0.33         

   At October 29, 2000, options to purchase 1,302,393 shares with an
average exercise price of $0.19 per share of Landec Ag's common stock were      
vested. For the options outstanding at October 29, 2000, 1,032,500 shares were  
granted with an exercise price of $0.10, 263,200 shares were granted with an    
exercise price of $0.20 and 410,400 were granted with an exercise price of      
$1.00. As of October 29, 2000, the Company has 1,981,251 common shares reserved 
for future issuance under the Landec Ag stock option plan.                      

        APIO STOCK PLAN. In connection with the acquisition of Apio, the Board
of Directors of Landec authorized the establishment of the 1999 Apio Stock      
Option Plan ("1999 Plan"). Under the 1999 Plan, the Board of Directors of Apio  
may grant incentive stock options or non-statutory stock options to employees   
and outside consultants. The exercise price of the incentive stock options and  
non-statutory stock options may be no less than 100% and 85%, respectively, of  
the fair market value of Apio's common stock as determined by Apio's Board of   
Directors. Five million shares are authorized to be issued under this plan.     
Options are exercisable upon vesting and generally vest ratably over four years 
and are subject to repurchase if exercised before being vested. As of October   
29, 2000, options for two million shares have been granted at an exercise price 
of $2.10 per share.                                                             

       In May 2000, the 1999 Plan was terminated. All existing grants remain
outstanding, and no future grants will be made from the plan. Concurrently, the 
2000 Apio Stock Option Plan ("2000 Plan") was authorized by Apio's Board of     
Directors, which authorized the issuance of two million shares under the same   
terms and conditions as the 1999 Plan. As of October 29, 2000, options for      
814,000 shares have been granted under the 2000 Plan at an exercise price of    
$2.10 per share.                                                                

     The following table summarizes activity under the Apio Stock Option
Plan.                                                                           

                                                        [Enlarge/Download Table]

                                                            Outstanding Options             
                                               ---------------------------------------------

                                  Options                               Weighted Average    
                                 Available       Number of Shares        Exercise Price     
                             ----------------  --------------------  -----------------------
                                                                                            
Balance at December 2, 1999     4,000,000               --                     --           

Options granted                (2,814,000)          2,814,000                 $2.10         
Options exercised                   --                  --                                  
Options forfeited                  57,000             (57,000)                $2.10         
                             ----------------  --------------------                         
Balance at October 29, 2000     1,243,000           2,757,000                 $2.10         

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8.       SHAREHOLDERS' EQUITY (CONTINUED)                                       

   At October 29, 2000 no options to purchase Apio common stock were
vested. As of October 29, 2000, the Company has 4,000,000 common shares reserved
for future issuance under the Apio stock option plan.                           

    PRO FORMA INFORMATION. The Company has elected to follow APB 25 in
accounting for its employee stock option because, as discussed below, the       
alternative fair value accounting provided for under SFAS 123 required the use  
of option valuation models that were not developed for use in valuing employee  
stock options. Under APB 25, no compensation expense is recognized in the       
Company's financial statements unless the exercise price of the Company's       
employee stock options is less than the market price of the underlying stock on 
the date of grant.                                                              

     Pro forma information regarding net loss and net loss per share has
been determined as if the Company had accounted for the Landec stock option     
plans under the fair value method and the Landec Ag stock plan and Apio stock   
plans under the minimum value method prescribed by SFAS No. 123. The fair value 
of options granted in fiscal years 2000, 1999 and 1998 reported below has been  
estimated at the date of grant using a Black-Scholes options pricing model with 
the following weighted average assumptions:                                     

                                                        [Enlarge/Download Table]

                                                         LANDEC                        
                                                 EMPLOYEE STOCK OPTIONS                
--------------------------------- -----------------------------------------------------
YEARS ENDED                         OCTOBER 29,     OCTOBER 31,        OCTOBER 31,     
                                       2000             1999              1998         
                                       ----             ----              ----         
                                                                                       
Expected life (in years)               4.47             3.30              3.91         
Risk-free interest rate                6.26            5.08%              5.62%        
Volatility                              .85             .43                .44         
Dividend yield                          0%               0%                0%          

    The assumptions used for the Landec stock options for the expected
life, the risk-free interest rate and the dividend yield are the same           
assumptions used to determine the fair value of the Landec Ag and Apio options  
granted in fiscal year 2000, 1999, and 1998. The fair value for Landec Ag and   
Apio options was estimated using the minimum value method since the stock of    
these subsidiaries is not publicly traded.                                      

   The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options that have no vesting restrictions   
and are fully transferable. In addition, option valuation models require the    
input of highly subjective assumptions, including the expected stock price      
volatility. The change in the volatility in fiscal year 2000 is a result of     
basing the volatility on Landec's stock price rather than that of comparable    
companies as was done in prior years. Because the Company's options have        
characteristics significantly different from those of traded options, and       
because changes in the subjective input assumptions can materially affect the   
fair value estimate, in the opinion of management, the existing models do not   
necessarily provide a reliable single measure of the fair value of its options. 

