SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 28, 1996

                         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 pursuant to Section 12(b) of the Act:

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

Securities registered pursuant to 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: $5,842,000

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 March 11, 1997 was $2,089,000.

As of March 11, 1997, the Registrant had 6,053,567  shares of Common Stock,  par
value $.01, outstanding.

Transitional Small Business Disclosure Format     Yes [ ]   No [x].




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                                     PART I

Item 1.  Description of Business

GENERAL

     Tofutti Brands Inc., a Delaware  corporation  (the "Company") is engaged in
the  development,  production and marketing of TOFUTTI(R) brand non-dairy frozen
desserts and other food products.  TOFUTTI  products are  non-dairy,  soya-based
products  which  contain no  butterfat,  cholesterol  or lactose.  Butterfat and
cholesterol  are perceived by some medical  experts and a significant  number of
consumers as causing health problems. In addition,  some studies have shown that
lactose  intolerance,  the inability to metabolize milk and dairy  products,  is
present to varying degrees in a significant number of people. All dairy products
have  lactose,  or milk  sugar.  Most  human  beings  are born  with a supply of
lactase, an enzyme essential for digesting lactose.  With age, the body's supply
of lactase may diminish, which may cause difficulty in the digestion of lactose.
TOFUTTI  products are 100% milk free yet offer the same texture and  full-bodied
taste as their dairy counterparts. TOFUTTI products are also free of cholesterol
and derive their fat from soy and corn,  both  naturally  lower in saturated fat
than dairy products.

     TOFUTTI  products are an alternative for  dairy-conscious  individuals with
lactose  intolerance or for those  health-oriented  people with a desire to keep
cholesterol  intake in check. The Company's  products enable such individuals to
enjoy products  similar to dairy products  without their downside  health risks.
Although the Company  believes  the absence of lactose and  butterfat in TOFUTTI
products  makes them  attractive  to persons with lactose  intolerance  or heart
disease,  the Company has not  conducted  any studies  regarding the efficacy of
TOFUTTI  products as they relate to lactose  intolerance  and heart  disease and
makes no representation as to the accuracy of studies performed by others.

     Since May 1982,  the Company  has been  engaged in the sale of a liquid mix
for the  processing  of TOFUTTI in  numerous  flavors by soft serve  machines at
retail  locations.  In June 1984,  the  Company  commenced  selling  hard frozen
TOFUTTI.  In 1987,  the Company  introduced a low fat version of Tofutti  called
Lite Lite(R), in both hard frozen and soft serve forms. During 1988, the Company
introduced two soya-based,  non-dairy products,  EGG WATCHERS(R) and BETTER THAN
CREAM CHEESE(R).  SOUR SUPREME(R), a non-dairy sour cream, was introduced at the
end of  1991.  During  1993,  the  Company  introduced  BETTER  THAN  YOGURT(R),
containing non-dairy acidophilus cultures. This product replaced the hard frozen
Lite Lite line and became the low fat  alternative to premium  Tofutti.  In 1993
the Company also introduced  TOFUTTI  FRUTTI(R),  a  cholesterol-free,  fat-free
frozen dessert sweetened only with fruit juice, which is currently being sold in
health  food  stores.  On  November  1, 1993,  the  Company  signed a  licensing
agreement with Papetti's Hygrade Egg Products, Inc. ("Papetti's"), the Company's
then-current EGG WATCHERS  co-packer.  The agreement granted Papetti's exclusive
worldwide manufacturing and distribution rights for TOFUTTI EGG WATCHERS. During
1994, the Company  increased its distribution in the natural health food market.
The



                                       -2-

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Company also saw significant  increases in its TOFUTTI  CUTIE(R)  novelty sales.
During  the  spring of 1995 the  Company  introduced  two new  stick  novelties,
TOFUTTI TEDDY FUDGE  BARS(R),  a low fat fudge bar and TOFUTTI  CHOCOLATE  FUDGE
TREATS,  a sugar-free,  fat-free  chocolate  fudge bar.  During the summer,  the
Company added a Wildberry CUTIE to its mini sandwich novelty line. In early fall
1995, the Company  introduced its new pint sorbet line and introduced  chocolate
enrobed novelty slices,  featuring the TOFUTTI CUTIE PIE, later in the fall. The
Company introduced its non-dairy tofu-filled TOFUTTI TORTELLINI and MINI RAVIOLI
in December  1995.  The Company also changed its BETTER THAN YOGURT product line
to low fat TOFUTTI non-dairy frozen dessert.

     The Company  made  several new product  introductions  in 1996.  During the
year,  the Company  extended its non-dairy  cheese line by  introducing  six new
flavors of BETTER  THAN  CREAM  CHEESE  and three new  flavors of SOUR  SUPREME.
During the summer of 1996,  the Company  introduced  several new frozen  novelty
items,  including cakes and other chocolate  enrobed  novelties.  The Company at
this time also introduced its first non-frozen,  non-refrigerated  product line,
TOFUTTI COOKIES. In December,  the Company introduced a chocolate coated CANNOLI
filled with a non-dairy cheese filling.

     In 1996,  the Company also made a change in its  distribution  arrangements
for the  metropolitan  New York area.  Effective  March 31,  1996,  the  Company
terminated the services of The Haagen-Dazs  Company and appointed the Mattus Ice
Cream Company to be its New York area master distributor.

TOFUTTI PRODUCT LINE

o         Premium  TOFUTTI  non-dairy  frozen  dessert,  available  in prepacked
          pints,  three-gallon  cans and soft serve mix, is sold  nationally  in
          supermarkets,  grocery  stores,  retail  shops  and  restaurants.  The
          Company currently offers seven flavors of premium hard frozen TOFUTTI:
          Chocolate Supreme, Wildberry Supreme, Vanilla, Vanilla Almond Bark(R),
          Vanilla Fudge, Chocolate Cookie Crunch and Better Pecan(R).

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

o        TOFUTTI FRUTTI(R) in pint containers is a non-dairy,  cholesterol-free,
         fat-free frozen dessert sweetened only with fruit juice, with non-dairy
         active  acidophilus  cultures.  Three flavors,  Apricot Mango,  Vanilla
         Apple  Orchard and Three Berry,  are being  distributed  to health food
         stores.




