Lifeway Foods (LWAY) 10-Q 14 Nov 22 2022 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2022	Nov. 09, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2022
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--12-31
Entity File Number	000-17363
Entity Registrant Name	LIFEWAY FOODS, INC.
Entity Central Index Key	0000814586
Entity Tax Identification Number	36-3442829
Entity Incorporation, State or Country Code	IL
Entity Address, Address Line One	6431 West Oakton
Entity Address, City or Town	Morton Grove
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60053
City Area Code	(847)
Local Phone Number	967-1010
Title of 12(b) Security	Common Stock, No Par Value
Trading Symbol	LWAY
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		15,495,102

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 8,933	$ 9,233
Accounts receivable, net of allowance for doubtful accounts and discounts & allowances of $1,400 and $1,170 at September 30, 2022 and December 31, 2021 respectively	11,507	9,930
Inventories, net	9,192	8,285
Prepaid expenses and other current assets	1,369	1,254
Refundable income taxes	653	344
Total current assets	31,654	29,046
Property, plant and equipment, net	20,905	20,130
Operating lease right-of-use asset	135	216
Goodwill	11,704	11,704
Intangible assets, net	7,573	7,978
Other assets	1,800	1,800
Total assets	73,771	70,874
Current liabilities
Current portion of note payable	1,000	1,000
Accounts payable	9,119	6,614
Accrued expenses	4,378	3,724
Accrued income taxes		725
Total current liabilities	14,497	12,063
Line of credit	2,777	2,777
Note payable	2,725	3,470
Operating lease liabilities	74	85
Deferred income taxes, net	3,201	3,201
Other long-term liabilities	0	147
Total liabilities	23,274	21,743
Commitments and contingencies
Stockholders' equity
Preferred stock, no par value; 2,500 shares authorized; no shares issued or outstanding at September 30, 2022 and December 31, 2021	0	0
Common stock, no par value; 40,000 shares authorized; 17,274 shares issued; 15,495 and 15,435 outstanding at September 30, 2022 and December 31, 2021, respectively	6,509	6,509
Paid-in capital	3,271	2,552
Treasury stock, at cost	(12,997)	(13,436)
Retained earnings	53,714	53,506
Total stockholders' equity	50,497	49,131
Total liabilities and stockholders' equity	$ 73,771	$ 70,874

Consolidated Balance Sheets (_2

Consolidated Balance Sheets (Unaudited (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Allowance for doubtful accounts and discounts	$ 1,400	$ 1,170
Preferred stock, par value	$ 0	$ 0
Preferred stock, shares authorized	2,500	2,500
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0	$ 0
Common stock, shares authorized	40,000	40,000
Common stock, shares issued	17,274	17,274
Common stock, shares outstanding	15,495	15,435

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Net sales	$ 38,140	$ 29,553	$ 105,730	$ 88,091
Cost of goods sold	29,962	21,915	85,032	63,273
Depreciation expense	590	645	1,833	2,099
Total cost of goods sold	30,552	22,560	86,865	65,372
Gross profit	7,588	6,993	18,865	22,719
Selling expenses	2,843	2,722	8,527	8,510
General and administrative	3,415	3,194	9,546	8,702
Amortization expense	135	33	405	33
Total operating expenses	6,393	5,949	18,478	17,245
Income from operations	1,195	1,044	387	5,474
Other income (expense):
Interest expense	(77)	(30)	(171)	(72)
Gain on investments	0	0	0	2
Loss on sale of property and equipment	0	(5)	0	(88)
Other (expense) income, net	(5)	(2)	(10)	(61)
Total other income (expense)	(82)	(37)	(181)	(219)
Income before provision (benefit) for income taxes	1,113	1,007	206	5,255
Provision (benefit) for income taxes	130	527	(2)	1,851
Net income	$ 983	$ 480	$ 208	$ 3,404
Earnings (loss) per common share:
Basic	$ 0.06	$ 0.03	$ 0.01	$ 0.22
Diluted	$ 0.06	$ 0.03	$ 0.01	$ 0.22
Weighted average common shares:
Basic	15,490	15,473	15,462	15,572
Diluted	15,848	15,651	15,759	15,712