    The weighted average estimated fair value of Landec employee stock
options granted at grant date market prices during fiscal years 2000, 1999 and  
1998 was $4.19, $1.71, and $1.67 per share, respectively. No stock options were 
granted above grant date market prices during fiscal years 2000 and 1999. The   
weighted average estimated fair value of Landec employee stock options granted  
above grant date market prices during fiscal year 1998 was $7.84 per share. The 
weighted average exercise price of employee stock options granted above grant   
date market prices during fiscal year 1998 was $5.00 per share. The weighted    
average estimated fair value of shares granted under the Landec Stock Purchase  
Plan during fiscal years 2000, 1999 and 1998 was $1.87, $1.42 and $1.57 per     
share, respectively. The weighted average estimated fair value of shares granted
under the Intellicoat Stock Purchase Plan during fiscal years 2000, 1999 and    
1998 was $0.23, $0.30 and $0.03 per share, respectively. The weighted average   
estimated fair value of shares granted under Apio Stock Purchase Plan during    
fiscal year 2000 was $0.73.                                                     

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8.       SHAREHOLDERS' EQUITY (CONTINUED)                                       

        For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's 
pro forma information follows (in thousands, except per share amounts):         

                                                        [Enlarge/Download Table]

YEARS ENDED                             OCTOBER 29,      OCTOBER 31,       OCTOBER 31,   
------------------------------------- ---------------- ----------------- ----------------
                                           2000              1999             1998       
------------------------------------- ---------------- ----------------- ----------------
                                                                                         
Pro forma net loss                       $(8,429)          $(4,126)         $(4,355)     
Pro forma net loss per share              $(0.53)          $(0.31)           $(0.34)     

       The effects on pro forma disclosures of applying SFAS No. 123 are not
likely to be representative of the effects on pro forma disclosures of future   
years.                                                                          

9.      DEBT                                                                    

REVOLVING DEBT                                                

  Apio has a revolving line of credit with a bank which allows for
borrowings up to a maximum of $12.0 million. Outstanding amounts bear interest  
at the greater of the prime rate set by the bank or the Federal fund rate (9.5% 
at October 29, 2000) plus a margin based on Apio's leverage ratio as defined in 
the revolving note agreement, currently plus .50%. The revolving note agreement 
expires on May 1, 2002. At October 29, 2000, $6.0 million was outstanding under 
the revolving line of credit.                                                   

        Dock Resins has a revolving line of credit which allows for borrowings
of up to $1.25 million. The interest rate on the revolving line of credit is    
principally charged at the one-month LIBOR rate plus 1.75%. The revolving line  
of credit expires on February 28, 2002, and contains certain restrictive        
covenants, which, among other things, require Dock Resins to maintain minimum   
levels of net working capital and tangible net worth. At October 29, 2000,      
$868,000 was outstanding under the revolving line of credit.                    

         Landec Ag has a revolving line of credit which allows for borrowings of
up to $3 million, based on Landec Ag's inventory levels, and a capital          
expenditure line of credit which allows for borrowings up to $1 million. The    
interest rate on the revolving line of credit is charged at the prime rate plus 
0.75%, and on the capital expenditure line of credit at the five-year Treasury  
bill rate plus 4.75%. These lines of credit contain certain restrictive         
covenants, which, among other things, affect the ability of Landec to receive   
payments on debt owed by Landec Ag to Landec. Landec has pledged substantially  
all of the assets of Landec Ag to secure the lines of credit. At October 29,    
2000, $2.3 million was outstanding under the revolving line of credit and       
$419,000 was outstanding under the capital expenditure line of credit.          

     The Company has entered into an interest rate swap agreement with a
bank to limit interest rates on a portion of its long-term debt to a maximum    
effective rate of 9.52% from February 2, 2000 until October 30, 2002 when the   
agreement expires. The notional amount covered by the agreement at October 29,  
2000 is $5,250,000. The differential to be paid or received is accrued as       
interest rate charges and recognized as an adjustment to interest expense       
related to the debt. Any related amounts payable to the bank would be recorded  
in other accrued liabilities. The fair value of the interest rate swap agreement
is approximately $25,000 at October 29, 2000.                                   

