10-Q

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 29, 2024

☐ 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.)

50 Jackson Drive, Cranford, New Jersey 07016

(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 15, 2024 the Registrant had 5,153,706 shares of Common Stock, par value $0.01, outstanding.

TOFUTTI BRANDS INC.

INDEX

		Page
Part I - Financial Information:
Item 1.	Unaudited Condensed Financial Statements	3
	Unaudited Condensed Balance Sheets – June 29, 2024 and December 30, 2023	3
	Unaudited Condensed Statements of Operations -Thirteen and Twenty-Six Weeks ended June 29, 2024 and July 1, 2023	4
	Unaudited Condensed Statements of Changes in Stockholders’ Equity -Thirteen and Twenty-Six Weeks ended June 29, 2024 and July 1, 2023	5
	Unaudited Condensed Statements of Cash Flows -Twenty-Six Weeks ended June 29, 2024 and July 1, 2023	6
	Notes to Unaudited Condensed Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	17
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

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

TOFUTTI BRANDS INC.

Condensed Balance Sheets

(in thousands, except share and per share figures)

	June 29, 2024 (Unaudited)		December 30, 2023
Assets
Current assets:
Cash	$	489	$	837
Accounts receivable, net of allowance for doubtful accounts and sales promotions of $505 and $525, respectively		817		828
Inventories		2,171		2,475
Prepaid expenses and other current assets		75		93
Total current assets		3,552		4,233
Operating lease right-of-use asset		47		81
Finance lease right-of-use asset		29		36
Deferred tax assets		246		246
Other assets		40		19
Total assets	$	3,914	$	4,615
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		12		237
Accrued expenses		387		541
Finance lease liability, current portion		11		15
Total current liabilities		410		793
Operating lease liabilities, net of current portion		—		7
Finance lease liability, net of current portion		20		23
Total liabilities		430		823
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		350		323
Retained earnings		3,082		3,417
Total stockholders’ equity		3,484		3,792
Total liabilities and stockholders’ equity	$	3,914	$	4,615

See accompanying notes to unaudited condensed financial statements.

3

TOFUTTI BRANDS, INC.

Unaudited Condensed Statements of Operations

(in thousands, except per share figures)

	Thirteen weeks ended June 29, 2024			Thirteen weeks ended July 1, 2023			Twenty-six weeks ended June 29, 2024			Twenty-six weeks ended July 1, 2023
Net sales	$	2,283		$	2,719		$	4,495		$	5,208
Cost of sales		1,616			2,052			3,359			3,935
Gross profit		667			667			1,136			1,273
Operating expenses:
Selling and warehouse		250			320			464			592
Marketing		79			89			213			184
Research and development		22			56			64			83
General and administrative		342			383			724			686
		693			848			1,465			1,545
Loss from operations		(26	)		(181	)		(329	)		(272	)
Loss before interest expense and income taxes		(26	)		(181	)		(329	)		(272	)
Interest expense		1			1			1			2
Loss before income tax		(27	)		(182	)		(330	)		(274	)
Income tax expense		5			136			5			146
Net loss	$	(32	)	$	(318	)	$	(335	)	$	(420	)
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	$	(0.01	)	$	(0.06	)	$	(0.06	)	$	(0.08	)
Diluted	$	(0.01	)	$	(0.06	)	$	(0.06	)	$	(0.08	)

See accompanying notes to unaudited condensed financial statements.

4

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 July 1, 2023
	Common Stock		Additional Paid-in Capital		Retained Earnings			Total
December 31, 2022	$	52		263		3,783			4,098
Stock-based compensation		—		20		—			20
Net loss		—		—		(102	)		(102	)
April 1, 2023	$	52		283		3,681			4,016
Stock-based compensation		—		13		—			13
Net loss		—		—		(318	)		(318	)
July 1, 2023	$	52		296		3,363			3,711

See accompanying notes to unaudited condensed financial statements.

5

TOFUTTI BRANDS INC.

Unaudited Condensed Statements of Cash Flows

(in thousands)

	Twenty-six weeks ended			Twenty-six weeks ended
	29-Jun-24			1-Jul-23
Cash used in operating activities, net	$	(344	)	$	(485	)
Cash used in financing activities, net		(4	)		(4	)
Net decrease in cash	$	(348	)	$	(489	)
Cash at beginning of period		837			1,072
Cash at end of period	$	489		$	569
Supplemental cash flow information:
Income taxes paid	$	7		$	—
Interest paid on finance leases	$	1		$	2

See accompanying notes to unaudited condensed financial statements.

6

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 and twenty-six-week period ended June 29, 2024 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 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:

	June 29, 2024		December 30, 2023
Finished products	$	1,237	$	1,366
Raw materials and packaging		934		1,109
	$	2,171	$	2,475

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.

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.

7

TOFUTTI BRANDS INC.

Notes to Unaudited Condensed Financial Statements

(in thousands, except share and per share data)

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

	Thirteen weeks ended June 29, 2024			Thirteen weeks ended July 1, 2023			Twenty-six weeks ended June 29, 2024			Twenty-six weeks ended July 1, 2023
Loss, numerator, basic computation	$	(32	)	$	(318	)	$	(335	)	$	(420	)
Net loss, numerator, diluted computation	$	(32	)	$	(318	)	$	(335	)	$	(420	)
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	$	(0.01	)	$	(0.06	)	$	(0.06	)	$	(0.08	)
Loss per common share - diluted	$	(0.01	)	$	(0.06	)	$	(0.06	)	$	(0.08	)

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

	Thirteen weeks Ended June 29, 2024		Thirteen weeks Ended July 1, 2023
Shares subject to outstanding common stock options		250,000		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 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.” 0 and 250,000 stock options were issued in 2023 and 2022, respectively, and 250,000 non-qualified options were outstanding as of June 29, 2024. 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 will vest in December 2023, and 83,334 will vest in December 2024. In the event of a sale of the Company at any time prior to December 22, 2024, all remaining unvested options shall vest immediately. All options expire on December 22, 2027. No additional options were made available or granted during the twenty-six weeks ended June 29, 2024.

