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<SEC-DOCUMENT>0000950137-06-010049.txt : 20060914
<SEC-HEADER>0000950137-06-010049.hdr.sgml : 20060914
<ACCEPTANCE-DATETIME>20060914153812
ACCESSION NUMBER:		0000950137-06-010049
CONFORMED SUBMISSION TYPE:	S-3
PUBLIC DOCUMENT COUNT:		3
FILED AS OF DATE:		20060914
DATE AS OF CHANGE:		20060914

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LIFEWAY FOODS INC
		CENTRAL INDEX KEY:			0000814586
		STANDARD INDUSTRIAL CLASSIFICATION:	DAIRY PRODUCTS [2020]
		IRS NUMBER:				363442829
		STATE OF INCORPORATION:			IL
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-137317
		FILM NUMBER:		061090674

	BUSINESS ADDRESS:	
		STREET 1:		6431 W OAKTON
		CITY:			MORTON GROVE
		STATE:			IL
		ZIP:			60053
		BUSINESS PHONE:		7089671010

	MAIL ADDRESS:	
		STREET 1:		6431 W OAKTON
		CITY:			MORTON GROVE
		STATE:			IL
		ZIP:			60053
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-3
<SEQUENCE>1
<FILENAME>c08278sv3.htm
<DESCRIPTION>REGISTRATION STATEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>sv3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">As
filed with the Securities and Exchange Commission on 9/14/06</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 0pt">Registration No.&nbsp;333-<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, DC 20549</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM S-3</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>REGISTRATION STATEMENT<BR>
UNDER<BR>
THE SECURITIES ACT OF 1933</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></B>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>LIFEWAY FOODS, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Illinois</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>2020</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>36-3442829</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction of
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Primary Standard Industrial
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Classification Code Number)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">6431 West Oakton<BR>
Morton Grove, IL 60053<BR>
(847)&nbsp;967-1010</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">(Address, including zip code, and telephone number, including area code, of<BR>
registrant&#146;s principal executive offices)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Julie Smolyansky<BR>
Chief Executive Officer and President<BR>
Lifeway Foods, Inc.<BR>
6431 West Oakton<BR>
Morton Grove, IL 60053<BR>
(847)&nbsp;967-1010</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">(Name, address, including zip code and telephone number,<BR>
including area code, of agent for service)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><I>With a copy to:</I></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>TIMOTHY R. LAVENDER, ESQ.</B><BR>
Kelley Drye &#038; Warren LLP<BR>
333 West Wacker Drive<BR>
Chicago, IL 60606<BR>
(312)&nbsp;857-7070</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Approximate date of commencement of proposed sale to the public: </B>From time to time
after the effective date of this registration statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the only securities being registered on this form are being offered pursuant to dividend or
interest reinvestment plans, please check the following box. <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of the securities being registered on this form are to be offered on a delayed or
continuous basis pursuant to Rule&nbsp;415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment plans, check the following box.
<FONT face="Wingdings">&#254;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same
offering. <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If delivery of the prospectus is expected to be made pursuant to Rule&nbsp;434, please check the
following box. <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>CALCULATION OF REGISTRATION FEE</B></DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="54%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="23" style="border-bottom: 3px double #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Proposed</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Proposed Maximum</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount of</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>Title of Each Class of</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount to be</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Price Per</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Aggregate Offering</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Registration</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>Securities to be Registered</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Registered (1)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Share (2)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Price</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fee</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
                    <TD valign="top" style="border-top: 2px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">Common Stock
</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">202,650</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">7.11</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">1,440,842</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">$</TD>

<TD align="right" valign="top" style="border-top: 2px solid #000000">154</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="23" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pursuant to Rule&nbsp;416 under the Securities Act of 1933, as amended,
the registrant is also registering such additional indeterminate
number of shares of common stock as may become issuable as a
result of stock splits or stock dividends.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The price is estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457(c) and represents the average
high and low trading prices of the common stock as reported on the
Nasdaq on September&nbsp;13, 2006.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The registrant hereby amends this registration statement on such date or dates as may be
necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in
accordance with </B><B>Section 8(a)</B><B> of the Securities Act or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section&nbsp;</B><B>8(a)</B><B>, may determine.</B>
</DIV>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>








<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Subject
to Completion. Dated September&nbsp;14, 2006
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>PROSPECTUS</B>

</DIV>

<DIV align="Center" style="font-size: 12pt; margin-top: 6pt">202,650 Shares

</DIV>

<DIV align="Center" style="font-size: 12pt; margin-top: 6pt">Common Stock

</DIV>
<DIV align="left" style="font-size: 9pt; margin-top: 6pt">This prospectus relates to the resale by certain selling security holders of Lifeway Foods, Inc.
(&#147;Lifeway&#148;) of 202,650 shares of our common stock, no par value (the &#147;Common Stock&#148;), the only
class of common equity of Lifeway.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">The selling security holders may offer to sell the shares of our common stock being offered by this
prospectus at fixed prices, at prevailing market prices at the time of sale, at varying prices, or
at negotiated prices.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">The shares of our common stock are listed for trading on The Nasdaq Stock Market Global Market
under the symbol &#147;LWAY.&#148; On September&nbsp;13, 2006 the last reported sale price of our common stock on
the Nasdaq was $7.11 per share.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">We will not receive any proceeds from the resale of shares of our common stock by the selling
security holders. We will pay the expenses of this offering.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt"><I>See &#147;Risk Factors&#148; beginning on page 5 for a discussion of factors that you should consider before
buying shares of our common stock.</I>
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt"><B>Neither the Securities and Exchange Commission nor any state securities commission has approved or
disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2006
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>