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9.      DEBT (CONTINUED)                                                        

LONG-TERM DEBT                                                

Long-term debt consists of the following (in thousands):      

                                                        [Enlarge/Download Table]

                                                                  OCTOBER 29, 2000  OCTOBER 31, 1999
                                                                  ----------------  ----------------
                                                                                                    
Bankterm loan for Apio; due in quarterly payments of $500,000                                       
    through October 31, 2000 increasing to $562,500 January 31,                                     
    2001 and to $625,000 on January 31, 2002 through October 31,                                    
    2004 with interest payable monthly at the LIBOR rate plus a                                     
    margin based on Apio's leverage ratio as defined in the loan                                    
    agreement, currently plus 2.5% (8.90% at October 29, 2000)      $    10,250       $        --   
Contractual obligation to former owners of Apio; due in                                             
    annual installments of $1,060,000 beginning January 2,                                          
    2001 through January 2, 2005 (see Note 2)                             4,092                --   
Bank term loan for Dock Resins; due in monthly installments of                                      
    $26,583 including interest at 8.19% beginning February 1,                                       
    1999 through January, 2006 with the balance due January 31,                                     
    2006                                                                  2,578             2,678   
Note payable of Apio to a commercial finance company; due in                                        
    monthly installments of $13,366 including interest at                                           
    7.0% with final payment due December 2019                             1,694                --   
Note payable of Apio to a bank; due in monthly installments                                         
    of $8,008 including interest at 9.5% with final payment                                         
    due December 2015                                                       856                --   
Various notes payable with interest rates ranging from 7.54%                                        
     to 10.82%                                                              417                84   
Capitalized lease obligations with interest rates ranging from                                      
     9.15% to 12.99%                                                        328                --   
                                                                  ----------------  ----------------
                                                                         20,215             2,762   
Less current portion                                                     (3,584)             (125)  
                                                                  ----------------  ----------------
                                                                    $    16,631       $     2,637   
                                                                  ================  ================

         Maturities of long-term debt, including obligations under capital lease
agreements, for each year presented are as follows (in thousands):              

                                                                [Download Table]
                                                                              
    FY 2001...............................................       $    3,584   
    FY 2002...............................................            3,573   
    FY 2003...............................................            3,545   
    FY 2004...............................................            3,618   
    FY 2005...............................................            1,833   
    Thereafter............................................            4,062   
                                                                --------------
                                                                 $   20,215   
                                                                ==============

      The contractual obligation of $5.3 million to former shareholders of
Apio is non-interest bearing and accordingly has been discounted at Apio's      
incremental borrowing rate of 9.5% over five years resulting in a discounted    
value of $4,092,000 at October 29, 2000.                                        

   Dock Resins' bank term loan limits dividend payments and contains
various financial covenants including minimum working capital levels, net worth 
and debt service ratio.                                                         

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9.      DEBT (CONTINUED)                                                        

Apio's bank term loan limits payments to Landec for dividends,
corporate service fees and tax sharing expenses until the principal is reduced  
to an amount specified in the loan agreement. In addition, the term loan and the
DEBT revolving note contain various financial covenants including minimum levels
of EBITDA, minimum fixed coverage ratio, minimum current ratio, minimum adjusted
net worth and maximum leverage ratios. These requirements and ratios generally  
become more restrictive over time.                                              

      Landec has pledged substantially all of Apio's, Landec Ag's and Dock
Resins' assets to secure their term debt.                                       

10.      INCOME TAXES                                                           

         The Company's provision (benefit) for income taxes of $(42,000), 54,000
and 150,000 for the years ended October 29, 2000, October 31, 1999 and October  
31, 1998, respectively, is attributable to state taxes.                         

         As of October 29, 2000, the Company had federal and state net operating
loss carryforwards of approximately $29.6 million and $7.9 million,             
respectively. The Company also had federal and state research and development   
tax credit carryforwards of approximately $1.2 million and $700,000,            
respectively. The net operating loss and credit carryforwards will expire at    
various dates beginning in 2003 through 2015, if not utilized.                  

         Utilization of the net operating losses and credits may be subject to a
substantial annual limitation due to the ownership change limitations provided  
by the Internal Revenue Code of 1986. The annual limitation may result in the   
expiration of net operating losses and credits before utilization.              