Consolidated Statements of Stoc

Consolidated Statements of Stockholder's Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2020	$ 6,509	$ (12,450)	$ 2,600	$ 50,195	$ 46,854
Beginning balance, shares at Dec. 31, 2020	17,274	(1,669)
Stock-based compensation			64		64
Net income				1,306	1,306
Ending balance, value at Mar. 31, 2021	$ 6,509	$ (12,450)	2,664	51,501	48,224
Ending balance, shares at Mar. 31, 2021	17,274	(1,669)
Beginning balance, value at Dec. 31, 2020	$ 6,509	$ (12,450)	2,600	50,195	46,854
Beginning balance, shares at Dec. 31, 2020	17,274	(1,669)
Net income					3,404
Ending balance, value at Sep. 30, 2021	$ 6,509	$ (13,436)	2,387	53,599	49,059
Ending balance, shares at Sep. 30, 2021	17,274	(1,839)
Beginning balance, value at Mar. 31, 2021	$ 6,509	$ (12,450)	2,664	51,501	48,224
Beginning balance, shares at Mar. 31, 2021	17,274	(1,669)
Issuance of common stock in connection with stock-based compensation		$ 339	(463)		(124)
Issuance of common stock in connection with stock-based compensation, shares		45
Stock-based compensation			287		287
Net income				1,618	1,618
Ending balance, value at Jun. 30, 2021	$ 6,509	$ (12,111)	2,488	53,119	50,005
Ending balance, shares at Jun. 30, 2021	17,274	(1,624)
Issuance of common stock in connection with stock-based compensation		$ 258	(258)
Issuance of common stock in connection with stock-based compensation, shares		35
Treasury stock purchased		$ (1,583)			(1,583)
Treasury stock purchased , shares		(250)
Stock-based compensation			157		157
Net income				480	480
Ending balance, value at Sep. 30, 2021	$ 6,509	$ (13,436)	2,387	53,599	49,059
Ending balance, shares at Sep. 30, 2021	17,274	(1,839)
Beginning balance, value at Dec. 31, 2021	$ 6,509	$ (13,436)	2,552	53,506	49,131
Beginning balance, shares at Dec. 31, 2021	17,274	(1,839)
Stock-based compensation			109		109
Net income				(895)	(895)
Ending balance, value at Mar. 31, 2022	$ 6,509	$ (13,436)	2,661	52,611	48,345
Ending balance, shares at Mar. 31, 2022	17,274	(1,839)
Beginning balance, value at Dec. 31, 2021	$ 6,509	$ (13,436)	2,552	53,506	49,131
Beginning balance, shares at Dec. 31, 2021	17,274	(1,839)
Net income					208
Ending balance, value at Sep. 30, 2022	$ 6,509	$ (12,997)	3,271	53,714	50,497
Ending balance, shares at Sep. 30, 2022	17,274	(1,779)
Beginning balance, value at Mar. 31, 2022	$ 6,509	$ (13,436)	2,661	52,611	48,345
Beginning balance, shares at Mar. 31, 2022	17,274	(1,839)
Issuance of common stock in connection with stock-based compensation		$ 280	(399)		(119)
Issuance of common stock in connection with stock-based compensation, shares		38
Stock-based compensation			746		746
Net income				120	120
Ending balance, value at Jun. 30, 2022	$ 6,509	$ (13,156)	3,008	52,731	49,092
Ending balance, shares at Jun. 30, 2022	17,274	(1,801)
Issuance of common stock in connection with stock-based compensation		$ 159	(159)
Issuance of common stock in connection with stock-based compensation, shares		22
Treasury stock purchased
Stock-based compensation			422		422
Net income				983	983
Ending balance, value at Sep. 30, 2022	$ 6,509	$ (12,997)	$ 3,271	$ 53,714	$ 50,497
Ending balance, shares at Sep. 30, 2022	17,274	(1,779)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net income	$ 208	$ 3,404
Adjustments to reconcile net income to operating cash flow:
Depreciation and amortization	2,238	2,132
Non-cash interest expense	5	9
Non-cash rent expense	0	1
Bad debt expense	0	6
Deferred revenue	(23)	(23)
Stock-based compensation	755	608
Loss on sale of property and equipment	0	88
(Increase) decrease in operating assets:
Accounts receivable	(1,576)	(1,832)
Inventories	(907)	(642)
Refundable income taxes	(309)	(384)
Prepaid expenses and other current assets	(115)	(152)
Increase (decrease) in operating liabilities:
Accounts payable	3,085	1,695
Accrued expenses	1,003	1,498
Accrued income taxes	(725)	(553)
Net cash provided by operating activities	3,639	5,855
Cash flows from investing activities:
Purchases of property and equipment	(2,609)	(1,685)
Acquisition, net of cash acquired	(580)	(5,220)
Net cash used in investing activities	(3,189)	(6,905)
Cash flows from financing activities:
Purchase of treasury stock	0	(1,583)
Payment of deferred financing cost	0	(25)
Proceeds from note payable	0	5,000
Repayment of note payable	(750)	(250)
Net cash used in financing activities	(750)	3,142
Net (decrease) increase in cash and cash equivalents	(300)	2,092
Cash and cash equivalents at the beginning of the period	9,233	7,926
Cash and cash equivalents at the end of the period	8,933	10,018
Supplemental cash flow information:
Cash paid for income taxes, net	640	2,788
Cash paid for interest	158	60
Non-cash investing activities
Increase (decrease) in right-of-use assets and operating lease obligations	$ 19	$ 45

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Basis of Presentation	Note 1 – Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) for interim financial information, and do not include certain information and footnote disclosures required for complete, audited financial statements. In the opinion of management, these statements include all adjustments necessary for a fair presentation of the results of all interim periods reported herein. The consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Results of operations for any interim period are not necessarily indicative of future or annual results. Principles of consolidation The consolidated financial statements include the accounts of Lifeway Foods, Inc. and all its wholly owned subsidiaries (collectively “Lifeway” or the “Company”). All significant intercompany accounts and transactions have been eliminated. Restatement of Previously Issued Consolidated Financial Statements As previously disclosed in Note 1 to the Company’s consolidated financial statements included in the 2021 Form 10-K, the Company identified past errors in the accounting for deferred income tax liabilities and goodwill that resulted from a 2009 acquisition when preparing the 2021 consolidated financial statements. In the 2021 Form 10-K, the Company restated its historical consolidated financial statements to properly reflect the impact of the 2009 acquisition, which resulted in adjustments to goodwill and deferred income tax liabilities in the affected periods. The consolidated financial statements for the three and nine months ended September 30, 2021 included in this Quarterly Report on Form 10-Q have been similarly restated to reflect the correction of these errors and should be read in conjunction with Notes 1 and 17 to the Company’s consolidated financial statements included in the 2021 Form 10-K. Reclassification Certain amounts have been reclassified from cash flows from investing to cash flows from operations on the consolidated statement of cash flows for the nine months ended September 31, 2021. This reclassification had no impact on the consolidated statements of operations, consolidated balance sheets, or consolidated statements of stockholders’ equity. The Company determined the reclassification to be immaterial to the previously filed consolidated financial statements.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 2 – Summary of Significant Accounting Policies A detailed description of our significant accounting policies can be found in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made in preparing the consolidated financial statements include the reserve for promotional allowances, the valuation of goodwill and intangible assets, stock-based and incentive compensation, and deferred income taxes. Cash and cash equivalents The Company has $ 0 580 580 Advertising and promotional costs Lifeway expenses advertising costs as incurred and is reported in Selling expense in the Company’s consolidated statement of operations. Total advertising expense was $ 2,585 2,892 848 726 Segments The Company is managed as a single reportable segment. The Chief Executive Officer, who is the Company’s Chief Operating Decision Maker (“CODM”), reviews financial information on an aggregate basis for purposes of allocating resources and assessing financial performance, as well as for making strategic operational decisions and managing the organization. Substantially all of Lifeway’s consolidated revenues relate to the sale of cultured dairy products that it produces using the same processes and materials and are sold to consumers through a common network of distributors and retailers in the United States. Recent accounting pronouncements Issued by not yet effective In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The new guidance provides a single comprehensive accounting model on revenue recognition for contracts with customers and requires that the acquirer in a business combination recognize and measure contract assets and liabilities acquired in a business combination in accordance with Topic 606 (Revenue from Contracts with Customers). The amendments in this ASU are effective for fiscal years beginning after December 15, 2022. Early adoption is permitted, including adoption in an interim period. With early adoption, the amendments are applied retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of adoption and prospectively to all business combinations that occur on or after the date of initial application. Management is evaluating the impact of the new guidance and does not currently expect the adoption of this ASU to have a material impact on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The guidance will be effective prospectively as of March 12, 2020 through December 31, 2022 and interim periods within those fiscal years. Management is evaluating the impact of the new guidance and does not currently expect the adoption of this ASU to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, in November 2018 issued an amendment, ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, and in November 2019 issued two amendments, ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. The series of new guidance amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. The guidance should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. The guidance is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. Management is currently evaluating the impact that the new guidance and does not currently expect the adoption of this ASU to have a material impact on its consolidated financial statements.