<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ABOUT THIS PROSPECTUS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is important for you to read and consider all of the information contained in this
prospectus and any applicable prospectus supplement before making a decision whether to invest in
our common stock. You should also read and consider the information contained in the documents
that we have incorporated by reference as described in &#147;Where You Can Find More Information&#148; and
&#147;Incorporation of Certain Documents By Reference&#148; in this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should rely only on the information provided in this prospectus and any applicable
prospectus supplement, including the information incorporated by reference. We have not authorized
anyone to provide you with additional or different information. If anyone provides you with
additional, different or inconsistent information, you should not rely on it. We are not offering
to sell or soliciting offers to buy, and will not sell, any securities in any jurisdiction where it
is unlawful. You should assume that the information contained in this prospectus or in any
prospectus supplement, as well as information contained in a document that we have previously filed
or in the future will file with the SEC and incorporate by reference in this prospectus or any
prospectus supplement, is accurate only as of the date of this prospectus, the applicable
prospectus supplement or the document containing that information, as the case may be. Our
financial condition, results of operations, cash flows or business may have changed since that
date.
</DIV>
<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are required to file periodic reports, proxy statements and other information relating to
our business, financial and other matters with the SEC under the Securities Exchange Act of 1934
(the &#147;Exchange Act&#148;). Our filings are available to the public over the Internet at the SEC&#146;s web
site at <U>http://www.sec.gov</U>. You may also read and copy any document we file with the SEC
at, and obtain a copy of any such document by mail from, the SEC&#146;s public reference room located at
100 F Street, N.E., Washington, D.C. 20549, at prescribed charges. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room and its charges.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have filed with the SEC a registration statement on Form S-3 under the Securities Act of
1933 (the &#147;Securities Act&#148;) with respect to our securities described in this prospectus.
References to the &#147;<B>registration statement</B>&#148; or the &#147;<B>registration statement of which this prospectus
is a part</B>&#148; mean the original registration statement and all amendments, including all schedules and
exhibits. This prospectus does not, and any prospectus supplement will not, contain all of the
information in the registration statement because we have omitted parts of the registration
statement in accordance with the rules of the SEC. Please refer to the registration statement for
any information in the registration statement that is not contained in this prospectus or a
prospectus supplement. The registration statement is available to the public over the Internet at
the SEC&#146;s web site described above and can be read and copied at the location described above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each statement made in this prospectus or any prospectus supplement concerning a document
filed as an exhibit to the registration statement is qualified in its entirety by reference to that
exhibit for a complete description of its provisions.
</DIV>
<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SEC allows us to &#147;<B>incorporate by reference</B>&#148; in this prospectus the information contained
in other documents filed separately with the SEC. This means that we can disclose important
information to you by referring you to other documents filed with the SEC that contain such
information. The information incorporated by reference is an important part of this prospectus and
prospectus supplement. Information disclosed in documents that we file later with the SEC will
automatically add to, update and change information previously disclosed. If there is additional
information in a later filed document or a conflict or inconsistency between information in this
prospectus or a prospectus supplement and information incorporated by reference from a later filed
document, you should rely on the information in the later dated document.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We incorporate by reference the documents listed below (and the documents incorporated by
reference therein) that we have previously filed, and any documents that we may file in the future,
with the SEC under Sections&nbsp;13(a), 13(c), 14 or 15(d) of the Exchange Act, until the offerings
contemplated by this prospectus are completed:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our annual report on Form 10-KSB for the fiscal year ended December&nbsp;31, 2005, filed with the SEC on March&nbsp;31,
2006;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our quarterly report on Form 10-QSB for the period ended March&nbsp;31, 2006, filed with the SEC on May&nbsp;15, 2006;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our quarterly report on Form 10-QSB for the period ended June&nbsp;30, 2006, filed with the SEC on August&nbsp;14, 2006;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K, dated January&nbsp;6, 2006, filed with the SEC on January&nbsp;9, 2006;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K, dated January&nbsp;6, 2006, filed with the SEC on January&nbsp;13, 2006;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K, dated March&nbsp;9, 2006, filed with the SEC on March&nbsp;14, 2006;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K, dated March&nbsp;29, 2006, filed with the SEC on April&nbsp;4, 2006;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K, dated April&nbsp;5, 2006, filed with the SEC on April&nbsp;6, 2006;</TD>
</TR>

</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K/A, dated April&nbsp;28, 2006, filed with the SEC on May&nbsp;5, 2006;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K, dated June&nbsp;19, 2006, filed with the SEC on June&nbsp;20, 2006;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K, dated July&nbsp;5, 2006, filed with the SEC on July&nbsp;10, 2006; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K, dated July&nbsp;27, 2006, filed with the SEC on August&nbsp;9, 2006;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the portions of our annual proxy statement relating to our annual meeting of stockholders held on June&nbsp;10, 2006,
filed with the SEC on May&nbsp;12, 2006, that have been incorporated by reference into the 2006 Form 10-KSB.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any statement made in this prospectus, a prospectus supplement or a document incorporated by
reference in this prospectus or a prospectus supplement will be deemed to be modified or superseded
for purposes of this prospectus and any applicable prospectus supplement to the extent that a
statement contained in an amendment to the registration statement, any subsequent prospectus
supplement or in any other subsequently filed document incorporated by reference herein or therein
adds, updates or changes that statement. Any statement so affected will not be deemed, except as so
affected, to constitute a part of this prospectus or any applicable prospectus supplement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You may obtain a copy of these filings, excluding exhibits (but including exhibits that are
specifically incorporated by reference in any such filing), free of charge, by oral or written
request directed to: Lifeway Foods, Inc., 6431 W. Oakton
Morton Grove, Illinois 60053.
</DIV>
<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FORWARD-LOOKING STATEMENTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Various statements contained in this prospectus or incorporated by reference into this prospectus
constitute &#147;forward-looking statements&#148; within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are based on current expectations and are indicated
by words or phrases such as &#147;believe,&#148; &#147;expect,&#148; &#147;may,&#148; &#147;will,&#148; &#147;should,&#148; &#147;seek,&#148; &#147;plan,&#148; &#147;intend&#148;
or &#147;anticipate&#148; or the negative thereof or comparable terminology, or by discussion of strategy.
Forward-looking statements represent as of the date of this prospectus our judgment relating to,
among other things, future results of operations, growth plans, sales, capital requirements and
general industry and business conditions applicable to us. Such forward-looking statements are
based largely on our current expectations and are inherently subject to risks and uncertainties.
Our actual results could differ materially from those that are anticipated or projected as a result
of certain risks and uncertainties, including, but not limited to, a number of factors, such as:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>successful integration of acquired businesses;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the effect of our indebtedness on our financial condition
and financial flexibility, including, but not limited to, the
ability to obtain necessary financing for our business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>economic and market conditions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the performance of our targeted markets;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in business relationships with our major customers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>competitive product and pricing pressures; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the other risks and uncertainties that are described under
&#147;Risk Factors&#148; and elsewhere in this prospectus and from time
to time in our filings with the SEC.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Except as otherwise required to be disclosed in periodic reports required to be filed by public
companies with the SEC pursuant to the SEC&#146;s rules, we have no duty to update these statements, and
we undertake no obligation to publicly update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise. In light of these risks and
uncertainties, we cannot assure you that the forward-looking information contained in this
prospectus will in fact transpire.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
</DIV>


