Basis of presentation

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Basis of presentation

Note 1 – Basis of presentation

The consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include all of the assets, liabilities and results of operations of Lifeway’s wholly owned subsidiaries (collectively “Lifeway” or the “Company”). All inter-company balances and transactions have been eliminated in the consolidated financial statements.

Restatement of Previously Issued Consolidated Financial Statements

Lifeway has restated herein its consolidated financial statements as of and for the year ended December 31, 2020. In addition, the Company has restated its unaudited quarterly consolidated financial statements for the first three quarters of the years ended December 31, 2020 and 2021, as presented in Note 17 – Correction of previously issued unaudited consolidated financial statements. Lifeway has also restated impacted amounts within the notes to the consolidated financial statements, as applicable.

Restatement Background

During the preparation of the fiscal 2021 consolidated financial statements, the Company identified an error in the accounting for its deferred income tax liabilities and goodwill. Specifically, in connection with its 2009 acquisition of Fresh Made, Inc., the Company did not record a deferred income tax liability and corresponding increase to goodwill related to the difference in the book and income tax bases for the $3,700 Fresh Made indefinite-lived brand name intangible asset acquired. The error resulted in a $1,180 understatement- of both deferred income tax liabilities and goodwill of as of January 1, 2020. The Restatement had no impact on the Company’s Consolidated Statements of Operations, Consolidated Statements of Cash Flows, or Consolidated Statements of Stockholders’ Equity during 2021 and 2020. The impact of the Restatement on periods prior to 2020 had no effect on opening retained earnings as of January 1, 2020.

The following table summarizes the impact of the restatement adjustments on the Consolidated Balance Sheet for the year ended December 31, 2020.

	December 31, 2020
	As Previously Reported			Restatement Adjustment		As Restated
Current assets
Cash and cash equivalents	$	7,926		$	–	$	7,926
Accounts receivable, net of allowance for doubtful accounts and discounts & allowances of $1,350 at December 31, 2020		8,002			–		8,002
Inventories, net		6,930			–		6,930
Prepaid expenses and other current assets		1,163			–		1,163
Refundable income taxes		31			–		31
Total current assets		24,052			–		24,052
Property, plant and equipment, net		21,048			–		21,048
Operating lease right-of use asset		345			–		345
Intangible assets
Goodwill and indefinite-lived intangibles		12,824			1,180		14,004
Other intangible assets, net		–			–		–
Total intangible assets		12,824			1,180		14,004
Other Assets		1,800			–		1,800
Total assets	$	60,069		$	1,180	$	61,249
Current liabilities
Accounts payable	$	5,592			–	$	5,592
Accrued expenses		2,196			–		2,196
Accrued income taxes		653			–		653
Total current liabilities		8,441			–		8,441
Line of credit		2,768			–		2,768
Operating lease liabilities		165			–		165
Deferred income taxes, net		1,764			1,180		2,944
Other long-term liabilities		77			–		77
Total liabilities		13,215			1,180		14,395
Commitments and contingencies		–			–		–
Stockholders’ equity
Preferred stock, no par value; 2,500 shares authorized; none issued		–			–		–
Common stock, no par value; 40,000 shares authorized; 17,274 shares issued; 15,604 shares outstanding at 2020		6,509			–		6,509
Paid-in capital		2,600			–		2,600
Treasury stock, at cost		(12,450	)		–		(12,450	)
Retained earnings		50,195			–		50,195
Total stockholders’ equity		46,854			–		46,854
Total liabilities and stockholders’ equity	$	60,069		$	1,180	$	61,249