                                       -3-

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o        Cool and  refreshing  TOFUTTI  SORBETS  in pint  containers  offer the
         consumer a natural sorbet dessert and come in six flavors:  Chocolate,
         Strawberry, Orange Peach Mango, Lemon, Coffee and Raspberry Tea.

o        TOFUTTI   CUTIES(R)  are  bite-size  frozen   sandwiches   combining  a
         chocolate,  vanilla or wildberry  filling between two chocolate wafers.
         Half the size of traditional ice cream sandwiches, TOFUTTI CUTIES offer
         consumers a portion controlled treat.

o        TOFUTTI FRUTTI(R) stick novelties have 180 calories per bar and combine
         creamy vanilla TOFUTTI with a tangy sorbet covered in chocolate.

o        TEDDY FUDGE POPS(R) and CHOCOLATE FUDGE TREATS are stick novelties that
         offer the consumer  the same taste as real fudge bars.  The TEDDY FUDGE
         POP has 70 calories and 1 gram of fat per bar,  while  CHOCOLATE  FUDGE
         TREATS have only 30 calories per bar and are fat and sugar free.

o        The TOFUTTI CUTIE PIE is a rich,  premium novelty treat that combines a
         rich vanilla or chocolate center covered with a chocolate coating. They
         are  available in bulk pack for  institutional  sale or retail pack for
         supermarkets.

o        TOFUTTI  DIXIE CUPS offer the consumer a portion  controlled 4 oz. cup
         of TOFUTTI frozen dessert in either Vanilla or Chocolate flavors.

o         TOFUTTI  SUNDAE CUPS offer the diet  conscious  consumer a sugar free,
          fat free dessert with the taste and texture of premium  TOFUTTI.  They
          are  currently  available  in two  flavors:  Vanilla  Fudge Sundae and
          Strawberry Sundae.

o        TOFUTTI  FROZEN  DESSERT  CAKES offer the  Tofutti  consumer an upscale
         non-dairy  frozen  dessert  alternative  to dairy ice cream cakes.  The
         cakes come in various types, CHOCOLATE LOVERS DELIGHT, ROCK N' ROLL and
         the  SPRINKLE  ROLL,  and  sizes.  They  are  currently   available  in
         supermarkets and health food store outlets.

o        TOFUTTI  ITALIAN STYLE  CANNOLI are made using the Company's  non-dairy
         BETTER  THAN CREAM  CHEESE.  They  combine a creamy,  non-dairy  cheese
         filling  with a  chocolate  covered  cannoli  shell.  The  CANNOLI  are
         available in retail and bulk boxes.

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.  The 8 oz. retail packages are available in plain,  French
         onion, herbs and chives, wildberry,  smoked salmon, jalapeno,  cinnamon
         and raisin, ginseng and dill, and garlic and herb. The plain version is
         also available in 30 lb. bulk boxes.




                                       -4-

<PAGE>



o         SOUR  SUPREME(R)  complements  BETTER THAN CREAM  CHEESE in that it is
          similar in taste and texture to traditional sour cream but is milk and
          butterfat-free and contains no cholesterol. The 12 oz. retail packages
          are available in plain, guacamole, salsa and cherries 'n' berries. The
          plain version is also available in 30 lb. bulk boxes.

o         TOFUTTI TORTELLINI and MINI RAVIOLI are bite-sized frozen pasta filled
          with TOFUTTI  BETTER THAN CREAM CHEESE and are sold in 15 oz. bags for
          supermarkets and 10 lb. boxes for institutional  sales. The tortellini
          are available in three  flavors:  cheese,  spinach cheese and meatless
          meat.

o        EGG  WATCHERS(R) is a fat-free  replacement for whole eggs that has the
         taste,  nutrition and versatility of whole eggs without the cholesterol
         and  with 60%  less  calories  and  fat.  EGG  WATCHERS  can be used in
         virtually all recipes that require 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 fig bars. Like all TOFUTTI products,  they
          are completely dairy and cholesterol free.

PRODUCTION

     All of the Company's  products are  manufactured  by co-packers to whom the
Company  supplies  certain key ingredients for the  manufacturing  process.  The
Company's  co-packers  manufacture  and package the  Company's  products and, in
certain  instances,  warehouse such products pending  shipment.  For certain key
product categories,  such as non-dairy frozen dessert and non-dairy cheeses, the
Company has more than one co-packer.  The Company  currently has ten co-packers,
including one in the United Kingdom that  manufactures  the Company's  non-dairy
frozen dessert pints.

     The  Company  does not  have any  written  production  agreements  with its
co-packers  and  does  not  anticipate  that it  would  encounter  any  material
difficulty in obtaining alternative production sources, at a comparable cost, if
one or all of its contract manufacturers decide to terminate their relationships
with the Company.

     In  order  to  protect  its   formulas,   the  Company  has  entered   into
confidentiality   arrangements   with  its  contract   manufacturers  and  their
employees. There can be no assurance that such confidentiality  arrangements can
or will be  maintained,  or that  the  Company's  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  ("KOF-K") of Teaneck,  New Jersey  provides the
Company's   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. The Company believes that its ability to successfully



                                       -5-

<PAGE>



market and distribute  its products is dependent  upon its continued  compliance
with the requirements of rabbinic  certification.  All TOFUTTI products meet the
requirements for certification as kosher-parve.

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, all products marketed by the Company are sold either through
independent  unaffiliated food brokers or distributors and sometimes on a direct
basis to retail  chain  accounts.  Food  brokers  act as agents for the  Company
within designated  territories or for specific accounts and receive commissions,
which average 5% of net sales.

