TOFUTTI BRANDS INC

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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. When a 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.

Previous wording

*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.

Current wording

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.

Previous wording

The Company learned in February 2026 that the owner of our primary co-packer for our key products intended 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. We have been successful in reaching a co-packing manufacturing agreement with the new owner of the facility and manufacturing business. Our relations with him commence on September 15 th and will be under the same terms and pricing as we had with the previous owner.

Current wording

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. We succeeded in reaching a co-packing manufacturing agreement with the new owner of the facility and manufacturing business. Our relations with the new owner commenced on September 3, 2026 and operations will be under the same terms and pricing as we had with the previous owner.

Previous wording

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 and twenty-six week periods ended June 27, 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.

Current wording

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 and thirty-nine week periods ended September 26, 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.

Previous wording

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of June 27, 2026, we had cash of approximately $121,000. During the last few years, we have experienced recurring losses and cash outflows from operations. For the six months ended June 27, 2026 our net sales decreased to $3,345,000 from $3,620,000 in the 2025 six month period and we incurred a net loss of $373,000 in the six months ended June 27, 2026 compared to a net loss of $169,000 for the six months ended June 28, 2025. The Company’s declining sales, increasing operating losses, continuing use of cash in operations, and limited available cash resources have adversely affected its liquidity.

Current wording

Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of September 26, 2026, we had cash of approximately $138,000. During the last few years, we have experienced recurring losses and cash outflows from operations. For the thirty-nine weeks ended September 26, 2026 our net sales decreased to $4,579,000 from $5,527,000 in the thirty-nine weeks ended September 27, 2025. In addition, we incurred a net loss of $386,000 in the thirty-nine weeks ended September 26, 2026 compared to a net loss of $306,000 for the thirty-nine weeks ended September 27, 2025. Our declining sales, increasing operating losses, continuing use of cash in operations, and limited available cash resources have adversely affected our liquidity.

Previous wording

Based on the Company’s current operating forecast, existing cash and anticipated cash flows from operations are not expected to be sufficient to fund the Company’s operating requirements and meet its obligations as they become due during the one-year period following the date these financial statements.. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans intends to address the Company’s liquidity requirements include:

Current wording

Based on our current operating forecast, existing cash and anticipated cash flows from operations are not expected to be sufficient to fund the Company’s operating requirements and meet its obligations as they become due during the one-year period following the date these financial statements are issued. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s intends to address the Company’s liquidity requirements by:

Previous wording

The Company’s ability to successfully execute these plans is subject to significant risks and uncertainties. ln particular, improvements in sales and operating results may not occur within the time frame anticipated by management. The avail ability and terms of any financing are uncertain and may not be within the Company’s control. Accordingly, management has concluded that its plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern for the one-year period following the date these financial statements are issued. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern.

Current wording

Accordingly, management has concluded that its plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern for the one-year period following the date these financial statements are issued. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern.

Previous wording

Net sales for the thirteen weeks ended June 27, 2026 decreased by $241,000, or 12% to $1,788,000 from net sales of $2,029,000 for the thirteen weeks ended June 28, 2025. Sales of our vegan cheese products decreased to $1,558,000 in the thirteen weeks ended June 27, 2026 from $1,708,000 in the thirteen weeks ended June 28, 2025. Sales of our frozen dessert products decreased to $230,000 in the thirteen weeks ended June 27, 2026 from $321,000 for the thirteen weeks ended June 28, 2025.

Current wording

Net sales for the thirteen weeks ended September 26, 2026 decreased by $673,000, or 35% to $1,234,000 from net sales of $1,907,000 for the thirteen weeks ended September 27, 2025. Sales of our vegan cheese products decreased to $1,084,000 in the thirteen weeks ended September 26, 2026 from $1,632,000 in the thirteen weeks ended September 27, 2025. Sales of our frozen dessert products decreased to $150,000 in the thirteen weeks ended September 26, 2026 from $275,000 for the thirteen weeks ended September 27, 2025.

