----

----

----

| (Mark One) |
|------------|

| x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------|

| o | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------------|

----

----

| Illinois                                                       | 36-3442829                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |

| Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  o   No  x                                              |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes  o   No  o  |
| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.                                                                                                        |

| Large accelerated filer o | Accelerated filer o | Non-accelerated filer  o | Smaller reporting company x |
|---------------------------|---------------------|------------------------------------|-----------------------------|

|  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  o   No  x |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                       |
| As of June 30, 2010, the issuer had 16,657,478 shares of common stock, no par value, outstanding.                                                                          |

----

----

| PART I —              | FINANCIAL INFORMATION                                                                        |   | Page(s) |
|-----------------------------|----------------------------------------------------------------------------------------------|--------|---------|
|                        |                                                                                         |   |    |
| ITEM 1.                     | FINANCIAL STATEMENTS.                                                                        |   | 3       |
|                        |                                                                                         |   |    |
|                        | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.                                                  |   | 8       |
|                        |                                                                                         |   |    |
| ITEM 2.                     | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |   | 21      |
|                        |                                                                                         |   |    |
| ITEM 3.                     | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.                                  |   | 24      |
|                        |                                                                                         |   |    |
|    ITEM 4T.       | CONTROLS AND PROCEDURES.                                                                     |   | 24      |
|                        |                                                                                         |   |    |
|                        |                                                                                         |   |    |
|                        |                                                                                         |   |    |
| PART II —             | OTHER INFORMATION                                                                            |   | 24      |
|                        |                                                                                         |   |    |
| ITEM 1.                     | LEGAL PROCEEDINGS.                                                                           |   | 24      |
|                        |                                                                                         |   |    |
|     ITEM 1A. | RISK FACTORS.                                                                                |   | 24      |
|                        |                                                                                         |   |    |
| ITEM 2.                     | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.                                 |   | 24      |
|                        |                                                                                         |   |    |
| ITEM 3.                     | DEFAULTS UPON SENIOR SECURITIES.                                                             |   | 25      |
|                        |                                                                                         |   |    |
| ITEM 4.                     | REMOVED AND RESERVED.                                                                        |   | 25      |
|                        |                                                                                         |   |    |
| ITEM 5.                     | OTHER INFORMATION.                                                                           |   | 25      |
|                        |                                                                                         |   |    |
| ITEM 6.                     | EXHIBITS.                                                                                    |   | 26      |
|                        |                                                                                         |   |    |
|                        |                                                                                         |   |    |
|                        |                                                                                         |   |    |
| SIGNATURES                  |                                                                                         |   | 27      |
|                        |                                                                                         |   |    |
| EXHIBIT INDEX               |                                                                                         |   | 28      |

----

----

|                                                                                                                                                                                                                                                                                      |   | (Unaudited) |             |   |         |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|------------------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                      |   | June 30,    |             |   | December 31, |   |
|                                                                                                                                                                                                                                                                                      |   | 2010        |             |   | 2009         |   |   | 2009 |   |
| ASSETS                                                                                                                                                                                                                                                                                    |   |        |             |   |         |   |   |   |   |
|                                                                                                                                                                                                                                                                                      |   |        |             |   |         |   |   |   |   |
| Current assets                                                                                                                                                                                                                                                                            |   |        |             |   |         |   |   |   |   |
| Cash and cash equivalents                                                                                                                                                                                                                                                                 |   | $           | 858,490          |   |         | $      | 582,766 |   |   | $ | 630,407 |   |
| Investments                                                                                                                                                                                                                                                                               |   |        | 3,411,804        |   |         |   | 4,659,161 |   |   |   | 4,392,125 |   |
| Certificates of deposits in financial institutions                                                                                                                                                                                                                                        |   |        | 550,000          |   |         |   | — |   |   |   | 652,005 |   |
| Inventories                                                                                                                                                                                                                                                                               |   |        | 4,154,719        |   |         |   | 3,817,195 |   |   |   | 3,296,976 |   |
| Accounts receivable, net of allowance for doubtful accounts and discounts                                                                                                                                                                                                                 |   |        | 7,780,512        |   |         |   | 6,064,801 |   |   |   | 5,999,738 |   |
| Prepaid expenses and other current assets                                                                                                                                                                                                                                                 |   |        | 70,130           |   |         |   | 55,669 |   |   |   | 40,697 |   |
| Other receivables                                                                                                                                                                                                                                                                         |   |        | 142,389          |   |         |   | 65,730 |   |   |   | 49,758 |   |
| Deferred income taxes                                                                                                                                                                                                                                                                     |   |        | 389,249          |   |         |   | 638,372 |   |   |   | 251,456 |   |
| Refundable income taxes                                                                                                                                                                                                                                                                   |   |        | —          |   |         |   | 778,125 |   |   |   | 1,308,978 |   |
| Total current assets                                                                                                                                                                                                                                                                      |   |        | 17,357,293       |   |         |   | 16,661,819 |   |   |   | 16,622,140 |   |
|                                                                                                                                                                                                                                                                                      |   |        |             |   |         |   |   |   |   |   |   |   |
| Property and equipment, net                                                                                                                                                                                                                                                               |   |        | 14,890,327       |   |         |   | 13,793,929 |   |   |   | 14,282,182 |   |
|                                                                                                                                                                                                                                                                                      |   |        |             |   |         |   |   |   |   |   |   |   |
| Intangible assets                                                                                                                                                                                                                                                                         |   |        |             |   |         |   |   |   |   |   |   |   |
| Goodwill and other non amortizable brand asset                                                                                                                                                                                                                                            |   |        | 13,806,091       |   |         |   | 13,806,091 |   |   |   | 13,806,091 |   |
| Other intangible assets, net of accumulated amortization of $1,949,729 and $1,260,809 at June 30, 2010 and 2009 and $1,598,208 at December 31, 2009                                                                                                                                       |   |        | 5,907,909        |   |         |   | 6,596,829 |   |   |   | 6,259,430 |   |
| Total intangible assets                                                                                                                                                                                                                                                                   |   |        | 19,714,000       |   |         |   | 20,402,920 |   |   |   | 20,065,521 |   |
|                                                                                                                                                                                                                                                                                      |   |        |             |   |         |   |   |   |   |   |   |   |
| Other assets                                                                                                                                                                                                                                                                              |   |        | 500,000          |   |         |   | 500,000 |   |   |   | 500,000 |   |
|                                                                                                                                                                                                                                                                                      |   |        |             |   |         |   |   |   |   |   |   |   |
| Total assets                                                                                                                                                                                                                                                                              |   | $           | 52,461,620       |   |         | $      | 51,358,668 |   |   | $ | 51,469,843 |   |
|                                                                                                                                                                                                                                                                                      |   |        |             |   |         |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                                      |   |        |             |   |         |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                      |   |        |             |   |         |   |   |   |   |   |   |   |
| Current liabilities                                                                                                                                                                                                                                                                       |   |        |             |   |         |   |   |   |   |   |   |   |
| Checks written in excess of bank balances                                                                                                                                                                                                                                                 |   | $           | 847,374          |   |         | $      | — |   |   | $ | 342,976 |   |
| Current maturities of notes payable                                                                                                                                                                                                                                                       |   |        | 4,431,873        |   |         |   | 6,219,788 |   |   |   | 4,842,315 |   |
| Accounts payable                                                                                                                                                                                                                                                                          |   |        | 2,259,236        |   |         |   | 2,024,313 |   |   |   | 2,764,000 |   |
| Accrued expenses                                                                                                                                                                                                                                                                          |   |        | 531,553          |   |         |   | 617,662 |   |   |   | 614,344 |   |
| Accrued income tax                                                                                                                                                                                                                                                                        |   |        | 604,323          |   |         |   | — |   |   |   | — |   |
| Total current liabilities                                                                                                                                                                                                                                                                 |   |        | 8,674,359        |   |         |   | 8,861,763 |   |   |   | 8,563,635 |   |
|                                                                                                                                                                                                                                                                                      |   |        |             |   |         |   |   |   |   |   |   |   |
| Notes payable                                                                                                                                                                                                                                                                             |   |        | 6,397,780        |   |         |   | 7,907,847 |   |   |   | 6,890,214 |   |
|                                                                                                                                                                                                                                                                                      |   |        |             |   |         |   |   |   |   |   |   |   |
| Deferred income taxes                                                                                                                                                                                                                                                                     |   |        | 3,262,795        |   |         |   | 3,593,740 |   |   |   | 3,444,664 |   |
| Total liabilities                                                                                                                                                                                                                                                                         |   |        | 18,334,934       |   |         |   | 20,363,350 |   |   |   | 18,898,513 |   |
|                                                                                                                                                                                                                                                                                      |   |        |             |   |         |   |   |   |   |   |   |   |
| Stockholders' equity                                                                                                                                                                                                                                                                      |   |        |             |   |         |   |   |   |   |   |   |   |
| Common stock, no par value; 20,000,000 shares authorized; 17,273,776 shares issued;16,657,478 shares outstanding at June 30, 2010; 17,273,776 shares issued: 16,812,955 shares outstanding at June 30, 2009; 17,273,776 shares issued; 16,778,555 shares outstanding at December 31, 2009 |   |        | 6,509,267        |   |         |   | 6,509,267 |   |   |   | 6,509,267 |   |
| Paid-in-capital                                                                                                                                                                                                                                                                           |   |        | 2,018,727        |   |         |   | 1,912,845 |   |   |   | 1,965,786 |   |
| Treasury stock, at cost                                                                                                                                                                                                                                                                   |   |        | ( 5,256,054 | )      |         |   | ( 3,353,490 | ) |   |   | ( 3,846,773 | ) |
| Retained earnings                                                                                                                                                                                                                                                                         |   |        | 30,906,602       |   |         |   | 26,463,077 |   |   |   | 27,953,409 |   |
| Accumulated other comprehensive loss, net of taxes                                                                                                                                                                                                                                        |   |        | ( 51,856    | )      |         |   | ( 536,381 | ) |   |   | ( 10,359 | ) |
| Total stockholders' equity                                                                                                                                                                                                                                                                |   |        | 34,126,686       |   |         |   | 30,995,318 |   |   |   | 32,571,330 |   |
|                                                                                                                                                                                                                                                                                      |   |        |             |   |         |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity                                                                                                                                                                                                                                                |   | $           | 52,461,620       |   |         | $      | 51,358,668 |   |   | $ | 51,469,843 |   |