     On April 1,  1993,  the  Company  entered  into an  exclusive  distribution
agreement with  Haagen-Dazs,  a subsidiary of Grand  Metropolitan  Ltd., for the
distribution  of its non-dairy  frozen dessert  products  principally in the New
York metropolitan  area. On February 27, 1996, the Company informed  Haagen-Dazs
that its  services  would be  terminated  effective  March 31, 1996 and that the
Mattus Ice Cream Company would begin  distributing in the  metropolitan New York
area. During 1996, sales to Haagen-Dazs distributors nationwide totaled $141,000
or 2% of sales as compared to  $1,044,000  or 21% of sales in 1995. In September
1993,  Haagen-Dazs  began  distributing the Company's frozen dessert products in
Florida  and in 1994 began  distributing  in  Atlanta,  Phoenix,  Dallas and San
Francisco.  Currently,  the Company  still sells to  Haagen-Dazs  in Florida and
Atlanta. Total sales to Haagen-Dazs and Mattus in the New York metropolitan area
were  $419,000 or 7% of sales in 1996 as compared to $663,000 or 13% of sales in
1995.  The reduction in sales in the  metropolitan  New York area was due to the
fact that in  anticipation of the termination of its agreement with the Company,
Haagen-Dazs made minimal  purchases of product during the first quarter of 1996,
as  compared to the first  quarter of 1995.  Additionally,  the  Company  issued
credits in excess of  $100,000 to  Haagen-Dazs  to settle  returned  product and
trade  allowance  expenses.  The  Company  anticipates  an  improvement  in  its
metropolitan New York area business during 1997.

     During 1996, the Company  expanded its  distribution in the national health
food market, which now includes twenty-two distributors.  Sales to the Company's
health food distributors in 1996 were $2,232,000 or 38% of sales, as compared to
$1,543,000 or 31% of sales in 1995.  In 1996,  the Company had sales of $821,000
or 14% of sales to Trader  Joe's,  a west coast based  health  food  supermarket
chain, as compared to $609,000 or 12% in 1995. Overall, the Company's west coast
sales were  $1,511,000 or 26% of sales in 1996, as compared to $1,237,000 or 25%
in 1995. The Company  continues to have a strong  presence in the kosher market,
with  sales of  $599,000  or 10% of sales in 1996,  as  compared  with  sales of
$496,000 or 10% in 1995. The Company expects the favorable trend in the national
health  food,  west coast and kosher  markets to continue  in 1997.  The Company
currently  sells its frozen desserts in most major markets in the United States,
including Atlanta, Boston, Dallas, Philadelphia, Cleveland, Cincinnati, Detroit,
Denver, Phoenix, Los Angeles, San Francisco and Seattle.




                                       -6-

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     During 1996, the Company shipped TOFUTTI non-dairy products to distributors
in Canada, England,  Belgium, France, Germany, the Netherlands,  Sweden, Panama,
Martinique,  Mexico,  Israel and Australia.  Sales to foreign  countries totaled
$621,000 or 11% of sales in 1996,  versus  $661,000 or 13% of sales in 1995. The
decrease  in  export  sales was due  primarily  to a  reduction  in sales to the
Company's Israeli distributor,  which was partially offset by increased sales to
other foreign  customers.  The Company's  future export sales could be adversely
affected by an increase in the value of the U.S.  dollar,  which could  increase
the Company's local currency price for its products.

RESEARCH AND DEVELOPMENT

     During the last two years, David Mintz, Chief Executive Officer, and Reuben
Rapoport,  Director of Product  Development,  have devoted  substantial time and
effort to the development of new products and the reformulation of the Company's
current  products.  In 1996 and 1995,  the  Company's  research and  development
expenses were $206,000 and $176,000,  respectively.  Such amounts do not include
any portion of Mr. Mintz's salary.

COMPETITION

     TOFUTTI  frozen  desserts  compete  with all forms of ice  cream  products,
yogurt-based desserts and other soya-based frozen desserts. The Company believes
it has the most  complete  line of non-dairy  frozen  dessert  products and is a
leader in this market.  Other  soya-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 the Company competes are  substantially
larger and have significantly  greater resources than the Company. The Company's
other products also face substantial competition,  from both non-dairy and dairy
competitive products marketed by companies with significantly  greater resources
than the Company.

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 the Company
seeks to market does not conform to an applicable  standard,  special permission
to market such a product is required.

     The Company's United States product labels are subject to regulation by the
United States Food and Drug  Administration  ("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.  The Company's labels,  ingredients
and manufacturing processes are subject to inspection by the FDA.



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In 1994,  federal laws relating to food product labeling were amended to require
food product companies to make numerous changes in their product  labeling.  The
Company believes that it is 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
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.  The Company has
applied for and received a wholesale frozen desserts manufacturer's license from
the New York  Department  of  Agriculture  and  Markets.  This  license does not
authorize the Company to manufacture its frozen dessert products  directly.  The
license is presently  valid only to the extent that the  Company's  products are
manufactured at its present contract  production  facilities in New Jersey,  New
York,  Pennsylvania,  Vermont  and Maine.  Manufacturing  at any other  facility
would,  to the extent that the Company's  products are  distributed in New York,
require separate approval by the New York Department of Agriculture and Markets.
Other states have similar rules requiring  pre-clearance  or notification of any
change in a manufacturing  location. The Company's Cranford, New Jersey facility
is  subject  to  inspection  by the New  Jersey-Kosher  Enforcement  Bureau  and
Environmental Health Services.

     The  Company  believes  it  and  its  distributors  and  co-packers  are in
compliance in all material respects with governmental  regulations regarding its
current products and has obtained the material governmental  permits,  licenses,
qualifications  and  approvals  required  for  its  operations.   The  Company's
compliance with Federal,  state and local  environmental laws has not materially
affected  it  either  economically  or in the  manner in which it  conducts  its
business.  However, there can be no assurance that the Company, its distributors
and  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
the Company's products to consumers.

TRADEMARKS AND PATENTS

     The Company has registered its trademark,  TOFUTTI(R), and other trademarks
for  its  frozen   desserts  and  other   products  in  the  United  States  and
approximately 35 foreign  countries.  The Company believes its trademarks are an
important means of establishing consumer recognition for its products.




                                       -8-

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     Although  the  Company   believes  that  its  formulas  and  processes  are
proprietary,  the Company has not sought patent  protection for such technology.
Instead,  the Company is relying on the complexity of its  technology,  on trade
secrecy laws, and on confidentiality  agreements.  The Company believes that its
technology has been independently developed and does not infringe the patents of
others.

