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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 28, 2026

☐	Transition report pursuant to Section 13 or 15(d) of the Exchange Act for the transition period from ☐ to ☐

Commission file number: 1-9009

Tofutti Brands Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		13-3094658
(State of Incorporation)		(I.R.S. Employer Identification No.)

105 Newfield Ave, Suite H, Edison, New Jersey 08837

(Address of Principal Executive Offices)

(908) 272-2400

(Registrant’s Telephone Number, including area code)

Securities registered pursuant to Section 12(g) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01 per share		TOFB		None

N/A

(Former Name, Former Address and Former Fiscal Year,

if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒
Smaller reporting company ☒		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of May 18, 2026 the Registrant had 5,153,706 shares of Common Stock, par value $0.01, outstanding.

TOFUTTI BRANDS INC.

INDEX

		Page
Part I - Financial Information:

Item 1.	Unaudited Condensed Financial Statements	3

	Unaudited Condensed Balance Sheets – March 28, 2026 and December 27, 2025	3

	Unaudited Condensed Statements of Operations -Thirteen weeks ended March 28, 2026 and March 29, 2025	4

	Unaudited Condensed Statements of Changes in Stockholders’ Equity - Thirteen weeks ended March 28, 2026 and March 29, 2025	5

	Unaudited Condensed Statements of Cash Flows – Thirteen weeks ended March 28, 2026 and March 29, 2025	6

	Notes to Unaudited Condensed Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16

Item 4.	Controls and Procedures	16

Part II - Other Information:

Item 1.	Legal Proceedings	17

Item 1A.	Risk Factors	17

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17

Item 3.	Defaults Upon Senior Securities	17

Item 4.	Mine Safety Disclosures	17

Item 5.	Other Information	17

Item 6.	Exhibits	17

Signatures		18

Item 1. Financial Statements

TOFUTTI BRANDS INC.

Unaudited Condensed Balance Sheets

(in thousands, except share and per share figures)

	March 28, 2026		December 27, 2025
Assets
Current assets:
Cash	$	63	$	347
Accounts receivable, net of allowance for doubtful accounts and sales promotions of $217 and $208		763		915
Inventories		1,936		1,729
Prepaid expenses and other current assets		92		91
Total current		2,854		3,082

Operating lease right-of-use assets		257		274
Finance lease right-of-use asset		1		7
Other assets		21		21
Total assets	$	3,133	$	3,384

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	651	$	586
Accrued expenses		254		294
Operating lease liability, current portion		72		70
Finance lease liability, current portion		1		6
Total current liabilities		978		956

Operating lease liabilities, net of current portion		202		220
Total liabilities	$	1,180	$	1,176

Stockholders’ equity:
Preferred stock - par value $.01 per share; authorized 100,000 shares, none issued and outstanding		-		-
Common stock - par value $.01 per share; authorized 15,000,000 shares, 5,153,706 shares issued and outstanding		52		52
Additional paid-in capital		377		377
Retained earnings		1,524		1,779
Total stockholders’ equity		1,953		2,208
Total liabilities and stockholders’ equity	$	3,133	$	3,384

See accompanying notes to unaudited condensed financial statements.

TOFUTTI BRANDS, INC.

Unaudited Condensed Statements of Operations

(in thousands, except per share figures)

	Thirteen weeks ended March 28, 2026			Thirteen weeks ended March 29, 2025

Net sales	$	1,557		$	1,591
Cost of sales		1,088			1,002
Gross profit		469			589

Operating expenses:
Selling and warehouse		239			217
Marketing		73			121
Research and development		51			44
General and administrative		359			368
Total operating expenses		722			750

Loss from operations		(253	)		(161	)
Interest expense		1			1
Loss before income tax		(254	)		(162	)
Provision for income taxes		1			—

Net loss	$	(255	)	$	(162	)

Weighted average common shares outstanding:
Basic		5,154			5,154
Diluted		5,154			5,154

Earnings (loss) per common share:
Basic	$	(0.05	)	$	(0.03	)
Diluted	$	(0.05	)	$	(0.03	)

See accompanying notes to unaudited condensed financial statements.

TOFUTTI BRANDS, INC.