<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROSPECTUS SUMMARY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>This summary highlights information contained elsewhere in this prospectus, any prospectus
supplement and the documents incorporated by reference. It does not contain all of the information
that you should consider before making a decision to invest in our common stock. You should read
carefully the entire prospectus, any applicable prospectus supplement and the documents
incorporated by reference, including &#147;Risk Factors&#148; and the Consolidated Financial Statements and
Notes thereto included elsewhere or incorporated by reference in this prospectus or any prospectus
supplement.</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In this prospectus, &#147;Lifeway&#148;, &#147;we,&#148; &#147;us,&#148; &#147;our&#148; and the &#147;Company&#148; refer to Lifeway Foods, Inc. and
its subsidiaries unless the context otherwise requires.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>OUR BUSINESS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lifeway Foods, Inc. commenced operations in February&nbsp;1986, and was incorporated under the laws
of the State of Illinois on May&nbsp;19, 1986. The Company&#146;s principal business activity is the
manufacturing of probiotic, cultured, functional dairy and non-dairy health food products.
Lifeway&#146;s primary products are kefir, a drinkable dairy beverage similar to but distinct from
yogurt, in several flavors sold under the name &#147;Lifeway Kefir&#148;; a line of various drinkable yogurts
sold under the &#147;La Fruta&#148; and &#147;Tuscan&#148; brands; and &#147;BasicsPlus,&#148; a dairy based immune-supporting
dietary supplement beverage. The Company also produces several soy-based kefir beverages under the
&#147;SoyTreat&#148; trademark. In addition to the drinkable products, Lifeway manufactures &#147;Lifeway Farmer
Cheese,&#148; a line of various farmer cheeses; &#147;Sweet Kiss,&#148; a fruit sugar-flavored spreadable cheese
similar in consistency to cream cheese; and a line of assorted fruit and vegetable flavored cream
cheese under the brand &#147;Cream Cheese Gourmet.&#148; The Company also manufactures and markets a
vegetable-based seasoning under the &#147;Golden Zesta&#148; brand. In the Chicago metropolitan area,
Lifeway distributes its products on its own trucks and via one distributor. The Company distributes
&#147;Cream Cheese Gourmet&#148; branded cream cheese products in the Philadelphia metropolitan area using
its own trucks<B>. </B>Lifeway manufactures all of its products at Company-owned facilities and
distributes its products primarily throughout the United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;30, 1992, Lifeway formed a wholly-owned subsidiary, LFI Enterprises, Inc.
(&#147;LFIE&#148;), incorporated in the State of Illinois. Until August&nbsp;1, 2001, LFIE operated a &#147;Russian&#148;
theme restaurant and supper club facility. On August&nbsp;1, 2001, Lifeway ceased operations at the
facility after condemnation proceedings were initiated by the Village of Niles, Illinois, which
sought to control the property for municipal purposes. This property was sold in January&nbsp;2003 for a
capital gain of approximately $1.2&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;19, 2004, LFIE formed Lifeway Foods Canada, LLC, an Illinois limited liability
company (&#147;LFC&#148;), to serve as a holding company for prospective operations within Canada. LFIE is
the manager and sole member of LFC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;26, 2004, Lifeway, through its subsidiary LFIE, acquired certain assets and inventory
of Ilya&#146;s Farms, Inc., a privately-held gourmet cream cheese producer based in the Philadelphia
metropolitan area. No prior relationship existed between Ilya&#146;s Farms, Inc. or its principal,
Michael Kofman, and either the Company or LFIE.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The total cash purchase consideration of $575,600 for the assets and inventory of Ilya&#146;s
Farms, Inc. was paid by LFIE in cash from Company funds without financing. Additionally, there are
certain royalty payments to be made in connection therewith. The Company provided a guaranty of
payment for the transaction. The acquisition included approximately $64,000 of tangible assets
(including certain manufacturing equipment and a delivery truck) and inventory as well as the brand
name &#147;Ilya&#146;s Farms&#148; and other trademarks and the recipes and manufacturing processes previously
used by Ilya&#146;s Farms, Inc. The equipment acquired by LFIE from Ilya&#146;s Farms, Inc. was previously
used to manufacture cream cheese products. The inventory which was purchased by LFIE consisted
entirely of different varieties of cream cheese. The founder of Ilya&#146;s Farms, Inc., Michael Kofman,
assisted LFIE over a one-month transition period and is available, if needed, on a consulting basis
going forward. Additionally, LFIE has hired the 10 employees formerly employed by Ilya&#146;s Farms,
Inc.