    Significant components of the Company's deferred tax assets are as
follows (in thousands):                                                         

                                                        [Enlarge/Download Table]

                                                                 YEARS ENDED          
  DEFERRED TAX ASSETS:                                     OCTOBER 29,     OCTOBER 31,
                                                             2000           1999      
                                                             ----           ----      
                                                                                      
   Net operating loss carryforwards....................  $  10,500         $  9,800   
   Research credit carryforwards.......................      1,900            1,600   
   Capitalized research and development................      1,600            1,400   
   In-process research and development.................      1,000            1,000   
   Other - net.........................................      1,300            1,100   
                                                       ---------------  --------------
Net deferred tax assets................................     16,300           14,900   
Valuation allowance....................................    (16,300)         (14,900)  
                                                       ---------------  --------------
Net deferred tax assets................................  $      --         $     --   
                                                       ===============  ==============

        Due to the Company's absence of earnings history, the net deferred tax
asset has been fully offset by a valuation allowance, which has increased by    
$1.4 million in the current year.                                               

    Approximately $100,000 of the valuation allowance for deferred tax
assets relates to benefits of stock option deductions which, when recognized,   
will be allocated directly to contributed capital.                              

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11.      COMMITMENTS AND CONTINGENCIES                                          

OPERATING LEASES                                              

         Landec leases facilities and equipment under operating lease agreements
with various terms and conditions, which expire at various dates through        
December 2002. The approximate future minimum lease payments under these        
operating leases, excluding farmland leases, at October 29, 2000 are as follows 
(in thousands):                                                                 

                                                                [Download Table]

                                                              AMOUNT  
                                                           -----------
                                                                      
       FY2001..............................................$       996
       FY2002..............................................        508
       FY2003..............................................        110
                                                           -----------
                                                           $     1,614
                                                           ===========

Rent expense for operating leases, including month to month   
arrangements was $1.1 million for fiscal year 2000, $522,000 for fiscal year    
1999, and $481,000 for fiscal year 1998.                                        

LAND LEASES                                                   

         Landec, through its Apio subsidiary, also leases farmland under various
non-cancelable leases expiring through October 2004. Landec subleases           
substantially all of the farmland to growers who, in turn, agree to market their
crops through Landec. The subleases are generally non-cancelable and expire     
through October 2004. The approximate future minimum leases and sublease amounts
receivable under farmland leases at October 29, 2000 are as follows (in         
thousands):                                                                     

                                                        [Enlarge/Download Table]

                                                          Minimum           Sublease                     
                                                           Lease              Rents                      
                                                         Payments          Receivable          Net       
                                                      ----------------  ---------------- ----------------
                                                                                                         
2001................................................. $        1,342    $          634   $          708  
2002.................................................          1,196               529              667  
2003.................................................            791               321              470  
2004.................................................            401               150              251  
                                                      ----------------  ---------------- ----------------
                                                      $        3,730    $        1,634   $        2,096  
                                                      ================  ================ ================

OTHER                                                         

Under the terms of the acquisition of Dock Resins, the former 
shareholder of Dock Resins has indemnified the Company with regard to           
expenditures subsequent to the acquisition for certain environmental matters    
relating to circumstances existing at the time of the acquisition. To cover any 
such cost, an escrow for $1.5 million in cash and all of the equity             
consideration was set aside. During fiscal years 2000, 1999 and 1998, $370,000, 
$460,000 and zero were drawn down from the escrow account to pay for            
environmental expenses incurred by Dock Resins, that had been indemnified by the
former shareholder of Dock Resins in the purchase agreement.                    

EMPLOYMENT AGREEMENTS                                         

Landec has entered into employment agreements with certain key
employees. These agreements provide for these employees to receive incentive    
bonuses based on the financial performance of certain divisions in addition to  
their annual base salaries. Certain key employees also receive minimum bonuses  
for their second year assuming continued employment. The accrued incentive      
bonuses amounted to $725,000 at October 29, 2000.                               

12.      EMPLOYEE SAVINGS AND INVESTMENT PLANS                                  

      The Company sponsors a 401(k) plan available to substantially all of
Apio's salaried employees. The plan's participants can contribute from 1% to 5% 
of their salary, up to the Internal Revenue Service limitation into designated  
investment funds. The Company, in turn, contributes an amount, as required by   
the plan, which is equal to the participant's contributions. Participants are at
all times fully vested in their contributions. The Company's contribution vests 
over a seven-year period beginning in year three at a rate of 20% per year. The 
Company retains the right, by action of the Board of Directors, to amend, modify
or terminate the plan. In fiscal year 2000, the Company contributed $282,000 to 
the foregoing plan.                                                             

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13.      BUSINESS SEGMENT REPORTING                                             