----

|                                                                                      |   | (Unaudited)        |          |   | (Unaudited)      |   |           |         |   |
|-------------------------------------------------------------------------------------------|--------|--------------------|---------------|--------|------------------|--------|----------------|--------------|--------|
|                                                                                      |   | Three Months Ended |          |   | Six Months Ended |   |           | Year Ended   |   |
|                                                                                      |   | June 30,           |          |   | June 30,         |   |           | December 31, |   |
|                                                                                      |   | 2010               |          |   | 2009             |   |           | 2010         |   |   | 2009 |   |   | 2009 |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |
| Sales                                                                                     |   |               | 15,546,556    |   |             |   | 14,479,429     |         |   |   | 31,510,715 |   |   |   | 28,215,509 |   |   |   | 58,115,878 |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of goods sold                                                                        |   |               | 9,273,872     |   |             |   | 7,978,110      |         |   |   | 17,892,871 |   |   |   | 16,102,691 |   |   |   | 36,083,553 |   |
| Depreciation expense                                                                      |   |               | 281,220       |   |             |   | 353,654        |         |   |   | 684,595 |   |   |   | 570,428 |   |   |   | 1,134,404 |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Total cost of goods sold                                                                  |   |               | 9,555,092     |   |             |   | 8,331,764      |         |   |   | 18,577,466 |   |   |   | 16,673,119 |   |   |   | 37,217,957 |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross profit                                                                              |   |               | 5,991,464     |   |             |   | 6,147,665      |         |   |   | 12,933,249 |   |   |   | 11,542,390 |   |   |   | 20,897,921 |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling expenses                                                                          |   |               | 2,183,304     |   |             |   | 1,386,815      |         |   |   | 4,710,777 |   |   |   | 2,694,740 |   |   |   | 5,987,917 |   |
| General and administrative                                                                |   |               | 1,478,062     |   |             |   | 1,437,505      |         |   |   | 2,968,219 |   |   |   | 2,810,103 |   |   |   | 5,294,550 |   |
| Amortization expense                                                                      |   |               | 175,761       |   |             |   | 168,698        |         |   |   | 351,521 |   |   |   | 339,388 |   |   |   | 676,786 |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Operating Expenses                                                                  |   |               | 3,837,127     |   |             |   | 2,993,018      |         |   |   | 8,030,517 |   |   |   | 5,844,231 |   |   |   | 11,959,253 |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from operations                                                                    |   |               | 2,154,337     |   |             |   | 3,154,647      |         |   |   | 4,902,732 |   |   |   | 5,698,159 |   |   |   | 8,938,668 |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense):                                                                   |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest and dividend income                                                              |   |               | 53,176        |   |             |   | 48,506         |         |   |   | 107,684 |   |   |   | 110,717 |   |   |   | 199,047 |   |
| Rental Income                                                                             |   |               | 2,800         |   |             |   | 11,947         |         |   |   | 4,035 |   |   |   | 21,294 |   |   |   | 35,240 |   |
| Interest expense                                                                          |   |               | ( 80,164 | )      |             |   | ( 110,090 | )            |   |   | ( 176,106 | ) |   |   | ( 264,473 | ) |   |   | ( 442,703 | ) |
| Loss on Disposition of Equipment                                                          |   |               | —       |   |             |   | ( 2,825   | )            |   |   | — |   |   |   | ( 2,825 | ) |   |   | ( 2,826 | ) |
| Gain (loss) on sale of marketable securities, net                                         |   |               | 84,043        |   |             |   | 53,638         |         |   |   | 54,784 |   |   |   | ( 96,152 | ) |   |   | ( 278,474 | ) |
| Total other income (expense)                                                              |   |               | 59,855        |   |             |   | 1,176          |         |   |   | ( 9,603 | ) |   |   | ( 231,439 | ) |   |   | ( 489,716 | ) |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before provision for income taxes                                             |   |               | 2,214,192     |   |             |   | 3,155,823      |         |   |   | 4,893,129 |   |   |   | 5,466,720 |   |   |   | 8,448,952 |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes                                                                |   |               | 1,029,688     |   |             |   | 623,918        |         |   |   | 1,939,936 |   |   |   | 1,387,350 |   |   |   | 2,879,250 |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                |   | $                  | 1,184,504     |   |             | $      | 2,531,905      |         |   | $ | 2,953,193 |   |   | $ | 4,079,370 |   |   | $ | 5,569,702 |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted earnings per common share                                               |   |               | 0.07          |   |             |   | 0.15           |         |   |   | 0.18 |   |   |   | 0.24 |   |   |   | 0.33 |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of shares outstanding                                        |   |               | 16,701,539    |   |             |   | 16,823,691     |         |   |   | 16,731,549 |   |   |   | 16,823,691 |   |   |   | 16,798,164 |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| COMPREHENSIVE INCOME                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                |   | $                  | 1,184,504     |   |             | $      | 2,531,905      |         |   | $ | 2,953,193 |   |   | $ | 4,079,370 |   |   | $ | 5,569,702 |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss), net of tax:                                            |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized gains (losses) on investments (net of tax)                                     |   |               | ( 55,842 | )      |             |   | 338,409        |         |   |   | ( 9,339 | ) |   |   | ( 93,913 | ) |   |   | 325,086 |   |
| Less reclassification adjustment for (gains) losses included in net income (net of taxes) |   |               | (49,333       | )      |             |   | (31,486        | )            |   |   | (32,158 | ) |   |   | 56,441 |   |   |   | 163,464 |   |
|                                                                                      |   |               |          |   |             |   |           |         |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income                                                                      |   | $                  | 1,079,329     |   |             | $      | 2,838,828      |         |   | $ | 2,911,696 |   |   | $ | 4,041,898 |   |   | $ | 6,058,252 |   |

