TOFUTTI BRANDS INC - Annual Report: 2010 (Form 10-K)

zk1008151.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

x	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the fiscal year ended January 2, 2010

o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission File Number: 1-9009

TOFUTTI BRANDS INC. (Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	13-3094658 (I.R.S. Employer Identification No.)
50 Jackson Drive, Cranford, New Jersey (Address of principal executive offices)	07016 (Zip Code)

(908) 272-2400

((Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Common Stock, par value $.01 per share

Name of each exchange on which registered

NYSE AMEX

Securities pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ¨ No x

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 x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, 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 o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ¨ Accelerated Filer ¨ Non-Accelerated Filer ¨ Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

Yes ¨ No x

The aggregate market value of voting stock held by non-affiliates computed by reference to the closing sale price of such stock, as reported by the NYSE Amex on March 30, 2010 was $4,391,154.00.

As of March 30, 2010, the issuer had 5,176,678 shares of Common Stock, par value $.01, outstanding.

TABLE OF CONTENTS

PART I			3
	Item 1.	Business.	3
	Item 1A.	Risk Factors.	9
	Item 1B.	Unresolved Staff Comments.	12
	Item 2.	Properties.	13
	Item 3.	Legal Proceedings.	13
	Item 4.	(Removed and Reserved).	13
PART II			14
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	14
	Item 6.	Selected Financial Data.	16
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	16
	Item 7A.	Quantitative and Qualitative Disclosures about Market Risk.	22
	Item 8.	Financial Statements and Supplementary Data.	22
	Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.	23
	Item 9A (T).	Controls and Procedures.	23
	Item 9B.	Other Information.	24
PART III			25
	Item 10.	Directors, Executive Officers and Corporate Governance.	25
	Item 11.	Executive Compensation.	27
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	29
	Item 13.	Certain Relationships and Related Transactions, and Director Independence.	30
	Item 14.	Principal Accounting Fees and Services.	31
PART IV			32
	Item 15.	Exhibits, Financial Statement Schedules.	32
SIGNATURES			33

INTRODUCTION

As used in this annual report, the terms “we,” “us” and “our” mean Tofutti Brands Inc., unless otherwise indicated.

Statements made in this annual report concerning the contents of any contract, agreement or other document are summaries of such contracts, agreements or documents and are not complete descriptions of all of their terms. If we filed any of these documents as an exhibit to this annual report or to any previous filling with the Securities and Exchange Commission, you may read the document itself for a complete recitation of its terms.

Except for the historical information contained in this annual report, the statements contained in this annual report are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended, with respect to our business, financial condition and results of operations. Such forward-looking statements reflect our current view with respect to future events and financial results. We urge you to consider that statements which use the terms “anticipate,” “believe,” “do not believe,” “expect,” “plan,” “intend,” “estimate,” “anticipate” and similar expressions are intended to identify forward-looking statements. We remind readers that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity, or our achievements, or industry results, to be materially different from any future results, performance, levels of activity, or our achievements expressed or implied by such forward-looking statements. Such forward-looking statements are also included in Item 1. “Business” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by applicable law, including the securities laws of the United States, we undertake no obligation to publicly release any update or revision to any forward-looking statements to reflect new information, future events or circumstances, or otherwise after the date hereof. We have attempted to identify significant uncertainties and other factors affecting forward-looking statements in the Risk Factors section that appears in Item 1A. “Risk Factors.”

We operate on a fiscal year ending on the Saturday closest to December 31. Fiscal years for the financial statements included herein are the fifty-three week period ended January 2, 2010 and the fifty-two week period ended December 27, 2008.

PART I

Item 1. Business.

GENERAL

We are engaged in the development, production and marketing of TOFUTTI® brand nondairy frozen desserts and other food products. TOFUTTI products are nondairy, soy-based products which contain no butterfat, cholesterol or lactose. Our products are 100% milk free yet offer the same texture and full-bodied taste as their dairy counterparts. Our products are also free of cholesterol and derive their fat from soy and corn, both naturally lower in saturated fat than dairy products.

We were organized under the laws of the State of New York in 1981 and became a Delaware corporation in 1984. Our registered office and principal executive offices are located at 50 Jackson Drive, Cranford, New Jersey 07016, our telephone number is 908-272-2400 and our email address is info@tofutti.com. Our address on the Internet is www.tofutti.com. The information on our website is not incorporated by reference into this annual report.

STRATEGY

Our objective is to be a leading provider of nondairy, soy-based food products, primarily frozen desserts and soy-cheese products, to supermarkets and health food stores in the United States and abroad. We intend to continue to introduce new products that offer good taste while containing no butterfat, cholesterol or dairy to these markets. We focus our marketing efforts toward those consumers who find our products essential to their everyday diets because of health, lifestyle or religious reasons. As part of this strategy, we seek to achieve brand awareness through product innovation, eye-catching packaging, trade advertising and a strong word-of-mouth marketing program. We believe that our ability to offer a wide range of nondairy, soy-based parve kosher products will continue to provide us with a competitive advantage.

TOFUTTI PRODUCT LINE

We offer a broad product line of nondairy soy-based products. Our products include frozen desserts, nondairy cheeses and spreads, other frozen food products and several dry grocery items.

Frozen Desserts

Premium TOFUTTI® nondairy frozen dessert, available in prepacked pints, three-gallon cans, and soft serve mix, is sold nationally in supermarkets, health food stores, retail shops, and restaurants. Premium TOFUTTI was the first nondairy frozen dessert to be marketed to the general public through supermarkets. We currently offer nine flavors of premium, hard frozen TOFUTTI in pints. Premium TOFUTTI soft serve mix is available in Vanilla. TOFUTTI in three gallon bulk cans is available in three flavors.

TOFUTTI CUTIES®, our best selling product, are bite size frozen sandwiches combining a Vanilla, Cookies and Cream, Chocolate, Mint Chocolate Chip or Wild Berry filling between two chocolate wafers. Half the size of traditional ice cream sandwiches, TOFUTTI CUTIES offer consumers a portion controlled treat. Unlike ice cream sandwiches, CUTIES are totally dairy free, without butterfat or cholesterol, yet with the same great taste that makes ice cream sandwiches one of the best selling novelties in the freezer case. Like all our frozen dessert products, they are completely trans fat free, including the wafers. For those individuals who cannot have chocolate, our TOTALLY VANILLA TOFUTTI CUTIE is vanilla TOFUTTI between two vanilla wafers, while our KEY LIME CUTIE combines tangy lime-flavored TOFUTTI between two vanilla wafers.

WOW CUTIES combine three TOFUTTI flavors-Vanilla, Chocolate and Cranberry into one full size sandwich.

YOURS TRULY cones have a generous scoop of creamy vanilla TOFUTTI set in a chocolate-coated crispy cone, then covered in deep, rich chocolate and topped with a crispy chocolate cookie crunch.

TOTALLY FUDGE POPSÒ, CHOCOLATE FUDGE TREATS, and COFFEE BREAK TREATS are stick novelties that offer the consumer the same taste as real fudge or coffee bars. The TOTALLY FUDGE POPS, made with organic sugar and with no gluten added, have 70 calories and 1 gram of fat per bar, while fat free, no sugar added CHOCOLATE FUDGE TREATS and COFFEE BREAK TREATSä have only 30 calories per bar. Both products are ideal for anyone on either a low fat or low carb diet.

CHOCOLATE COVERED FLOWERS, a frozen dessert stick novelty, combine a dark chocolate coating over a blend of frozen flower and fruit nectars for a portion controlled treat.

MINT BY MINTZ are no sugar added stick novelties shaped just like TREATS, with a mint-flavored TOFUTTI center, covered with a thick, dark chocolate coating.

MARRY ME BARSä are stick novelties that feature creamy vanilla TOFUTTI surrounded with a dark chocolate coating. Made with organic sugar and with no gluten added, MARRY ME BARS satisfy important diet requirements of certain consumers with that great TOFUTTI taste.

Nondairy Cheese Products

BETTER THAN CREAM CHEESEÒ is similar in taste and texture to traditional cream cheese, but is milk and butterfat free and contains no cholesterol. It is as versatile as real cream cheese, whether spread on a bagel, used as a dip for snack items, such as crackers or chips, or used in any favorite recipe. The 8 oz. retail packages are available in six flavors. The plain version is also available in 30 lb. bulk boxes.

SOUR SUPREMEÒ is similar in taste and texture to traditional sour cream, but is milk and butterfat free and contains no cholesterol. SOUR SUPREME has the versatility of sour cream with the added benefit of being dairy free. The 12 oz. retail packages are available in Plain and Guacamole. The plain version is also available in 30 lb. bulk boxes. Like BETTER THAN CREAM CHEESE, SOUR SUPREME is sold nationally in most health food stores and select supermarkets.

For consumers concerned with their fat and calorie intake, TOFUTTI also offers versions of BETTER THAN CREAM CHEESE AND SOUR SUPREME without partially hydrogenated fat and no trans fatty acids. They are also made with organic sugar and are available in most health food stores. Non-hydrogenated fat BETTER THAN CREAM CHEESE is available in three flavors.

TOFUTTI SOY-CHEESE SLICESÔ offer consumers a delicious nondairy, vegan alternative to regular cheese slices and contain no trans fatty acids. Available as individually wrapped slices in 8 oz. packages, TOFUTTI SOY-CHEESE SLICES are sold in most health food stores and select supermarkets and come in two types: Mozzarella and American.

Other Food Products

TOFUTTI PIZZA PIZZAZ combines a delicious pan crust, zesty sauce and TOFUTTI totally dairy free BETTER THAN MOZZARELLA CHEESE into a completely authentic, yet healthy pizza. TOFUTTI PIZZA PIZZAZ is sold three squared slices to a package and is available in freezer cases in select supermarkets and health food stores.

TOFUTTI BLINTZES are frozen crepes filled with TOFUTTI BETTER THAN CREAM CHEESE that are dairy and cholesterol free, yet taste just like real cheese blintzes. Our BLINTZES can be served hot, warm, or slightly chilled as a main meal or a snack.

MARKETING AND DISTRIBUTION

TOFUTTI products are sold and distributed across the United States and internationally, and can be found in gourmet specialty shops, kosher supermarkets, natural/health food stores, and national and regional supermarket chains. Generally, most of our products are sold by independent unaffiliated food brokers to distributors and sometimes on a direct basis to retail chain accounts. Food brokers act as our agents within designated territories or for specific accounts and receive commissions, which average 5% of net collected sales. Certain key domestic accounts and all international accounts are handled directly by us. Our products are also sold in approximately twenty-five other countries.

