R
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the fiscal year ended December 31, 2008
|
|
£
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the transition period from: __________ to
__________
|
Illinois
|
36-3442829
|
(State
or other jurisdiction of
|
(IRS
Employer
|
incorporation
or organization)
|
Identification
No.)
|
Large accelerated
filer ¨
|
Accelerated
filer ¨
|
Non-accelerated
filer o
|
Smaller reporting
company þ
|
PART
I
|
||
Item
1.
|
Business
|
4
|
Item
1A.
|
Risk
Factors
|
13
|
Item 1B. | Unresovled Staff Comments |
13
|
Item
2.
|
Properties
|
13
|
Item
3.
|
Legal
Proceedings
|
14
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
14
|
|
||
PART
II
|
||
Item
5.
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity
Securities
|
14
|
Item
6.
|
Selected
Financial Data
|
16
|
Item
7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
16
|
Item
7A.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
18
|
Item
8.
|
Financial
Statements and Supplementary Data
|
18
|
Item
9.
|
Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure
|
37
|
Item
9A.
|
Controls
and Procedures
|
37
|
Item
9B.
|
Other
Information
|
37
|
PART
III
|
||
Item
10.
|
Directors,
Executive Officers and Corporate Governance
|
38
|
Item
11.
|
Executive
Compensation
|
41
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
43
|
Item
13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
44
|
Item
14.
|
Principal
Accountant Fees and Services
|
44
|
PART
IV
|
||
Item
15.
|
Exhibits,
Financial Statement Schedules
|
46
|
Signatures
|
48
|
|
Index
of Exhibits
|
49
|
|
List
of Subsidiaries
|
||
Consent of Independent Registered Public Accounting Firm | ||
Rule
13a-14(a)/15d-14(a) Certifications
|
||
Section
1350 Certifications
|
||
Press Release |
Mark
|
Use
|
Date
of Registration
|
Expiration
of
Registration
|
Comments
|
Lifeway
|
Cheese
and kefir
|
December
12, 1989
|
December
12, 2009
|
Registration
was timely renewed on December 12, 1999. Registration is renewable for ten
year periods or during the six-month grace period following the
registration expiration date.
|
Sweet
Kiss
|
Cheese,
cottage cheese
and
other milk
products,
excluding
ice
cream, ice milk
and
frozen yogurt
|
February
10, 1998
|
February
10, 2018
|
Registration
was timely renewed on May 23, 2008. Registration is renewable
for ten year periods or during the six-month grace period following the
registration expiration date.
|
Kwashenka
|
Kefir,
yogurt, cheeses, cottage cheeses and other milk products, excluding ice
cream, ice milk and frozen yogurt
|
February
10, 1998
|
February
10, 2018
|
An
Affidavit of Continued Use was timely filed between the 5th and 6th
anniversaries of the registration date. Registration is
renewable between the 9th and 10th
anniversaries of the registration date or the six-month grace period
following the registration expiration date.
|
Bambino
|
Cheeses,
cottage cheeses and other milk products
|
October
7, 2003
|
October
7, 2013
|
An
Affidavit of Continued Use was timely filed between the 5th and 6th
anniversaries of the registration date. Registration is
renewable between the 9th and 10th
anniversaries of the registration date or the six-month grace period
following the registration expiration
date.
|
Mark
|
Use
|
Date
of
Registration
|
Expiration
of
Registration
|
Comments
|
KPECTBRHCKNN
(A stylized presentation of “Krestyanskiy” in Cyrillic characters-means
“Peasant”)
|
Cheeses,
cottage cheeses and other milk products excluding ice cream, ice milk and
frozen yogurt
|
September
8, 1998
|
September
8, 2018
|
Registration
was timely renewed on August 23, 2008. Registration is renewable for ten
year periods or during the six-month grace period following the
registration expiration date.
|
BA3APHBIII
(A stylized presentation of “Bazarny” in Cyrillic
characters)
|
Pressed
unripened cheese
|
July
25, 2000
|
July
25, 2010
|
An
Affidavit of Continued Use was timely filed between the 5th and 6th
anniversaries of the registration date. Registration is
renewable between the 9th and 10th
anniversaries of the registration date or the six-month grace period
following the registration expiration date.
|
BA3APHBIII
(A stylized presentation of “Bazarny” in Cyrillic
characters)
|
Cultured
milk products, excluding ice cream, ice milk and frozen yogurt; cheeses
and cottage cheese.
|
Application
filed on July 31, 2008, based on actual use.
|
||
BAZARNY
|
Cultured
milk products, excluding ice cream, ice milk and frozen yogurt; cheeses
and cottage cheese.
|
Application
filed on July 31, 2008, based on actual use.
|
||
SoyTreat
|
Soy-based
food beverage intended for use as cultured milk substitute
|
November
11, 2008
|
November
11, 2014
|
Registration
is renewable at the time of expiration provided mandatory documents are
filed with the USPTO between the 5th and 6th anniversaries of the
registration date or the six-month grace period following the sixth
anniversary date.
|
Korovka
|
Dairy-based
spread
|
November
6, 2001
|
November
6, 2011
|
Registration
is renewable at the time of expiration provided mandatory documents are
filed with the USPTO between the 5th and 6th anniversaries of the
registration date or the six-month grace period following the sixth
anniversary date.
|
La
Fruta
|
Cultured
milk products, excluding ice cream, ice milk and frozen
yogurt
|
March
29, 2005
|
March
29, 2015
|
Registration
is renewable at the time of expiration provided mandatory documents are
filed with the USPTO between the 5th and 6th anniversaries of the
registration date or the six-month grace period following the sixth
anniversary
date.
|
Mark
|
Use
|
Date
of Registration
|
Expiration
of
Registration
|
Comments
|
PTICHYE
MOLOKO (a stylized presentation of “Ptichye Moloko” in Cyrillic
characters)
|
Kefir,
yogurt, cheeses, cottage cheeses and other milk products, excluding ice
cream, ice milk and frozen yogurt
|
October
18, 2005
|
October
18, 2015
|
Registration
is renewable at the time of expiration provided mandatory documents are
filed with the USPTO between the 5th and 6th anniversaries of the
registration date or the six-month grace period following the sixth
anniversary date.
|
BIOKEFIR
|
yogurt,
cheeses, cottage cheeses and other milk products, excluding ice cream, ice
milk and frozen yogurt
|
Application
filed April 8, 2008, on an intent-to-use basis. A Notice of
Allowance was issued on November 18, 2008. A Statement of Use is due on
May 18, 2009, or within the 3 year extension period following the Notice
of Allowance date. After acceptance of the Statement of Use, registration
will precede in due course.
