Lifeway Foods (LWAY) 10-Q 14 Aug 23 2023 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	Jun. 30, 2023	Aug. 10, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
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		14,672,717

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 7,449	$ 4,444
Accounts receivable, net of allowance for doubtful accounts and discounts & allowances of $1,390 and $1,820 at June 30, 2023 and December 31, 2022 respectively	11,320	11,414
Inventories, net	9,670	9,631
Prepaid expenses and other current assets	1,214	1,445
Refundable income taxes	4	44
Total current assets	29,657	26,978
Property, plant and equipment, net	21,699	20,905
Operating lease right-of-use asset	136	174
Goodwill	11,704	11,704
Intangible assets, net	7,168	7,438
Other assets	1,800	1,800
Total assets	72,164	68,999
Current liabilities
Current portion of note payable	1,250	1,250
Accounts payable	5,565	7,979
Accrued expenses	4,294	3,813
Accrued income taxes	1,024	0
Total current liabilities	12,133	13,042
Line of credit	2,777	2,777
Note payable	1,980	2,477
Operating lease liabilities	73	104
Deferred income taxes, net	3,029	3,029
Total liabilities	19,992	21,429
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred stock, no par value; 2,500 shares authorized; no shares issued or outstanding at June 30, 2023 and December 31, 2022	0	0
Common stock, no par value; 40,000 shares authorized; 17,274 shares issued; 14,656 and 14,645 outstanding at June 30, 2023 and December 31, 2022, respectively	6,509	6,509
Paid-in capital	4,167	3,624
Treasury stock, at cost	(16,920)	(16,993)
Retained earnings	58,416	54,430
Total stockholders' equity	52,172	47,570
Total liabilities and stockholders' equity	$ 72,164	$ 68,999

Consolidated Balance Sheets (_2

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Allowance for doubtful accounts and discounts	$ 1,390	$ 1,820
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	14,656	14,645

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Net sales	$ 39,230	$ 33,491	$ 77,134	$ 67,590
Cost of goods sold	27,299	27,207	56,329	55,070
Depreciation expense	651	587	1,299	1,243
Total cost of goods sold	27,950	27,794	57,628	56,313
Gross profit	11,280	5,697	19,506	11,277
Selling expenses	2,571	2,482	6,090	5,684
General and administrative	3,808	2,839	6,943	6,131
Amortization expense	135	135	270	270
Total operating expenses	6,514	5,456	13,303	12,085
Income (loss) from operations	4,766	241	6,203	(808)
Other income (expense):
Interest expense	(109)	(52)	(213)	(94)
Gain on sale of property and equipment	33	0	33	0
Other (expense) income, net	(5)	(4)	0	(5)
Total other income (expense)	(81)	(56)	(180)	(99)
Income (loss) before provision for income taxes	4,685	185	6,023	(907)
Provision (benefit) for income taxes	1,529	65	2,037	(132)
Net income (loss)	$ 3,156	$ 120	$ 3,986	$ (775)
Earnings (loss) per common share:
Basic	$ 0.22	$ 0.01	$ 0.27	$ (0.05)
Diluted	$ 0.21	$ 0.01	$ 0.26	$ (0.05)
Weighted average common shares:
Basic	14,654	15,466	14,649	15,450
Diluted	15,084	15,875	15,058	15,772