----

|                                                                         |   | Common Stock, No Par Value20,000,000 Shares |       |   | # of Shares |   |           |     |   |   |           |   |   |    |      |   |     |   |      | AccumulatedOther |   |   |             |   |
|------------------------------------------------------------------------------|--------|---------------------------------------------|------------|--------|------------------|--------|----------------|----------|--------|--------|----------------|--------|--------|---------|-----------|--------|----------|--------|-----------|------------------|--------|--------|------------------|--------|
|                                                                         |   |  Authorized                            |       |   | of               |   |           |     |   |   |           |   |   |    |      |   |     |   |      | Comprehensive    |   |   |             |
|                                                                         |   | # of Shares                                 |       |   | # of Shares      |   |           | Treasury |   |   | Common         |   |   | Paid In |      |   | Treasury |   |      | Retained         |   |   | Income (Loss),   |   |   |   |
|                                                                         |   | Issued                                      |       |   | Outstanding      |   |           | Stock    |   |   | Stock          |   |   | Capital |      |   | Stock    |   |      | Earnings         |   |   | Net of Tax       |   |   | Total |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |
| Balances at December 31, 2008                                                |   |                                        | 17,273,776 |   |             |   | 16,724,467     |     |   |   | 549,309        |   |   | $       | 6,509,267 |   |     | $      | 1,202,009 |             |   | $      | (3,302,025       | )      |   | $ | 22,383,707 |   |   | $ | (498,909 | ) |   | $ | 26,294,049 |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Redemption of stock                                                          |   |                                        | —    |   |             |   | ( 87,991  | )        |   |   | 87,991         |   |   |    | —   |   |     |   | —   |             |   |   | ( 905,607   | )      |   |   | — |   |   |   | — |   |   |   | ( 905,607 | ) |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of treasury stock for compensation                                  |   |                                        | —    |   |             |   | 13,132         |     |   |   | ( 13,132  | )      |   |    | —   |   |     |   | 119,039   |             |   |   | 25,597           |   |   |   | — |   |   |   | — |   |   |   | 144,636 |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of treasury stock for Fresh Made acquisition                        |   |                                        | —    |   |             |   | 128,947        |     |   |   | ( 128,947 | )      |   |    | —   |   |     |   | 644,738   |             |   |   | 335,262          |   |   |   | — |   |   |   | — |   |   |   | 980,000 |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss):                                           |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized gains on securities, net of taxes and reclassification adjustment |   |                                        | —    |   |             |   | —        |     |   |   | —        |   |   |    | —   |   |     |   | —   |             |   |   | —          |   |   |   | — |   |   |   | 488,550 |   |   |   | 488,550 |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income for the year endedDecember 31, 2009                               |   |                                        | —    |   |             |   | —        |     |   |   | —        |   |   |    | —   |   |     |   | —   |             |   |   | —          |   |   |   | 5,569,702 |   |   |   | — |   |   |   | 5,569,702 |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances at December 31, 2009                                                |   |                                        | 17,273,776 |   |             |   | 16,778,555     |     |   |   | 495,221        |   |   | $       | 6,509,267 |   |     | $      | 1,965,786 |             |   | $      | (3,846,773       | )      |   | $ | 27,953,409 |   |   | $ | (10,359 | ) |   | $ | 32,571,330 |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances at January 1, 2009                                                  |   |                                        | 17,273,776 |   |             |   | 16,724,467     |     |   |   | 549,309        |   |   | $       | 6,509,267 |   |     | $      | 1,202,009 |             |   | $      | (3,302,025       | )      |   | $ | 22,383,707 |   |   | $ | (498,909 | ) |   | $ | 26,294,049 |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Redemption of stock                                                          |   |                                        | —    |   |             |   | ( 48,341  | )        |   |   | 48,341         |   |   |    | —   |   |     |   | —   |             |   |   | ( 402,947   | )      |   |   | — |   |   |   | — |   |   |   | ( 402,947 | ) |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of treasury stock for compensation                                  |   |                                        | —    |   |             |   | 7,882          |     |   |   | ( 7,882   | )      |   |    | —   |   |     |   | 66,098    |             |   |   | 16,220           |   |   |   | — |   |   |   | — |   |   |   | 82,318 |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of treasury stock for Fresh Made acquisition                        |   |                                        | —    |   |             |   | 128,947        |     |   |   | ( 128,947 | )      |   |    | —   |   |     |   | 644,738   |             |   |   | 335,262          |   |   |   | — |   |   |   | — |   |   |   | 980,000 |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss):                                           |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized gains on securities, net of taxes and reclassification adjustment |   |                                        | —    |   |             |   | —        |     |   |   | —        |   |   |    | —   |   |     |   | —   |             |   |   | —          |   |   |   | — |   |   |   | ( 37,472 | ) |   |   | (37,472 | ) |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income for the six months ended June 30, 2009                            |   |                                        | —    |   |             |   | —        |     |   |   | —        |   |   |    | —   |   |     |   | —   |             |   |   | —          |   |   |   | 4,079,370 |   |   |   | — |   |   |   | 4,079,370 |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances at June 30, 2009                                                    |   |                                        | 17,273,776 |   |             |   | 16,812,955     |     |   |   | 460,821        |   |   | $       | 6,509,267 |   |     | $      | 1,912,845 |             |   | $      | (3,353,490       | )      |   | $ | 26,463,077 |   |   | $ | (536,381 | ) |   | $ | 30,995,318 |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances at January 1, 2010                                                  |   |                                        | 17,273,776 |   |             |   | 16,778,555     |     |   |   | 495,221        |   |   | $       | 6,509,267 |   |     | $      | 1,965,786 |             |   | $      | (3,846,773       | )      |   | $ | 27,953,409 |   |   | $ | (10,359 | ) |   | $ | 32,571,330 |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Redemption of stock                                                          |   |                                        | —    |   |             |   | ( 129,841 | )        |   |   | 129,841        |   |   |    | —   |   |     |   | —   |             |   |   | ( 1,418,657 | )      |   |   | — |   |   |   | — |   |   |   | ( 1,418,657 | ) |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of treasury stock for compensation                                  |   |                                        | —    |   |             |   | 8,764          |     |   |   | ( 8,764   | )      |   |    | —   |   |     |   | 52,941    |             |   |   | 9,376            |   |   |   | — |   |   |   | — |   |   |   | 62,317 |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss):                                           |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized gains on securities, net of taxes and reclassification adjustment |   |                                        | —    |   |             |   | —        |     |   |   | —        |   |   |    | —   |   |     |   | —   |             |   |   | —          |   |   |   | — |   |   |   | ( 41,497 | ) |   |   | ( 41,497 | ) |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |
| Net income for the six months ended June 30, 2010                            |   |                                        | —    |   |             |   | —        |     |   |   | —        |   |   |    | —   |   |     |   | —   |             |   |   | —          |   |   |   | 2,953,193 |   |   |   | — |   |   |   | 2,953,193 |   |
|                                                                         |   |                                        |       |   |             |   |           |     |   |   |           |   |   |    |      |   |     |   |      |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances at June 30, 2010                                                    |   |                                        | 17,273,776 |   |             |   | 16,657,478     |     |   |   | 616,298        |   |   | $       | 6,509,267 |   |     | $      | 2,018,727 |             |   | $      | (5,256,054       | )      |   | $ | 30,906,602 |   |   | $ | (51,856 | ) |   | $ | 34,126,686 |   |