Inventories, net

Inventories, net	9 Months Ended
	Sep. 30, 2022
Inventory Disclosure [Abstract]
Inventories, net	Note 3 – Inventories, net Inventories consisted of the following: Schedule of inventories September 30, December 31, Ingredients $ 2,536 $ 2,279 Packaging 3,254 2,723 Finished goods 3,402 3,283 Total inventories $ 9,192 $ 8,285

Property, Plant and Equipment,

Property, Plant and Equipment, net	9 Months Ended
	Sep. 30, 2022
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment, net	Note 4 – Property, Plant and Equipment, net Property, plant and equipment consisted of the following: Schedule of property, plant and equipment September 30, December 31, Land $ 1,565 $ 1,565 Buildings and improvements 18,296 17,920 Machinery and equipment 32,733 32,073 Vehicles 640 640 Office equipment 936 900 Construction in process 1,894 417 56,064 53,515 Less accumulated depreciation (35,159 ) (33,385 ) Total property, plant and equipment, net $ 20,905 $ 20,130

Goodwill and Intangible Assets

Goodwill and Intangible Assets	9 Months Ended
	Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets	Note 5 – Goodwill and Intangible Assets Goodwill Goodwill consisted of the following: Schedule of goodwill Total Balance at December 31, 2021, before accumulated impairment loses $ 12,948 Accumulated impairment losses (1,244 ) Balance at December 31, 2021 $ 11,704 Balance at September 30, 2022 $ 11,704 Intangible Assets Other intangible assets, net consisted of the following: Schedule of finite-lived intangible assets September 30, 2022 December 31, 2021 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Intangible assets with finite lives: Recipes $ 44 $ (44 ) $ – $ 44 $ (44 ) $ – Customer lists and other customer related intangibles 4,529 (4,529 ) – 4,529 (4,529 ) – Customer relationship 3,385 (1,172 ) 2,213 3,385 (1,052 ) 2,333 Brand names 7,948 (2,588 ) 5,360 4,248 (2,303 ) 1,945 Formula 438 (438 ) – 438 (438 ) – Total finite lived intangible assets $ 16,344 $ (8,771 ) $ 7,573 $ 12,644 $ (8,366 ) $ 4,278 Intangible assets with indefinite lives: Brand names (1) $ – $ – $ – $ 3,700 $ – $ 3,700 Total intangible assets $ 16,344 $ (8,771 ) $ 7,573 $ 16,344 $ (8,366 ) $ 7,978 (1) During the fourth quarter of 2021, the Company completed an assessment of the useful life of its one indefinite-lived brand name intangible asset and determined that it should adjust the estimated useful life from an indefinite length to 15 years. The change in accounting estimate was effective January 1, 2022, at which time the Company began amortizing the intangible asset over 15 years. The cost and accumulated amortization is included in Brand Names in the intangible assets with finite lives in the table above as of January 1, 2022. The Company has reclassified the $3,700 net book value as of December 31, 2021 from goodwill to finite lived intangible assets to conform the presentation as of September 30, 2022. Estimated amortization expense on intangible assets for the next five years is as follows: Schedule of amortization expense on intangible assets Year Amortization Three months ended December 31, 2022 $ 135 2023 $ 540 2024 $ 540 2025 $ 540 2026 $ 540

Accrued Expenses

Accrued Expenses	9 Months Ended
	Sep. 30, 2022
Payables and Accruals [Abstract]
Accrued Expenses	Note 6 – Accrued Expenses Accrued expenses consisted of the following: Schedule of accrued expenses September 30, December 31, 2021 Payroll and incentive compensation $ 3,438 $ 2,951 Real estate taxes 536 359 Current portion of operating lease liabilities 61 131 Other 343 283 Total accrued expenses $ 4,378 $ 3,724

Debt

Debt	9 Months Ended
	Sep. 30, 2022
Debt Disclosure [Abstract]
Debt	Note 7 – Debt Note payable consisted of the following: Schedule of debt September 30, 2022 December 31, 2021 Term loan due August 18, 2026. Interest (4.94% at September 30, 2022) payable monthly. $ 3,750 $ 4,500 Unamortized deferred financing costs (25 ) (30 ) Total note payable 3,725 4,470 Less current portion (1,000 ) (1,000 ) Total long-term portion $ 2,725 $ 3,470 The scheduled maturities of the term loan, excluding deferred financing costs, at September 30, 2022 are as follows: Schedule of maturities of long-term debt Three months ended December 31, 2022 $ 250 2023 1,000 2024 1,000 2025 1,000 2026 500 Total term loan $ 3,750 Credit Agreement On August 18, 2021, Lifeway entered into the Fourth Modification (the “Fourth Modification”) to the Amended and Restated Loan and Security Agreement (as amended and modified from time to time, the “Credit Agreement” and, as amended and modified by the Fourth Modification, the “Modified Credit Agreement”) with its existing lender and certain of its subsidiaries. The Fourth Modification amends the Credit Agreement to provide for, among other things, a $5 million term loan by the existing lender to the borrowers to be repaid in quarterly installments of principal and interest over a term of five years (the “Term Loan”). The termination date of the Term Loan is August 18, 2026, unless earlier terminated. The Amended and Restated Loan and Security Agreement continues to provide Lifeway with a revolving line of credit up to a maximum of $5 million (the “Revolving Loan”) and provides the Borrowers with an incremental facility not to exceed $5 million (the “Incremental Facility” and together with the Revolving Loan, the “Loans”). The Termination Date of the Revolving Loan was extended to June 30, 2025 As amended, all outstanding amounts under the revolving line of credit and term loan bear interest, at Lifeway’s election, at either the lender Base Rate (the Prime Rate minus 1.00 1.95 0.20 0.20 The Modified Credit Agreement includes customary representations, warranties, and covenants, including financial covenants requiring the Company to maintain a fixed charge coverage ratio of no less than 1.25 to 1.00, and a minimum working capital financial covenant, as defined, of no less than $11.25 million, in each of the fiscal quarters ending through the expiration date. The Modified Credit Agreement continues to provide for events of default, including failure to repay principal and interest when due and failure to perform or violation of the provisions or covenants of the agreement, as a result of which amounts due under the Modified Credit Agreement may be accelerated. The loans and all other amounts due and owed under the Credit Agreement and related documents are secured by substantially all of the Company’s assets. Lifeway was in compliance with the fixed charge coverage ratio and minimum working capital covenants at September 30, 2022. Revolving Credit Facility As of September 30, 2022, the Company had $ 2,777 2,223 4.61