The following is a summary of stock option activity from December 30, 2023 to June 29, 2024:

	NON-QUALIFIED OPTIONS
	Shares		Weighted Average Exercise Price ($)
Outstanding at December 30, 2023		250,000		0.95
Granted		—		—
Exercised		—		—
Outstanding at June 29, 2024		250,000		0.95
Exercisable at June 29, 2024		166,666		0.95

8

TOFUTTI BRANDS INC.

Notes to Unaudited Condensed Financial Statements

(in thousands, except share and per share data)

The following table summarizes information about stock options outstanding from December 30, 2023 to June 29, 2024:

Range of Exercise Prices ($)		Number Outstanding		Weighted Average Remaining Life (in years)		Weighted Average Exercise Price($)		Number Exercisable
$	0.95		250,000		3.50	$	0.95		166,666

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing formula. Expected volatilities and risk-free interest rates are based upon the expected life of the grant. The interest rates used are the U.S. Treasury yield curve in effect at the time of the grant.

During the fiscal year ended December 31, 2022, 250,000 options were granted, with 83,333 of the options vesting at the respective grant date, 83,333 vesting in December 2023, and 83,334 vesting in December 2024. At the date of grant, expected volatility was 82.65%, a risk-free rate of 3.79%, 0% expected dividends, and an expected term of five years.

The expected term was determined based on the reasoning that all previously granted options have been held to expiration. Additionally, all 5 members who were granted options are board members or an officer, and the expectation is that they are holding these options to expiration or until any such liquidation event would take place which is not estimable.

As of June 29, 2024, and July 1, 2023 the intrinsic value of the options outstanding and exercisable options was $0 and $12, respectively, and there was $22 of total unrecognized compensation cost. Total stock-based compensation for both of the thirteen weeks ended June 29, 2024 and July 1, 2023 was $13, which is recorded in general and administrative expenses on the statement of operations. Total stock-based compensation was $27 and $34 for the twenty-six weeks ended June 29, 2024 and July 1, 2023, respectively.

The 250,000 options will expire on December 22, 2027 if not exercised by that date.

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 29, 2024		Thirteen weeks ended July 1, 2023		Twenty-six weeks ended June 29, 2024		Twenty-six weeks ended July 1, 2023
Revenues by geography:
Americas	$	2,099	$	2,586	$	4,224	$	5,006
Europe		79		7		79		11
Asia Pacific and Africa		—		—		—		57
Middle East		105		126		192		134
	$	2,283	$	2,719	$	4,495	$	5,208

Approximately 95% of the Americas’ revenue for the thirteen weeks ended June 29, 2024 is attributable to sales in the United States compared with 93% of the Americas’ revenue for the thirteen weeks ended July 1, 2023. For the twenty-six week period ended June 29, 2024 approximately 92% of the Americas’ revenue is attributable to sales in the United States compared to 91% for the twenty-six week period ended July 1, 2023. All of the Company’s assets are located in the United States.

9

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 29, 2024		Thirteen weeks ended July 1, 2023		Twenty-six Weeks ended June 29, 2024		Twenty-six Weeks ended July 1, 2023
Frozen desserts and foods	$	357	$	436	$	760	$	826
Cheeses		1,926		2,283		3,735		4,382
	$	2,283	$	2,719	$	4,495	$	5,208

Note 8: Leases

The Company’s facilities are located in a one-story facility in Cranford, New Jersey. The 6,200 square foot facility houses its administrative offices, a warehouse, walk-in freezer and refrigerator, and a product development laboratory and test kitchen. The Company’s original lease agreement expired on July 1, 1999, but it continues to occupy the premises on a monthly basis. Any changes by either the landlord or the Company remains subject to a six-month notification period. The Company currently has no plans to enter into a long-term lease agreement for the facility. Rent expense was $7 and $7 for the thirteen weeks ended June 29, 2024 and July 1, 2023, and $14 and $14 for the twenty-six weeks ended June 29, 2024 and July 1, 2023, respectively. The Company rents warehouse storage space at various outside facilities. Outside warehouse expenses were $98 for the thirteen weeks ended June 29, 2024 and $85 for the thirteen weeks ended July 1, 2023, and $181 and $161 for the twenty-six weeks ended June 29, 2024 and July 1, 2023, respectively. The Company rents copiers under finance leases. In 2022, the Company terminated two copier leases, and entered into one additional lease, which still exists as of June 29, 2024. Payments for copiers amounted to $0 and $4 for the thirteen weeks ended June 29, 2024 and July 1, 2023, respectively and $0 and $8 for the twenty-six weeks ended June 29, 2024 and July 1, 2023, respectively.

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. The current portion of lease liabilities is included in accrued expenses on the condensed balance sheets.

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. At the time of adoption of Topic 842, the Company used the incremental borrowing rate of 5.5% for all leases that commenced prior to that date.

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

	As of			As of
	June 29, 2024			December 30, 2023
Operating lease right-of-use assets	$	47		$	81
Current portion of lease liabilities		47			74
Operating lease liabilities, net of current portion		—			7
Total lease liability	$	47		$	81
Weighted average remaining lease term (in years)		0.5			1.2
Weighted average discount rate		5.5	%		5.5	%

10

TOFUTTI BRANDS INC.

Notes to Unaudited Condensed Financial Statements

(in thousands, except share and per share data)

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

	As of			As of
	June 29, 2024			December 30, 2023
Finance lease right-of-use asset	$	29		$	36
Current portion of lease liabilities		11			15
Finance lease liabilities, net of current portion		20			23
Total lease liabilities	$	31		$	38
Weighted average remaining lease term (in years)		1.8			2.4
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 29, 2024 are as follows:

	Operating lease liabilities		Finance lease liability		Total
2024 (remainder of the year)		47		8		55
2025		—		18		18
2026		—		7		7
Total future minimum lease payments		47		33		80
Present value adjustment		—		2		2
Total	$	47	$	31	$	78

Note 9: Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

	As of		As of
	June 29, 2024		December 30, 2023
Accrued payroll and other benefits	$	2	$	—
Accrued professional fees		15		11
Uncertain tax position		216		211
Operating lease liability		47		81
Accrued purchases		107		238
Total accrued expenses and other current liabilities	$	387	$	541

Note 10: Subsequent Events

The Company notes it will be moving its offices and corporate offices some time during the third quarter. We expect the move to be completed no later than September 30^th, 2024.