|
||
SUBLIME
SLIME LIME
|
Dairy-based
beverages; dairy-based food beverages; kefir; soy- based food beverage
used as milk substitute
|
July
10, 2007
|
July
10, 2013
|
Registration
is renewable at the time of expiration provided mandatory documents are
filed with the USPTO between the 5th and 6th anniversaries of the
registration date or the six-month grace period following the sixth
anniversary date.
|
PROBUGS
|
Dairy-based
beverages; dairy-based food beverages; kefir; soy- based food beverage
used as milk substitute
|
July
10, 2007
|
July
10, 2013
|
Registration
is renewable at the time of expiration provided mandatory documents are
filed with the USPTO between the 5th and 6th anniversaries of the
registration date or the six-month grace period following the sixth
anniversary date.
|
ORANGE
CREAMY CRAWLER
|
Dairy-based
beverages; dairy-based food beverages; kefir; soy- based food beverage
used as milk substitute
|
July
10, 2007
|
July
10, 2013
|
Registration
is renewable at the time of expiration provided mandatory documents are
filed with the USPTO between the 5th and 6th anniversaries of the
registration date or the six-month grace period following the sixth
anniversary date.
|
(DESIGN)
|
Dairy-based
beverages; dairy-based food beverages; kefir; soy- based food beverage
used as milk substitute
|
July
17, 2007
|
July
17, 2013
|
Registration
is renewable at the time of expiration provided mandatory documents are
filed with the USPTO between the 5th and 6th anniversaries of the
registration date or the six-month grace period following the sixth
anniversary date.
|
(DESIGN)
|
Dairy-based
beverages; dairy-based food beverages; kefir; soy- based food beverage
used as milk substitute
|
July
10, 2007
|
July
10, 2013
|
Registration
is renewable at the time of expiration provided mandatory documents are
filed with the USPTO between the 5th and 6th anniversaries of the
registration date or the six-month grace period following the sixth
anniversary date.
|
Mark
|
Use
|
Date
of Registration
|
Expiration
of
Registration
|
Comments
|
(DESIGN)
Penelope
|
Dairy-based
beverages; dairy-based food beverages; kefir; soy- based food beverage
used as milk substitute
|
April
8, 2008
|
April
8, 2014
|
Registration
is renewable at the time of expiration provided mandatory documents are
filed with the USPTO between the 5th and 6th anniversaries of the
registration date or the six-month grace period following the sixth
anniversary date.
|
PRIDE
OF MAIN STREET
|
Dairy
Product
|
November
9, 1987
|
November
9, 2007
|
Only
for the State of MN, not in US
|
HELIOS
NUTRITION
|
Dairy
products and functional foods
|
October
5, 1999
|
October
5, 2009
|
Registration
is renewable at the time of expiration provided mandatory documents are
filed with the USPTO between the 5th and 6th anniversaries of the
registration date or the six-month grace period following the sixth
anniversary date.
|
STARFRUIT
|
Franchise
services, namely, offering technical and business management assistance in
the establishment and operation of restaurants
|
October
7, 2008
|
October
7, 2014
|
Registration
is renewable at the time of expiration provided mandatory documents are
filed with the USPTO between the 5th and 6th anniversaries of the
registration date or the six-month grace period following the sixth
anniversary date.
|
STARFRUIT
|
Restaurant
services
|
June
24, 2008
|
June
24, 2014
|
Registration
is renewable at the time of expiration provided mandatory documents are
filed with the USPTO between the 5th and 6th anniversaries of the
registration date or the six-month grace period following the sixth
anniversary date.
|
GOO-BERRY
PIE
|
Dairy-based
beverages; dairy-based food beverages; kefir; soy-based food beverage used
as a milk substitute
|
April
1, 2008
|
April
1, 2014
|
Registration is renewable at the
time of expiration provided mandatory documents are filed with the USPTO
between the 5th and 6th anniversaries of the registration date or the
six-month grace period following the sixth anniversary
date.
|
Low
Bid
|
High
Bid
|
||
First
Qtr. 2007
|
8.51
|
10.24
|
|
Second
Qtr. 2007
|
8.55
|
11.59
|
|
Third
Qtr. 2007
|
11.09
|
17.75
|
|
Fourth
Qtr. 2007
|
9.62
|
20.75
|
|
First
Qtr. 2008
|
9.25
|
11.75
|
|
Second
Qtr. 2008
|
10.40
|
14.05
|
|
Third
Qtr. 2008
|
9.02
|
15.48
|
|
Fourth
Qtr. 2008
|
5.43
|
11.89
|
Period
|
(a)
Total
Numbers
of
Shares
(or Units)
Purchased
|
(b)
Average Price Paid per Share (or Unit)
|
(c)
Total Number of Shares (or Units) Purchased as Part of Publicly Announced
Plans or Programs
|
(d)
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May
Yet Be Purchased Under the Plans or
Programs
|
January
1, 2008 to January 31, 2008*
|
3,000
|
$
|
9.53
|
3,000
|
97,000
|
||||
February
1, 2008 to February 28, 2008 *
|
15,800
|
10.12
|
15,800
|
81,200
|
|||||
March
1, 2008 to March 31, 2008*
|
18,200
|
9.59
|
18,200
|
63,000
|
|||||
April
1, 2008 to April 31, 2008*
|
21,745
|
12.80
|
21,745
|
41,255
|
|||||
May
1, 2008 to May 31, 2008*
|
24,418
|
12.47
|
24,418
|
16,837
|
|||||
June
1, 2008 to June 30, 2008*
|
7,656
|
12.12
|
7,656
|
9,181
|
|||||
July
1, 2008 to July 30, 2008*
|
9,181
|
11.03
|
9,181
|
0
|
*Total
|
100,000
|
$
|
11.09
|
100,000
|
0
|
||||
December
1, 2008 to December 31, 2008**
|
12,009
|
$
|
8.22
|
12,009
|
87,991
|
||||
**Total
|
12,009
|
$ |
8.22
|
12,009
|
87,991
|
|
•
|
Changes
in economic conditions, commodity
prices;
|
|
•
|
Shortages
of and price increase for fuel, labor strikes or work stoppages, market
acceptance of the Company’s new
products;
|
|
•
|
Significant
changes in the competitive
environment;
|
|
•
|
Changes
in laws, regulations, and tax rates;
and
|
|
•
|
Management’s
ability to achieve reductions in cost and employment levels, to realize
production efficiencies and to implement capital expenditures, all at of
the levels and times planned by
management.