        The acquisition of Apio in December 1999 resulted in a redefinition of
operating segments by management. Prior period segment information has been     
restated to conform to the current segment definitions. Landec operates in two  
business segments: the Food Products Technology segment and the Agricultural    
Seed Technology segment. The Food Products Technology segment markets and packs 
produce and specialty packaged fresh-cut vegetables that incorporate the        
Intellipac(TM) breathable membrane for the fresh-cut produce industry through   
its Apio subsidiary. The amounts presented for fiscal year 2000 include the     
results of Apio from the effective close date of November 29, 1999 through      
October 29, 2000. The Food Products Technology segment for the fiscal years     
ended October 31, 1999 and 1998 only includes the operations of the Intellipac  
business. The Agricultural Seed Technology segment markets and distributes      
hybrid seed corn to the farming industry and is developing seed coatings using  
Landec's proprietary Intelimer(R) polymers through Intellicoat. The Food        
Products Technology and Agricultural Seed Technology segments include charges   
for corporate services allocated from the Corporate and Other segment. Corporate
and Other amounts include non-core operating activities, corporate operating    
costs and net interest expense. Assets classified as Corporate and Other consist
primarily of assets of Dock Resins.                                             

Operations by Business Segment (in thousands):                

                                                        [Enlarge/Download Table]


                                                                    Agricultural                             
2000                                             Food Products         Seed        Corporate and             
                                                   Technology        Technology        Other         Total   
----------------------------------------------  ----------------  ---------------  --------------  ----------
                                                                                                             
Net sales..................................     $    178,809      $      17,212      $  13,529     $ 209,550 
Net income (loss) before cumulative effect of                                                                
accounting change..........................     $        249      $      (2,914)     $     581     $  (2,084)
Identifiable assets........................     $     95,267      $      15,775      $  22,210     $ 133,252 
Depreciation and amortization..............     $      3,790      $       1,055      $   1,221     $   6,066 
Capital expenditures.......................     $      2,839      $         763      $   1,736     $   5,338 
Interest income............................     $        723      $          82      $      72     $     877 
Interest expense...........................     $      2,120      $          23      $     192     $   2,335 
Income tax expense (benefit) ..............     $        588      $          --      $    (630)    $     (42)

1999                                                                                                         
----------------------------------------------                                                               
Net sales..................................     $      4,459      $      15,197      $  15,791     $  35,447 
Net income (loss)..........................     $        105      $      (1,219)     $  (1,655)    $  (2,769)
Identifiable assets........................     $      2,352      $      17,318      $  21,038     $  40,708 
Depreciation and amortization..............     $        139      $         983      $   1,006     $   2,128 
Capital expenditures.......................     $        347      $         295      $   3,066     $   3,708 
Interest income............................     $         --      $         113      $     250     $     363 
Interest expense...........................     $         --      $          --      $      99     $      99 
Income tax expense.........................     $         --      $          --      $      54     $      54 

1998                                                                                                         
----------------------------------------------                                                               
Net sales..................................     $      2,859      $      13,275      $  17,382     $  33,516 
Net loss...................................     $       (353)     $      (1,427)     $  (1,110)    $  (2,890)
Identifiable assets........................     $      1,513      $      14,356      $  26,487     $  42,356 
Depreciation and amortization..............     $        125      $         917      $     921     $   1,963 
Capital expenditures.......................     $        142      $       1,389      $   2,569     $   4,100 
Interest income............................     $         --      $          95      $     642     $     737 
Interest expense...........................     $         --      $           9      $     128     $     137 
Income tax expense.........................     $         --      $          --      $     150     $     150 

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13.      BUSINESS SEGMENT REPORTING (CONTINUED)                                 

    During fiscal years 1999 and 1998, a customer in the Corporate and
Other segment accounted for 10% and 13%, respectively, of the Company's total   
revenue. This was the only customer with revenues individually representing 10% 
or more of total revenues.                                                      

       Export product sales were $35.6 million, $828,000 and $863,000 in the
years ended October 29, 2000 and October 31, 1999 and 1998, respectively.       

14.      QUARTERLY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)               

              The following is a summary of the unaudited quarterly results of
operations for fiscal years 2000 and 1999. The Company has included the         
following information below to demonstrate the effect on the first, second and  
third quarters of fiscal year 2000 as if the provisions of SAB No. 101 (See Note
1), had been applied as of the beginning of the fiscal year (in thousands,      
except for per share amounts):                                                  

                                                        [Enlarge/Download Table]

