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2024-06-29 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure TOFB:Segment utr:sqft

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 June 28, 2025

☐	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 August 18, 2025 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

	Condensed Balance Sheets (Unaudited) – June 28, 2025 and December 28, 2024	3

	Unaudited Condensed Statements of Operations -Thirteen and Twenty-Six weeks ended June 28, 2025 and June 29, 2024	4

	Unaudited Condensed Statements of Changes in Stockholders’ Equity - Thirteen and Twenty-Six weeks ended June 28, 2025 and June 29, 2024	5

	Unaudited Condensed Statements of Cash Flows – Twenty-Six weeks ended June 28, 2025 and June 29, 2024	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	18

Item 1A.	Risk Factors	18

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18

Item 3.	Defaults Upon Senior Securities	18

Item 4.	Mine Safety Disclosures	18

Item 5.	Other Information	18

Item 6.	Exhibits	18

Signatures		19

Item 1. Financial Statements

TOFUTTI BRANDS INC.

Condensed Balance Sheets

(in thousands, except share and per share figures)

	(Unaudited) June 28, 2025		December 28, 2024
Assets
Current assets:
Cash	$	350	$	462
Accounts receivable, net of allowance for credit losses and sales promotions of $331 and $389.		715		989
Inventories		2,211		1,879
Prepaid expenses and other current assets		91		111
Total current		3,367		3,441

Operating lease right-of-use assets		307		340
Finance lease right-of-use asset		13		21
Other assets		21		21
Total assets	$	3,708	$	3,823

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	333	$	257
Accrued expenses		220		211
Operating lease liability, current portion		67		64
Finance lease liability, current portion		14		16
Total current liabilities		634		548

Operating lease liabilities, net of current portion		257		283
Finance lease liability, net of current portion		—		6
Total liabilities		891		837

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		2,388		2,557
Total stockholders’ equity		2,817		2,986
Total liabilities and stockholders’ equity	$	3,708	$	3,823

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 June 28, 2025			Thirteen weeks ended June 29, 2024			Twenty-six weeks ended June 28, 2025			Twenty-six weeks ended June 29, 2024

Net sales	$	2,029		$	2,283		$	3,620		$	4,495
Cost of sales		1,411			1,616			2,413			3,359
Gross profit		618			667			1,207			1,136

Operating expenses:
Selling and warehouse		188			250			405			464
Marketing		89			79			210			213
Research and development		39			22			83			64
General and administrative		309			342			670			724
Total operating expenses		625			693			1,368			1,465

Loss from operations		(7	)		(26	)		(161	)		(329	)


Loss before interest expense and income taxes		(7	)		(26	)		(161	)		(329	)
Interest expense		—			1			1			1
Loss before income tax expense		(7	)		(27	)		(162	)		(330	)
Income tax expense		—			5			7			5

Net loss	$	(7	)	$	(32	)	$	(169	)	$	(335	)

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

Loss per common share:
Basic	$	(0.00	)	$	(0.01	)	$	(0.03	)	$	(0.06	)
Diluted	$	(0.00	)	$	(0.01	)	$	(0.03	)	$	(0.06	)

See accompanying notes to unaudited condensed financial statements.

TOFUTTI BRANDS, INC.

Unaudited Condensed Statements of Changes in Stockholders’ Equity

(in thousands)


	Thirteen and twenty-six weeks ended June 29, 2024
	Common Stock		Additional Paid-in Capital		Retained Earnings			Total

December 30, 2023	$	52		323		3,417			3,792
Stock-based compensation		—		14		—			14
Net loss		—		—		(303	)		(303	)
March 30, 2024	$	52		337		3,114			3,503
Stock-based compensation		—		13		—			13
Net loss		—		—		(32	)		(32	)
June 29, 2024	$	52		350		3,082			3,484

	Thirteen and twenty-six weeks ended June 28, 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
Balance	$	52	$	377	$	2,395		$	2,824

Net loss		—		—		(7	)		(7	)
June 28, 2025	$	52	$	377	$	2,388		$	2,817
Balance	$	52	$	377	$	2,388		$	2,817

See accompanying notes to unaudited condensed financial statements.

TOFUTTI BRANDS INC.

Unaudited Condensed Statements of Cash Flows

(in thousands)

	Twenty-six weeks ended June 28, 2025			Twenty-six weeks ended June 29, 2024

Cash used in operating activities, net	$	(108	)	$	(344	)

Cash used in financing activities, net		(4	)		(4	)

Net decrease in cash		(112	)		(348	)

Cash at beginning of period		462			837

Cash at end of period	$	350		$	489

Supplemental cash flow information:
Income taxes payable	$	—		$	7
Interest paid on finance leases	$	1		$	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 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 June 28, 2025 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. The Company is currently evaluating the impact of these standards will have on it financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. The ASU’s amendments are effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact that adoption of ASU 2023-09 will have on its financial statements.