Unaudited Condensed Statements of Changes in Stockholders’ Equity

(in thousands)

	Common Stock		Additional Paid-in Capital		Retained Earnings			Total
	Thirteen weeks ended March 29, 2025
	Common Stock		Additional Paid-in Capital		Retained Earnings			Total

December 29, 2024	$	52	$	377	$	2,557		$	2,986

Net loss		—		—		(162	)		(162	)
March 29, 2025	$	52	$	377	$	2,395		$	2,824

	Thirteen weeks ended March 28, 2026
	Common Stock		Additional Paid-in Capital		Retained Earnings			Total

December 27, 2025	$	52	$	377	$	1,779		$	2,208

Net loss		—		—		(255	)		(255	)
March 28, 2026	$	52		377		1,524			1,953

See accompanying notes to unaudited condensed financial statements.

TOFUTTI BRANDS INC.

Unaudited Condensed Statements of Cash Flows

(in thousands)

	Thirteen weeks ended March 28, 2026			Thirteen weeks ended March 29, 2025

Cash (used in) provided by operating activities, net	$	(279	)	$	148

Cash (used in) financing activities, net		(5	)		(1	)

Net (decrease) increase in cash		(284	)		147

Cash at beginning of period		347			462

Cash at end of period	$	63		$	609

Supplemental cash flow information:
Interest paid	$	—		$	1

See accompanying notes to unaudited condensed financial statement

TOFUTTI BRANDS INC.

Notes to Unaudited Condensed Financial Statements

(in thousands, except share and per share data)

Note 1: Basis of Presentation

The Company learned in February 2026 that the owner of our primary co-packer for our key products intends to close its plant effective July 31, 2026. The products produced by this facility accounted for approximately 80% of our sales for the year ended December 27, 2025. While management is actively searching for an alternative co-packer, there is no assurance a suitable replacement can be found. In addition, we have had declining revenues, recurring losses from operations and cash outflows from operations in the last few years. These conditions result in substantial doubt about our ability to continue as a going concern.

The accompanying unaudited condensed financial information, in the opinion of management, reflects all adjustments (which include only normally recurring adjustments) necessary to present fairly the Company’s financial position, operating results and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. The results of operations for the thirteen-week period ended March 28, 2026 are not necessarily indicative of the results to be expected for the full year or any other period.

The Company’s fiscal year is either a fifty-two or fifty-three-week period which ends on the Saturday closest to December 31^st.

Note 2: Recently Issued Accounting Standards

The Company considers the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s balance sheets or statements of operations.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

In July 2025, the FASB issued ASU No. 2025-05, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets,” which provides all entities, including public business entities, with a practical expedient, which allows the entity to assume that the current conditions as of the balance sheet date do not change for the remaining life of the asset when developing reasonable and supportable forecasts as part of estimating expected credit losses. The adoption of this standard did not have a material impact on our financial statements.

Note 3: Inventories

Inventories consist of the following:

Schedule of Inventories

	March 28, 2026		December 27, 2025
Finished products	$	988	$	1,158
Raw materials and packaging		948		571
Total Inventory	$	1,936	$	1,729

TOFUTTI BRANDS INC.

Notes to Unaudited Condensed Financial Statements

(in thousands, except share and per share data)

Note 4: Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company accounts for penalties or interest related to uncertain tax positions as part of its provision for income taxes.

The Company recognized income tax expense of $1 for the thirteen-week periods ended March 28, 2026 and $0 for the thirteen weeks ended March 29, 2025. The Company recorded a full valuation allowance on the deferred tax asset as of March 28, 2026.

Note 5: Earnings (Loss) Per Share

Basic earnings per common share (“EPS”) applicable to common stockholders is computed by dividing earnings applicable to common stockholders by the weighted-average number of common shares outstanding. If there is a loss from operations, diluted EPS is computed in the same manner as basic EPS is computed.