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Treasury Stock, Common [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
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					(775)
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)
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)
Beginning balance, value at Dec. 31, 2022	$ 6,509	$ (16,993)	3,624	54,430	47,570
Beginning balance, shares at Dec. 31, 2022	17,274	(2,629)
Stock-based compensation			343		343
Net income				830	830
Ending balance, value at Mar. 31, 2023	$ 6,509	$ (16,993)	3,967	55,260	48,743
Ending balance, shares at Mar. 31, 2023	17,274	(2,629)
Beginning balance, value at Dec. 31, 2022	$ 6,509	$ (16,993)	3,624	54,430	47,570
Beginning balance, shares at Dec. 31, 2022	17,274	(2,629)
Net income					3,986
Ending balance, value at Jun. 30, 2023	$ 6,509	$ (16,920)	4,167	58,416	52,172
Ending balance, shares at Jun. 30, 2023	17,274	(2,618)
Beginning balance, value at Mar. 31, 2023	$ 6,509	$ (16,993)	3,967	55,260	48,743
Beginning balance, shares at Mar. 31, 2023	17,274	(2,629)
Issuance of common stock in connection with stock-based compensation		$ 73	(112)		(39)
Issuance of common stock in connection with stock-based compensation, shares		11
Stock-based compensation			312		312
Net income				3,156	3,156
Ending balance, value at Jun. 30, 2023	$ 6,509	$ (16,920)	$ 4,167	$ 58,416	$ 52,172
Ending balance, shares at Jun. 30, 2023	17,274	(2,618)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net income (loss)	$ 3,986	$ (775)
Adjustments to reconcile net income (loss) to operating cash flow:
Depreciation and amortization	1,569	1,513
Stock-based compensation	655	547
Non-cash interest expense	3	3
Bad debt expense	2	0
Deferred revenue	0	(15)
Gain on sale of equipment	(33)	0
(Increase) decrease in operating assets:
Accounts receivable	91	(424)
Inventories	(39)	(151)
Refundable income taxes	40	(440)
Prepaid expenses and other current assets	232	154
Increase (decrease) in operating liabilities:
Accounts payable	(2,526)	246
Accrued expenses	451	(462)
Accrued income taxes	1,024	(725)
Net cash provided by (used in) operating activities	5,455	(529)
Cash flows from investing activities:
Purchases of property and equipment	(1,990)	(1,710)
Proceeds from sales of equipment	40	0
Net cash used in investing activities	(1,950)	(1,710)
Cash flows from financing activities:
Repayment of note payable	(500)	(500)
Net cash used in financing activities	(500)	(500)
Net increase (decrease) in cash and cash equivalents	3,005	(2,739)
Cash and cash equivalents at the beginning of the period	4,444	9,233
Cash and cash equivalents at the end of the period	7,449	6,494
Supplemental cash flow information:
Cash paid for income taxes, net	973	640
Cash paid for interest	238	88
Non-cash investing activities
Accrued purchase of property and equipment	110	398
Increase in right-of-use assets and operating lease obligations	$ 0	$ 36

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2023
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, 2022. 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.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 2 – Summary of Significant Accounting Policies Our significant accounting policies, which are summarized in detail in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, have not materially changed. The following is a description of certain of our significant accounting policies. 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 Lifeway considers cash and all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are stated at cost, which approximates or equals fair value due to their short-term nature. Lifeway from time to time may have bank deposits in excess of insurance limits of the Federal Deposit Insurance Corporation. The Company places its cash and cash equivalents with high credit quality financial institutions. Lifeway has not experienced any losses in such accounts and believes the financial risks associated with these financial instruments are minimal. Customer concentration Sales are predominately to companies in the retail food industry located within the United States. Two major customers accounted for approximately 23 22 22 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 $ 2,006 1,738 543 533 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 Adopted 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. The Company adopted this standard during the first quarter of 2023. The adoption did not have a material impact on the Company’s 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. T he ASU was effective upon issuance and allowed companies to adopt the amendments on a prospective basis through December 31, 2024. 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. The Company adopted this standard during the first quarter of 2023. The adoption did not have a material impact on the Company’s financial statements.

Inventories, net

Inventories, net	6 Months Ended
	Jun. 30, 2023
Inventory Disclosure [Abstract]
Inventories, net	Note 3 – Inventories, net Inventories consisted of the following: Schedule of inventories June 30, December 31, Ingredients $ 2,813 $ 2,859 Packaging 3,091 3,233 Finished goods 3,766 3,539 Total inventories, net $ 9,670 $ 9,631

Property, Plant and Equipment,

Property, Plant and Equipment, net	6 Months Ended
	Jun. 30, 2023
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 June 30, December 31, Land $ 1,565 $ 1,565 Buildings and improvements 19,422 19,341 Machinery and equipment 32,969 32,786 Vehicles 705 640 Office equipment 1,046 979 Construction in process 2,830 1,180 58,537 56,491 Less accumulated depreciation (36,838 ) (35,586 ) Total property, plant and equipment, net $ 21,699 $ 20,905

Goodwill and Intangible Assets

Goodwill and Intangible Assets	6 Months Ended
	Jun. 30, 2023
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, 2022, before accumulated impairment loses $ 12,948 Accumulated impairment losses (1,244 ) Balance at December 31, 2022 $ 11,704 Balance at June 30, 2023 $ 11,704 Intangible Assets Other intangible assets, net consisted of the following: Schedule of finite-lived intangible assets June 30, 2023 December 31, 2022 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Recipes $ 44 $ (44 ) $ – $ 44 $ (44 ) $ – Customer lists and other customer related intangibles 4,529 (4,529 ) – 4,529 (4,529 ) – Customer relationship 3,385 (1,292 ) 2,093 3,385 (1,212 ) 2,173 Brand names 7,948 (2,873 ) 5,075 7,948 (2,683 ) 5,265 Formula 438 (438 ) – 438 (438 ) – Total intangible assets, net $ 16,344 $ (9,176 ) $ 7,168 $ 16,344 $ (8,906 ) $ 7,438 Estimated amortization expense on intangible assets for the next five years is as follows: Schedule of estimated amortization expense on intangible assets Year Amortization Six months ended December 31, 2023 $ 270 2024 $ 540 2025 $ 540 2026 $ 540 2027 $ 540