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;27, 2006, Lifeway acquired all of the outstanding
equity interests of Helios Nutrition, Ltd. (&#147;Helios&#148;) and its
wholly-owned subsidiary Pride Main Street Dairy, L.L.C.
(&#147;Pride&#148;), Minnesota-based Kefir and other dairy
products manufacturers. The purchase price of such
equity interests was a combination of 202,650 shares of
Lifeway&#146;s common stock (adjusted for the 2 for 1 stock split
completed in August, 2006), a promissory note issued by the
Company in favor of the stockholders of Helios in the
principal amount of $4,200,000 and a cash payment of $2,500,000.
Helios and Pride represents the second largest Kefir manufacturer
(Lifeway being the largest) and allows Lifeway in expanding its
manufacturing capacity of Kefir and other dairy products.
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE OFFERING</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="25%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Common Stock offered <BR>
by selling security holders
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">202,650 shares (1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Common Stock equivalents <BR>
presently outstanding
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">16,908,144 shares</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Common Stock equivalents to be
outstanding immediately
after this offering
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">16,908,144 shares</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Use of proceeds
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">We will not receive any proceeds from the
resale of shares of Common Stock by the
selling security holders.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Nasdaq symbol
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">LWAY</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>This prospectus covers the resale by the selling security holders named in this
prospectus of up to 202,650&nbsp;shares of our Common Stock. The selling security holders may offer
to sell the shares of Common Stock being offered in this prospectus at fixed prices, at
prevailing market prices at the time of sale, at varying prices or at negotiated prices.
Please see &#147;Plan of Distribution&#148; in this prospectus for a detailed explanation of how the
shares of Common Stock may be sold.</TD>
</TR>

</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This prospectus contains our trademarks, tradenames and servicemarks and also contains certain
trademarks, tradenames and servicemarks of other parties.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RISK FACTORS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>An investment in our Common Stock involves a high degree of risk and uncertainty. You should
carefully consider the risks described below before deciding to invest in Common Stock. The risks
described below are not the only ones facing the Company. Additional risks not presently known to
us or that we presently consider immaterial may also adversely affect the Company. If any of the
following risks occur, our business, financial condition, results of operations and prospects could
be materially adversely affected. In that case, the trading price of the Common Stock could
decline, and you could lose all or part or your investment. In assessing these risks, you should
also refer to the other information included or incorporated by reference in this prospectus,
including the consolidated financial statements and notes thereto of the Company.</I>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Risks relating to our business</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Changing consumer preferences make demand for our products unpredictable.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As is the case with other companies marketing dairy products, Lifeway is subject to changing
consumer preferences and nutritional and health-related concerns. Our business could be affected by
certain consumer concerns about dairy products, such as the fat, cholesterol, calorie, sodium,
lactose content or contamination of such products. Lifeway could become subject to increased
competition from companies whose products or marketing strategies address these consumer concerns
more effectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Adverse medical research relating to milk and demand for milk could decrease the demand for our
products.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Periodically, medical and other studies are released and announcements by medical and other groups
are made which raise concerns over the healthfulness of cow&#146;s milk in the human diet. A study may
be published or an announcement made concerning the healthfulness of cow&#146;s milk which may result in
a decrease in demand for dairy products.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Possible volatility of raw milk costs makes our operating costs difficult to predict, and a steep
cost increase could cause our profits to diminish significantly.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There is a risk of price volatility in the dairy industry, making our net income difficult to
predict. If prices escalate, our costs will rise which will lead to a decrease in profits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>The dairy business is highly competitive and, therefore, we face substantial competition in
connection with the marketing and sale of our products.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In general, milk products are price sensitive and affected by many factors beyond our control,
including changes in consumer tastes, fluctuating commodity prices and changes in supply due to
weather, production, feed costs and natural disasters. Our products compete with other premium
quality dairy brands as well as less expensive, non-premium brands. Most of our competitors are
well established, have significant financial, marketing, personnel and other resources and have