----

|                                                                                                 |   | (Unaudited) |             |   |         |   |
|------------------------------------------------------------------------------------------------------|--------|-------------|------------------|--------|--------------|--------|
|                                                                                                 |   | June 30,    |             |   | December 31, |   |
|                                                                                                 |   | 2010        |             |   | 2009         |   |   | 2009 |   |
|                                                                                                 |   |        |             |   |         |   |   |   |   |
| Cash flows from operating activities:                                                                |   |        |             |   |         |   |   |   |   |
| Net income                                                                                           |   | $           | 2,953,193        |   |         | $      | 4,079,370 |   |   | $ | 5,569,702 |   |
| Adjustments to reconcile net income to net cash flows from operating activities, net of acquisition: |   |        |             |   |         |   |   |   |   |   |   |   |
| Depreciation and amortization                                                                        |   |        | 1,036,116        |   |         |   | 909,816 |   |   |   | 1,811,190 |   |
| (Gain) Loss on sale of investments, net                                                              |   |        | ( 54,784    | )      |         |   | 96,152 |   |   |   | 278,474 |   |
| Loss on disposition of assets                                                                        |   |        | —          |   |         |   | 2,825 |   |   |   | 2,826 |   |
| Deferred income taxes                                                                                |   |        | ( 290,465   | )      |         |   | 179,796 |   |   |   | 389,754 |   |
| Treasury stock issued for compensation                                                               |   |        | 62,317           |   |         |   | 82,318 |   |   |   | 144,636 |   |
| Decrease in allowance for doubtful accounts                                                          |   |        | —          |   |         |   | — |   |   |   | ( 75,000 | ) |
| (Increase) decrease in operating assets:                                                             |   |        |             |   |         |   |   |   |   |   |   |   |
| Accounts receivable                                                                                  |   |        | ( 1,780,774 | )      |         |   | ( 752,978 | ) |   |   | ( 612,915 | ) |
| Other receivables                                                                                    |   |        | ( 92,631    | )      |         |   | ( 25,416 | ) |   |   | ( 7,758 | ) |
| Inventories                                                                                          |   |        | ( 857,743   | )      |         |   | ( 346,800 | ) |   |   | 173,419 |   |
| Refundable income taxes                                                                              |   |        | 1,308,978        |   |         |   | ( 435,205 | ) |   |   | ( 475,635 | ) |
| Prepaid expenses and other current assets                                                            |   |        | ( 29,433    | )      |         |   | 5,029 |   |   |   | 9,506 |   |
| Increase (decrease) in operating liabilities:                                                        |   |        |             |   |         |   |   |   |   |   |   |   |
| Accounts payable                                                                                     |   |        | ( 504,764   | )      |         |   | ( 440,911 | ) |   |   | 298,800 |   |
| Accrued expenses                                                                                     |   |        | ( 82,791    | )      |         |   | 36,719 |   |   |   | 96,062 |   |
| Accrued income taxes                                                                                 |   |        | 604,323          |   |         |   | — |   |   |   | — |   |
| Net cash provided by operating activities                                                            |   |        | 2,271,542        |   |         |   | 3,390,715 |   |   |   | 7,603,061 |   |
|                                                                                                 |   |        |             |   |         |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                                                |   |        |             |   |         |   |   |   |   |   |   |   |
| Purchases of investments                                                                             |   |        | ( 538,852   | )      |         |   | ( 3,342,662 | ) |   |   | ( 6,156,682 | ) |
| Proceeds from sale of investments                                                                    |   |        | 1,502,724        |   |         |   | 4,127,666 |   |   |   | 6,928,321 |   |
| Proceeds from redemption of certificates of deposit                                                  |   |        | 102,545          |   |         |   | — |   |   |   | — |   |
| Purchases of property and equipment                                                                  |   |        | ( 1,292,741 | )      |         |   | ( 714,052 | ) |   |   | ( 1,766,280 | ) |
| Acquisition of Fresh Made, net of cash acquired                                                      |   |        | —          |   |         |   | ( 10,498,224 | ) |   |   | ( 11,042,546 | ) |
| Net cash used in investing activities                                                                |   |        | ( 226,324   | )      |         |   | ( 10,427,272 | ) |   |   | ( 12,037,187 | ) |
|                                                                                                 |   |        |             |   |         |   |   |   |   |   |   |   |
| Cash flows from financing activities:                                                                |   |        |             |   |         |   |   |   |   |   |   |   |
| Proceeds of note payable                                                                             |   |        | 250,000          |   |         |   | 9,342,085 |   |   |   | 9,353,504 |   |
| Checks written in excess of bank balances                                                            |   |        | 504,398          |   |         |   | — |   |   |   | 342,976 |   |
| Purchases of treasury stock                                                                          |   |        | ( 1,418,657 | )      |         |   | ( 402,947 | ) |   |   | ( 905,607 | ) |
| Repayment of notes payable                                                                           |   |        | ( 1,152,876 | )      |         |   | ( 1,597,063 | ) |   |   | ( 4,003,588 | ) |
| Net cash (used in) provided by in financing activities                                               |   |        | ( 1,817,135      | )      |         |   | 7,342,075 |   |   |   | 4,787,285 |   |
|                                                                                                 |   |        |             |   |         |   |   |   |   |   |   |   |
| Net increase in cash and cash equivalents                                                            |   |        | 228,083          |   |         |   | 305,518 |   |   |   | 353,159 |   |
|                                                                                                 |   |        |             |   |         |   |   |   |   |   |   |   |
| Cash and cash equivalents at the beginning of the period                                             |   |        | 630,407          |   |         |   | 277,248 |   |   |   | 277,248 |   |
|                                                                                                 |   |        |             |   |         |   |   |   |   |   |   |   |
| Cash and cash equivalents at the end of the period                                                   |   | $           | 858,490          |   |         | $      | 582,766 |   |   | $ | 630,407 |   |

----

----

| Category                   |   | Years        |
|----------------------------|--------|--------------|
| Buildings and improvements |   | 31 and 39    |
| Machinery and equipment    |   | 5 – 12 |
| Office equipment           |   | 5 – 7  |
| Vehicles                   |   | 5            |

----

| Category                                              |   | Years |
|-------------------------------------------------------|--------|-------|
| Recipes                                               |   | 4     |
| Customer lists and other customer related intangibles |   | 7-10  |
| Lease agreement                                       |   | 7     |
| Trade names                                           |   | 15    |
| Formula                                               |   | 10    |
| Customer relationships                                |   | 12    |