11

TOFUTTI BRANDS INC.

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.

12

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

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 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.

Results of Operations

Thirteen Weeks Ended June 29, 2024 Compared with Thirteen Weeks Ended July 1, 2023

Net sales for the thirteen weeks ended June 29, 2024 decreased by $436,000, or 16%, to $2,283,000, from net sales of $2,719,000 for the thirteen weeks ended July 1, 2023. Sales of our vegan cheese products decreased to $1,926,000 in the thirteen weeks ended June 29, 2024 from $2,283,000 in the thirteen weeks ended July 1, 2023. Sales of our frozen dessert products decreased to $357,000 in the thirteen weeks ended June 29, 2024 from $436,000 for the thirteen weeks ended July 1, 2023. The decrease in frozen dessert product sales was due to a decrease in sales of our frozen dessert pints. The decrease in the sales of our vegan cheese products was due to continued introduction of competitive products in the vegan cheese category and a decline of our export cheese business.

13

Our gross profit was $667,000 for both the thirteen weeks ended June 29, 2024 and the thirteen weeks ended July 1, 2023. Our gross profit percentage increased to 29% for the thirteen weeks ending June 29, 2024 compared to 25% for the thirteen weeks ending July 1, 2023. Our gross profit dollars and gross profit percentage were positively impacted by a decrease in our sales promotion and allowance expenses to $249,000 in the second quarter of this year as compared to $273,000 in the second quarter of the prior fiscal year. We anticipate that our gross profit dollars and gross profit percentage will remain consistent for the balance of 2024.

Freight expense, a significant part of our cost of sales, increased slightly by $6,000, or 4%, to $179,000 for the thirteen weeks ended June 29, 2024 compared with $173,000 for the thirteen weeks ended July 1, 2023. Freight expense was 8% of sales for the thirteen weeks ended June 29, 2024 compared to 6% of sales for the thirteen weeks ended July 1, 2023. We anticipate that our freight expense will continue at a higher rate for the balance of 2024.

Selling expenses decreased by $70,000, or 22%, to $250,000 for the thirteen weeks ended June 29, 2024 from $320,000 for the thirteen weeks ended July 1, 2023. The decrease was due to decreases in commission expense of $38,000, meetings and convention expense of $18,000, bad debt expense of $16,000, and sample shipping expenses of $11,000 which were partially offset by an increase in outside warehouse rental expenses of $13,000. The decrease in commission expense is due to the decrease in sales for the thirteen-weeks ended June 29,2024 compared with the thirteen-weeks ended July 1, 2023.

Marketing expenses decreased by $10,000, or 11%, to $79,000 for the thirteen weeks ended June 29, 2024 from $89,000 for the thirteen weeks ended July 1, 2023. The decrease was primarily due to decreases in artwork and plates expense of $3,000, and advertising expense $14,000, which were partially offset by an increase in promotion expense of $7,000. We anticipate that our marketing expenses for the balance of the year will be comparable to the corresponding periods in fiscal year 2023.

Product development costs, which consist principally of salary expenses and laboratory costs, decreased by $34,000, or 61%, to $22,000 for the thirteen weeks ended June 29, 2024 from $56,000 for the thirteen weeks ended July 1, 2023. The decrease was primarily due to a decrease in professional fees and outside services expense of $24,000 and lab costs and supplies expense of $7,000. We anticipate our product development costs will continue at a lower level than the corresponding 2023 periods as we have reduced our research and development work.

General and administrative expenses decreased by $41,000, or 11%, to $342,000 for the thirteen weeks ended June 29, 2024 from $383,000 for the thirteen weeks ended July 1, 2023, primarily due to decreases in public relations expense of $16,000 and professional fees and outside services expense of $43,000, which were partially offset by increases in office supplies expense of $7,000 and payroll expense of $11,000. We anticipate our general and administrative expenses for the remaining periods in 2024 will approximate the same levels as in the corresponding 2023 periods.

Income tax expense was $5,000 for the thirteen weeks ended June 29, 2024 and $136,000 for the thirteen weeks ended July 1, 2023.

14

Twenty Six Weeks Ended June 29, 2024 Compared with Twenty Six Weeks Ended July 1, 2023

Net sales for the twenty-six weeks ended June 29, 2024 decreased by $713,000, or 14%, to $4,495,000, from net sales of $5,208,000 for the twenty-six weeks ended July 1, 2023. Sales of our vegan cheese products decreased to $3,735,000 in the twenty-six weeks ended June 29, 2024 from $4,382,000 for the twenty-six weeks ended July 1, 2023. Sales of our frozen dessert products decreased to $764,000 for the twenty-six weeks ended June 29, 2024 from $826,000 for the twenty-six weeks ended July 1, 2023. The significant reduction in sales for the current twenty-six week period was primarily due to the decrease in our vegan cheese sales caused by increased competition in the vegan cheese category and a decline in our export cheese business.

Our gross profit decreased to $1,136,000 for the twenty-six weeks ended June 29, 2024 from $1,273,000 for the twenty-six weeks ended July 1, 2023, while our gross profit percentage was 25% for the twenty-six weeks ending June 29, 2024 compared to 24% for the twenty-six weeks ending July 1, 2023. The decrease in gross profit dollars was due to the reduction in sales. The increase in our gross profit percentage was due to a $85,000 decrease in sales promotion and allowance expense to $442,000 in fiscal 2024, from $527,000 in fiscal 2023. We anticipate that our gross margin percentage will remain unchanged or slightly increase for the balance of the fiscal year.

Freight expense, a significant part of our cost of sales, decreased by $28,000, or 8%, to $357,000 for the twenty-six weeks ended June 29, 2024 compared with $385,000 for the twenty-six weeks July 1, 2023. Freight expense was 8% of sales for the twenty-six weeks ended June 29, 2024 and for the twenty-six weeks ended July 1, 2023.