We currently sell our frozen dessert products in most major markets in the United States, including Atlanta, Baltimore, Boston, Charlotte, Chicago, Cincinnati, Cleveland, Dallas, Denver, Detroit, Houston, Kansas City, Los Angeles, Miami, Milwaukee, Minneapolis, New York, Orlando, Philadelphia, Phoenix, Portland, Richmond, San Francisco, Seattle, St. Louis, Tampa and Washington, D.C.

We currently distribute all of our products by common carrier or by allowing customers to pick-up products from outside storage facilities. We do not own, lease or otherwise maintain any vehicles involved in the shipping of our products. From our co-packing facilities, we either ship direct to our customers or we ship to outside public storage facilities from which our customers are able to pick-up products. Use of outside storage facilities in several key locations in the United States allows us to provide our customers with products in a timely fashion.

In addition to ice cream distributors, our products are handled by almost every major national and regional natural and/or gourmet specialty distributor in the country. We distribute our products through thirty (30) distributors in the national health food market.

Our sales to health food distributors in fiscal 2009 decreased to approximately $8,896,000, or 48% of total sales, as compared to approximately $9,300,000, or 47% of total sales, in fiscal 2008. In fiscal 2009, sales to Trader Joe’s declined to approximately $3,205,000, or 17% of sales, as compared to approximately $3,634,000, or 19% of sales, in fiscal 2008. Our sales to the kosher market decreased to approximately $832,000, or 4% of sales, in fiscal 2009, from sales of approximately $1,120,000, or 6% of sales, in fiscal 2008.

The following table presents the geographical breakdown of our sales in our largest domestic markets for the last two fiscal years.

	Fiscal Year ended January 2, 2010					Fiscal Year ended December 27, 2008
	Sales		% of total Sales			Sales		% of total Sales
	(Dollars in thousands)
California	$	4,245		23	%	$	4,901		25	%
Midwest		3,095		17	%		2,979		15	%
New England		2,785		15	%		2,657		14	%
Metropolitan New York		2,395		13	%		2,534		13	%
Florida		1,109		6	%		1,345		7	%
Mid-Atlantic		844		5	%		1,498		8	%
Northwest		820		4	%		809		4	%
Southeast		780		4	%		347		2	%
Rocky Mountains		448		2	%		394		2	%
Upstate New York		227		1	%		238		1	%
Southwest		186		1	%		251		1	%

During fiscal 2008, we shipped TOFUTTI nondairy products to distributors in Australia, Bermuda, Brazil, Canada, China, England, Israel, Mexico and Panama. Our distributor in England is our master distributor for all of Europe and part of the Middle East, excluding Israel, and sells our products to approximately twenty other countries. Sales to foreign distributors increased to approximately $2,023,000, or 11% of sales, in fiscal 2009, as compared to approximately $1,736,000, or 9% of sales, in fiscal 2008. We conduct all of our foreign business in U.S. dollars. Therefore, our future export sales could be adversely affected by an increase in the value of the U.S. dollar against local currencies, which could increase the local currency price of our products.

COMPETITION

TOFUTTI frozen desserts compete with all forms of ice cream products, yogurt-based desserts and other soy-based frozen desserts. We believe that we are a leader in the nondairy frozen dessert product market and have the most complete line of nondairy frozen dessert products. Other soy-based frozen dessert products are presently being sold throughout the United States by established manufacturers, distributors of ice cream and other frozen dessert products and, wherever possible, directly to supermarket warehouses. The ice cream and frozen dessert industry is highly competitive and most companies with whom we compete are substantially larger and have significantly greater resources than us. Our other products also face substantial competition from both nondairy and dairy competitive products marketed by companies with significantly greater resources than we have. We believe that we are able to compete effectively due to our ability to offer an array of non-dairy frozen dessert and other food products that contain no butterfat, cholesterol or lactose and are 100% milk-free, yet offer the same texture and full-bodied taste as their dairy counterparts.

PRODUCT DEVELOPMENT

All of our current products were developed internally in our own laboratory. David Mintz, our Chief Executive Officer, devotes a substantial amount of his time and effort to new product development and product reformulation. In fiscal 2009 and 2008, our product development expenses were approximately $581,000 and $590,000, respectively. These amounts do not include any portion of Mr. Mintz’s salary, and since they cannot be directly associated with any specific customers or products, they are considered part of operating expenses. All product development costs are expensed as incurred.

PRODUCTION

We believe that all of our products are produced under the strictest quality control procedures that are available in each manufacturing facility used by us. These quality control procedures include, but are not limited to, the cleaning processes utilized prior to running our products; spot line inspections during production; in-house laboratory testing as required by government agencies; supervision of all our production by our kosher supervisory service; and random testing by outside independent laboratories to ensure that our internal quality control procedures and guidelines are being properly followed.

All of our products are produced by co-packers to whom we supply certain key ingredients and packaging for the manufacturing processes. Our co-packing facilities are fully licensed and must comply with all state and federal laws and regulations. We currently utilize six co-packers. Our co-packers manufacture and package our products and, in certain instances, warehouse such products pending shipment. For certain key product categories, such as nondairy frozen desserts and nondairy cheeses, we have more than one co-packer. In selecting an appropriate co-packer, we take into account all of the preceding factors, plus cost considerations such as product processing fees and freight and warehouse expenses.

Relationship with Co-Packers

We do not have any written production agreements with our co-packers and do not anticipate that we would encounter any material difficulty in obtaining alternative production sources, at a comparable cost, if one or all of our co-packers decide to terminate their relationships with us. Nevertheless, any disruption in supply could have a material adverse effect on our company.

In order to protect our formulas, we have entered into confidentiality arrangements with our co-packers and certain of their employees. All of our employees, including officers, sign similar confidentiality agreements. There can be no assurance that such confidentiality arrangements can or will be maintained, or that our trade secrets, know-how and marketing ability cannot be obtained by others, or that others do not now possess similar or even more effective capabilities.

Kosher Certification

KOF-K Kosher Supervision, or KOF-K, of Teaneck, New Jersey provides us with our kosher certification service. Before KOF-K will permit its certification, evidenced by its symbol, to be placed on a product, KOF-K must approve both the ingredients contained in the product and the facility processing the product. Approval of the manufacturing facilities we use include periodic inspections, and in most cases, on-site supervision of actual production. We believe that our ability to successfully market and distribute our products is dependent upon our continued compliance with the requirements of rabbinical certification. All TOFUTTI products meet the requirements for certification as kosher-parve.

Product Recall

At the beginning of the second quarter of 2009, we were notified by the FDA that several consumers filed complaints claiming that they had experienced skin rash symptoms after eating vanilla Cuties that were produced at an ancillary production facility during July 2008. The suspect product was identified as having been produced by our smaller ice cream novelty facility that only produced vanilla Cuties. No illness or serious injury was reported and no further reports have been received since early April 2009. While we were investigating the complaints, 12 pallets shipped from the suspect lots were recalled. The bulk of these 12 pallets were recalled from the New York City metro area as well as from the Midwest, New England, the Mid Atlantic region and California. No complaints from consumers were received from the Midwest or New England regions. Investigation and reports from distributors and store visits indicate that none of the suspect product remains in distribution, and it is not currently being offered for sale. However, to make certain that there would be no further issues with product made at this facility, we put on hold any vanilla Cuties that were produced by them. Due to the decrease in sales, we stopped making product at this facility in January 2009. We have reviewed our quality control procedures at our remaining co-packing facilities to ensure compliance with all food-processing safety rules and regulations.

In May 2009, at the request of the FDA, we issued a recall notice for the suspected lots. During the last week of June 2009, we disposed of all remaining product manufactured by this facility. We have no insurance coverage for the actual product destroyed. However, there is coverage for all costs related to the analysis, collection and physical disposal of such product. In March 2010, we received $40,000 from our insurance company as the settlement for this claim. We are also in discussions with our former co-packer regarding their repayment for the cost of the product that was destroyed. There is no guarantee that we will be successful in our discussions. All costs relating to this recall were expensed in the second quarter of 2009 and we do not anticipate any further charges.

TRADEMARKS AND PATENTS

We have registered our trademark, TOFUTTI®, and other trademarks for our frozen desserts and other products in the United States and approximately thirty-five foreign countries. We believe our trademarks are an important means of establishing consumer recognition for our products and we will vigorously oppose any unauthorized use of our trademarks. We are not currently involved in any trademark litigation.

Although we believe that our formulas and processes are proprietary, we have not sought patent protection for such technology. Instead, we are relying on the complexity of our technology, on trade secrecy laws and on confidentiality agreements. We believe that our technology has been independently developed and does not infringe the patents of others.

GOVERNMENT REGULATION

Companies engaged in the manufacture, packaging and distribution of food items are subject to extensive regulation by various government agencies which, pursuant to statutes, rules, and regulations, prescribe quality, purity, manufacturing and labeling requirements. Food products are often subject to “standard of identity” requirements, which are promulgated at either the Federal or state level to determine the permissible qualitative and quantitative ingredient content of food. To the extent that any product that we seek to market does not conform to an applicable standard, special permission to market such a product is required.

Our United States product labels are subject to regulation by the United States Food and Drug Administration, or the FDA. Such regulations include standards for product descriptions, nutritional claims, label format, minimum type sizes, content and location of nutritional information panels, nutritional comparisons, and ingredient content panels. Our labels, ingredients and manufacturing processes are subject to inspection by the FDA. We believe that we are in compliance with current labeling requirements and conduct periodic reviews to make certain that such compliance is on-going.

The Food, Drug and Cosmetic Act and rules and regulations promulgated by the FDA thereunder, contain no specific Federal standard of identity which is applicable to TOFUTTI. TOFUTTI frozen dessert products meet the New York State standard of identity for “parevine,” which has been adopted by at least eight other states. Many states require registration and label review before food products can be sold. While approval in one jurisdiction generally indicates the products will meet with approval in other jurisdictions, there is no assurance that approval from other jurisdictions will be forthcoming.

Food manufacturing facilities are subject to inspections by various safety, health and environmental regulatory authorities. A finding of a failure to comply with one or more regulatory requirements can result in the imposition of sanctions including the closing of all or a portion of a company’s facilities, subject to a period during which the company can remedy the alleged violations. Our Cranford, New Jersey facility is subject to inspection by the New Jersey-Kosher Enforcement Bureau and the New Jersey Environmental Health Services. We believe that we and our distributors and co-packers are in compliance in all material respects with governmental regulations regarding our current products and have obtained the material governmental permits, licenses, qualifications and approvals required for our operations. Our compliance with Federal, state and local environmental laws has not materially affected us either economically or in the manner in which we conduct our business. However, there can be no assurance that our company, our distributors and our co-packers will be able to comply with such laws and regulations in the future or that new governmental laws and regulations will not be introduced that could prevent or temporarily inhibit the development, distribution and sale of our products to consumers.