Accrued Expenses

Accrued Expenses	6 Months Ended
	Jun. 30, 2023
Payables and Accruals [Abstract]
Accrued Expenses	Note 6 – Accrued Expenses Accrued expenses consisted of the following: Schedule of accrued expenses June 30, December 31, 2022 Payroll and incentive compensation $ 3,237 $ 2,925 Real estate taxes 432 394 Accrued utilities 218 121 Current portion of operating lease liabilities 63 70 Other 344 303 Total accrued expenses $ 4,294 $ 3,813

Debt

Debt	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
Debt	Note 7 – Debt Note payable consisted of the following: Schedule of debt June 30, 2023 December 31, 2022 Term loan due August 18, 2026. Interest (7.10% at June 30, 2023) payable monthly. $ 3,250 $ 3,750 Unamortized deferred financing costs (20 ) (23 ) Total note payable 3,230 3,727 Less current portion (1,250 ) (1,250 ) Total long-term portion $ 1,980 $ 2,477 The scheduled maturities of the term loan, excluding deferred financing costs, at June 30, 2023 are as follows: Schedule of maturities of long-term debt Six months ended December 31, 2023 $ 750 2024 1,000 2025 1,000 2026 500 Total term loan $ 3,250 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%) or the LIBOR plus 1.95%, payable monthly in arrears. Lifeway is also required to pay a quarterly unused revolving line of credit fee of 0.20 0.20 On June 26, 2023, the Company executed the Early Opt-In Election and Related Amendment to Loan Documents (the “SOFR Election”). Under the SOFR election, the interest rate on the Company’s outstanding borrowings after June 30, 2023, will transition from LIBOR to the Secured Overnight Financing Rate (“SOFR”), plus 2.07%. 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 June 30, 2023. Revolving Credit Facility As of June 30, 2023, the Company had $ 2,777 2,223 7.14

Leases

Leases	6 Months Ended
	Jun. 30, 2023
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. The Company includes lease extension options, if applicable and reasonably certain to be exercised, in the 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 obtains substantially all the economic benefits of the asset. 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. 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 $ 61 147 30 82 Future maturities of lease liabilities were as follows: Schedule of future maturities of lease liabilities Year Operating Leases Six months ended December 31, 2023 $ 40 2024 67 2025 33 2026 10 2027 3 Thereafter – Total lease payments 153 Less: Interest (17 ) Present value of lease liabilities $ 136 The weighted-average remaining lease term for its operating leases was 2.36 11.54 46 85 21 42

Commitments and contingencies

Commitments and contingencies	6 Months Ended
	Jun. 30, 2023
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	6 Months Ended
	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Income taxes	Note 10 – Income taxes Income taxes were recognized at effective rates of 33.8 14.5 32.6 35.3 The Company calculates the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full year, excluding unusual or infrequently occurring discrete items, and applies that rate to income (loss) before provision for income taxes for the period. 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 2023, the percentage effect is different due to the difference in pre-tax income (loss) in 2023 compared to 2022. Unrecognized tax benefits were $ 0

