SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OR
                       THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 30, 1995

                         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: $5,023,000

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 12, 1996 was $2,264,000.

As of March 12, 1996, 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 (registered  trademark)
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  (registered  trademark),  in both hard  frozen and soft serve  forms.
During 1988, the Company  introduced two  soya-based,  non-dairy  products,  EGG
WATCHERS  (registered  trademark)  and  BETTER  THAN  CREAM  CHEESE  (registered
trademark).  SOUR SUPREME  (registered  trademark),  a non-dairy sour cream, was
introduced at the end of 1991.  During 1993, the Company  introduced BETTER THAN
YOGURT (registered  trademark),  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  (registered  trademark),  a  cholesterol-free,  fat-free  frozen dessert
sweetened  only with fruit  juice that 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-EGG
WATCHERS co-packer. The agreement granted Papetti's



                                       -2-

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exclusive  worldwide  manufacturing  and  distribution  rights for  TOFUTTI  EGG
WATCHERS.  During 1994, the Company  increased its  distribution  in the natural
health market.  The Company also saw significant  increases in its TOFUTTI CUTIE
novelty sales.

         The Company made several new product  introductions in 1995. During the
spring the Company introduced two new stick novelties,  TOFUTTI TEDDY FUDGE BARS
(registered trademark), a low fat fudge bar and TOFUTTI CHOCOLATE FUDGE TREAT, a
sugar-free,  fatfree 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 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.

TOFUTTI PRODUCT LINE

*        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
         (registered  trademark),   Vanilla  Fudge,  Chocolate  Cookies  Supreme
         (registered trademark)
         and Better Pecan (registered trademark).

*        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.

*        TOFUTTI  FRUTTI   (registered   trademark)  in  pint  containers  is  a
         non-dairy, cholesterolfree, 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.

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

*        TOFUTTI CUTIES  (registered  trademark) 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 a portion controlled treat.

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



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<PAGE>



*        TEDDY FUDGE POPS (registered  trademark) 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 the CHOCOLATE FUDGE TREAT has only 30 calories per bar and is fat
         and sugar free.

*        TOFUTTI  SLICES are  specialty  novelties  that come  either  chocolate
         coated or plain.  The TOFUTTI CUTIE PIE combines a rich vanilla  center
         with a chocolate  coating,  while the WILDBERRY  SORBET combines creamy
         vanilla  with a tangy  sorbet  covered  in  chocolate.  Both  also come
         uncoated  and are  available  in bulk  pack for  institutional  sale or
         retail pack for supermarkets.

*        EGG WATCHERS (registered trademark) 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.

*        BETTER THAN CREAM CHEESE (registered trademark) is similar in taste and
         texture to traditional cream cheese but is milk and  butterfat-free and
         contains no cholesterol.  Available in plain,  French onion,  herbs and
         chives and wildberry, the product is distributed in several key markets
         including   metropolitan  New  York,  New  England,  Los  Angeles,  San
         Francisco,  Canada,  England,  Panama and  Australia.  It is also being
         distributed  nationally  to health  food stores  through the  Company's
         health food distribution  network.  It is sold in 8 oz. retail packages
         and 30 lb. bulk boxes.

*        SOUR SUPREME (registered trademark) complements BETTER THAN CREAM
         CHEESE  (registered  trademark)  in that it is  similar  in  taste  and
         texture to traditional  sour cream but is milk and  butterfat-free  and
         contains no  cholesterol.  It is currently sold in 30 lb. bulk packages
         to food service  distributors  and bakers and in 12 oz. retail packages
         in  metropolitan  New York,  New England,  Los Angeles,  San Francisco,
         Canada,  England,  Panama and Australia.  It is also being  distributed
         nationally  to health food stores  through  the  Company's  health food
         distribution network.

*        TOFUTTI TORTELLINI and MINI RAVIOLI are bite-sized frozen pasta filled
         with  TOFUTTI  BETTER  THAN CREAM  CHEESE and sold in 15 oz.  bags for
         supermarkets and 10 lb. boxes for institutional sales.

