SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

        [X]     ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                EXCHANGE ACT OF 1934.
                   For the fiscal year ended January 1, 2005

        [ ]     TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES
                EXCHANGE ACT OF 1934.

                                Commission File Number: 1-9009

                               TOFUTTI BRANDS INC.
                 (Name of small business issuer in its charter)

                   Delaware                                13-3094658
        (State or other jurisdiction of                 (I.R.S. Employer
        incorporation or organization)                 Identification No.)

       50 Jackson Drive, Cranford, New Jersey                07016
      (Address of principal executive offices)             (Zip Code)

                    Issuer's telephone number (908) 272-2400

              Securities registered under Section 12(b) of the Act:

             Title of each class                         Name of each exchange
             -------------------                          on which registered
    Common Stock, par value $.01 per share                -------------------
                                                        American Stock Exchange

Securities registered under Section 12(g) of the Act: None

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the Exchange  Act during the past 12 months,  and (2) has
been subject to such filing requirements for the past 90 days.

                             Yes [X]        No [ ]

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will 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-KSB
or any amendment to this Form 10-KSB. [X]

     Issuer's revenues for its most recent fiscal year: $19,188,000

     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
American Stock Exchange, on April 1, 2005 was $9,122,000.

     As of April 1, 2005, the  Registrant had 5,636,867  shares of Common Stock,
par value $.01, outstanding.

     Transitional Small Business Disclosure Format Yes [ ] No [X]



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                                     PART I

        This Annual Report on Form 10-KSB contains various "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
within the Private Securities Litigation Reform Act of 1995, as amended. Such
forward-looking statements reflect our current view with respect to future
events and financial results. Forward-looking statements usually include the
verbs "anticipates," "believes," "estimates," "expects," "intends," "plans,"
"projects," "understands" and other verbs suggesting uncertainty. 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. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date hereof. We undertake no obligation to publicly release any
revisions to these forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.

        We have attempted to identify additional significant uncertainties and
other factors affecting forward-looking statements in the Risk Factors section
which appears in Item 1. Description of Business.

Item 1. Description of Business.

GENERAL

        We are engaged in the development, production and marketing of
TOFUTTI(R) 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.

        During 2004, we introduced two new frozen dessert products: TOFUTTI
KIDS(TM) and TOFUTTI REWARD BARS(TM) . TOFUTTI KIDS is a fruit ice novelty item
designed for and targeted towards the children's market, and the REWARD BAR is
an unique upscale chocolate coated stick novelty.

        Beginning in 2003 and continuing throughout 2004, we have focused on our
core business of non-dairy frozen dessert and cheese products. Accordingly, we
discontinued a number of products that did not fit into our long term plans,
both in terms of market acceptance and profitability. Specifically, we
eliminated our candy and nut products, certain flavors of our BETTER THAN CREAM
CHEESE and SOUR SUPREME, slow-moving frozen dessert items, and a number of
frozen food products. Although the elimination these products adversely affected
our sales in 2004, we believe that the elimination of these products, when
coupled with our new product introductions, will greatly enhance the visibility
of our remaining products and should result in increased inventory turnover and
translate into additional shelf space and ultimately greater sales.

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        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 lactose to these markets. We focus our marketing efforts towards
those consumers who find our products essential to their everyday diets because
of health and lifestyle reasons. As part of this strategy, we seek to achieve
brand awareness through product innovation, eye-catching packaging 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

   o    Premium TOFUTTI(R) 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 eight flavors of
        premium, hard frozen TOFUTTI in pints: Vanilla, Chocolate Supreme,
        Wildberry Supreme, Vanilla Almond Bark(R), Vanilla Fudge, Chocolate
        Cookie Crunch, Better Pecan(R), and Mint Chocolate Chip. Premium TOFUTTI
        soft serve mix is available in three flavors: Vanilla, Chocolate, and
        Peanut Butter. TOFUTTI in three gallon bulk cans is available in
        Vanilla, Chocolate Supreme and Vanilla Almond Bark.

   o    LOW FAT TOFUTTI offers the calorie-conscious consumer a creamy dessert
        that is 98% fat free and has less than 120 calories per serving. Sold
        nationally in pints, LOW FAT TOFUTTI is offered in a number of flavors
        including Chocolate Fudge, Coffee Marshmallow, and Vanilla Fudge.

   o    NO SUGAR ADDED TOFUTTI pints offer the diet or sugar conscious consumer
        a nondairy frozen dessert with the taste and texture of premium TOFUTTI
        and the calories and fat of our low fat product. With its low carb
        count, it is ideal for people on the Atkins diet. Available in
        Strawberry and Chocolate flavors, NO SUGAR ADDED TOFUTTI pints are sold
        in select supermarkets.

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   o    TOFUTTI CHEESECAKE SUPREME PINTS, available in three flavors, contain
        rich, creamy premium vanilla TOFUTTI with a taste of our dairy free
        BETTER THAN CREAM CHEESE(R) added to give it a cheesecake flavor, and
        are swirled with either a blueberry, strawberry, or chocolate sauce.

   o    TOFUTTI CUTIES(R), our best selling product, are bite size frozen
        sandwiches combining a Vanilla, Cookies and Cream, Chocolate, Peanut
        Butter, Mint Chocolate Chip, Wild Berry, or Coffee 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. Using the same vanilla wafers, we have also introduced the WAVE
        CUTIETM in three different flavors - blueberry, strawberry and chocolate
        sauces blended with creamy vanilla TOFUTTI. Last, but not least is the
        JAZZY CUTIETM, which consists of vanilla TOFUTTI between a vanilla and
        chocolate wafer.

   o    No sugar added TOFUTTI CUTIES not only have the same great taste and
        health benefits of our regular Vanilla CUTIES, but combine a creamy no
        sugar added vanilla filling with a crispy, great tasting no sugar added
        wafer. A low carb product, they are an ideal snack for individuals on
        the Atkins diet.

   o    TOFUTTI TOO-TOO'S are frozen dessert cookie sandwiches combining creamy
        and delicious premium vanilla TOFUTTI and chocolate chips with a round,
        chocolate chip cookie.

   o    TOTALLY FUDGE POPS(R), CHOCOLATE FUDGE TREATS, and COFFEE BREAK TREATS
        are stick novelties that offer the consumer the same taste as real fudge
        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 TREATS(TM) have only
        30 calories per bar. Both TREATS are ideal for anyone on either a low
        fat or low carb diet.

   o    TOFUTTI DELIGHTS(TM) are no sugar added stick novelties shaped just like
        TREATS, each one covered in a thick, dark chocolate coating. A
        multi-pack product, each box of DELIGHTS comes with three different
        centers--vanilla, chocolate or strawberry. They are available in select
        supermarkets and health food stores and are an ideal snack for those
        individuals on a low carb diet.

   o    TOFUTTI KIDS(TM) , a new frozen dessert treat aimed at the children's
        market, are bullet-shaped stick novelties made with creamy premium
        vanilla TOFUTTI with a taste of our dairy free BETTER THAN CREAM CHEESE
        added to give them a cheesecake flavor, surrounded with real fruit ice.
        A multi-pack product, they come in strawberry, orange, and lime flavors
        in each package.

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   o    TOFUTTI MONKEY BARS(TM) are stick novelties that feature a rich
        chocolate center surrounded by peanut butter flavored TOFUTTI, dipped in
        a rich chocolate coating.

   o    HOORAY HOORAY BARS (TM) are no sugar added stick novelties that combine
        creamy vanilla TOFUTTI with a chocolate center covered in a thick dark
        chocolate coating.

   o    MARRY ME BARS(TM) 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.

   o    An upscale product with a unique shape, TOFUTTI REWARD BARS(TM) are an
        exciting new stick novelty with a center of premium vanilla TOFUTTI with
        a Wildberry sauce swirl, surrounded by a heavy, deep, rich chocolate
        coating which gives the product the taste of a rich chocolate candy bar.

Nondairy Cheese Products

   o    BETTER THAN CREAM CHEESE(R) 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 or used in any favorite recipe. The 8 oz. retail packages are
        available in Plain, French Onion, Herbs & Chives, Smoked Salmon, Garlic
        & Herb, and Garden Veggie. The plain version is also available in 30 lb.
        bulk boxes. The product is sold in many health food stores and select
        supermarkets around the country.

   o    SOUR SUPREME(R) 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 benefits 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.

   o    For consumers concerned with their fat and calorie intake, TOFUTTI also
        offers versions of BETTER THAN CREAM CHEESE and SOUR SUPREME with no
        partially hydrogenated fat and no trans fatty acids. They are also made
        with organic sugar, no preservatives, and are available in most health
        food stores.

   o    TOFUTTI SOY-CHEESE SLICES(TM) offer consumers a delicious nondairy,
        vegan alternative to regular cheese slices. 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 three
        flavors: Mozzarella, American, and Roasted Garlic.