EMPLOYEES

     On December  28,  1996,  the Company  employed  seven people on a full-time
basis, compared with eight people as of December 30, 1995. The Company considers
its relations with its employees to be good.

Item 2.  Description of Properties

     The  Company's  facilities  are located in a modern  one-story  facility in
Cranford,  New Jersey.  The 6,200  square  foot  facility  houses the  Company's
administrative  offices,  a warehouse,  walk-in freezer and refrigerator,  and a
product development laboratory and test kitchen. On January 3, 1994, the Company
signed a  five-year  lease  extension  which  expires  July 1, 1999.  Management
believes that the Cranford facility will continue to satisfy the Company's space
requirements for the foreseeable future.

Item 3.  Legal Proceedings

     The Company is not a party to any material litigation.

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

     None.

                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

     The Company's  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
-------------                                 ----             ---

April 1, 1995........................         1               13/16
July 1, 1995.........................           7/8            9/16
September 30, 1995...................         1-1/2            5/8




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<PAGE>


 
Quarter Ended                                 High             Low
-------------                                 ----             ---

December 30, 1995....................          15/16           9/16

March 30, 1996.......................         1                9/16
June 29, 1996........................          15/16           5/8
September 28, 1996...................           3/4            5/8
December 28, 1996....................           3/4            9/16

     As of March 11, 1997, there were  approximately  1,141 holders of record of
the  Company's  Common  Stock.  The  Company  has not  paid  and has no  present
intention  of paying  cash  dividends  on its  Common  Stock in the  foreseeable
future.

Item 6.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

     This report contains forward-looking  statements which are subject to risks
and   uncertainties.   Actual   results   could  differ   materially   from  the
forward-looking   statements  in  this  report.  Factors  that  could  cause  or
contribute to such differences  include, but are not limited to, those discussed
in  "Description  of  Business,"  as well as those  discussed  elsewhere in this
report. The following discussion and analysis should be read in conjunction with
the Company's financial  statements and notes thereto included elsewhere in this
report.

Fifty-two Weeks Ended December 28, 1996 Compared with Fifty-two Weeks Ended
December 30, 1995

     Net sales for the fifty-two weeks ended December 28, 1996 were  $5,842,000,
an increase of $819,000 from the sales level  realized for the  fifty-two  weeks
ended December 30, 1995. In the 1996 period, sales of hard pack TOFUTTI and food
product sales  increased by $449,000 and $390,000,  respectively.  The hard pack
sales  increase was  attributable  to an increase in novelty  sales of $749,000,
which was offset by a decline in pint sales of  $316,000.  The  Company's  gross
profit for the current year  increased  by $123,000  due  primarily to the sales
increase,  while its gross profit percentage  decreased to 36% from 40% in 1995.
The decline in the Company's gross profit  percentage was due to the increase in
frozen  novelty and food product sales and the decline in pint sales.  The gross
profit  percentage  on novelties  and food  products is less than on pints.  The
gross  profit  in  1996  was  also  adversely  affected  by the  start-up  costs
associated with the Company's new frozen dessert and non-dairy cheese products.

     Based on its recent sales  trend,  the Company  believes  that its revenues
will  improve in 1997.  The Company  expects  continued  sales  increases in its
frozen dessert and food product lines and in most customer categories.



                                      -10-

<PAGE>



     Selling  expenses  increased to $870,000 for the current fiscal period from
$848,000 for the comparable  1995 period.  The primary cause of the increase was
increased  warehouse and freight expenses.  The increase in warehouse expense is
attributable  to the increase in  inventory.  The increased  freight  expense is
attributable  to an increase in shipments to the  mid-western and western United
States.  Marketing and sales  promotion  expenses  decreased in 1996 to $230,000
from  $276,000 in 1995.  This  decrease  was due  principally  to the  Company's
reduction in trade magazine and newspaper advertising.

     Research and development expenses increased in 1996 to $206,000 as compared
to $176,000 in 1995. The increase in research and  development  expenses was due
to increased costs  associated with new product  development and the start-up of
new  co-packing  plants  to make  those  products.  General  and  administrative
expenses  were  $716,000 for the current  period  compared with $661,000 for the
comparable  period in 1995. The increase of $55,000 was due in part to increased
telephone,  building  maintenance,  professional  fees,  and business  insurance
expenses.

     Interest  expense was $12,000 for each of the fifty-two  week periods ended
December 28, 1996 and December 30, 1995.

     As a result of  reductions  in the  valuation  allowance  on  deferred  tax
assets,  the Company recorded income tax benefits of $45,000 and $19,000 in 1996
and 1995, respectively.

Liquidity and Capital Resources

     At December  28, 1996,  the  Company's  working  capital was  $715,000,  an
increase of $53,000 from  December 30, 1995.  At the end of the  fifty-two  week
period,  accounts  receivable  decreased  by $29,000  from  December  30,  1995,
principally  reflecting  the similar level of sales in December 1996 as compared
to December 1995.  Inventories increased by $155,000,  reflecting the additional
finished  goods  inventory  for  the  Company's  new  products.  Deferred  taxes
increased  $47,000 as a result of a  reduction  in the  valuation  allowance  on
deferred tax assets. Accounts payable increased to $504,000 from $364,000, while
accrued expenses decreased to $115,000 from $186,000 in 1995.

     The Company does not have any material capital commitments and contemplates
no material expenditures in the foreseeable future. As a result of the Company's
inability  to secure  additional  financing  or equity  capital,  it has not had
sufficient funds to fully implement the marketing of its new products.  This has
hindered  the  Company in its  efforts to  increase  the sales of its  products.
Although  the Company was able to fund its  operations  in 1996 from its current
resources,  any  substantial  increase in its operations may require  additional
working  capital.  Although the Company has had  discussions and intends to have
future ones with  interested  parties  concerning  additional  financing for the
Company,  no assurance can be given that such working  capital will be available
if required.  Management  believes that if its  operations  continue in a manner
consistent  with  its  results  for  1996,  it will  have  sufficient  financial
resources to continue its operations throughout the coming year.