|
December
31,
|
December
31,
|
|||||||
2008
|
2007
|
|||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ | 277,248 | $ | 595,885 | ||||
Marketable
securities
|
5,262,168 | 6,989,474 | ||||||
Inventories
|
3,097,542 | 3,506,554 | ||||||
Accounts
receivable, net of allowance for doubtful accounts of $110,011 and
$39,460 at December 31, 2008 and 2007
|
4,765,865 | 4,209,662 | ||||||
Prepaid
expenses and other current assets
|
23,226 | 21,253 | ||||||
Other
receivables
|
40,314 | 43,111 | ||||||
Deferred
income taxes
|
919,649 | 311,960 | ||||||
Refundable
income taxes
|
356,416 | 240,880 | ||||||
Total
current assets
|
14,742,428 | 15,918,779 | ||||||
Property
and equipment, net
|
11,062,714 | 9,678,948 | ||||||
Intangible
assets
|
||||||||
Goodwill
|
5,414,858 | 5,414,858 | ||||||
Other
intangible assets, net of accumulated amortization of $921,422 and
$601,976 at December 31, 2008 and 2007
|
2,936,216 | 3,255,662 | ||||||
Total
intangible assets
|
8,351,074 | 8,670,520 | ||||||
Other
assets
|
500,000 | 500,000 | ||||||
Total
assets
|
$ | 34,656,216 | $ | 34,768,247 | ||||
LIABILITIES AND STOCKHOLDERS’
EQUITY
|
||||||||
Current
liabilities
|
||||||||
Current
maturities of notes payable
|
$ | 928,444 | $ | 1,136,126 | ||||
Accounts
payable
|
2,260,272 | 1,594,330 | ||||||
Accrued
expenses
|
458,282 | 414,039 | ||||||
Total
current liabilities
|
3,646,998 | 3,144,495 | ||||||
Notes
payable
|
3,108,014 | 4,096,797 | ||||||
Deferred
income taxes
|
1,607,155 | 1,712,795 | ||||||
Stockholders’
equity
|
||||||||
Common
stock, no par value; 20,000,000 shares authorized; 17,273,776
shares issued; 16,724,467 shares outstanding at December 31, 2008;
17,273,776 shares issued; 16,827,726 shares outstanding at December 31,
2007
|
6,509,267 | 6,509,267 | ||||||
Paid-in-capital
|
1,202,009 | 1,120,669 | ||||||
Treasury
stock, at cost
|
( 3,302,025 | ) | ( 2,078,165 | ) | ||||
Retained
earnings
|
22,383,707 | 20,471,432 | ||||||
Accumulated
other comprehensive loss, net of taxes
|
( 498,909 | ) | ( 209,043 | ) | ||||
Total
stockholders’ equity
|
26,294,049 | 25,814,160 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 34,656,216 | $ | 34,768,247 |
Year
Ended
|
Year
Ended
|
|||||||
December
31,
|
December
31,
|
|||||||
2008
|
2007
|
|||||||
Sales
|
44,461,455 | $ | 38,729,156 | |||||
Cost
of goods sold
|
30,926,114 | 25,582,981 | ||||||
Depreciation
expense
|
777,715 | 726,647 | ||||||
Total
cost of goods sold
|
31,703,829 | 26,309,628 | ||||||
Gross
profit
|
12,757,626 | 12,419,528 | ||||||
Selling
Expenses
|
4,098,176 | 3,744,388 | ||||||
General
and Administrative
|
4,149,010 | 3,914,825 | ||||||
Amortization
expense
|
319,446 | 323,266 | ||||||
Total
Operating Expenses
|
8,566,632 | 7,982,479 | ||||||
Income
from operations
|
4,190,994 | 4,437,049 | ||||||
Other
income (expense):
|
||||||||
Interest
and dividend income
|
343,329 | 350,286 | ||||||
Rental
Income
|
48,886 | 48,305 | ||||||
Interest
expense
|
( 298,619 | ) | ( 410,180 | ) | ||||
Impairment
of marketable securities
|
( 958,879 | ) | — | |||||
Gain
(loss) on sale of marketable securities,
net
|
( 733,647 | ) | 539,739 | |||||
Total
other income (Expense)
|
( 1,598,930 | ) | 528,150 | |||||
Income
before provision for income
taxes
|
2,592,064 | 4,965,199 | ||||||
Provision
for income taxes
|
679,789 | 1,812,539 | ||||||
Net
income
|
$ | 1,912,275 | $ | 3,152,660 | ||||
Basic
and diluted earnings per common
share
|
0.11 | 0.19 | ||||||
Weighted
average number of shares
outstanding
|
16,765,080 | 16,855,611 | ||||||
COMPREHENSIVE INCOME
|
||||||||
Net
income
|
$ | 1,912,275 | $ | 3,152,660 | ||||
Other
comprehensive income (loss), net of tax:
|
||||||||
Unrealized
gains (losses) on marketable securities (net of tax
benefits)
|
( 720,517 | ) | ( 47,091 | ) | ||||
Less
reclassification adjustment for (gains) losses included in net
income (net of taxes)
|
430,651 | ( 315,721 | ) | |||||
Comprehensive
income
|
$ | 1,622,409 | $ | 2,789,848 |
Common
Stock, No Par Value
|
Accumulated
|
|||||||||||||||||||||||||||||||||||
20,000,000
Shares
|
#
of Shares
|
Other
|
||||||||||||||||||||||||||||||||||
Authorized
|
of
|
Comprehensive
|
||||||||||||||||||||||||||||||||||
#
of Shares
|
#
of Shares
|
Treasury
|
Common
|
Paid
In
|
Treasury
|
Retained
|
Income
(Loss),
|
|||||||||||||||||||||||||||||
Issued
|
Outstanding
|
Stock
|
Stock
|
Capital
|
Stock
|
Earnings
|
Net
of Tax
|
Total
|
||||||||||||||||||||||||||||
Balances
at December 31, 2006
|
17,273,776 | 16,897,826 | 375,950 | 6,509,267 | 1,080,911 | (1,334,313 | ) | 17,318,772 | 153,770 | 23,728,407 | ||||||||||||||||||||||||||
Redemption
of stock
|
— | ( 75,000 | ) | 75,000 | — | — | ( 752,603 | ) | — | — | ( 752,603 | ) | ||||||||||||||||||||||||
Issuance
of treasury stock for compensation
|
— | 4,900 | ( 4,900 | ) | — | 39,758 | 8,751 | — | — | 48,509 | ||||||||||||||||||||||||||
Other
comprehensive income (loss):
|
||||||||||||||||||||||||||||||||||||
Unrealized
losses on securities, net of taxes and reclassification
adjustment
|
— | — | — | — | — | — | — | ( 362,813 | ) | ( 362,813 | ) | |||||||||||||||||||||||||
Net
income for the year ended December 31,
2007
|