The following table sets forth the computation of basic and diluted earnings per share:

	Thirteen weeks ended March 28, 2026			Thirteen weeks ended March 29, 2025
Net Loss, numerator, basic computation	$	(255	)	$	(162	)
Net Loss, numerator, diluted computation		(255	)		(162	)
Weighted average shares - denominator basic computation		5,154			5,154
Weighted average shares, as adjusted - denominator diluted computation		5,154			5,154
Net Loss per common share - basic	$	(0.05	)	$	(0.03	)
Net Loss per common share - diluted	$	(0.05	)	$	(0.03	)

The following are securities excluded from weighted-average shares used to calculate diluted Net loss per common share, as the result of including them to calculate diluted EPS is anti-dilutive:

Thirteen weeks

Ended

March 28, 2026

Thirteen weeks

Ended

March 29, 2025

Shares subject to outstanding common stock options

250,000

Note 6: Share Based Compensation

On June 10, 2014, the shareholders of the Company approved the 2014 Equity Incentive Plan (the “2014 Plan”). The 2014 Plan provides for grants of various types of awards that are designed to attract and retain highly qualified personnel who will contribute to the success of the Company and to provide incentives to participants in the 2014 Plan that are linked directly to increases in shareholder value which will therefore ensure to the benefit of all shareholders of the Company. Such grants can be, but are not limited to, options, stock appreciation rights, restricted stock, performance grants, stock bonuses, and any other type of award that is consistent with the purposes of the 2014 Plan. Employees and officers of the Company are eligible to receive incentive stock options while corporate directors are only eligible to receive non-qualified options.

TOFUTTI BRANDS INC.

Notes to Unaudited Condensed Financial Statements

(in thousands, except share and per share data)

The 2014 Plan made 250,000 shares of common stock available for awards. No stock options have been granted since 2022. In 2022, 250,000 stock options were issued, and as of March 28, 2026, 250,000 non-qualified stock options remain outstanding. The exercise price of all options granted in 2022 is $0.95 per share, the market price at the close of business on the date of the grant. All options expire on December 22, 2027.

The following is a summary of stock option activity from December 27, 2025 to March 28, 2026:

Schedule of Stock Option Activity

	Shares		Weighted Average Exercise Price ($)
Outstanding at December 27, 2025		250,000		0.95
Granted		—		—
Exercised		—		—
Outstanding at March 28, 2026		250,000		0.95
Exercisable at March 28, 2026		250,000		0.95

The following table summarizes information about stock options outstanding from December 27, 2025 to March 28, 2026:

Range of

Exercise Prices ($)

Number

Outstanding

Weighted Average

Remaining Life

(in years)

Weighted Average

Exercise

Price($)

Number

Exercisable

0.95

250,000

1.75

0.95

250,000

Note 7: Revenue

Performance obligations relating to the delivery of food products are satisfied when the goods are shipped to the customer and net of all applicable discounts, as follows: Payment term discounts, off-invoice allowance, manufacturer chargeback, freight allowance, spoilage discounts, and product returns.

Revenues by geographical region are as follows:

	Thirteen weeks ended March 28, 2026		Thirteen weeks ended March 29, 2025
Revenues by geography:
Americas	$	1,519	$	1,499
Middle East		2		92
Europe		36		-
Total Net Sales	$	1,557	$	1,591

Approximately 95% of the Americas’ revenue for the thirteen weeks ended March 28, 2026 is attributable to sales in the United States compared with 94% of the Americas’ revenue for the thirteen weeks ended March 29, 2025. All of the Company’s assets are located in the United States.

TOFUTTI BRANDS INC.

Notes to Unaudited Condensed Financial Statements

(in thousands, except share and per share data)

Net sales by major product category:

	Thirteen weeks ended March 28, 2026		Thirteen weeks ended March 29, 2025
Frozen desserts	$	195	$	218
Cheeses		1,362		1,373
Total Net Sales	$	1,557	$	1,591

Note 8: Leases

In 2024, the Company signed a 5five-year lease to move our offices into a one-story facility in Edison, New Jersey. The 5,100 square foot facility houses our administrative offices, a warehouse, freezers, and refrigerators. The lease commenced on July 1, 2024, with an option to extend for an additional five years at the end of the lease. Annual rent for the lease escalates by 3% year over year until the end of the lease term. We completed the move into the new facility in September 2024. The Company determined that this lease met the criteria for classification as an operating lease under ASC 842. Rent expense was $22 for the thirteen weeks ended March 28, 2026 and $21 for the thirteen weeks ended March 29, 2025. The Company also rents warehouse storage space at various outside facilities. Outside warehouse expenses were $82 for the thirteen weeks ended March 28, 2026 and $77 for the thirteen weeks ended March 29, 2025. The Company has determined that these warehouse leases do not fall within the scope of ASC 842, as they are either month-to-month leases or have terms of 12 months or less. The Company rents a copier and mail machine under a finance lease. In 2022, the Company entered into a copier and mail machine lease, which still exists as of March 28, 2026. Payments for the copier and mail machine amounted to $2 for both the thirteen weeks ended March 28, 2026 and the thirteen weeks ended March 29, 2025.