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Other Food Products

   o    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.

   o    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. They can be served hot, warm, or slightly chilled as a
        main meal or a snack.

   o    TOFUTTI CHEESE PILLOWS are frozen crepes filled with BETTER THAN CREAM
        CHEESE and a variety of fruit fillings. They are available in Blueberry
        Cheese, Apple Danish & Cheese, and Cherry Cheese flavors, and can be
        served hot, warm, or slightly chilled as a main meal or a snack. TOFUTTI
        PILLOWS are sold in most health food stores and select supermarkets.

   o    EGG WATCHERS(R) is a fat free replacement for whole eggs that has the
        taste, nutrition, and versatility of whole eggs without the fat and
        cholesterol and with 60% less calories. EGG WATCHERS can be used in
        virtually all recipes that require whole eggs. It appeals to those
        consumers who are concerned about lowering dietary cholesterol and fat
        levels, but do not want to give up the great taste and good nutritional
        values of whole eggs.

   o    TOFUTTI COOKIES are made with all natural ingredients and unbleached
        flour. The 16 oz. packages are available in Peanut Butter, Oatmeal
        Raisin, Chocolate Chip, and TOFIGGY(R) fig bars. Like all TOFUTTI
        products, they are completely dairy and cholesterol free and can be
        found in select supermarkets and health food stores.

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.

        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 allows
us to provide our customers with products in a timely fashion in Canada and
several key locations in the United States.

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        Since mid-2003, Eskimo Pie Frozen Distribution, Inc., a wholly-owned
subsidiary of CoolBrands International, Inc., has been the distributor of our
frozen desserts in the New York metropolitan area, as well our distributor in
the Southern New Jersey-Philadelphia area, Maryland, Delaware and Northern
Virginia and in the Southeastern United States including Florida. Eskimo Pie
became our distributor in these areas as a result of the sale of the
distribution assets of Nestle Ice Cream Company, LLC, or NICC, our distributor
since May 2001, to CoolBrands. NICC, formerly known as Haagen Dazs, had also
been our distributor of frozen desserts in the Southeastern United States for
the last twelve years.

        Total sales to Eskimo Pie in the New York metropolitan area were
$1,013,000, or 5% of sales, in 2004 as compared to $1,244,000, or 7% of sales,
in 2003 to Eskimo Pie/NICC. We currently sell our frozen dessert products in
most major markets in the United States, including Atlanta, Baltimore, Boston,
Charlotte, Chicago, Cincinnati, Cleveland, Denver, Detroit, Los Angeles, Miami,
Milwaukee, Minneapolis, New York, Orlando, Philadelphia, Phoenix, Richmond, San
Francisco, Seattle and Tampa.

        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 forty-three
distributors in the national health food market. Our sales to health food
distributors in 2004 were $10,132,000, or 53% of total sales, as compared to
$10,541,000, or 55% of sales, in 2003. In 2004, sales to Trader Joe's, a West
Coast based health food supermarket chain, were $4,042,000, or 21% of sales, as
compared to $4,221,000, or 22% of sales, in 2003. Overall, West Coast sales were
$5,484,000, or 29% of our sales, in 2004, as compared to $5,033,000, or 26% of
sales, in 2003. Sales in Florida, one of our major geographical markets, were
adversely impacted by the severe hurricane season in August and September of
2004. Despite the difficult conditions, our sales in Florida increased to
$1,843,000, or 10% of sales, in 2004 compared to $1,831,000, or 10% of sales, in
2003. Total sales in the Midwest increased to $1,838,000, or 10% of sales, in
2004 as compared to $1,681,000, or 9% of sales, in 2003, while sales in New
England, another important market for us, increased to $2,795,000, or 15% of
sales, as compared to sales of $2,320,000, or 12% of sales, in 2003. We continue
to have a strong presence in the kosher market, with sales of $1,129,000, or 6%
of sales, in 2004, as compared with sales of $1,299,000, or 7% of sales, in
2003.

        During 2004, we shipped TOFUTTI nondairy products to distributors in
Australia, Bermuda, Canada, England, Israel, Mexico, and Panama. Our distributor
in England is our master distributor for all of Europe and sells our products to
approximately ten other European countries. Sales to foreign distributors
increased to $1,909,000, or 10% of sales, in 2004, as compared to $1,586,000, or
8% of sales, in 2003. Our international sales were positively impacted by more
favorable economic conditions in some of the countries where we sell our
products and a weaker U.S. dollar. 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, which could increase the local
currency price of our products.

        We expect the favorable sales trend in the preceding sales categories to
continue in 2005 and anticipate an improvement in those categories where there
was a decline in sales from 2003 to 2004.

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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 in both soft serve and hard frozen
form throughout the United States by established manufacturers and distributors
of ice cream and other frozen dessert products. 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 products are developed internally in our own laboratory.
During the last two years, David Mintz, our Chief Executive Officer, has devoted
a substantial amount of time and effort to the development of new products and
the reformulation of our current products. In 2004 and 2003, our research and
development expenses were $477,000 and $552,000, respectively. These amounts do
not include any portion of Mr. Mintz's salary, and since they cannot be directly
associated with any specific customers, they are considered part of operating
expenses. All product development costs are expensed as incurred.

PRODUCTION

        We believe that all of our products are made 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; 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 manufactured 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 eight co-packers, including
one in the United Kingdom, a decrease from nine co-packers in the previous year.
This decrease is a result of consolidation and the discontinuation of some
products. 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 October 2004, H.P. Hood, the parent company of Kemps Foods, Inc.
announced it was closing Kemps' Lancaster, PA facility. This facility has
produced our non-dairy frozen dessert products for the past twenty years. The
Lancaster facility will close in July 2005. We are in the process of relocating
the production of our frozen dessert products and anticipate no problems in

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doing so. We are taking steps to build inventory to maintain our current levels
of sales service during the transition period. Although we may incur some
non-recurring transitional expenses, we do not expect them to have a material
impact on our operation.

        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
contract manufacturers decide to terminate their relationships with us.

        In order to protect our formulas, we have entered into confidentiality
arrangements with our contract manufacturers 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.

        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.

TRADEMARKS AND PATENTS

        We have registered our trademark, TOFUTTI(R), and other trademarks for
our frozen desserts and other products in the United States and approximately
thirty-six 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.

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        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.

        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 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.

        On January 18, 2001, the FDA proposed new policy guidelines regarding
the labeling of genetically engineered foods. The FDA is currently considering
the comments it received before issuing final guidance. These guidelines, if
adopted, could require us to modify the labeling of our products, which could
affect the sales of our products and thus harm our business.

        The FDA published the final rule amending the Nutritional Labeling
regulations to require declaration of "Trans Fatty Acids" in the nutritional
label of conventional foods and dietary supplements on July 11, 2003. The final
rule will be effective on January 1, 2006. Additionally, an allergen labeling
law was passed and signed on August 3, 2004. This law requires certain allergens
to be clearly labeled by January 1, 2006. We are in the process of revising our
labels to comply with the final rules.

        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

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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.

        We are currently in the process of reviewing these new regulations and
have already begun to change our existing packaging to ensure compliance. Our
new product packaging has incorporated these rule changes. We expect to be fully
compliant as required and do not anticipate any material adverse effect on our
business.

EMPLOYEES

        On January 1, 2005 we employed nine persons on a full-time basis
compared with twelve persons as of December 27, 2003. We consider our relations
with our employees to be good. We do not have any collective bargaining
agreements with our employees.

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.

        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 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.

        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.

        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 years ended January 1, 2005 and
December 27, 2003, Trader Joe's, a West Coast based health food supermarket
chain, accounted for 21% and 22% of our net sales, respectively, and Eskimo Pie,
our East Coast frozen dessert distributor, accounted for 11% and 14% of our net
sales, respectively. The loss of a substantial

                                       11

<PAGE>


portion of our sales to either of these customers would have a material adverse
affect on our company.

        Dependence on Key Suppliers. During the years ended January 1, 2005 and
December 27, 2003, we purchased approximately 64% and 66% of our finished goods,
respectively, from Kemps Foods and we purchased 15% and 13% of our finished
goods, respectively, from Franklin Foods. Although we believe that there will be
no problem in continuing to obtain these finished goods from these companies or
alternative sources in the future, any disruption in supply could have a
material adverse affect on our company.

        Product Liability Suits, if Brought, Could Have a Material Adverse
Effect on Our Business. 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.

        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 and in the last month, or even weeks, of a quarter. 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 73), Chief Executive
Officer and Steven Kass (age 53), 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 47% of the outstanding shares, permitting him as a practical
matter 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
2004 approximately 10% 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

                                       12

<PAGE>


timely manner, our business, operating results and financial condition will be
adversely affected. International operations are subject to inherent risks,
including the following:

          o    the impact of  possible  recessionary  environments  in  multiple
               foreign markets;

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

          o    unexpected changes in regulatory requirements;

          o    potentially adverse tax consequences; and

          o    political and economic instability.

        We May Be Adversely Affected by Fluctuations in Currency Exchange Rates.
Since our foreign transactions are always in U.S. dollars, we do not currently
engage 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.

        Compliance with Changing Regulation of Corporate Governance and Public
Disclosure May Result in Additional Expenses. Changing laws, regulations and
standards relating to corporate governance and public disclosure, including the
Sarbanes-Oxley Act of 2002, new Securities and Exchange Commission regulations
and AMEX Stock Market rules, are creating uncertainty for companies such as
ours. We are committed to maintaining high standards of corporate governance and
public disclosure. As a result, we intend to invest such resources as necessary
to comply with evolving standards, and this investment may result in increased
general and administrative expenses and a diversion of management time and
attention from revenue-generating activities to compliance activities, which
could harm our operating results and business prospects.