                                                    1ST QUARTER           2ND QUARTER             3RD QUARTER        4TH QUARTER  
                                                    -----------           -----------             -----------        -----------  
                                                      As                    As                     As                             
                                                 Previously     As     Previously      As      Previously      As                 
                    FY 2000                       Reported  Restated    Reported    Restated    Reported    Restated              
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                  
Revenues                                            33,797    33,890     60,771      60,864      61,401      61,494        53,302 
Gross Profit                                         4,263     4,356     12,386      12,479       8,504       8,597         7,930 
Income (Loss) Before Cumulative Effect of                                                                                         
Accounting Change                                   (2,734)   (2,641)     2,815       2,908        (662)       (569)       (1,782)
Cumulative Effect of Accounting Change (Note 1)               (1,914)                                                             
                                                 ---------------------------------------------------------------------------------
Net Income (Loss)                                   (2,734)   (4,555)     2,815       2,908        (662)       (569)       (1,782)
                                                 =================================================================================
Basic Amounts per Common Share:                                                                                                   
Income Before Cumulative Effect of Accounting                                                                                     
Change                                               (0.18)    (0.17)      0.18        0.18       (0.04)      (0.04)        (0.11)
Cumulative Effect of Change in Accounting                      (0.13)                                                             
                                                 ---------------------------------------------------------------------------------
Net Income/(Loss)                                    (0.18)    (0.30)      0.18        0.18       (0.04)      (0.04)        (0.11)
                                                 =================================================================================
Dilutive Amounts Per Common Share:                                                                                                
Income Before Cumulative Effect of Change in                                                                                      
Accounting                                           (0.18)    (0.17)      0.12        0.13       (0.04)      (0.04)        (0.11)
Cumulative Effect of Change in Accounting (Note 1)             (0.13)                                                             
                                                 ---------------------------------------------------------------------------------
Net Income/(Loss)                                    (0.18)    (0.30)      0.12        0.13       (0.04)      (0.04)        (0.11)
                                                 =================================================================================

                                                        [Enlarge/Download Table]

                    FY 1999                           1st                 2nd                     3rd                       4th   
                                                    Quarter             Quarter                 Quarter                   Quarter 
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                  
Revenues                                             5,289               19,126                   5,530                     5,502 
Gross Profit                                         2,276                8,054                   1,942                     1,699 
Net Income (Loss)                                   (1,641)               3,451                  (2,027)                   (2,552)
Basic Earnings per Share                             (0.12)                0.26                   (0.15)                    (0.19)
Dilutive Earnings per Share                          (0.12)                0.22                   (0.15)                    (0.19)

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LANDEC CORPORATION
 VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

                                                                   SCHEDULE II

                                                        [Enlarge/Download Table]

                                                              ADDITIONS                              
                                                 BALANCE AT   CHARGED TO                             
                                                 BEGINNING    COSTS AND                  BALANCE AT  
                                                 OF PERIOD     EXPENSES    DEDUCTIONS   END OF PERIOD
                                                 -----------  -----------  -----------  -------------
                                                                                                     
Year ended October 31, 1998                                                                          
     Allowance for doubtful accounts............. $    27       $   31       $   (8)       $  50     
Year ended October 31, 1999                                                                          
     Allowance for doubtful accounts............. $    50       $   --       $   (5)       $  45     
Year ended October 29, 2000                                                                          
     Allowance for doubtful accounts............. $    45       $1,180       $ (598)       $ 627     

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(b)      No reports on Form 8-K were filed by the Company during the period July
31, 2000 to October 29, 2000.                                 

(c)      Index of Exhibits                                                      

                                                        [Enlarge/Download Table]
                                                                                                         