New government laws and regulations may be introduced in the future that could result in additional compliance costs, seizures, confiscations, recalls or monetary fines, any of which could prevent or inhibit the development, distribution and sale of our products. If we fail to comply with applicable laws and regulations, we may be subject to civil remedies, including fines, injunctions, recalls or seizures, as well as potential criminal sanctions, which could have a material adverse effect on our business, results of operations and financial condition.

EMPLOYEES

On January 2, 2010 and on December 27, 2008, we employed eight and eleven persons on a full-time basis, respectively. We consider our relations with our employees to be good. We do not have any collective bargaining agreements with our employees.

Item 1A. Risk Factors.

Investing in our common stock involves a high degree of risk and uncertainty. You should carefully consider the risks and uncertainties described below before investing in our common stock. If any of the following risks actually occurs, our business prospects, financial condition and results of operations could be harmed. In that case, the value of our common stock could decline, and you could lose all or part of your investment.

Risks Related to Our Business

Reliance on Independent Distributors. The success of our business depends, in large part, upon the establishment and maintenance of a strong distribution network. Although we believe that the business associated with any of our primary distributors can be readily transferred to other distributors or directly to supermarket warehouses if necessary, no assurance can be given that a change in distributors would not be disruptive to our business, which could have a material adverse effect on our business and results of operations.

Dependence on Key Suppliers. We do not produce any of our own products. During the years ended January 2, 2010 and December 27, 2008, we purchased approximately 28% and 30%, of our finished goods, respectively, from Ice Cream Specialties, our primary frozen dessert novelty co-packer; 7% and 8%, respectively, from Leiby’s Dairy, Inc, our frozen dessert pint co-packer; 19% and 18%, respectively, from Franklin Foods, our BETTER THAN CREAM CHEESE and SOUR SUPREME co-packer; and 6% and 6% respectively, from Old Fashioned Kitchen, Inc., our blintz co-packer. These producers are required to comply with FDA regulations relating to the production of food products. Although we believe that there will be no problem in continuing to obtain finished goods from our current or alternative sources in the future, any disruption in supply could have a material adverse effect on our company.

Our Business May Be Negatively Affected by the Current Global Credit Crisis. The current economic climate, and particularly the increased difficulty in securing credit, could impact the ability of our customers to purchase our products. Certain of our retail customers who have seen significant dampening of consumer demand, could face increased financial pressures that could impact their ability to purchase our products and make payments in a timely manner. The extent of the impact, if any, of the global credit crisis, will depend on a number of factors, including whether the U.S. economy, and the global economy generally, enter into a prolonged recession as a result of the deterioration of the credit markets.

A Material Change in Consumer Demand for Our Products Could Have a Significant Impact on Our Business. We are a consumer food products company and rely on continued demand for our products. To achieve business goals, we must develop and sell products that appeal to consumers. If demand and growth rates fall substantially below expected levels or our market share declines significantly in these businesses, our results could be negatively impacted. This could occur due to unforeseen negative economic or political events or to changes in consumer trends and habits.

Our Business Faces Cost Pressures Which Could Affect Our Business Results. Our costs are subject to fluctuations, particularly due to changes in commodity prices, raw materials, cost of labor, foreign exchange and interest rates. Therefore, our success is dependent, in part, on our continued ability to manage these fluctuations through pricing actions, cost savings projects and sourcing decisions. In the manufacturing and general overhead areas, we need to maintain key manufacturing and supply arrangements, including any key sole supplier and manufacturing plant arrangements.

We Face Risks Related to the Current Credit Crisis. The current uncertainty in the global economic conditions resulting from the recent disruption in credit markets pose a risk to the overall economy that could impact consumer and customer demand for our products, as well as our ability to manage normal commercial relationships with our customers, suppliers and creditors. If the current situation deteriorates significantly, our business could be negatively impacted, including such areas as reduced demand for our products from a slow-down in the general economy, or supplier or customer disruptions resulting from tighter credit markets.

Competitive Environment. The frozen dessert and health food markets are highly competitive. The ability to successfully introduce innovative products on a periodic basis that are accepted by the marketplace is a significant competitive factor. In addition, many of our principal competitors are large, diversified companies with resources significantly greater than ours. We expect strong competition to continue, including competition for adequate distribution and competition for the limited shelf space for the frozen dessert category in supermarkets and other retail food outlets.

Dependence on Key Customers. During the fiscal years ended January 2, 2010 and December 27, 2008, Trader Joe’s accounted for 17% and 19% of our net sales, respectively. In addition, a significant portion of our sales are to several key distributors, which are large distribution companies with numerous divisions and subsidiaries who act independently. Such distributors as a group accounted for 29% of our net sales for the fiscal year ended January 2, 2010 and 31% of our net sales for the fiscal year ended December 27, 2008. The loss of a substantial portion of our sales to Trader Joe’s would have a material adverse affect on our company.

The Absence of Patent Protection Could Adversely Affect Our Results of Operations. We rely upon the confidentiality of our formulas and our know-how rather than upon patent protection since patent protection may not be available for the recipes or manufacturing processes for any of our food products. There is no assurance that such confidentiality can or will be maintained or that our know-how cannot be obtained by others or that others do not now possess similar or even more effective capabilities. The failure to maintain the confidentiality of our know-how could adversely effect our operating results.

Product Liability Suits, if Brought, Could Have a Material Adverse Effect on Our Business. From time to time in the normal course of our business, we become subject to product liability claims. If a product liability claim exceeding our insurance coverage were to be successfully asserted against us, it could harm our business. We cannot assure you that such coverage will be sufficient to insure against claims which may be brought against us, or that we will be able to maintain such insurance or obtain additional insurance covering existing or new products. As a marketer of food products, we are subject to the risk of claims for product liability. We maintain general product liability and umbrella insurance coverages and generally require that our co-packers maintain product liability insurance with us as a co-insured. Similarly, most of our customers require us to name them as additional insureds as well, and in some cases we are required to sign hold harmless agreements.

Continuing Need to Introduce New Products. The successful introduction of innovative products on a periodic basis has become increasingly important to our sales growth. Accordingly, the future degree of market acceptance of any of our new products, which may be accompanied by significant promotional expenditures, is likely to have an important impact on our future financial results.

Our Operating Results Vary Quarterly and Seasonally. We have often recognized a slightly greater portion of revenues in the second and third quarter of the year. Our expense levels are substantially based on our expectations for future revenues and are therefore relatively fixed in the short-term. If revenue levels fall below expectations, our quarterly results are likely to be disproportionately adversely affected because a proportionately smaller amount of our expenses vary with our revenues. 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 nondairy frozen desserts. Sales to our major customers fluctuate widely from period to period and there is no way to accurately predict that their sales pattern from one year will be repeated in the corresponding period of the next fiscal year. Due to the foregoing factors, in some future quarter our operating results may be below the expectations of investors. In such event, it is likely that the price of our common stock would be materially adversely affected.

Reliance on a Limited Number of Key Personnel. Our success is significantly dependent on the services of David Mintz (age 78), Chief Executive Officer, and Steven Kass (age 58), Chief Financial Officer. The loss of the services of either of these persons could have a material adverse effect on our business.

Control of the Company. Our Chairman of the Board and Chief Executive Officer, David Mintz, holds 2,630,440 shares of common stock representing approximately 50.8% of the outstanding shares, permitting him to elect all members of the Board of Directors and thereby effectively control the business, policies and management of our company.

We are Subject to Risks Associated with International Operations. In fiscal 2009 approximately 11% of our revenues were from international sales. Although we continue to expand our international operations, we cannot be certain that we will be able to maintain or increase international market demand for our products. To the extent that we cannot do so in a timely manner, our business, operating results and financial condition will be adversely affected. International operations are subject to inherent risks, including the following:

the impact of possible recessionary environments in multiple foreign markets;

longer receivables collection periods and greater difficulty in accounts receivable collection;

unexpected changes in regulatory requirements;

potentially adverse tax consequences; and

political and economic instability.

We May Be Adversely Affected by Fluctuations in Currency Exchange Rates. Our foreign transactions are always in U.S. dollars, and to date we have not engaged in any currency hedging transactions intended to reduce the effect of fluctuations in foreign currency exchange rates on our results of operations. Therefore, our future export sales could be adversely affected by an increase in the value of the U.S. dollar, which could increase the local currency price of our products. Although exposure to currency fluctuations to date has not had a material adverse effect on our business, there can be no assurance such fluctuations in the future will not have a material adverse effect on revenues from international sales and, consequently, our business, operating results and financial condition.

Our Stock Price is Subject to Volatility. The market price of our common stock has been subject to fluctuations in the past and may be subject to wide fluctuations in the future in response to announcements concerning us or our competitors, quarterly variations in operating results, the introduction of new products or changes in product pricing policies by us or our competitors, general market conditions in the industry, developments in the financial markets and other factors.

We Do Not Intend to Pay Cash Dividends. Our policy is to retain earnings, if any, for use in our business and, for this reason, we do not intend to pay cash dividends on our shares of common stock in the foreseeable future.

We May Fail to Maintain Effective Internal Controls in Accordance with Section 404 of the Sarbanes-Oxley Act of 2002, Which Could Have an Adverse Effect on our Financial Results and the Market Price of Our Ordinary Shares. The Sarbanes-Oxley Act of 2002 imposes certain duties on us and our executives and directors. Our efforts to comply with the requirements of Section 404 have resulted in increased general and administrative expense and a diversion of management time and attention, and we expect these efforts to require the continued commitment of resources. Section 404 of the Sarbanes-Oxley Act requires us to provide management’s annual review and evaluation of our internal control over financial reporting and in future years a statement by management that its independent registered public accounting firm has issued an attestation report on our internal control over financial reporting, in connection with the filing of our Annual Report on Form 10-K for each fiscal year. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules. If we fail to maintain the adequacy of our internal controls, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting. Failure to maintain effective internal controls over financial reporting could result in investigation or sanctions by regulatory authorities, and could have a material adverse effect on our operating results, investor confidence in our reported financial information, and the market price of our ordinary shares.

Item 1B.

Unresolved Staff Comments.

None.

Item 2.

Properties.

