Annual Statement of Changes in Beneficial Ownership (5)

FORM 5

[ ] Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
[ ] Form 3 Holdings Reported
[ X ] Form 4 Transactions Reported

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

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Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940

1. Name and Address of Reporting Person ^* SMOLYANSKY JULIE	2. Issuer Name and Ticker or Trading Symbol LIFEWAY FOODS INC [LWAY]	5. Relationship of Reporting Person(s) to Issuer (Check all applicable) __ X __ Director _____ 10% Owner __ X __ Officer (give title below) _____ Other (specify below) President and CEO
(Last) (First) (Middle) C/O LIFEWAY FOODS, INC., 6431 OAKTON STREET	3. Statement for Issuer's Fiscal Year Ended (MM/DD/YYYY) 12/31/2016
(Street) MORTON GROVE, IL 60053 (City) (State) (Zip)	4. If Amendment, Date Original Filed (MM/DD/YYYY)	6. Individual or Joint/Group Filing (Check Applicable Line) _ X _ Form Filed by One Reporting Person ___ Form Filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security (Instr. 3)	2. Trans. Date	2A. Deemed Execution Date, if any	3. Trans. Code (Instr. 8)	4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1.Title of Security (Instr. 3)	2. Trans. Date	2A. Deemed Execution Date, if any	3. Trans. Code (Instr. 8)	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock, no par value							499262	D
Common Stock, no par value	12/30/2016		G	1200	A	$0	16920	I	See Footnote ⁽¹⁾
Common Stock, no par value							2886	I	See Footnote ⁽²⁾
Common Stock, no par value							500000	I	See Footnote ⁽³⁾

*Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g.* , puts, calls, warrants, options, convertible securities)**
1. Title of Derivate Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Trans. Date	3A. Deemed Execution Date, if any	4. Trans. Code (Instr. 8)	5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (MM/DD/YYYY)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of Derivative Securities Beneficially Owned at End of Issuer's Fiscal Year (Instr. 4)	10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivate Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Trans. Date	3A. Deemed Execution Date, if any	4. Trans. Code (Instr. 8)	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)			11. Nature of Indirect Beneficial Ownership (Instr. 4)
Performance Shares	$0	11/17/2016		J4 ⁽⁴⁾		9407	8/17/2017	8/17/2017	Common Stock	9407	$0	0	D

Explanation of Responses:
( 1)	Held for the benefit of minor children.
( 2)	Held by the Reporting Person's spouse.
( 3)	The reporting person is the beneficial owner of 50% of Smolyansky Family Holdings, LLC and disclaims beneficial ownership of such shares except to the extent of any pecuniary interest therein.
( 4)	The grant of Performance Shares, which provided for vesting on August 17, 2017, was cancelled and extinguished pursuant to resolutions adopted by the Board of Directors' Compensation Committee in exchange for a cash payment in the amount of the original value of the performance share award.

Reporting Owners
Reporting Owner Name / Address	Relationships
Reporting Owner Name / Address	Director	10% Owner	Officer	Other
SMOLYANSKY JULIE C/O LIFEWAY FOODS, INC. 6431 OAKTON STREET MORTON GROVE, IL 60053	X		President and CEO

Signatures
/s/ Julie Smolyansky		2/14/2017
^** Signature of Reporting Person		Date

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note:	File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
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