— | — | — | — | — | — | 3,152,660 | — | 3,152,660 | |||||||||||||||||||||||||||
Balances
at December 31, 2007
|
17,273,776 | 16,827,726 | 446,050 | 6,509,267 | 1,120,669 | (2,078,165 | ) | 20,471,432 | ( 209,043 | ) | 25,814,160 | |||||||||||||||||||||||||
Redemption
of stock
|
— | ( 112,009 | ) | 112,009 | — | — | ( 1,239,488 | ) | — | — | ( 1,239,488 | ) | ||||||||||||||||||||||||
Issuance
of treasury stock for compensation
|
— | 8,750 | ( 8,750 | ) | — | 81,340 | 15,628 | — | — | 96,968 | ||||||||||||||||||||||||||
Other
comprehensive income (loss):
|
||||||||||||||||||||||||||||||||||||
Unrealized
gains on securities, net of taxes and reclassification
adjustment
|
— | — | — | — | — | — | — | ( 289,866 | ) | ( 289,866 | ) | |||||||||||||||||||||||||
Net
income for the year ended December 31,
2008
|
— | — | — | — | — | — | 1,912,275 | — | 1,912,275 | |||||||||||||||||||||||||||
Balances
at December 31, 2008
|
17,273,776 | 16,724,467 | 549,309 | $ | 6,509,267 | $ | 1,202,009 | $ | (3,302,025 | ) | $ | 22,383,707 | $ | (498,909 | ) | $ | 26,294,049 |
Years
Ended
|
||||||||
December
31,
|
||||||||
2008
|
2007
|
|||||||
Cash flows from operating
activities:
|
||||||||
Net
income
|
$ | 1,912,275 | $ | 3,152,660 | ||||
Adjustments
to reconcile net income to net
|
||||||||
cash
flows from operating activities, net of acquisition:
|
||||||||
Depreciation
and amortization
|
1,092,995 | 1,049,913 | ||||||
(Gain)Loss
on sale of marketable securities, net
|
733,647 | ( 539,739 | ) | |||||
Impairment
of marketable securities
|
958,879 | — | ||||||
Deferred
income taxes
|
( 509,386 | ) | ( 223,717 | ) | ||||
Treasury
stock issued for compensation
|
96,968 | 48,509 | ||||||
Increase
(decrease) in allowance for doubtful accounts
|
70,551 | ( 40,540 | ) | |||||
(Increase)
decrease in operating assets:
|
||||||||
Accounts
receivable
|
( 626,754 | ) | ( 226,405 | ) | ||||
Other
receivables
|
2,797 | 27,939 | ||||||
Inventories
|
409,012 | ( 984,358 | ) | |||||
Refundable
income taxes
|
( 115,536 | ) | 26,891 | |||||
Prepaid
expenses and other current assets
|
( 1,973 | ) | ( 9,270 | ) | ||||
Increase
(decrease) in operating liabilities:
|
||||||||
Accounts
payable
|
665,942 | 131,316 | ||||||
Accrued
expenses
|
44,243 | ( 66,062 | ) | |||||
Net
cash provided by operating activities
|
4,733,660 | 2,347,137 | ||||||
Cash flows from investing
activities:
|
||||||||
Investment
in cost method securities
|
— | ( 500,000 | ) | |||||
Purchases
of marketable securities
|
( 5,782,452 | ) | ( 5,744,697 | ) | ||||
Sale
of marketable securities
|
5,323,423 | 7,168,246 | ||||||
Purchases
of property and equipment
|
( 2,157,315 | ) | (1,824,879 | ) | ||||
Net
cash used in investing activities
|
( 2,616,344 | ) | ( 901,330 | ) | ||||
Cash flows from financing
activities:
|
||||||||
Proceeds
of note payable
|
— | 300,000 | ||||||
Purchases
of treasury stock, net
|
( 1,239,488 | ) | ( 752,603 | ) | ||||
Repayment
of notes payable
|
( 1,196,465 | ) | ( 1,945,131 | ) | ||||
Net
cash used in financing activities
|
( 2,435,953 | ) | ( 2,397,734 | ) | ||||
Net
decrease in cash and cash equivalents
|
( 318,637 | ) | ( 951,927 | ) | ||||
Cash
and cash equivalents at the beginning of the period
|
595,885 | 1,547,812 | ||||||
Cash
and cash equivalents at the end of the period
|
$ | 277,248 | $ | 595,885 |
December
31,
|
||||||||
2008
|
2007
|
|||||||
Amounts
insured
|
$ | 847,711 | $ | 576,563 | ||||
Uninsured
and uncollateralized amounts
|
— | 523,295 | ||||||
Total
bank balances
|
$ | 847,711 | $ | 1,099,858 |
Category
|
Years
|
|
Buildings
and improvements
|
31
and 39
|
|
Machinery
and equipment
|
5 –
12
|
|
Office
equipment
|
5 –
7
|
|
Vehicles
|
5
|
Category
|
Years
|
|
Recipes
|
4
|
|
Customer
lists and other customer
related intangibles
|
7
|
|
Lease
agreement
|
7
|
|
Trade
names
|
15
|
|
Formula
|
10
|
|
Customer
relationships
|
12
|
December
31, 2008
|
December
31, 2007
|
|||||||||||||||
Cost
|
Accumulated
Amortization
|
Cost
|
Accumulated
Amortization
|
|||||||||||||
Recipes
|
$ | 43,600 | $ | 43,600 | $ | 43,600 | $ | 37,242 | ||||||||
Customer
lists and other customer related intangibles
|
305,200 | 182,938 | 305,200 | 141,518 | ||||||||||||
Lease
acquisition
|
87,200 | 55,019 | 87,200 | 42,562 | ||||||||||||
Other
|
6,638 | 4,647 | 6,638 | 3,319 | ||||||||||||
Customer
relationship
|
985,000 | 198,368 | 985,000 | 116,285 | ||||||||||||
Contractual
backlog
|
12,000 | 12,000 | 12,000 | 12,000 | ||||||||||||
Trade
names
|
1,980,000 | 319,000 | 1,980,000 | 187,000 | ||||||||||||
Formula
|
438,000 | 105,850 | 438,000 | 62,050 | ||||||||||||
$ | 3,857,638 | $ | 921,422 | $ | 3,857,638 | $ | 601,976 |
2009
|
$ |
313,225
|
||
2010
|
312,756
|
|||
2011
|
300,964
|
|||
2012
|
257,883
|
|||
2013
|
257,883
|
|||
Thereafter
|
1,493,505
|
|||
$ |
2,936,216
|
December 31, 2008
|
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair
Value
|
||||||||||||
Equities
|
$ | 2,116,004 | $ | 75,333 | $ | ( 279,487 | ) | $ | 1,911,850 | |||||||
Mutual
Funds
|
888,182 | 202 | ( 339,970 | ) | 548,414 | |||||||||||
Preferred
Securities
|
1,541,423 | 13,075 | ( 308,963 | ) | 1,245,535 | |||||||||||
Corporate
Bonds
|
783,761 | 1,559 | ( 19,289 | ) | 766,031 | |||||||||||