                                      -11-

<PAGE>



Item 7.  Financial Statements


                          Index to Financial Statements


    Independent Auditors' Report....................................F-1

    Financial Statements:

         Balance Sheets
            December 28, 1996 and December 30, 1995.................F-2

         Statements of Operations and Accumulated Deficit
            Fifty-two weeks ended
            December 28, 1996 and December 30, 1995.................F-3

         Statements of Cash Flows
            Fifty-two weeks ended
            December 28, 1996 and December 30, 1995.................F-4

         Notes to Financial Statements..............................F-5







                                      -12-

<PAGE>



                          Independent Auditors' Report





The Board of Directors
Tofutti Brands Inc.:

We have audited the  accompanying  balance  sheets of Tofutti  Brands Inc. as of
December  28,  1996  and  December  30,  1995,  and the  related  statements  of
operations  and  accumulated  deficit,  and cash  flows for the  fifty-two  week
periods  ended  December  28,  1996  and  December  30,  1995.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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 audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Tofutti  Brands Inc. as of
December 28, 1996 and December 30, 1995 and the results of their  operations and
their cash flows for the  fifty-two  week  periods  ended  December 28, 1996 and
December 30, 1995, in conformity with generally accepted accounting principles.

                                             /s/KPMG Peat Marwick LLP


New York, New York
March 17, 1997



                                       F-1

<PAGE>



                               TOFUTTI BRANDS INC.
                                 BALANCE SHEETS
               (000's omitted except for share and per share data)

<TABLE>
<CAPTION>
                                                                            December 28,            December 30,
                                                                               1996                    1995
                                                                           ------------            ------------
<S>                                                                          <C>                     <C>
Assets

Current Assets:
     Cash                                                                    $   11                      12
     Accounts receivable (net of reserves of $295 in
       1996 and $242 in 1995) (Note 2)                                          977                   1,006
     Inventories (Note 3)                                                       351                     196
     Prepaid expense                                                             10                      11
                                                                             ------                   -----
                Total current assets                                          1,349                   1,225

Fixed assets (net of accumulated depreciation) (Note 4)                          --                      --

Deferred taxes (Note 10)                                                        311                     264
Other assets (Note 5)                                                            76                      56
                                                                             ------                  ------
                Total assets                                                 $1,736                   1,545
                                                                             ======                  ======

Liabilities and Stockholders' Equity

Current liabilities:
     Legal settlement payable - current portion (Note 6)                         15                      13
     Accounts payable                                                           504                     364
     Accrued expenses (Note 7)                                                  115                     186
                                                                             ------                  ------
                  Total current liabilities                                     634                     563

Legal settlement payable (Note 6)                                                66                      81
                                                                             ------                  ------
                  Total liabilities                                             700                     644

Stockholders' equity (Note 8):
     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 6,053,567 shares at 12/28/96 and
       at 12/30/95                                                               61                      61

     Paid-in capital                                                          3,503                   3,503
     Accumulated deficit                                                     (2,528)                 (2,663)
                                                                             ------                  ------
                  Total stockholders' equity                                  1,036                     901
                                                                             ------                  ------

Commitments (Note 9)                                                             --                      --

                 Total liabilities and stockholders' equity                  $1,736                   1,545
                                                                             ======                  ======

</TABLE>


     The accompanying notes are an integral part of these financial statements.



                                       F-2

<PAGE>



                               TOFUTTI BRANDS INC.
                STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
                    (000's omitted except for per share data)

<TABLE>
<CAPTION>
                                                             Fifty-two weeks          Fifty-two weeks
                                                                  ended                    ended
                                                            December 28, 1996        December 30, 1995
                                                            -----------------        -----------------
<S>                                                               <C>                     <C>    
Net sales                                                         $5,842                   5,023
Cost of sales                                                      3,718                   3,022
                                                                   -----                   -----
                  Gross profit                                     2,124                   2,001
                                                                  ------                   -----

Operating expenses:
 Selling                                                             870                     848
 Marketing and sales promotion                                       230                     276
 Research and development                                            206                     176
 General and administrative                                          716                     661
                                                                   -----                   -----
                                                                   2,022                   1,961
                                                                  ------                   -----

                  Operating income                                   102                      40

Interest expense                                                      12                      12
                                                                   -----                   -----
                  Income before tax benefit                           90                      28

Income tax benefit (Note 10)                                          45                      19
                                                                  ------                  ------

Net income                                                           135                      47

Accumulated deficit, beginning of year                            (2,663)                 (2,710)
                                                                  ------                  ------

Accumulated deficit, end of year                                  (2,528)                 (2,663)
                                                                  ======                  ======

Net income per share                                               $ .02                     .01
                                                                  ======                  ======

Weighted average number of common shares
         outstanding                                               6,054                   6,071
                                                                  ======                  ======

</TABLE>



   The accompanying notes are an integral part of these financial statements.



                                       F-3

<PAGE>



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

<TABLE>
<CAPTION>
                                                                      Fifty-two                 Fifty-two
                                                                     weeks ended               weeks ended
                                                                     December 28,              December 30,
                                                                        1996                      1995
                                                                     ------------              ------------
<S>                                                                   <C>                         <C>  
Cash flows from operating activities:
   Net income                                                         $  135                        47
   Net adjustments to reconcile net income to net
    cash provided by operating activities:
   Deferred taxes                                                        (47)                      (20)
   Provision for bad debts                                                62                       100
   Change in assets and liabilities:
    (Increase) in accounts receivable                                    (33)                      (37)
    (Increase) in inventories                                           (155)                      (70)
    Decrease (increase) in prepaid expense                                 1                        (1)
    (Increase) decrease in other assets                                  (20)                       26
    Increase (decrease) in accounts payable                              140                      (110)
    (Decrease) increase in accrued expenses                              (71)                      124
                                                                      ------                    ------

   Net cash provided by operating activities                              12                         7
                                                                      ------                    ------

Cash flows from financing activities:
   Repayment of legal settlement payable                                 (13)                      (12)
   Issuance of common stock                                              --                         10
                                                                      ------                    ------

   Net cash (used in) financing activities                               (13)                       (2)
                                                                      ------                    ------
   Net (decrease) increase in cash                                        (1)                        5

Cash at beginning of period                                               12                         7
                                                                      ------                    ------
Cash at end of period                                                 $   11                        12
                                                                      ======                    ======

Supplemental  disclosures  of cash flow  information:  
   Cash paid during the year for:
    Interest                                                          $   12                        12
                                                                      ======                    ======
    Income taxes                                                           2                         1
                                                                      ======                    ======

</TABLE>



   The accompanying notes are an integral part of these financial statements.