Our facilities are located in a modern one-story facility in Cranford, New Jersey. The 6,200 square foot facility houses our administrative offices, a warehouse, walk-in freezer and refrigerator, and a product development laboratory and test kitchen. Our lease agreement expired on July 1, 1999, but we continue to occupy the premises under the terms of that agreement, subject to a six month notification period for us and the landlord with respect to any changes. We currently have no plans to enter into a long-term lease agreement for the facility. Our rent expense was $81,000 in both fiscal 2009 and 2008. Our management believes that the Cranford facility will continue to satisfy our space requirements for the foreseeable future.

Item 3.

Legal Proceedings.

We are not a party to any material litigation.

Item 4.

(Removed and Reserved).

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock has traded on the NYSE AMEX under the symbol TOF since October 29, 1985. Each share ranks equally as to dividends, voting rights, participation in assets on winding-up and in all other respects. No shares have been or will be issued subject to call or assessment. There are no preemptive rights, provisions for redemption or for either cancellation or surrender, or provisions for sinking or purchase funds.

The following table sets forth the high and low sales prices as reported on the NYSE AMEX for the two most recent fiscal years:

Quarter Ended	High		Low
March 29, 2008	$	3.35	$	2.55
June 28, 2008		3.15		2.61
September 27, 2008		2.99		2.54
December 27, 2008		2.65		1.28
March 28, 2009		2.22		0.88
June 27, 2009		1.97		0.71
September 26, 2009		1.64		1.10
January 2, 2010		1.84		1.21

The closing price for our common stock on March 30, 2010, as reported on the NYSE AMEX, was $1.46.

Holders of Record

As of March 30, 2010, there were approximately 595 direct holders of record of our common stock. Based upon the most recent census performed by our stock transfer agent, brokerage houses and other financial institutions hold our common stock for approximately an additional 950 shareholders.

Dividends

We have not paid and have no present intention of paying cash dividends on our common stock in the foreseeable future.

Equity Compensation Plans

The following table sets forth, as of January 2, 2010, certain information related to our compensation plans under which shares of our common stock are authorized for issuance.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities Remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)
	(a)	(b)	(c)
Equity Compensation Plans Approved by Security Holders	61,000	$ 2.94	39,000
Equity Compensation Plans Not Approved by Security Holders	--	n/a	--

1993 Stock Option Plan

The 1993 Stock Option Plan (the “1993 Plan”) provides for the grant to key employees of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, and for the grant of non-qualified stock options to key employees and consultants. The 1993 Plan had a term of ten years and terminated in 2003. No grants have been made under the 1993 Plan since 2003, and no further grants of options can be made under the 1993 Plan. As of March 26, 2010, none of our executive officers and directors held options to purchase shares of common stock under the 1993 Plan.

The term of any option granted under the 1993 Stock Option Plan was fixed by the Board of Directors at the time the options were granted. All options granted under the 1993 Stock Option Plan had up to 10-year terms and vesting periods that ranged from one to three years from date of grant. The exercise price of any options granted under the 1993 Stock Option Plan was the fair market value at the date of grant.

2004 Non-Employee Directors’ Stock Option Plan

Our shareholders adopted the 2004 Non-Employee Directors’ Stock Option Plan (the “2004 Directors’ Plan”) on June 3, 2004. The purpose and intent of the 2004 Directors’ Plan is to attract and retain the best available individuals as non-employee directors of the company, to provide additional incentive to non-employee directors to continue to serve as directors and to encourage their continued service on the Board. All options granted under 2004 Directors’ Plan are “non-qualified stock options.” The maximum aggregate number of shares of common stock which may be issued under the 2004 Directors’ Plan is 100,000 shares.

The 2004 Directors’ Plan is currently administered by our Board of Directors, which in the future may delegate such administration to a committee of directors. Subject to the provisions of the 2004 Directors’ Plan and applicable law, the Board or the Committee has the authority, to determine, among other things, to whom options may be granted, the number of shares of common stock to be covered by each option, the exercise price for each share, the vesting period of the option, and the terms, conditions and restrictions thereof, to construe and interpret the 2004 Directors’ Plan, to prescribe, amend and rescind rules and regulations relating to the 2004 Directors’ Plan, and to make all other determinations deemed necessary or advisable for the administration of the 2004 Directors’ Plan.

The term of any option granted under the 2004 Directors’ Plan was fixed by the Board of Directors at the time the options were granted, provided that the exercise period was not to be longer than five years from the date of grant. All options granted under the 2004 Directors’ Plan have up to five-year terms and have vesting periods that range from one to three years from the grant date. The exercise price of any options granted under the 2004 Directors’ Plan is the fair market value at the date of grant. As of March 30, 2010, our non-employee directors as a group, consisting of three persons, held options to purchase 51,000 shares of common stock under the 2004 Directors’ Plan.

Sales of Unregistered Securities

There were no sales of unregistered securities during fiscal 2009.

Purchase of Equity Securities By the Issuer and Affiliates

Our Board of Directors first instituted a share repurchase program in September 2000 which, after several amendments, has to date authorized the repurchase of 2,200,000 shares of our common stock at prevailing market prices. Based on such authorization we may purchase an additional 381,000 shares of common stock. We have not purchased any shares of our common stock since the first quarter of fiscal 2009.

Item 6.

Selected Financial Data.

Not applicable.

Item 7.

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 audited financial statements.

Critical Accounting Policies

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 recognize revenue when goods are shipped from our production facilities or outside warehouses and the following four criteria have been met: (i) the product has been shipped and we have no significant remaining obligations; (ii) persuasive evidence of an arrangement exists; (iii) the price to the buyer is fixed or determinable; and (iv) collection is probable. We record as deductions against sales all trade discounts, returns and allowances that occur in the ordinary course of business, when the sale occurs. To the extent we charge our customers for freight expense, it is included in revenues. The amount of freight costs charged to customers has not been material to date.

Accounts Receivable. The majority of our accounts receivables are due from distributors (domestic and international) and retailers. Credit is extended based on evaluation of a customers’ financial condition and, generally, collateral is not required. Accounts receivable are most often due within 30 to 90 days and are stated at amounts due from customers net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. We determine whether an allowance is necessary by considering a number of factors, including the length of time trade accounts receivable are past due, our previous loss history, the customer’s current ability to pay its obligation, and the condition of the general economy and the industry as a whole. We write-off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the bad debt expense account. We do not accrue interest on accounts receivable past due.

Allowance for Inventory Obsolescence. We are required to state our inventories at the lower of cost or market price. We maintain an allowance for inventory obsolescence for losses resulting from inventory items becoming unsaleable due to expiration of product shelf life, loss of specific customers or changes in customers’ requirements. Based on historical and projected sales information, we believe our allowance is adequate. However, changes in general economic, business and market conditions could cause our customers’ purchasing requirements to change. These changes could affect our ability to sell our inventory; therefore, the allowance for inventory obsolescence is reviewed regularly and changes to the allowance are updated as new information is received.

Income Taxes. The carrying value of deferred tax assets assumes that we will be able to generate sufficient future taxable income to realize the deferred tax assets based on estimates and assumptions. If these estimates and assumptions change in the future, we may be required to record a valuation allowance against deferred tax assets which could result in additional income tax expense. 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

In June 2009, the FASB, issued "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles" Statement of Financial Accounting Standards, or SFAS, No. 168. SFAS No. 168, which is incorporated in ASC Topic 105, Generally Accepted Accounting Principles ("ASC 105"), identifies the accounting standard codification as the authoritative source of generally accepted accounting principles in the United States. We adopted ASC 105 in 2009, and therefore all references by us to authoritative accounting principles recognized by the FASB reflect the Codification. ASC Topic 105 changes the referencing and organization of accounting guidance and is effective for interim and annual periods ending after September 15, 2009. Since it is not intended to change or alter existing GAAP, the Codification did not have any impact on the our financial condition or results of operations. Going forward, the Board will not issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead, it will issue Accounting Standards Updates. The FASB will not consider Accounting Standards Updates as authoritative in their own right; these updates will serve only to update the Codification, provide background information about the guidance, and provide the bases for conclusions on the change(s) in the Codification. In the description of Accounting Standards Updates that follows, references in “italics” relate to Codification Topics and Subtopics, and their descriptive titles, as appropriate.

In April 2009, the FASB issued “Interim Disclosures about Fair Value of Financial Instruments.” This update amends “Disclosures about Fair Value of Financial Instruments,” to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This update also amends Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. This update became effective for the interim period ending June 27, 2009 and did not have a material impact on our financial statements.

Other Accounting Standards Updates that became effective after December 31, 2009 are not expected to have a significant effect on our financial position or results of operations.

Product Recall

In May, 2009, at the request of the FDA, we issued a recall notice for certain pallets of vanilla Cuties, the suspected lots. During the last week of June 2009, we disposed of all remaining product manufactured by this facility. The total cost of this recall was approximately $376,000 broken down as follows:

Actual product destroyed	$	291,000	(cost of sales)
Cost of disposal		10,000	(sales)
Product returned		52,000	(sales)
Product testing		20,000	(research & development)
Freight		1,000	(cost of sales)
Legal		2,000	(general & administrative)

We have no insurance coverage for the actual product destroyed. However, there is coverage for all costs related to the analysis, collection and physical disposal of such product. In March 2010, we received $40,000 from our insurance company as the settlement for this claim. We are also in discussions with our former co-packer regarding their repayment for the cost of the product that was destroyed. There is no guarantee that we will be successful in our discussions. All costs relating to this recall were expensed in the second quarter of 2009 and we do not anticipate any further charges. Any subsequent reimbursements will be credited to the appropriate revenue and expense accounts referenced above if and when they are received.

Results of Operations

Fiscal Year Ended January 2, 2010 Compared with Fiscal Year Ended December 27, 2008

Net sales for the fiscal year ended January 2, 2010 were $18,617,000, a decrease of $992,000, or 5%, from net sales of $19,609,000 for the fiscal year ended December 27, 2008. The reduction in sales was caused by the general economic conditions and the discontinuance of a number of slower moving, less profitable products during 2009. Although the discontinuance of these slower moving items contributed to reduced sales in fiscal 2009, it also contributed to improving our gross profit and profit percentage for the year.