Leases

Leases	9 Months Ended
	Sep. 30, 2022
Leases
Leases	Note 8 – Leases The Company leases certain machinery and equipment with fixed base rent payments and variable costs based on usage. Remaining lease terms for these leases range from less than one year to five years. Some of its leases include options to extend the leases for up to 5 years and have been included in our calculation of the right-of-use asset and lease liabilities. Lifeway includes only fixed payments for lease components in the measurement of the right-of-use asset and lease liability. Variable lease payments are those that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time. There are no residual value guarantees. Lifeway does not currently have leases which meet the finance lease classification as defined under ASC 842. Lifeway treats contracts as a lease when the contract conveys the right to use a physically distinct asset for a period of time in exchange for consideration, it directs the use of the asset and obtain substantially all the economic benefits of the asset. The Company does not record leases with an initial term of 12 months or less on the balance sheet. Expense for these short-term leases is recorded on a straight-line basis over the lease term. Total lease expense was $ 191 245 44 76 Right-of-use assets and lease liabilities are measured and recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Lifeway has elected the practical expedient to combine lease and non-lease components into a single component for all of its leases. When the Company is unable to determine an implicit interest rate, it uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments for those leases. Lifeway includes options to extend or terminate the lease in the measurement of the right-of-use asset and lease liability when it is reasonably certain that it will exercise such options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Future maturities of lease liabilities were as follows: Future maturities of lease liabilities Year Operating Leases Three months ended December 31, 2022 $ 27 2023 63 2024 46 2025 22 2026 6 Thereafter – Total lease payments 164 Less: Interest (29 ) Present value of lease liabilities $ 135 The weighted-average remaining lease term for its operating leases was 2.51 14.20 121 153 35 46

Commitments and contingencies

Commitments and contingencies	9 Months Ended
	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and contingencies	Note 9 – Commitments and contingencies Litigation Lifeway is involved in various legal proceedings, claims, disputes, regulatory matters, audits, and proceedings arising in the ordinary course of, or incidental to the Company’s business, including commercial disputes, product liabilities, intellectual property matters and employment-related matters. Lifeway records provisions in the consolidated financial statements for pending legal matters when it believes it is probable that a loss will be incurred and the amount of such loss can be reasonably estimated. The Company evaluates, on a periodic basis, developments in legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. If a loss contingency is not both probable and estimable, it does not establish an accrued liability. Currently, none of its accruals for outstanding legal matters are material individually or in the aggregate to its financial position and it is management’s opinion that the ultimate resolution of these outstanding legal matters will not have a material adverse effect on its business, financial condition, results of operations, or cash flows. However, if the Company is ultimately required to make payments in connection with an adverse outcome, it is possible that such contingency could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

Income taxes

Income taxes	9 Months Ended
	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income taxes	Note 10 – Income taxes Income taxes were recognized at effective rates of (0.8) 35.2 11.7 52.3 The Company has historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year income, excluding unusual or infrequently occurring discrete items, for the reporting period. In accordance with the authoritative guidance, the Company used a discrete effective tax rate method to calculate income taxes for the quarter and year to date periods ended March 31, 2022 and June 30, 2022 because small changes in the estimated level and mix of annual income or loss by jurisdiction would result in significant changes in the estimated annual effective tax rate making the historical method unreliable. During the quarter and year to date period ended September 30, 2022, the Company utilized an estimate of the annual effective tax rate for the full fiscal year income, excluding unusual or infrequently occurring discrete items, as small changes in the estimated level and mix of annual income or loss by jurisdiction would not result in significant changes in the estimated annual effective tax rate. The Company’s effective tax rate may change from period to period based on recurring and non-recurring factors including the relative mix of pre-tax earnings (or losses), the jurisdictional mix of earnings, enacted tax legislation, state income taxes, the impact of non-deductible items, changes in valuation allowances, settlement of tax audits, and the expiration of the statute of limitations in relation to unrecognized tax benefits. The Company records discrete income tax items such as enacted tax rate changes and completed tax audits in the period in which they occur. The Company consistently reflects non-deductible officer compensation expense, non-deductible compensation expense related to equity incentive awards and separate state tax rates from period to period. Although similar items were reflected in 2022, the percentage effect is different due to the difference in pre-tax (loss) income in 2022 compared to 2021. Unrecognized tax benefits were $ 0 98

Stock-based and Other Compensat

Stock-based and Other Compensation	9 Months Ended
	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
Stock-based and Other Compensation	Note 11 – Stock-based and Other Compensation Omnibus Incentive Plan In December 2015, Lifeway stockholders approved the 2015 Omnibus Incentive Plan, which authorized the issuance of an aggregate of 3.5 On August 31, 2022, Lifeway stockholders approved the 2022 Plan. Under the 2022 Plan, the Compensation Committee of the Board of Directors may grant awards of various types of compensation, including, nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, cash-based awards and other stock-based awards. The maximum number of shares authorized to be awarded under the 2022 Plan is 3.25 million Awards granted under the 2022 Plan are generally subject to a minimum vesting period of at least one year. Awards may be subject to cliff-vesting or graded-vesting conditions, with graded vesting starting no earlier than one year after the grant date. The Plan Administrator may provide for shorter vesting periods in an award agreement for no more than five percent of the maximum number of shares authorized for issuance under the 2022 Plan. As of September 30, 2022, 3.00 million Stock Options The following table summarizes stock option activity during the nine months ended September 30, 2022: Schedule of stock option activity Options Weighted Weighted Aggregate Outstanding at December 31, 2021 41 $ 10.42 4.22 $ – Granted – – – – Exercised – – – – Forfeited – – – – Outstanding at September 30, 2022 41 $ 10.42 3.47 $ – Exercisable at September 30, 2022 41 $ 10.42 3.47 $ – As of December 31, 2019, all outstanding options were vested and there was no remaining unearned compensation expense. Restricted Stock Awards A Restricted Stock Award (“RSA”) represents the right to receive one share of common stock in the future. RSAs have no exercise price. The grant date fair value of the awards is determined by the Company’s closing stock price on the grant date. Lifeway expenses RSAs over the vesting period. The following table summarizes RSA activity during the nine months ended September 30, 2022. Schedule of RSA Activity Restricted Stock Awards Weighted Average Grant Date Fair Value Outstanding at December 31, 2021 94 $ 4.50 Granted 97 6.25 Shares issued upon vesting (27 ) 3.43 Forfeited – – Outstanding at September 30, 2022 164 $ 5.69 Vested and deferred at September 30, 2022 37 $ 5.60 For the nine months ended September 30, 2022 and 2021 total pre-tax stock-based compensation expense recognized in the consolidated statements of operations was $ 175 106 49 31 48 37 14 11 624 1.57 Long-Term Incentive Plan Compensation Lifeway has established long-term incentive-based compensation programs for certain senior executives and key employees pursuant to the terms of its incentive plans. 2020 CEO Incentive Award During the fourth quarter 2020, Lifeway awarded a long-term equity-based incentive of $ 750 186 255 44 85 173 44 105 24 2021 Equity Award The 2021 long-term equity incentive plan compensation is based on Lifeway’s achievement of adjusted EBITDA performance versus the respective target established by the Board for 2021. Under the 2021 plan, collectively the participants earned equity-based incentive compensation of $ 1,069 364 150 85 150 319 85 194 40 2022 Equity Award Under the 2022 long-term incentive plan, participants can earn a specified number of target level Performance Share Units (“PSUs”) contingent upon the achievement of strategic milestones during the three-year Measurement Period, which is fiscal year 2022 to 2024. The strategic milestones are 1) 3-year cumulative net revenue, and 2) 3-year cumulative adjusted EBITDA. The target number of PSU awards are weighted 50% on net revenue and 50% on adjusted EBITDA. Collectively, the participants can earn 125,066 PSUs at the target level. Participants may earn more or less than the target number of shares based on actual results, however the minimum and maximum number of shares that can be earned are bound by minimum and maximum thresholds of net revenue and adjusted EBITDA. The PSU awards will be earned and will vest, if at all, after the end of the three-year measurement period based on achievement of the milestones. The PSU awards do not vest during the three-year measurement period. The PSUs have a grant date fair value of $6.25 dollars per share. For the nine months ended September 30, 2022 and 2021, $ 31 0 31 0 The 2022 long-term incentive plan also granted restricted stock unit awards that contain only a service condition and vest on the passage of time in three equal installments on each of the first three anniversaries of the August 31, 2022 grant date. The stock based compensation expense for these awards is included in the Restricted Stock Award section above. Non-Employee Director Plan On August 31, 2022, Lifeway stockholders approved the 2022 Non-Employee Director Equity and Deferred Compensation Plan (the “ 466 Retirement Benefits Lifeway has a defined contribution plan which is available to substantially all full-time employees. Under the terms of the plan, the Company matches employee contributions under a prescribed formula. For the nine months ended September 30, 2022 and 2021 total contribution expense recognized in the consolidated statements of operations was $ 328 315 97