Under Topic 842, operating lease expense is generally recognized evenly over the term of the lease. The standard requires a lessee to record a right-of-use asset and a corresponding lease liability at the inception of the lease.

Under Topic 842, finance lease cost includes amortization, which is recognized on a straight-line basis over the expected life of the leased asset, and interest expense, which is recognized following an effective interest rate method. The Company has a finance lease consisting of a copier lease with a term of four years. The standard requires a lessee to record a right-of-use asset and a corresponding lease liability at the inception of the lease.

The Company’s lease agreements generally do not provide an implicit borrowing rate; therefore, an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments. The Company used the incremental borrowing rates of between 5.5% and 6.5% for all leases.

TOFUTTI BRANDS INC.

Notes to Unaudited Condensed Financial Statements

(in thousands, except share and per share data)

ROU lease assets and lease liabilities for our operating leases were recorded in the balance sheet as follows:

	As of			As of
	March 28, 2026			December 27, 2025
Operating lease right-of-use assets	$	257		$	274

Current portion of lease liabilities		72			70
Operating lease liabilities, net of current portion		202			220
Total lease liability	$	274		$	290

Weighted average remaining lease term (in years)		3.3			3.6
Weighted average discount rate		5.5	%		5.5	%

ROU lease asset and lease liability for our finance lease were recorded in the balance sheet as follows:

	As of			As of
	March 28, 2026			December 27, 2025
Finance lease right-of-use asset	$	1		$	7

Current portion of lease liabilities		1			6
Total finance lease liabilities	$	1		$	6

Weighted average remaining lease term (in years)		.1			.4
Weighted average discount rate		6.5	%		6.5	%

Future lease payments included in the measurement of lease liabilities on the balance sheet as of March 28, 2026 are as follows:

Schedule of Future Lease Payments

	Operating lease liabilities		Finance lease liability		Total
2026 (remainder of the year)	$	69	$	1	$	70
2027		87		—		87
2028		89		—		89
2029		53		—		53
Total future minimum lease payments		298		1		299
Less present value adjustment		24		—		24
Total	$	274	$	1	$	275

Note 9: Commitments and Contingencies

The Company sells its products throughout the United States and in approximately twelve foreign countries and may be impacted by any future public health crises beyond its control. This could disrupt its operations and negatively impact sales of its products. The Company’s customers, suppliers and co-packers may experience similar disruption. Our selling prices may be affected due to market changes, increased competition, the general risk of inflation, the impacts of tariffs or the responses of other governments, consumers or suppliers to U.S. imposed tariffs, shortages or interruptions in supply due to weather, disease or other conditions beyond our control, or other reasons. While there are no current tariffs that have affected any of the Company’s imports or exports, uncertainty regarding their implementation has already influenced the purchasing decisions of some of our domestic and international customers.

TOFUTTI BRANDS INC.

Notes to Unaudited Condensed Financial Statements

(in thousands, except share and per share data)

Note 10: Accrued Expenses

Accrued expenses and other current liabilities consist of the following:

	As of		As of
	March 28, 2026		December 27, 2025
Accrued professional fees		9		-
Uncertain tax position		214		213
Inventory and expense accrual		31		81

Total accrued expenses	$	254	$	294

Note 11: Related Party Transactions

During the thirteen weeks ending March 28, 2026 and March 29, 2025, we paid The CFO Squad $6 and $2, respectively, for financial services. Joseph Himy is the Managing Director of The CFO Squad and a member of our Board of Directors. No amounts were accrued in our balance sheet for services provided by the CFO Squad during the thirteen weeks ended March 28, 2026, and March 29, 2025.