Although sales decreased in fiscal 2009, our gross profit in fiscal 2009 increased by $200,000, or 0.4%, while our gross profit percentage increased to 30% in fiscal 2009 from 27% in fiscal 2008. The entire frozen dessert industry was subject to significant price increases to certain key ingredients and packaging, due mainly to supply shortages as a result of political events in certain foreign countries, the general economic situation here in the United States and the fluctuating cost of petroleum, from which a number of our packaging items are produced. These increases were offset by a significant reduction in our freight out expense. Freight out expense decreased to $974,000 in fiscal 2009 from $1,430,000 in fiscal 2008. Freight out expense decreased for a number of reason. First, while the cost of fuel did begin to increase again over the last part of 2009, for most of the year fuel costs tended to be lower than in 2008. This decrease is also attributable in part to the fact that shipping our frozen dessert novelties from our new ice cream co-packer in Indiana to the West Coast is more cost-effective than shipping them from our third-party Mountville, Pennsylvania warehouse or from our former frozen dessert novelties manufacturer’s location. Additionally, in some instances we increased the minimum size of orders to customers where we paid the freight, which reduced our shipping costs. Finally, we also began offering pick-up allowances to our customers, which while high enough to encourage them to pick up their orders was still significantly less than if we had paid for shipping the products ourselves. While we anticipate that our gross profit will increase due to increased unit sales and higher sales prices in 2010, we do not expect that our gross profit percentage will improve materially due to promotional allowances associated with the planned introduction of new products. We also expect ingredient costs for certain key items and packaging costs to continue at their current high levels.

Selling and warehousing expenses decreased by $158,000 to $1,668,000 for fiscal 2009 from $1,826,000 in fiscal 2008. This decrease was caused primarily by a $62,000 decrease in outside warehouse rental expense, a $94,000 decrease in bad debt expense and a $34,000 decrease in commission expense. The decreases were offset by increases in payroll expense of $20,000 and travel and entertainment expense of $28,000. We anticipate that with the exception of commission expenses and outside warehouse rental expense, which are variable to sales, all other selling expenses in 2010 should remain relatively consistent with our expenses in 2009.

Marketing expenses decreased by $54,000 in fiscal 2009 to $503,000 as compared to $557,000 in fiscal 2008. This decrease is primarily attributable to a $66,000 decrease in promotion expense, a $12,000 decrease in artwork and plates expense, a $33,000 decrease in television and radio advertising expense and a $18,000 decrease in magazine advertising expense. These decreases were offset by an increase in newspaper advertising expenses of $79,000. We expect marketing expenses to decrease in fiscal 2010.

Product development expenses decreased to $581,000 in fiscal 2009 as compared to $590,000 in fiscal 2008. The decrease was caused primarily by a decreases in payroll costs of $15,000. Our management expects that product development costs in 2010 will remain consistent with fiscal 2009 costs.

General and administrative expenses were $2,035,000 for fiscal 2009 as compared with $2,014,000 for fiscal 2008, a slight increase of $21,000 or 1%. The increase was primarily due to a $52,000 increase in travel and entertainment expense and a $10,000 increase in outside fees and professional services . These increases were partially offset by a reduction in payroll costs of $23,000 and IT expense of $10,000. We anticipate that professional fees and outside services, which include legal and accounting fees, will increase in fiscal 2010 primarily due to the costs associated with compliance with the attestation provisions of The Sarbanes-Oxley Act. Our management expects that general and administrative expenses in 2010 will remain consistent with fiscal 2009 expenses.

Overall, total operating expenses in fiscal 2009 decreased to $4,787,000, a decrease of $200,000, or 4%, from total operating expenses in fiscal 2008.

Income before income taxes increased by $400,000 to $835,000 in fiscal 2009 as compared with $435,000 in fiscal 2008 as a result of our improved gross profit and lower operating expenses.

Income taxes for the current fiscal period were $329,000, or 39% of taxable income, compared to $218,000, or 50% of taxable income, in fiscal 2008. The decrease in our effective tax rate in fiscal 2009 was due to an adjustment to last year’s tax accrual based on the differences between book and actual income tax expense.

Liquidity and Capital Resources

At January 2, 2010, our working capital was $4,089,000, an increase of $508,000 from December 27, 2008. Our current and quick acid test ratios, both measures of liquidity, were 4.2 and 2.2, respectively, at January 2, 2010 compared to 3.4 and 1.2, respectively, at December 27, 2008.

At January 2, 2010, accounts receivable decreased by $113,000 to $1,461,000 from December 27, 2008, reflecting an increase in cash collections and a slight reduction in sales in the fourth quarter of the fiscal year ended January 2, 2010. The average number of days used to collect our gross accounts receivable in fiscal 2009 was 38 days as compared to 38 days in fiscal 2008. At January 2, 2010, inventories decreased to $1,931,000 from $2,334,000 at December 27, 2008. The decrease in our inventories is due to a reduction in sales and the discontinuation of a number of slower moving products. Accounts payable and accrued expenses decreased by $183,000 to $1,280,000 at January 2, 2010, from $1,463,000 at December 27, 2008, reflecting a reduction in our purchases of ingredients, packaging and finished goods in the fourth quarter.

Our Board of Directors first instituted a share repurchase program in September 2000 and has to date authorized the repurchase of 2,200,000 shares of our common stock at prevailing market prices. As of December 27, 2008, we had repurchased 1,806,000 shares at a total cost of $5,280,000, or an average price of $2.92 per share. During fiscal 2009 ( in the first quarter), we repurchased an additional 12,665 shares for $15,000 or an average price of $1.14, bringing the total number of shares cumulatively purchased to 1,818,889 at a total cost of $5,294,000, or an average price of $2.91 per share.

We have a $1,000,000 line of credit with Wachovia Bank. Any money borrowed under the line of credit will be at the prime rate of borrowing and any such loans will be secured by the assets of our company. This agreement will expire on April 30, 2010, but can be renewed for an additional one-year term with the consent of both parties. We intend to extend the facility. There can be no assurances that this facility will be extended. There were no amounts outstanding under this facility at January 2, 2010 or December 27, 2008.

Cash Flows	Fiscal Year ended
	January 2, 2010			December 27, 2008
	(In thousands)

Net cash provided by (used in) operating activities	$	1,189		$	(151	)
Net cash used in financing activities		(14	)		(1,110	)
Net increase (decrease) in cash and cash equivalents		1,175			(1,261	)
Cash and cash equivalents at beginning of year		238			1,499
Cash and cash equivalents at end of year	$	1,413		$	238

Cash provided by operating activities was $1,189,000 for the fiscal year ended January 2, 2010 compared with cash used in operating activities of $151,000 for the fiscal year ended December 27, 2008. In the fiscal year ended January 2, 2010, our cash flow from operating activities reflected net income of $506,000, a $103,000 decrease in accounts receivable, a $403,000 decrease in inventories, a $303,000 decrease in income taxes payable, offset in part by a $183,000 decrease in accounts payable and accrued expenses.

We used $14,000 in financing activities in fiscal 2009 to repurchase 12,665 shares of common stock compared to $1,110,000 used in financing activities in fiscal 2008 to repurchase 464,124 shares of our common stock.

As a result of the foregoing, our cash and cash equivalents increased to $1,413,000 at January 2, 2010.

We believe our existing cash and cash equivalents on hand at January 2, 2010, and the cash flows expected from operations will be sufficient to support our operating and capital requirements during the next twelve months.

Contractual Obligations

We have no contractual obligations at January 2, 2010.

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 nondairy frozen desserts during those periods.

Market Risk

We will invest our excess cash, should there be any, in highly rated money market funds which are subject to changes in short-term interest rates. We do not believe that our foreign currency exposure is significant as our export sales are transacted in U.S. dollars. We did not enter into any foreign exchange contracts in the year ended January 2, 2010.

Off-Balance Sheet Arrangements

None.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

Item 8. Financial Statements and Supplementary Data.

Index to Financial Statements

Report of Independent Registered Public Accounting Firm	F-1
Financial Statements:
Balance Sheets	F-2
Statements of Income	F-3
Statements of Changes in Stockholders’ Equity	F-4
Statements of Cash Flows	F-5
Notes to Financial Statements	F-6

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of

Tofutti Brands Inc.

We have audited the accompanying balance sheets of Tofutti Brands, Inc. as of January 2, 2010 and December 27, 2008, and the related statements of income, changes in stockholders’ equity and cash flows for the fiscal years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Tofutti Brands, Inc. as of January 2, 2010 and December 27, 2008, and the results of its operations and its cash flows for the fiscal years then ended, in conformity with United States generally accepted accounting principles.

Amper, Politziner & Mattia, LLP

/s/Amper, Politziner & Mattia, LLP

April 2, 2010

Edison, New Jersey

F-1

TOFUTTI BRANDS INC.

BALANCE SHEETS

(In thousands, except for share and per share data)

	January 2, 2010		December 27, 2008
Assets
Current assets:
Cash and cash equivalents	$	1,413	$	238
Accounts receivable, net of allowance for doubtful accounts and sales promotions of $538 and $528, respectively		1,461		1,574
Inventories, net		1,931		2,334
Prepaid expenses		13		19
Refundable income taxes		252		555
Deferred income taxes		299		324
Total current assets		5,369		5,044

Fixed assets (net of accumulated amortization of $33 and $29, respectively)		15		19
Other assets		16		16
	$	5,400	$	5,079

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	164	$	398
Accrued expenses		616		565
Accrued officers’ compensation		500		500
Total current liabilities		1,280		1,463


Stockholders’ equity:
Preferred stock - par value $.01 per share; authorized 100,000 shares, none issued		--		--
Common stock - par value $.01 per share; authorized 15,000,000 shares, issued and outstanding 5,176,678 shares at January 2, 2010, and 5,189,343 shares at December 27, 2008		52		52
Additional paid-in capital		--		--
Retained earnings		4,068		3,564
Total stockholders’ equity		4,120		3,616
Total liabilities and stockholders’ equity	$	5,400	$	5,079

See accompanying notes to financial statements.

F-2

TOFUTTI BRANDS INC.

STATEMENTS OF INCOME

(In thousands, except for per share data)

	Fiscal year ended January 2, 2010		Fiscal Year ended December 27, 2008

Net sales	$	18,617	$	19,609
Cost of sales		12,995		14,187
Gross profit		5,622		5,422

Operating expenses:
Selling and warehousing		1,668		1,826
Marketing		503		557
Product development costs		581		590
General and administrative		2,035		2,014
		4,787		4,987

Income before income taxes		835		435

Income taxes		329		218

Net income	$	506	$	217

Weighted average common shares outstanding:
Basic		5,177		5,476
Diluted		5,177		5,716

Net income per common share:
Basic	$	0.10	$	0.04
Diluted	$	0.10	$	0.04

See accompanying notes to financial statements.