                                       F-4

<PAGE>


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


(1)  Summary of Significant Accounting Policies

Description of Business

Tofutti Brands Inc. (the  "Company") is engaged in the  development,  production
and marketing of non-dairy frozen desserts and other food products.

Revenue Recognition

The  Company  recognizes  revenue  when goods are  shipped  from its  production
facilities or outside warehouses.

Common Stock

Net income per share of common stock is based upon the weighted  average  number
of  common  shares  outstanding  in  each  year.   Dilution  from  common  stock
equivalents amounts to less than 3%.

In October 1995,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Statement  123,   "Accounting  for  Stock-Based   Compensation,"  which  allowed
companies,  beginning in 1996, to either  retain APB Opinion 25 for  recognizing
expense for stock-based compensation,  or to adopt a new accounting method based
on  estimated  fair value.  The Company has decided to continue to follow APB 25
and describe the impact of using an estimated fair value approach on a pro forma
basis in footnote disclosure.  Since the Company did not issue any stock options
in 1996 or 1995, such pro forma disclosure was not required.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined by the
first-in, first-out method.

Fixed Assets

Fixed  assets  are  carried  at  cost.   Depreciation   is  computed  using  the
straight-line method. When assets are retired or otherwise disposed of, the cost
and related  accumulated  depreciation  are removed from the  accounts,  and any
resulting  gain or loss is  recognized  in income  for the  period.  The cost of
maintenance and repairs is charged to income as incurred;  significant  renewals
and betterments are capitalized.





                                       F-5

<PAGE>


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

Income Taxes

Income taxes are accounted for under the asset and  liability  method.  Deferred
tax assets  and  liabilities  are  recognized  for the  future tax  consequences
attributable to differences  between the financial statement carrying amounts of
existing  assets and  liabilities  and their  respective tax bases and operating
loss and tax credit  carryforwards.  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.

Fair Value of Financial Instruments

FASB Statement 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,  accounts  receivable,   accounts  payable,  accrued  expenses  and  legal
settlement  payable as of December  28, 1996 and December 30, 1995 are stated at
their carrying values.  The carrying  amounts  approximate fair value because of
the  short-term  maturity of those  instruments  or because the  interest  rates
approximate market rates of interest.

Use of Estimates

The  preparation  of the  financial  statements  in  conformity  with  generally
accepted  accounting  principles  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. Actual results could differ from those estimates.

(2)  Accounts Receivable

The Company accounts for its bad debts using the reserve method. The reserve for
bad debts consists of the following:


                                       Fifty-two weeks         Fifty-two weeks
                                           ended                   ended
                                        December 28,            December 30,
                                            1996                    1995
                                       --------------          ---------------
Beginning balance                          $ 242                   $ 171
Additions charged to expense                  62                     100
Less: Write off                                9                      29
                                          ------                  ------
                                           $ 295                   $ 242
                                           =====                   =====




                                      F-6

<PAGE>


(3)  Inventories

Inventories consist of:

                                          December 28,            December 30,
                                             1996                    1995
                                             ----                    ----
Finished products                           $ 262                   $ 108
Raw materials and packaging                    89                      88
                                           ------                 -------
                                            $ 351                   $ 196
                                            =====                   =====


(4)  Fixed Assets

Fixed assets consist of the following:


                                   December 28,       December 30,     Useful
                                       1996               1995         Lives
                                      ------             ------        -----
Machinery and equipment                $ 30                30           5 yr
Leasehold improvements                   29                29           5 yr
                                         --                --
                                         59                59

Less accumulated depreciation            59                59
                                         --                --
                                      $  --                --
                                       ====              ====


(5)  Other Assets

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 a member of David  Mintz's  family.  Mr. Mintz is
Chairman and  President of the Company.  The purpose of this  transaction  is 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. The sale of such stock might have 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,  the
Company is to receive a complete  refund of all its premiums  paid plus interest
at 4%.






                                       F-7

<PAGE>


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

(6)  Legal Settlement Payable

On May 1, 1991 the Company and its former  commission  agent,  NEMP Corporation,
settled a lawsuit that was commenced in 1989. Under the terms of the settlement,
the  Company  agreed to pay NEMP $2 per month for a period of ten  years,  which
includes  interest at an imputed rate of 12% per annum.  If there is a change in
ownership in the Company,  NEMP will receive an additional  $120. As of December
28, 1996,  the balance of the  settlement was $81 and is shown as a liability in
the Company's balance sheet, the current portion of which is $15.  Management of
the Company  believes that the monthly  payments will not have a material impact
on the Company's future cash flow.

The Company is not a party to any material legal proceedings at present.

(7)  Accrued Expenses

Accrued expenses consist of the following:


                                    December 28,           December 30,
                                       1996                   1995
                                    ------------           ------------
Advertising                          $    7                     --
Professional fees                        26                     25
Selling                                  80                    134
Inventory purchases                      --                     27
Other                                     2                     --
                                      -----                  -----
               Total                 $  115                  $ 186
                                     ======                  =====


(8)  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 nonstatutory
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. A
total of 400,000  shares have been reserved for issuance under the 1993 Plan. At
December  28,  1996,  138,000  shares were  subject to  outstanding  options and
212,000  shares,  representing  less than 4% of the  Common  Stock  outstanding,
remained available for future grant.