Note 12: Segment Information

The Company views its operations and manages its business in one reportable segment, which is the development, production and marketing of soy and other vegetable protein- based, dairy free cheese and frozen food products.

Steven Kass, the Company’s Chief Executive Officer and Chief Financial Officer is the Chief Operating Decision Maker (“CODM”). The CODM evaluates performance and makes operating decisions about allocating resources based on net loss and cash balances presented in the accompanying statement of operations and balance sheet, respectively.

The measure of segment assets is reported on the balance sheets as total assets. Any long-lived assets are located in the United States.

NOTE 13: Customer Concentrations

As of March 28, 2026 two customers accounted for 43% of our accounts receivable. Two customers accounted for 44% of our accounts receivable as of December 27, 2025.

One customer represented 20% and another customer accounted for 14% of total sales, for the thirteen weeks ended March 28, 2026. For the thirteen weeks ending March 29, 2025, one customer represented 24% and another customer accounted for 16% of total sales.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is management’s discussion and analysis of certain significant factors which have affected our financial position and operating results during the periods included in the accompanying financial statements.

The discussion and analysis which follows in this Quarterly Report and in other reports and documents and in oral statements made on our behalf by our management and others may contain trend analysis and other forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 which reflect our current views with respect to future events and financial results. These include statements regarding our earnings, projected growth and forecasts, and similar matters which are not historical facts. We remind stockholders that forward-looking statements are merely predictions and therefore are inherently subject to uncertainties and other factors which could cause the actual future events or results to differ materially from those described in the forward-looking statements. These uncertainties and other factors include, among other things, business conditions in the food industry and general economic conditions, both domestic and international; lower than expected customer orders; competitive factors; changes in product mix or distribution channels; and resource constraints encountered in developing new products. The forward-looking statements contained in this Quarterly Report and made elsewhere by or on our behalf should be considered in light of these factors.

Critical Accounting Estimates

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The policies discussed below are considered by management to be critical to an understanding of our financial statements because their application places the most significant demands on management’s judgment, with financial reporting results relying on estimation about the effect of matters that are inherently uncertain. Specific risks for these critical accounting policies are described in the following paragraphs. For all of these policies, management cautions that future events rarely develop exactly as forecast, and the best estimates routinely require adjustment.

Revenue Recognition. We primarily sell vegan and dairy-free soy-based cheeses and frozen desserts. We recognize revenue when control over the products transfers to our customers, deemed to be the performance obligation, which generally occurs when the product is shipped or picked up from one of our distribution locations by the customer. We account for product shipping, handling and insurance as fulfillment activities with revenues for these activities recorded within net revenue and costs recorded within cost of sales. Revenues are recorded net of trade and sales incentives and estimated product returns. Known or expected pricing or revenue adjustments, such as trade discounts, rebates or returns, are estimated at the time of sale. We base these estimates of expected amounts principally on historical utilization and redemption rates. Estimates that affect revenue, such as trade incentives and product returns, are monitored and adjusted each period until the incentives or product returns are realized.

Key sales terms, such as pricing and quantities ordered, are established on a frequent basis such that most customer arrangements and related incentives have a one year or shorter duration. As such, we do not capitalize contract inception costs and we capitalize product fulfillment costs in accordance with U.S. GAAP and our inventory policies. We generally do not have any unbilled receivables at the end of a period.

Accounts Receivable. The majority of our accounts receivables are due from distributors (domestic and international) and retailers. Management closely monitors outstanding balances during the year and allocates an allowance account if appropriate. The Company estimates and records a provision for its expected credit losses related to its financial instruments, including its trade receivables and contract assets. The Company considers historical collection rates, the current financial status of its customers, macroeconomic factors, and other industry-specific factors when evaluating for current expected credit losses. Forward-looking information is also considered in the evaluation of current expected credit losses. However, because of the short time to the expected receipt of accounts receivable, the Company believes that the carrying value, net of expected losses, approximates fair value and therefore, relies more on historical and current analysis of such financial instruments.

Inventory. Inventory is stated at lower of cost or net realizable value determined by first in first out (FIFO) method. Inventories in excess of future demand are written down and charged to the provision for inventories. At the point of which loss is recognized, a new, lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in the newly established cost basis.