Stock-based and Other Compensat

Stock-based and Other Compensation	6 Months Ended
	Jun. 30, 2023
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 million 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 June 30, 2023, 2.77 million Stock Options The following table summarizes stock option activity during the six months ended June 30, 2023: Schedule of stock option activity Options Weighted Weighted Aggregate Outstanding at December 31, 2022 41 $ 10.42 3.22 $ – Granted – – – – Exercised – – – – Forfeited – – – – Outstanding at June 30, 2023 41 $ 10.42 2.72 $ – Exercisable at June 30, 2023 41 $ 10.42 2.72 $ – 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 six months ended June 30, 2023. Schedule of RSA Activity Restricted Stock Awards Weighted Average Grant Date Fair Value Outstanding at December 31, 2022 164 $ 5.69 Granted 58 6.88 Shares issued upon vesting – – Forfeited (5 ) 6.25 Outstanding at June 30, 2023 217 $ 5.99 Vested and deferred at June 30, 2023 37 $ 5.60 For the six months ended June 30,2023 and 2022 total pre-tax stock-based compensation expense recognized in the consolidated statements of operations was $ 202 127 57 35 98 64 28 17 686 1.40 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 69 142 26 57 60 36 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 $ 1,069 128 278 44 112 106 66 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 six months ended June 30, 2023 and 2022, $ 240 0 For the three months ended June 30, 2023 and 2022, $ 127 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. 2023 Equity Award Under the 2023 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 2023 to 2025. 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 115,622 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 $6.88 dollars per share. For the six months ended June 30, 2023 and 2022, $ 16 0 For the three months ended June 30, 2023 and 2022, $ 16 0 The 2023 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 June 16, 2023 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 six months ended June 30, 2023 and 2022 total contribution expense recognized in the consolidated statements of operations was $ 258 231 108 102

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jun. 30, 2023
Earnings (loss) per common share:
Earnings Per Share	Note 12 - Earnings Per Share The following table summarizes the effects of the share-based compensation awards on the weighted average number of shares outstanding used in calculating diluted earnings (loss) per share: Schedule of weighted average number of shares Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) Weighted average common shares outstanding 14,654 15,466 14,649 15,450 Assumed exercise/vesting of equity awards 430 409 409 322 Weighted average diluted common shares outstanding 15,084 15,875 15,058 15,772

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Note 13 – Related Party Transactions Consulting Services Lifeway obtained consulting services from Ludmila Smolyansky, a member of the Company’s Board of Directors and former Chairperson of its Board of Directors. On January 4, 2022, the Company notified Ms. Smolyansky that it was terminating the amended and restated consultancy agreement effective January 17, 2022. Service fees earned are included in general and administrative expenses in the accompanying consolidated statements of operations and were $ 0 22 0 Endorsement Agreement Lifeway was 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 paid 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 paid Ms. Smolyansky a lump sum payment of $400, (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 were $ 0 300 0 150

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2023
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 Lifeway considers cash and all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are stated at cost, which approximates or equals fair value due to their short-term nature. Lifeway from time to time may have bank deposits in excess of insurance limits of the Federal Deposit Insurance Corporation. The Company places its cash and cash equivalents with high credit quality financial institutions. Lifeway has not experienced any losses in such accounts and believes the financial risks associated with these financial instruments are minimal.
Customer concentration	Customer concentration Sales are predominately to companies in the retail food industry located within the United States. Two major customers accounted for approximately 23 22 22
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 $ 2,006 1,738 543 533
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 Adopted 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. The Company adopted this standard during the first quarter of 2023. The adoption did not have a material impact on the Company’s 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. T he ASU was effective upon issuance and allowed companies to adopt the amendments on a prospective basis through December 31, 2024. 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. The Company adopted this standard during the first quarter of 2023. The adoption did not have a material impact on the Company’s financial statements.

Inventories, net (Tables)

Inventories, net (Tables)	6 Months Ended
	Jun. 30, 2023
Inventory Disclosure [Abstract]
Schedule of inventories	Schedule of inventories June 30, December 31, Ingredients $ 2,813 $ 2,859 Packaging 3,091 3,233 Finished goods 3,766 3,539 Total inventories, net $ 9,670 $ 9,631

Property, Plant and Equipment_2

Property, Plant and Equipment, net (Tables)	6 Months Ended
	Jun. 30, 2023
Property, Plant and Equipment [Abstract]
Schedule of property, plant and equipment	Schedule of property, plant and equipment June 30, December 31, Land $ 1,565 $ 1,565 Buildings and improvements 19,422 19,341 Machinery and equipment 32,969 32,786 Vehicles 705 640 Office equipment 1,046 979 Construction in process 2,830 1,180 58,537 56,491 Less accumulated depreciation (36,838 ) (35,586 ) Total property, plant and equipment, net $ 21,699 $ 20,905