----

----

| Cash and cash equivalents                                                                             |   | $      | 226,000          |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|------------------|--------|
| Accounts receivable (contractual amounts totaling $545,958)                                           |   |   | 546,000          |   |
| Other current assets                                                                                  |   |   | 361,000          |   |
| Building and other fixed assets                                                                       |   |   | 2,617,000        |   |
| Customer list                                                                                         |   |   | 4,000,000        |   |
| Non amortizable goodwill and brand asset                                                              |   |   | 8,391,000        |   |
| Current liabilities                                                                                   |   |   | ( 461,000   | )      |
| Deferred tax liability associated with purchase adjustments                                           |   |   | ( 1,652,000 | )      |
|        Total fair value of assets acquired and liabilities assumed |   | $      | 14,028,000       |   |

|               |   | For the Six Months EndedJune 30, 2009 |       |   | For the Year EndedDecember 31, 2009 |   |
|--------------------|--------|---------------------------------------|------------|--------|-------------------------------------|--------|
| Gross revenue      |   | $                                     | 29,331,092 |   |                                | $      | 59,231,461 |   |
|               |   |                                  |       |   |                                |   |   |   |
| Net income         |   | $                                     | 4,128,139  |   |                                | $      | 5,618,471 |   |
|               |   |                                  |       |   |                                |   |   |   |
| Earnings per share |   | $                                     | 0.25       |   |                                | $      | 0.33 |   |

|                                                  |   | June 30, 2010 |      |   | June 30, 2009            |   |      | December 31, 2009 |   |
|-------------------------------------------------------|--------|---------------|-----------|--------|--------------------------|--------|-----------|-------------------|--------|
|                                                  |   | Cost          |      |   | Accumulated Amortization |   |      | Cost              |   |   | Accumulated Amortization |   |   | Cost |   |   | Accumulated Amortization |   |
| Recipes                                               |   | $             | 43,600    |   |                     | $      | 43,600    |              |   | $ | 43,600 |   |   | $ | 43,600 |   |   | $ | 43,600 |   |   | $ | 43,600 |   |
| Customer lists and other customer related intangibles |   |          | 4,305,200 |   |                     |   | 803,744   |              |   |   | 4,305,200 |   |   |   | 385,166 |   |   |   | 4,305,200 |   |   |   | 587,393 |   |
| Lease acquisition                                     |   |          | 87,200    |   |                     |   | 73,707    |              |   |   | 87,200 |   |   |   | 61,245 |   |   |   | 87,200 |   |   |   | 67,473 |   |
| Other                                                 |   |          | 6,638     |   |                     |   | 6,638     |              |   |   | 6,638 |   |   |   | 6,638 |   |   |   | 6,638 |   |   |   | 6,638 |   |
| Customer relationship                                 |   |          | 985,000   |   |                     |   | 321,490   |              |   |   | 985,000 |   |   |   | 239,410 |   |   |   | 985,000 |   |   |   | 280,454 |   |
| Contractual backlog                                   |   |          | 12,000    |   |                     |   | 12,000    |              |   |   | 12,000 |   |   |   | 12,000 |   |   |   | 12,000 |   |   |   | 12,000 |   |
| Trade names                                           |   |          | 1,980,000 |   |                     |   | 517,000   |              |   |   | 1,980,000 |   |   |   | 385,000 |   |   |   | 1,980,000 |   |   |   | 451,000 |   |
| Formula                                               |   |          | 438,000   |   |                     |   | 171,550   |              |   |   | 438,000 |   |   |   | 127,750 |   |   |   | 438,000 |   |   |   | 149,650 |   |
|                                                  |   | $             | 7,857,638 |   |                     | $      | 1,949,729 |              |   | $ | 7,857,638 |   |   | $ | 1,260,809 |   |   | $ | 7,857,638 |   |   | $ | 1,598,208 |   |

----

| 2011                                                                                                                                                       |   | $      | 703,040   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|
| 2012                                                                                                                                                       |   |   | 690,583   |   |
| 2013                                                                                                                                                       |   |   | 690,583   |   |
|                          2014 |   |   | 676,958   |   |
| 2015                                                                                                                                                       |   |   | 657,883   |   |
| Thereafter                                                                                                                                                 |   |   | 2,488,862 |   |
|                                                                                                                                                       |   | $      | 5,907,909 |   |

| June 30, 2010                 |   | Cost   |      |   | UnrealizedGains |   |    | UnrealizedLosses |   |   | FairValue      |   |
|-------------------------------|--------|--------|-----------|--------|-----------------|--------|---------|------------------|--------|--------|----------------|--------|
|                          |   |   |      |   |            |   |    |             |   |   |           |   |
| Equities                      |   | $      | 653,068   |   |            | $      | 26,400  |             |   | $      | ( 117,892 | )      |   | $ | 561,576 |   |
| Mutual Funds                  |   |   | 206,961   |   |            |   | 3,056   |             |   |   | ( 7,853   | )      |   |   | 202,164 |   |
| Preferred Securities          |   |   | 272,629   |   |            |   | 6,650   |             |   |   | ( 64,789  | )      |   |   | 214,490 |   |
| Corporate Bonds               |   |   | 1,751,719 |   |            |   | 89,355  |             |   |   | ( 30,140  | )      |   |   | 1,810,934 |   |
| Government Agency Obligations |   |   | 615,767   |   |            |   | 8,625   |             |   |   | ( 1,752   | )      |   |   | 622,640 |   |
| Total                         |   | $      | 3,500,144 |   |            | $      | 134,086 |             |   | $      | ( 222,426 | )      |   | $ | 3,411,804 |   |

| June 30, 2009                 |   | Cost   |      |   | UnrealizedGains |   |   | UnrealizedLosses |   |   | FairValue      |   |
|-------------------------------|--------|--------|-----------|--------|-----------------|--------|--------|------------------|--------|--------|----------------|--------|
|                          |   |   |      |   |            |   |   |             |   |   |           |   |
| Equities                      |   | $      | 1,536,976 |   |            | $      | 57,665 |             |   | $      | ( 178,926 | )      |   | $ | 1,415,715 |   |
| Mutual Funds                  |   |   | 617,082   |   |            |   | 842    |             |   |   | ( 267,818 | )      |   |   | 350,106 |   |
| Preferred Securities          |   |   | 680,527   |   |            |   | 14,361 |             |   |   | ( 207,218 | )      |   |   | 487,670 |   |
| Corporate Bonds               |   |   | 506,165   |   |            |   | 5,836  |             |   |   | ( 7,781   | )      |   |   | 504,220 |   |
| Government Agency Obligations |   |   | 1,889,963 |   |            |   | 15,201 |             |   |   | ( 3,714   | )      |   |   | 1,901,450 |   |
| Total                         |   | $      | 5,230,713 |   |            | $      | 93,905 |             |   | $      | ( 665,457 | )      |   | $ | 4,659,161 |   |