Products and Customers

Products and Customers	9 Months Ended
	Sep. 30, 2022
Segment Reporting [Abstract]
Products and Customers	Note 12 – Products and Customers Lifeway’s primary product is drinkable kefir. The Company manufactures (directly or through a co-manufacturer) and markets products under the Lifeway, Fresh Made, and GlenOaks Farms brand names, as well as under private labels on behalf of certain customers. The Company’s product categories are: · Drinkable Kefir, a cultured dairy product sold in a variety of organic and non-organic sizes, flavors, and types. · European-style soft cheeses, including farmer cheese, white cheese, and Sweet Kiss. · Cream and other, which primarily consists of cream, a byproduct of raw milk processing. · Drinkable Yogurt, sold in a variety of sizes and flavors. · ProBugs, a line of kefir products designed for children. · Other Dairy, which primarily consists of Fresh Made butter and sour cream. Net sales by product category were as follows for the nine months ended September 30: Schedule of sales of products by category 2022 2021 $ % $ % Drinkable Kefir other than ProBugs $ 82,779 78 $ 72,204 82 Cheese 9,233 9 9,158 11 Cream and other 5,438 5 2,568 3 Drinkable yogurt 4,559 5 739 1 ProBugs Kefir 2,481 2 2,197 2 Other dairy 1,240 1 1,225 1 Net Sales $ 105,730 100 $ 88,091 100 Net sales of products by category were as follows for the three months ended September 30: 2022 2021 $ % $ % Drinkable Kefir other than ProBugs $ 30,297 79 $ 23,831 81 Cheese 3,211 9 2,937 10 Cream and other 1,874 5 877 3 Drinkable yogurt 1,482 4 739 2 ProBugs Kefir 882 2 766 3 Other dairy 394 1 403 1 Net Sales $ 38,140 100 $ 29,553 100 Significant Customers 22 23 23

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2022
Related Party Transactions [Abstract]
Related Party Transactions	Note 13 – Related Party Transactions Lifeway obtains consulting services from Ludmila Smolyansky, a member of the Company’s Board of Directors and former Chairperson of its Board of Directors. On December 28, 2020, Lifeway entered into an amended and restated consulting agreement (the “Agreement”), effective as of December 31, 2020, with Ms. Smolyansky. Under the terms and conditions of the Agreement, Ms. Smolyansky will continue to provide consulting services with respect to, among other things, the Company’s business strategy, international expansion and product management and expansion. For the services, the Company will pay an annual service fee of $500, and Ms. Smolyansky will also be eligible for an annual performance fee target of $500 based on the achievement of specified performance criteria. The annual service fee and target bonus amounts are subject to periodic change by the Compensation Committee of the Company’s Board of Directors on 30 days’ prior written notice to the Chairperson. The Agreement shall continue until either party provides at least a 10-day written notice of termination. On January 4, 2022, the Company notified Ms. Smolyansky that it was terminating the Agreement effective January 17, 2022. Service fees earned are included in general and administrative expenses in the accompanying consolidated statements of operations and were $ 22 375 0 125 Lifeway is also a party to an endorsement agreement, dated as March 14, 2016, by and between the Company and Ludmila Smolyansky, a member of the Company’s Board of Directors and former Chairperson of its Board of Directors (the “Endorsement Agreement”) under which it pays the Chairperson a royalty based on the sale of certain Lifeway products, not to exceed $50 in any fiscal month. On September 6, 2022, the Company entered into an agreement (the “Termination Agreement”) with Ms. Smolyansky that terminated the Endorsement Agreement as of September 6, 2022. Pursuant to the Termination Agreement, the Company and Ms. Smolyansky have agreed, among other things, that (i) the Company will pay Ms. Smolyansky a lump sum payment of $400,000, (ii) Ms. Smolyansky will no longer have any further claims against the Company under the Endorsement Agreement, and (iii) the Endorsement Agreement was terminated and of no further force or effect except for the provisions thereof that expressly survive termination. Royalties earned are included in selling expenses in the accompanying consolidated statements of operations and were $ 400 450 100 150