        The Implementation of SFAS No. 123R, which will Require Us to Record
Compensation Expense in Connection with Equity Share Based Compensation as of
the First Quarter of 2006, may Reduce Our Profitability. On December 16, 2004,
the Financial Accounting Standards Board (FASB) issued Statement No. 123
(revised 2004), Share-Based Payment ("SFAS No. 123R"), which is a revision of
SFAS No. 123. Generally, the approach in SFAS 123(R) is similar to the approach
described in Statement 123. However, SFAS No. 123 permitted, but not required,
share-based payments to employees to be recognized based on their fair values
while SFAS No. 123(R) requires, as of the third quarter of 2005, all share-based
payments to employees to be recognized based on their fair values. SFAS No. 123R
also revises, clarifies and expands guidance in several areas, including
measuring fair value, classifying an award as equity or as a liability and
attributing compensation cost to reporting periods. The adoption of SFAS No.
123R may have a significant effect on our results of operations in the future,
depending on whether stock options are issued in 2006 that meet the relevant
criteria. In addition, such

                                       13

<PAGE>


adoption could also limit our ability to use stock options as an incentive and
retention tool, which could, in turn, hurt our ability to recruit employees and
retain existing employees.

        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.

Item 2. Description of Property.

        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. In 2003 we completed renovations to our product development laboratory
and offices in the facility. We currently have no plans to enter into a
long-term lease agreement for the facility. Our rent expense was $74,000 in
2004. Our management believes that the Cranford facility will continue to
satisfy our space requirements for the foreseeable future.

Item 3. Legal Proceedings.

        Our company was served with a complaint by a candy manufacturer in June
2003. The plaintiff alleged that we breached our obligations in connection with
the sale of certain candy bars manufactured by the candy manufacturer that were
to be distributed by us within the United States. The candy manufacturer is
seeking damages in the amount of $308,798, plus interest. We have
counterclaimed, asserting among other things, that the candy manufacturer
breached its obligations to us and caused us damages. Discovery has been
completed and non-binding mediation and arbitration hearings have been held. A
motion for summary judgment by the plaintiff was denied by the trial judge on
February 18, 2005. The trial for this matter began on April 4, 2005. While we
believe that the complaint is without merit, there can be no assurance that a
legal finding favorable to us will be entered. We intend to continue to
vigorously defend this action and oppose all relief sought by the plaintiff
while seeking compensation on our counterclaims.

        We were notified at the end of 2004 that a former employee intended to
bring an action against our company alleging discrimination and unlawful
termination. During the first quarter of 2005 the parties resolved this matter
through mediation. The expense associated with this settlement has been provided
for in our income statement for fiscal 2004.

        We believe that we have made adequate provision for these matters in the
fiscal 2004 financial statements.

                                       14

<PAGE>




Item 4. Submission of Matters to a Vote of Security Holders.

        No matters were submitted to a vote of security holders during the final
quarter of the 2004 fiscal year.

                                    PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

        Our common stock has traded on the American Stock Exchange under the
symbol TOF since October 29, 1985. The following table sets forth the high and
low sales prices as reported on the American Stock Exchange for the two most
recent fiscal years:

Quarter Ended                         High              Low
-------------                       ---------         -----
March 29, 2003...............         $2.65            $2.45
June 28, 2003................          2.88             2.35
September 27, 2003...........          3.32             2.80
December 27, 2003............          3.18             2.75
March 27, 2004...............          4.10             2.91
June 26, 2004................          4.27             3.00
September 25, 2004...........          3.08             2.84
January 1, 2005..............          3.54             2.95

        As of April 1, 2005, there were approximately 670 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 2,904 shareholders. We have not
paid and have no present intention of paying cash dividends on our common stock
in the foreseeable future.

Item 6. 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

                                       15

<PAGE>


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 and
allowances that occur in the ordinary course of business, when the sales occur.

        Freight Out Expense. We record freight out expense as a selling expense.
Freight billed to customers is included in revenues. During fiscal 2004, our
freight out expense was $1,172,000 as compared to $1,042,000 in fiscal 2003.

        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 allowance for doubtful accounts. 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 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.

        Valuation Allowance for Deferred Tax Assets. 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.


                                       16


<PAGE>

Results of Operations

Fifty-Three  Weeks Ended  January 1, 2005 Compared  with  Fifty-Two  Weeks Ended
December 27, 2003

        Net sales for the fifty-three weeks ended January 1, 2005 (fiscal 2004)
were $19,188,000, an increase of $174,000, or 1%, from the sales level realized
for the fifty-two weeks ended December 27, 2003 (fiscal 2003). Based on recent
sales trends, we expect continued sales increases in our frozen dessert and food
product lines and in most customer categories.

        We were able to report increased sales in fiscal 2004 due to record
sales of approximately $5.3 million in the fourth quarter of fiscal 2004
compared to sales of approximately $4.5 million in the fourth quarter of fiscal
2003. The improved fourth quarter results, which include one additional week in
fiscal year 2004 as compared to fiscal year 2003, offset reductions in sales in
the first and third quarters of fiscal 2004. In the first quarter of fiscal
2004, sales were affected because our shipping schedule was adversely affected
due to the loss of shipping days when the extended New Year's holiday was
celebrated by our trucking companies and because we discontinued certain
unprofitable products and product lines starting at the end 2003 and no longer
had the benefit of their sales in fiscal 2004. In addition, sales to several of
our major customers were significantly lower than in the corresponding period in
fiscal 2003. 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. In the
third quarter of fiscal 2004, our sales were negatively impacted due to the loss
of business in Florida and the southeastern United States in August and
September as a result of problems caused by the severe weather those areas
experienced and attendant transportation problems.

        Our gross profit in fiscal 2004 increased by $214,000, or 3%, due
primarily to the slight sales increase and improved product mix, while our gross
profit percentage increased slightly to 34% in fiscal 2004 as compared to 33% in
fiscal 2003. Our gross profit percentage continues to be adversely affected by
start-up manufacturing costs associated with our new products and the increased
cost of allowances associated with the introduction of those new products.
Additionally, 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 and the
general economic situation here in the United States. In order to improve the
gross profit percentage, we initiated a series of price increases that was
completed by the end of 2004. Although we anticipate that our gross profit will
increase due to increased unit sales and higher sales prices in 2005, our gross
profit percentage will not improve materially due to manufacturing start-up
costs at our new frozen dessert facility and promotional allowances associated
with the planned introduction of new products. We also expect ingredient costs
for certain key items to continue at their current high levels.

        Selling expenses increased $133,000, or 6%, to $2,352,000 for fiscal
2004 from $2,192,000 in fiscal 2003. This increase was caused primarily by a
$130,000 increase in freight expense and a $33,000 increase in commissions,
which was partially offset by a decline in trade show expense of $18,000. The
increased freight expense, a variable expense, is attributable to the increase
in sales and the increased cost of fuel. We do not anticipate a significant
reduction in the cost of shipping in the foreseeable future as world oil prices
are at record highs and show no

                                       17

<PAGE>


signs of abating in the foreseeable future. The increase in commissions expense
is directly related to the increase in sales. We anticipate that with the
exception of freight and commission expenses, which are variable to sales, all
other selling expenses in 2005 should remain relatively consistent with our
expenses in 2004.

        Marketing expenses decreased by $80,000 in fiscal 2004 to $521,000 as
compared to fiscal 2003. This decrease is primarily attributable to a $26,000
decrease in expenses for artwork and plates, a $25,000 decrease in public
relations expense and an $25,000 decrease in promotion expenses. We expect
marketing expenses to remain consistent with fiscal 2004 expenses or increase
modestly in fiscal 2005.

        Product development expenses decreased to $477,000 in fiscal 2004 as
compared to $552,000 in fiscal 2003. The decrease was due mainly to a decrease
in payroll costs of approximately $61,000. Our management expects that product
development costs will increase slightly in fiscal 2005.

        General and administrative expenses were $2,159,000 for fiscal 2004 as
compared with $1,838,000 for fiscal 2003, an increase of $321,000 or 18%. The
$321,000 increase was due primarily to an increase of $393,000 in provisions for
legal matters and professional fees which was partially offset by slight
declines in payroll, travel and entertainment and building maintenance and
repairs. We anticipate that increases in professional fees and outside services,
which include legal and accounting fees, will continue in fiscal 2005 primarily
associated with the costs required for us to become compliant with the
provisions of The Sarbanes-Oxley Act.

        Operating income decreased by $85,000 to $1,046,000 in fiscal 2004 as
compared with $1,131,000 in fiscal 2003 as a result of increases in operating
expenses due primarily to the expected costs of the litigation we are currently
involved in.

        Interest income was $5,000 for the fifty-three week period ended January
1, 2005 as compared with interest income of $15,000 for the fifty-two week
period ended December 27, 2003. The decrease in interest income was primarily
attributable to the lower interest rates available for investment of our funds.
We anticipate that despite a consistent level of cash balances our interest
income will not improve given the current level of interest rates.

        Income taxes for the current fiscal period were $444,000, or 42% of
taxable income, compared to $760,000, or 66% of taxable income, in fiscal 2003.
The higher effective rate in fiscal 2003 was due to an adjustment in the
deferred tax asset account as a result of a revaluation of taxable reserves and
allowances. We believe that our effective tax rate will continue to approximate
our historical tax rate of 40-42% during fiscal 2005.