2.1(6)     Stock Purchase Agreement by and among the Registrant, Dock Resins Corporation and A. Wayne    
           Tamarelli dated as of April 18, 1997.                                                         
2.2(7)     Agreement and Plan of Reorganization by and among the Registrant, Intellicoat Corporation,    
           Williams & Sun, Inc. (d/b/a Fielder's Choice Hybrids) and Michael L. Williams dated as of     
           August 20, 1997.                                                                              
2.3(11)    Form of Agreement and Plan Merger and Purchase Agreement by and among the Registrant, Apio,   
           Inc. and related companies and each of the respective shareholders dated as of November 29,   
           1999.                                                                                         
3.1(1)     Amended and Restated Bylaws of Registrant.                                                    
3.2(2)     Ninth Amended and Restated Articles of Incorporation of Registrant.                           
3.3(13)    Certificate of Determination of Series A Preferred Stock                                      
4.1(12)    Series A Preferred Stock Purchase Agreement between the Registrant and Frederick Frank, dated 
           as of November 19, 1999.                                                                      
10.1(3)    Form of Indemnification Agreement.                                                            
10.3(4)*   1995 Employee Stock Purchase Plan, as amended, and form of Subscription Agreement.            
10.4(4)*   1995 Directors' Stock Option Plan, as amended, and form of Option Agreement.                  
10.6(3)    Industrial Real Estate Lease dated March 1, 1993 between the Registrant and Wayne R. Brown &  
           Bibbits Brown, Trustees of the Wayne R. Brown & Bibbits Brown Living Trust dated December 30, 
           1987.                                                                                         
10.14(4)*  Consulting Agreement dated May 1, 1996 between the Registrant and Richard Dulude.             
10.15(4)*  1996 Intellicoat Stock Option Plan and form of Option Agreements.                             
10.16(4)*  1996 Non-Executive Stock Option Plan and form of Option Agreements.                           
10.17(5)*  1996 Stock Option Plan and Form of Option Agreement.                                          
10.19(8)   Technology License Agreement between Bissell Healthcare Corporation and the Registrant, dated 
           as of August 28, 1997.                                                                        
10.21(9)*  Employment Agreement between the Registrant and A. Wayne Tamarelli dated as of April 18, 1997.
10.22(10)* Form of Common Stock Purchase Agreement for certain officers and directors for restricted     
           stock purchase.                                                                               
10.23(10)  Loan agreement between Registrant and  Michael Williams dated October 1, 1998.                
10.24(13)* Employment agreement between the Registrant and Nicholas Tompkins dated as of November 29,    
           1999.                                                                                         
10.25(13)* Stock Option Agreement between the Registrant and Nicholas                                    
           Tompkins dated as of November 29, 1999.                                                       
10.26(13)* 1999 Apio, Inc. Stock Option Plan and form of Option Agreement.                               
10.27(13)  Loan agreement between Apio, Inc. and the Bank of America dated as of November 29, 1999.      
10.28+*    2000 Apio, Inc. Stock Option Plan and form of Option Agreement                                
10.29+     Loan Agreement between Landec Ag, Inc. and Old National Bank dated as of June 5, 2000, as     
           amended.                                                                                      
10.30+*    New Executive Stock Option Plan.                                                              
21.1       Subsidiaries of the Registrant.                                                               
                  SUBSIDIARY                                      STATE OF INCORPORATION                 
           Landec Ag (formerly Intellicoat Corporation)                Delaware                          
           Dock Resins Corporation                                     New Jersey                        
           Apio, Inc.                                                  Delaware                          
23.1+      Consent of Independent Auditors.                                                              
24.1+      Power of Attorney.  See page 59.                                                              

-------------------                                                             

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(1)      Incorporated by reference to Exhibit 3.4 filed with Registrant's       
 Registration Statement on Form S-1 (File No. 33-80723) declared
effective on February 12, 1996.                               

(2)      Incorporated by reference to Exhibit 3.5 filed with Registrant's       
 Registration Statement on Form S-1 (File No. 33-80723) declared
effective on February 12, 1996.                               

(3)      Incorporated by reference to the identically numbered exhibits filed   
    with the Registrant's Registration Statement on Form S-1 (File No.
33-80723) declared effective on February 12, 1996.            

(4)      Incorporated by reference to the identically numbered exhibits filed   
       with the Registrant's Form 10-K filed for the years ended October 31,
1996.                                                         

(5)      Incorporated by reference to the identically numbered exhibits filed   
       with the Registrant's Form 10-Q filed for the quarter ended April 30,
1997.                                                         

(6)      Incorporated by reference to Exhibit 2.1 filed with the Registrant's   
Form 8-K dated April 18, 1997.                                

(7)      Incorporated by reference to Exhibit 2.1 filed with the Registrant's   
Form 10-Q for the quarter ended July 31, 1997.                

(8)      Incorporated by reference to the identically numbered exhibits filed   
with the Registrant's Form 8-K dated August 28, 1997.         

(9)      Incorporated by reference to Exhibit C to Exhibit 2.1 filed with the   
Registrant's Form 8-K dated April 18, 1997.                   

(10)     Incorporated by reference to identically number exhibits filed with the
   Registrant's Form 10-K filed for the year ended October 10, 1998.

(11)     Incorporated by reference to the Exhibit 2.1 filed with the            
Registrant's Form 8-K dated December 2, 1999.                 

(12)     Incorporated by reference to identically numbered exhibits filed with  
the Registrant's Form 8-K dated December 2, 1999.             

(13)     Incorporated by reference to identically numbered exhibits filed with  
       the Registrant's Form 10-K filed for the year ended October 31, 1999.

* Management contract or compensatory plan or arrangement required to be filed  
as an exhibit to this report pursuant to item 14(c) of Form 10-K.               

+ Filed herewith.                                                               

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SIGNATURES                                                    

       Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report on Form 10-K to
be signed on its behalf by the undersigned, thereunto duly authorized, in the   
City of Menlo Park, State of California, on January 26 , 2001.                  

