|  LWAY:US Lifeway      Foods Inc                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Lifeway      Foods Reports Record 3rd Quarter 2008 Results -      Q3 Sales Up 15% from Q3 2007 -      Q3 2008 Gross Profit up 30%; Operating Income up 153% from Q3      2007 -      Q3 Net Income up 83% from Q3 2007 PR      Newswire MORTON      GROVE, Ill., Nov. 14 MORTON      GROVE, Ill., Nov. 14 /PRNewswire-FirstCall/ -- Lifeway Foods, Inc.,      (Nasdaq: LWAY), makers of a nutritious, probiotic dairy beverage      called kefir, announced today for the third quarter ended September 30,      2008, sales increased 15% to approximately $11,240,000 from $9,817,000      during the same period a year ago. This increase in sales was driven by      another strong sales increase of Lifeway’s kefir and      ProBugs(R). Third      quarter 2008 gross profit increased 30% to $3,537,122 from $2,720,659      during the same period a year ago. Third quarter operating income      increased 153% to $1,467,239 from $581,043 during the same period a year      ago. Third quarter 2008 net income increased 83% to $854,916 from $468,194      during the same period a year ago. Edward      Smolyansky, CFO commented, “We are      extremely proud of our third quarter and nine months 2008 results. Our      margins continued to remain strong even as oil and energy prices reached      record levels in July and August. All of our oil related production      supplies, utilities and transportation costs hit record levels during the      third quarter, and we have only just begun to see these costs subside as      the price of oil retreats. Additionally, the cost of milk in October      declined to the lowest level in 16 months, and we expect them the decline      even further. In a very tight credit environment, our cash flows have      never been stronger and, combined with these declining costs, should only      further benefit us in the fourth quarter 2008 and into 2009.” Julie      Smolyansky, CEO commented, “The final months of the year should be a very      exciting time for our company as we continue to expand our club store      initiative during this difficult economic time for consumers. In the      coming weeks, we expect to begin shipments of our 8 oz Kefir variety pack      to stores in the northeast region, and a new Probugs(TM) club variety pack      to stores in the northern California region. In difficult economic times,      when consumers are looking for value at warehouse and club type outlets,      it is part of our growing initiative to provide value to these      consumers.” About      Lifeway Foods Lifeway,      recently named Fortune Small Business’ 49th Fastest Growing Small      Business, is America’s leading    supplier of the      cultured dairy product known as kefir. Lifeway Kefir is a dairy beverage      that contains Lifeway’s    exclusive 10 Live and      Active probiotic cultures. While most regular yogurt only contains two or      three of these “friendly” cultures, Lifeway kefir products offer more      nutritional benefits. Lifeway offers 12 different flavors of its Kefir      beverage, Organic Kefir and SoyTreat (a soy based kefir). Lifeway recently      introduced a series of innovative new products such as pomegranate kefir,      Greek-style kefir, a children’s line of organic kefir products called      ProBugs (TM) in a no-spill pouch in kid-friendly flavors like Orange      Creamy Crawler and Sublime Slime Lime, and a line of organic      whole milk kefir. Lifeway also produces a line of products marketed in US      Hispanic communities, called La Fruta, Drinkable Yogurt (yogurt drinks      distinct from kefir). In addition to its line of Kefir products, the      company produces a variety of cheese products and recently introduced a      line of organic pudding called It’s Pudding! Live conference calls will      now be on an annual basis to discuss fiscal full year    results. |

----

|                                                   |   | (Unaudited)             |       |
|--------------------------------------------------------|--------|-------------------------|------------|
|                                                   |   | Three      Months Ended |       |
|                                                   |   | September      30,      |       |
|                                                   |   | 2008                    |       |   | 2007 |   |
|                                                   |   |                    |       |   |   |   |   |   |
| Sales                                                  |   | $                       | 11,240,282 |   |   | $ | 9,817,478 |   |
|                                                   |   |                    |       |   |   |   |   |   |
| Cost      of goods sold                                |   |                    | 7,505,794  |   |   |   | 6,901,471 |   |
| Depreciation      expense                              |   |                    | 197,366    |   |   |   | 195,348 |   |
|                                                   |   |                    |       |   |   |   |   |   |
| Total      cost of goods sold                          |   |                    | 7,703,160  |   |   |   | 7,096,819 |   |
|                                                   |   |                    |       |   |   |   |   |   |
| Gross      profit                                      |   |                    | 3,537,122  |   |   |   | 2,720,659 |   |
|                                                   |   |                    |       |   |   |   |   |   |
| Selling      Expenses                                  |   |                    | 957,978    |   |   |   | 1,174,140 |   |
| General      and Administrative                        |   |                    | 1,032,043  |   |   |   | 916,893 |   |
| Amortization      expense                              |   |                    | 79,862     |   |   |   | 48,583 |   |