products that have gained wide customer acceptance in the marketplace. The dairy industry is also
characterized by the frequent introduction of new products, accompanied by substantial promotional
campaigns. We may be unable to compete successfully or our competitors may develop products which
have superior qualities or gain wider market acceptance than ours.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We face the potential risk of product liability associated with food products.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Lifeway faces the risk of liability in connection with the sale and consumption of milk products
should the consumption of such products cause injury, illness or death. Lifeway currently
maintains product liability insurance, which may be
insufficient to cover potential claims or the level of insurance coverage needed may be unavailable
at a reasonable cost. A partially or completely uninsured successful claim against Lifeway would
drive up our costs to defend such claim or pay damages and could cause reputational damage which
would hurt our revenues. Either of these results would in turn reduce our profitability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Many of our corporate actions may be controlled by our officers, directors and principal
stockholders; these actions may benefit these principal stockholders more than our other
stockholders.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of June&nbsp;8, 2006, our directors, executive officers and principal stockholders beneficially own,
directly or indirectly, in the aggregate, approximately 73.7% of our outstanding Common Stock. In
particular, as of the filing date, Mrs.&nbsp;Ludmila Smolyansky, Chairperson of the Board of Directors, beneficially holds
7,693,632 shares of Common Stock. These stockholders, and Mrs.&nbsp;Smolyansky herself, will have
significant influence over our business affairs, with the ability to control matters requiring
approval by our security
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">holders, including elections of directors and approvals of mergers or other business combinations.
Also, certain corporate actions directed by our officers may not necessarily inure to the
proportional benefit of other stockholders of our company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We depend upon common carriers to ship our products to our customers; Our shipping costs and the
dependability of our carriers are therefore beyond our control.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We use common carriers to distribute our products. Any disruption in our distribution system or
increase in its costs is therefore beyond our control and could have a material adverse impact on
our business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Possible increase in energy costs makes our operating costs difficult to predict; A steep cost
increase could cause our profits to diminish significantly.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Significant increases in gas and energy prices could adversely affect our operating costs, which
would in turn diminish our profit margin.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Risks relating to the offering</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>The liquidity of the Common Stock is uncertain; the limited trading volume of the Common Stock
may depress the price of such stock or cause it to fluctuate significantly.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Although shares of the Common Stock are listed on NASDAQ, there has been a limited public market
for the Common Stock and there can be no assurance that a more active trading market for the Common
Stock will develop. As a result, you may not be able to sell your shares of Common Stock in short
time periods, or possibly at all. The absence of an active trading market may cause the price per
share of the Common Stock to fluctuate significantly.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Substantial resales or future issuances of the Common Stock could depress our stock price.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The market price for the Common Stock could decline, perhaps significantly, as a result of resales
or issuances of a large number of shares of the Common Stock in the public market or even the
perception that such resales or issuances could occur, including resales of the shares being
registered hereunder pursuant to the registration statement of which this prospectus is a part.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We may not be able to maintain listing on NASDAQ, which may adversely affect the ability of
purchasers in this offering to resell their securities in the secondary market.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Common Stock is presently listed on NASDAQ. However, we cannot assure you that the company
will meet the criteria for continued listing on NASDAQ. If the company were unable to meet the
continued listing criteria of NASDAQ and the Common Stock became delisted, trading of the Common
Stock could thereafter be conducted in the over-the-counter market in the so-called &#147;pink sheets&#148;
or, if available, on the NASD&#146;s Electronic Bulletin Board. In such case, an investor would likely
find it more difficult to dispose of, or to obtain accurate market quotations for, the company&#146;s
securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If the shares of Common Stock were to be delisted from NASDAQ, they may become subject to Rule
15g-9 under the Exchange Act, which imposes sales practice requirements on broker-dealers that sell
such securities to persons other than established customers and &#147;accredited investors.&#148; Application
of this Rule could adversely affect the ability and/or willingness of broker-dealers to sell the
company&#146;s securities and may adversely affect the ability of purchasers in this offering to resell
their securities in the secondary market.
</DIV>