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2022
Subsequent Events [Abstract]
Subsequent Events	Note 14 – Subsequent Events On November 7, 2022, the Company entered into a Stock Purchase Agreement with Ludmila Smolyansky (“Ms. Smolyansky”), to purchase 850,340 shares of Lifeway common stock from Ms. Smolyansky. Pursuant to the Stock Purchase Agreement, the Company and Ms. Smolyansky have agreed, among other things, that (i) Ms. Smolyansky will sell the shares at a purchase price of $4.70 per share, which represents a twenty percent (20.0%) discount to the average closing price of the common stock on Nasdaq over the five (5) trading day period ended on the trading day immediately preceding the date of the Stock Purchase Agreement and (ii) Ms. Smolyansky will use a portion of the proceeds to satisfy in full certain obligations of Ms. Smolyansky, which are secured by previously disclosed pledges of common stock, causing all such pledges to be released. The purchased shares will be held in treasury by the Company. As a closing condition to the Stock Purchase Agreement, Ms. Smolyansky and Mr. Smolyansky will deliver an executed amendment (the “Amendment”) to that certain Settlement Agreement dated as of July 27, 2022 (the “Settlement Agreement”), between the Company and Ms. Smolyansky and Mr. Smolyansky. Pursuant to the Amendment, Ms. Smolyansky and Mr. Smolyansky each agree, among other things, to (i) grant the Company a right of first refusal, subject to Danone North America Public Benefit Corporation’s (“Danone”) right of first refusal, on substantially similar terms as Danone (ii) extend the standstill and all related terms under the Proxy Settlement Agreement through the date of the 2024 annual meeting of the Company’s shareholders (the “Standstill”); and (iii) to appear in person or by proxy and vote their respective remaining shares of common stock beneficially owned, individually or otherwise, and controlled by either of them and over which they have power and authority to vote during the Standstill (a) in accordance with the recommendations of the Board at any special meeting or annual meeting of the shareholders with respect to any proposal(s) not related to the sale of the Company or all or substantially all of the assets of the Company; and (b) in proportion to the vote of the other shareholders with respect to any proposal relating to any vote on the sale of the Company or all or substantially all of the assets of the Company.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Use of estimates	Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made in preparing the consolidated financial statements include the reserve for promotional allowances, the valuation of goodwill and intangible assets, stock-based and incentive compensation, and deferred income taxes.
Cash and cash equivalents	Cash and cash equivalents The Company has $ 0 580 580
Advertising and promotional costs	Advertising and promotional costs Lifeway expenses advertising costs as incurred and is reported in Selling expense in the Company’s consolidated statement of operations. Total advertising expense was $ 2,585 2,892 848 726
Segments	Segments The Company is managed as a single reportable segment. The Chief Executive Officer, who is the Company’s Chief Operating Decision Maker (“CODM”), reviews financial information on an aggregate basis for purposes of allocating resources and assessing financial performance, as well as for making strategic operational decisions and managing the organization. Substantially all of Lifeway’s consolidated revenues relate to the sale of cultured dairy products that it produces using the same processes and materials and are sold to consumers through a common network of distributors and retailers in the United States.
Recent accounting pronouncements	Recent accounting pronouncements Issued by not yet effective In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The new guidance provides a single comprehensive accounting model on revenue recognition for contracts with customers and requires that the acquirer in a business combination recognize and measure contract assets and liabilities acquired in a business combination in accordance with Topic 606 (Revenue from Contracts with Customers). The amendments in this ASU are effective for fiscal years beginning after December 15, 2022. Early adoption is permitted, including adoption in an interim period. With early adoption, the amendments are applied retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of adoption and prospectively to all business combinations that occur on or after the date of initial application. Management is evaluating the impact of the new guidance and does not currently expect the adoption of this ASU to have a material impact on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The guidance will be effective prospectively as of March 12, 2020 through December 31, 2022 and interim periods within those fiscal years. Management is evaluating the impact of the new guidance and does not currently expect the adoption of this ASU to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, in November 2018 issued an amendment, ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, and in November 2019 issued two amendments, ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. The series of new guidance amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. The guidance should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. The guidance is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. Management is currently evaluating the impact that the new guidance and does not currently expect the adoption of this ASU to have a material impact on its consolidated financial statements.

Inventories, net (Tables)

Inventories, net (Tables)	9 Months Ended
	Sep. 30, 2022
Inventory Disclosure [Abstract]
Schedule of inventories	Schedule of inventories September 30, December 31, Ingredients $ 2,536 $ 2,279 Packaging 3,254 2,723 Finished goods 3,402 3,283 Total inventories $ 9,192 $ 8,285

Property, Plant and Equipment_2

Property, Plant and Equipment, net (Tables)	9 Months Ended
	Sep. 30, 2022
Property, Plant and Equipment [Abstract]
Schedule of property, plant and equipment	Schedule of property, plant and equipment September 30, December 31, Land $ 1,565 $ 1,565 Buildings and improvements 18,296 17,920 Machinery and equipment 32,733 32,073 Vehicles 640 640 Office equipment 936 900 Construction in process 1,894 417 56,064 53,515 Less accumulated depreciation (35,159 ) (33,385 ) Total property, plant and equipment, net $ 20,905 $ 20,130

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of goodwill	Schedule of goodwill Total Balance at December 31, 2021, before accumulated impairment loses $ 12,948 Accumulated impairment losses (1,244 ) Balance at December 31, 2021 $ 11,704 Balance at September 30, 2022 $ 11,704
Schedule of finite-lived intangible assets	Schedule of finite-lived intangible assets September 30, 2022 December 31, 2021 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Intangible assets with finite lives: Recipes $ 44 $ (44 ) $ – $ 44 $ (44 ) $ – Customer lists and other customer related intangibles 4,529 (4,529 ) – 4,529 (4,529 ) – Customer relationship 3,385 (1,172 ) 2,213 3,385 (1,052 ) 2,333 Brand names 7,948 (2,588 ) 5,360 4,248 (2,303 ) 1,945 Formula 438 (438 ) – 438 (438 ) – Total finite lived intangible assets $ 16,344 $ (8,771 ) $ 7,573 $ 12,644 $ (8,366 ) $ 4,278 Intangible assets with indefinite lives: Brand names (1) $ – $ – $ – $ 3,700 $ – $ 3,700 Total intangible assets $ 16,344 $ (8,771 ) $ 7,573 $ 16,344 $ (8,366 ) $ 7,978 (1) During the fourth quarter of 2021, the Company completed an assessment of the useful life of its one indefinite-lived brand name intangible asset and determined that it should adjust the estimated useful life from an indefinite length to 15 years. The change in accounting estimate was effective January 1, 2022, at which time the Company began amortizing the intangible asset over 15 years. The cost and accumulated amortization is included in Brand Names in the intangible assets with finite lives in the table above as of January 1, 2022. The Company has reclassified the $3,700 net book value as of December 31, 2021 from goodwill to finite lived intangible assets to conform the presentation as of September 30, 2022.
Schedule of amortization expense on intangible assets	Schedule of amortization expense on intangible assets Year Amortization Three months ended December 31, 2022 $ 135 2023 $ 540 2024 $ 540 2025 $ 540 2026 $ 540

Accrued Expenses (Tables)

Accrued Expenses (Tables)	9 Months Ended
	Sep. 30, 2022
Payables and Accruals [Abstract]
Schedule of accrued expenses	Schedule of accrued expenses September 30, December 31, 2021 Payroll and incentive compensation $ 3,438 $ 2,951 Real estate taxes 536 359 Current portion of operating lease liabilities 61 131 Other 343 283 Total accrued expenses $ 4,378 $ 3,724