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.  The chart below
indicates  certain  information  with respect to the production of the Company's
products:




                                       -4-

<PAGE>



<TABLE>
<CAPTION>
                                                                                              PRODUCTION
PRODUCT                           MANUFACTURER                 LOCATION                         STARTED
-------                           ------------                 --------                         -------     
<S>                               <C>                          <C>                               <C> 
Soft serve                        Welsh Farms                  Long Valley, New Jersey           1982

Hard frozen dessert               Kemps Foods, Inc.            Lancaster, Pennsylvania           1984

Better Than Cream Cheese          Frank Hahn, Inc.             Enosburg Falls, Vermont           1988

Sour Supreme                      Frank Hahn, Inc.             Enosburg Falls, Vermont           1988

Egg Watchers                      Papetti's Hygrade Egg        Elizabeth, New Jersey             1988
                                  Products

Chocolate Enrobed                 Deering Ice Cream            Portland, Maine                   1995
Novelties

Tofu Filled Pasta                 John's Ravioli               New Rochelle, New York            1995
</TABLE>

         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 ability of the  Company to  continue  developing,
marketing  and  distributing  its  products  is  therefore  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,  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.



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<PAGE>




          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  in  the  New  York
metropolitan  area.  During 1995, sales to Haagen-Dazs  distributors  nationwide
totaled  $663,000  or 13% of sales as  compared  to  $946,000 or 18% of sales in
1994.  Sales  to  the  New  York  metropolitan   area  Haagen-Dazs   distributor
represented 8% of sales in 1995 as compared to 13% of sales in 1994. 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.

         In September 1993,  Haagen-Dazs began distributing the Company's frozen
dessert  products in Florida and in 1994 began  distributing  in Atlanta and San
Francisco.  During 1995, the Company  expanded its  distribution in the national
health food  market,  which now  includes  nineteen  distributors.  Sales to the
Company's  health food  distributors in 1995 were $1,549,000 or 31% of sales, as
compared to $946,000 or 18% of sales in 1994. In 1995,  the Company had sales of
$609,000  or 12% of sales to  Trader  Joe's,  a West  Coast  based  health  food
supermarket  chain.  The Company  expects the trend in the national  health food
market to continue in 1996. The Company  continues to have a strong  presence in
the kosher  market,  with sales of $496,000 or 10% of sales in 1995, as compared
with $554,000 or 11% of sales in 1994.  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.

         During  1995,  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  $661,000 or 13% of sales in 1995,  versus $826,000 or 16% of
sales in 1994.  The large  decrease  in  export  sales  was due  primarily  to a
reduction in sales to the Company's  European  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 value of the U.S.
dollar, which could increase the local currency prices 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 1995 and  1994,  the  Company's  research  and
development expenses were $176,000 and $185,000, respectively.
Such amounts do not include any portion of Mr. Mintz's salary.




                                       -6-

<PAGE>



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. 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



                                       -7-

<PAGE>



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 Maine, New Jersey,  New York,
Pennsylvania  and Vermont.  Manufacturing  at any other facility  would,  to the
extent that 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   (registered
trademark),  and other  trademarks for its frozen desserts and other products in
the United States and approximately 40 foreign  countries.  The Company believes
its trademarks are an important means of establishing  consumer  recognition for
its products.

         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 30, 1995, the Company  employed seven people on a full-time
basis, compared with eight people as of December 31, 1994. The Company considers
its relations with its employees to be good.

Item 2.  Description of Properties

         In August 1989, the Company moved into 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, with



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an annual rent of $68,000 for the first three years and $74,000 for the last two
years.  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 2, 1994..........................            $  1-5/8          $ 13/16
July 2, 1994...........................               1-5/8              7/8
October 1, 1994........................               1-3/8              7/8
December 31, 1994......................               1-3/8              7/8

April 1, 1995..........................               1                13/16
July 1, 1995...........................                 7/8             9/16
September 30, 1995.....................               1-1/2              5/8
December 30, 1995......................               15/16             9/16

         As of March 12, 1996, there were approximately  1,177 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.



                                       -9-

<PAGE>



Item 6.  Management's Discussion and Analysis

         The  following  is  management's  discussion  and  analysis  of certain
significant  factors which have affected the  Company's  financial  position and
operating  results  during the periods  included in the  accompanying  financial
statements.

Fifty-two Weeks Ended December 30, 1995 Compared with Fifty-two Weeks Ended
December 31, 1994

         Net  sales  for the  fifty-two  weeks  ended  December  30,  1995  were
$5,023,000,  a  decrease  of  $194,000  from the sales  level  realized  for the
fifty-two weeks ended December 31, 1994. In the 1995 period,  sales of hard pack
TOFUTTI  decreased by $297,000,  while food product sales increased by $103,000.
The hard pack sales decrease consisted of a decline in pint sales of $912,000 to
$2,301,000 in 1995, while the Company's novelty sales increased to $1,705,000 in
1995,  up from  $1,062,000 in 1994.  The Company's  gross profit for the current
year decreased by $75,000 due primarily to the sales  decrease,  while its gross
profit percentage was unchanged from 1994 at 40%.