Compliance with Section 404 of Sarbanes-Oxley Act

        Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (the Act),
beginning with our Annual Report on Form 10-KSB for the fiscal year ending
December 30, 2006, we will be required to furnish a report by our management on
our internal control over financial reporting. This report will contain, among
other matters, an assessment of the effectiveness of our internal control over
financial reporting as of the end of our fiscal year, including a statement as
to whether or not our internal control over financial reporting is effective.
This assessment must

                                       18

<PAGE>


include disclosure of any material weaknesses in our internal control over
financial reporting identified by management. If we identify one or more
material weaknesses in our internal control over financial reporting, we will be
unable to assert our internal control over financial reporting is effective.
This report will also contain a statement that our independent registered public
accountants have issued an attestation report on management's assessment of such
internal controls and a conclusion on the operating effectiveness of those
controls.

        Management acknowledges its responsibility for internal controls over
financial reporting and seeks to continually improve those controls. In order to
achieve compliance with Section 404 of the Act within the prescribed period, we
will shortly commence performing the system and process documentation and
evaluation needed to comply with Section 404, which is both costly and
challenging.

Liquidity and Capital Resources

        At January 1, 2005, our working capital was $3,618,000, a decrease of
$420,000 from December 27, 2003. Our current and quick acid test ratios, both
measures of liquidity, were 3.0 and 2.1, respectively, at January 1, 2005
compared to 4.8 and 3.8 at December 27, 2003. At January 1, 2005, accounts
receivable increased by $106,000 to $1,614,000 from December 27, 2003,
reflecting the increase in sales. The average number of days needed to collect
our receivables in fiscal 2004 was 30 days as compared to 28 days in fiscal
2003. At January 1, 2005, inventories increased to $792,000 compared to $774,000
in 2003. At January 1, 2005, accounts payable and accrued expenses increased by
$220,000, reflecting the additional accrual for the expected costs of
litigation.

        Our cash flow from operations generated $675,000 in fiscal 2004 as
compared to generating $1,061,000 in fiscal 2003. We used cash flows of
$1,033,000 and $890,000 in financing activities during fiscal years 2004 and
2003, respectively.

        On September 18, 2000, our Board of Directors authorized the repurchase
of 250,000 shares of our common stock at prevailing market prices. During fiscal
2000 we repurchased 122,400 shares of common stock at a total cost of $247,000.
On May 21, 2001, our Board of Directors authorized the repurchase of up to an
additional 250,000 shares of common stock. During 2001 we purchased an
additional 204,000 shares for $436,000. During 2002 we purchased an additional
299,600 shares at a cost of $767,000.

        On January 2, 2003, our Board of Directors authorized the repurchase of
an additional 250,000 shares of common stock. From December 29, 2002 through
December 27, 2003, we purchased an additional 234,700 shares at a cost of
$599,000, bringing our total purchases through December 27, 2003 to 860,700
shares at a total cost of $2,049,000 or $2.38 per share. On March 23, 2004, our
Board of Directors ratified certain purchases and brought the aggregate number
of shares subject to our repurchase program up to 1,250,000 shares. During the
period December 28, 2003 through January 1, 2005, we purchased an additional
258,000 shares at a cost of $887,000, bringing cumulative totals to date to
1,118,700 shares at a total cost of $3,419,000 or $3.05 per share. There were no
stock purchases from January 2, 2005 to April 1, 2005.

                                       19

<PAGE>

        In view of the strong financial condition of the company, our Board of
Directors on October 17, 2003 authorized us to enter into a transaction with
David Mintz whereby Mr. Mintz surrendered 300,000 of his options in
consideration of the payment to him of $358,000, an amount equal to the
difference of 75% of the closing market price of our common stock on that date
($3.45) less the exercise price of such options. In October 2003, $358,000 was
paid to Mr. Mintz.

        On January 12, 2004, our Board of Directors authorized us to enter into
a transaction with David Mintz whereby Mr. Mintz surrendered an additional
300,000 of his options, which represented the balance of the options held by
him, in consideration of the payment to him of $324,000, an amount equal to the
difference of 75% of the average closing price of our common stock on the nine
days of trading from December 29, 2003 through January 9, 2004 ($3.00) less the
exercise price of such options. In January 2004, $324,000 was paid to Mr. Mintz.

        We do not have any material capital commitments and contemplate no
material capital expenditures in the foreseeable future. We do not currently
have nor anticipate our obtaining a credit facility with any financial
institution. We believe that we will be able to fund our operations during 2005
from current resources.

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 invest our excess cash, should there be any, in highly rated money
market funds which are subject to changes in short-term interest rates.


Off-Balance Sheet Arrangements

        None.

                                       20

<PAGE>

Item 7. Financial Statements.

                          Index to Financial Statements


Report of Independent Registered Public Accounting Firm...................F-1

Independent Auditors' Report..............................................F-2

Financial Statements:

Balance Sheets.............................................................F-3

Statements of Income.......................................................F-4

Statements of Changes in Stockholders' Equity..............................F-5

Statements of Cash Flows...................................................F-6

Notes to Financial Statements..............................................F-7

                                       21

<PAGE>



                [Letterhead of Amper, Politziner & Mattia, P.C.]


                              REPORT OF INDEPENDENT
                        REGISTERED PUBLIC ACCOUNTING FIRM



The Board of Directors and Stockholders
Tofutti Brands Inc.

We have  audited the  accompanying  balance  sheet of Tofutti  Brands Inc. as of
January 1, 2005, and the related statements of income,  changes in stockholders'
equity and cash flows for the  fifty-three  weeks 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 audit.

We conducted our audit in  accordance  with  standards of the Public  Accounting
Oversight  Board  (United  States).  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit 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  audit  provides  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 1, 2005,  and the results of its  operations  and its cash flows for the
fifty-three  weeks then  ended,  in  conformity  with  United  States  generally
accepted accounting principles.



                                            AMPER, POLITZINER & MATTIA, P.C.
                                            /s/Amper, Politziner & Mattia, P.C.


Edison, New Jersey
March 30, 2005

                                       F-1

<PAGE>


                          INDEPENDENT AUDITORS' REPORT


The Board of Directors and Stockholders
Tofutti Brands Inc.

        We have audited the accompanying balance sheet of Tofutti Brands Inc. as
of December 27, 2003, and the related statements of income, changes in
stockholders' equity and cash flows for the fifty-two weeks 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 audit.

        We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit 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 audit provides 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 December 27, 2003, and the results of its operations and its cash flows
for the fifty-two weeks then ended, in conformity with generally accepted
accounting principles in the United States of America.



                                            /s/Wiss & Company, LLP



Livingston, New Jersey
March 18, 2004


                                      F-2


<PAGE>







                               TOFUTTI BRANDS INC.
                                 BALANCE SHEETS
               (000's omitted except for share and per share data)
<TABLE>
<CAPTION>
                                                                January 1,        December 27,
                                                                   2005               2003
                                                                ----------        ------------
<S>                                                              <C>                <C>
Assets
Current assets:
     Cash and equivalents                                        $2,199             $2,557
     Accounts receivable, net of allowance for doubtful
        accounts of $219 and $149, respectively                   1,614              1,508
     Inventories                                                    792                774
     Prepaid expenses                                                14                 --
     Prepaid income taxes                                            --                 55
     Deferred income taxes                                          593                220
                                                                  -----              -----
                Total current assets                              5,212              5,114

Fixed assets (net of accumulated amortization of
        $10 and $5)                                                  38                 43
Other assets                                                         16                 16
                                                                 ------             ------
                                                                 $5,266             $5,173
                                                                 ======             ======

Liabilities and Stockholders' Equity
Current liabilities:
     Accounts payable and accrued expenses                         $691               $471
     Accrued officers' compensation                                 500                500
     Income taxes payable                                           403                105
                                                                  -----              -----
                Total current liabilities                         1,594              1,076
                                                                  -----              -----

Commitment and Contingencies
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 5,636,867 shares at  January 1,
         2005 and 5,709,867 shares at December 27, 2003              56                 57
     Additional paid-in capital                                     162              1,193
     Retained earnings                                            3,454              2,847
                                                                  -----              -----
                Total stockholders' equity                        3,672              4,097
                                                                 ------             ------
                Total liabilities and stockholders' equity       $5,266             $5,173
                                                                 ======             ======

</TABLE>


                 See accompanying notes to financial statements.

                                       F-3


<PAGE>



                               TOFUTTI BRANDS INC.
                              STATEMENTS OF INCOME
                    (000's omitted except for per share data)

                                      Fifty-three weeks         Fifty-two weeks
                                            ended                    ended
                                        January 1, 2005        December 27, 2003
                                        ---------------        -----------------
Net sales                                  $19,188                 $19,014
Cost of sales                               12,660                  12,700
                                            ------                  ------
          Gross profit                       6,528                   6,314
                                             -----                   -----

Operating expenses:
  Selling                                    2,325                   2,192
  Marketing                                    521                     601
  Product development costs                    477                     552
  General and administrative                 2,159                   1,838
                                             -----                   -----
                                             5,482                   5,183
                                             -----                   -----

Operating income                             1,046                   1,131

Interest income                                  5                      15
                                             -----                   -----
Income before income taxes                   1,051                   1,146

Income taxes                                   444                     760
                                               ---                     ---

Net income                                    $607                    $386
                                              ====                    ====

Weighted average common shares
  outstanding:
   Basic                                     5,685                   5,744
                                             =====                   =====
   Diluted                                   6,263                   6,556
                                             =====                   =====

Net income per share:
   Basic                                     $0.11                   $0.07
                                             =====                   =====
   Diluted                                   $0.10                   $0.06
                                             =====                   =====


                 See accompanying notes to financial statements.