Municipal
Bonds
|
4,586 | 414 | — | 5,000 | ||||||||||||
Government
agency Obligations
|
778,140 | 8,668 | ( 1,470 | ) | 785,338 | |||||||||||
Total
|
$ | 6,112,096 | $ | 99,251 | $ | ( 949,179 | ) | $ | 5,262,168 |
December 31, 2007
|
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair
Value
|
||||||||||||
Equities
|
$ | 3,037,507 | $ | 331,776 | $ | ( 309,014 | ) | $ | 3,060,269 | |||||||
Mutual
Funds
|
946,357 | 4,978 | ( 104,529 | ) | 846,806 | |||||||||||
Preferred
Securities
|
1,776,750 | 40,020 | ( 241,726 | ) | 1,575,044 | |||||||||||
Corporate
Bonds
|
1,480,433 | 1,556 | ( 79,433 | ) | 1,402,556 | |||||||||||
Municipal
Bonds
|
4,586 | 253 | — | 4,839 | ||||||||||||
Government
agency Obligations
|
100,000 | — | ( 40 | ) | 99,960 | |||||||||||
Total
|
$ | 7,345,633 | $ | 378,583 | $ | ( 734,742 | ) | $ | 6,989,474 |
Less
Than 12 Months
|
12
Months or Greater
|
Total
|
||||||||||||||||||||||
Description
of Securities
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
Equities
|
$ | 733,161 | $ | ( 242,055 | ) | $ | 65,931 | $ | ( 37,432 | ) | $ | 799,092 | $ | ( 279,487 | ) | |||||||||
Mutual
Funds
|
363,006 | ( 179,941 | ) | 86,086 | ( 160,029 | ) | 449,092 | ( 339,970 | ) | |||||||||||||||
Preferred
Securities
|
150,722 | ( 28,643 | ) | 435,043 | ( 280,320 | ) | 585,765 | ( 308,963 | ) | |||||||||||||||
Corporate
Bonds
|
345,302 | ( 18,789 | ) | 125,348 | ( 500 | ) | 470,650 | ( 19,289 | ) | |||||||||||||||
Government
Agency Obligations
|
168,319 | ( 1,470 | ) | — | — | 168,319 | ( 1,470 | ) | ||||||||||||||||
$ | 1,760,510 | $ | ( 470,898 | ) | $ | 712,408 | $ | ( 478,281 | ) | $ | 2,472,918 | $ | ( 949,179 | ) |
December
31,
|
||||||||
2008
|
2007
|
|||||||
Finished
goods
|
$ | 1,343,811 | $ | 1,296,985 | ||||
Production
supplies
|
1,291,484 | 1,383,384 | ||||||
Raw
materials
|
462,247 | 826,185 | ||||||
Total
inventories
|
$ | 3,097,542 | $ | 3,506,554 |
December
31,
|
||||||||
2008
|
2007
|
|||||||
Land
|
$ | 969,232 | $ | 969,232 | ||||
Buildings
and improvements
|
7,138,042 | 6,743,647 | ||||||
Machinery
and equipment
|
8,229,202 | 8,159,199 | ||||||
Vehicles
|
610,558 | 581,458 | ||||||
Office
equipment
|
180,351 | 101,583 | ||||||
Construction
in process
|
2,309,045 | 719,830 | ||||||
19,436,430 | 17,274,949 | |||||||
Less
accumulated depreciation
|
8,373,716 | 7,596,001 | ||||||
Total
property and equipment
|
$ | 11,062,714 | $ | 9,678,948 |
December
31,
|
||||||||
2008
|
2007
|
|||||||
Accrued
payroll and payroll taxes
|
$ | 98,089 | $ | 58,395 | ||||
Accrued
property tax
|
291,819 | 285,279 | ||||||
Other
|
68,374 | 70,365 | ||||||
$ | 458,282 | $ | 414,039 |
December
31,
|
||||||||
2008
|
2007
|
|||||||
Mortgage
note payable to a bank, payable in monthly installments of $3,273
including interest at 7%, with a balloon payment of $416,825 due September
25, 2011. Collateralized by real estate.
|
$ | 438,926 | $ | 446,450 | ||||
Mortgage
note payable to a bank, payable in monthly installments of $19,513
including interest at 5.6%, with a balloon payment of $2,652,143 due July
14, 2010. Collateralized by real estate.
|
2,760,288 | 2,834,970 | ||||||
Note
payable to Amani Holding LLC, payable in quarterly installments of
$262,500 plus interest at the floating prime rate per annum (3.25% at
December 31, 2008) due September 1, 2010 secured by letter of
credit
|
837,244 | 1,951,503 | ||||||
Total
notes payable
|
4,036,458 | 5,232,923 | ||||||
Less
current maturities
|
928,444 | 1,136,126 | ||||||
Total
long-term portion
|
$ | 3,108,014 | $ | 4,096,797 |
For
the Year Ended December 31,
|
|||||
2009
|
$ | 928,444 | |||
2010
|
2,687,827 | ||||
2011
|
420,187 | ||||
Total
|
$ | 4,036,458 |
For
the Years Ended
|
||||||||
December,
|
||||||||
2008
|
2007
|
|||||||
Current:
|
||||||||
Federal
|
$ | 1,005,159 | $ | 1,699,408 | ||||
State
and local
|
184,016 | 336,848 | ||||||
Total
current
|
1,189,175 | 2,036,256 | ||||||
Deferred
|
( 509,386 | ) | ( 223,717 | ) | ||||
Provision
for income taxes
|
$ | 679,789 | $ | 1,812,539 |
For
the Years Ended
|
||||||||
December
31,
|
||||||||
2008
|
2007
|
|||||||
Federal
income tax expense computed
at the statutory rate
|
$ | 881,302 | $ | 1,688,168 | ||||
State
and local tax expense, net
|
124,419 | 238,330 | ||||||
Permanent
differences
|
( 150,772 | ) | ( 113,959 | ) | ||||
Correction
of prior year estimate
|
( 175,160 | ) | — | |||||
Provision
for income taxes
|
$ | 679,789 | $ | 1,812,539 |
December
31,
|
||||||||
2008
|
2007
|
|||||||
Non-current
deferred tax liabilities arising
from:
Temporary
differences -
|
||||||||
accumulated
depreciation and amortization
|
$ | ( 1,607,155 | ) | $ | ( 1,712,795 | ) | ||
Current
deferred tax assets arising from:
|
||||||||
Unrealized
losses on marketable securities
|
351,020 | 147,077 | ||||||
Impairment
of marketable securities
|
396,017 | — | ||||||
Inventory
|
127,177 | 148,586 | ||||||
Allowance
for doubtful accounts
|
14,460 | 16,297 | ||||||
Allowance
for promotions
|
30,975 | — | ||||||
Total
current deferred tax assets (liabilities)
|
919,649 | 311,960 | ||||||
Net
deferred tax liability
|
$ | ( 687,506 | ) | $ | ( 1,400,835 | ) |
For
the Years Ended
|
||||||||
December
