SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010

       DIVISION OF
CORPORATION FINANCE

VIA FACSIMILE AND U.S. MAIL

                                                                             February 27, 2009
 Gregory S. Skinner Chief Financial Officer Landec Corporation 3603 Haven Avenue Menlo Park, California 94025
 RE: Landec Corporation
Form 10-K for Fiscal Ye ar Ended May 25, 2008
Forms 10-Q for Fiscal Quarters  Ended August 31, 2008 and
November 30, 2008 File No. 0-27446

Dear Mr. Skinner:
   We have reviewed your filings and have  the following comments.  If you disagree
with a comment, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary.  Pl ease be as detailed as necessary in your
explanation.  In some of our comments, we  may ask you to provide us with information
so we may better understand your disclosure.  After reviewing this information, we may
or may not raise additional comments.   Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filings.  We look forward to working with you in these respects.  We
welcome any questions you may have about our  comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

FORM 10-K FOR THE YEAR ENDED MAY 25, 2008

 General

1. Where a comment below requests additional disclosures or other revisions to be
made, please show us in your supplemental response what the revisions will look like.  These revisions should be include d in your future filings, including your
interim filings.

Mr. Gregory Skinner
February 27, 2009 Page 2  Item 1A. Risk Factors, page 15

 2. In filings containing risk f actor disclosure, please refr ain from using qualifying or
limiting statements in the introductory paragraph, such as references to other factors described elsewhere in this report or other risks that you do not currently
deem material or of which you are current ly unaware. In view of the requirements
of Item 503(c) of Regulation S-K, su ch qualifications and limitations are
inappropriate.  Your risk factor disclosure  should address all of the material risks
that you face.  If you do not deem risks material, you should not make reference
to them.
 Item 7. Management’s Discussion and Analys is of Financial Condition and Results of
Operations, page 25
Critical Accounting Policies – Goodwill and Other Intangible Assets, page 27

3. In the interest of providing readers w ith a better insight into management’s
judgments in accounting for goodwill and inta ngible assets, please disclose the
following in future filings.  In this re gard, we note your expanded disclosures in
Note 6 to your Form 10-Q for the quarter ended November 30, 2008 and request that you provide those disclosures as well as the following additional disclosures.

• The reporting unit level at which you test goodwill for impairment and your
basis for that determination;
• You disclose in your Form 10-Q that you consider the results  of both of the
approaches set forth in SFAS 142 to estim ate the fair value of each relevant
reporting unit.  Please expand your disclosures to include sufficient
information to enable a reader to und erstand the assumed benefits of each
approach;
• How you weight each of the techniques  used including the basis for that
weighting;
• A qualitative and quantitative description of the material assumptions used
and a sensitivity analysis of those assumptions based upon reasonably likely
changes; and
If applicable, how the assumptions a nd methodologies used for valuing goodwill
in the current year have changed since th e prior year highlight ing the impact of
any changes.
 Liquidity and Capital Resources – Ca sh Flows from Operations, page 37

 4. Please enhance your disclosure to discuss all material changes in your operating
activities as depicted in your statement of cash flows.  For example, you should
expand upon your disclosure to discuss in gr eater detail that “the primary sources
of cash from operating activities during fis cal year 2008 were from net income of
$13.5 million and non-cash expenses of $3.1 million…”  Specifically, you should

Mr. Gregory Skinner
February 27, 2009 Page 3
discuss changes in your working capital accounts such as accounts receivable,
accounts payable, etc. and the reasons for those changes.
 Financial Statements

1. Organization, Basis of Presentation, and Su mmary of Significant Accounting Policies,
page 49
 Basis of Consolidation, page 49

 5. You indicate that Monsanto has a variable  interest in Landec Ag and therefore
Landec Ag has been determined to be a VIE.  You also determined that you are the primary beneficiary of Landec Ag and therefore the accounts of Landec Ag
are consolidated in you r financial statements.  Please disclose how you
determined that Landec Ag is a variable interest entity pursuant to paragraphs 4 and 5 through 7 of FIN 46R.  If based on this analysis, Landec is a VIE, please
also disclose how you determined you were the primary beneficiary of this entity as well as provide the other disclosure s required by paragr aph 23 of FIN 46(R).
 Revenue Recognition, page 51

 6. We note that your recognize revenue when, in  part, title has passed.  Please revise
to clarify, if true, that deli very occurs when title passes.  Otherwise, provide us
with additional information for us to  understand the appropr iateness of your
revenue recognition policy.  Refer to SAB Topic 13.
 7. We note, as indicated on page 30 and elsewhere in your filing, that $60,414,000
and $49,706,000 of your product sales in fi scal years 2008 and 2007 relate to
trading revenues.  We also note that $167,817,000 and $154,744,000 of your
product sales in fiscal years 2008 and 2007 rela te to the sale of specialty packaged
fresh-cut and whole vegeta ble products that are wash ed and packaged in your
propriety packaging.  We further note that you have relatively immaterial
inventory and accounts receivable balan ces as of May 25, 2008 and May 27, 2007
relative to the revenue s you generated in those fiscal years.  Please clarify whether
you take title to the produce you trade a nd/or the produce you package and with
reference to EITF 99-19 Reporting Revenue Gr oss as a Principal versus Net as an
Agent, please address the indicators of gross and net revenue reporting to support
your accounting.  Consider addressing these indicators in your critical accounting
policy disclosures.
 Recent Accounting Pronouncements, page 58

 8. We note that you adopted of EITF 06-3 a nd that you record the expenses for sales
and use taxes to general and administrativ e expenses.  The Task Force reached a
consensus that the presentation of taxes on ei ther a gross basis or a net basis is an

Mr. Gregory Skinner
February 27, 2009 Page 4
accounting policy decision that should be disclosed pursuant to Opinion 22.  In
addition, for any such taxes that are repor ted on a gross basis, an entity should
disclose the amounts of those taxes in in terim and annual financial statements for
each period for which an income statem ent is presented if those amounts are
significant.  If necessary , please quantify these amount s as required by EITF 06-3.