Leases. Under Topic 842, operating lease expense is generally recognized evenly over the term of the lease. We have operating leases primarily consisting of facilities with remaining lease terms of approximately one to three years. Leases with an initial term of twelve months or less are not recorded on the balance sheet. For lease agreements entered into or reassessed after the adoption of Topic 842, we have combined the lease and non-lease components in determining the lease liabilities and right of use assets.

Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded if there is uncertainty as to the realization of deferred tax assets. We will recognize a tax benefit in the financial statements for an uncertain tax position only if management’s assessment is that the position is “more likely than not” (i.e., a likelihood greater than 50 percent) to be allowed by the tax jurisdiction based solely on the technical merits of the position. The term “tax position” refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for financial reporting purposes.

Recent Accounting Pronouncements and Adoption

Our company considers the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on our balance sheets or statements of operations.

In July 2025, the FASB issued ASU No. 2025-05, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”, which provides all entities, including public business entities, with a practical expedient, which allows the entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset when developing reasonable and supportable forecasts as part of estimating expected credit losses. The adoption of this standard did not have a material impact on our financial statements.

Results of Operations

Thirteen Weeks Ended March 28, 2026 Compared with Thirteen Weeks Ended March 29, 2025

Net sales for the thirteen weeks ended March 28, 2026 decreased by $34,000, or 2%, from net sales of $1,591,000 for the thirteen weeks ended March 29, 2025 to $1,557,000 for the thirteen weeks ended March 28, 2026. Sales of our vegan cheese products decreased slightly to $1,362,000 in the thirteen weeks ended March 28, 2026 from $1,373,000 in the thirteen weeks ended March 29, 2025. Sales of our frozen dessert products decreased to $195,000 in the thirteen weeks ended March 28, 2026 from $218,000 for the thirteen weeks ended March 29, 2025.

Our gross profit decreased to $469,000 for the thirteen weeks ended March 28, 2026 from $589,000 for the thirteen weeks ended March 29, 2025. Our gross profit percentage was 30% for the thirteen weeks ending March 28, 2026 compared to 37% for the thirteen weeks ending March 29, 2025. There were significant ingredient and packaging cost increases that took place in the first quarter of 2026 that were not present in the first quarter of 2025.

Freight out expense, a significant part of our cost of sales, decreased by $19,000, or 17%, to $90,000, for the thirteen weeks ended March 28, 2026 compared with $109,000 for the thirteen weeks March 29, 2025. Freight out expense was 6% of sales for the thirteen weeks ended March 28, 2026 compared to 7% of sales for the thirteen weeks ended March 29, 2025. We anticipate that the freight expense, as a percentage of sales, will increase for the balance of 2026 due to the ongoing fuel cost increases caused by the hostilities in Iran.

Selling expenses increased by $22,000, or 10%, to $239,000 for the thirteen weeks ended March 28, 2026 from $217,000 for the thirteen weeks ended March 29, 2025. This increase was due to increases in meetings and convention expense of $6,000 and outside warehouse retail expense of $5,000.

Marketing expenses decreased by $48,000, or 40%, to $73,000 for the thirteen weeks ended March 28, 2026 from $121,000 for the thirteen weeks ended March 29, 2025. The decrease was due primarily to decreases in advertising expense of $34,000, and artwork and plate expense of $12,000. We anticipate that our marketing promotion expenses will continue at the same level for the balance of 2026.

Product development costs increased slightly by $7,000, or 16%, to $51,000 for the thirteen weeks ended March 28, 2026 from $44,000 for the thirteen weeks ended March 29, 2025 due to a $5,000 increase in professional fees and outside services expense. We anticipate our product development costs for the balance of the year will continue at a slightly higher level as compared to the 2025 period due to higher professional fees and outside services expense.

General and administrative expenses decreased by $9,000, or 2%, to $359,000 for the thirteen weeks ended March 28, 2026 from $368,000 for the thirteen weeks ended March 29, 2025, due to a decrease in general insurance expense of $35,000, which was partially offset by increases in professional fees and outside service expense of $15,000 and public relation expense of $12,000.

Income tax expense was $1 for the thirteen weeks ended March 28, 2026 and $0 for the thirteen weeks ended March 29, 2025 due to the net losses incurred during both periods.