<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We will receive no proceeds from the sale of any of or all of the shares being offered by the
selling security holders under this prospectus.
</DIV>

<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SELLING STOCKHOLDERS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The
following table sets forth as of September&nbsp;14, 2006, certain information with respect to the
beneficial ownership of the common stock as to each selling
stockholder. As of September&nbsp;14, 2006,
shares of Common Stock were outstanding.
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares which</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>may be offered</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Shares Beneficially Owned</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Pursuant to this</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Shares Beneficially</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Prior to Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Owned After Offering</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Number (a)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Percent</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:15px; text-indent:-15px">Amani Holdings LLC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">176,242</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">176,242</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:30px; text-indent:-15px">Stephen Chao</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>less than 1%</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Assumes the sale of all shares of Common Stock offered hereunder by each selling
stockholder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each selling stockholder acquired the shares of Common Stock being offered hereunder in
connection with the sale to the Company of shares of common stock of
Helios Nutrition, Ltd. in August&nbsp;2006
(the &#147;Helios Transaction&#148;). No selling stockholder has or has had any other relationship with the
Company.
</DIV>
<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PLAN OF DISTRIBUTION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each selling stockholder and any of their pledgees, assignees and successors-in-interest may,
from time to time, sell any or all of their shares of common stock on the Nasdaq or any other stock
exchange, market or trading facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. A selling stockholder may use any one or more of
the following methods when selling shares:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>block trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate the
transaction;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>purchases by a broker-dealer as principal and resale by the broker-dealer for its account;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an exchange distribution in accordance with the rules of the applicable exchange;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>privately negotiated transactions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>settlement of short sales entered into after the effective date of the
registration statement of which this prospectus is a part;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a combination of any such methods of sale;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any other method permitted pursuant to applicable law.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders may also sell shares under Rule&nbsp;144 under the Securities Act, if
available, rather than under this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Broker-dealers engaged by the selling stockholders may arrange for other broker-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the selling
stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this
prospectus, in the case of an agency transaction not in excess of a customary brokerage commission
in compliance with NASDR Rule&nbsp;2440; and in the case of a principal transaction a markup or markdown
in compliance with NASDR IM-2440.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the sale of the Common Stock or interests therein, the selling stockholders
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of Common Stock in the course of hedging the positions they assume.
The selling stockholders may also sell shares of Common Stock short and deliver
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">these securities to close out their short positions, or loan or pledge Common Stock to
broker-dealers that in turn may sell these securities. The selling stockholders may also enter
into option or other transactions with broker-dealers or other financial institutions or the
creation of one or more derivative securities which require the delivery to such broker-dealer or
other financial institution of shares offered by this prospectus, which shares such broker-dealer
or other financial institution may resell pursuant to this prospectus (as supplemented or amended
to reflect such transaction).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders and any broker-dealers or agents that are involved in selling the
shares may be deemed to be &#147;underwriters&#148; within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act. Each selling stockholder has informed the Company that it
does not have any written or oral agreement or understanding, directly or indirectly, with any
person to distribute the Common Stock. In no event shall any broker-dealer receive fees,
commissions and markups which, in the aggregate, would exceed eight percent (8%).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is required to pay certain fees and expenses incurred by the Company incident to
the registration of the shares of Common Stock. The Company has agreed to indemnify the selling
stockholders against certain losses, claims, damages and liabilities, including liabilities under
the Securities Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because selling stockholders may be deemed to be &#147;underwriters&#148; within the meaning of the
Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act.
In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule&nbsp;144
under the Securities Act may be sold under Rule&nbsp;144 rather than under this prospectus. Each
selling stockholder has advised us that they have not entered into any written or oral agreements,
understandings or arrangements with any underwriter or broker-dealer regarding the sale of the
resale shares. There is no underwriter or coordinating broker acting in connection with the
proposed sale of the resale shares by the selling stockholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have agreed to keep this prospectus effective until the earlier of (i)&nbsp;August&nbsp;2, 2008 or
(ii)&nbsp;the date on which all shares of common stock received by the selling stockholders in
connection with the Helios Transaction have been resold or may be resold by the selling
stockholders without registration and without regard to any volume limitations pursuant to Rule&nbsp;144
under the Securities Act. The resale shares will be sold only through registered or licensed
brokers or dealers if required under applicable state securities laws. In addition, in certain
states, the resale shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification requirements is
available and is complied with.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under applicable rules and regulations under the Exchange Act, any person engaged in the
distribution of the resale shares may not simultaneously engage in market making activities with
respect to the common stock for a period of two business days prior to the commencement of the
distribution. In addition, the selling stockholders will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder, including Regulation&nbsp;M, which may limit
the timing of purchases and sales of shares of the common stock by the selling stockholders or any
other person. We will make copies of this prospectus available to the selling stockholders and
have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior
to the time of the sale.
</DIV>
<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LEGAL MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of the offered shares of common stock has been passed on for us by Kelley Drye &#038;
Warren LLP of Chicago, Illinois.
</DIV>
<DIV align="left">
<A name="111"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPERTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements of Lifeway as of December&nbsp;31, 2005 and 2004 incorporated
by reference into this prospectus have been so incorporated in reliance on the report of Plante &#038;
Moran, PLLC , an independent registered public accounting firm, given on the authority of said firm
as experts in auditing and accounting.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="112"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INDEMNIFICATION AGAINST LIABILITY UNDER THE SECURITIES ACT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are permitted to indemnify to the extent now or hereafter permitted by law, each
director, officer or other authorized representative of the Company who was or is made a party or
is threatened to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he
is or was an authorized representative of the Company, against all expenses including attorneys&#146;
fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such action, suit or
proceeding.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A director of the Company shall not be personally liable to the Company or its stockholders
for monetary damages for breach of fiduciary duty as a director, provided, however that this
provision shall not eliminate or limit the liability of a director to the extent that such
elimination or liability is expressly prohibited by the Illinois Business Corporation Act of 1983
as in effect at the time of the alleged breach of duty by such director.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Securities Act may be permitted
to our directors, officers and controlling persons pursuant to any arrangement, provision or
otherwise, we have been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the payment by us of expenses
incurred or paid by any of our directors, officers or controlling persons in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, we will, unless in the opinion of our counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->9<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="1" style="border-bottom: 1px solid #000000">Page</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101">About this prospectus</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#102">Where you can find more information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#103">Incorporation of certain documents by reference</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#104">Forward looking statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">Prospectus summary</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106">Risk factors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#107">Use of proceeds</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#108">Selling stockholders</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#109">Plan of distribution</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#110">Legal matters</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#111">Experts</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#112">Indemnification against liability under the Securities Act</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">9</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="c08278exv5w1.htm">Exhibit 5.1 - Opinion</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="c08278exv23w2.htm">Exhibit 23.2 - Consent</A></FONT></TD></TR>
</TABLE>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 18pt">202,650 Shares
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 18pt">Common Stock
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROSPECTUS</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2006
</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART II</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>INFORMATION NOT REQUIRED IN PROSPECTUS</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;14. Other Expenses of Issuance and Distribution.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents the costs and expenses, payable by us in connection with the sale
of the Common Stock being registered under this registration statement. The selling stockholders
will not pay any expenses, other than commissions or discounts. All amounts are estimates except
for the SEC registration fee.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">