Previous wording

Freight out expense, a significant part of our cost of sales, decreased by $30,000, or 24%, to $99,000, for the thirteen weeks ended June 27, 2026 compared with $119,000 for the thirteen weeks ended June 28, 2025 due primarily to the reduction in sales. Freight out expense was 5% of sales for the thirteen weeks ended June 27, 2026 compared to 6% of sales for the thirteen weeks ended June 28, 2025.

Current wording

Freight out expense, a significant part of our cost of sales, decreased by $53,000, or 39%, to $83,000, for the thirteen weeks ended September 26, 2026 compared with $136,000 for the thirteen weeks ended September 27, 2025 due primarily to the reduction in sales. Freight out expense was 7% of sales for both the thirteen weeks ended September 26, 2026 and for the thirteen weeks ended September 27, 2025.

Previous wording

Marketing expenses decreased by $25,000, or 28%, to $64,000 for the thirteen weeks ended June 27, 2026 from $89,000 for the thirteen weeks ended June 28, 2025. The decrease was due primarily to decreases in promotions expense of $19,000, and artwork and plate expense of $10,000. We anticipate that our marketing expenses will continue at the same level for the balance of 2026.

Current wording

Marketing expenses increased slightly by $3,000, or 3%, to $98,000 for the thirteen weeks ended September 26, 2026 from $95,000 for the thirteen weeks ended September 27, 2025. The increase was due primarily to increases in promotions expense of $5,000 and advertising expense of $6,000, which were partially offset by decreases in point of sale materials expenses of $5,000 and artwork and plate expense of $4,000. We anticipate that our marketing expenses will continue at the same level for the balance of 2026.

Previous wording

Product development costs decreased slightly by $9,000, or 23%, to $30,000 for the thirteen weeks ended June 27, 2026 from $39,000 for the thirteen weeks ended June 28, 2025 due to a $5,000 decrease in professional fees and outside services expense. We anticipate our product development costs for the balance of the year will continue at a comparable level as compared to the 2025 period.

Current wording

Product development costs decreased slightly by $10,000, or 32%, to $21,000 for the thirteen weeks ended September 26, 2026 from $31,000 for the thirteen weeks ended September 27, 2025 due to a $10,000 decrease in professional fees and outside services expense. We anticipate our product development costs for the balance of the year will decline as compared to the 2025 period.

Previous wording

General and administrative expenses decreased by $23,000, or 7%, to $286,000 for the thirteen weeks ended June 27, 2026 from $309,000 for the thirteen weeks ended June 28, 2025, due to decreases in professional fees and outside service expense of $15,000 and public relation expense of $13,000. These decreases were partially offset by an increase in payroll expense of $9,000. The increase in payroll expense was caused by an increase in the Company’s group health insurance premiums.

Current wording

General and administrative expenses decreased slightly by $8,000, or 3%, to $301,000 for the thirteen weeks ended September 26, 2026 from $309,000 for the thirteen weeks ended September 27, 2025 due to a $10,000 decrease in professional fees and outside service expense.

Previous wording

The Company recorded an income tax benefit of $7 for the thirteen weeks ended June 27, 2026 and $0 for the thirteen weeks ended June 28, 2025 due to the receipt of a federal income tax refund in the 2026 period.

Current wording

The Company recorded an income tax expense of $0 for the thirteen weeks ended September 26, 2026 and $4,000 for the thirteen weeks ended September 27, 2025.

Previous wording

Net sales for the twenty-six weeks ended June 27, 2026 decreased by $275,000, or 8%, to $3,345,000 from net sales of $3,620,000 for the twenty-six weeks ended June 28, 2025. Sales of our vegan cheese products decreased by $161,000 to $2,920,000 in the twenty-six weeks ended June 27, 2026 from $3,081,000 in the twenty-six weeks ended June 28, 2025. Sales of our frozen dessert products decreased by $114,000 for the twenty-six weeks ended June 27, 2026 compared to $539,000 for the twenty-six weeks ended June 28, 2025.