Selling expenses decreased by $128,000, or 22%, to $464,000 for the twenty-six weeks ended June 29, 2024 from $592,000 for the twenty-six weeks ended July 1, 2023. The decrease was primarily attributable to decreases in meetings and convention expense of $44,000, commission expense of $76,000, bad debt expense of $15,000, and sample shipping expenses of $23,000, which were partially offset by an increase in outside warehouse rental expenses of $20,000 and payroll expenses of $10,000. The decrease in commission expense is due to the decrease in sales and a reduction to the commission rate we pay to our brokers from 5% to 4% for the twenty-six weeks ended June 29, 2024 compared with the twenty-six weeks ended July 1, 2023.

Marketing expenses increased by $29,000, or 16%, to $213,000 for the twenty-six weeks ended June 29, 2024 from $184,000 for the twenty-six weeks ended July 1, 2023. The increase was primarily due to increases in promotions expense of $37,000 and advertising expense of $7,000, which were partially offset by a decrease in point of sale material expense of $14,000.

Product development costs, which consist principally of salary expenses and laboratory costs, were $64,000 for the twenty-six weeks ended June 29, 2024 and $83,000 for the twenty-six weeks ended July 1, 2023. The decrease was due primarily to a decrease in professional fees and outside services expenses of $15,000 and lab costs and supplies expense of $6,000.

General and administrative expenses increased by 6%, or $38,000, to $724,000 for the twenty-six weeks ended June 29, 2024 from $686,000 for the twenty-six weeks ended July 1, 2023. This increase was primarily due to increases in payroll expense of $20,000, professional fees and outside services expense of $12,000, office supply expense of $7,000, equipment repairs expense of $5,000, and general insurance expense of $6,000, which were partially offset by decreases in public relations expense of $21,000. Our increase in payroll expense was due primarily to an increase in group insurance expense.

Income tax expense was $5,000 for the twenty-six weeks ended June 29, 2024 and $146,000 for the thirteen weeks ended July 1, 2023.

Liquidity and Capital Resources

As of June 29, 2024, we had approximately $489,000 in cash and our working capital was approximately $3,105,000, compared with approximately $837,000 in cash and working capital of $3,440,000 at December 30, 2023.

15

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

	Twenty-six weeks ended			Twenty-six weeks ended
	29-Jun-24			1-Jul-23
Cash used in operating activities, net	$	(344	)	$	(485	)
Cash used in financing activities, net		(4	)		(4	)
Net decrease in cash	$	(348	)	$	(489	)

Net cash used in operating activities for the twenty-six weeks ended June 29, 2024 was $344,000 compared to $485,000 used in operating activities for the twenty-six weeks ended July 1, 2023. Net cash used in operating activities for the twenty-six weeks ended June 29, 2024 was primarily a result of the net loss of $335,000 and decreases in current assets other than cash of $313,000, primarily inventory, which were offset by decreases in current liabilities, primarily accounts payable and accrued expenses, of $383,000.

We believe our existing cash on hand at June 29, 2024, 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 do not believe that our operating results have been materially affected by inflation during the preceding two years. There can be no assurance, however, that our operating results will not be affected by inflation in the future. 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 29, 2024.

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.

16

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. As of June 29, 2024, 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 29, 2024.

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 29, 2024 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 29, 2024.

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.

17

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any material litigation.

Item 1A. Risk Factors

There have been no material changes to the Company’s “Risk Factors” set forth in its Annual Report on Form 10-K for the year ended December 30, 2023.

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

None.

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).

18

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 15, 2024

19

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Steven Kass, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Tofutti Brands Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; and

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 15, 2024

/s/ Steven Kass

Steven Kass

Chief Executive Officer

* The originally executed copy of this Certification will be maintained at the Company’s offices and will be made available for inspection upon request.

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Steven Kass, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Tofutti Brands Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; and

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 15, 2024

/s/ Steven Kass

Steven Kass

Chief Financial Officer

* The originally executed copy of this Certification will be maintained at the Company’s offices and will be made available for inspection upon request.

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Tofutti Brands Inc. (the “Company”) on Form 10-Q for the period ending June 29, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven Kass, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Steven Kass

Steven Kass

Chief Executive Officer

Date: August 15, 2024

* The originally executed copy of this Certification will be maintained at the Company’s offices and will be made available for inspection upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Tofutti Brands Inc. (the “Company”) on Form 10-Q for the period ending June 29, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven Kass, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Steven Kass

Steven Kass

Chief Financial Officer

Date: August 15, 2024

* The originally executed copy of this Certification will be maintained at the Company’s offices and will be made available for inspection upon request.

XML

Cover - $ / shares	6 Months Ended
	Jun. 29, 2024	Aug. 15, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 29, 2024
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-28
Entity File Number	1-9009
Entity Registrant Name	Tofutti Brands Inc.
Entity Central Index Key	0000730349
Entity Tax Identification Number	13-3094658
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	50 Jackson Drive
Entity Address, City or Town	Cranford
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07016
City Area Code	(908)
Local Phone Number	272-2400
Trading Symbol	TOFB
Title of 12(g) Security	Common Stock, par value $0.01 per share
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		5,153,706
Entity Listing, Par Value Per Share	$ 0.01

XML

Condensed Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 29, 2024	Dec. 30, 2023
Current assets:
Cash	$ 489	$ 837
Accounts receivable, net of allowance for doubtful accounts and sales promotions of $505 and $525, respectively	817	828
Inventories	2,171	2,475
Prepaid expenses and other current assets	75	93
Total current assets	3,552	4,233
Operating lease right-of-use asset	47	81
Finance lease right-of-use asset	29	36
Deferred tax assets	246	246
Other assets	40	19
Total assets	3,914	4,615
Current liabilities:
Accounts payable	12	237
Accrued expenses	387	541
Finance lease liability, current portion	11	15
Total current liabilities	410	793
Operating lease liabilities, net of current portion		7
Finance lease liability, net of current portion	20	23
Total liabilities	430	823
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	350	323
Retained earnings	3,082	3,417
Total stockholders’ equity	3,484	3,792
Total liabilities and stockholders’ equity	$ 3,914	$ 4,615

XML

Condensed Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 29, 2024	Dec. 30, 2023
Statement of Financial Position [Abstract]
Allowance for doubtful accounts and sales promotions on accounts receivable	$ 505	$ 525
Preferred stock par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	100,000	100,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	15,000,000	15,000,000
Common stock, shares issued	5,153,706	5,153,706
Common stock, shares outstanding	5,153,706	5,153,706