|                                                   |   |                    |       |   |   |   |   |   |
| Total      Operating Expenses                          |   |                    | 2,069,883  |   |   |   | 2,139,616 |   |
|                                                   |   |                    |       |   |   |   |   |   |
| Income      from operations                            |   |                    | 1,467,239  |   |   |   | 581,043 |   |
|                                                   |   |                    |       |   |   |   |   |   |
| Other      income (expense):                           |   |                    |       |   |   |   |   |   |
| Interest      and dividend income                      |   |                    | 95,042     |   |   |   | 84,918 |   |
| Rental      Income                                     |   |                    | 13,647     |   |   |   | 9,731 |   |
| Interest      expense                                  |   |                    | (71,928    | ) |   |   | (102,197 | ) |
| Impairment      of marketable securities               |   |                    | (270,908   | ) |   |   |   |   |
| Gain      (loss) on sale of marketable securities, net |   |                    | (110,259   | ) |   |   | 209,207 |   |
| Total      other income (Expense)                      |   |                    | (344,406   | ) |   |   | 201,659 |   |
|                                                   |   |                    |       |   |   |   |   |   |
| Income      before provision for income taxes          |   |                    | 1,122,833  |   |   |   | 782,702 |   |
|                                                   |   |                    |       |   |   |   |   |   |
| Provision      for income taxes                        |   |                    | 267,917    |   |   |   | 314,508 |   |
|                                                   |   |                    |       |   |   |   |   |   |
| Net      income                                        |   | $                       | 854,916    |   |   | $ | 468,194 |   |
|                                                   |   |                    |       |   |   |   |   |   |
| Basic      and diluted earnings per common share       |   |                    | 0.05       |   |   |   | 0.03 |   |
|                                                   |   |                    |       |   |   |   |   |   |
| Weighted      average number of shares outstanding     |   |                    | 16,730,650 |   |   |   | 16,824,911 |   |

----

|                                                                                                           |   | (Unaudited)Nine      Months Ended |       |   |              |   |
|----------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|------------|--------|-------------------|--------|
|                                                                                                           |   | September      30,                |       |   | December      31, |   |
|                                                                                                           |   | 2008                              |       |   | 2007              |   |   | 2007 |   |
| Cash      flows from operating activities:                                                                     |   |                              |       |   |              |   |   |   |   |
| Net      income                                                                                                |   | $                                 | 2,655,240  |   |              | $      | 2,999,551 |   |   | $ | 3,152,660 |   |
| Adjustments      to reconcile net income to net cash flows from operating activities, net      of acquisition: |   |                              |       |   |              |   |   |   |   |   |   |   |
| Depreciation      and amortization                                                                             |   |                              | 821,505    |   |              |   | 789,215 |   |   |   | 1,049,913 |   |
| (Gain)Loss      on sale of marketable securities, net                                                          |   |                              | 146,404    |   |              |   | (663,538 | ) |   |   | (539,739 | ) |
| Impairment      of marketable securities                                                                       |   |                              | 270,908    |   |              |   |   |   |   |   |   |   |
| Deferred      income taxes                                                                                     |   |                              | (125,221   | )      |              |   | 12,419 |   |   |   | (223,717 | ) |
| Treasury      stock issued for compensation                                                                    |   |                              | 65,809     |   |              |   | 27,720 |   |   |   | 48,509 |   |
| Increase      (decrease) in allowance for doubtful accounts                                                    |   |                              | (4,449     | )      |              |   | (40,540 | ) |   |   | (40,540 | ) |
| (Increase)      decrease in operating assets:                                                                  |   |                              |       |   |              |   |   |   |   |   |   |   |
| Accounts      receivable                                                                                       |   |                              | (947,303   | )      |              |   | (862,699 | ) |   |   | (226,405 | ) |
| Other      receivables                                                                                         |   |                              | 14,193     |   |              |   | 25,240 |   |   |   | 27,939 |   |
| Inventories                                                                                                    |   |                              | (700,540   | )      |              |   | (1,538,993 | ) |   |   | (984,358 | ) |