Current wording

Net sales for the thirty-nine weeks ended September 26, 2026 decreased by $948,000, or 17%, to $4,579,000 from net sales of $5,527,000 for the thirty-nine weeks ended September 27, 2025. Sales of our vegan cheese products decreased by $709,000 to $4,004,000 in the thirty-nine weeks ended September 26, 2026 from $4,713,000 in the thirty-nine weeks ended September 27, 2025. Sales of our frozen dessert products decreased by $239,000 to $575,000 for the thirty-nine weeks ended September 26, 2026 compared to $814,000 for the thirty-nine weeks ended September 27, 2025.

Previous wording

Freight out expense, a significant part of our cost of sales, decreased by $92,000, or 33%, to $189,000, for the twenty-six weeks ended June 27, 2026 compared with $281,000 for the twenty-six weeks June 28, 2025 primarily due to the reduction in sales. Freight out expense was 6% of sales for the twenty-six weeks ended June 27, 2026 compared to 8% of sales for the twenty-six weeks ended June 28, 2025.

Current wording

Freight out expense, a significant part of our cost of sales, decreased by $144,000, or 35%, to $273,000, for the thirty-nine weeks ended September 26, 2026 compared with $417,000 for the thirty-nine weeks ended September 27, 2025 primarily due to the reduction in sales. Freight out expense was 6% of sales for the thirty-nine weeks ended September 26, 2026 compared to 8% of sales for the thirty-nine weeks ended September 27, 2025.

Previous wording

Selling expenses increased slightly by $11,000, or 6%, to $199,000 for the thirteen weeks ended June 27, 2026 from $188,000 for the thirteen weeks ended June 28, 2025. This increase was due to increases in meetings and convention expense of $8,000 and bad debt expense of $28,000, which were partially offset by decrease in travel, entertainment and auto expenses of $12,000 and outside warehouse rental expense of $22,000. The decrease in outside warehouse rental expense is due to the decrease in our inventories during the fiscal period.

Current wording

Selling and warehouse expenses decreased by $20,000, or 3%, to $602,000 for the thirty-nine weeks ended September 26, 2026 from $622,000 for the thirty-nine weeks ended September 27, 2025. This decrease was due to decreases in travel, entertainment and auto expense of $21,000, outside warehouse rental expense of $51,000 and shipping supplies expense of $7,000, which were partially offset by increases in bad debt expense of $28,000 and meetings and convention expenses of $18,000. The decrease in outside warehouse rental expense was due to the decrease in sales during the current fiscal period.

Previous wording

Marketing expenses decreased by $73,000, or 35%, to $137,000 for the twenty-six weeks ended June 27, 2026 from $210,000 for the twenty-six weeks ended June 28, 2025. The decrease was primarily due to decreases in advertising expense of $26,000, artwork and plate expense of $22,000 and promotion expense of $18,000.

Current wording

Marketing expenses decreased by $69,000, or 23%, to $236,000 for the thirty-nine weeks ended September 26, 2026 from $305,000 for the thirty-nine weeks ended September 27, 2025. The decrease was primarily due to decreases in advertising expense of $18,000, artwork and plate expense of $26,000 and promotion expense of $14,000.

Previous wording

Product development costs decreased slightly by $3,000, or 4%, to $80,000 for the twenty-six weeks ended June 27, 2026 from $83,000 for the twenty-six weeks ended June 28, 2025.

Current wording

Product development costs decreased slightly by $12,000, or 11%, to $101,000 for the thirty-nine weeks ended September 26, 2026 from $113,000 for the thirty-nine weeks ended September 27, 2025.

Previous wording

We had an income tax benefit of $5,000 for the twenty-six weeks ended June 27, 2026 compared to an income tax expense of $7,000 for the twenty-six weeks ended June 28, 2025.

Current wording

We had an income tax benefit of $5,000 for the thirty-nine weeks ended September 26, 2026 compared to an income tax expense of $12,000 for the thirty-nine weeks ended September 27, 2025.

Previous wording

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 and twenty-six week periods ended June 27, 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.

Current wording

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 and thirty-nine weeks ended September 26, 2026 are not necessarily indicative of the results to be expected for the full year or any other period.