                                       F-8

<PAGE>


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

The  following is a summary of stock option  activity  from December 31, 1994 to
December 28, 1996:

<TABLE>
<CAPTION>

                                                 INCENTIVE OPTIONS                  NON-QUALIFIED OPTIONS
                                                 -----------------                  ---------------------
                                           Shares       Option Price          Shares         Option Price
                                           ------       ------------          ------         ------------
<S>                                        <C>         <C>                    <C>                <C>  
Outstanding at December 31, 1994           99,000      $.625--$.6875          55,000             $.625
Exercisable at December 31, 1994           66,000      $.625--$.6875            --                 --
Exercised in 1995                         (16,000)     $.625     --           26,000             $.625
Outstanding and exercisable at
  December 30, 1995 and
  December 28, 1996                        83,000      $.625--$.6875          55,000             $.625

</TABLE>

The following table  summarizes  information  about the stock option plan awards
outstanding at December 28, 1996:

                           OPTIONS OUTSTANDING AND EXERCISABLE

                                             Weighted Average         Weighted
           Range of            Number        Remaining Life           Average
       Exercise Prices      Outstanding        (in years)         Exercise Price
       ---------------      -----------        ----------         --------------
        $.625--$.6875         138,000             2.3                 $.659


(9)  Lease Obligation

Future minimum lease payments under an existing  operating lease that expires on
July 1, 1999 are as follows:


Period ending                   Amount
-------------                   ------
December 27, 1997                $  71
December 26, 1998                   74
Thru July 1, 1999                   37
                                    --
                   Total          $182
                                  ====

Annual net rental expenses aggregated $68 for each of the fifty-two week periods
ended December 28, 1996 and December 30, 1995.







                                       F-9

<PAGE>


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

(10) Income Taxes

The components of income tax benefits for 1996 and 1995 are as follows:

                           1996       1995
                           ----       ----
Current tax expense       $   2        $ 1
Deferred tax benefit        (47)       (20)
                           ----       ----
                          $ (45)       (19)
                           ====       ====

Total income tax benefit for the fifty-two  week periods ended December 28, 1996
and  December  30,  1995  differs  from the amount  computed  using the  Federal
statutory rate  primarily due to a reduction in the valuation  allowance of $132
and $30 in 1996 and 1995, respectively.

Deferred tax assets at December 28, 1996 and December 30, 1995 are as follows:


                                      December 28,          December 30,
                                         1996                  1995
                                         ----                  ----
Allowance for doubtful accounts          $123                   92
Inventory                                   7                   63
Settlement reserve                         35                   41
Loss carryforwards                        641                  695
                                          ---                  ---
Gross deferred tax assets                 806                  891
Valuation allowance                       495                  627
                                          ---                  ---

Deferred tax asset                       $311                  264
                                         ====                  ===

Based upon the level of  projected  future  taxable  income  over the periods in
which the deferred  tax assets are  deductible,  management  believes it is more
likely  than not the Company  will  realize  the  benefits  of these  deductible
differences,  net of the existing valuation allowances at December 28, 1996. The
amount  of the  deferred  tax asset  considered  realizable,  however,  could be
reduced  in the near term if  estimates  of future  taxable  income  during  the
carryforward period are reduced.

     The Company has loss carryforwards of approximately $558 and $1,272,  which
will expire in 2004 and 2005,  respectively,  if the Company  does not  generate
sufficient   taxable  income.  The  Company  also  has  unused  tax  credits  of
approximately $24.

(11) Business Concentrations

During the fifty-two week periods ended December 28, 1996 and December 30, 1995,
the Company derived  approximately 89% and 87%,  respectively,  of its net sales
domestically. The remaining sales of 11% and 13% in 1996 and 1995, respectively,
were exports to various other countries.  Sales to two customers represented 14%
and 12% of net sales in 1996. In 1995,  sales to two customers  represented  12%
and 8% of net sales.



                                      F-10

<PAGE>



Item 8.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure

     None.


                                    PART III

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

         The Directors and Executive Officers of the Company are:


Name                         Age      Position
----                         ---      --------
David Mintz...............    65      Chairman of the Board of Directors,
                                      Chief Executive Officer
Steven Kass...............    45      Chief Financial Officer, Secretary and
                                      Treasurer
Reuben Rapoport...........    66      Director of Product Development and
                                      Director
Franklyn Snitow...........    50      Director
Bernard Koster............    62      Director

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

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

     Reuben Rapoport has been the Director of Product Development of the Company
since January 1984 and a Director of the Company since July 1983.

     Franklyn  Snitow has been a Director of the Company since 1987. He has been
a partner in the New York City law firm of Snitow & Pauley, the Company's
general counsel, since 1985.

     Bernard  Koster has been a Director of the Company since March 1993. He has
been counsel to the New Jersey law firm of Litwin and  Holsinger  since  January
1993. Since February 1990, Mr. Koster has also acted as an independent  business
consultant.  From 1980 to 1990,  Mr.  Koster was  president  of Kartsun  Ltd., a
private company engaged in venture capital formation.

     All  Directors of the Company 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.  There are no family
relationships between Directors and executive officers



                                      -13-

<PAGE>



of the  Company.  All of the  executive  officers  devote their full time to the
operations of the Company.

     Compliance  with Section  16(a) of The Exchange  Act.  Section 16(a) of the
Securities Exchange Act of 1934, as amended, requires the Company's officers and
directors,  and persons who own more than  ten-percent  of its Common Stock,  to
file initial  statements of  beneficial  ownership  (Form 3), and  statements of
changes in beneficial ownership (Forms 4 or 5), of Common Stock and other equity
securities  of the Company  with the  Securities  and Exchange  Commission  (the
"SEC") and the American  Stock  Exchange.  Officers,  directors and greater than
ten-percent  stockholders  are required by SEC regulation to furnish the Company
with copies of all such forms they file.

     To the  Company's  knowledge,  based  solely on its review of the copies of
such forms  received by it, or written  representations  from certain  reporting
persons that no additional  forms were required for those  persons,  the Company
believes  that  during  fiscal 1996 its  officers,  directors  and greater  than
ten-percent beneficial owners complied with all applicable filing requirements.

