Letter Urges Shareholders to Vote the GREEN Universal Proxy Card for Nominees. 

CHICAGO, Dec. 5, 2025 /PRNewswire/ -- Edward Smolyansky today announced that he has filed a Definitive Proxy Statement (DEFN14A) with the U.S. Securities and Exchange Commission in connection with the upcoming 2025 Annual Meeting of Shareholders of Lifeway Foods, Inc. (NASDAQ: LWAY). The action continues the effort toward comprehensive board change to finally end the long-running governance failures, value destruction, and entrenched leadership practices that have plagued the Company at the expense of its shareholders.

Dear Shareholders,

I, together with my mother and co-founder Ludmila Smolyansky, maintain significant ownership in Lifeway Foods, Inc. (Nasdaq: LWAY) with an aggregate 26.17% stake in the Company.

Over the past year, Lifeway shareholders have witnessed first-hand how a board motivated by both self-interest and entrenchment, and hampered by its legacy of failed governance, can become undone. The recent Cooperation Agreement reached between Lifeway and its largest shareholder Danone North America PBC ("Danone"), calls for favorable governance changes including the separation of the CEO and Chair roles and the mandated refreshment of the Board through the addition of four new independent directors.¹  

While certain shareholders may be satisfied with this outcome, we fear that the Cooperation Agreement did not go far enough in ensuring that Lifeway can move forward with a well-constituted board for the benefit of ALL shareholders. Specifically, we believe that certain legacy directors prioritized self-preservation ahead of long-term value creation, and their continued presence on the Board might ultimately harm shareholders again. Furthermore, we question the vetting process for these new directors and whether a search firm should have been retained to help identify candidates with relevant skills.

We believe that the retention of certain legacy directors along with the addition of new nominees lacking relevant skills and expertise will create another sub-optimal Board for Lifeway and undermine the will of its shareholders in a manner similar to the previous Board. Accordingly, I have nominated two qualified nominees –George Sent and Edward Smolyansky – both of whom have served Lifeway in an executive or director role and thus have relevant industry experience and institutional knowledge.

Additionally, we are seeking to establish the Strategy and Performance Committee, comprised of only new independent directors, to evaluate management and Lifeway's corporate strategy.

The Danone Debacle

On September 23, 2024, Danone offered to buy Lifeway for $25 per share, later increasing the bid to $27 per share, representing a 72% premium. The Board rejected both offers and adopted a rights plan. Legal disputes arose over a shareholder agreement and a stock grant to CEO Julie Smolyansky. In July 2025, a consent solicitation was launched to replace the Board, prompting governance improvements through a Cooperation Agreement. Despite citing topline growth as justification for rejecting the offers, the Board lacked a clear strategy to boost share price, raising concerns about management's effectiveness and alignment with shareholder interests. Danone eventually gained influence on Board membership without paying a control premium, but new directors lack relevant industry experience. The Board requires independent members not tied to either the CEO or Danone.

Self-Dealing by Legacy Directors

Shareholders have repeatedly opposed CEO compensation, with Institutional Shareholder Services advising against it due to excessive pay. Jason Burdeen, the CEO's spouse, received $313,800 as Chief of Staff in 2024 without a formal contract. In December 2024, the Board granted the CEO $6.5 million in shares and a $2 million cash bonus—totaling $8.5 million, 94% of net income and nearly matching three years' total CEO pay. These actions eroded shareholder trust. The combined CEO/Chair structure has compromised Board independence, and shareholders are encouraged to vote "WITHHOLD" for Jason Scher at the 2025 meeting.

Questionable Stock Sales

Amid the negotiations with Danone, shareholders should be deeply concerned as to why Lead Independent Director and Chair of the Audit and Corporate Governance Committee, Jason Scher, sold 24,566 of his 24,567 shares at an average share price of $24.23, thereby reducing his ownership in Lifeway stock to a single common share in June of 2025.² This seems inconsistent with the Board's view that Danone's $27 offer price significantly undervalued the Company. Furthermore, the Board has yet to address how its Lead Independent Director is not in violation of the Company's Director Stock Ownership and Holding Policy by reducing his ownership to a single share instead of the required 200% of the annual retainer. 

Continued Governance Failures

Following the announcement of the Cooperation Agreement on September 30, 2025, there continues to be signs of failed governance that plagued the previous Board. On October 29, 2025, the Company extended the poison pill for another year.³ While the intent is typically to deter hostile takeover attempts, which the Company acknowledges is not a risk, the unintended consequence is that credible merger and/or acquisition interest is often discouraged. We fear that the same legacy directors that worked to oppose the Danone sale may continue to eschew other credible offers at the expense of shareholders.  

We note that the latest shareholder letter from the "new" Board demonstrates an ongoing pattern of actions aligning closely with those of the CEO. This includes issuing a shareholder communication under their own name containing statements that appear not to have undergone independent verification. The letter also contains critiques seemingly based on personal conjecture  rather than objective and appropriate evaluation by the Board.

We also note that a byproduct of such attacks has been the Company's propensity to engage in meritless and costly litigation with its largest shareholders versus constructive dialogue centered around long-term value creation.  

Regarding the annual meeting of shareholders, the Company not only delayed the 2025 meeting unnecessarily from June to December but also failed to provide the customary notice period of 45 days. The Company's last shareholder meeting occurred in June of 2024. The December 29, 2025, meeting date was announced with the publication of the definitive proxy filed on December 1, 2025.

While we applaud the comprehensive refreshment mandated by the recent Cooperation Agreement, we continue to be reminded that the Lifeway Board has not in fact turned the proverbial corner in the way that is administers governance and engages with its shareholders.

We believe that Lifeway's hostility towards certain shareholders deflects attention away from those matters most important to investors: ridding the Board of the persistent misconduct and governance failures that has caused the Company's share price to underachieve. It is only by removing those legacy directors most responsible for the Board's prior misconduct that the Company will be able to embrace accountability and effect the type of change that shareholders need.

Very truly yours,

Edward Smolyansky

Important Information

This communication is not a request for a proxy to vote on any matter. Any written solicitation of a proxy by Mr. Smolyansky will be made through the definitive proxy statement (the "Shareholder Proxy Statement"). Lifeway shareholders are urged to read the Shareholder Proxy Statement, including any amendments or supplements thereto, and any other soliciting materials, when they become available as they will contain important information. Shareholders may obtain, free of charge, copies of the Shareholder Proxy Statement at sec.gov.

Participants in the Solicitation

Mr. Smolyansky has notified the Company of his intent to nominate himself and George Sent for election as directors of Lifeway at the 2025 Annual Meeting. Each of them may be deemed to be a participant in any solicitation of proxies by Mr. Smolyansky. Lifeway shareholders can find information regarding Mr. Smolyansky and Mr. Sent, and their respective direct or indirect interests, by security holdings or otherwise, in the Shareholder Proxy Statement and in Mr. Smolyansky's other filings with the SEC, all of which information is incorporated herein by reference.

¹ Danone Lifeway Cooperation Agreement 9/30/2025 
² SEC FORM 4 - Jason Scher 6/26/2025 
³ Lifeway Shareholder Rights Plan 10/29/2025

Contact: 
Edward Smolyansky
esmolyansky79@icloud.com 

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