ILLINOIS
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000-17363
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36-3442829
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(State or other jurisdiction of
incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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6431 West Oakton St. Morton Grove, IL
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60053
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(Address of principal executive offices)
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(Zip code)
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LIFEWAY FOODS, INC.
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Dated: March 16, 2015
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By:
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/s/ Edward Smolyansky
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Edward Smolyansky
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Chief Financial and Accounting Officer, Secretary and Treasurer
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Exhibit No.
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Description
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99.1
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Press release dated March 16, 2015.
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Lifeway Foods, Inc.
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Phone: 877.281.3874
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Email: info@Lifeway.net
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Investor Relations:
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ICR
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Katie Turner
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John Mills
646.277.1228
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December 31,
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||||||||
2014
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2013
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|||||||
ASSETS
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||||||||
Current assets
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||||||||
Cash and cash equivalents
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$ | 3,260,244 | $ | 3,306,608 | ||||
Investments
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2,779,140 | 2,516,380 | ||||||
Certificates of deposits in financial institutions
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149,965 | 15,373 | ||||||
Inventories
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5,814,219 | 6,899,008 | ||||||
Accounts receivable, net of allowance for doubtful accounts and discounts of $1,050,000 in 2014 and 2013
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10,213,541 | 10,444,839 | ||||||
Prepaid expenses and other current assets
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96,825 | 128,323 | ||||||
Other receivables
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31,204 | 103,272 | ||||||
Deferred income taxes
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408,340 | 322,071 | ||||||
Refundable income taxes
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1,826,664 | 1,014,947 | ||||||
Total current assets
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24,580,142 | 24,750,821 | ||||||
Property and equipment, net
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21,860,273 | 20,824,448 | ||||||
Intangible assets
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||||||||
Goodwill
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14,068,091 | 14,068,091 | ||||||
Other intangible assets, net of accumulated amortization of $5,184,036 and $4,468,359 in 2014 and 2013, respectively
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3,059,764 | 3,750,441 | ||||||
Total intangible assets
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17,127,855 | 17,818,532 | ||||||
Other Assets
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||||||||
Long-term accounts receivable, net of current portion
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251,683 | 280,000 | ||||||
Total assets
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$ | 63,819,953 | $ | 63,673,801 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
Current liabilities
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||||||||
Current maturities of notes payable
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$ | 872,285 | $ | 875,002 | ||||
Accounts payable
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5,586,755 | 6,723,179 | ||||||
Accrued expenses
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1,577,785 | 1,284,060 | ||||||
Total current liabilities
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8,036,825 | 8,882,241 | ||||||
Notes payable
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8,124,515 | 8,999,012 | ||||||
Deferred income taxes
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2,075,095 | 2,843,426 | ||||||
Total liabilities
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18,236,435 | 20,724,679 | ||||||
Stockholders' equity
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||||||||
Common stock, no par value; 40,000,000 shares authorized;
17,273,776 shares issued;16,346,017 shares outstanding at 2014 and 2013 |
6,509,267 | 6,509,267 | ||||||
Paid-in-capital
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2,032,516 | 2,032,516 | ||||||
Treasury stock, at cost
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( 8,187,682 | ) | ( 8,187,682 | ) | ||||
Retained earnings
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45,427,424 | 42,587,214 | ||||||
Accumulated other comprehensive income (loss), net of taxes
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( 198,007 | ) | 7,807 | |||||
Total stockholders' equity
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45,583,518 | 42,949,122 | ||||||
Total liabilities and stockholders' equity
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$ | 63,819,953 | $ | 63,673,801 |
Years Ended
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||||||||||||||||||||||||
December 31,
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||||||||||||||||||||||||
2014
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2013
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2012
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||||||||||||||||||||||
Sales
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$ | 130,215,716 | $ | 108,966,094 | $ | 89,754,007 | ||||||||||||||||||
Less: discounts and allowances
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( 11,256,103 | ) | ( 11,441,952 | ) | ( 8,402,742 | ) | ||||||||||||||||||
Net sales
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118,959,613 | 118,959,613 | 97,524,142 | 97,524,142 | 81,351,265 | 81,351,265 | ||||||||||||||||||
Cost of goods sold
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87,560,837 | 69,186,473 | 53,098,191 | |||||||||||||||||||||
Depreciation expense
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2,535,937 | 1,626,575 | 1,629,594 | |||||||||||||||||||||
Total cost of goods sold
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90,096,774 | 70,813,048 | 54,727,785 | |||||||||||||||||||||
Gross profit
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28,862,839 | 26,711,094 | 26,623,480 | |||||||||||||||||||||
Selling expenses
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14,557,184 | 11,296,381 | 10,703,980 | |||||||||||||||||||||
General and administrative
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9,167,370 | 6,670,598 | 6,319,972 | |||||||||||||||||||||
Amortization expense
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715,677 | 712,803 | 754,817 | |||||||||||||||||||||
Total operating expenses
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24,440,231 | 18,679,782 | 17,778,769 | |||||||||||||||||||||
Income from operations