XML

Condensed Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 29, 2024	Jul. 01, 2023	Jun. 29, 2024	Jul. 01, 2023
Income Statement [Abstract]
Net sales	$ 2,283	$ 2,719	$ 4,495	$ 5,208
Cost of sales	1,616	2,052	3,359	3,935
Gross profit	667	667	1,136	1,273
Operating expenses:
Selling and warehouse	250	320	464	592
Marketing	79	89	213	184
Research and development	22	56	64	83
General and administrative	342	383	724	686
Total operating expenses	693	848	1,465	1,545
Loss from operations	(26)	(181)	(329)	(272)
Loss before interest expense and income taxes	(26)	(181)	(329)	(272)
Interest expense	1	1	1	2
Loss before income tax	(27)	(182)	(330)	(274)
Income tax expense	5	136	5	146
Net loss	$ (32)	$ (318)	$ (335)	$ (420)
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	$ (0.01)	$ (0.06)	$ (0.06)	$ (0.08)
Diluted	$ (0.01)	$ (0.06)	$ (0.06)	$ (0.08)

XML

Condensed Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2022	$ 52	$ 263	$ 3,783	$ 4,098
Stock-based compensation		20		20
Net loss			(102)	(102)
Balance at Apr. 01, 2023	52	283	3,681	4,016
Balance at Dec. 31, 2022	52	263	3,783	4,098
Net loss				(420)
Balance at Jul. 01, 2023	52	296	3,363	3,711
Balance at Apr. 01, 2023	52	283	3,681	4,016
Stock-based compensation		13		13
Net loss			(318)	(318)
Balance at Jul. 01, 2023	52	296	3,363	3,711
Balance at Dec. 30, 2023	52	323	3,417	3,792
Stock-based compensation		14		14
Net loss			(303)	(303)
Balance at Mar. 30, 2024	52	337	3,114	3,503
Balance at Dec. 30, 2023	52	323	3,417	3,792
Net loss				(335)
Balance at Jun. 29, 2024	52	350	3,082	3,484
Balance at Mar. 30, 2024	52	337	3,114	3,503
Stock-based compensation		13		13
Net loss			(32)	(32)
Balance at Jun. 29, 2024	$ 52	$ 350	$ 3,082	$ 3,484

XML

Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 29, 2024	Jul. 01, 2023
Statement of Cash Flows [Abstract]
Cash used in operating activities, net	$ (344)	$ (485)
Cash used in financing activities, net	(4)	(4)
Net decrease in cash	(348)	(489)
Cash at beginning of period	837	1,072
Cash at end of period	489	569
Supplemental cash flow information:
Income taxes paid	7
Interest paid on finance leases	$ 1	$ 2

XML

Basis of Presentation

6 Months Ended

Jun. 29, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

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 and twenty-six-week period ended June 29, 2024 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.

XML

Recently Issued Accounting Standards

6 Months Ended

Jun. 29, 2024

Accounting Changes and Error Corrections [Abstract]

Recently Issued Accounting Standards

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 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.

XML

Inventories

6 Months Ended

Jun. 29, 2024

Inventory Disclosure [Abstract]

Inventories

Note 3: Inventories

Inventories consist of the following:

	June 29, 2024		December 30, 2023
Finished products	$	1,237	$	1,366
Raw materials and packaging		934		1,109
	$	2,171	$	2,475

XML

Income Taxes

6 Months Ended

Jun. 29, 2024

Income Tax Disclosure [Abstract]

Income Taxes

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.

XML

Earnings (Loss) Per Share

6 Months Ended

Jun. 29, 2024

Loss per common share:

Earnings (Loss) Per Share

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.

TOFUTTI BRANDS INC.

Notes to Unaudited Condensed Financial Statements

(in thousands, except share and per share data)

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

	Thirteen weeks ended June 29, 2024			Thirteen weeks ended July 1, 2023			Twenty-six weeks ended June 29, 2024			Twenty-six weeks ended July 1, 2023
Loss, numerator, basic computation	$	(32	)	$	(318	)	$	(335	)	$	(420	)
Net loss, numerator, diluted computation	$	(32	)	$	(318	)	$	(335	)	$	(420	)
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	$	(0.01	)	$	(0.06	)	$	(0.06	)	$	(0.08	)
Loss per common share - diluted	$	(0.01	)	$	(0.06	)	$	(0.06	)	$	(0.08	)

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

	Thirteen weeks Ended June 29, 2024		Thirteen weeks Ended July 1, 2023
Shares subject to outstanding common stock options		250,000		250,000

XML

Share Based Compensation

6 Months Ended

Jun. 29, 2024

Share-Based Payment Arrangement [Abstract]

Share Based Compensation

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 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.” 0 and 250,000 stock options were issued in 2023 and 2022, respectively, and 250,000 non-qualified options were outstanding as of June 29, 2024. 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 will vest in December 2023, and 83,334 will vest in December 2024. In the event of a sale of the Company at any time prior to December 22, 2024, all remaining unvested options shall vest immediately. All options expire on December 22, 2027. No additional options were made available or granted during the twenty-six weeks ended June 29, 2024.

The following is a summary of stock option activity from December 30, 2023 to June 29, 2024:

	NON-QUALIFIED OPTIONS
	Shares		Weighted Average Exercise Price ($)
Outstanding at December 30, 2023		250,000		0.95
Granted		—		—
Exercised		—		—
Outstanding at June 29, 2024		250,000		0.95
Exercisable at June 29, 2024		166,666		0.95

TOFUTTI BRANDS INC.

Notes to Unaudited Condensed Financial Statements

(in thousands, except share and per share data)

The following table summarizes information about stock options outstanding from December 30, 2023 to June 29, 2024:

Range of Exercise Prices ($)		Number Outstanding		Weighted Average Remaining Life (in years)		Weighted Average Exercise Price($)		Number Exercisable
$	0.95		250,000		3.50	$	0.95		166,666

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing formula. Expected volatilities and risk-free interest rates are based upon the expected life of the grant. The interest rates used are the U.S. Treasury yield curve in effect at the time of the grant.