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of goodwill	Schedule of goodwill Total Balance at December 31, 2022, before accumulated impairment loses $ 12,948 Accumulated impairment losses (1,244 ) Balance at December 31, 2022 $ 11,704 Balance at June 30, 2023 $ 11,704
Schedule of finite-lived intangible assets	Schedule of finite-lived intangible assets June 30, 2023 December 31, 2022 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Recipes $ 44 $ (44 ) $ – $ 44 $ (44 ) $ – Customer lists and other customer related intangibles 4,529 (4,529 ) – 4,529 (4,529 ) – Customer relationship 3,385 (1,292 ) 2,093 3,385 (1,212 ) 2,173 Brand names 7,948 (2,873 ) 5,075 7,948 (2,683 ) 5,265 Formula 438 (438 ) – 438 (438 ) – Total intangible assets, net $ 16,344 $ (9,176 ) $ 7,168 $ 16,344 $ (8,906 ) $ 7,438
Schedule of estimated amortization expense on intangible assets	Schedule of estimated amortization expense on intangible assets Year Amortization Six months ended December 31, 2023 $ 270 2024 $ 540 2025 $ 540 2026 $ 540 2027 $ 540

Accrued Expenses (Tables)

Accrued Expenses (Tables)	6 Months Ended
	Jun. 30, 2023
Payables and Accruals [Abstract]
Schedule of accrued expenses	Schedule of accrued expenses June 30, December 31, 2022 Payroll and incentive compensation $ 3,237 $ 2,925 Real estate taxes 432 394 Accrued utilities 218 121 Current portion of operating lease liabilities 63 70 Other 344 303 Total accrued expenses $ 4,294 $ 3,813

Debt (Tables)

Debt (Tables)	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
Schedule of debt	Schedule of debt June 30, 2023 December 31, 2022 Term loan due August 18, 2026. Interest (7.10% at June 30, 2023) payable monthly. $ 3,250 $ 3,750 Unamortized deferred financing costs (20 ) (23 ) Total note payable 3,230 3,727 Less current portion (1,250 ) (1,250 ) Total long-term portion $ 1,980 $ 2,477
Schedule of maturities of long-term debt	Schedule of maturities of long-term debt Six months ended December 31, 2023 $ 750 2024 1,000 2025 1,000 2026 500 Total term loan $ 3,250

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 30, 2023
Leases
Schedule of future maturities of lease liabilities	Schedule of future maturities of lease liabilities Year Operating Leases Six months ended December 31, 2023 $ 40 2024 67 2025 33 2026 10 2027 3 Thereafter – Total lease payments 153 Less: Interest (17 ) Present value of lease liabilities $ 136

Stock-based and Other Compens_2

Stock-based and Other Compensation (Tables)	6 Months Ended
	Jun. 30, 2023
Share-Based Payment Arrangement [Abstract]
Schedule of stock option activity	Schedule of stock option activity Options Weighted Weighted Aggregate Outstanding at December 31, 2022 41 $ 10.42 3.22 $ – Granted – – – – Exercised – – – – Forfeited – – – – Outstanding at June 30, 2023 41 $ 10.42 2.72 $ – Exercisable at June 30, 2023 41 $ 10.42 2.72 $ –
Schedule of RSA Activity	Schedule of RSA Activity Restricted Stock Awards Weighted Average Grant Date Fair Value Outstanding at December 31, 2022 164 $ 5.69 Granted 58 6.88 Shares issued upon vesting – – Forfeited (5 ) 6.25 Outstanding at June 30, 2023 217 $ 5.99 Vested and deferred at June 30, 2023 37 $ 5.60

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jun. 30, 2023
Earnings (loss) per common share:
Schedule of Weighted Average Number of Shares	Schedule of weighted average number of shares Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (In thousands) Weighted average common shares outstanding 14,654 15,466 14,649 15,450 Assumed exercise/vesting of equity awards 430 409 409 322 Weighted average diluted common shares outstanding 15,084 15,875 15,058 15,772

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Product Information [Line Items]
Advertising Expense	$ 543	$ 533	$ 2,006	$ 1,738
Revenue Benchmark [Member] | Two Customers [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk	22%	22%	23%	22%

Inventories, net (Details)

Inventories, net (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Ingredients	$ 2,813	$ 2,859
Packaging	3,091	3,233
Finished goods	3,766	3,539
Total inventories, net	$ 9,670	$ 9,631

Property, Plant and Equipment_3

Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 58,537	$ 56,491
Less accumulated depreciation	(36,838)	(35,586)
Total property, plant and equipment, net	21,699	20,905
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	19,422	19,341
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	32,969	32,786
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	705	640
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,046	979
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 2,830	$ 1,180

Goodwill and Intangible Asset_2

Goodwill and Intangible Assets (Details - Goodwill) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
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	Jun. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 16,344	$ 16,344
Accumulated Amortization	(9,176)	(8,906)
Net Carrying Amount	7,168	7,438
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	(1,292)	(1,212)
Net Carrying Amount	2,093	2,173
Brand Names [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	7,948	7,948
Accumulated Amortization	(2,873)	(2,683)
Net Carrying Amount	5,075	5,265
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	Jun. 30, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Six months ended December 31, 2023	$ 270
2024	540
2025	540
2026	540
2027	$ 540