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4,422,608 | 8,031,312 | 8,844,711 | |||||||||||||||||||||
Other income (expense):
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||||||||||||||||||||||||
Interest and dividend income
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122,018 | 116,380 | 85,383 | |||||||||||||||||||||
Rental income
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4,300 | 11,727 | 12,285 | |||||||||||||||||||||
Interest expense
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( 266,095 | ) | ( 203,365 | ) | ( 177,622 | ) | ||||||||||||||||||
Gain on sale of investments, net reclassified from OCI
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98,953 | 195,500 | 71,286 | |||||||||||||||||||||
Gain on sale of equipment
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6,592 | (304,958 | ) | |||||||||||||||||||||
Other Income (Expense)
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8,192 | 10,577 | ( 11,169 | ) | ||||||||||||||||||||
Total other income (expense)
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(26,040 | ) | (174,139 | ) | (19,837 | ) | ||||||||||||||||||
Income before provision for
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||||||||||||||||||||||||
income taxes
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4,396,568 | 7,857,173 | 8,824,874 | |||||||||||||||||||||
Provision for income taxes
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1,556,358 | 2,866,875 | 3,205,076 | |||||||||||||||||||||
Net income
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$ | 2,840,210 | $ | 4,990,298 | $ | 5,619,798 | ||||||||||||||||||
Basic and diluted earnings
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||||||||||||||||||||||||
per common share
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0.17 | 0.31 | 0.34 | |||||||||||||||||||||
Weighted average number of
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||||||||||||||||||||||||
shares outstanding
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16,346,017 | 16,346,017 | 16,373,224 | |||||||||||||||||||||
COMPREHENSIVE INCOME
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Net income
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$ | 2,840,210 | $ | 4,990,298 | $ | 5,619,798 | ||||||||||||||||||
Other comprehensive income (loss), net of tax:
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||||||||||||||||||||||||
Unrealized gains (losses) on investments (net of tax), $93,540, $49,793 and $79,159 for 2014, 2013 and 2012, respectively
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( 145,571 | ) | 64,674 | 102,816 | ||||||||||||||||||||
Less reclassification adjustment for (gains) losses included in net income (net of taxes), $38,711, $85,042 and $31,009 for 2014, 2013 and 2012, respectively
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(60,243 | ) | ( 110,458 | ) | ( 40,277 | ) | ||||||||||||||||||
Comprehensive income
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$ | 2,634,396 | $ | 4,944,514 | $ | 5,682,337 |
December 31,
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||||||||||||
2014
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2013
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2012
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Cash flows from operating activities:
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||||||||||||
Net income
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$ | 2,840,210 | $ | 4,990,298 | $ | 5,619,798 | ||||||
Adjustments to reconcile net income to net
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||||||||||||
cash flows from operating activities:
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||||||||||||
Depreciation and amortization
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3,251,614 | 2,339,378 | 2,384,411 | |||||||||
Gain on sale of investments, net
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( 98,953 | ) | ( 195,500 | ) | ( 71,286 | ) | ||||||
Deferred income taxes
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( 719,778 | ) | ( 238,804 | ) | ( 434,896 | ) | ||||||
Bad debt expense
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204,700 | 32,604 | 435,344 | |||||||||
(Gain) Loss on sale of equipment
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(6,592 | ) | 304,958 | 11,169 | ||||||||
(Increase) decrease in operating assets:
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||||||||||||
Accounts receivable
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54,915 | ( 1,741,759 | ) | ( 1,213,253 | ) | |||||||
Other receivables
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72,068 | ( 94,447 | ) | 215,379 | ||||||||
Inventories
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1,084,789 | ( 959,822 | ) | ( 984,711 | ) | |||||||
Refundable income taxes
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( 811,717 | ) | ( 930,119 | ) | ( 43,512 | ) | ||||||
Prepaid expenses and other current assets
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31,498 | ( 6,185 | ) | ( 17,508 | ) | |||||||
Increase (decrease) in operating liabilities:
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||||||||||||
Accounts payable
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( 1,136,424 | ) | 2,466,454 | ( 129,514 | ) | |||||||
Accrued expenses
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293,725 | 128,383 | 601,952 | |||||||||
Income taxes payable
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— | (254,311 | ) | 254,311 | ||||||||
Net cash provided by operating activities
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5,060,055 | 5,841,128 | 6,627,684 | |||||||||
Cash flows from investing activities:
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||||||||||||
Purchases of investments
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( 3,280,157 | ) | ( 3,518,781 | ) | ( 1,452,672 | ) | ||||||
Proceeds from sale of investments
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2,773,570 | 3,001,016 | 1,475,730 | |||||||||
Redemption of certificates of deposits
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15,000 | 423,997 | — | |||||||||
Investments in certificates of deposit
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( 149,965 | ) | — | (150,255 | ) | |||||||
Purchases of property and equipment
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( 3,652,246 | ) | ( 8,479,886 | ) | ( 1,428,717 | ) | ||||||
Proceeds from sale of equipment
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64,593 | 710,681 | — | |||||||||
Net cash used in investing activities
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(4,229,205 | ) | (7,862,973 | ) | (1,555,914 | ) | ||||||
Cash flows from financing activities:
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||||||||||||
Checks written in excess of bank balance
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— | — | (592,040 | ) | ||||||||
Purchase of treasury stock
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— | — | (580,708 | ) | ||||||||
Dividends paid
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— | (1,307,861 | ) | (1,146,317 | ) | |||||||
Net proceeds from debt issuance
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— | 4,975,000 | 250,000 | |||||||||
Repayment of notes payable
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( 877,214 | ) | ( 624,912 | ) | ( 1,831,626 | ) | ||||||
Net cash provided by (used in) financing activities
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( 877,214 | ) | 3,042,227 | ( 3,900,691 | ) | |||||||
Net (decrease) increase in cash and cash equivalents
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(46,364 | ) | 1,020,382 | 1,171,079 | ||||||||
Cash and cash equivalents at the beginning of the year
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3,306,608 | 2,286,226 | 1,115,150 | |||||||||
Cash and cash equivalents at the end of the year
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$ | 3,260,244 | $ | 3,306,608 | $ | 2,286,229 |