                                       F-4


<PAGE>

                               TOFUTTI BRANDS INC.
                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                      (000's omitted except for share data)


<TABLE>
<CAPTION>

                                           Common Stock             Treasury Stock       Additional                      Total
                                    --------------------------     ----------------       Paid-In       Retained      Stockholders'
                                        Shares         Amount      Shares     Amount       Capital       Earnings         Equity
                                        ------         ------      ------     ------     -----------    ---------     -------------
<S>                                    <C>              <C>       <C>         <C>        <C>              <C>             <C>
Balances, December 28, 2002            5,878,567        $ 59            --    $  --      $  2,081         $2,461          $4,601
Issuance of common stock upon
exercise of stock options                 66,000           1            --       --            66             --              67
Purchase of treasury stock              (234,700)         --       234,000     (599)           --             --            (599)
Retirement of treasury stock                  --          (3)     (234,000)     599          (596)            --              --
Purchase of options from officer              --          --            --       --          (358)            --            (358)
Net income for period ended
December 27, 2003                             --          --            --       --            --            386             386
                                       ---------        ----      --------    -----      ---------        ------          ------
Balances, December 27, 2003            5,709,867          57            --       --         1,193          2,847           4,097
Issuance of common stock upon
exercise of stock options                185,000           2            --       --           190             --             192
Purchase of treasury stock              (258,000)         --       258,000     (900)           --             --            (900)
Retirement of treasury stock                  --          (3)     (258,000)     900          (897)            --              --
Purchase of options from officer              --          --            --       --          (324)            --            (324)
Net income for period ended
January 1, 2005                               --          --            --       --            --            607             607
                                       ---------        ----      --------    -----      ---------        ------          ------
Balances, January 1, 2005              5,636,867        $ 56            --    $  --      $    162         $3,454          $3,672
                                       =========        ====      ========    =====      =========        ======          ======

</TABLE>

                 See accompanying notes to financial statements.

                                       F-5

<PAGE>
                               TOFUTTI BRANDS INC.
                            STATEMENTS OF CASH FLOWS
                                 (000's omitted)

<TABLE>
<CAPTION>
                                                                   Fifty-three        Fifty-two
                                                                   weeks ended       weeks ended
                                                                    January 1,       December 27,
                                                                       2005              2003
                                                                   -----------       ------------
<S>                                                                 <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                       $  607             $  386
   Adjustments to reconcile net income to net
    cash flows provided by (used in)operating activities:
   Amortization                                                          5                  5
   Provision for bad debts                                              70                 65
   Deferred taxes                                                     (373)               265
   Change in assets and liabilities:
       Accounts receivable                                            (176)              (204)
       Inventories                                                     (18)                40
       Prepaid expenses and income taxes                                41                (40)
       Accounts payable and accrued expenses                           220                521
       Income taxes payable                                            298                 23
                                                                       ---              -----
   Net cash flows provided by operating activities                     674              1,061
                                                                       ---              -----

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from sale of insurance policy                               --                200
   Purchase of fixed assets                                             --                (48)
                                                                        --                ---
   Net cash flows provided by investing activities                      --                152
                                                                        --                ---

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from exercise of  stock options                            192                 67
   Purchase of treasury stock                                         (900)              (599)
   Purchase of options from officer                                   (324)              (358)
                                                                      -----              -----
   Net cash flows used in financing activities                      (1,032)              (890)
                                                                    -------              -----

NET CHANGE IN CASH AND EQUIVALENTS                                    (358)               323

CASH AND EQUIVALENTS, AT BEGINNING OF PERIOD                         2,557              2,234
                                                                     -----              -----
CASH AND EQUIVALENTS, AT END OF PERIOD                              $2,199             $2,557
                                                                    ======             ======

SUPPLEMENTAL CASH FLOW INFORMATION:
   Income taxes paid                                                  $488               $525
                                                                      ====               ====
</TABLE>

                 See accompanying notes to financial statements.




                                       F-6


<PAGE>


                               TOFUTTI BRANDS INC.
                          NOTES TO FINANCIAL STATEMENTS
               (000's omitted 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 ended on January 1, 2005, a fifty-three week fiscal year, and December 27
2003, a fifty-two week fiscal year.

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, litigation accruals, 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.

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 $100,000. 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 1, 2005 is limited.

During the years ended January 1, 2005 and December 27, 2003, the Company
derived approximately 90% and 92% of its net sales domestically. The remaining
sales in both periods were exports to foreign countries. The Company had sales
to two customers representing 21% and 11% of net sales during 2004 and 22% and
14% of net sales during 2003. The accounts receivable balance of one customer
represented approximately 11% of total accounts receivable at January 1, 2005.

                                      F-7

<PAGE>

                               TOFUTTI BRANDS INC.
                          NOTES TO FINANCIAL STATEMENTS
               (000's omitted except for share and per share data)

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 allowance for doubtful accounts. The Company does not accrue
interest on accounts receivable past due.

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 and product
demand. The Company periodically reviews inventories and establishes reserves
for obsolescence based on forecasted sales and market trend. Management feels
that risk beyond the established reserve is limited.

The Company purchased approximately 64% and 66% of its raw products from one
supplier and 15% and 13% of its finished goods from another supplier during the
periods ended January 1, 2005 and December 27, 2005, 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.

Net Income Per Share and Stock Based Compensation - 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.

                                      F-8

<PAGE>
                               TOFUTTI BRANDS INC.
                          NOTES TO FINANCIAL STATEMENTS
               (000's omitted except for share and per share data)

                                                     Year Ended      Year Ended
                                                     January 1,     December 27,
                                                        2005            2003
                                                     ----------     ------------
Net Income, numerator, basic and diluted
   computation                                       $  607           $  386

Weighted average shares - denominator basic
   computation
                                                      5,685            5,744
Effect of dilutive stock options                        578              812
                                                        ---              ---
Weighted average shares, as adjusted - denominator
   diluted computation                                6,263            6,556
                                                      -----            -----
Net Income per share:
Basic                                                 $0.11            $0.07
                                                      =====            =====
Diluted                                               $0.10            $0.06
                                                      =====            =====


The Company accounts for stock-based compensation using the intrinsic value
method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," and related Interpretations. Accordingly,
compensation cost for stock options is measured as the excess, if any, of the
quoted market price at the date of the grant over the amount an employee must
pay to acquire the stock. Because the Company grants options at a price equal to
the market price of the stock at the date of grant, no compensation expense is
recorded. In accordance with SFAS No. 123 (revised 2004) and SFAS No. 148,
"Share Based Payment," the Company will begin to recognize compensation expense
for stock options in the first quarter of 2006, if any such options are issued
and meet the specified criteria.

As required by Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation" (SFAS No. 123), the Company computes pro forma net
income and earnings per share as if the fair value method had been applied. The
pro forma net income and net income per share for the periods ended January 1,
2005 and December 27, 2003 would be substantially the same as the reported net
income for those periods.

There were no stock options granted in fiscal 2003.

Fair Value of Financial Instruments - SFAS No. 107, "Disclosures about Fair
Value of Financial Instruments," defines the fair value of a financial
instrument as the amount at which the instrument could be exchanged in a current
transaction between willing parties.

Cash and equivalents, accounts receivable, and accounts payable payable as of
January 1, 2005 and December 27, 2003 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 are included in selling expense and amounted to $1,172 and $1,042
during the years ended January 1, 2005 and December 27, 2003, respectively.

                                      F-9

<PAGE>
                               TOFUTTI BRANDS INC.
                          NOTES TO FINANCIAL STATEMENTS
               (000's omitted except for share and per share data)


Advertising Costs - The Company expenses advertising costs as they are incurred.
Advertising expenses amounted to $50 and $24 during the years ended January 1,
2005 and December 27, 2003, respectively.

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

Reclassifications - Certain amounts previously recorded have been reclassified
to conform to the current year presentation.

Recent Accounting Pronouncements - On December 16, 2004, the Financial
Accounting Standards Board ("FASB") issued SFAS No. 123(R), "Share-Based
Payment," which is a revision of SFAS No. 123 and supersedes APB Opinion 25.
SFAS No. 123(R) requires all share-based payments to employees, including grants
of employee stock options, to be valued at fair value on the date of grant, and
to be expensed over the applicable vesting period. Pro forma disclosure of the
income statement effects of share-based payments is no longer an alternative.
SFAS No. 123(R) is effective for all stock-based awards granted on or after July
1, 2005. In addition, companies must also recognize compensation expense related
to any awards that are not fully vested as of the effective date. Compensation
expense for the unvested awards will be measured based on the fair value of the
awards previously calculated in developing the pro forma disclosures in
accordance with the provisions of SFAS No. 123.

The Company plans to adopt SFAS No. 123(R) in the first quarter of fiscal 2006.
This change in accounting is not expected to materially impact our financial
position. We have not completed the calculation of this impact. However, because
we currently account for share-based payments to our employees using the
intrinsic value method, our results of operations have not included the
recognition of compensation expense for the issuance of stock option awards.

On December 16, 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
Assets," which is an amendment to APB Opinion No. 29. It states that the
exchanges of nonmonetary assets should be measured based on the fair value of
the assets exchanged. Further, FSAS No. 153 eliminates the narrow exception for
nonmonetary exchanges of similar productive assets and replaces it with a
broader exception for exchanges of nonmonetary assets that do not have
"commercial substance." FSAS No. 153 is effective for financial statements for
fiscal years beginning after June 15, 2005. Earlier application is permitted for
nonmonetary asset exchanges incurred during fiscal years beginning after the
date that this statement is issued. Management does not believe the adoption of
this Statement will not have an effect on the financial statements.