Note 3: Inventories

Inventories consist of the following:

Schedule of Inventories

	June 28, 2025		December 28, 2024
Finished products	$	1,401	$	1,101
Raw materials and packaging		810		778
Total inventory	$	2,211	$	1,879

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 $0 and $5 for the thirteen week periods ended June 28, 2025 and June 29, 2024, respectively. The Company recognized income tax expense of $7 and $5 for the twenty-six week periods ended June 28, 2025 and June 29, 2024, respectively. The Company recorded a full valuation allowance on the deferred tax asset as of June 28, 2025.

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 June 28, 2025			Thirteen weeks ended June 29, 2024			Twenty-six weeks ended June 28, 2025			Twenty-six weeks ended June 29, 2024
Loss, numerator, basic computation	$	(7	)	$	(32	)	$	(169	)	$	(335	)
Net loss, numerator, diluted computation	$	(7	)	$	(32	)	$	(169	)	$	(335	)
Weighted average shares - denominator basic computation		5,154			5,154			5,154			5,154
Weighted average shares, as adjusted - denominator diluted computation		5,154			5,154			5,154			5,154
Loss per common share - basic	$	(0.00	)	$	(0.01	)	$	(0.03	)	$	(0.06	)
Loss per common share - diluted	$	(0.00	)	$	(0.01	)	$	(0.03	)	$	(0.06	)

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

June 28, 2025

Thirteen weeks

Ended

June 29, 2024

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. The 2014 Plan also permits performance-based 2014 awards paid under it to be tax deductible under Section 162(m) of the Internal Revenue Code of 1986, as amended, as “performance-based compensation. As of June 28, 2025 the 2014 plan is expired. “No stock options have been granted since 2022. In 2022, 250,000 stock options were issued, and as of June 28, 2025, 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. 83,333 of the options vested at the respective grant date, 83,333 vested in December 2023, and 83,334 vested in December 2024. All options expire on December 22, 2027.

The following is a summary of stock option activity from December 28, 2024 to June 28, 2025:

Schedule of Stock Option Activity

	NON-QUALIFIED OPTIONS
	Shares		Weighted Average Exercise Price ($)
Outstanding at December 28, 2024		250,000	$	0.95
Granted		—		—
Exercised		—		—
Outstanding at June 28, 2025		250,000	$	0.95
Exercisable at June 28, 2025		250,000	$	0.95

The following table summarizes information about stock options outstanding from December 29, 2024 to June 28, 2025:

Range of

Exercise Prices ($)

Number

Outstanding

Weighted Average Remaining Life

(in years)

Weighted Average

Exercise

Price($)

Number

Exercisable

0.95

250,000

1.5

0.95

250,000

As of June 28, 2025 and June 29, 2024 the intrinsic value of the options outstanding and exercisable options was $0. As of June 28, 2025 there was $0 of total unrecognized compensation cost. Total stock-based compensation for the thirteen weeks ended June 28, 2025 and June 29, 2024 was $0 and $22, respectively, which is recorded in general and administrative expenses on the statements of operations. Total stock-based compensation for the twenty-six weeks ended June 28, 2025 and June 29, 2024 was $0 and $26, respectively, which is recorded in general and administrative expenses on the statements of operations.

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 June 28, 2025		Thirteen weeks ended June 29, 2024		Twenty-six weeks ended June 28, 2025		Twenty-six weeks ended June 29, 2024
Revenues by geography:
Americas	$	1,916	$	2,099	$	3,415	$	4,224
Europe		6		79		6		79
Asia Pacific and Africa		65		—		65		—
Middle East		42		105		134		192
Total Net Sales	$	2,029	$	2,283	$	3,620	$	4,495

Approximately 80% of the Americas’ revenue for the thirteen weeks ended June 28, 2025 is attributable to sales in the United States compared with 95% of the Americas’ revenue for the thirteen weeks ended June 29, 2024. Approximately 81% of the Americas’ revenue for the twenty-six weeks ended June 28, 2025 is attributable to sales in the United States compared with 92% of the Americas’ revenue for the twenty-six weeks ended June 29, 2024.