During the fiscal year ended December 31, 2022, 250,000 options were granted, with 83,333 of the options vesting at the respective grant date, 83,333 vesting in December 2023, and 83,334 vesting in December 2024. At the date of grant, expected volatility was 82.65%, a risk-free rate of 3.79%, 0% expected dividends, and an expected term of five years.

The expected term was determined based on the reasoning that all previously granted options have been held to expiration. Additionally, all 5 members who were granted options are board members or an officer, and the expectation is that they are holding these options to expiration or until any such liquidation event would take place which is not estimable.

As of June 29, 2024, and July 1, 2023 the intrinsic value of the options outstanding and exercisable options was $0 and $12, respectively, and there was $22 of total unrecognized compensation cost. Total stock-based compensation for both of the thirteen weeks ended June 29, 2024 and July 1, 2023 was $13, which is recorded in general and administrative expenses on the statement of operations. Total stock-based compensation was $27 and $34 for the twenty-six weeks ended June 29, 2024 and July 1, 2023, respectively.

The 250,000 options will expire on December 22, 2027 if not exercised by that date.

XML

Revenue

6 Months Ended

Jun. 29, 2024

Revenue from Contract with Customer [Abstract]

Revenue

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 29, 2024		Thirteen weeks ended July 1, 2023		Twenty-six weeks ended June 29, 2024		Twenty-six weeks ended July 1, 2023
Revenues by geography:
Americas	$	2,099	$	2,586	$	4,224	$	5,006
Europe		79		7		79		11
Asia Pacific and Africa		—		—		—		57
Middle East		105		126		192		134
	$	2,283	$	2,719	$	4,495	$	5,208

Approximately 95% of the Americas’ revenue for the thirteen weeks ended June 29, 2024 is attributable to sales in the United States compared with 93% of the Americas’ revenue for the thirteen weeks ended July 1, 2023. For the twenty-six week period ended June 29, 2024 approximately 92% of the Americas’ revenue is attributable to sales in the United States compared to 91% for the twenty-six week period ended July 1, 2023. All of the Company’s assets are located in the United States.

TOFUTTI BRANDS INC.

Notes to Unaudited Condensed Financial Statements

(in thousands, except share and per share data)

Net sales by major product category:

	Thirteen weeks ended June 29, 2024		Thirteen weeks ended July 1, 2023		Twenty-six Weeks ended June 29, 2024		Twenty-six Weeks ended July 1, 2023
Frozen desserts and foods	$	357	$	436	$	760	$	826
Cheeses		1,926		2,283		3,735		4,382
	$	2,283	$	2,719	$	4,495	$	5,208

XML

Leases

6 Months Ended

Jun. 29, 2024

Leases

Leases

Note 8: Leases

The Company’s facilities are located in a one-story facility in Cranford, New Jersey. The 6,200 square foot facility houses its administrative offices, a warehouse, walk-in freezer and refrigerator, and a product development laboratory and test kitchen. The Company’s original lease agreement expired on July 1, 1999, but it continues to occupy the premises on a monthly basis. Any changes by either the landlord or the Company remains subject to a six-month notification period. The Company currently has no plans to enter into a long-term lease agreement for the facility. Rent expense was $7 and $7 for the thirteen weeks ended June 29, 2024 and July 1, 2023, and $14 and $14 for the twenty-six weeks ended June 29, 2024 and July 1, 2023, respectively. The Company rents warehouse storage space at various outside facilities. Outside warehouse expenses were $98 for the thirteen weeks ended June 29, 2024 and $85 for the thirteen weeks ended July 1, 2023, and $181 and $161 for the twenty-six weeks ended June 29, 2024 and July 1, 2023, respectively. The Company rents copiers under finance leases. In 2022, the Company terminated two copier leases, and entered into one additional lease, which still exists as of June 29, 2024. Payments for copiers amounted to $0 and $4 for the thirteen weeks ended June 29, 2024 and July 1, 2023, respectively and $0 and $8 for the twenty-six weeks ended June 29, 2024 and July 1, 2023, respectively.

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. The current portion of lease liabilities is included in accrued expenses on the condensed balance sheets.

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. At the time of adoption of Topic 842, the Company used the incremental borrowing rate of 5.5% for all leases that commenced prior to that date.

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

	As of			As of
	June 29, 2024			December 30, 2023
Operating lease right-of-use assets	$	47		$	81
Current portion of lease liabilities		47			74
Operating lease liabilities, net of current portion		—			7
Total lease liability	$	47		$	81
Weighted average remaining lease term (in years)		0.5			1.2
Weighted average discount rate		5.5	%		5.5	%

TOFUTTI BRANDS INC.

Notes to Unaudited Condensed Financial Statements

(in thousands, except share and per share data)

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

	As of			As of
	June 29, 2024			December 30, 2023
Finance lease right-of-use asset	$	29		$	36
Current portion of lease liabilities		11			15
Finance lease liabilities, net of current portion		20			23
Total lease liabilities	$	31		$	38
Weighted average remaining lease term (in years)		1.8			2.4
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 29, 2024 are as follows:

	Operating lease liabilities		Finance lease liability		Total
2024 (remainder of the year)		47		8		55
2025		—		18		18
2026		—		7		7
Total future minimum lease payments		47		33		80
Present value adjustment		—		2		2
Total	$	47	$	31	$	78

XML

Accrued Expenses and Other Current Liabilities

6 Months Ended

Jun. 29, 2024

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

Note 9: Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

	As of		As of
	June 29, 2024		December 30, 2023
Accrued payroll and other benefits	$	2	$	—
Accrued professional fees		15		11
Uncertain tax position		216		211
Operating lease liability		47		81
Accrued purchases		107		238
Total accrued expenses and other current liabilities	$	387	$	541

XML

Subsequent Events

6 Months Ended

Jun. 29, 2024

Subsequent Events [Abstract]

Subsequent Events

Note 10: Subsequent Events

The Company notes it will be moving its offices and corporate offices some time during the third quarter. We expect the move to be completed no later than September 30^th, 2024.