Liquidity and Capital Resources

As of March 28, 2026, we had approximately $63,000 in cash and our working capital was approximately $1,876,000, compared with approximately $347,000 in cash and working capital of $2,126,000 at December 27, 2025. As of May 14, 2026, we had approximately $366,000 in cash.

The following table summarizes our cash flows for the periods presented:

	Thirteen Weeks ended			Thirteen Weeks ended
	March 28, 2026			March 29, 2025

Cash (used in) provided by operating activities, net	$	(279,000	)	$	148,000
Cash (used in) financing activities, net		(5,000	)		(1,000	)
Net increase (decrease) in cash	$	(284,000	)	$	147,000

Net cash used in operating activities for the thirteen weeks ended March 28, 2026 was $279,000 compared to $148,000 provided by operating activities for the thirteen weeks ended March 29, 2025. The decrease in net cash used by operating activities for the thirteen weeks ended March 28, 2026 was primarily a result of net loss of $255,000 and an increase in inventory of $207,000, which was partially offset by a decrease in accounts receivable of $152,000.

Inflation and Seasonality

While we do not believe that our operating results have been materially affected by inflation during the preceding two years, there can be no assurance that our operating results will not be affected by inflation in the future. Although we have not experienced adverse price increases on our imports or exports due to tariffs, there is no guarantee that future tariffs will not negatively impact our business. Our business is subject to minimal seasonal variations with slightly increased sales historically in the second and third quarters of the fiscal year. We expect to continue to experience slightly higher sales in the second and third quarters, and slightly lower sales in the fourth and first quarters, as a result of reduced sales of dairy free frozen desserts during those periods.

Off-balance Sheet Arrangements

None.

Contractual Obligations

We had no material contractual obligations as of March 28, 2026.

Recently Issued Accounting Standards

See Note 2 to the unaudited condensed financial statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We do not believe that our exposure to market risk related to the effect of changes in interest rates, foreign currency exchange rates, commodity prices and other market risks with regard to instruments entered into for trading or for other purposes is material.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. As of March 28, 2026, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 28, 2026 because of the material weaknesses in internal control over financial reporting described below.

The material weaknesses related to: (i) a continuing lack of sufficient resources and an insufficient level of monitoring and oversight, which may restrict our ability to gather, analyze and report information relative to the financial statements, including accounting estimates, reserves, allowances and income tax matters, in a timely manner; and (ii) the limited size of our accounting department, which makes it impracticable to achieve an optimum separation of duties and monitoring of internal controls. To date, we have been unable to remediate these weaknesses, which stem from our small workforce.

Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended March 28, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any material litigation.

Item 1A. Risk Factors

Increased commodity costs could decrease our profit margins which could adversely affect our business.

Our profitability depends, in part, on our ability to anticipate and react to changes in the price and availability of food commodities. Prices may be affected due to market changes, increased competition, the general risk of inflation, the impacts of tariffs or the responses of other governments, consumers or suppliers to U.S. imposed tariffs, shortages or interruptions in supply due to weather, disease or other conditions beyond our control, or other reasons. While we have been able to partially offset inflation and other changes in the costs of commodities by increasing prices, there can be no assurance that we will be able to continue to do so in the future.

Additionally, with elevated inflationary pressures across the business, we face an above average risk that we will have to renegotiate contracts and agreements with suppliers on a more frequent basis. Shortened windows of certainty can impact our ability to plan our business from a supply and profitability perspective and we face greater risk of margin volatility.

There have been no other material changes to the Company’s “Risk Factors” set forth in its Annual Report on Form 10-K for the year ended December 27, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Default Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

During the three months ended March 28, 2026, no director or executive officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

31.1		Certification by Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
31.2		Certification by Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
32.1		Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Schema Document
101.CAL		Inline XBRL Calculation Linkbase Document
101.DEF		Inline XBRL Definition Linkbase Document
101.LAB		Inline XBRL Labels Linkbase Document
101.PRE		Inline XBRL Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TOFUTTI BRANDS INC.
	(Registrant)

	/s/ Steven Kass
	Steven Kass
	Chief Executive Officer
	Chief Accounting and Financial Officer

Date: May 18, 2026

TOFUTTI BRANDS INC 10-Q