Debt (Tables)

Debt (Tables)	9 Months Ended
	Sep. 30, 2022
Debt Disclosure [Abstract]
Schedule of debt	Schedule of debt September 30, 2022 December 31, 2021 Term loan due August 18, 2026. Interest (4.94% at September 30, 2022) payable monthly. $ 3,750 $ 4,500 Unamortized deferred financing costs (25 ) (30 ) Total note payable 3,725 4,470 Less current portion (1,000 ) (1,000 ) Total long-term portion $ 2,725 $ 3,470
Schedule of maturities of long-term debt	Schedule of maturities of long-term debt Three months ended December 31, 2022 $ 250 2023 1,000 2024 1,000 2025 1,000 2026 500 Total term loan $ 3,750

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 30, 2022
Leases
Future maturities of lease liabilities	Future maturities of lease liabilities Year Operating Leases Three months ended December 31, 2022 $ 27 2023 63 2024 46 2025 22 2026 6 Thereafter – Total lease payments 164 Less: Interest (29 ) Present value of lease liabilities $ 135

Stock-based and Other Compens_2

Stock-based and Other Compensation (Tables)	9 Months Ended
	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
Schedule of stock option activity	Schedule of stock option activity Options Weighted Weighted Aggregate Outstanding at December 31, 2021 41 $ 10.42 4.22 $ – Granted – – – – Exercised – – – – Forfeited – – – – Outstanding at September 30, 2022 41 $ 10.42 3.47 $ – Exercisable at September 30, 2022 41 $ 10.42 3.47 $ –
Schedule of RSA Activity	Schedule of RSA Activity Restricted Stock Awards Weighted Average Grant Date Fair Value Outstanding at December 31, 2021 94 $ 4.50 Granted 97 6.25 Shares issued upon vesting (27 ) 3.43 Forfeited – – Outstanding at September 30, 2022 164 $ 5.69 Vested and deferred at September 30, 2022 37 $ 5.60

Products and Customers (Tables)

Products and Customers (Tables)	9 Months Ended
	Sep. 30, 2022
Segment Reporting [Abstract]
Schedule of sales of products by category	Schedule of sales of products by category 2022 2021 $ % $ % Drinkable Kefir other than ProBugs $ 82,779 78 $ 72,204 82 Cheese 9,233 9 9,158 11 Cream and other 5,438 5 2,568 3 Drinkable yogurt 4,559 5 739 1 ProBugs Kefir 2,481 2 2,197 2 Other dairy 1,240 1 1,225 1 Net Sales $ 105,730 100 $ 88,091 100 Net sales of products by category were as follows for the three months ended September 30: 2022 2021 $ % $ % Drinkable Kefir other than ProBugs $ 30,297 79 $ 23,831 81 Cheese 3,211 9 2,937 10 Cream and other 1,874 5 877 3 Drinkable yogurt 1,482 4 739 2 ProBugs Kefir 882 2 766 3 Other dairy 394 1 403 1 Net Sales $ 38,140 100 $ 29,553 100

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Aug. 31, 2022	Aug. 18, 2021
Accounting Policies [Abstract]
Restricted Cash	$ 0		$ 0		$ 580	$ 580
Advertising Expense	$ 848	$ 726	$ 2,585	$ 2,892

Inventories, net (Details)

Inventories, net (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Ingredients	$ 2,536	$ 2,279
Packaging	3,254	2,723
Finished goods	3,402	3,283
Total inventories	$ 9,192	$ 8,285

Property, Plant and Equipment_3

Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 56,064	$ 53,515
Less accumulated depreciation	(35,159)	(33,385)
Total property, plant and equipment, net	20,905	20,130
Land [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,565	1,565
Building and Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	18,296	17,920
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	32,733	32,073
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	640	640
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	936	900
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,894	$ 417

Goodwill and Intangible Asset_2

Goodwill and Intangible Assets (Details - Godwill) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill Before Impairment		$ 12,948
Goodwill, Impaired, Accumulated Impairment Loss		(1,244)
Goodwill	$ 11,704	$ 11,704

Goodwill and Intangible Asset_3

Goodwill and Intangible Assets (Details - Finite lived) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 16,344	$ 12,644
Accumulated Amortization	(8,771)	(8,366)
Net Carrying Amount	7,573	4,278
Net Carrying Amount, Intangible assets with indefinite lives	7,573	7,978
Gross Carrying Amount, Intangible assets with indefinite lives	16,344	16,344
Brand Names [Member]
Finite-Lived Intangible Assets [Line Items]
Accumulated Amortization	0	0
Gross Carrying Amount, Intangible assets with indefinite lives	0	3,700
Net Carrying Amount, Intangible assets with indefinite lives	0	3,700
Recipes [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	44	44
Accumulated Amortization	(44)	(44)
Net Carrying Amount	0	0
Customer Lists And Other Customer Related Intangibles [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	4,529	4,529
Accumulated Amortization	(4,529)	(4,529)
Net Carrying Amount	0	0
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	3,385	3,385
Accumulated Amortization	(1,172)	(1,052)
Net Carrying Amount	2,213	2,333
Brand Names [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	7,948	4,248
Accumulated Amortization	(2,588)	(2,303)
Net Carrying Amount	5,360	1,945
Formula [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	438	438
Accumulated Amortization	(438)	(438)
Net Carrying Amount	$ 0	$ 0

Goodwill and Intangible Asset_4

Goodwill and Intangible Assets (Details - Amortization expense on intangible assets) $ in Thousands	Sep. 30, 2022 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Three months ended December 31, 2022	$ 135
2023	540
2024	540
2025	540
2026	$ 540

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Payroll and incentive compensation	$ 3,438	$ 2,951
Real estate taxes	536	359
Current portion of operating lease liabilities	61	131
Other	343	283
Total accrued expenses	$ 4,378	$ 3,724

Debt (Details)

Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Disclosure [Abstract]
Term loan due August 18, 2026. Interest (4.94% at September 30, 2022) payable monthly.	$ 3,750	$ 4,500
Unamortized deferred financing costs	(25)	(30)
Total note payable	3,725	4,470
Less current portion	(1,000)	(1,000)
Total long-term portion	$ 2,725	$ 3,470

Debt (Details 1)

Debt (Details 1) $ in Thousands	Sep. 30, 2022 USD ($)
Debt Disclosure [Abstract]
Three months ended December 31, 2022	$ 250
2023	1,000
2024	1,000
2025	1,000
2026	500
Total term loan	$ 3,750

Debt (Details Narrative)