31,
|
||||||||
2008
|
2007
|
|||||||
Interest
|
$ | 307,620 | $ | 430,098 | ||||
Income
taxes
|
$ | 1,288,428 | $ | 2,026,031 |
Quoted
Prices in Active Markets for Identical Assets (Level 1)
|
Significant
Other Observable Inputs (Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Balance
at December 31, 2008
|
|||||||||||||
Assets
|
||||||||||||||||
Investment
securities- available - for - sale
|
$ | 5,262,168 | — | — | 5,262,168 |
Name
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
All
other Comp. (5)
|
Total
|
|
Julie
Smolyansky, CEO
and President(1)
|
2008
2007
|
$247,038
166,153
|
$20,000
22,500
|
$42,050
17,325
|
$20,288
23,334
|
$329,376
229,312
|
|
Edward
P. Smolyansky,
CFO
Chief Accounting Officer and Controller (2)
|
2008
2007
|
$276,884
178,461
|
$40,000
22,500
|
$42,050
17,325
|
$11,900
11,838
|
$370,831
230,124
|
|
Ludmila
Smolyansky, Chairman
(3)
|
2008
2007
|
$190,076
162,807
|
$50,000
55,000
|
$
—
—
|
$8,400
5,600
|
$248,476
233,407
|
|
Val
Nikolenko, Vice President
of Operations
and
Secretary
(4)
|
2008
2007
|
$114,035
110,832
|
$12,000
10,000
|
$5,030
2,887
|
$14,021
13,813
|
$145,086
137,532
|
(1)
|
The
Board appointed Julie Smolyansky as the CEO, CFO, President and Treasurer
of the Company on June 10,
2002. Until that date and since September 21, 1998 she had been
Director of Sales and Marketing of the
Company. Since November 2004, Ms. Smolyansky has served solely
as CEO and President.
|
|
(2)
|
The
Board appointed Edward Smolyansky as the CFO, Chief Accounting Officer and
Controller of the Company
in November 2004.
|
|
(3)
|
The
Company approves, on an annual basis, the payment to Ludmila Smolyansky of
salary and bonus as other compensation
for continuing advisory services to the Company and in light of her
extensive experience. Ludmila
Smolyansky devotes as much time as necessary to the business of the
Company.
|
|
(4)
|
The
Board appointed Val Nikolenko as the Vice President of Operations and
Secretary of the Company in December 1993.
|
|
(5)
|
Represents
(i) the Company’s portion of the matching contributions to the Company’s
401(k) plan on behalf of the Named Executive Officer, Julie Smolyansky
($4,500 for 2008 and $7,546 for 2007); Edward Smolyansky ($8,100 for 2008
and $8,038 for 2007); Val Nikolenko ($5,041 for 2005 and $4,833 for 2007)
and (ii) the following amounts related to personal useage of automobiles
leased by the Company, and related insurance and fuel, for 2007 and 2008,
(x) for Julie Smolyansky, $11,988 of lease payments, $2,000 of insurance
premiums and $1,800 of fuel, (y) for Edward Smolyansky, $2,000 of
insurance premiums and $1,800 of fuel, and (z) for Val Nikolenko, $7,080
of lease payments, $1,000 of insurance premiums and $1,800 of
fuel.
|
Stock Awards
|
||
Name
|
Number of Shares or Units of
Stock That Have Not Vested
|
Market Value of Shares or Units
of
Stock That Have Not
Vested
|
Julie
Smolyansky
|
2,500
|
$22,450
|
Edward
Smolyansky
|
2,500
|
$22,450
|
Ludmila
Smolyansky
|
--
|
--
|
Val
Nikolenko
|
250
|
$
2,245
|
Name
|
Fees
Earned or Paid in Cash
|
Total
|
||
Pol
Sikar
|
$2,000
|
$2,000
|
||
Renzo
Bernardi
|
$2,000
|
$2,000
|
||
Julie
Oberweis
|
$2,000
|
$2,000
|
Equity
Compensation Plan Information
|
|||
Plan
category
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|
(a)
|
(b)
|
(c)
|
Equity
compensation plans approved by security holders
|
0
|
$0.00
|
936,000
|
Equity
compensation plans not approved by security holders
|
0
|
$0.00
|
0
|
Total
|
0
|
$0.00
|
936,000
|
Name
and Address of Beneficial Owner
|
Amount
and Nature of Beneficial Ownership
|
Percent
of Class
|
||||||
Ludmila
Smolyansky(3,4)
|
|
7,540,354
|
(3)
|
|
45.1
|
%
|
||
Julie
Smolyansky(4)
|
541,060
|
3.24
|
%
|
|||||
Edward
Smolyansky(4)
|
340,946
|
2.04
|
%
|
|||||
Pol
Sikar(4)
|
3,000
|
*
|
||||||
Renzo
Bernardi(4)
|
14,900
|
*
|
||||||
Juan
Carlos Dalto(4,5)
|
0
|
*
|
||||||
Julie
Oberweis(4)
|
0
|
*
|
||||||
Val
Nikolenko
|
5,000
|
*
|
||||||
All
Directors and Officers of the Company as a Group (Eight persons
in total)
|
8,445,260
|
50.5
|
%
|
|||||
DS
Waters, LP
|
3,454,756
|
20.7
|
%
|
(1)
|
With
the exception of Juan Carlos Dalto and DS Waters, LP, the address for all
Directors and shareholders listed
in this table is 6431 Oakton St., Morton Grove, IL 60053. The address for
Juan Carlos Dalto and DS Waters,
LP is 100 Hillside Avenue, White Plains, NY 10603-2861.
|
|
(2)
|
Based
upon 16,722,592 shares of Common Stock outstanding as of March 2,
2009.
|
|
(3)
|
On
March 2, 2009, Mrs. Smolyansky directly owned 7,535,354 shares of
Common Stock. Additionally, Mrs. Smolyansky is deemed to
be the indirect beneficial owner of 5,000 shares of Common Stock held in
the Smolyansky Family Foundation, of which Mrs. Smolyansky
is the Trustee.
|
|
(4)
|
A
director or officer of the Company.
|
|
(5)
|
Mr. Dalto
is also an officer of The Dannon Company, Inc., which is an affiliate of
DS Waters, LP.
|
2.1
|
Stock
Purchase Agreement dated February 6, 2009 by and among Lifeway Foods,
Inc., Iyla Mandel and Michael Edelson (incorporated by reference to
Exhibit 2.1 of Lifeway’s Current Report on Form 8-K dated February 6, 2009
and filed February 13, 2009). (File No.