XML

Inventories (Tables)

6 Months Ended

Jun. 29, 2024

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consist of the following:

	June 29, 2024		December 30, 2023
Finished products	$	1,237	$	1,366
Raw materials and packaging		934		1,109
	$	2,171	$	2,475

XML

Earnings (Loss) Per Share (Tables)

6 Months Ended

Jun. 29, 2024

Loss per common share:

Schedule of Computation of Basic and Diluted Earnings Per Share

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

	Thirteen weeks ended June 29, 2024			Thirteen weeks ended July 1, 2023			Twenty-six weeks ended June 29, 2024			Twenty-six weeks ended July 1, 2023
Loss, numerator, basic computation	$	(32	)	$	(318	)	$	(335	)	$	(420	)
Net loss, numerator, diluted computation	$	(32	)	$	(318	)	$	(335	)	$	(420	)
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	$	(0.01	)	$	(0.06	)	$	(0.06	)	$	(0.08	)
Loss per common share - diluted	$	(0.01	)	$	(0.06	)	$	(0.06	)	$	(0.08	)

Schedule of Securities Excluded From Weighted Average Shares

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

	Thirteen weeks Ended June 29, 2024		Thirteen weeks Ended July 1, 2023
Shares subject to outstanding common stock options		250,000		250,000

XML

Share Based Compensation (Tables)

6 Months Ended

Jun. 29, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Option Activity

The following is a summary of stock option activity from December 30, 2023 to June 29, 2024:

	NON-QUALIFIED OPTIONS
	Shares		Weighted Average Exercise Price ($)
Outstanding at December 30, 2023		250,000		0.95
Granted		—		—
Exercised		—		—
Outstanding at June 29, 2024		250,000		0.95
Exercisable at June 29, 2024		166,666		0.95

Schedule of Information About Stock Options

The following table summarizes information about stock options outstanding from December 30, 2023 to June 29, 2024:

Range of Exercise Prices ($)		Number Outstanding		Weighted Average Remaining Life (in years)		Weighted Average Exercise Price($)		Number Exercisable
$	0.95		250,000		3.50	$	0.95		166,666

XML

Revenue (Tables)

6 Months Ended

Jun. 29, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation Revenue

Revenues by geographical region are as follows:

	Thirteen weeks ended June 29, 2024		Thirteen weeks ended July 1, 2023		Twenty-six weeks ended June 29, 2024		Twenty-six weeks ended July 1, 2023
Revenues by geography:
Americas	$	2,099	$	2,586	$	4,224	$	5,006
Europe		79		7		79		11
Asia Pacific and Africa		—		—		—		57
Middle East		105		126		192		134
	$	2,283	$	2,719	$	4,495	$	5,208

Net sales by major product category:

	Thirteen weeks ended June 29, 2024		Thirteen weeks ended July 1, 2023		Twenty-six Weeks ended June 29, 2024		Twenty-six Weeks ended July 1, 2023
Frozen desserts and foods	$	357	$	436	$	760	$	826
Cheeses		1,926		2,283		3,735		4,382
	$	2,283	$	2,719	$	4,495	$	5,208

 

XML

Leases (Tables)

6 Months Ended

Jun. 29, 2024

Leases

Schedule of ROU Lease Assets and Liabilities For Operating Lease

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

	As of			As of
	June 29, 2024			December 30, 2023
Operating lease right-of-use assets	$	47		$	81
Current portion of lease liabilities		47			74
Operating lease liabilities, net of current portion		—			7
Total lease liability	$	47		$	81
Weighted average remaining lease term (in years)		0.5			1.2
Weighted average discount rate		5.5	%		5.5	%

Schedule of ROU Lease Assets and Liabilities For Finance Leases

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

	As of			As of
	June 29, 2024			December 30, 2023
Finance lease right-of-use asset	$	29		$	36
Current portion of lease liabilities		11			15
Finance lease liabilities, net of current portion		20			23
Total lease liabilities	$	31		$	38
Weighted average remaining lease term (in years)		1.8			2.4
Weighted average discount rate		6.5	%		6.5	%

Schedule of Future Lease Payments

Future lease payments included in the measurement of lease liabilities on the balance sheet as of June 29, 2024 are as follows:

	Operating lease liabilities		Finance lease liability		Total
2024 (remainder of the year)		47		8		55
2025		—		18		18
2026		—		7		7
Total future minimum lease payments		47		33		80
Present value adjustment		—		2		2
Total	$	47	$	31	$	78

XML

Accrued Expenses and Other Current Liabilities (Tables)

6 Months Ended

Jun. 29, 2024

Payables and Accruals [Abstract]

Schedule of Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following:

	As of		As of
	June 29, 2024		December 30, 2023
Accrued payroll and other benefits	$	2	$	—
Accrued professional fees		15		11
Uncertain tax position		216		211
Operating lease liability		47		81
Accrued purchases		107		238
Total accrued expenses and other current liabilities	$	387	$	541

XML

Schedule of Inventories (Details) - USD ($) $ in Thousands	Jun. 29, 2024	Dec. 30, 2023
Inventory Disclosure [Abstract]
Finished products	$ 1,237	$ 1,366
Raw materials and packaging	934	1,109
Inventories, net	$ 2,171	$ 2,475

XML

Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 29, 2024	Jul. 01, 2023	Jun. 29, 2024	Jul. 01, 2023
Loss per common share:
Loss, numerator, basic computation	$ (32)	$ (318)	$ (335)	$ (420)
Net loss, numerator, diluted computation	$ (32)	$ (318)	$ (335)	$ (420)
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	$ (0.01)	$ (0.06)	$ (0.06)	$ (0.08)
Loss per common share - diluted	$ (0.01)	$ (0.06)	$ (0.06)	$ (0.08)

XML

Schedule of Securities Excluded From Weighted Average Shares (Details) - shares	3 Months Ended
	Jun. 29, 2024	Jul. 01, 2023
Common Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares subject to outstanding common stock options	250,000	250,000