         Based on its recent sales trend, the Company believes that its revenues
will remain stable or improve  slightly in 1996. The Company  expects  continued
sales  increases  in its novelty  product  line and in its  natural  health food
business.

         Selling  expenses  increased to $848,000 for the current  fiscal period
compared with $746,000 for the comparable 1994 period.  The primary cause of the
increase was an additional  provision  for bad debt and increased  warehouse and
freight  expenses.  The increased freight expense is attributable to an increase
in shipments to the  mid-western  and western United  States,  with a decline in
shipments to the east coast. Marketing and sales promotion expenses decreased in
1995 to $276,000 from $389,000 in 1994. This decrease was due principally to the
Company's 1994 third quarter radio  advertising  campaign in New York and Boston
that was not repeated in 1995.

         Research and development  expenses remained  relatively flat in 1995 as
compared to 1994.  General and  administrative  expenses  were  $661,000 for the
current period compared with $677,000 for the comparable period in 1994.

         Interest expense was $12,000 for the fifty-two weeks ended December 30,
1995 compared with $14,000 for the fifty-two weeks ended December 31, 1994.

         There was no  federal  income tax  payable in either  1995 or 1994 as a
result of the utilization of a portion of the Company's tax loss carryforward in
both years.




                                      -10-

<PAGE>



Liquidity and Capital Resources

         At December 30, 1995,  the Company's  working  capital was $662,000,  a
decrease of $2,000 from  December 31,  1994.  At the end of the  fifty-two  week
period,  accounts  receivable  decreased  by $63,000  from  December  31,  1994,
principally  reflecting the lower level of sales in December 1995 as compared to
December  1994.  Inventories  increased by $70,000,  reflecting  the  additional
finished  goods  inventory  for the Company's  new  products.  Accounts  payable
decreased to $364,000  from  $474,000,  while accrued  liabilities  increased to
$186,000 from $62,000 in 1994. The increase in accrued  liabilities  reflects an
accrual  at year end for  allowances  and  promotion  expenses  associated  with
Haagen-Dazs  sales in the  metropolitan New York area. In the most recent fiscal
year, stockholders' equity increased by $82,000, of which $10,000 was due to the
purchase  of  16,000  shares  of stock by  employees  of the  Company  under the
Company's 1993 Stock Option Plan.

         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.  The Company was able to fund its level of operations in 1995 from its
current  resources.  Any  substantial  increase or decrease in  operations  will
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  1995,  it will  have
sufficient financial resources to continue its operations  throughout the coming
year.

          In  October  1995,  the FASB  issued  SFAS  No.  123  "Accounting  for
Stock-Based  Compensation",  which  establishes  a fair  value  based  method of
accounting for employee stock options or similar equity instruments.  Under SFAS
No. 123, entities can recognize  stock-based  compensation  expense in the basic
financial  statements  using either (i) the intrinsic  value based  approach set
forth in APB Opinion No. 25 or (ii) the fair value based  method  introduced  in
SFAS No. 123.  Entities electing to remain with the accounting in APB Opinion 25
must make proforma  disclosures of net income and earnings per share,  as if the
fair value based method of accounting  defined in SFAS No. 123 had been applied.
Management has not yet  determined  which method the Company will use to measure
stock-based compensation.
                                      -11-

<PAGE>



Item 7.  Financial Statements


                                           Index to Financial Statements


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

 Financial Statements:

          Balance Sheets
             December 30, 1995 and December 31, 1994.......................F-2

          Statements of Operations and Accumulated Deficit
             Fifty-two weeks ended
             December 30, 1995 and December 31, 1994.......................F-3

          Statements of Cash Flows
             Fifty-two weeks ended
             December 30, 1995 and December 31, 1994.......................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  30,  1995  and  December  31,  1994,  and the  related  statements  of
operations  and  accumulated  deficit,  and cash  flows for the  fifty-two  week
periods  ended  December  30,  1995  and  December  31,  1994.  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 30, 1995 and December 31, 1994 and the results of their  operations and
their cash flows for the  fifty-two  week  periods  ended  December 30, 1995 and
December 31, 1994, in conformity with generally accepted accounting principles.

