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<SEC-DOCUMENT>0000950137-07-010543.txt : 20070725
<SEC-HEADER>0000950137-07-010543.hdr.sgml : 20070725
<ACCEPTANCE-DATETIME>20070725165505
ACCESSION NUMBER:		0000950137-07-010543
CONFORMED SUBMISSION TYPE:	424B3
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20070725
DATE AS OF CHANGE:		20070725

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:		424B3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-137317
		FILM NUMBER:		07999813

	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>424B3
<SEQUENCE>1
<FILENAME>c16753b3e424b3.htm
<DESCRIPTION>PROSPECTUS SUPPLEMENT
<TEXT>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Filed Pursuant to Rule&nbsp;424(b)(3)<BR>
Registration No.&nbsp;333-137317
</DIV>


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


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">202,650 Shares

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Common Stock

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The shares of our common stock are listed for trading on The Nasdaq Stock Market Global Market
under the symbol &#147;LWAY.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;9, 2007 the last reported sale price of our common stock on the Nasdaq was $12.80 per
share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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: 10pt; margin-top: 6pt"><I>See &#147;Risk Factors&#148; beginning on page 7 for a discussion of factors that you should consider before
buying shares of our common stock.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<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: 60pt">July 25, 2007
</DIV>


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<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;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="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 http://www.sec.gov. 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="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
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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, 2006, filed with the SEC
on April&nbsp;2, 2007;</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 amendment to annual report on Form 10-KSB/A No.&nbsp;1 for the fiscal year ended December&nbsp;31,
2006, filed with the SEC on April&nbsp;30, 2007;</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 amendment to annual report on Form 10-KSB/A No.&nbsp;2 for the fiscal year ended December&nbsp;31,
2006, filed with the SEC on April&nbsp;30, 2007;</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, 2007, filed with the SEC on
May&nbsp;15, 2007;</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;3, 2007, filed with the SEC on January&nbsp;3, 2007; 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>The description of our common stock contained in our registration statement on Form S-18,
Registration No.&nbsp;33-14329C, final prospectus dated September&nbsp;29, 1987 and filed with the SEC on
October&nbsp;5, 1987.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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="center" style="font-size: 10pt; margin-top: 18pt"><B>FORWARD-LOOKING STATEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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="2%" 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="2%" 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="2%" 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="2%" 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="2%" 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="2%" 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>


</TABLE>
</DIV>
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<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>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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

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<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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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>


<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 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="30%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<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 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">16,806,226 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">16,806,226 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 style="margin-top: 12pt">
<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="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This prospectus covers the resale by the selling security holders
named in this prospectus of up to 202,650 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>

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




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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"><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><BR>
As of July&nbsp;9, 2007, our directors, executive officers and principal stockholders beneficially own,
directly or indirectly, in the aggregate, approximately 71.6% of our outstanding Common Stock. In
particular, as of the filing date, Mrs.&nbsp;Ludmila Smolyansky, Chairperson of the Board of Directors,
beneficially holds 7,608,273 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 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><BR>
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><BR>
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><BR>
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><BR>
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><BR>
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>




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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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="center" style="font-size: 10pt; margin-top: 18pt"><B>SELLING STOCKHOLDERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth as of July&nbsp;9, 2007, certain information with respect to the
beneficial ownership of the common stock as to each selling stockholder. As of July&nbsp;9, 2007,
16,806,226 shares Common Stock were outstanding.
</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="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&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="6">&nbsp;</TD>
    <TD>&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="6">&nbsp;</TD>
    <TD>&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="left">&nbsp;</TD>
    <TD align="right">1.0</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 nowrap align="left">&nbsp;</TD>
    <TD align="right">202,650</TD>
    <TD nowrap>(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.2</TD>
    <TD nowrap>%</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: 12pt; width: 18%; border-top: 0px 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>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes the sale of all shares of Common Stock offered hereunder by each selling stockholder.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(b)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 176,242 shares owned by Amani Holdings, LLC. Stephen Chao is the CEO of Amani
Holdings, LLC. Mr.&nbsp;Chao disclaims beneficial ownership with respect to the shares held by
Amani Holdings, LLC.</TD>
</TR>

</TABLE>



<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="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="2%" 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="2%" 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="2%" 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="2%" 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="2%" 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="2%" 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="2%" 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="2%" 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="2%" 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>


</TABLE>
</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 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>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 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
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->10<!-- /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">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="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="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, 2006 and 2005 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>

<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>



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</DIV>

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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="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 nowrap align="center" colspan="2" 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">About this prospectus</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Where you can find more information</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Incorporation of certain documents by reference</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Forward looking statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Prospectus summary</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Risk factors</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Use of proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Selling stockholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Plan of distribution</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Legal matters</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Experts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Indemnification against liability under the
Securities Act</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">202,650 Shares
</DIV>


<DIV align="center" style="font-size: 10pt; 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: 60pt">July 25, 2007
</DIV>



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</DIV>

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