On November 24, 2004, FASB issued SFAS No. 151, "Inventory Costs," which is an
amendment to ARB No. 43, Chapter 4. It clarifies the accounting for abnormal
amounts of idle facility expense, freight, handling costs, and wasted material
(spoilage). The FASB states that these costs should be expensed as incurred and
not included in overhead. Further, SFAS No. 151 requires that allocation of
fixed production overheads to conversion costs should be based on normal
capacity of the production facilities. SFAS No. 151 is effective for inventory
costs

                                      F-10

<PAGE>
                               TOFUTTI BRANDS INC.
                          NOTES TO FINANCIAL STATEMENTS
               (000's omitted except for share and per share data)

incurred during fiscal years beginning after June 15, 2005. Management does not
believe the adoption of this Statement will not have an effect on the financial
statements.

We adopted FIN 46R in the period ended January 1, 2005, and it had no impact as
the Company has no variable interest entity interests.

NOTE 2: INVENTORIES

Inventories consist of the following:

                                               January 1,        December 27,
                                                  2005               2003
                                               ----------        ------------
Finished products                                 $550               $532
Raw materials and packaging                        242                242
                                                   ---                ---
                                                  $792               $774
                                                  ====               ====


NOTE 3: STOCK OPTIONS

The 1993 Stock Option Plan (the "1993 Plan") provides for the granting 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 granting of non-qualified
stock options to key employees and consultants. The 1993 Plan is currently
administered by the Board of Directors, which determines the terms and
conditions of the options granted under the 1993 Plan, including the exercise
price, number of shares subject to the option and the exercisability thereof.
Options generally vest and are exercisable in cumulative installments of 33-1/3%
or 50% per year commencing one year after the date of grant and annually
thereafter, with contract lives of generally five or ten years from the date of
grant. A total of 2,900,000 shares have been reserved for issuance under the
1993 Plan. At January 1, 2005, 825,000 shares were subject to outstanding
options and no additional shares are available for future grant.

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 "nonstatutory 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 following is a summary of stock option activity from December 28, 2002 to
January 1, 2005:

                                      F-11

<PAGE>

                               TOFUTTI BRANDS INC.
                          NOTES TO FINANCIAL STATEMENTS
               (000's omitted except for share and per share data)

<TABLE>
<CAPTION>
                                           INCENTIVE OPTIONS           NON-QUALIFIED OPTIONS
                                      ---------------------------     ----------------------
                                                        Weighted                  Weighted
                                                        Average                   Average
                                                        Exercise                  Exercise
                                        Shares          Price ($)       Shares    Price ($)
                                      ----------        ---------      --------   ---------
<S>                                   <C>                 <C>          <C>            <C>
Outstanding and exercisable at
December 28, 2002                     1,572,000           1.016        116,000        1.199
Granted in 2003                              --            --               --         --
Exercised in 2003                       (29,000)          1.00         (37,000)       1.04
Purchased and retired in 2003          (300,000)          1.17              --         --
Expired in 2003                          12,000           1.06              --         --
                                         ------           ----         -------        ----
Outstanding and exercisable at
December 27, 2003                     1,231,000           0.96          79,000        1.27
                                      =========           ====          ======        ====
Granted in 2004                              --            --           20,000        3.15
Exercised in 2004                      (126,000)          1.03         (59,000)       1.06
Purchased and retired in 2004          (300,000)          1.17              --          --
                                       ---------          ----         -------   ----   --
Outstanding at January 1, 2005          805,000           0.90          40,000        2.53
                                        =======           ====          ======        ====
Exercisable at January 1, 2005          805,000                         26,667
                                        =======                         ======
</TABLE>


There were no stock options granted during 2003. In 2004, 20,000 non-qualified
stock options were granted with a fair value at grant date of $3.04, using the
following assumptions: Dividend rate - 0%, expected life - 5, risk free interest
- 3.89% and volatility - 26%.

The following table summarizes information about stock options outstanding at
January 1, 2005:

<TABLE>
<CAPTION>
                                          Weighted Average       Weighted
        Range of             Number       Remaining Life         Average             Number
     Exercise Prices      Outstanding       (in years)       Exercise Price       Exercisable
     ---------------      -----------       ----------       --------------       -----------
     <S>                    <C>                <C>                <C>               <C>
     $0.6875--0.9375        395,000            2.3                $0.73             395,000
         $1.0625            410,000            4.3                $1.0625           410,000
          $1.90              20,000            2.4                $1.90              20,000
          $3.15              20,000            4.6                $3.15               6,667
                             ------                                                   -----
                            845,000                                                 831,667
                            =======                                                 =======
</TABLE>

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 lease

                                      F-12

<PAGE>

                               TOFUTTI BRANDS INC.
                          NOTES TO FINANCIAL STATEMENTS
               (000's omitted except for share and per share data)

agreement expired on July 1, 1999, but it continues to occupy the premises under
the terms of that agreement, subject to a six month notification period for the
landlord or for the Company with respect to any changes. The Company currently
has no plans to enter into a long-term lease agreement for the facility. Rent
expense was $74 in 2004 and 2003. 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: CONTINGENCIES

The Company was served with a complaint by a candy manufacturer in June 2003.
The plaintiff alleged that the company breached its obligations in connection
with the sale of certain candy bars manufactured by the candy manufacturer that
were to be distributed by it within the United States. The candy manufacturer is
seeking damages in the amount of $308,798, plus interest. The Company has
counterclaimed, asserting among other things, that the candy manufacturer
breached its obligations to it and caused it damages. Discovery has been
completed and non-binding mediation and arbitration hearings have been held. A
motion for summary judgment by the plaintiff was denied by the trial judge on
February 18, 2005. The matter is scheduled to be heard at trial on April 4,
2005. While the Company believes that the complaint is without merit, there can
be no assurance that a legal finding favorable to it will be entered. The
Company intends to continue to vigorously defend this action and oppose all
relief sought by the plaintiff while seeking compensation on its counterclaims.

The Company was notified at the end of 2004 that a former employee intended to
bring an action against it alleging discrimination and unlawful termination.
During the first quarter of 2005 the parties resolved this matter through
mediation.

The expense associated with the above matters has been provided for in the
Company's income statement for fiscal 2004.

NOTE 6: INCOME TAXES

The components of income tax expense (benefit) for the years ended January 1,
2005 and December 27, 2003 are as follows:

                                           Jan. 1, 2005      Dec. 27, 2003
                                           ------------      -------------
        Current:
                 Federal                       $624               $386
                 State                          192                109
                                                ---                ---
                                                816                495
                                                ---                ---
        Deferred:
                 Federal                       (316)               206
                 State                          (56)                59
                                               ----                 --
                                               (372)               265
                                               ----                ---
        Total income tax expense               $444               $760
                                               ====               ====



                                      F-13

<PAGE>

                               TOFUTTI BRANDS INC.
                          NOTES TO FINANCIAL STATEMENTS
               (000's omitted except for share and per share data)

Deferred tax asset at January 1, 2005 and December 27, 2003 follows:

                                                  Jan. 1,           Dec. 27,
                                                   2005               2003
                                                   ----               ----
        Allowance for doubtful accounts             $87               $75
        Inventory                                   154               145
        Accruals and reserves                       352                --
                                                    ---              ----
        Deferred tax asset                         $593              $220
                                                   ====              ====


A reconciliation between the expected federal tax expense at the statutory tax
rate of 34% and the Company's actual tax expense for the years ended January 1,
2005 and December 27, 2003 follows:

                                                            Jan. 1,     Dec. 27,
                                                             2005         2003
                                                             ----         ----
        Income tax expense computed at federal statutory
           rate                                              $357         $390
        Permanent and other items                              13          317
        State income taxes, net of federal income tax
           benefit                                             74           69
                                                               --           --
                                                             $444         $760
                                                             ====         ====

NOTE 7: RELATED PARTY TRANSACTIONS

The Board of Directors on October 17, 2003 authorized a transaction with David
Mintz whereby Mr. Mintz surrendered 300,000 of his options in consideration of
the payment to him of $358, an amount equal to the difference of 75% of the
closing market price of its common stock on that date ($3.45) less the exercise
price of such options. In October 2003, $358 was paid to Mr. Mintz.

On January 12, 2004, the Board of Directors authorized a transaction with David
Mintz whereby Mr. Mintz surrendered an additional 300,000 of his options, which
represented the balance of the options held by him, in consideration of the
payment to him of $324, an amount equal to the difference of 75% of the average
closing price of the Company's common stock on the nine days of trading from
December 29, 2003 through January 9, 2004 ($3.00) less the exercise price of
such options. In January 2004, $324 was paid to Mr. Mintz.

The law firm of Snitow Kanfer Holtzer & Millus, LLP, of which a director of the
Company, Franklyn Snitow, is a partner, represents the Company in its legal
action against the candy manufacturer. During the fiscal years ended January 1,
2005 and December 27, 2003, the Company paid $47 and $9, respectively in legal
fees to Snitow Kanfer Holtzer & Millus, LLP. At January 1, 2005, the balance
owed the firm was $19.