                                        s/KPMG Peat Marwick LLP


New York, New York
March 25, 1996



                                       F-1

<PAGE>

<TABLE>


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

<CAPTION>

                                                          December 30,    December 31,
Assets                                                       1995             1994
                                                          ------------    ------------
<S>                                                           <C>          <C>    
Current Assets:
     Cash                                                       $    12          7
     Accounts receivable (net of reserves of $242 in
       1995 and $171 in 1994) (Note 2)                            1,006      1,069
     Inventories (Note 3)                                           196        126
     Prepaid expense                                                 11         10
                                                                -------    -------
                Total current assets                              1,225      1,212

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

Deferred taxes (Note 11)                                            264        244
Other assets (Note 5)                                                56         30
                                                                -------    -------
                Total assets                                    $ 1,545      1,486
                                                                =======    =======

Liabilities and Stockholders' Equity

Current liabilities:
     Legal settlement payable - current portion (Note 6)             13         12
     Accounts payable                                               364        474
     Accrued expenses (Note 7)                                      186         62
                                                                -------    -------
                  Total current liabilities                         563        548
Legal settlement payable (Note 6)                                    81         94
                                                                -------    -------
                  Total liabilities                                 644        642

Stockholders' equity (Notes 8 and 9):
     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 12/30/95 and
       6,037,567 shares at 12/31/94                                  61         60

     Paid-in capital                                              3,503      3,494
     Accumulated deficit                                         (2,663)    (2,710)
                                                                -------    -------
                  Total stockholders' equity                        901        844
                                                                -------    -------

Commitments (Note 10)                                              --         --

                   Total liabilities and stockholders' equity   $ 1,545      1,486
                                                                =======    =======
<FN>

                    The  accompanying  notes  are  an  integral  part  of  these
financial statements.
</FN>
</TABLE>



                                       F-2

<PAGE>



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


                                           Fifty-two weeks       Fifty-two weeks
                                                ended                ended
                                          December 30, 1995    December 31, 1994
                                          -----------------    -----------------

Net sales                                        $ 5,023             5,217
Cost of sales                                      3,022             3,141
                                                 -------           -------
                  Gross profit                     2,001             2,076
                                                 -------           -------

Operating expenses:
 Selling                                             848               746
 Marketing and sales promotion                       276               389
 Research and development                            176               185
 General and administrative                          661               677
                                                 -------           -------
                                                   1,961             1,997
                                                 -------           -------

                  Operating income                    40                79
Interest expense                                      12                14
                                                 -------           -------
                  Income before tax benefit           28                65

Income tax benefit (Note 11)                          19                57
                                                 -------           -------

Net income                                            47               122

Accumulated deficit, beginning of year            (2,710)           (2,832)
                                                 -------           -------

Accumulated deficit, end of year                  (2,663)           (2,710)
                                                 =======           =======

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

Weighted average number of common shares
      outstanding                                  6,071             6,057
                                                 =======           =======






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



                                       F-3

<PAGE>



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


                                                      Fifty-two      Fifty-two
                                                     weeks ended    weeks ended
                                                     December 30,   December 31,
                                                        1995           1994
                                                    -------------   ------------

Cash flows from operating activities:
   Net income                                          $  47           122
Net adjustments to reconcile net income to net
    cash provided by (used in) operating activities:
  Depreciation and amortization                           --             6
  Deferred taxes                                         (20)          (57)
  Provision for bad debts                                100            18
  Change in assets and liabilities:
    (Increase) in accounts receivable                    (37)         (541)
    (Increase) decrease in inventories                   (70)            3
    (Increase) in prepaid expense                         (1)           (2)
    (Increase) in other assets                           (26)          (14)
    (Decrease) increase in accounts payable             (110)          342
    Increase (decrease) increase in accrued expenses     124           (14)
                                                       -----         -----

    Net cash provided by (used in) operating
       activities                                          7          (137)
                                                       -----         -----

Cash flows from financing activities:
   Repayment of legal settlement payable                 (12)          (12)
   Issuance of common stock                               10            21
                                                       -----         -----

   Net cash (used in) provided by financing
       activities                                         (2)            9
                                                       -----         -----
   Net increase (decrease) in cash                         5          (128)

Cash at beginning of period                                7           135
                                                       -----         -----
Cash at end of period                                  $  12             7
                                                       =====         =====

Supplemental  disclosures  of cash flow  information:  
  Cash paid during the year for:
    Interest                                           $  12            14

                    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 nondairy  frozen  desserts and other food  products.  