    <TD><DIV style="margin-left:15px; text-indent:-15px">SEC registration fee</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">154</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Legal fees and expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounting fees and expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Miscellaneous fees and expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">846</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

    <TD><DIV style="margin-left:15px; text-indent:-15px">Total:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">19,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;15. Indemnification of Directors and Officers.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are permitted to indemnify to the extent now or hereafter permitted by law, each
director, officer or other authorized representative of the Company who was or is made a party or
is threatened to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he
is or was an authorized representative of the Company, against all expenses including attorneys&#146;
fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such action, suit or
proceeding.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A director of the Company shall not be personally liable to the Company or its stockholders
for monetary damages for breach of fiduciary duty as a director, provided, however that this
provision shall not eliminate or limit the liability of a director to the extent that such
elimination or liability is expressly prohibited by the Illinois Business Corporation Act of 1983
(&#147;IBCA&#148;) as in effect at the time of the alleged breach of duty by such director.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amended and restated certificate of incorporation and the bylaws of the registrant provide
that the registrant shall indemnify its officers, directors and certain others to the extent permitted by the IBCA. Section&nbsp;8.75 of the IBCA, provides in pertinent part as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The
Company shall indemnify any person who was or is a party, or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the right of the
Company) by reason of the fact that he or she is or was a director, officer, employee or agent
of the Company, or who is or was serving at the request of the
Company as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses including attorneys&#146; fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with such action, suit or
proceeding, if such person acted in good faith and in a manner he or she reasonably believed to be
in, or not opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which he or she reasonably believed to be in or
not opposed to the best interests of the Company or, with respect to any criminal action or
proceeding, that the person had reasonable cause to believe that his or her conduct was unlawful.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The
Company shall indemnify any person who was or is a party, or is threatened to be made
a party to any threatened, pending or completed action or suit by or in the right of the
Company to procure a judgment in its favor by reason of the fact that such person is or was a
director, officer, employee or agent of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another Company, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys&#146; fees) actually and
reasonably incurred by such person in connection with the defense or settlement of such action or
suit, if such person acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the Company, and except that no indemnification shall be
made with respect to any claim, issue, or matter as to which such
person has been adjudged to be liable for negligence or misconduct in
the performance of his or her duty to the Company, unless, and only to the extent that the court in which such action
or suit was brought shall determine upon application that, despite the adjudication of liability,
but in view of all the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court shall deem proper.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;To
the extent that a director, officer or employee of the Company has
been successful, on the merits or otherwise, in the defense of any action, suit or proceeding
referred to in subsections (a)&nbsp;and (b), or in defense of
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">any claim,
or matter therein, such person shall be indemnified against expenses actually and reasonably incurred by such person in connection
therewith.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Any indemnification under subsections (a)&nbsp;and (b) shall be
made by the Company only as authorized in the specific case, upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he or she has met the applicable standard of conduct set forth in subsections
(a)&nbsp;or (b). Such determination shall be made: (1)&nbsp;the board
of directors by a majority vote of a quorum consisting of directors
who were not parties to
such action, suit or proceeding, or (2)&nbsp;if such a quorum is
not obtainable, or even if obtainable, a quorum of disinterested
directors so directs, by independent legal counsel in a written
opinion, or (3)&nbsp;by the stockholders.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;Expenses
incurred in defending a
civil or criminal action, suit or proceeding may be paid by the
Company in advance of the final
disposition of such action, suit or proceeding, as authorized by the
board of directors in the specific case, upon receipt of an undertaking by or on behalf of
the director, officer, employee or agent to repay such amount, unless it shall ultimately be
determined that he or she is entitled to be indemnified by the Company as authorized in this Section.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;The indemnification provided by the other
subsections of this Section shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors, or otherwise, both as to action in his or her
official capacity and as to action in another capacity while holding
such office, and shall continue as to a person who has ceased to be a
director, officer, or agent and shall inure to benefit of the heirs,
executors and administrators of such a person.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;The
Company shall have the power to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or who is or was serving at the request of
the Company as a director, officer, employee or agent of another
company, partnership,
joint venture, trust or other enterprise, against any liability asserted against such person and
incurred by such person in any such capacity, or arising out of his or her status as such, whether
or not the Company would have the power to indemnify such person against such liability under
the provisions of these Sections.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;If
the Company has paid indemnity or has advanced expenses to a
director, officer, employee or agent under
subsection (b)&nbsp;of this Section, the Company shall report the indemnification or advance in
writing to the stockholders with or before the notice of the next
stockholders meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;16. Exhibits</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The exhibits listed in the following table have been filed as part of this registration
statement.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Exhibit Number</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Description of Document</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&#151;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Kelley Drye &#038; Warren LLP.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&#151;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Kelley Drye &#038; Warren LLP (included in Exhibit&nbsp;5.1).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&#151;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Plante &#038; Moran, PLLC.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&#151;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Powers of Attorney (included on signature page).</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;17. Undertakings</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Undertakings Required by Regulation&nbsp;S-B, Item&nbsp;</I></B><B><I>512(a)</I></B><B><I>.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration Statement to:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>include any prospectus required by Section
10(a)(3) of the Securities Act;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>reflect in the prospectus any facts or events
which, individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->II-2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth in the
&#147;Calculation of Registration Fee&#148; table in the effective registration
statement; and</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>include any additional or changed material
information on the plan of distribution;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For determining liability under the Securities Act, to treat
each post-effective amendment as a new registration statement of the securities
offered, and the offering of such securities at that time to be the initial
bona fide offering.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To file a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Undertaking Required by Regulation&nbsp;S-B, Item&nbsp;</I></B><B><I>512(e)</I></B><B><I>.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Securities Act may be permitted
to directors, officers and controlling persons of the registrant pursuant to any arrangement,
provision or otherwise, the registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Undertakings Required by Regulation&nbsp;S-B, Item&nbsp;</I></B><B><I>512(g)</I></B><B><I>.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes that, for the purpose of determining liability
under the Securities Act to any purchaser:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;Each prospectus filed by the undersigned small business issuer pursuant to Rule&nbsp;424(b)(3)
shall be deemed to be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;Each prospectus required to be filed pursuant to Rule&nbsp;424(b)(2), (b)(5), or (b)(7) as part
of a registration statement in reliance on Rule&nbsp;430B relating to an offering made pursuant to Rule
415(a)(1)(i), (vii), or (x)&nbsp;for the purpose of providing the information required by section 10(a)
of the Securities Act shall be deemed to be part of and included in the registration statement as
of the earlier of the date such form of prospectus is first used after effectiveness or the date of
the first contract of sale of securities in the offering described in the prospectus. As provided
in Rule&nbsp;430B, for liability purposes of the issuer and any person that is at that date an
underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the
offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof. Provided, however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such effective date.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->II-3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In accordance with the requirements of the Securities Act of 1933, the registrant hereby certifies
that it has reasonable grounds to believe that it meets all of the requirements for filing on Form
S-3 for the resale of shares of common stock and authorized this Form S-3 registration statement to
be signed on its behalf by the undersigned, in the city of Morton Grove, State of Illinois, on the
14 day of September, 2006.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">LIFEWAY FOODS, INC.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Julie Smolyansky</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000" colspan="2">&nbsp;</TD>