2.  Sale of Fielder’s Choice Direct and License Agreement, page 59

9. We note that on December 31, 2006, you sold FCD to ASI, a wholly owned
subsidiary of Monsanto.  On that sa me day you entered into a five-year co-
exclusive technology and polymer supply agr eement with Monsanto for the use of
your Intellicoat polymer seed coating technology.  As a result of these
transactions, you recorded income from the sale of FCD, net of direct expenses
and bonuses, of $22.7 million.  We also note that you recorded a deferred gain of
$10 million which will be recognized as reve nue over five years.  Please provide
the following:
• Tell us the fair value of the technolo gy licensing agreement and how such fair
value was determined.
• Tell us why you did not use the technology licensing agreement’s fair value to
allocate a portion of the $50 million FCD acquisition price to the license
agreement (e.g. based on the relative fa ir values of FCD and the licensing
agreement) rather than simply allocati ng the residual value to the licensing
agreement.

10. We note that in conjunction with the sa le of FCD, you purchased all of the
outstanding common stock and options of Landec Ag not owned by you at the fair
market value of each share as if all opti ons had been exercised as of December 1,
2006 of $7.4 million.  You indicate th at the repurchase of Landec Ag’s
outstanding common stock and options was r ecorded to retained earnings as the
repurchase occurred after the sale of FCD to Monsanto.  Clarify why the sale of
FCD to Monsanto impacted your accounting for the acquisition of Landec Ag common stock and options.  Please clar ify herein and Note 9 Stockholders’
Equity – Shares Subject to Vesting whet her the subsequent re classification of $4.8
million from retained earnings to goodwill is  a correction of an error.   If so,
please fully address the guidan ce in SAB Topic 1M and SFAS 154.
 11. You made references on pages 11 and 59 to the use of an independent appraiser in
determining the fair value of  FCD.  Please tell us the nature and extent of the
appraiser’s involvement and tell us whet her you believe they were acting as an
expert as defined in the S ecurities Act of 1933.  If these
actuaries are experts, you
must delete your reference to them or name the parties.

12. You indicate that if Monsanto elects to pur chase the stock of Landec Ag, a gain or
loss on the sale of the stock of Landec Ag will be recognized at the time of

Mr. Gregory Skinner
February 27, 2009 Page 5
purchase.  Based on the fair value of La ndec Ag as of the latest balance sheet
presented, disclose the estimated gain  or loss that would be recognized.
 License Agreements, page 61

13. You indicate that on November 22, 2006 you received an additional 800,000
shares of preferred stock of  Aesthetic Sciences.  Clarify why, as you indicate, the
receipt of those additional shares did not  change your 19.9% owne rship interest in
Aesthetic Sciences.
 14. You indicate that on May 14, 2006, you entere d into an exclusive license and
research and development agreement with Air Products and Chemicals, Inc.  You
also indicate that in 2008 an amendm ent was entered into whereby certain
technology applications were re-acquired as well as the elimination of an existing
claim in order to refine the existing re lationship.  As a result, you recorded a
$600,000 expense to selling, general and ad ministrative expense during the year
ended May 25, 2008.  Please disclose the nature of the certain technology
applications you required and the exis ting claim as well as the facts and
circumstances that resulted in a $600,000 expense.  Please cite the accounting
literature used to s upport our conclusions.

Definitive Proxy Statement filed on September 2, 2008

Executive Compensation and Related Information, page 29
Compensation Discussion and Analysis, page 29
Base Salaries, page 30
 15. Please tell us, with a view toward fu ture disclosure, how  you reconcile your
statement that “the Committee expects that the base salaries should be in the mid
to upper quartile of the range of base sa laries for comparable positions” with your
“goal . . . to target base pay at the median  level (that is, the 50th percentile),” as
disclosed in the first full paragraph on page 30.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 2008

General
 16. Please address the above comments in your interim filings as well.

*    *    *    *

  Please respond to these comments with in 10 business days, or tell us when you
will provide us with a response.  Please provi de us with a response letter that keys your
responses to our comments and provides a ny requested information.  Detailed letters
greatly facilitate our review .  Please file your response on EDGAR as a correspondence

Mr. Gregory Skinner
February 27, 2009 Page 6  file.  Please understand that we may have additional comments after reviewing your
responses to our comments.
We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.

 In connection with responding to our comments, please provide, in writing, a
statement from the company acknowledging that:
• the company is responsible for the adequacy and accuracy of the disclosure in
their filings;
• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.
  In addition, please be advi sed that the Division of En forcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.
You may contact Dietrich King, Attorne y, at (202) 551-3338 or, in his absence,
Brigitte Lippmann, Attorney, at (202) 551-3713 if you have any questions regarding legal
matters.  Please contact Erne st Greene, Staff Accountant, at (202) 551-3733 or, in his
absence, Jeanne Baker, Assistant Chie f Accountant, at (202) 551-3691 if you have
questions regarding comments on the financ ial statements and related matters.
        Sincerely,            R u f u s  D e c k e r
       Accounting Branch Chief