000-17363)
|
|
2.2
|
Real
Property Agreement dated February 6, 2009 by and among Lifeway Foods,
Inc., Ilya Mandel and Michael Edelson (incorporated by reference to
Exhibit 2.2 of Lifeway’s Current Report on Form 8-K dated February 6, 2009
and filed on February 13, 2009). (File No.
000-17363)
|
|
3.1
|
Amended
and Restated By-laws (incorporated by reference to
Exhibit No. 3.5 of Lifeway’s Current Report on Form 8-K
dated and filed on December 10, 2002). (File
No. 000-17363)
|
|
3.2
|
Articles
of Incorporation, as amended and currently in effect (incorporated by
reference to Exhibit 3.5 of Lifeway’s Quarterly Report on
Form 10-QSB for the quarter ended June 30, 2000 and filed on
August 8, 2000). (File No. 000-17363)
|
|
4.1
|
Form
of Promissory Note, dated August 3, 2006 in favor of Amani Holdings,
LLC (incorporated by reference to Exhibit 4.1 of Lifeway’s Current
Report on Form 8-K dated August 9, 2006 and filed on August 9,
2006). (File No. 000-17363)
|
|
4.2
|
Revolving
Note dated February 6, 2009 (incorporated by reference to Exhibit 10.2 on
Lifeway’s Current Report on Form 8-K dated February 6, 2009 and filed on
February 13, 2009). (File No.
000-17363).
|
|
4.3 |
Term
Note dated February 6, 2009 (incorporated by reference to Exhibit 10.3 on
Lifeway’s Current Report on Form 8-K dated February 6, 2009 and filed on
February 13, 2009). (File No.
000-17363).
|
|
10.1
|
Lifeway
Foods, Inc. Consulting and Services Compensation Plan, dated June 5,
1995 (incorporated by reference to Lifeway’s Registration Statement on
Form S-8, File No. 33-93306). (File
No. 000-17363)
|
|
10.2
|
Stock
Purchase Agreement with Danone Foods, Inc., dated October 1, 1999
(incorporated by reference to Exhibit 10.10 of Lifeway’s Current
Report on Form 8-K dated October 1, 1999, and filed
October 12, 1999). (File
No. 000-17363)
|
|
10.3
|
Employment
Agreement, dated September 12, 2002, between Lifeway Foods, Inc. and
Julie Smolyansky (incorporated by reference to Exhibit 10.14 of
Amendment No. 2 filed April 30, 2003 to Lifeway’s Quarterly
Report on Form 10-QSB/A for the quarter ended September 30,
2002). (File No. 000-17363)
|
|
10.4
|
Stock
Purchase Agreement dated as of July 27, 2006, among Lifeway Foods,
Inc., George Economy, Amani Holdings, LLC, the other shareholders of
Helios Nutrition, Ltd. and Pride of Main Street Dairy, L.L.C.
(incorporated by reference to Exhibit 10.1 of Lifeway’s Current Report on
Form 8-K dated August 9, 2006 and filed on August 9, 2006).
(File No. 000-17363)
|
|
10.5
|
Fourth
Extension to Stockholders’ Agreement, dated May 3, 2006, between
Lifeway Foods, Inc. and DS Waters, L.P. (incorporated by reference to
Exhibit 99.1 of Lifeway’s Current Report on Form 8-K dated
April 28, 2006 and filed on May 5, 2006). (File
No. 0-17363)
|
|
10.6
|
Fifth
Extension to Stockholders’ Agreement, dated December 26, 2006,
between Lifeway Foods, Inc. and DS Waters, L.P. (incorporated by reference
to Exhibit 10.1 of Lifeway’s Current Report on Form 8-K dated
January 3, 2007 and filed on January 3, 2007). (File
No. 000-17363)
|
|
10.7
|
Sixth
Extension to Stockholders’ Agreement, dated December 31, 2007,
between Lifeway Foods, Inc. and DS Waters, L.P. (incorporated by reference
to Exhibit 10.1 of Lifeway’s Current Report on Form 8-K dated
December 31, 2007 and filed on January 3, 2008). (File
No. 000-17363)
|
|
10.8
|
Seventh
Extension to Stockholders’ Agreement, dated January 15, 2009, between
Lifeway Foods, Inc. and DS Waters, L.P. (incorporated by
reference to Exhibit 10.1 of Lifeway’s Current Report on
Form 8-K dated January 15, 2009 and filed on January 16, 2009).
(File No. 000-17363)
|
|
10.9
|
Loan
and Security Agreement dated February 6, 2009 by and among Lifeway Foods,
Inc., Fresh Made, Inc., LFI Enterprises, Inc., Helios Nutrition Limited,
Pride Main Street Dairy, LLC and Starfruit, LLC and The Private Bank and
Trust Company (incorporated by reference to Exhibit 10.1 of Lifeway’s
Current Report on Form 8-K dated February 6, 2009 and filed on February
13, 2009). (File No. 000-17363)
|
|
11
|
Statement
re: computation of per share earnings. (Incorporated by reference to Note
2 of the Consolidated Financial Statements).
|
|
14
|
Code
of Ethics (incorporated by reference to Exhibit 14 on Lifeway’s Annual
Report on Form 10-KSB for the year ended December 31, 2007 and filed on
March 31, 2008). (File No. 000-17363).
|
|
21
|
List
of Subsidiaries of the Registrant
|
|
23.1 | Consent of Independent Registered Public Accounting Firm | |
31.1
|
Rule 13a-14(a)/15d-14(a)
Certification of Julie Smolyansky
|
|
31.2
|
Rule 13a-14(a)/15d-14(a)
Certification of Edward P. Smolyansky
|
|
32.1
|
Section 1350
Certification of Julie Smolyansky
|
|
32.2
|
Section 1350
Certification of Edward P. Smolyansky
|
|
99.1 | Press Release dated March 31, 2009 – “Lifeway Foods Reports 4th Quarter and Twelve Months Ended December 31, 2008 Results.” |
LIFEWAY
FOODS, INC.
|
|||
By:
|
/s/ Julie
Smolyansky
|
||
Julie
Smolyansky
|
|||
Chief
Executive Officer, President, and
Director
|
By:
|
/s/ Edward
P. Smolyansky
|
||
Edward
P. Smolyansky
|
|||
Chief
Financial and Accounting Officer
and
Treasurer
|
/s/ Julie
Smolyansky
|
|||
Julie
Smolyansky
|
|||
Date: March
31, 2009
|
Chief
Executive Officer, President, and Director
|
/s/ Ludmila
Smolyansky
|
|||
Ludmila
Smolyansky
|
|||
Date: March
31, 2009
|
Chairperson
of the Board of Directors
|
/s/ Pol
Sikar
|
|||
Pol
Sikar
|
|||
Date: March
31, 2009
|
Director
|
Juan
Carlos Dalto
|
|||
Date: March
31, 2009
|
Director
|
/s/ Renzo Bernardi | |||
Renzo
Bernardi
|
|||
Date: March
31, 2009
|
Director
|
|
|||
Julie
Oberweis
|
|||
Date:
|
Director
|
2.1
|
Stock
Purchase Agreement dated February 6, 2009 by and among Lifeway Foods,
Inc., Iyla Mandel and Michael Edelson (incorporated by reference to
Exhibit 2.1 of Lifeway’s Current Report on Form 8-K dated February 6, 2009
and filed February 13, 2009). (File No.