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 June 28, 2025		Thirteen weeks ended June 29, 2024		Twenty-six Weeks ended June 28, 2025		Twenty-six Weeks ended June 29, 2024
Frozen desserts and foods	$	321	$	357	$	539	$	760
Cheeses		1,708		1,926		3,081		3,735
Total Sales	$	2,029	$	2,283	$	3,620	$	4,495

Note 8: Leases

In 2024, the Company signed a 5 five-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 $21 and $27 for the thirteen weeks ended June 28, 2025 and June 29, 2024. Rent expense was $42 and $55 for the twenty-six weeks ended June 28, 2025 and June 29, 2024. The Company also rents warehouse storage space at various outside facilities. Outside warehouse expenses were $100 for the thirteen weeks ended June 28, 2025 and $98 for the thirteen weeks ended June 29, 2024. Outside warehouse expenses were $177 for the twenty-six weeks ended June 28, 2025 and $181 for the twenty-six weeks ended June 29, 2024. 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 June 28, 2025. Payments for the copier and mail machine amounted to $4 for the thirteen weeks ended June 28, 2025 and $0 for the thirteen weeks ended June 29, 2024. Payments for the copier and mail machine amounted to $6 for the twenty-six weeks ended June 28, 2025 and $0 for the twenty-six weeks ended June 29, 2024.

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
	June 28, 2025			December 28, 2024
Operating lease right-of-use assets	$	307		$	340

Current portion of lease liabilities		67			64
Operating lease liabilities, net of current portion		257			283
Total lease liability	$	324		$	347

Weighted average remaining lease term (in years)		4.2			4.7
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
	June 28, 2025			December 28, 2024
Finance lease right-of-use asset	$	13		$	21

Current portion of lease liabilities		14			16
Finance lease liabilities, net of current portion		0			6
Total finance lease liabilities	$	14		$	22

Weighted average remaining lease term (in years)		0.83			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 June 28, 2025 are as follows:

Schedule of Future Lease Payments

	Operating lease liability			Finance lease liability			Total
2025 (remainder of the year)	$	41		$	9		$	50
2026		84			7			91
2027		87			—			87
2028		89			—			89
2029		53			—			53
Total future minimum lease payments		354			16			370
Present value adjustment		(30	)		(2	)		(32	)
Total	$	324		$	14		$	338

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
	June 28, 2025		December 28, 2024
Accrued payroll and other benefits	$	1	$	-
Accrued professional fees		8		-
Uncertain tax position		211		211

Total accrued expenses	$	220	$	211

Note 11: Related Party Transactions

During the thirteen weeks ending June 28, 2025 and June 29, 2024, we paid The CFO Squad $2,000 and $1,000, and $25,000 and $16,000 for the twenty-six weeks ending June 28, 2025 and June 29, 2024, respectively. 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 CFO Squad during the thirteen weeks ended June 28, 2025, and June 29, 2024.

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 June 28, 2025 two customers accounted for 20% and 19% of accounts receivable, respectively. There was two customers that accounted for 15% and 14% of accounts receivable as of June 29, 2024.

For sales, three customers represented 17%, 16%, and 15%, respectively, of total sales, for the thirteen weeks ended June 28, 2025. For the thirteen weeks ended June 29, 2024 three customers accounted for 17%, 15%, and 14% of sales, respectively. For sales, three customers represented 19%, 17%, and 12% of total sales, respectively, for the twenty-six weeks ended June 28, 2025. For the twenty-six weeks ended June 29, 2024 three customers accounted for 18%, 15%, and 13% of sales, respectively.

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

Results of Operations

Thirteen Weeks Ended June 28, 2025 Compared with Thirteen Weeks Ended June 29, 2024

Net sales for the thirteen weeks ended June 28, 2025 decreased by $254,000, or 11%, from net sales of $2,283,000 for the thirteen weeks ended June 29, 2024 to $2,029,000 for the thirteen weeks ended June 28, 2025. Sales of our vegan cheese products decreased to $1,708,000 in the thirteen weeks ended June 28, 2025 from $1,926,000 in the thirteen weeks ended June 29, 2024, due to increased competition in the vegan cheese category. Sales of our frozen dessert products decreased to $321,000 in the thirteen weeks ended June 28, 2025 from $357,000 for the thirteen weeks ended June 29, 2024. Our sales were also negatively impacted by the proposed new tariffs to be implemented by the USA and foreign countries that we sell to. The uncertainty created by the tariffs caused our two largest domestic customers to pause some of their regular purchase plans.

Our gross profit decreased to $618,000 for the thirteen weeks ended June 28, 2025 from $667,000 for the thirteen weeks ended June 29, 2024, due primarily due to the reduction of sales from the prior year period. Our gross profit percentage increased slightly to 30% for the thirteen weeks ending June 28, 2025 compared to 29% for the thirteen weeks ending June 29, 2024.

