TOFUTTI BRANDS INC

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. Certain amounts presented in thousands may not sum precisely due torounding. The results of operations for the thirty-nine week period 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.

The Company learned in February 2026 that the owner of its primary co-packer for the Company’s 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 successfully reached a co-packing manufacturing agreement with the new owner of the facility and manufacturing business that commenced on September 3, 2026 under which we operate under the same terms and pricing as we had with the previous owner.

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 nine months ended September 26, 2026 our net sales decreased to $4,579,000 from $5,527,000 for the nine months ended September 27, 2025 and we incurred a net loss of $386,000 in the nine months ended September 26, 2026 compared to a net loss of $306,000 for the nine months 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.

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 intends to address the Company’s liquidity requirements by:

Our ability to successfully execute these plans is subject to significant risks and uncertainties. For example, 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 our 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.

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. The Company intends to adopt this standard when required and believes it will not have a material effect upon our operations or report in 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:

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 an income tax expense of $0 for the thirteen weeks ended September 26, 2026 as compared to $4 for the thirteen weeks ended September 27, 2025. The Company recognized an income tax benefit of $5 and an income tax expense of $12 for the thirty-nine week periods ended September 26, 2026 and September 27, 2025, respectively.

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:

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.

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 September 26, 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 September 26, 2026:

The following table summarizes information about stock options outstanding from December 27, 2025 to September 26, 2026:

Note 7: Net Sales

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.

Net sales by geographical region are as follows:

Approximately 95% of the Americas’ sales for the thirteen weeks ended September 26, 2026 is attributable to sales in the United States compared with 97% for the thirteen weeks ended September 27, 2025. Approximately 93% of the Americas’ sales for the thirty-nine weeks ended September 26, 2026 is attributable to sales in the United States compared with 92% for the thirty-nine weeks ended September 27, 2025.

Net sales by major product category:

Note 8: Leases

In 2024, we signed afive-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 for the thirteen and thirty-nine weeks ended September 26, 2026 was $23,000 and $67,000, respectively compared to $22,000 and $64,000 for the thirteen and thirty-nine weeks ended September 27, 2025, respectively.

Outside warehouse rental expense was $61,000 and $221,000 for the thirteen and thirty-nine weeks ended September 26, 2026, respectively, compared to $95,000 and $271,000 for the thirteen and thirty-nine weeks ended September 27, 2025, respectively. 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.

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 commencement 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 commencement 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.

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:

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

Future lease payments included in the measurement of lease liabilities on the balance sheet as of September 26, 2026 are as follows:

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.

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:

Note 11: Related Party Transactions

During the thirteen weeks ending September 26, 2026 and September 27, 2025, we paid The CFO Squad $2,000 and $0, respectively, and $22,000 and $30,000 for the thirty-nine weeks ending September 26, 2026 and September 27, 2025, respectively. Joseph Himy is the Managing Director of The CFO Squad and a member of our Board of Directors.

Note 12: Segment Information

The Company views its operations and manages its business inone 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.

NOTE 13: Customer Concentrations

As of September 26, 2026 one customer accounted for 15% of accounts receivable. Two customers accounted for 44% of our accounts receivable as of December 27, 2025.

For the thirteen weeks ended September 26, 2026 three customers represented 21%,14%, and 14% of our total sales. For the thirteen weeks ended September 27, 2025 three customers accounted for 20%,16%, and 15% of our total sales. Three customers represented 19%,18%, and 3% of our total sales for the thirty-nine weeks ended September 26, 2026. For the thirty-nine weeks ended September 27, 2025 three customers accounted for 20%,16%, and 15% of our total sales.