000-17363)
|
|
2.2
|
Real
Property Agreement dated February 6, 2009 by and among Lifeway Foods,
Inc., Ilya Mandel and Michael Edelson (incorporated by reference to
Exhibit 2.2 of Lifeway’s Current Report on Form 8-K dated February 6, 2009
and filed on February 13, 2009). (File No.
000-17363)
|
|
3.1
|
Amended
and Restated By-laws (incorporated by reference to
Exhibit No. 3.5 of Lifeway’s Current Report on Form 8-K
dated and filed on December 10, 2002). (File
No. 000-17363)
|
|
3.2
|
Articles
of Incorporation, as amended and currently in effect (incorporated by
reference to Exhibit 3.5 of Lifeway’s Quarterly Report on
Form 10-QSB for the quarter ended June 30, 2000 and filed on
August 8, 2000). (File No. 000-17363)
|
|
4.1
|
Form
of Promissory Note, dated August 3, 2006 in favor of Amani Holdings,
LLC (incorporated by reference to Exhibit 4.1 of Lifeway’s
Current Report on Form 8-K dated August 9, 2006 and filed on
August 9, 2006). (File No. 000-17363)
|
|
4.2 |
Revolving
Note dated February 6, 2009 (incorporated by reference to Exhibit 10.2 on
Lifeway’s Current Report on Form 8-K dated February 6, 2009 and filed on
February 13, 2009). (File No.
000-17363).
|
|
4.3 |
Term
Note dated February 6, 2009 (incorporated by reference to Exhibit 10.3 on
Lifeway’s Current Report on Form 8-K dated February 6, 2009 and filed on
February 13, 2009). (File No.
000-17363).
|
|
10.1
|
Lifeway
Foods, Inc. Consulting and Services Compensation Plan, dated June 5,
1995 (incorporated by reference to Lifeway’s Registration Statement on
Form S-8, File No. 33-93306). (File
No. 000-17363)
|
|
10.2
|
Stock
Purchase Agreement with Danone Foods, Inc., dated October 1, 1999
(incorporated by reference to Exhibit 10.10 of Lifeway’s Current
Report on Form 8-K dated October 1, 1999, and filed
October 12, 1999). (File No. 000-17363)
|
|
10.3
|
Employment
Agreement, dated September 12, 2002, between Lifeway Foods, Inc. and
Julie Smolyansky (incorporated by reference to Exhibit 10.14 of
Amendment No. 2 filed April 30, 2003 to Lifeway’s Quarterly
Report on Form 10-QSB/A for the quarter ended September 30,
2002). (File No. 000-17363)
|
|
10.4
|
Stock
Purchase Agreement dated as of July 27, 2006, among Lifeway Foods,
Inc., George Economy, Amani Holdings, LLC, the other shareholders of
Helios Nutrition, Ltd. and Pride of Main Street Dairy, L.L.C.
(incorporated by reference to Exhibit 10.1 of Lifeway’s Current Report on
Form 8-K dated August 9, 2006 and filed on August 9, 2006).
(File No. 000-17363)
|
|
10.5
|
Fourth
Extension to Stockholders’ Agreement, dated May 3, 2006, between
Lifeway Foods, Inc. and DS Waters, L.P. (incorporated by reference to
Exhibit 99.1 of Lifeway’s Current Report on Form 8-K dated April
28, 2006 and filed on May 5, 2006). (File
No. 0-17363)
|
|
10.6
|
Fifth
Extension to Stockholders’ Agreement, dated December 26, 2006,
between Lifeway Foods, Inc. and DS Waters, L.P. (incorporated by reference
to Exhibit 10.1 of Lifeway’s Current Report on Form 8-K dated
January 3, 2007 and filed on January 3, 2007). (File
No. 000-17363)
|
|
10.7
|
Sixth
Extension to Stockholders’ Agreement, dated December 31, 2007,
between Lifeway Foods, Inc. and DS Waters, L.P. (incorporated by reference
to Exhibit 10.1 of Lifeway’s Current Report on Form 8-K dated
December 31, 2007 and filed on January 3, 2008). (File
No. 000-17363)
|
|
10.8
|
Seventh
Extension to Stockholders’ Agreement, dated January 15, 2009, between
Lifeway Foods, Inc. and DS Waters, L.P. (incorporated by
reference to Exhibit 10.1 of Lifeway’s Current Report on
Form 8-K dated January 15, 2009 and filed on January 16, 2009).
(File No. 000-17363)
|
|
10.9
|
Loan
and Security Agreement dated February 6, 2009 by and among Lifeway Foods,
Inc., Fresh Made, Inc., LFI Enterprises, Inc., Helios Nutrition Limited,
Pride Main Street Dairy, LLC and Starfruit, LLC and The Private Bank and
Trust Company (incorporated by reference to Exhibit 10.1 of Lifeway’s
Current Report on Form 8-K dated February 6, 2009 and filed on February
13, 2009). (File No. 000-17363)
|
|
11
|
Statement
re: computation of per share earnings. (Incorporated by reference to Note
2 of the Consolidated Financial Statements).
|
|
14
|
Code
of Ethics (incorporated by reference to Exhibit 14 on Lifeway’s Annual
Report on Form 10-KSB for the year ended December 31, 2007 and filed on
March 31, 2008). (File No. 000-17363).
|
|
21
|
List
of Subsidiaries of the Registrant
|
|
23.1 | Consent of Independent Registered Public Accounting Firm | |
31.1
|
Rule 13a-14(a)/15d-14(a)
Certification of Julie Smolyansky
|
|
31.2
|
Rule 13a-14(a)/15d-14(a)
Certification of Edward P. Smolyansky
|
|
32.1
|
Section 1350
Certification of Julie Smolyansky
|
|
32.2
|
Section 1350
Certification of Edward P. Smolyansky
|
|
99.1 | Press Release dated March 31, 2009 – “Lifeway Foods Reports 4th Quarter and Twelve Months Ended December 31, 2008 Results.” |