XML

Schedule of Stock Option Activity (Details)	6 Months Ended
	Jun. 29, 2024 $ / shares shares
Share-Based Payment Arrangement [Abstract]
Non-qualified options, outstanding, beginning balance | shares	250,000
Non-qualified options, weighted average exercise price beginning balance | $ / shares	$ 0.95
Non-qualified options, granted | shares
Non-qualified options, weighted average exercise price, granted | $ / shares
Non-qualified options, exercised | shares
Non-qualified options, weighted average exercise price, exercised | $ / shares
Non-qualified options, outstanding, ending balance | shares	250,000
Non-qualified options, weighted average exercise price ending balance | $ / shares	$ 0.95
Non-qualified options,exercisable | shares	166,666
Non-qualified options, weighted average exercise price, exercisable | $ / shares	$ 0.95

XML

Schedule of Information About Stock Options (Details)	6 Months Ended
	Jun. 29, 2024 $ / shares shares
Share-Based Payment Arrangement [Abstract]
Range of exercise prices | $ / shares	$ 0.95
Number of options, outstanding | shares	250,000
Weighted average remaining life (in years)	3 years 6 months
Weighted average exercise price | $ / shares	$ 0.95
Number of options, exercisable | shares	166,666

XML

Share Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 29, 2024	Jul. 01, 2023	Dec. 30, 2023	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock options, granted
Number of shares outstanding	250,000		250,000
Options expiration date	Dec. 22, 2027
Intrinsic value of options outstanding	$ 0	$ 12
Intrinsic value of options exercisable	0	12
Unrecognized compensation cost	22
Rent expense	$ 27	34
Number of shares options will expire	250,000
General and Administrative Expense [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share based compensation	$ 13	$ 13
Non-Qualified Options [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares outstanding	250,000
2014 Equity Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock available for awards	250,000
Stock options, granted			0	250,000
Exercise price				$ 0.95
Number of options vested	83,333			83,333
Options expiration date	Dec. 22, 2027
Expected volatility				82.65%
Risk-free interest rate				3.79%
Expected dividends				0.00%
Expected term				5 years
2014 Equity Incentive Plan [Member] | December 2023 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of options will vest in future	83,333			83,333
2014 Equity Incentive Plan [Member] | December 2024 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of options will vest in future	83,334			83,334

XML

Schedule of Disaggregation Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 29, 2024	Jul. 01, 2023	Jun. 29, 2024	Jul. 01, 2023
Disaggregation of Revenue [Line Items]
Revenues	$ 2,283	$ 2,719	$ 4,495	$ 5,208
Frozen Desserts and Foods [Member]
Disaggregation of Revenue [Line Items]
Revenues	357	436	760	826
Cheeses [Member]
Disaggregation of Revenue [Line Items]
Revenues	1,926	2,283	3,735	4,382
Americas [Member]
Disaggregation of Revenue [Line Items]
Revenues	2,099	2,586	4,224	5,006
Europe [Member]
Disaggregation of Revenue [Line Items]
Revenues	79	7	79	11
Asia Pacific and Africa [Member]
Disaggregation of Revenue [Line Items]
Revenues				57
Middle East [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 105	$ 126	$ 192	$ 134

XML

Revenue (Details Narrative)	3 Months Ended		6 Months Ended
	Jun. 29, 2024	Jul. 01, 2023	Jun. 29, 2024	Jul. 01, 2023
Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | Americas [Member]
Disaggregation of Revenue [Line Items]
Concentration risk percentage	95.00%	93.00%	92.00%	91.00%

XML

Schedule of ROU Lease Assets and Liabilities For Operating Lease (Details) - USD ($) $ in Thousands	Jun. 29, 2024	Dec. 30, 2023
Leases
Operating lease right-of-use assets	$ 47	$ 81
Current portion of lease liabilities	47	74
Operating lease liabilities, net of current portion		7
Total lease liability	$ 47	$ 81
Weighted average remaining lease term (in years)	6 months	1 year 2 months 12 days
Weighted average discount rate	5.50%	5.50%

XML

Schedule of ROU Lease Assets and Liabilities For Finance Leases (Details) - USD ($) $ in Thousands	Jun. 29, 2024	Dec. 30, 2023
Leases
Finance lease right-of-use asset	$ 29	$ 36
Current portion of lease liabilities	11	15
Finance lease liabilities, net of current portion	20	23
Total lease liabilities	$ 31	$ 38
Weighted average remaining lease term (in years)	1 year 9 months 18 days	2 years 4 months 24 days
Weighted average discount rate	6.50%	6.50%

XML

Schedule of Future Lease Payments (Details) - USD ($) $ in Thousands	Jun. 29, 2024	Dec. 30, 2023
Leases
Operating lease liabilities, 2024	$ 47
Finance lease liability, 2024	8
Operating lease and Financing lease, 2024	55
Operating lease liabilities, 2025
Finance lease liability, 2025	18
Operating lease and Financing lease, 2025	18
Operating lease liabilities, 2026
Finance lease liability, 2026	7
Operating lease and Financing lease, 2026	7
Operating lease liabilities, future minimum lease payments	47
Finance lease liability, future minimum lease payments	33
Operating lease and Financing lease, future minimum lease payments	80
Operating lease liabilities, Present value adjustment
Finance lease liability, Present value adjustment	2
Operating lease and Financing lease, Present value adjustment	2
Operating lease liabilities, Total	47	$ 81
Finance lease liability, Total	31	$ 38
Operating lease and Financing lease, Liabilities	$ 78

XML

Leases (Details Narrative) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 29, 2024 USD ($) ft²	Jul. 01, 2023 USD ($)	Jun. 29, 2024 USD ($) ft²	Jul. 01, 2023 USD ($)
Area of real estate property | ft²	6,200		6,200
Rent expense	$ 7	$ 7	$ 14	$ 14
Warehouse expenses	98	85	181	161
Payments for rent copiers	$ 0	$ 4	$ 0	$ 8
Minimum [Member]
Incremental borrowing rate, percentage			5.50%

XML

Schedule of Accrued expenses and other current liabilities (Details) - USD ($) $ in Thousands	Jun. 29, 2024	Dec. 30, 2023
Payables and Accruals [Abstract]
Accrued payroll and other benefits	$ 2
Accrued professional fees	15	11
Uncertain tax position	216	211
Operating lease liability	47	81
Accrued purchases	107	238
Total accrued expenses and other current liabilities	$ 387	$ 541