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Payroll and incentive compensation	$ 3,237	$ 2,925
Real estate taxes	432	394
Accrued utilities	218	121
Current portion of operating lease liabilities	63	70
Other	344	303
Total accrued expenses	$ 4,294	$ 3,813

Debt (Details)

Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
Term loan due August 18, 2026. Interest (7.10% at June 30, 2023) payable monthly.	$ 3,250	$ 3,750
Unamortized deferred financing costs	(20)	(23)
Total note payable	3,230	3,727
Less current portion	(1,250)	(1,250)
Total long-term portion	$ 1,980	$ 2,477

Debt (Details - Maturities)

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

Debt (Details Narrative)

Debt (Details Narrative) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Line of Credit Facility [Line Items]
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]
Outstanding amount	$ 2,777
Available for future borrowings	$ 2,223
Credit line effective interest rate	7.14%
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	Jun. 30, 2023 USD ($)
Leases
Six months ended December 31, 2023	$ 40
2024	67
2025	33
2026	10
2027	3
Thereafter	0
Total lease payments	153
Less: Interest	(17)
Present value of lease liabilities	$ 136

Leases (Details Narrative)

Leases (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Leases
Total lease expense	$ 30	$ 82	$ 61	$ 147
Weighted average remaining lease term	2 years 4 months 9 days		2 years 4 months 9 days
Weighted average discount rate	11.54%		11.54%
Operating lease liabilities	$ 21	$ 42	$ 46	$ 85

Income taxes (Details Narrative

Income taxes (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, Percent	32.60%	35.30%	33.80%	14.50%
Unrecognized Tax Benefits	$ 0	$ 0	$ 0	$ 0

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	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
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	2 years 8 months 19 days	3 years 2 months 19 days
Aggregate intrinsic value, options outstanding beginning	$ 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
Aggregate intrinsic value, options outstanding ending	$ 0	$ 0
Exercisable	41
Weighted average exercise price, Exercisable	$ 10.42
Weighted average remaining contractural life, exercisable	2 years 8 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	6 Months Ended
	Jun. 30, 2023 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares outstanding, beginning | shares	164
Weighted average grant date fair value outstanding, beginning | $ / shares	$ 5.69
Granted | shares	58
Weighted average grant date fair value, granted | $ / shares	$ 6.88
Shares issued upon vesting | shares	0
Weighted average grant date fair value, shares issued upon vesting | $ / shares	$ 0
Forfeited | shares	(5)
Weighted average grant date fair value, forfeited | $ / shares	$ 6.25
Number of shares outstanding, ending | shares	217
Weighted average grant date fair value outstanding, ending | $ / shares	$ 5.99
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		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Aug. 31, 2022
Restricted Stock Award [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation	$ 98	$ 64	$ 202	$ 127
Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation			686
Tax related benefits	28	17	$ 57	35
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			1 year 4 months 24 days
2020 CEO Award [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation	26	57	$ 69	142
Long-term equity-based incentive			750
Unearned compensation related to non-vested RSA's	60		60
Unearned compensation related to non-vested 2023	36		36
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	44	112	128	278
Long-term equity-based incentive			1,069
Unearned compensation related to non-vested RSA's	106		106
Unearned compensation related to non-vested 2023	66		66
Unearned compensation related to non-vested 2024	40		40
Plan 2022 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation	127	0	240	0
Plan 2023 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation	$ 16	0	$ 16	0
2015 Omnibus Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares authorized for issuance	3,500,000		3,500,000
Omnibus 2022 Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares authorized for issuance					3,250,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant	2,770,000		2,770,000
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	$ 108	$ 102	$ 258	$ 231

Schedule of Weighted Average Nu

Schedule of Weighted Average Number of Shares (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings (loss) per common share:
Weighted average common shares outstanding	14,654	15,466	14,649	15,450
Assumed exercise/vesting of equity awards	430	409	409	322
Weighted average diluted common shares outstanding	15,084	15,875	15,058	15,772

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - Ludmila Smolyansky [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Related Party Transaction [Line Items]
Other General and Administrative Expense	$ 0	$ 0	$ 0	$ 22
Royalty Expense	$ 0	$ 150	$ 0	$ 300