----

| December 31, 2009             |   | Cost   |      |   | UnrealizedGains |   |    | UnrealizedLosses |   |   | FairValue    |   |
|-------------------------------|--------|--------|-----------|--------|-----------------|--------|---------|------------------|--------|--------|--------------|--------|
|                          |   |   |      |   |            |   |    |             |   |   |         |   |
| Equities                      |   | $      | 1,385,524 |   |            | $      | 177,024 |             |   | $      | (128,547     | )      |   | $ | 1,434,001 |   |
| Mutual Funds                  |   |   | 172,543   |   |            |   | 7,453   |             |   |   | ( 22,833     | )      |   |   | 157,163 |   |
| Preferred Securities          |   |   | 388,705   |   |            |   | 6,700   |             |   |   | ( 95,753     | )      |   |   | 299,652 |   |
| Corporate Bonds               |   |   | 1,569,245 |   |            |   | 65,226  |             |   |   | ( 6,772 | )      |   |   | 1,627,699 |   |
| Government Agency Obligations |   |   | 893,755   |   |            |   | 2,989   |             |   |   | ( 23,134     | )      |   |   | 873,610 |   |
| Total                         |   | $      | 4,409,772 |   |            | $      | 259,392 |             |   | $      | (277,039     | )      |   | $ | 4,392,125 |   |

|                          |   | Less Than 12 Months |    |   | 12 Months or Greater |   |          | Total      |   |
|-------------------------------|--------|---------------------|---------|--------|----------------------|--------|---------------|------------|--------|
| June 30, 2010                 |   | Fair Value          |    |   | Unrealized Losses    |   |          | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                          |   |                |    |   |                 |   |          |       |   |   |   |   |   |   |   |   |   |   |
| Equities                      |   | $                   | 58,222  |   |                 | $      | ( 10,953 | )          |   | $ | 154,154 |   |   | $ | (106,939 | ) |   | $ | 212,376 |   |   | $ | ( 117,892 | ) |
| Mutual Funds                  |   |                | 278     |   |                 |   | ( 4      | )          |   |   | 99,486 |   |   |   | ( 7,849 | ) |   |   | 99,764 |   |   |   | ( 7,853 | ) |
| Preferred Securities          |   |                | — |   |                 |   | —       |       |   |   | 193,090 |   |   |   | ( 64,789 | ) |   |   | 193,090 |   |   |   | ( 64,789 | ) |
| Corporate Bonds               |   |                | 499,285 |   |                 |   | ( 26,989      | )          |   |   | 181,076 |   |   |   | ( 3,151 | ) |   |   | 680,361 |   |   |   | ( 30,140 | ) |
| Government Agency Obligations |   |                | — |   |                 |   | —       |       |   |   | 84,775 |   |   |   | ( 1,752 | ) |   |   | 84,775 |   |   |   | ( 1,752 | ) |
|                          |   | $                   | 557,785 |   |                 | $      | ( 37,946      | )          |   | $ | 712,581 |   |   | $ | (184,480 | ) |   | $ | 1,270,366 |   |   | $ | (222,426 | ) |

----

|                               |   | Less Than 12 Months |    |   | 12 Months or Greater |   |           | Total      |   |
|------------------------------------|--------|---------------------|---------|--------|----------------------|--------|----------------|------------|--------|
| June 30, 2009                      |   | Fair Value          |    |   | Unrealized Losses    |   |           | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                               |   |                |    |   |                 |   |           |       |   |   |   |   |   |   |   |   |   |   |
| Equities                           |   | $                   | 537,047 |   |                 | $      | ( 113,772 | )          |   | $ | 270,700 |   |   | $ | ( 65,154 | ) |   | $ | 807,747 |   |   | $ | ( 178,926 | ) |
| Mutual Funds                       |   |                | 95,391  |   |                 |   | ( 33,238  | )          |   |   | 248,327 |   |   |   | (234,580 | ) |   |   | 343,718 |   |   |   | ( 267,818 | ) |
| Preferred Securities               |   |                | 21,527  |   |                 |   | ( 3,368   | )          |   |   | 365,740 |   |   |   | (203,850 | ) |   |   | 387,267 |   |   |   | ( 207,218 | ) |
| Corporate Bonds                    |   |                | — |   |                 |   | —        |       |   |   | 212,531 |   |   |   | ( 7,781 | ) |   |   | 212,531 |   |   |   | ( 7,781 | ) |
| Government Agency Obligations |   |                | — |   |                 |   | —        |       |   |   | 202,046 |   |   |   | ( 3,714 | ) |   |   | 202,046 |   |   |   | ( 3,714 | ) |
|                               |   | $                   | 653,965 |   |                 | $      | ( 150,378 | )          |   | $ | 1,299,344 |   |   | $ | (515,079 | ) |   | $ | 1,953,309 |   |   | $ | ( 665,457 | ) |

|                               |   | Less Than 12 Months |    |   | 12 Months or Greater |   |          | Total      |   |
|------------------------------------|--------|---------------------|---------|--------|----------------------|--------|---------------|------------|--------|
| December 31, 2009                  |   | Fair Value          |    |   | Unrealized Losses    |   |          | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                               |   |                |    |   |                 |   |          |       |   |   |   |   |   |   |   |   |   |   |
| Equities                           |   | $                   | 128,959 |   |                 | $      | ( 27,142 | )          |   | $ | 230,502 |   |   | $ | ( 101,405 | ) |   | $ | 359,461 |   |   | $ | ( 128,547 | ) |
| Mutual Funds                       |   |                | 1,694   |   |                 |   | ( 321    | )          |   |   | 131,870 |   |   |   | ( 22,512 | ) |   |   | 133,564 |   |   |   | ( 22,833 | ) |
| Preferred Securities               |   |                | — |   |                 |   | —       |       |   |   | 278,202 |   |   |   | ( 95,753 | ) |   |   | 278,202 |   |   |   | ( 95,753 | ) |
| Corporate Bonds                    |   |                | 178,874 |   |                 |   | ( 3,176  | )          |   |   | 124,395 |   |   |   | ( 3,596 | ) |   |   | 303,269 |   |   |   | ( 6,772 | ) |
| Government Agency Obligations |   |                | 564,941 |   |                 |   | ( 20,096 | )          |   |   | 161,466 |   |   |   | ( 3,038 | ) |   |   | 726,407 |   |   |   | ( 23,134 | ) |
|                               |   | $                   | 874,468 |   |                 | $      | ( 50,735 | )          |   | $ | 926,435 |   |   | $ | ( 226,304 | ) |   | $ | 1,800,903 |   |   | $ | ( 277,039 | ) |

----

|                |   | June 30, |      |   | December 31, |   |
|---------------------|--------|----------|-----------|--------|--------------|--------|
|                |   | 2010     |      |   | 2009         |   |   | 2009 |   |
| Finished goods      |   | $        | 1,405,538 |   |         | $      | 1,500,090 |   |   | $ | 1,101,885 |   |
| Production supplies |   |     | 1,657,546 |   |         |   | 1,704,240 |   |   |   | 1,367,457 |   |
| Raw materials       |   |     | 1,091,635 |   |         |   | 612,865 |   |   |   | 827,634 |   |
| Total inventories   |   | $        | 4,154,719 |   |         | $      | 3,817,195 |   |   | $ | 3,296,976 |   |

|                          |   | June 30, |       |   | December 31 |   |
|-------------------------------|--------|----------|------------|--------|-------------|--------|
|                          |   | 2010     |       |   | 2009        |   |   | 2009 |   |
| Land                          |   | $        | 1,178,160  |   |        | $      | 1,178,160 |   |   | $ | 1,178,160 |   |
| Buildings and improvements    |   |     | 11,051,821 |   |        |   | 9,769,348 |   |   |   | 10,380,393 |   |
| Machinery and equipment       |   |     | 13,182,669 |   |        |   | 12,213,069 |   |   |   | 12,525,241 |   |
| Vehicles                      |   |     | 963,245    |   |        |   | 961,245 |   |   |   | 961,245 |   |
| Office equipment              |   |     | 299,110    |   |        |   | 208,213 |   |   |   | 255,616 |   |
| Construction in process       |   |     | —    |   |        |   | — |   |   |   | 81,608 |   |
|                          |   |     | 26,675,005 |   |        |   | 24,330,035 |   |   |   | 25,382,263 |   |
| Less accumulated depreciation |   |     | 11,784,676 |   |        |   | 10,536,106 |   |   |   | 11,100,081 |   |
| Total property and equipment  |   | $        | 14,890,327 |   |        | $      | 13,793,929 |   |   | $ | 14,282,182 |   |