REVENUE RECOGNITION

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

NET INCOME PER SHARE OF 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 amount to less than 3%.

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.

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.



                                       F-5

<PAGE>




FAIR VALUE OF FINANCIAL INSTRUMENTS

The  Financial   Accounting   Standards   Board's  (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  30, 1995 and December 31, 1994 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:
                                           December 30,    December 31,
                                               1995           1994
                                               ----           ----
        Beginning balance                      $171            153
        Additions charged to expense            100             18
        Less: Write off                          29            --
                                               ----           ----
                                               $242            171
                                               ====           ====

(3)  Inventories

        Inventories consist of:
                                           December 30,   December 31,
                                               1995           1994
                                               ----           ----
        Finished products                      $108             76
        Raw materials and
            packaging                            88             50
                                               ----           ----
                                               $196            126
                                               ====           ====




                                       F-6

<PAGE>



(4)  Fixed Assets

         Fixed assets consist of the following:


                                      December 30,      December 31,    Useful
                                          1995             1994         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%.

(6)  Legal Settlement Payable

On May 1, 1991 the Company and its former  commission  agent,  NEMP Corporation,
settled  a  lawsuit  which  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 intrest 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  30,  1995,  the  balance of the  settlement  was $94 and is shown as a
liability in the Company's  balance sheet,  the current portion of which is $13.
It is estimated 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.





                                       F-7

<PAGE>



(7)  Accrued Expenses

Accrued expenses consist of the following:

                                               December 30,      December 31,
                                                  1995               1994
                                                  ----               ----
Advertising                                      $  -                  5
Professional fees                                  25                 25
Selling                                           134                  5
Inventory purchases                                27                 25
Other                                             --                   2
                                                 ----               ----
               Total                             $186                 62
                                                 ====               ====

(8) Stockholders' Equity

During  1995,  common  stock and  paid-in  capital  increased  by $10 due to the
exercise of stock options to purchase 16,000 shares by employees of the Company.

(9)  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  30,  1995,  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.

The  following  is a summary of stock  option  activity  from January 1, 1994 to
December 30, 1995:

<TABLE>
<CAPTION>

                                           INCENTIVE OPTIONS           NON-QUALIFIED OPTIONS
                                          Shares   Option Price        Shares    Option Price
                                          ------   ------------        ------    ------------
<S>                    <C>                <C>     <C>     <C>          <C>           <C>  
Outstanding at January 1, 1994            99,000  $.625   $.6875       89,000        $.625
Exercisable at January 1, 1994               -      -        -           -             -
Exercised                                    -      -        -        (34,000)       $.625
Outstanding at December 31, 1994          99,000  $.625   $.6875       55,000        $.625
Exercisable at December 31, 1994          66,000  $.625   $.6875       26,000        $.625
Exercised                                (16,000) $.625      -           -             -
Outstanding at December 30, 1995          83,000  $.625   $.6875       55,000        $.625
Exercisable at December 30, 1995          83,000  $.625   $.6875       55,000        $.625
</TABLE>




                                       F-8

<PAGE>



(10)  Lease Obligation

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


  Period ending               Amount
December 28, 1996            $  68
December 27, 1997               71
December 26, 1998               74
Thru July 1, 1999               37
                                --
            Total             $250
                              ====

Annual net rental expenses aggregated $68 for each of the fifty-two week periods
ended December 30, 1995 and December 31, 1994.

(11)     Income Taxes

The components of income tax benefits for 1995 and 1994 are as follows:

                                       1995         1994
                                       ----         ----
     Current tax expense               $  1         --
     Deferred tax benefit               (20)        (57)
                                       ----         ----
                                       $(19)        (57)
                                       ====         ====

Total income tax expense for the fifty-two  week periods ended December 30, 1995
and  December  31,  1994  differs  from the amount  computed  using the  Federal
statutory rate due to a change in the valuation allowance of $30 and $64 in 1995
and 1994, respectively, relating principally to the utilization of net operating
loss carryforwards.

Deferred tax assets at December 30, 1995 and December 31, 1994 are as follows:


                                             December 30,      December 31,
                                                 1995              1994
                                                 ----              ----
Allowance for doubtful accounts                 $ 92                66
Inventory                                         63                32
Settlement reserve                                41                41
Loss carryforwards                               695               762
                                                ----              ----
Gross deferred tax assets                        891               901
Valuation allowance                              627               657
                                                ----              ----

Deferred tax asset                              $264               244
                                                ====              ====




                                       F-9

<PAGE>



Based upon the level of projected  future  taxable income over the periods which
the deferred tax asset is 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 30, 1995.  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  $715 and $1,271 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.