    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Julie Smolyansky</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="white-space: nowrap">Chief Executive Officer and President</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears below hereby
constitutes and appoints Julie Smolyansky and Edward P. Smolyansky, and each of them individually,
his true and lawful agent, proxy and attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all capacities, to (i)&nbsp;act on,
sign and file with the Securities and Exchange Commission any and all amendments to the
registration statement (which includes any additional registration statement under Rule&nbsp;462(b))
together with all schedules and exhibits thereto, (ii)&nbsp;act on, sign and file with the Securities
and Exchange Commission any and all exhibits to the registration statement and any and all exhibits
and schedules thereto, (iii)&nbsp;act on, sign and file any and all such certificates, applications,
registration statements, notices, reports, instruments, agreements and other documents necessary or
appropriate in connection with the registration or qualification under foreign and state securities
laws of the securities described in the registration statement or any amendment thereto, or obtain
an exemption therefrom, in connection with the offerings described therein and (iv)&nbsp;take any and
all such actions which may be necessary or appropriate in connection therewith, granting unto such
agents, proxies and attorneys-in-fact, and each of them individually, full power and authority to
do and perform each and every act and thing necessary or appropriate to be done, as fully for all
intents and purposes as he or she might or could do in person, and hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact, any of them or any of his or her or
their substitute or substitutes may lawfully do or cause to be done by virtue hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed below by the following persons in the capacities and on the dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Signature(s)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Title(s)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/
Ludmila Smolyansky
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director and Chairman of the Board of Directors
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September 14, 2006</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Ludmila Smolyansky
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/
Julie Smolyansky
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="white-space: nowrap">President, Chief Executive Officer and
Director (Principal Executive Officer)</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September 14, 2006</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Julie Smolyansky
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="bottom"><DIV style="margin-left:0px; text-indent:-0px">/s/
Edward P. Smolyansky
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial and Accounting Officer and
Treasurer (Principal Financial Officer)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">September 14, 2006</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Edward P. Smolyansky
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/
Pol Sikar
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September 14, 2006</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Pol Sikar
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/
Renzo Bernardi
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September 14, 2006</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Renzo Bernardi
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/
Julie Oberweis
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September 14, 2006</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Julie Oberweis
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="114"></A>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INDEX TO EXHIBITS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Exhibit Number</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Description of Document</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&#151;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Kelley Drye &#038; Warren LLP.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&#151;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Kelley Drye &#038; Warren LLP (included in Exhibit&nbsp;5.1).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&#151;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Plante &#038; Moran, PLLC.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&#151;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Powers of Attorney (included on signature page).</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->II-5<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>2
<FILENAME>c08278exv5w1.htm
<DESCRIPTION>EXHIBIT 5.1 - OPINION
<TEXT>
<HTML>
<HEAD>
<TITLE>exv5w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;5.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">September
14, 2006
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Lifeway Foods, Inc.<BR>
6431 West Oakton<BR>
Morton Grove, Illinois 60053

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ladies and Gentlemen:

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are acting as counsel to Lifeway Foods, Inc., an Illinois corporation (the &#147;Company&#148;), in
connection with the registration of the resale of 202,650 shares (the &#147;Shares&#148;) of the Company&#146;s
common stock, no par value per share (the &#147;Common Stock&#148;) issued to certain stockholders pursuant
to that certain Stock Purchase Agreement, dated as of July&nbsp;27, 2006, by and among the Company,
George Economy, Amani Holdings, LLC, the holders of capital stock of Helios Nutrition, Ltd. and
Pride of Main Street Dairy, L.L.C. The Company is filing concurrently herewith a Registration
Statement on Form S-3 (the &#147;Registration Statement&#148;) with the Securities and Exchange Commission
(the &#147;Commission&#148;) pursuant to the Securities Act of 1933, as amended (the &#147;Act&#148;), with respect to
the Shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with this opinion, we have examined and relied upon copies certified or
otherwise identified to our satisfaction of: (i)&nbsp;the Registration Statement, together with exhibits
and schedules thereto, in the form filed with the Commission; (ii)&nbsp;the Company&#146;s Articles of
Incorporation, (iii)&nbsp;the Company&#146;s Amended and Restated By-Laws; and (iv)&nbsp;the minute books and
other records of corporate proceedings of the Company, as made available to us by officers of the
Company; and have reviewed such matters of law as we have deemed necessary or appropriate for the
purpose of rendering this opinion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this opinion we have assumed the authenticity of all documents submitted to us
as originals, the conformity to originals of all documents submitted to us as certified or
photostatic copies, and the authenticity of the originals of all documents submitted to us as
copies. We have also assumed the legal capacity of all natural persons, the genuineness of all
signatures on all documents examined by us, the authority of such persons signing on behalf of the
parties thereto other than the Company and the due authorization, execution and delivery of all
documents by the parties thereto other than the Company. As to certain factual matters material to
the opinion expressed herein, we have relied to the extent we deemed proper upon representations,
warranties and statements as to factual matters of officers and other representatives of the
Company. We have been advised by the Company that all of the Shares are fully paid; we have relied
upon such advice and have made no independent investigation thereof. Our opinion expressed below
is subject to the qualification that we express no opinion as to any law other than the corporate
laws of the State of Illinois and the federal laws of the United States of America. Without
limiting the foregoing, we express no opinion with respect to the
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">applicability thereto or effect of municipal laws or the rules, regulations or orders of any
municipal agencies within any such state.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based upon and subject to the foregoing qualifications, assumptions and limitations and the
further limitations set forth below, it is our opinion that the Shares have been validly issued and
are fully paid and non-assessable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hereby consent to the filing of this letter as an exhibit to the Registration Statement and
to the reference to our Firm in the Prospectus included therein under the caption &#147;Legal Matters&#148;.
In giving such consent, we do not admit that we are in the category of persons whose consent is
required under Section&nbsp;7 of the Act or the rules and regulations of the Commission promulgated
thereunder, nor do we admit that we are experts with respect to any part of the Registration
Statement or prospectus within the meaning of the term &#147;expert&#148; as defined in Section&nbsp;11 of the Act
or the rules and regulations promulgated thereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This opinion is furnished to you in connection with the filing of the Registration Statement
and is not to be used, circulated, quoted or otherwise relied upon for any other purpose.
</DIV>
<DIV align="center">
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    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">Very truly yours,</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Timothy R. Lavender</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">A Member of the Firm</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
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</DIV>



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<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>3
<FILENAME>c08278exv23w2.htm
<DESCRIPTION>EXHIBIT 23.2 - CONSENT
<TEXT>
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<DIV align="right" style="font-size: 10pt; margin-top: 6pt">Exhibit&nbsp;23.2
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">CONSENT OF INDEPENDENT REGISTERED ACCOUNTING FIRM
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hereby consent to the incorporation by reference in this Registration Statement on Form S-3
of our report dated February&nbsp;24, 2006 on the consolidated financial statements of Lifeway Foods,
Inc. appearing in the Annual Report on Form 10-KSB for the year ended December&nbsp;31, 2005 and to the
reference to us under the heading &#147;Experts&#148; in the Prospectus, which is part of this Registration
Statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">/s/ Plante &#038; Moran, PLLC<BR>
Elgin, IL<BR>
September&nbsp;14, 2006

</DIV>


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