Item 10.  Executive Compensation

     The  following   table  sets  forth   information   concerning   the  total
compensation  during the last three  fiscal  years for the  Company's  executive
officers whose total salary in fiscal 1996 totaled $100,000 or more:

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                                                                                  Long-Term
                                                            Annual              Compensation
                                                         Compensation       Securities Underlying
Name and Principal Position                Year           Salary ($)             Options (#)
---------------------------                ----           ----------             -----------
<S>                                        <C>            <C>                       <C>  
David Mintz                                1996           $155,000(1)               --
Chief Executive Officer                    1995            125,000                  --
  and Chairman of the Board                1994            125,000                  --

Steven Kass                                1996            100,000(1)               --
Chief Financial Officer                    1995               --  (2)               --
  Secretary and Treasurer                  1994               --  (2)               --
---------------
<FN>
(1)      Includes bonuses of $30,000 and $15,000 for Messrs. Mintz and Kass, respectively,
         accrued at year-end and payable April 1, 1997.
(2)      Less than $100,000.
</FN>
</TABLE>

     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 October 17, 1994, the Company's Board of Directors  adopted a resolution
wherein the  Corporation  was  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
Chairman and Chief Executive Officer of the




                                      -14-

<PAGE>



Company.  The purpose of this  transaction  is 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,  the  Company is to receive a complete  refund of all its
premiums paid plus interest at 4%.

     There are currently no employment agreements between the Company and any of
its officers.  The Company has not paid any cash  remuneration  to Mr. Snitow or
Mr. Koster for their services as Directors in the last three years.

STOCK OPTIONS

     The following table provides  information  concerning stock options held in
1996 by each of the executive  officers named above in the Summary  Compensation
Table. There were no options granted to any officers in 1996.


                       AGGREGATED OPTION EXERCISES IN LAST
                  FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>

                                                                            Number of Shares
                                      Shares                             Underlying Unexercised         Value of Unexercised in the
                                 Acquired on             Value           Options at FY-End (#)          Money Options at FY-End ($)
Name                             Exercise (#)        Realized ($)      Exercisable/Unexercisable         Exercisable/Unexercisable
----                             ------------        ------------      -------------------------        --------------------------
<S>                                    <C>                <C>                  <C>                             <C>  
David Mintz,                            --                --                   75,000 (E)                      $ -- (1)
Chief Executive Officer
  and Chairman of the
  Board

Steven Kass,                            --                --                       --                            --
Executive Vice President
  Chief Financial Officer,
  Secretary and Treasurer
--------
<FN>
 (E)     Exercisable options
 (1)     Year-end market price less than option price
</FN>
</TABLE>



                                      -15-

<PAGE>



Item 11.  Security Ownership of Certain Beneficial Owners and Management

     The following  table sets forth as of March 11, 1997,  certain  information
regarding the Company's  Common Stock,  $.01 par value, for each person known by
the Company to be the beneficial owner of more than 5% of the outstanding shares
of the Company's Common Stock,  for each executive  officer named in the Summary
Compensation  Table,  for each of the Company's  Directors and for the executive
officers and Directors of the Company as a group:


                                           Amount of              
Name                                 Beneficial Ownership       Percent of Class
----                                 --------------------       ----------------
David Mintz.........................    3,090,440 (1)                 49.9%
Franklyn Snitow.....................       30,000 (2)                  *
Reuben Rapoport.....................       20,000                      *
Bernard Koster......................       16,000 (3)                  *
Steven Kass.........................           --                      *
All Executive Officers and
Directors as a group (5 persons)....    3,156,440 (4)                 51.0%
----------

     The  address of all  individuals  except  Messrs.  Koster and Snitow is c/o
Tofutti Brands, Inc., 50 Jackson Drive,  Cranford, New Jersey 07016. The address
of Mr. Snitow is 345 Madison  Avenue,  New York, NY 10017 and the address of Mr.
Koster is 1450 Broadway,  New York, New York 10018. Each person listed above has
sole voting and/or investment power of the shares attributed to him.

*        Less than 1%.

(1)  Includes 75,000 shares issuable upon the exercise of currently  exercisable
     stock options.

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

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

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

Item 12.  Certain Relationships and Related Transactions

     Franklyn Snitow, a director of the Company,  is a member of the law firm of
Snitow & Pauley,  which firm provided  minimal  legal  services on behalf of the
Company in 1996.



                                      -16-

<PAGE>



Item 13.  Exhibits and Reports on Form 8-K

(a)      Exhibits

3.1*              Certificate of Incorporation.

3.1.1**           March 1986 Amendment to Certificate of Incorporation.

3.2*              By-laws of Registrant.

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

10.1****          Copy of Legal Settlement between the Company and the NEMP 
                  Corporation.

23.1              Consent of Independent Auditors.

(b)  Reports on Form 8-K filed during the last quarter of the period  covered by
     this report:

         None.



*        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  Company's  Form  10-KSB for the fiscal year
         ended January 1, 1994 and hereby incorporated by reference thereto.

****     Filed as an exhibit to the  Registrant's  Form 10-K for the fiscal year
         ended December 28, 1991 and hereby incorporated by reference thereto.



                                      -17-

<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 March 25, 1997.

                                            TOFUTTI BRANDS INC.
                                            (Registrant)

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

                                            Date:  March 25, 1997

     In Accordance  with the  Securities  Exchange Act of 1934,  this Report has
been signed below on March 22, 1997, 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 Officer

/s/ Bernard Koster
------------------
Bernard Koster
Director

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

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



                                      -18-

<PAGE>



                                  EXHIBIT INDEX


Exhibit                                                                     Page

3.1*             Certificate of Incorporation, as amended through February 
                 1986.

3.1.1**          March 1986 Amendment to Certificate of Incorporation.

3.2*             By-laws of the Registrant.

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

10.1****         Copy of Legal Settlement between the Company and the NEMP 
                 Corporation.

23.1             Consent of Independent Auditors.



*    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 Company's  Form 10-KSB for the fiscal year ended
     January 1, 1994 and hereby incorporated by reference thereto.

**** Filed as an exhibit to the Registrant's Form 10-K for the fiscal year ended
     December 28, 1991 and hereby incorporated by reference thereto.



                                      
<PAGE>



                                                                    EXHIBIT 23.1