Financial Analysis

NOTE 8: 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 Companys customers, suppliers and co-packers may experience similar disruption. …

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Revenues by geographical region are as follows: SCHEDULE OF DISAGGREGATION REVENUE Fifty-two weeks ended December 27, 2025 Fifty-two weeks ended December 28, 2024 Americas $ 7,273 $ 8,315 Europe 49 108 Middle East 389 320 Asia Pacific and Africa 65 77 Total Revenue $ 7,776 $ 8,820 Net sales by major product category: Fifty-two weeks ended December 27, 2025 Fifty-two weeks ended December 28, 2024 Dairy free cheeses $ 6,668 $ 7,428 Frozen desserts and foods 1,108 1,392 Total Revenue $ 7,776 $ 8,820

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NOTE 4: STOCK-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 inure 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. 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. No stock options were issued in 2025 and 2024, and 250,000 non-qualified options were outstanding as of December 27, 2025 and December 28, 2024, respectively. 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 outstanding options will expire on …

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NOTE 7: INCOME TAXES The components of income tax expense for the fifty-two weeks ended December 27, 2025 and December 28, 2024 are as follows: SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) Fifty-two weeks ended December 27, 2025 December 28, 2024 Current: Federal $ - $ - State 4 10 4 10 Deferred: Federal - 179 State - 62 - 241 Total income tax (benefit) expense $ 4 $ 251 A reconciliation between the expected federal tax expense at the statutory tax rate of 21 % and the Companys actual tax expense for the fifty-two weeks ended December 27, 2025 and December 28, 2024, respectively, follows: SCHEDULE OF RECONCILIATION BETWEEN THE EXPECTED FEDERAL TAX EXPENSE AT STATUTORY TAX RATE December 27, 2025 December 28, 2024 Fifty-two weeks ended December 27, 2025 December 28, 2024 Federal income tax $ (103 ) $ (128 ) NJ income taxes, net of federal income tax benefit (33 ) (34 ) Prior period adjustments 7 3 Change in state valuation allowance 26 35 Permanent items 5 15 Increase in valuation allowance 80 351 Change in UTBs 2 - Other 20 9 Total $ 4 $ 251 Deferred tax assets for the fifty-two weeks ended December 27, 2025 and December 28, 2024 consist of the following components: SCHEDULE OF DEFERRED TAX ASSETS December 27, 2025 December 28, 2024 Allowance for doubtful accounts $ 27 $ 83 Right of use asset (77 ) (95 ) Lease liabilities 82 100 Inventory - - Net operating loss carryforward 635 367 Stock options - - Research and development - 80 Fixed assets - 27 Deferred tax asset, …

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NOTE 6: LEASES Through September 1, 2024, the Companys facilities were located in a one-story 6,200 square foot facility in Cranford, New Jersey. The facility housed the Companys administrative offices, a warehouse, walk-in freezer and refrigerator, and a product development laboratory and test kitchen. The Companys original lease agreement expired on July 1, 1999, but it continued to occupy the premises on a monthly basis. In September, the Company left the facility and derecognized the associated right of use asset and liability. In 2024, we signed a 5 five-year lease for a one-story facility in Edison, New Jersey. 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 5,100 square foot facility houses our administrative offices, a warehouse, freezers, and refrigerators. Rent expense was $ 86 for the fifty-two weeks ended December 27, 2025 and $ 118 for the fifty-two weeks ended December 27, 2024. The Companys management believes that the Edison facility will continue to satisfy its space requirements for the immediate future and if necessary, such space can be replaced without a significant impact to the business. The Company rents warehouse storage space at various outside facilities. Outside warehouse expenses amounted to $ 351 and $ 359 for the fifty-two w …

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Recent Accounting Pronouncements and adoption 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 will present the additional required disclosures when it adopts the standard. The Company plans to adopt this standard in fiscal 2027 and will provide the additional disclosures required by ASU 2024-03. 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 …

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NOTE 10: RELATED PARTY TRANSACTIONS During fiscal 2025 and 2024, we paid The CFO Squad $ 35,000 and $ 24,000 , respectively, for financial services. Joseph Himy is the Managing Director of The CFO Squad and a member of our Board of Directors.

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NOTE 5: REVENUE Performance obligations relating to the sale of our products are fulfilled when the goods are shipped or upon customer pickup and net of all applicable discounts, as follows: Early payment term discounts, off-invoice allowance, manufacturer chargeback, freight allowance, spoilage discounts, and product returns. In 2024 and 2025, the Company only provided off-invoice and early payment discounts to its customers, and the amount was netted against revenue. Revenues by geographical region are as follows: SCHEDULE OF DISAGGREGATION REVENUE Fifty-two weeks ended December 27, 2025 Fifty-two weeks ended December 28, 2024 Americas $ 7,273 $ 8,315 Europe 49 108 Middle East 389 320 Asia Pacific and Africa 65 77 Total Revenue $ 7,776 $ 8,820 TOFUTTI BRANDS INC. NOTES TO FINANCIAL STATEMENTS (In thousands, except for share and per share data) Approximately 92 % in both the fiscal years 2025 and 2024 of the Americas revenue is attributable to the United States. All of the Companys assets are located in the United States. Net sales by major product category: Fifty-two weeks ended December 27, 2025 Fifty-two weeks ended December 28, 2024 Dairy free cheeses $ 6,668 $ 7,428 Frozen desserts and foods 1,108 1,392 Total Revenue $ 7,776 $ 8,820 …

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NOTE 11: 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. The Companys Chief Executive and Chief Financial Officer is the Chief Operating Decision Maker (CODM). The CODM evaluates performance and makes operating decisions about allocating resources based on the operating expenses, 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. All material long-lived assets are located in the United States. …

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NOTE 12: SUBSEQUENT EVENTS The Company has completed an evaluation of all subsequent events after the balance sheet date of December 31, 2025 through the date the financial statements were issued, and has determined that there are no subsequent events that require disclosure.

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