| Refundable      income taxes                                                                                   |   |                              | 240,880    |   |              |   | 142,008 |   |   |   | 26,891 |   |
| Prepaid      expenses and other current assets                                                                 |   |                              | 665        |   |              |   | (1,068 | ) |   |   | (9,270 | ) |
| Increase      (decrease) in operating liabilities:                                                             |   |                              |       |   |              |   |   |   |   |   |   |   |
| Accounts      payable                                                                                          |   |                              | 766,988    |   |              |   | 402,027 |   |   |   | 131,316 |   |
| Accrued      expenses                                                                                          |   |                              | 118,650    |   |              |   | (39,033 | ) |   |   | (66,062 | ) |
| Accrued      income taxes                                                                                      |   |                              | 308,260    |   |              |   | --- |   |   |   | --- |   |
| Net      cash provided by operating activities                                                                 |   |                              | 3,631,989  |   |              |   | 1,252,309 |   |   |   | 2,347,137 |   |
|                                                                                                           |   |                              |       |   |              |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                                     |   |                              |       |   |              |   |   |   |   |   |   |   |
| Investment      in cost method securities                                                                      |   |                              | ---        |   |              |   | (500,000 | ) |   |   | (500,000 | ) |
| Purchases      of marketable securities                                                                        |   |                              | (4,864,873 | )      |              |   | (4,408,170 | ) |   |   | (5,744,697 | ) |
| Sale      of marketable securities                                                                             |   |                              | 4,659,350  |   |              |   | 6,652,670 |   |   |   | 7,168,246 |   |
| Increase      in margin                                                                                        |   |                              | 428,951    |   |              |   | --- |   |   |   | --- |   |
| Purchases      of property and equipment                                                                       |   |                              | (1,892,472 | )      |              |   | (1,142,709 | ) |   |   | (1,824,879 | ) |
| Purchases      of organizational costs                                                                         |   |                              | ---        |   |              |   | (5,858 | ) |   |   | --- |   |
| Net      cash used in investing activities                                                                     |   |                              | (1,669,044 | )      |              |   | 595,933 |   |   |   | (901,330 | ) |
|                                                                                                           |   |                              |       |   |              |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                                     |   |                              |       |   |              |   |   |   |   |   |   |   |
| Proceeds      of note payable                                                                                  |   |                              | ---        |   |              |   | 300,000 |   |   |   | 300,000 |   |
| Purchases      of treasury stock, net                                                                          |   |                              | (1,139,987 | )      |              |   | (752,603 | ) |   |   | (752,603 | ) |
| Repayment      of notes payable                                                                                |   |                              | (887,977   | )      |              |   | (1,318,885 | ) |   |   | (1,945,131 | ) |
| Net      cash used in financing activities                                                                     |   |                              | (2,027,964 | )      |              |   | (1,771,488 | ) |   |   | (2,397,734 | ) |
|                                                                                                           |   |                              |       |   |              |   |   |   |   |   |   |   |
| Net      decrease in cash and cash equivalents                                                                 |   |                              | (65,019    | )      |              |   | 76,754 |   |   |   | (951,927 | ) |
|                                                                                                           |   |                              |       |   |              |   |   |   |   |   |   |   |
| Cash      and cash equivalents at the beginning of the period                                                  |   |                              | 595,885    |   |              |   | 1,547,812 |   |   |   | 1,547,812 |   |
|                                                                                                           |   |                              |       |   |              |   |   |   |   |   |   |   |
| Cash      and cash equivalents at the end of the period                                                        |   | $                                 | 530,866    |   |              | $      | 1,624,566 |   |   | $ | 595,885 |   |