|                              |   | June 30, |    |   | December 31, |   |
|-----------------------------------|--------|----------|---------|--------|--------------|--------|
|                              |   | 2010     |    |   | 2009         |   |   | 2009 |   |
| Accrued payroll and payroll taxes |   | $        | 161,175 |   |         | $      | 219,842 |   |   | $ | 191,744 |   |
| Accrued property tax              |   |     | 299,254 |   |         |   | 300,446 |   |   |   | 306,707 |   |
| Other                             |   |     | 71,124  |   |         |   | 97,374 |   |   |   | 115,893 |   |
|                              |   | $        | 531,553 |   |         | $      | 617,662 |   |   | $ | 614,344 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                |   | June 30, |       |   | December 31 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|------------|--------|-------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                |   | 2010     |       |   | 2009        |   |   | 2009 |   |
|                                                                                                                                                                                                                                                                                                                                                                |   |     |       |   |        |   |   |   |   |
| Note payable to Private Bank in monthly installments of $42,222, plus variable interest rate, currently at 2.756%, with a balloon payment of $5,066,667 due February 6, 2014.  Collateralized by substantially all assets of the Company.                                                                                                                 |   | $        | 6,904,444  |   |        | $      | 7,388,889 |   |   | $ | 7,135,556 |   |
|                                                                                                                                                                                                                                                                                                                                                                |   |     |       |   |        |   |   |   |   |   |   |   |
| Line of credit with Private Bank at variable interest rate, currently at 2.781%, due on February 6, 2011.  Collateralized by substantially all assets of the Company.                                                                                                                                                                                     |   |     | 750,000    |   |        |   | 2,400,000 |   |   |   | 500,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                |   |     |       |   |        |   |   |   |   |   |   |   |
| Line of credit with Morgan Stanley at variable interest rate, currently at 2.23% due on demand.  Collateralized by investments.                                                                                                                                                                                                                           |   |     | 2,303,090  |   |        |   | 1,945,621 |   |   |   | 2,468,151 |   |
|                                                                                                                                                                                                                                                                                                                                                                |   |     |       |   |        |   |   |   |   |   |   |   |
| Notes payable to Ilya Mandel & Michael Edelson, subordinated to Private Bank, payable in quarterly installments of $341,875, plus interest at the floating rate per annum (3.25% at June 30, 2010) due August 1, 2010, as amended and restated.  Collateralized by a mortgage on specific real estate and shares of the Company’s common stock. |   |     | 872,119    |   |        |   | 2,393,125 |   |   |   | 1,628,822 |   |
| Total notes payable                                                                                                                                                                                                                                                                                                                                                 |   |     | 10,829,653 |   |        |   | 14,127,635 |   |   |   | 11,732,529 |   |
| Less current maturities                                                                                                                                                                                                                                                                                                                                             |   |     | 4,431,873  |   |        |   | 6,219,788 |   |   |   | 4,842,315 |   |
| Total long-term portion                                                                                                                                                                                                                                                                                                                                             |   | $        | 6,397,780  |   |        | $      | 7,907,847 |   |   | $ | 6,890,214 |   |

| For the Period Ended June 30, |   |   |
|-------------------------------|--------|--------|
|                          |   |   |   |
| 2011                          |   | $      | 4,431,873 |   |
| 2012                          |   |   | 506,664 |   |
| 2013                          |   |   | 506,664 |   |
| 2014                          |   |   | 5,384,452 |   |
| Total                         |   | $      | 10,829,653 |   |

----

|                       |   |                     |           |   | For the      |   |
|----------------------------|--------|--------------------------|----------------|--------|--------------|--------|
|                       |   | For the Six Months Ended |           |   | Year Ended   |   |
|                       |   | June 30,                 |           |   | December 31, |   |
|                       |   | 2010                     |           |   | 2009         |   |   | 2009 |   |
| Current:                   |   |                     |           |   |         |   |   |   |   |
| Federal                    |   | $                        | 1,759,484      |   |         | $      | 974,423 |   |   | $ | 2,045,904 |   |
| State and local            |   |                     | 470,917        |   |         |   | 233,131 |   |   |   | 443,592 |   |
| Total current              |   |                     | 2,230,401      |   |         |   | 1,207,555 |   |   |   | 2,489,496 |   |
| Deferred                   |   |                     | ( 290,465 | )      |         |   | 179,796 |   |   |   | 389,754 |   |
| Provision for income taxes |   | $                        | 1,939,936      |   |         | $      | 1,387,350 |   |   | $ | 2,879,250 |   |

|                                                           |   |                     |          |   | For the      |   |
|----------------------------------------------------------------|--------|--------------------------|---------------|--------|--------------|--------|
|                                                           |   | For the Six Months Ended |          |   | Year Ended   |   |
|                                                           |   | June 30,                 |          |   | December 31, |   |
|                                                           |   | 2010                     |          |   | 2009         |   |   | 2009 |   |
| Federal income tax expense computed at the statutory rate |   | $                        | 1,663,664     |   |         | $      | 1,858,685 |   |   | $ | 2,872,644 |   |
| State and local tax expense, net                               |   |                     | 234,870       |   |         |   | 262,403 |   |   |   | 405,550 |   |
| Permanent differences                                          |   |                     | ( 92,868 | )      |         |   | ( 733,738 | ) |   |   | ( 178,160 | ) |
| Tax credits and other                                          |   |                     | 134,270       |   |         |   | — |   |   |   | ( 220,784 | ) |
| Provision for income taxes                                     |   | $                        | 1,939,936     |   |         | $      | 1,387,350 |   |   | $ | 2,879,250 |   |

|                                                                               |   | June 30, |             |   | December 31, |   |
|------------------------------------------------------------------------------------|--------|----------|------------------|--------|--------------|--------|
|                                                                               |   | 2010     |             |   | 2009         |   |   | 2009 |   |
| Non-current deferred tax assets (liabilities) arising from:Temporary differences - |   |     |             |   |         |   |   |   |   |
| Accumulated depreciation                                                           |   | $        | ( 2,014,477 | )      |         | $      | ( 1,941,740 | ) |   | $ | ( 2,129,680 | ) |
| Purchase accounting adjustments                                                    |   |     | ( 1,585,334 | )      |         |   | (1,652,000 | )  |   |   | ( 1,652,000 | ) |
| Capital loss carry-forwards                                                        |   |     | 337,016          |   |         |   | — |   |   |   | 337,016 |   |
| Total non-current net deferred tax liabilities                                     |   |     | ( 3,262,795 | )      |         |   | ( 3,593,740 | ) |   |   | ( 3,444,664 | ) |
| Current deferred tax assets arising from:                                          |   |     |             |   |         |   |   |   |   |   |   |   |
| Unrealized (gains) losses on investments                                           |   |     | 95,488           |   |         |   | 431,188 |   |   |   | 7,288 |   |
| Impairment of investments                                                          |   |     | —          |   |         |   | — |   |   |   | 59,003 |   |
| Inventory                                                                          |   |     | 176,051          |   |         |   | 161,749 |   |   |   | 139,730 |   |
| Allowance for doubtful accounts and discounts                                 |   |     | 117,710          |   |         |   | 45,435 |   |   |   | 45,435 |   |
| Total current deferred tax assets                                                  |   |     | 389,249          |   |         |   | 638,372 |   |   |   | 251,456 |   |
| Net deferred tax liability                                                         |   | $        | ( 2,873,546 | )      |         | $      | ( 2,955,368 | ) |   | $ | ( 3,193,208 | ) |