Previous wording

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of June 27, 2026, we had cash of approximately $121,000. During the last few years, we have experienced recurring losses and cash outflows from operations. For the six months ended June 27, 2026 our net sales decreased to $3,345,000 from $3,620,000 in the 2025 six month period and we incurred a net loss of $373,000 in the six months ended June 27, 2026 compared to a net loss of $169,000 for the six months ended June 28, 2025. The Company’s declining sales, increasing operating losses, continuing use of cash in operations, and limited available cash resources have adversely affected its liquidity.

Current wording

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of September 26, 2026, we had cash of approximately $138,000. During the last few years, we have experienced recurring losses and cash outflows from operations. For the thirty-nine weeks ended September 26, 2026 our net sales decreased to $4,579,000 from $5,527,000 in the thirty-nine weeks ended September 27, 2025 and we incurred a net loss of $386,000 in the thirty-nine weeks ended September 26, 2026 compared to a net loss of $306,000 for the thirty-nine weeks ended September 27, 2025. As of September 26, 2026, we had approximately $138,000 in cash and our working capital was approximately $1,744,000, compared with approximately $347,000 in cash and working capital of $2,126,000 at December 27, 2025. The Company’s declining sales, increasing operating losses, continuing use of cash in operations, and limited available cash resources have adversely affected our liquidity.

Previous wording

Based on the Company’s current operating forecast, existing cash and anticipated cash flows from operations are not expected to be sufficient to fund the Company’s operating requirements and meet its obligations as they become due during the one-year period following the date these financial statements.. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans intends to address the Company’s liquidity requirements include:

Current wording

Based on the Company’s current operating forecast, existing cash and anticipated cash flows from operations are not expected to be sufficient to fund the Company’s operating requirements and meet its obligations as they become due during the one-year period following the date these financial statements are issued. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management intends to address the Company’s liquidity requirements by:

Previous wording

The Company’s ability to successfully execute these plans is subject to significant risks and uncertainties. ln particular, improvements in sales and operating results may not occur within the time frame anticipated by management. The availability and terms of any financing are uncertain and may not be within the Company’s control. Accordingly, management has concluded that its plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern for the one-year period following the date these financial statements are issued. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern.

Current wording

The Company’s ability to successfully execute these plans is subject to significant risks and uncertainties. ln particular, improvements in sales and operating results may not occur within the time frame anticipated by management. We will need to raise additional working capital from the sale of equity or debt in order to support our operations, for which there is no guarantee that we will be successful. Accordingly, management has concluded that its plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern for the one-year period following the date these financial statements are issued. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern.

Previous wording

Net cash used in operating activities for the twenty-six weeks ended June 27, 2026 was $218,000 compared to $108,000 used in operating activities for the twenty-six weeks ended June 28, 2025. Net cash used in operating activities for the twenty-six weeks ended June 27, 2026 was primarily a result of the net loss of $373,000 and a reduction in liabilities of $249,000, which were partially offset by a decrease in accounts receivable of $248,000 and inventory of $116,000. Net cash used in operations for the twenty-six weeks ended June 28, 2025 was primarily a result of the net loss of $169,000 and an increase in inventory of $448,000 which were partially offset by a decrease in account receivables of $274,000 and an increase in liabilities of $54,000.

Current wording

Net cash used in operating activities for the thirty-nine weeks ended September 26, 2026 was $203,000 compared to net cash provided by operating activities of $174,000 in the thirty-nine weeks ended September 27, 2025. Net cash used in operating activities for the 2026 period was primarily a result of the net loss of $386,000 and a decrease in total liabilities of $303,000, which were partially offset by a decrease in accounts receivable of $392,000. Net cash provided by operating activities for the thirty-nine weeks ended September 27, 2025 was primarily a result of the decrease in accounts receivable of $202,000 and an increase in current liabilities of $595,000 which were partially offset by an increase in inventories of $352,000 and the net loss of $306,000.

Previous wording

We had no material contractual obligations as of June 27, 2026.

Current wording

We had no material contractual obligations as of September 26, 2026 other than with respect to our headquarters lease.