F-3

TOFUTTI BRANDS INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Fiscal Years ended January 2, 2010 and December 27, 2008

(In thousands, except for share data)

	Common Stock						Additional Paid-In Capital			Retained Earnings			Total Stockholders’ Equity
	Shares			Amount			Additional Paid-In Capital			Retained Earnings			Total Stockholders’ Equity
Balances, December 30, 2007		5,653,467		$	57		$	225		$	4,215		$	4,497
Stock compensation expense		--			--			12			--			12
Stock purchases and retirements, net		(464,124	)		(5	)		(237	)		(868	)		(1,110	)
Net income for year ended December 27, 2008		--			-			--			217			217
Balances, December 27, 2008		5,189,343			52			--			3,564			3,616
Stock compensation expense		--			--			12			--			12
Stock purchases and retirements, net		(12,665	)		--			(12	)		(2	)		(14	)
Net income for year ended January 2, 2010		--			--			--			506			506
Balances, January 2, 2010		5,176,678		$	52		$	--		$	4,068		$	4,120

See accompanying notes to financial statements.

F-4

TOFUTTI BRANDS INC.

STATEMENTS OF CASH FLOWS

(In thousands)

	Fiscal Year ended January 2, 2010			Fiscal Year ended December 27, 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	506		$	217
Adjustments to reconcile net income to net cash flows provided by (used in) operating activities:
Amortization		4			5
Provision for bad debts and sales promotions		10			98
Stock compensation expense		12			12
Deferred taxes		25			(26	)
Change in assets and liabilities:
Accounts receivable		103			319
Inventories		403			(782	)
Prepaid expenses		6			242
Income taxes refundable		303			--
Accounts payable and accrued expenses		(183	)		(236	)
Net cash flows provided by (used in) operating activities		1,189			(151	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of common stock		(14	)		(1,110	)
Net cash flows used in financing activities		(14	)		(1,110	)

NET CHANGE IN CASH AND CASH EQUIVALENTS		1,175			(1,261	)
CASH AND CASH EQUIVALENTS, AT BEGINNING OF YEAR		238			1,499
CASH AND CASH EQUIVALENTS, AT END OF YEAR	$	1,413		$	238
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid	$	5		$	4

See accompanying notes to financial statements.

F-5

TOFUTTI BRANDS INC.

NOTES TO FINANCIAL STATEMENTS

(In thousands, except for share and per share data)

NOTE 1:

DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business - Tofutti Brands Inc. (“Tofutti” or the “Company”) is engaged in one business segment, the development, production and marketing of nondairy frozen desserts and other food products.

Fiscal Year - The Company operates on a fiscal year ending on the Saturday closest to December 31. Fiscal years for the financial statements included herein are the fifty-three week fiscal period ended on January 2, 2010 and the fifty-two week fiscal period ended on December 27, 2008, respectively.

Estimates and Uncertainties - The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Significant estimates include allowance for doubtful accounts, sales promotion accruals and inventory reserves. Actual results could differ from those estimates.

Revenue Recognition - Revenue is recognized when goods are shipped from production facilities or outside warehouses to customers. Revenue is recognized when the following four criteria under Staff Accounting Bulletin No. 104 have been met: the product has been shipped and the Company has no significant remaining obligations; persuasive evidence of an arrangement exists; the price to the buyer is fixed or determinable; and collection is probable. Deductions from sales for promotional programs, manufacturers' charge-backs, co-operative advertising programs and other programs are recorded as reductions of revenues and are provided for at the time of initial sale of product. Freight charged to customers is included in revenues, and has generally been insignificant.

Concentration of Credit/Sales Risk - Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and unsecured trade receivables. During the year, the Company’s cash balance at a financial institution exceeded the FDIC limit of $250,000. Management believes that the financial institution is financially sound and, accordingly, minimal credit risk exists.

The Company performs ongoing evaluations of its customers’ financial condition and does not require collateral. Management feels that credit risk beyond the established allowances at January 2, 2010 is limited.

During the fiscal years ended January 2, 2010 and December 27, 2008, the Company derived approximately 89% and 91%, respectively, of its net sales domestically. The remaining sales in both periods were exports to foreign countries. The Company had sales to one customer representing 17% of net sales during fiscal 2009 and 19% of net sales during fiscal 2008. The accounts receivable balance of the one customer represented approximately 29% of total accounts receivable at January 2, 2010 and 26% of total accounts receivable at December 27, 2008. In addition, a significant portion of the Company’s sales are to several key distributors, which are large distribution companies with numerous divisions and subsidiaries who act independently. Such distributors as a group accounted for 29% and 31% of the Company’s net sales for the years ended January 2, 2010 and December 27, 2008.

Accounts Receivable - The majority of the Company’s accounts receivables are due from distributors (domestic and international) and retailers. Credit is extended based on evaluation of a customers’ financial condition and, generally, collateral is not required. Accounts receivable are most often due within 30 to 90 days and are stated at amounts due from customers net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes-off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the bad debt expense. The Company does not accrue interest on accounts receivable past due.

F-6

TOFUTTI BRANDS INC.

NOTES TO FINANCIAL STATEMENTS

(In thousands, except for share and per share data)

Cash and Equivalents - The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

Inventories -Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out method. Reserves for slow moving and obsolete inventories are provided based on historical experience, shelf life and product demand. The Company periodically reviews inventories and establishes reserves for obsolescence based on forecasted sales and market trend.

The Company purchased approximately 28% and 30% of its finished products from one supplier and 19% and 18% of its finished products from another supplier during the periods ended January 2, 2010 and December 27, 2008, respectively.

Fixed Assets - Fixed assets consist of leasehold improvements. Amortization is provided by charges to income using the straight-line method over the useful life of ten years.

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. The Company 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.

Net Income Per Share - Basic earnings per common share has been computed by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share has been computed by dividing net income by the weighted average number of common shares outstanding, including the dilutive effects of stock options. For the fiscal years ended January 2, 2010 and December 27, 2008, stock equivalents of 61,000 shares and 10,000 shares, respectively, were excluded from the diluted earnings per share calculations since the effect was anti-dilutive, because the strike price of these options was greater than the quoted market value at such date.

F-7

TOFUTTI BRANDS INC.

NOTES TO FINANCIAL STATEMENTS

(In thousands, except for share and per share data)

	Fiscal Year Ended January 2, 2010		Fiscal Year Ended December 27, 2008

Net income, numerator, basic and diluted computation	$	506	$	217

Weighted average shares - denominator basic computation		5,177		5,476
Effect of dilutive stock options		--		240
Weighted average shares, as adjusted - denominator diluted computation		5,177		5,716
Net income per common share:
Basic	$	0.10	$	0.04
Diluted	$	0.10	$	0.04

Stock Based Compensation -The Company follows the provisions of ASC 718 Share-Based Payment. The Company uses the Black-Scholes option pricing model to measure the estimated fair value of the options under ASC 718. The compensation expense, less forfeitures, is being recognized over the service period on a straight-line basis.

Fair Value of Financial Instruments - The fair value of financial instruments, which primarily consist of cash and equivalents, accounts receivable and accounts payable are stated at their carrying values. The carrying amounts approximate fair value because of the short-term maturity of those instruments.

Freight Costs - Freight costs to ship inventory to customers and to outside warehouses amounted to $974 and $1,430 during the fiscal years ended January 2, 2010 and December 27, 2008, respectively. Such costs are included in costs of goods sold.

Advertising Costs - The Company expenses advertising costs as they are incurred. Advertising expenses amounted to $295 and $267 during the fiscal years ended January 2, 2010 and December 27, 2008, respectively.

Product Development Costs - Costs of new product development and product redesign are charged to expense as incurred.

Recent Accounting Pronouncements – New Accounting Standards In June 2009, the FASB issued ASC Topic 105 which establishes the FASB Accounting Standards Codification as the single source of authoritative GAAP for all non-governmental entities, with the exception of the SEC and its staff. ASC Topic 105 changes the referencing and organization of accounting guidance and is effective for interim and annual periods ending after September 15, 2009. Since it is not intended to change or alter existing GAAP, the Codification did not have any impact on the Company’s financial condition or results of operations. Going forward, the Board will not issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead, it will issue Accounting Standards Updates. The FASB will not consider Accounting Standards Updates as authoritative in their own right; these updates will serve only to update the Codification, provide background information about the guidance, and provide the bases for conclusions on the change(s) in the Codification. In the description of Accounting Standards Updates that follows, references in “italics” relate to Codification Topics and Subtopics, and their descriptive titles, as appropriate.

F-8

TOFUTTI BRANDS INC.

NOTES TO FINANCIAL STATEMENTS

(In thousands, except for share and per share data)

Other Accounting Standards Updates that became effective after December 31, 2009 are not expected to have a significant effect on our financial position or results of operations.

NOTE 2: INVENTORIES

Inventories consist of the following:

	January 2, 2010		December 27, 2008
Finished products	$	1,214	$	2,009
Raw materials and packaging		717		325
	$	1,931	$	2,334

NOTE 3: STOCK OPTIONS

The following is a summary of stock option activity from December 30, 2007 to January 2, 2010:

	INCENTIVE OPTIONS					NON-QUALIFIED OPTIONS
	Shares			Weighted Average Exercise Price ($)		Shares		Weighted Average Exercise Price ($)		Total Aggregate Intrinsic Value ($)
Outstanding at December 30, 2007		410,000			1.06		61,000		2.94		664
Exercisable at December 30, 2007		410,000			--		27,000		--		755
Outstanding at December 27, 2008		410,000			1.06		61,000		2.94		138
Exercisable at December 27, 2008		410,000			--		44,000		--		161
Expired in fiscal 2009		(410,000	)		1.06		--		--		--
Outstanding at January 2, 2010		--			--		61,000		2.94		--
Exercisable at January 2, 2010		--			--		61,000		2.94		--

The Company’s shareholders adopted the 2004 Non-Employee Directors’ Stock Option Plan (the “2004 Directors’ Plan”) on June 3, 2004. The purpose and intent of the 2004 Directors’ Plan is to attract and retain the best available individuals as non-employee directors of the Company, to provide additional incentive to non-employee directors to continue to serve as directors and to encourage their continued service on the Board. All options granted under 2004 Directors’ Plan are “non-qualified stock options.” The maximum aggregate number of shares of common stock which may be issued under the 2004 Directors’ Plan is 100,000 shares.

F-9

TOFUTTI BRANDS INC.

NOTES TO FINANCIAL STATEMENTS

(In thousands, except for share and per share data)

There were no stock options granted in the last two fiscal years.