LANDEC CORPORATION        

  By:   /s/ Gregory S. Skinner
          ----------------------------
      Gregory S. Skinner
                                Vice President of Finance and Administration
               and Chief Financial Officer

 POWER OF ATTORNEY

      KNOW ALL PERSONS BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE
APPEARS BELOW HEREBY CONSTITUTES AND APPOINTS GARY T. STEELE AND GREGORY S.     
SKINNER, AND EACH OF THEM, AS HIS ATTORNEY-IN-FACT, WITH FULL POWER OF          
SUBSTITUTION, FOR HIM IN ANY AND ALL CAPACITIES, TO SIGN ANY AND ALL AMENDMENTS 
TO THIS REPORT ON FORM 10-K, AND TO FILE THE SAME, WITH EXHIBITS THERETO AND    
OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE       
COMMISSION, HEREBY RATIFYING AND CONFIRMING OUR SIGNATURES AS THEY MAY BE SIGNED
BY OUR SAID ATTORNEY TO ANY AND ALL AMENDMENTS TO SAID REPORT ON FORM 10-K.     

      PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT ON FORM 10-K HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE        
CAPACITIES AND ON THE DATES INDICATED:                                          

                                                        [Enlarge/Download Table]

                      SIGNATURE                                              TITLE                               DATE      
                      ---------                                              -----                               ----      
                                                                                                                           
                 /s/ Gary T. Steele                                                                                        
------------------------------------------------------                                                                     
                   Gary T. Steele                      President and Chief Executive Officer and Director  January 26, 2001
                                                       (Principal Executive Officer)                                       

               /s/ Gregory S. Skinner                                                                                      
------------------------------------------------------                                                                     
                 Gregory S. Skinner                    Vice President of Finance and Administration and    January 26, 2001
                                                       Chief Financial Officer (Principal Financial and                    
                                                       Accounting Officer)                                                 

                 /s/ Kirby L. Cramer                                                                                       
------------------------------------------------------                                                                     
                   Kirby L. Cramer                     Director                                            January 26, 2001

                 /s/ Richard Dulude                                                                                        
------------------------------------------------------                                                                     
                   Richard Dulude                      Director                                            January 26, 2001

                 /s/ Frederick Frank                                                                                       
------------------------------------------------------                                                                     
                   Frederick Frank                     Director                                            January 26, 2001

               /s/ Stephen E. Halprin                                                                                      
------------------------------------------------------                                                                     
                 Stephen E. Halprin                    Director                                            January 26, 2001

------------------------------------------------------                                                                     
                Richard S. Schneider                   Director                                            January 26, 2001

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 EXHIBIT INDEX

                                                                [Download Table]

EXHIBIT                                                                       
NUMBER                             EXHIBIT TITLE                              
-------                                                                       
                                                                              
10.28    2000 Apio, Inc. Stock Option Plan and form of Option Agreement       

10.29    Loan Agreement between Landec Ag, Inc. and Old National Bank dated as
         of June 5, 2000, as amended                                          

10.30    New Executive Stock Option Plan                                      

23.1     Consent of Independent Auditors                                      

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K’ Filing		Date		First		Last			Other Filings
		1/31/05		43
		1/2/05		51
		11/1/04		43
		10/31/04		51
		11/29/03		44
		5/1/03		43					4
		10/30/02		50
		5/1/02		50
		2/28/02		50
		1/31/02		51
		7/31/01		39
		2/26/01		31					DEF 14A
		1/31/01		51					4,  4/A
Filed on:		1/26/01		59
		1/5/01		1		17
		1/2/01		51
		12/22/00		33
		10/31/00		51
For Period End:		10/29/00		1		57
		10/24/00		45
		9/12/00		11
		7/31/00		57
		7/30/00		17					10-Q
		6/15/00		41
		6/5/00		57		60
		4/30/00		17					10-Q
		4/10/00		11
		2/2/00		50
		1/30/00		17					10-Q
		12/2/99		17		58			8-K,  8-K/A
		11/29/99		21		57
		11/19/99		17		57
		11/1/99		20		40
		10/31/99		9		58			10-K
		10/11/99		11
		7/31/99		17		39			10-Q
		4/30/99		17					10-Q
		2/1/99		51
		1/31/99		17					10-Q
		1/1/99		29
		12/15/98		46
		11/1/98		42
		10/31/98		9		56			10-K
		10/10/98		58
		10/1/98		57
		4/15/98		45					DEF 14A
		1/1/98		11
		12/4/97		45		46
		10/31/97		36					10-K
		8/28/97		57		58			8-K,  8-K/A
		8/20/97		57					8-K
		7/31/97		58					10-Q
		4/30/97		58					10-Q
		4/18/97		57		58			8-K,  8-K/A
		1/7/97		45
		10/31/96		58					10-K
		5/1/96		57
		2/12/96		58
		8/10/95		10
		3/14/95		10
		10/1/94		10
		3/1/93		57
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