                                      F-14

<PAGE>

                               TOFUTTI BRANDS INC.
                          NOTES TO FINANCIAL STATEMENTS
               (000's omitted except for share and per share data)

On October 17, 1994, the Company's Board of Directors adopted a resolution
wherein the Corporation was authorized to purchase a $1,000 split dollar
insurance plan on the life of the Company's Chairman and President, David Mintz.
The purpose of this transaction was to provide the Mintz estate with funds
sufficient to pay any estate taxes levied upon the transfer of Mr. Mintz's
Tofutti stock, which would otherwise might have necessitated a sale of the
stock. This might have had the negative effect of significantly decreasing the
market price of the stock to the detriment of other shareholders. Upon the death
of the family member or termination of the policy prior to death, the Company
was guaranteed to receive a complete refund of all its premiums paid plus
interest at 4%. As of December 28, 2002, the $200 balance receivable under this
contract was completely secured by the guaranteed cash surrender value of the
policy and the assets in a related party trust created specifically to generate
payment to the Company in the event of termination of the policy prior to the
death of the insured.

Under The Sarbanes-Oxley Act of 2002, public companies are prohibited from
extending credit to any director or executive officer, or from renewing or
extending existing loans. As a result, public companies have taken the view that
they may not make annual premium payments on split dollar insurance plans, since
they may be deemed to be prohibited loans. In 2003, the Company ceased making
any payments under the policy, subject to future guidance as to the legality of
such payments. On December 24, 2003, Mr. Mintz purchased the insurance policy
from the Company for $208, which represented all previous premiums paid by the
Company plus interest of 4% per annum.

                                      F-15



<PAGE>





Item  8.  Changes In and Disagreements With Accountants on Accounting and
          Financial Disclosure.

        Effective January 14, 2005, Wiss & Company, LLP, or Wiss, notified us
that it would not stand for reappointment as our independent accountants. Wiss
did not qualify their audit opinion for either of the past two fiscal years as
to uncertainty, audit scope or accounting principles. There were no
disagreements with Wiss on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure in any of the two
most recent fiscal years or any later interim period. None of the kinds of
events listed in (A) or (B) of Item 304(a)(1)(iv) of Regulation S-B occurred
during either of the Registrant's two most recent fiscal years or any later
interim period. Wiss was asked to provide a letter addressed to the SEC stating
that they agreed with the above statements. This letter was filed as Exhibit 16
to our Form8-K/A bearing a cover date of January 14, 2005 on January 25, 2005 in
accordance with the requirements of Item 304 of Regulation S-B. On January 18,
2005, our Audit Committee appointed Amper, Politziner & Mattia, P.C. as our
independent registered public accountants and on January 25, 2005, Amper,
Politziner & Mattia, P.C. accepted the appointment as our independent registered
public accountants.

Item 8A. Controls and Procedures.

        Our management, including our chief executive officer and chief
financial officer, evaluated the effectiveness of our disclosure controls and
procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the
period covered by this annual report on Form 10-KSB. Based upon that evaluation,
our chief executive officer and chief financial officer have concluded that, as
of such date, our disclosure controls and procedures were effective to ensure
that information required to be disclosed by our company in reports that we file
under the Securities Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's rules and forms and that such information was made known
to them by others within the company, as appropriate to allow timely decisions
regarding required disclosure.

        There were no changes to our internal control over financial reporting
that occurred during the period covered by this annual report on Form 10-KSB
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.

        All internal control systems no matter how well designed, have inherent
limitations. Therefore, even those systems determined to be effective may not
prevent or detect misstatements and can provide only reasonable assurance with
respect to financial statement preparation and presentation. 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.

Compliance with Section 404 of Sarbanes-Oxley Act

        Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (the Act),
beginning with our Annual Report on Form 10-KSB for the fiscal year ending
December 30, 2006, we will be


                                       22

<PAGE>


required to furnish a report by our management on our internal control over
financial reporting. This report will contain, among other matters, an
assessment of the effectiveness of our internal control over financial reporting
as of the end of our fiscal year, including a statement as to whether or not our
internal control over financial reporting is effective. This assessment must
include disclosure of any material weaknesses in our internal control over
financial reporting identified by management. If we identify one or more
material weaknesses in our internal control over financial reporting, we will be
unable to assert our internal control over financial reporting is effective.
This report will also contain a statement that our independent registered public
accountants have issued an attestation report on management's assessment of such
internal controls and a conclusion on the operating effectiveness of those
controls.

        Management acknowledges its responsibility for internal controls over
financial reporting and seeks to continually improve those controls. In order to
achieve compliance with Section 404 of the Act within the prescribed period, we
will shortly commence performing the system and process documentation and
evaluation needed to comply with Section 404, which is both costly and
challenging.


Item 8B. Other Information.

        None.

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act.

        Our directors and executive officers are:

Name                             Age      Position
----                             ---      --------
David Mintz.................      73      Chairman of the Board of Directors,
                                          Chief Executive Officer
Steven Kass.................      53      Chief Financial Officer, Secretary and
                                          Treasurer
Joseph Fischer..............      65      Director
Aaron Forem ................      50      Director
Reuben Rapoport.............      75      Director
Franklyn Snitow.............      58      Director
Jeremy Wiesen...............      63      Director

        David Mintz has been our Chairman of the Board and Chief Executive
Officer since August 1981.

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

                                       23

<PAGE>




        Joseph Fischer was appointed to our Board of Directors in March 2004. 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.

        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.

        Reuben Rapoport, our former Director of Product Development who retired
in April 2003, has been a director since July 1983.

        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.

        Jeremy Wiesen has been a director since 1999. He has been an Associate
Professor of Business Law and Accounting at the Leonard N. Stern School of
Business, New York University since 1972. He was a member of the board of
directors of Mego Mortgage Corporation from November 1996 through March 1998 and
was previously a director and officer of our company from June 1983 through
January 1986.

        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 five 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.

                                       24

<PAGE>


Audit Committee Financial Expert

        The Audit Committee of the Board of Directors is comprised of Mr.
Fischer, who serves as chairman, Mr. Forem and Mr. Wiesen. 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 Joseph Fischer 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 2004 all persons subject to these reporting requirements filed the
required reports on a timely basis, except that Mr. Snitow was late filing two
Form 4s and Mr. Rapoport was late filing one Form 4.

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 10. Executive Compensation.

        The following table sets forth information concerning the total
compensation during the last three fiscal years for our executive officers whose
total salary in fiscal 2004 totaled $100,000 or more:

                                       25

<PAGE>


                           SUMMARY COMPENSATION TABLE
                           --------------------------

                                                   Annual           Long-Term
                                                Compensation       Compensation
                                                ------------       ------------
                                                                    Securities
                                                                    Underlying
Name and Principal Position            Year      Salary ($)        Options (#)
---------------------------            ----      ----------        -----------
David Mintz,                           2004      $ 656,000(1)           --
Chief Executive Officer                2003        603,000(2)           --
  and Chairman of the Board            2002        500,000(2)           --
Steven Kass,                           2004       $277,000(1)           --
Chief Financial Officer,               2003        275,000(2)           --
  Secretary and Treasurer              2002        250,000(3)           --
---------------

(1)     Includes bonuses of $350,000 and $150,000 for Messrs. Mintz and Kass,
        respectively, accrued at year end and paid on or about April 1, 2005.

(2)     Includes bonuses of $350,000 and $150,000 for Messrs. Mintz and Kass,
        respectively, accrued at year-end and paid on or about January 16, 2004.

(3)     Includes bonuses of $250,000 and $125,000 for Messrs. Mintz and Kass,
        respectively, accrued at year-end and paid on or about March 28, 2003.

        The aggregate value of all other perquisites and other personal benefits
furnished in each of the last three years to each of these executive officers
was less than 10% of each officer's salary for such year.

        On January 27, 2005, our Board of Directors, based on the recommendation
of the Compensation Committee, adopted a resolution increasing David Mintz's
salary by $150,000 to $450,000 effective as of January 2, 2005.

        On October 17, 1994, our Board of Directors adopted a resolution wherein
we were authorized to purchase a $1,000,000 split dollar insurance plan on the
life of a member of David Mintz's family. Mr. Mintz is our Chairman and Chief
Executive Officer. The purpose of this transaction was to provide the Mintz
estate with funds sufficient to pay any estate taxes levied upon the transfer of
Mr. Mintz's Tofutti stock, which would have otherwise necessitated a sale of the
stock. The sale of such stock might have a negative effect of significantly
decreasing the market price of the stock to the detriment of other shareholders.
Upon the death of the family member or termination of the policy prior to death,
we are guaranteed to receive a complete refund of all the premiums paid plus
interest at 4%. As of December 28, 2002, the balance receivable under this
contract of $200,000 was completely secured by the guaranteed cash surrender
value of the policy and the assets in a related party trust created specifically
to generate payment to us in the event of termination of the policy prior to the
death of the insured.

        Under the Sarbanes-Oxley Act of 2002, public companies are prohibited
from extending credit to any director or executive officer, or from renewing or
extending existing loans. As a result, public companies have taken the view that
they may not be able to make annual premium

                                       26



<PAGE>


payments on split dollar insurance plans, since they may be deemed to be
prohibited loans. In 2003, we ceased making any payments under the policy
subject to future guidance as to the legality of such payments. Such guidance
was not forthcoming and in December 2003, Mr. Mintz purchased the insurance
policy from us for $208,000, which represented all previous premiums paid by our
company plus interest of 4% per annum.