The following table summarizes information about stock options outstanding at January 2, 2010:

Range of Exercise Prices ($)		Number Outstanding		Weighted Average Remaining Life (in years)		Weighted Average Exercise Price($)		Number Exercisable
	3.14		10,000		0.08		3.14		10,000
	2.90		10,000		1.42		2.90		10,000
	2.90		41,000		2.83		2.90		41,000
	2.90-3.14		61,000		2.20		2.94		61,000

The aggregate unrecognized stock-based compensation charge at January 2, 2010 is approximately $7 expected to be expensed over one year.

NOTE 4: LEASES

The Company’s facilities are located in a modern 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 under the terms of that agreement. 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 $81 in 2009 and $81 in 2008. The Company’s management believes that the Cranford facility will continue to satisfy its space requirements for the foreseeable future and that if necessary, such space can be replaced without a significant impact to the business.

NOTE 5: INCOME TAXES

The components of income tax expense (benefit) for the fiscal years ended January 2, 2010 and December 27, 2008 are as follows:

	January 2, 2010			December 27, 2008
Current:
Federal	$	280		$	195
State		74			49
		354			244
Deferred:
Federal		(21	)		(14	)
State		(4	)		(12	)
		(25	)		(26	)
Total income tax expense	$	329		$	218

F-10

TOFUTTI BRANDS INC.

NOTES TO FINANCIAL STATEMENTS

(In thousands, except for share and per share data)

A reconciliation between the expected federal tax expense at the statutory tax rate of 34% and the Company’s actual tax expense for the fiscal years ended January 2, 2010 and December 27, 2008 follows:

	January 2, 2010			December 27, 2008
Income tax expense computed at federal statutory rate	$	283		$	148
State income taxes, net of federal income tax benefit		50			24
Permanent and other items		26			21
Under-accrual of prior year		(30	)		--
Addition to FIN 48 provision		--			25
	$	329		$	218

Deferred tax assets at January 2, 2010 and December 27, 2008 consist of the following components:

	January 2, 2010		December 27, 2008
Allowance for doubtful accounts	$	215	$	211
Inventory		84		113
Deferred tax asset	$	299	$	324

The Company 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.

The following table indicates the changes to the Company's uncertain tax positions for the for the fiscal years ended January 2, 2010 and December 27, 2008 including interest and penalties:

Balance at December 30, 2007	$	419
Additions based on tax positions related to the current year		25
Balance at December 27, 2008		444
Additions based on tax positions related to the current year		--
Balance at January 2, 2010	$	444

The Company accounts for penalties or interest related to uncertain tax positions as part of its provision for income taxes. The Company had approximately $25,000 of accrued interest and penalties related to uncertain tax positions. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense.

The liability at January 2, 2010 for uncertain tax positions is included in accrued expenses. The Company’s federal and state tax returns are open to examination for the years 2007 to 2009.

F-11

TOFUTTI BRANDS INC.

NOTES TO FINANCIAL STATEMENTS

(In thousands, except for share and per share data)

NOTE 6: LINE OF CREDIT

The Company established a $1,000 line of credit with Wachovia Bank in April 2006, which was renewed every year since then for an additional year, the last renewal being effected April 30, 2009. As of March 30, 2010, the Company has not used the line of credit. If the line of credit is drawn upon, the underlying promissory note becomes due and payable in consecutive monthly payments of accrued interest only, commencing, and continuing on, the same day of each month thereafter until fully paid. The line of credit may be used to finance working capital of the Company and interest on the unpaid balance shall accrue at Wachovia’s Prime Rate. The line of credit is secured by all of the personal property of the registrant including, without limitation, all accounts, equipment, accessions, inventory, chattel paper, instruments, investment property, documents, letter-of-credit rights, deposit accounts, and general intangibles, wherever located.

F-12

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A (T). Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures. As of January 2, 2010, our company's chief executive officer and chief 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 officer and chief financial officer concluded that our disclosure controls and procedures were not effective with respect to the material weaknesses, as described below in our internal control over financial reporting, that have not been fully remediated as of the end of the fiscal year 2009.

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 insure 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 inconformity with generally accepted accounting principles.

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

Based on their evaluation under the frameworks described above, our chief executive officer and chief financial officer have concluded that our internal control over financial reporting was ineffective as of January 2, 2010 because of the following material weaknesses in internal controls over financial reporting:

a 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 statement and income tax assertions in a timely manner.

The limited size of the accounting department makes it impracticable to achieve an optimum separation of duties.

Remediation Plan

We are seeking ways to remediate these weaknesses, which stem from our small workforce, that will not require us to hire additional personnel.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during the quarter ended January 2, 2010, that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Our directors and executive officers are:

Name	Age	Position
David Mintz	78	Chairman of the Board of Directors, Chief Executive Officer
Steven Kass	58	Chief Financial Officer, Secretary and Treasurer
Neal S. Axelrod	57	Director
Joseph Fischer	70	Director
Aaron Forem	55	Director
Philip Gotthelf	57	Director
Reuben Rapoport	81	Director
Franklyn Snitow	63	Director

David Mintz has been our Chairman of the Board and Chief Executive Officer since August 1981. Mr. Mintz’s knowledge about our company and his role as the developer of our product line is essential to the operation of our board.

Steven Kass has been our Chief Financial Officer since November 1986 and Secretary and Treasurer since January 1987.

Neal S. Axelrod has been a director since August 2007. Mr. Axelrod has been a self-employed certified public accountant in New Jersey since 1977. Mr. Axelrod’s accounting and financial background enhances the breadth of experience of the board of directors.

Joseph Fischer has been a director since August 2007. He previously served as a director from March 2004 until June 2007. He has been the principal in FMM Investments, which manages private portfolios, since 1992. Prior to that and since 1982, Mr. Fischer was the Controller of the Swingline Division of American Brands Inc. Mr. Fisher’s accounting and financial background enhances the breadth of experience of the board of directors.

Aaron Forem has been a director since 2000. Since 1980, he has been the president of Wuhl Shafman Lieberman Corp., located in Newark, New Jersey, which is one of the largest produce wholesalers in the Northeastern United States. Mr. Forem’s experience in the food industry and his managerial experience enhances the breadth of experience of the board of directors.

Philip Gotthelf has been a director since 2006. He has been President of EQUIDEX Incorporated, a registered Commodity Trading Advisor, and EQUIDEX Brokerage Group, a registered Introducing Broker, since 1985. He has also been publisher of the COMMODEX System and COMMODITY FUTURES FORECAST Service since 1975 and has authored several financial books for Probus/McGraw Hill, McGraw Hill and John Wiley & Sons. Mr. Gotthelf’s financial background enhances the breadth of experience of the board of directors.

Reuben Rapoport, our former Director of Product Development who retired in April 2003, has been a director since July 1983. Mr. Rapoport’s product development background enhances the breadth of experience of the board of directors.

Franklyn Snitow has been a director since 1987. He has been a partner in the New York City law firm Snitow Kanfer Holtzer & Millus, LLP, our general counsel, since 1985. Mr. Snitow’s legal and corporate governance background enhances the breadth of experience of the board of directors.

All directors hold office until the next Annual Meeting of Stockholders and until their successors have been elected and qualified. Officers serve at the pleasure of the Board of Directors All of the executive officers devote their full time to our operations.

Employment Agreements

There are currently no employment agreements between us and any of our officers.

Family Relationships

There are no family relationships between any of our directors and executive officers.

Involvement in Legal Proceedings

To the best of our knowledge, during the past ten years, none of our directors or executive officers were involved in one of the following: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of any competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

Audit Committee Financial Expert

The Audit Committee of the Board of Directors is comprised of Mr. Axelrod, who serves as chairman, Mr. Gotthelf and Mr. Forem. The Board of Directors has determined that all of the Audit Committee members are independent, as that term is defined under the enhanced independence standards for audit committee members in the Securities and Exchange Act of 1934. The Board of Directors has also determined that Mr. Axelrod is an Audit Committee Financial Expert as that term is defined in rules issued pursuant to the Sarbanes-Oxley Act of 2002.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers, directors and persons who own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of common stock and other of our equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by Commission regulations to furnish us with copies of all Section 16(a) reports they file.

To our knowledge, based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons that no additional forms were required for those persons, we believe that during fiscal 2009 all persons subject to these reporting requirements filed the required reports on a timely basis.

Code of Ethics

We have adopted a Code of Ethics for Executive and Financial Officers. This code of ethics applies to our chief executive officer, chief financial officer, corporate controller and other finance organization employees. We also adopted a Code of Conduct, which applies to all of our employees. The Code of Ethics and the Code of Conduct are publicly available on our website at www.tofutti.com and printed copies are available upon request. If we make any substantive amendments to the Code of Ethics or the Code of Conduct or grant any waivers, including any implicit waiver, from a provision of these codes to our chief executive officer, chief financial officer or corporate controller, we will disclose the nature of such amendment or waiver on our website.

Item 11. Executive Compensation.

The following table sets forth information concerning the total compensation during the last three fiscal years for our named executive officers whose total salary in fiscal 2009 totaled $100,000 or more:

Summary Compensation Table

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		All Other Compensation ($)			Total($)
David Mintz	2009		459,000		350,000		--		--		--		--			809,000
Chief Executive Officer	2008		450,000		350,000		--		--		--		--			800,000
and Director	2007		450,000		350,000		--		--		--		--			800,000

Steven Kass	2009		127,000		150,000		--		--		--		--			277,000
Chief Financial Officer	2008		125,000		150,000		--		--		--		215,000	(1)		490,000
	2007		125,000		150,000		--		--		--		853,975	(2)		1,128,975

_________________

(1)

The value of the unexercised options as of December 27, 2008 is calculated as the difference between the closing price of the common stock as of December 27, 2008 and the option exercise price.

(2)

On February 26, 2007, our Board of Directors authorized us to enter into a transaction with Steven Kass, our Chief Financial Officer, whereby Mr. Kass surrendered 175,000 of his stock options that were expiring that month, in consideration for a purchase price of $2.3325 per share, reflecting a 25% discount from the $3.11 closing price of the common stock on February 26, 2007. After subtracting the underlying $.6875 per share exercise price of the options, this resulted in a net buyback price to our company of $1.645 per share, or $287,875. Concurrently, Mr. Kass exercised 150,000 options that were expiring on February 27, 2007 at an exercise price of $.6875 per share ($103,125) and 70,000 options that were expiring on July 30, 2007 at an exercise price of $.9375 per share ($65,625) (consistent with the original terms of the grants), for a combined total purchase cost of $168,750, resulting in a net payment to Mr. Kass of $119,125. The value of the unexercised options is calculated as the difference between the closing price of the common stock as of December 27, 2008 and the option exercise price ($566,100).

