Basis of Presentation	3 Months Ended
Mar. 31, 2016
Notes to Financial Statements
Note 1 - Basis of Presentation	Basis of presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information, and do not include all of the information and disclosures required for complete, audited financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included. For further information, refer to the consolidated financial statements and disclosures included in the consolidated financial statements included in the Company's Annual Report on Form 10-K as of and for the year ended December 31, 2015. Certain amounts in prior-year financial statements were reclassified to conform to the current-year presentation. The results for the period are not necessarily indicative of the results to be expected for other interim periods or the full year. Principles of consolidation Our Consolidated Financial Statements include the accounts of Lifeway Foods, Inc. and all of its wholly owned subsidiaries (collectively "Lifeway" or the "Company"). All significant intercompany accounts and transactions have been eliminated. Restatement of previously issued consolidated financial statements On August 12, 2016, the Audit Committee of the Board of Directors (the "Board") of Lifeway Foods, Inc. (the "Company"), upon the recommendation of management, determined that the consolidated financial statements as of and for the three months ended March 31, 2016 presented in Lifeway's previously issued Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016 ("First Quarter Form 10-Q"), filed on May 10, 2016, should be restated to correct errors that resulted in misstatements of inventories, accounts payable, accrued expenses, costs of goods sold, selling expenses and general and administrative expense. The corrections of the errors have the effect of increasing inventory by $710, accounts payable by $108, accrued expenses by $100 and reducing refundable income taxes by $195 in the consolidated balance sheet at March 31, 2016 from the previously reported amounts; and increasing gross profit by $631, increasing general and administrative expense by $109, selling expenses by $20, income before provision for income taxes by $502 in the consolidated statements of income and comprehensive income for the three months ended March 31,2016 from the previously reported amounts. Net income and basic and diluted earnings per common share increased by $307 and $0.02 respectively from the previously reported amounts for the three months ended March 31, 2016. The inventory errors arose from errors in the manual compilation of our priced-out-physical inventory at March 31, 2016, which had the consequential effect of increasing our accrued bonuses at March 31,2016. In connection with correcting the inventory related errors we also corrected errors in our accounts payable balance that arose from inaccurate cut-off procedures.

Basis of Presentation

3 Months Ended

Mar. 31, 2016

Basis of presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information, and do not include all of the information and disclosures required for complete, audited financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included. For further information, refer to the consolidated financial statements and disclosures included in the consolidated financial statements included in the Company's Annual Report on Form 10-K as of and for the year ended December 31, 2015. Certain amounts in prior-year financial statements were reclassified to conform to the current-year presentation. The results for the period are not necessarily indicative of the results to be expected for other interim periods or the full year.

Principles of consolidation

Our Consolidated Financial Statements include the accounts of Lifeway Foods, Inc. and all of its wholly owned subsidiaries (collectively "Lifeway" or the "Company"). All significant intercompany accounts and transactions have been eliminated.

Restatement of previously issued consolidated financial statements

On August 12, 2016, the Audit Committee of the Board of Directors (the "Board") of Lifeway Foods, Inc. (the "Company"), upon the recommendation of management, determined that the consolidated financial statements as of and for the three months ended March 31, 2016 presented in Lifeway's previously issued Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016 ("First Quarter Form 10-Q"), filed on May 10, 2016, should be restated to correct errors that resulted in misstatements of inventories, accounts payable, accrued expenses, costs of goods sold, selling expenses and general and administrative expense.

The corrections of the errors have the effect of increasing inventory by $710, accounts payable by $108, accrued expenses by $100 and reducing refundable income taxes by $195 in the consolidated balance sheet at March 31, 2016 from the previously reported amounts; and increasing gross profit by $631, increasing general and administrative expense by $109, selling expenses by $20, income before provision for income taxes by $502 in the consolidated statements of income and comprehensive income for the three months ended March 31,2016 from the previously reported amounts. Net income and basic and diluted earnings per common share increased by $307 and $0.02 respectively from the previously reported amounts for the three months ended March 31, 2016.

The inventory errors arose from errors in the manual compilation of our priced-out-physical inventory at March 31, 2016, which had the consequential effect of increasing our accrued bonuses at March 31,2016. In connection with correcting the inventory related errors we also corrected errors in our accounts payable balance that arose from inaccurate cut-off procedures.