Freight out expense, a significant part of our cost of sales, decreased by $16,000, to $163,000, for the thirteen weeks ended June 28, 2025 compared with $179,000 for the thirteen weeks June 29, 2024. Freight out expense was 8% of sales for the thirteen weeks ended June 28, 2025 and June 29, 2024, respectively.

Selling expenses decreased significantly by $62,000, or 25%, to $188,000 for the thirteen weeks ended June 28, 2025 from $250,000 for the thirteen weeks ended June 29, 2024. This decrease was primarily due to decreases in meetings and convention expense of $53,000 and bad debt expense of $18,000. We anticipate that our selling expense will continue at this lower level, for the balance of 2025.

Marketing expenses increased slightly by $10,000, or 13%, to $89,000 for the thirteen weeks ended June 28, 2025 from $79,000 for the thirteen weeks ended June 29, 2024. The increase was primarily due to a decrease in artwork and plates of $11,000, and advertising expense of $5,000 which was partially offset by an increase in promotion expense of $5,000. We anticipate that our marketing promotion expenses will continue at the same level for the balance of 2025.

Product development costs, increased by $17,000, or 77%, to $39,000 for the thirteen weeks ended June 28, 2025 from $22,000 for the thirteen weeks ended June 29, 2024 due primarily to a $13,000 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 2024 period due to higher professional fees and outside services expense.

General and administrative expenses decreased by $34,000, or 10%, to $308,000 for the thirteen weeks ended June 28, 2025 from $342,000 for the thirteen weeks ended June 29, 2024, primarily due to a decrease in payroll expense of 13,000, stock option expense of $13,000, real and personal property tax expense of $6,000, office supplies expense of 8,000, and waste removal expense of $4,000. Which were partially offset by an increase in professional fees and outside services expense pf $10,000. We anticipate our general and administrative expense will continue at a lower level compared to 2024.

Income tax expense was $0 for the thirteen weeks ended June 28, 2025 and $5,000 for the thirteen weeks ended June 29, 2024.

Twenty-Six Weeks Ended June 28, 2025, Compared with Twenty-Six Weeks Ended June 29, 2024

Net sales for the twenty-six weeks ended June 28, 2025 decreased by $875,000, or 19%, to $3,620,000 from net sales of $4,495,000 for the twenty-six weeks ended June 29, 2024. Sales of our vegan cheese products decreased to $3,081,000 in the twenty-six weeks ended June 28, 2025 from $3,735,000 in the twenty-six weeks ended June 29, 2024, due to increased competition in the vegan cheese category. Sales of our frozen dessert products decreased to $539,000 in the twenty-six weeks ended June 28, 2025 from $700,000 for the twenty-six weeks ended June 29, 2024. Our sales were also negatively impacted by the proposed new tariffs to be implemented by the USA and foreign countries that we sell to. The uncertainty created by the tariffs caused our two largest domestic customers to pause some of their regular purchase plans.

Our gross profit increased to $1,207,000 for the twenty-six weeks ended June 28, 2025 by $71,000 from $1,136,000 for the twenty-six weeks ended June 29, 2024, due principally to significant price increases we implemented at the end of 2024. Our gross profit percentage was 33% for the twenty-six weeks ending June 28, 2025 compared to 25% for the twenty-six weeks ending June 29, 2024. There were ingredient and packaging cost increases that took place in the first twenty-six weeks of 2024 that negatively impacted the gross profit in the 2024 period that were not present in the first two quarters of 2025.

Freight out expense, a significant part of our cost of sales, decreased by $16,000, or 21%, to $281,000, for the twenty-six weeks ended June 28, 2025 compared with $357,000 for the twenty-six weeks June 29, 2024. Freight out expense was 8% of sales for the twenty-six weeks ended June 28, 2025 and the twenty-six weeks ended June 29, 2024. The significant reduction in freight expense was due to significant decrease in sales for fiscal year 2025. We anticipate the freight expense, as a percentage of sales, will remain constant for the balance of 2025.

Selling expenses decreased by $59,000, or 13%, to $405,000 for the twenty-six weeks ended June 28, 2025 from $464,000 for the twenty-six weeks ended June 29, 2024. Due to decreases in meetings and convention expense of $41,000, bad debt expense of $10,000, and commission expense of $7,000. We anticipate that our selling expense will continue at the same level, or lower, for the balance of 2025.

Marketing expenses decreased by $3,000, or 19%, to $210,000 for the twenty-six weeks ended June 28, 2025 from $213,000 for the twenty-six weeks ended June 29, 2024. Decreases in advertising expense of $33,000, were offset by increases in promotion expenses of $11,000, and artwork and plate expense of $21,000. We anticipate that our marketing promotion expenses will continue at the same level for the balance of 2025.