The aggregate value of all other perquisites and other personal benefits furnished to each of these executive officers was less than $10,000 for the 2009 and 2008 fiscal years.

Grants of Plan-Based Awards for Fiscal 2009

There were no stock options awarded during the fiscal year ended January 2, 2010.

Long-Term Incentive Plans-Awards in Last Fiscal Year

We do not currently have any long-term incentive plans.

Director Compensation

Our non-employee directors earned director compensation in fiscal 2009 based on the number of meetings attended. Mr. Axelrod, chairman of the audit committee, receives $1,500 per meeting attended. All other non-employees are entitled to $500 per meeting attended. Messrs. Forem and Snitow waive their compensation.

The following table sets forth the compensation received by each of the Company’s non-employee directors for the year ended January 2, 2010. Each non-employee director is considered independent under AMEX listing standards. Messrs. Forem and Snitow waive their compensation.

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation ($)		All Other Compensation ($)		Total ($)
Neal S. Axelrod		14,500		--		--		--		--		--		14,500
Joseph Fischer		1,000		--		--		--		--		--		1,000
Aaron Forem		--		--		--		--		--		--		--
Philip Gotthelf		4,500		--		--		--		--		--		4,500
Franklyn Snitow		--		--		--		--		--		--		--

Employment Agreements

We do not currently have any employment agreements with our executive officers. We do not anticipate having employment contracts with executive officers and key personnel in the future.

Outstanding Equity Awards at Fiscal Year End

The following table summarizes the options awards granted to each of the named executive officers identified above in the summary compensation table above pursuant to an Equity Incentive Plan.

Outstanding Equity Awards at Fiscal Year-End

Option Awards

Stock Awards

Name

Number of securities underlying unexercised options (#) Exerciseable

Number of securities underlying unexercised options (#) Unexerciseable

Equity incentive plan awards: number of securities underlying unexercised unearned options (#)

Option exercise

price ($)

Option expiration date

Number of shares or units of stock that have not vested (#)

Market value of shares or units of stock that have not vested ($)

Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)

Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)

David Mintz

Steven Kass

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following tables set forth as of March 30, 2010 certain information regarding the ownership of our common stock, $0.01 par value, for each person known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, for each executive officer named in the Summary Compensation Table, for each of our directors and for our executive officers and directors as a group:

Security ownership of certain beneficial owners.

Name and Address of Beneficial Owner(1)		Amount and Nature of Beneficial Owner(2)			Percent of Class(3)
David Mintz			2,630,440			50.8	%

(1)	The address of Mr. Mintz is c/o Tofutti Brands Inc., 50 Jackson Drive, Cranford, New Jersey 07016. Mr. Mintz has sole voting and/or investment power of the shares attributed to him.

(2)

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock relating to options currently exercisable or exercisable within 60 days of March 30, 2010 are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares shown as beneficially owned by them.

(3)	Based on 5,176,678 shares issued and outstanding as of March 30, 2010.

Security ownership of management.

Name and Address of Beneficial Owner(1)	Amount and Nature of Beneficial Owner(2)			Percent of Class(3)
David Mintz		2,630,440			50.8	%
Steven Kass		220,000			4.2	%
Reuben Rapoport		85,000			1.6	%
Franklyn Snitow		71,200			*
Joseph Fischer		26,000	(4)		*
Neal S. Axelrod		16,000	(5)		*
Philip Gotthelf		10,000	(6)		*
Aron Forem		0			*
All Executive Officers and Directors as a group (8 persons)		3,058,640	(7)		58.5	%

______________

* Less than 1%.

(1)

The address of Messrs. Mintz, Kass, Axelrod, Fischer, Gotthelf and Rapoport is c/o Tofutti Brands Inc., 50 Jackson Drive, Cranford, New Jersey 07016. The address of Mr. Snitow is 575 Lexington Avenue, New York, New York 10017. The address of Mr. Forem is 52-62 Cornelia Street, Newark, New Jersey 07105. Each of these persons has sole voting and/or investment power of the shares attributed to him.

(2)

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock relating to options currently exercisable or exercisable within 60 days of March 23, 2009 are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares shown as beneficially owned by them.

(3)	Based on 5,176,678 shares issued and outstanding as of March 30, 2009.

(4)	Issuable upon the exercise of currently exercisable stock options.

(5)	Includes 15,000 share issuable upon the exercise of currently exercisable stock options.

(6)	Issuable upon the exercise of currently exercisable stock options.

(7)	Includes 51,000 shares issuable upon the exercise of currently exercisable stock options.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

None.

Item 14. Principal Accounting Fees and Services.

Fees Paid to Independent Public Accountants

The following table sets forth, for each of the years indicated, the fees paid to our independent public accountants and the percentage of each of the fees out of the total amount paid to the accountants.

	Year Ended
	January 2, 2010					December 27, 2008
Services Rendered	Fees		Percentages			Fees		Percentages

Audit Fees (1)	$	95,025		100	%	$	103,000		100	%
Audit-related Fees		--		--			--		--
Tax Fees		--		--			--		--
All Other Fees		--		--			--		--
Total	$	95,025		100	%	$	103,000		100	%

______________

(1)	Audit fees consist of services that would normally be provided in connection with statutory and regulatory filings or engagements, including services that generally only the independent accountant can reasonably provide.

Pre-Approval Policies and Procedures

Our Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit services rendered by our independent public accountants, Amper, Politziner & Mattia, LLP. The policy generally pre-approves certain specific services in the categories of audit services, audit-related services, and tax services up to specified amounts, and sets requirements for specific case-by-case pre-approval of discrete projects, those which may have a material effect on our operations or services over certain amounts. Pre-approval may be given as part of the Audit Committee’s approval of the scope of the engagement of our independent auditor or on an individual basis. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be presented to the full Audit Committee at its next scheduled meeting. The policy prohibits retention of the independent public accountants to perform the prohibited non-audit functions defined in Section 201 of the Sarbanes-Oxley Act or the rules of the SEC, and also considers whether proposed services are compatible with the independence of the public accountants.

PART IV

Item 15.

Exhibits, Financial Statement Schedules.

(a)	Financial Statements

See Item 8.

(b)	Financial Statement Schedules

None.

(c)

Exhibits

3.1	Certificate of Incorporation, as amended through February 1986.(1)

3.1.1

March 1986 Amendment to Certificate of Incorporation.(2)

3.1.2

June 1993 Amendment to Certificate of Incorporation.(3)

3.2	By-laws.(1)

4.1	Copy of the Registrant's Amended 1993 Stock Option Plan.(4)

4.2	Tofutti Brands Inc. 2004 Non-Employee Directors' Stock Option Plan.(5)

10.1	Form of Loan Agreement between the Registrant and Wachovia Bank, N. A.(6)

10.2	Form of Promissory Note between the Registrant and Wachovia Bank, N. A.(6)

10.3	Form of Security Agreement between the Registrant and Wachovia Bank, N. A.(6)

23.1	Consent of Amper, Politziner & Mattia, LLP

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.

____________________

(1)	Filed as an exhibit to the Registrant's Form 10-K for the fiscal year ended July 31, 1985 and hereby incorporated by reference thereto.

(2)	Filed as an exhibit to the Registrant's Form 10-K for the fiscal year ended August 2, 1986 and hereby incorporated by reference thereto.

(3)	Filed as an exhibit to the Registrant's Form 10-KSB for the fiscal year ended January 1, 2005 and hereby incorporated by reference thereto.

(4)	Filed as an exhibit to the Registrant's Form S-8 (Registration No. 333-79567) filed May 28, 1999 and hereby incorporated by reference thereto.

(5)	Filed as Appendix B to the Registrant’s Schedule 14A filed May 10, 2004 and hereby incorporated by reference thereto.

(6)	Filed as an exhibit to the Registrant's Form 8-K bearing a cover date of April 13, 2006 and hereby incorporated by reference thereto.

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 on April 2, 2010.

	TOFUTTI BRANDS INC. (Registrant)

	/s/ David Mintz
	David Mintz Chairman of the Board and
	Chief Executive Officer

In accordance with the Securities Exchange Act of 1934, this Report has been signed below on April 2, 2010, by the following persons on behalf of the Registrant and in the capacities indicated.

/s/David Mintz

David Mintz

Chairman of the Board

and Chief Executive Officer

/s/Steven Kass

Steven Kass

Secretary, Treasurer and

Chief Financial and Accounting Officer

/s/Neal S. Axelrod

Neal S. Axelrod

Director

/s/Joseph Fischer

Joseph Fischer

Director

/s/Aaron Forem

Aaron Forem

Director

/s/Philip Gotthelf

Philip Gotthelf

Director

________________________

Reuben Rapoport

Director

/s/Franklyn Snitow

Franklyn Snitow

Director

EXHIBIT INDEX

Exhibit

3.1	Certificate of Incorporation, as amended through February 1986.(1)

3.1.1

March 1986 Amendment to Certificate of Incorporation.(2)

3.1.2

June 1993 Amendment to Certificate of Incorporation.(3)

3.2	By-laws.(1)

4.1	Copy of the Registrant's Amended 1993 Stock Option Plan.(4)

4.2	Tofutti Brands Inc. 2004 Non-Employee Directors' Stock Option Plan.(5)

10.1	Form of Loan Agreement between the Registrant and Wachovia Bank, N. A.(6)

10.2	Form of Promissory Note between the Registrant and Wachovia Bank, N. A.(6)

10.3	Form of Security Agreement between the Registrant and Wachovia Bank, N. A.(6)

23.1	Consent of Amper, Politziner & Mattia, LLP

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.

____________________

(1)	Filed as an exhibit to the Registrant's Form 10-K for the fiscal year ended July 31, 1985 and hereby incorporated by reference thereto.

(2)	Filed as an exhibit to the Registrant's Form 10-K for the fiscal year ended August 2, 1986 and hereby incorporated by reference thereto.

(3)	Filed as an exhibit to the Registrant's Form 10-KSB for the fiscal year ended January 1, 2005 and hereby incorporated by reference thereto.

(4)	Filed as an exhibit to the Registrant's Form S-8 (Registration No. 333-79567) filed May 28, 1999 and hereby incorporated by reference thereto.

(5)	Filed as Appendix B to the Registrant’s Schedule 14A filed May 10, 2004 and hereby incorporated by reference thereto.

(6)	Filed as an exhibit to the Registrant's Form 8-K bearing a cover date of April 13, 2006 and hereby incorporated by reference thereto.