        Mr. Snitow did not earn compensation for his service as a director in
the last three years. In 2002, 2003 and 2004, Mr. Wiesen earned $2,500, $1,000
and $0, respectively, for his services as director. In 2002, Mr. Forem donated
his $1,000 fee for services as director to charity and did not receive any
earned compensation in 2003 or 2004. Mr. Fischer has not received any earned
compensation for his service as a director since his appointment in March 2004.

STOCK OPTIONS

        Neither of the officers named above in the Summary Compensation Table
received a grant of stock options nor exercised stock options in our last fiscal
year.

        The following table provides information concerning stock options held
in 2004 by each of the executive officers named above in the Summary
Compensation Table.


<TABLE>
<CAPTION>
                                                              AGGREGATED OPTION EXERCISES IN LAST
                                                         FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
                                  -----------------------------------------------------------------------------------------
                                                                   Number of Shares Underlying       Value of Unexercised
                                  Shares                              Unexercised Options at         in the Money Options
                                  Acquired on      Value                    FY-End (#)                  at FY-End ($)
Name                              Exercise (#)     Realized ($)     Exercisable/Unexercisable     Exercisable/Unexercisable
----                              ------------     ------------     -------------------------     -------------------------
<S>                                     <C>             <C>                 <C>                            <C>
David Mintz,                            --              $ --                    --                              --
Chief Executive Officer
  and Chairman of the
  Board
Steven Kass,                            --                --                795,000(E)                     1,904,000(E)(1)
  Chief Financial Officer,
  Secretary and Treasurer
</TABLE>
-----------------------
 (E)  Exercisable options
 (1) Calculated by subtracting option exercise price from year-end market price
     of $3.29 per share.



Item 11.  Security  Ownership of Certain  Beneficial  Owners and  Management and
          Related Stockholder Matters.

        The following table sets forth as of April 1, 2005 certain information
regarding the ownership of our common stock, $.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:

                                       27

<PAGE>




                                     Amount of
                                     Beneficial         Percent of
Name                                Ownership(1)         Class(2)
----                                ------------        --------
David Mintz................         2,630,440             46.7%
Steven Kass................           795,000(3)          12.4%
Financial & Investment
Management Group, Ltd. ....           380,350(4)           6.8%
John V. Winfield...........           304,300(5)           5.4%
Reuben Rapoport............            90,000              1.6 %
Jeremy Wiesen..............            41,900              *
Franklyn Snitow............            24,000              *
Aaron Forem................            20,000(6)           *
Joseph Fischer.............                --              *
All Executive Officers and
Directors as a group (7 persons)    3,621,040(7)          56.1%

--------------

*       Less than 1%.

        The address of Messrs. Mintz, Kass, Fischer, Rapoport and Wiesen 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.

(1)  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
     April 1, 2005 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.
(2)  Based on 5,636,867 shares issued and outstanding as of April 1, 2005.
(3)  Issuable upon the exercise of 795,000 currently exercisable stock options.
(4)  Based on a Schedule  13 G filed by the  Financial &  Investment  Management
     Group, Ltd., or the Group, filed February 1, 2005. The address of the Group
     is 111 Cass Street, Traverse City, MI 49684.
(5)  Based on a Schedule 13 D filed by Mr.Winfield  filed December 23, 2004. The
     address of Mr. Winfield is 820 Moraga Drive, Los Angeles, CA 90049.
(6)  Includes 20,000 shares issuable upon the exercise of currently  exercisable
     stock options.
(7)  Includes 815,000 shares issuable upon the exercise of currently exercisable
     stock options.

                                       28

<PAGE>




Item 12. Certain Relationships and Related Transactions.

        In view of the strong financial condition of our company, the Board of
Directors on October 17, 2003 authorized a transaction with David Mintz whereby
Mr. Mintz surrendered 300,000 of his options in consideration of the payment to
him of $358,000, an amount equal to the difference of 75% of the closing market
price of our common stock on that date ($3.45) less the exercise price of such
options. In October 2003, $358,000 was paid to Mr. Mintz.

        On October 17, 1994, our Board of Directors adopted a resolution wherein
we were authorized to purchase a $1 million plan on the life of our Chairman and
President. The purpose of this transaction was to provide the Mintz estate with
funds sufficient to pay any estate taxes levied upon the transfer of Mr. Mintz's
Tofutti stock, which would otherwise have necessitated a sale of the stock which
might have had the negative effect of significantly decreasing the market price
of the stock to the detriment of other shareholders. Upon the death of the
family member or termination of the policy prior to death, we were guaranteed to
receive a complete refund of all premiums paid plus interest at 4%. As of
December 28, 2002, the $200,000 balance receivable under this contract was
completely secured by the guaranteed cash surrender value of the policy and the
assets in a related party trust created specifically to generate payment to us
in the event of termination of the policy prior to the death of the insured.

        Under the Sarbanes-Oxley Act of 2002, public companies are prohibited
from extending credit to any director or executive officer, or from renewing or
extending existing loans. As a result, public companies have taken the view that
they may not make annual premium payments on split dollar insurance plans, since
they may be deemed to be prohibited loans. In 2003, we ceased making any
payments under the policy, subject to future guidance as to the legality of such
payments. On December 24, 2003, we sold the policy to Mr. Mintz for $208,000,
which represented all previous premiums paid by us plus interest of 4% per
annum.

        On January 12, 2004, our Board of Directors authorized us to enter into
a transaction with David Mintz whereby Mr. Mintz surrendered an additional
300,000 of his options, which represented the balance of the options held by
him, in consideration of the payment to him of $324,000, an amount equal to the
difference of 75% of the average closing price of our common stock on the nine
days of trading from December 29, 2003 through January 9, 2004 ($3.00) less the
exercise price of such options. In January 2004, $324,000 was paid to Mr. Mintz.

        The law firm of Snitow Kanfer Holtzer & Millus, LLP, of which one of
directors, Franklyn Snitow, is a partner, represents us in our legal action
against the candy manufacturer. During the fiscal years ended January 1, 2005
and December 27, 2003, we paid $47,000 and $9,000, respectively, in legal fees
to Snitow Kanfer Holtzer & Millus, LLP.

Item 13. Exhibits.

3.1*       Certificate of Incorporation.

3.1.1**    March 1986 Amendment to Certificate of Incorporation.

                                       29

<PAGE>


3.1.2      June 1993 Amendment to Certificate of Incorporation.

3.2*       By-laws of Registrant.

4.1***     Copy of the Registrant's Amended 1993 Stock Option Plan.

4.2****    Tofutti Brands Inc. 2004 Non-Employee Directors' Stock Option Plan.

23.1       Consent of Amper, Politziner & Mattia, P.C.

23.2       Consent of WISS & COMPANY, LLP.

31.1       Certification of 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.

-----------

*       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.

**      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.

***     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.

****    Filed as Appendix B to the Registrant's Schedule 14A filed May 10, 2004
        and hereby incorporated by reference thereto.

Item 14. Principal Accountant 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.

                                       30

<PAGE>



<TABLE>
<CAPTION>
                                                       Year Ended
                                 ------------------------------------------------------
                                         January 1,                  December 27,
                                           2005                         2003
                                 --------------------------   -------------------------

          Services Rendered       Fees          Percentages    Fees         Percentages
       ---------------------     -------        -----------   -------       ------------
       <S>                       <C>               <C>        <C>              <C>
       Audit (1)............     $33,000           100%       $31,000          100%
       Audit-related (2)....          --            --             --            --
       Tax (3)..............          --            --             --            --
       Other................          --            --             --            --
                                 -------           ----       -------          ----
       Total ...............     $33,000           100%       $31,000          100%
                                 =======           ====       =======          ====
</TABLE>
--------------

(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.

(2)     Audit-related fees relate to assurance and associated services that
        traditionally are performed by the independent accountant, including:
        attest services that are not required by statute or regulation;
        accounting consultation and audits in connection with mergers,
        acquisitions and divestitures; employee benefit plans audits; and
        consultation concerning financial accounting and reporting standards.

(3)     Tax fees relate to services performed by the tax division for tax
        compliance, planning, and advice.

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, P.C. 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.


                                       31


<PAGE>





                                   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 7, 2005.

                                            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 7, 2005, 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/Aaron Forem
--------------
Aaron Forem
Director

/s/Reuben Rapport
-----------------
Reuben Rapoport
Director

/s/Franklyn Snitow
------------------
Franklyn Snitow
Director

/s/Jeremy Wiesen
----------------
Jeremy Wiesen
Director

/s/Joseph Fischer
-----------------
Joseph Fischer
Director





                                       32

<PAGE>





                                  EXHIBIT INDEX


Exhibit
-------

3.1*             Certificate of Incorporation, as amended through February 1986.
3.1.1**          March 1986 Amendment to Certificate of Incorporation.
3.1.2            June 1993 Amendment to Certificate of Incorporation.
3.2*             By-laws of the Registrant.
4.1***           Copy of the Registrant's Amended 1993 Stock Option Plan.
4.2****          Tofutti Brands Inc. 2004 Non Employee  Directors'  Stock Option
                 Plan.
23.1             Consent of Amper, Politziner & Mattia, P. C.
23.2             Consent of WISS & COMPANY, LLP.
31.1             Certification of 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.

-------------

*       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.

**      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.

***     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.

****    Filed as Appendix B to the Registrant's Schedule 14A filed May 10, 2004
        and hereby incorporated by reference thereto.