Debt (Details Narrative) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Line of Credit Facility [Line Items]
Credit line effective interest rate	1%
Interest payable	1.95%
Unused revolving line of credit fee	0.20%
Letter of credit fee percentage	0.20%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit line effective interest rate	4.61%
Long-Term Line of Credit	$ 2,777
Line of Credit Facility, Remaining Borrowing Capacity	$ 2,223
Revolving Credit Facility [Member] | Incremental Facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Expiration Date	Jun. 30, 2025

Leases (Details)

Leases (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Leases
Three months ended December 31, 2022	$ 27
2023	63
2024	46
2025	22
2026	6
Thereafter	0
Total lease payments	164
Less: Interest	(29)
Present value of lease liabilities	$ 135

Leases (Details Narrative)

Leases (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Leases
Operating Lease, Expense	$ 44	$ 76	$ 191	$ 245
Weighted average remaining lease term	2 years 6 months 3 days		2 years 6 months 3 days
Weighted average discount rate	14.20%		14.20%
Operating lease liabilities	$ 35	$ 46	$ 121	$ 153

Income taxes (Details Narrative

Income taxes (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, Percent	11.70%	52.30%	(0.80%)	35.20%
Unrecognized Tax Benefits	$ 0	$ 98	$ 0	$ 98

Stock-based and Other Compens_3

Stock-based and Other Compensation (Details - Option Activity) - Equity Option [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options outstanding, beginning balance	41
Weighted average exercise price, options outstanding, beginning balance	$ 10.42
Weighted average remaining contractural life, outstanding ending	3 years 5 months 19 days	4 years 2 months 19 days
Aggregate intrinsic value, options outstanding ending	$ 0	$ 0
Options granted	0
Weighted average exercise price, options granted	$ 0
Options exercised	0
Weighted average exercise price, options exercised	$ 0
Options forfeited	0
Weighted average exercise price, options forfeited	$ 0
Options outstanding, ending balance	41	41
Weighted average exercise price, options outstanding, ending balance	$ 10.42	$ 10.42
Exercisable	41
Weighted average exercise price, Exercisable	$ 10.42
Weighted average remaining contractural life, exercisable	3 years 5 months 19 days
Aggregate intrinsic value, options exercisable	$ 0

Stock-based and Other Compens_4

Stock-based and Other Compensation (Details - Restricted Stock Awards) - Restricted Stock Award [Member] shares in Thousands	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares outstanding, beginning | shares	94
Weighted average grant date fair value outstanding, beginning | $ / shares	$ 4.50
Granted | shares	97
Weighted average grant date fair value, granted | $ / shares	$ 6.25
Shares issued upon vesting | shares	(27)
Weighted average grant date fair value, shares issued upon vesting | $ / shares	$ 3.43
Forfeited | shares	0
Weighted average grant date fair value, forfeited | $ / shares	$ 0
Number of shares outstanding, ending | shares	164
Weighted average grant date fair value outstanding, ending | $ / shares	$ 5.69
Vested and deferred | shares	37
Weighted average grant date fair value, vested and deferred | $ / shares	$ 5.60

Stock-based and Other Compens_5

Stock-based and Other Compensation (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Aug. 31, 2022
Restricted Stock Award [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation	$ 48	$ 37	$ 175	$ 106
Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation			624
Tax related benefits	14	11	$ 49	31
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			1 year 6 months 25 days
2020 CEO Award [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation	44	85	$ 186	255
Long-term equity-based incentive			750
Unearned compensation related to non-vested RSA's	173		173
Unearned compensation related to non-vested 2022	44		44
Unearned compensation related to non-vested 2023	105		105
Unearned compensation related to non-vested 2024	24		24
Plan 2021 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation	85	150	364	150
Unearned compensation related to non-vested RSA's	319		319
Unearned compensation related to non-vested 2022	85		85
Unearned compensation related to non-vested 2023	194		194
Unearned compensation related to non-vested 2024	40		40
Plan 2021 [Member] | Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Long-term equity-based incentive			1,069
Plan 2022 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation	$ 31	0	$ 31	0
2015 Omnibus Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized	3,500,000		3,500,000
Omnibus 2022 Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized					3,250,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant	3,000,000		3,000,000
2022 Director Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant	466,000		466,000
Defined Contribution Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Contribution expense	$ 97	$ 97	$ 328	$ 315

Products and Customers (Details

Products and Customers (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue, Major Customer [Line Items]
Total sales	$ 38,140	$ 29,553	$ 105,730	$ 88,091
Drinkable Kefir Other Than ProBugs [Member]
Revenue, Major Customer [Line Items]
Total sales	$ 30,297	$ 23,831	$ 82,779	$ 72,204
Drinkable Kefir Other Than ProBugs [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Revenue, Major Customer [Line Items]
Total sales percentage	79%	81%	78%	82%
Cheese [Member]
Revenue, Major Customer [Line Items]
Total sales	$ 3,211	$ 2,937	$ 9,233	$ 9,158
Cheese [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Revenue, Major Customer [Line Items]
Total sales percentage	9%	10%	9%	11%
Cream and Other [Member]
Revenue, Major Customer [Line Items]
Total sales	$ 1,874	$ 877	$ 5,438	$ 2,568
Cream and Other [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Revenue, Major Customer [Line Items]
Total sales percentage	5%	3%	5%	3%
Drinkable Yogurt [Member]
Revenue, Major Customer [Line Items]
Total sales	$ 1,482	$ 739	$ 4,559	$ 739
Drinkable Yogurt [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Revenue, Major Customer [Line Items]
Total sales percentage	4%	2%	5%	1%
ProBugs Kefir [Member]
Revenue, Major Customer [Line Items]
Total sales	$ 882	$ 766	$ 2,481	$ 2,197
ProBugs Kefir [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Revenue, Major Customer [Line Items]
Total sales percentage	2%	3%	2%	2%
Other Dairy [Member]
Revenue, Major Customer [Line Items]
Total sales	$ 394	$ 403	$ 1,240	$ 1,225
Other Dairy [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Revenue, Major Customer [Line Items]
Total sales percentage	1%	1%	1%	1%
Total Net Sales [Member]
Revenue, Major Customer [Line Items]
Total sales	$ 38,140	$ 29,553	$ 105,730	$ 88,091
Total Net Sales [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Revenue, Major Customer [Line Items]
Total sales percentage	100%	100%	100%	100%

Products and Customers (Detai_2

Products and Customers (Details Narrative)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue Benchmark [Member] | Two Customers [Member] | Customer Concentration Risk [Member]
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage	23%	23%	22%	23%

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - Ludmila Smolyansky [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Related Party Transaction [Line Items]
Other General and Administrative Expense	$ 0	$ 125	$ 22	$ 375
Royalty Expense	$ 100	$ 150	$ 400	$ 450