----

|         |   |                     |    |   | For the      |   |
|--------------|--------|--------------------------|---------|--------|--------------|--------|
|         |   | For the Six Months Ended |    |   | Year Ended   |   |
|         |   | June 30,                 |    |   | December 31, |   |
|         |   | 2010                     |    |   | 2009         |   |   | 2009 |   |
| Interest     |   | $                        | 211,836 |   |         | $      | 250,553 |   |   | $ | 419,186 |   |
| Income taxes |   | $                        | 317,346 |   |         | $      | 1,563,750 |   |   | $ | 3,432,228 |   |

----

|                                                              |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |      |   | Significant Other Observable Inputs(Level 2) |   |    | Significant UnobservableInputs(Level 3) |   |   | Balance |   |
|-------------------------------------------------------------------|--------|---------------------------------------------------------------|-----------|--------|----------------------------------------------|--------|---------|-----------------------------------------|--------|--------|---------|--------|
| Assets                                                            |   |                                                          |      |   |                                         |   |    |                                    |   |   |    |   |
| Investment securities- available - for – sale June 30, 2010 |   | $                                                             | 3,411,804 |   |                                         |   | — |                                    |   |   | — |   |   | $ | 3,411,804 |   |
| December 31, 2009                                                 |   | $                                                             | 4,392,125 |   |                                         |   | — |                                    |   |   | — |   |   | $ | 4,392,125 |   |
| June 30, 2009                                                     |   | $                                                             | 4,659,161 |   |                                         |   | — |                                    |   |   | — |   |   | $ | 4,659,161 |   |

----

| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
|---------|----------------------------------------------------------------------------------------------|

----

----

----

| Period                                       |   | (a) TotalNumbers ofShares (or Units)Purchased |   | (b) Average Price Paid per Share (or Unit) |        | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |          | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |
|----------------------------------------------|--------|-----------------------------------------------|--------|--------------------------------------------|-------------|-------------------------------------------------------------------------------------------------|---------------|-----------------------------------------------------------------------------------------------------------------------------|
| April 1, 2010 to April 30, 2010         |   |   38,388                                 |   |                                       | 11.25       |                                                                                            |   38,388 |                                                                                                                        |   33,247 |
| May  1, 2010 to May 31, 2010  |   |   33,380                                 |   |                                       | 10.41       |                                                                                            |   33,380 |                                                                                                                        | 199,867 |
| June 1, 2010 to June 30, 2010*               |   |   29,708                                 |   |                                       |   9.98 |                                                                                            |   29,708 |                                                                                                                        | 170,159 |
| *Total                                  |   | 101,476                                       |   | $                                     | 10.60       |                                                                                            | 101,476       |                                                                                                                        | 170,159 |

----

----

| ExhibitNumber |   | Description of Document                                                                                                                                                                                                                                                              |
|---------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |   |                                                                                                                                                                                                                                                                                 |
| 3.4           |   | Amended and Restated By-laws (incorporated by reference to Exhibit No. 3.5 of Lifeway’s Current Report on Form 8-K dated and filed on December 10, 2002). (File No. 000-17363)                                                                   |
|          |   |                                                                                                                                                                                                                                                                                 |
| 3.5           |   | Articles of Incorporation, as amended and currently in effect (incorporated by reference to Exhibit 3.5 of Lifeway’s Quarterly Report on Form 10-QSB for the quarter ended June 30, 2000 and filed on August 8, 2000). (File No. 000-17363) |
|          |   |                                                                                                                                                                                                                                                                                 |
| 4.1           |   | Amended and Restated Non-Negotiable Promissory Note.                                                                                                                                                                                                                                 |
|          |   |                                                                                                                                                                                                                                                                                 |
| 31.1          |   | Officer’s Certificate Pursuant to 15 U.S.C. 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                        |
|          |   |                                                                                                                                                                                                                                                                                 |
| 31.2          |   | Officer’s Certificate Pursuant to 15 U.S.C. 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                        |
|          |   |                                                                                                                                                                                                                                                                                 |
| 32.1          |   | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                              |
|          |   |                                                                                                                                                                                                                                                                                 |
| 32.2          |   | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                         |
|          |   |                                                                                                                                                                                                                                                                                 |
| 99.1          |   | Press Release dated  August 16, 2010.                                                                                                                                                                                                                                 |

----

|                                                                 | LIFEWAY FOODS, INC. |                                                      |
|----------------------------------------------------------------------|---------------------|-----------------------------------------------------------|
|                                                                 | (Registrant)        |                                                      |
|                                                                 |                |                                                      |
|                                                                 |                |                                                      |   |
| Date:       August 16,  2010 | By:                 | /s/ Julie Smolyansky                                 |   |
|                                                                 |                | Julie Smolyansky                                          |   |
|                                                                 |                | Chief Executive Officer, President and Director      |   |
|                                                                 |                |                                                      |   |
|                                                                 |                |                                                      |   |
|                                                                 |                |                                                      |   |
|                                                                 |                |                                                      |   |
|                                                                 |                |                                                      |   |
|                                                                 |                |                                                      |   |
| Date:       August 16,  2010 | By:                 | /s/ Edward P. Smolyansky                                  |   |
|                                                                 |                | Edward P. Smolyansky                                      |   |
|                                                                 |                | Chief Financial and Accounting Officer and Treasurer |   |
|                                                                 |                |                                                      |   |
|                                                                 |                |                                                      |   |
|                                                                 |                |                                                      |   |
|                                                                 |                |                                                      |   |

----

| ExhibitNumber |   | Description of Document                                                                                                                                                                                                                                                                        |
|---------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |   |                                                                                                                                                                                                                                                                                           |
| 3.4           |   | Amended and Restated By-laws (incorporated by reference to Exhibit No. 3.5  of Lifeway’s Current Report on Form 8-K dated and filed on December 10, 2002). (File No. 000-17363)                                                                       |
|          |   |                                                                                                                                                                                                                                                                                           |
| 3.5           |   | Articles of Incorporation, as amended and currently in effect (incorporated by reference to Exhibit 3.5 of Lifeway’s Quarterly Report on Form 10-QSB for the quarter ended June 30, 2000 and filed on August 8, 2000). (File No. 000-17363) |
|          |   |                                                                                                                                                                                                                                                                                           |
| 4.1           |   | Amended and Restated Non-Negotiable Promissory Note.                                                                                                                                                                                                                                           |
|          |   |                                                                                                                                                                                                                                                                                           |
| 31.1          |   | Officer’s Certificate Pursuant to 15 U.S.C. 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                  |
|          |   |                                                                                                                                                                                                                                                                                           |
| 31.2          |   | Officer’s Certificate Pursuant to 15 U.S.C. 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                  |
|          |   |                                                                                                                                                                                                                                                                                           |
| 32.1          |   | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                              |
|          |   |                                                                                                                                                                                                                                                                                           |
| 32.2          |   | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                        |
|          |   |                                                                                                                                                                                                                                                                                           |
| 99.1          |   | Press Release dated August 16, 2010.                                                                                                                                                                                                                                                      |

----