/C O R R E C T I O N -- Edward and Ludmila Smolyansky/

Rhea-AI Summary

Edward and Ludmila Smolyansky, who control approximately 28% of Lifeway Foods (NASDAQ: LWAY) shares, have requested the Board force CEO Julie Smolyansky to withdraw her lawsuit against Edward Smolyansky. This comes after a controversial $2 million retention bonus awarded to Julie Smolyansky on December 23, 2024.

The Founding Shareholders express concerns about directors Jason Scher and Pol Sikar, citing potential conflicts of interest due to their personal ties to Julie Smolyansky. The Smolyanskys plan to expand their ongoing investigation that began in 2019, following the departure of two CFOs in 2018.

Ludmila Smolyansky revealed she began selling shares on January 3 to defend Edward after Julie filed suit on January 23. The activist campaign launched by the Smolyanskys in 2022 has reportedly increased LWAY's share price, though they claim the current board is obstructing asset monetization and charitable efforts. Their stated goal remains implementing new management and an independent slate of Directors.

In the news release, Edward and Ludmila Smolyansky Request Lifeway Foods Inc. NASDAQ (LWAY) CEO Julie Smolyansky Immediately Withdraws Her Lawsuit Against Edward Smolyansky. Reiterate and Reaffirm Singular Goal Amid Ongoing Activism Battle, issued 03-Feb-2025 by Edward and Ludmila Smolyansky over PR Newswire, we are advised by the company that "Withdraws" in the headline should read "Withdraw". The complete, corrected release follows:

Edward and Ludmila Smolyansky Request Lifeway Foods Inc. NASDAQ (LWAY) CEO Julie Smolyansky Immediately Withdraw Her Lawsuit Against Edward Smolyansky. Reiterate and Reaffirm Singular Goal Amid Ongoing Activism Battle

• Summarizes recent filings and next steps, previews upcoming proxy schedule
  
  
• Reaffirms and updates previously stated goal

CHICAGO, Feb. 3, 2025 /PRNewswire/ -- Edward and Ludmila Smolyansky ("Founding Shareholders"), who together exercise sole voting control with respect to approximately 28% of the outstanding shares of common stock of Lifeway Foods, Inc. ("Lifeway" or the "Company"), today requested that Lifeway's Board of Directors force its CEO and Chairperson, Julie Smolyansky to immediately withdraw her most recent lawsuit filed in Cook County, IL against the Company's largest individual shareholder Edward Smolyansky.

On December 23, 2024, Lifeway's Compensation Committee, led by director Jason Scher, awarded what was described as a $2 million "retention bonus."  The Smolyanskys believe this was yet another desperate leverage tactic to enable Julie Smolyansky to continue to fund her war against the Founding Shareholders. Directors Scher and Pol Sikar in particular, given their decades old family ties to Julie Smolyansky and her spouse and former jeweler, Jason Burdeen, have deep and conflicting personal motives that run contra to those of the rest of the Company's shareholders. These obvious conflicts are presented at www.lifebacktolifeway.com. Additionally, the Smolyanskys intend to expand their ongoing investigation, which began in 2019 and which followed the departure of two CFOs in 2018 alone and ultimately led to the departures of two independent directors and the Company's general counsel shortly thereafter.

Edward Smolyansky said, "Lifeway seems determined to plunge the Company deeper and deeper into litigation this time via proxy by Julie. We look forward to providing all shareholders a fully transparent accounting of the inner workings of America's Worst Governed Publicly Traded Company."

Ludmila Smolyansky stated, "After they cut a check to Julie for $2 million, I anticipated that she would file a lawsuit against Edward the following month." Mrs. Smolyansky continued, "On January 23, Julie filed suit. In anticipation of this, on January 3, I began to sell some of my shares to defend Edward. I have no choice, as Lifeway's legal counsel has refused to provide the adequate paperwork to Edward to monetize his holdings in LWAY as permitted under our 1999 Shareholders Agreement between our family member and Group Danone."

The activist campaign that The Smolyanskys launched in 2022 has produced significant increases in the value of Lifeway's share price, yet Julie and her Board seem determined to obstruct the ability to monetize these assets and prohibit making significant charitable contributions. For example, last May, the charitable arm of the Founding Shareholders' new organization, Pure Culture Organics, announced its commitment to the Ann & Robert H. Lurie Children's Hospital of Chicago.

Ludmila Smolyansky stated, "While my daughter's Board can attempt to interfere with our philanthropic efforts, these are mere speed bumps on the road to our singular goal, fresh new management and new independent slate of Directors."

For more information and update to date news connect with Edward on LinkedIn @ Edward Smolyansky and visit www.lifebacktolifeway.com to learn more about the Proxy Campaign.

View original content:https://www.prnewswire.com/news-releases/edward-and-ludmila-smolyansky-request-lifeway-foods-inc-nasdaq-lway-ceo-julie-smolyansky-immediately-withdraws-her-lawsuit-against-edward-smolyansky-reiterate-and-reaffirm-singular-goal-amid-ongoing-activism-battle-302366859.html

SOURCE Edward and Ludmila Smolyansky

FAQ

What is the significance of the $2 million retention bonus awarded to LWAY CEO Julie Smolyansky in December 2024?

The Smolyanskys believe the $2 million retention bonus awarded on December 23, 2024, was a leverage tactic to fund Julie Smolyansky's legal actions against the Founding Shareholders.

How much voting control do Edward and Ludmila Smolyansky have in Lifeway Foods (LWAY)?

Edward and Ludmila Smolyansky exercise sole voting control of approximately 28% of the outstanding shares of Lifeway Foods common stock.

What impact has the Smolyanskys' activist campaign had on LWAY stock since 2022?

According to the press release, the activist campaign launched in 2022 has produced significant increases in Lifeway's share price.

Why did Ludmila Smolyansky begin selling LWAY shares in January 2025?

Ludmila Smolyansky began selling shares on January 3, 2025, to defend Edward after anticipating and following Julie's lawsuit filing on January 23.

What are the main governance concerns raised about LWAY's current board?

The concerns include potential conflicts of interest involving directors Jason Scher and Pol Sikar due to their personal ties to Julie Smolyansky, and obstruction of asset monetization and charitable efforts.