(12) Business Concentrations

During the fifty-two week periods ended December 30, 1995 and December 31, 1994,
the Company derived  approximately 87% and 84%,  respectively,  of its net sales
domestically. The remaining sales of 13% and 16% in 1995 and 1994, respectively,
were exports to various other countries.  Sales to two customers represented 12%
and 8% of net sales in 1995,  respectively.  In 1994, sales to a single customer
represented 13% 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.........       64     Chairman of the Board of Directors,
                                  Chief Executive Officer
Steven Kass.........       44     Chief Financial Officer, Secretary and
                                  Treasurer
Reuben Rapoport.....       65     Director of Production and Product
                                  Development and Director
Franklyn Snitow.....       49     Director
Bernard Koster......       61     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  Production  and  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.




                                      -13-

<PAGE>



         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 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 1995 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 1995 totaled $100,000 or more:

                                            SUMMARY COMPENSATION TABLE

                                                                 Long-Term
                                                Annual         Compensation
                                             Compensation  Securities Underlying
Name and Principal Position            Year   Salary ($)        Options (#)
---------------------------            ----   ----------        -----------
David Mintz, Chief Executive Officer   1995   $125,000             -
  and Chairman of the Board            1994    125,000             -
                                       1993    127,404           75,000 

Rick W. Malloy, Executive Vice         1995    100,000             -
President (1)                          1994    100,000             -
                                       1993    101,923             -
          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 their salary for such year.

--------------- 
(1) Mr. Malloy resigned as an officer in 1995.




                                      -14-

<PAGE>


          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  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  1995  by  each  of  the  executive  officers  named  above  in  the  Summary
Compensation Table. There were no options granted to any officers in 1995.

<TABLE>

                       AGGREGATED OPTION EXERCISES IN LAST
                  FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
                  ---------------------------------------------
<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,
Chief Executive Officer            -              -                75,000 (E)                    $4,688 (E)

Rick W. Malloy,
Executive Vice President           -              -                    -                                  -
<FN>

--------
 (E)     Exercisable options
</FN>
</TABLE>





                                      -15-

<PAGE>



Item 11.  Security Ownership of Certain Beneficial Owners and Management

         The  following  table  sets  forth  as  of  March  12,  1996,   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)               *
Rick W. Malloy.....................              -                   *
All Executive Officers and
Directors as a group (6 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)      Includes 30,000 shares issuable upon the exercise of currently 
         exercisable stock options.

(3)      Includes 16,000 shares issuable upon the exercise of currently 
         exercisable stock options.

(4)      Includes 121,000 shares 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 1995.



                                      -16-

<PAGE>



Item 13.  Exhibits and Reports on Form 8-K

(a)      Exhibits

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

3.1.1**   March 1986 Amendment to Certificate of Incorporation.

3.2*      By-laws.

4.1***    Copy of the Company'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 22, 1996.

                                     TOFUTTI BRANDS INC.
                                     (Registrant)

                                     /s/ David Mintz
                                         David Mintz
                                     Chairman of the Board and
                                     Chief Executive Officer
   
                                     Date: March 22, 1996

         In Accordance with the Securities Exchange Act of 1934, this Report has
been signed below on March 22, 1996, 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.

4.1***    Copy of the Company'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.



                                      -19-

<PAGE>



                                                                   EXHIBIT 23.1



                                      -20-

<PAGE>


                                                                   Exhibit 23.1









                         Consent of Independent Auditors



The Board of Directors
Tofutti Brands Inc.:

We consent to the incorporation by reference in the Registration  Statement (No.
33-72654) on Form S-8 of Tofutti Brands Inc. of our report dated March 25, 1996,
relating to the balance  sheets of Tofutti  Brands Inc. as of December  30, 1995
and December 31, 1994 and the related  statements of operations and  accumulated
deficit,  and cash flows for the fifty-two  week periods ended December 30, 1995
and  December  31, 1994 which  report  appears in the  December  30, 1995 annual
report on Form 10-KSB of Tofutti Brands Inc.


                                         s/KPMG Peat Marwick LLP

New York, New York
March 25, 1996



                                      -21-

<PAGE>