Product development costs, increased by $19,000, or 23%, to $83,000 for the twenty-six weeks ended June 28, 2025 from $64,000 for the twenty-six weeks ended June 29, 2024 due to an increase in professional fees and outside services expense of $18,000. We anticipate our product development costs for the balance of the year will continue at a slightly higher level as compared to the 2024 period due to higher professional fees and outside services expense.

General and administrative expenses decreased by $54,000, or 8%, to $669,000 for the twenty-six weeks ended June 28, 2025 from $724,000 for the twenty-six weeks ended June 29, 2024, primarily due to a decrease in stock option expense of $27,000, payroll expense of $16,000, building rental expense of $13,000, real and personal property tax of $10,000, waste removal of $8,000. These decreases were partially offset by increases in professional fees and outside services expense of $10,000, and general insurance expenses of $13,000. We anticipate our general and administrative expense will continue at a lower level compared to 2024.

Income tax expense was $0 for the twenty-six weeks ended June 28, 2025 and $0 for the twenty-six weeks ended June 29, 2024.

Liquidity and Capital Resources

As of June 28, 2025, we had approximately $350,000 in cash and our working capital was approximately 2,733,000, compared with approximately $462,000 in cash and working capital of $2,893,000 at December 30, 2024.

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

	Twenty-six Weeks ended			Twenty-six Weeks ended
	June 28, 2025			June 29, 2024

Cash used in operating activities, net	$	(108	)	$	(344	)
Cash used in financing activities, net		(4	)		(4	)
Net decrease in cash	$	(112	)	$	(348	)

Net cash used in operating activities for the Twenty-six weeks ended June 28, 2025 was $108,000 compared to $344,000 used in operating activities for the Twenty-six weeks ended June 29, 2024. Net cash used in operating activities for the Twenty-six weeks ended June 28, 2025 was primarily a result of the net loss of $169,000.

We believe our existing cash on hand at June 28, 2025, existing working capital and the cash flows expected from operations, will be sufficient to support our operating and capital requirements during the next twelve months.

Inflation and Seasonality

We have faced inflationary price increases in the costs of some of our imported commodities and in freight costs. 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. While there are no current tariffs that have affected any of the Company’s imports or exports, uncertainty regarding their implementation by the U.S. and certain foreign countries has already influenced the purchasing decisions of some of our domestic and international customers. 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 June 28, 2025.

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 June 28, 2025, our Company’s chief executive and financial officer conducted an evaluation regarding the effectiveness of our Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based upon the evaluation of these controls and procedures, our chief executive and financial officer concluded that our disclosure controls and procedures were not effective as of June 28, 2025.

Disclosure Controls and Internal Controls. As provided in Rule 13a-14 of the General Rules and Regulations under the Securities and Exchange Act of 1934, as amended, Disclosure Controls are defined as meaning controls and procedures that are designed with the objective of insuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, designed and reported within the time periods specified by the SEC’s rules and forms. Disclosure Controls include, within the definition under the Exchange Act, and without limitation, controls and procedures to ensure that information required to be disclosed by us in our reports is accumulated and communicated to our management, including our chief executive officer and principal financial officer, as appropriate to allow timely decisions regarding disclosure. Internal Controls are procedures which are designed with the objective of providing reasonable assurance that (1) our transactions are properly authorized; (2) our assets are safeguarded against unauthorized or improper use; and (3) our transactions are properly recorded and reported, all to permit the preparation of our financial statements in conformity with generally accepted accounting principles.

Management’s Report on Internal Control Over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of the interim Chief Executive Officer and Chief Financial Officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management’s evaluation of internal control over financial reporting includes using the COSO framework, an integrated framework for the evaluation of internal controls issued by the Committee of Sponsoring Organizations of the Treadway Commission, to identify the risks and control objectives related to the evaluation of our control environment.

Based on the evaluation under the frameworks described above, Mr. Kass, our chief executive and chief financial officer, has concluded that our internal control over financial reporting was ineffective as of June 28, 2025 because of the following material weaknesses in internal controls over financial reporting:

	●	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 but not limited to accounting estimates, reserves, allowances, and income tax matters, in a timely manner.

	●	The limited size of the accounting department 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 of five persons at June 28, 2025.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the period covered by this report on Form 10-Q that have 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, including among other things. 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. Uncertainty regarding their implementation by the U.S. and certain foreign countries has already influenced the purchasing decisions of some of our domestic and international customers.

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.

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 June 28, 2025, 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: August 18, 2025

TOFUTTI BRANDS INC 10-Q