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 January 1, 2000

                         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: $11,912,000

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 24, 2000 was $12,835,000.

As of March 24, 2000, the Registrant had 6,299,567  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

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

     We introduced several new products during 1999. Among them were several new
frozen dessert items including  vanilla and strawberry  Crumb Cake Bars,  Monkey
Bars and additional sugar free half gallons  flavors.  We also introduced a line
of veggie and veggie  cheese  burgers  called  Quit  Beef'n and a  nutriceutical
product called Tofutti Ultra Soy Protein Powder.  With the introduction of these
new products and improved channels of distribution,  we significantly  increased
our sales in 1999.

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.  We currently  offer 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    LOW FAT TOFUTTI 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. LOW FAT TOFUTTI is also available as a soft serve mix in three
     flavors: Vanilla, Chocolate and Strawberry.

o    HONEY  SWEETENED  TOFUTTI  in pints  offers  those  individuals  with sugar
     restrictions a natural  alternative  without  artificial  sweeteners and is
     available in Vanilla Chamomile.

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




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

o    TOFUTTI TOO-TOO'S are frozen dessert cookie sandwiches combining creamy and
     delicious TOFUTTI with a round,  vanilla/chocolate  chip cookie.  TOO-TOO's
     are  available  in three  flavors:  Vanilla,  Vanilla/Chocolate  Swirl  and
     Vanilla/Chocolate Chip.

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  fat free,  sugar  free
     CHOCOLATE FUDGE TREATS have only 30 calories per bar.

o    TOFUTTI  MONKEY  BAR(TM) is a stick novelty that features a rich  chocolate
     center  surrounded  by peanut  butter  flavored  TOFUTTI,  dipped in a rich
     chocolate coating.

o    TOFUTTI CRUMB CAKE BARS offer consumers a milk free crunchie-coated TOFUTTI
     vanilla stick novelty.  CRUMB CAKE BARS come in two flavors,  Vanilla Fudge
     and Sensational Strawberry. Vanilla Fudge has a rich chocolate fudge center
     surrounded  by crispy dairy free  chocolate  crunchies,  while  Sensational
     Strawberry features a strawberry center surrounded by vanilla crunchies.

o    TOFUTTI  CUTIE PIE is a premium  novelty  treat on a stick that  combines a
     rich,  creamy TOFUTTI vanilla or chocolate  center covered with a chocolate
     coating.  This  product is  available in most health food stores and select
     supermarkets.

o    TOFUTTI  ROCK N' ROLL FROZEN  DESSERT  CAKE offers the Tofutti  consumer an
     upscale non-dairy frozen dessert alternative to dairy ice cream cakes. This
     product is currently available in select supermarkets and health food store
     outlets.

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,  ginseng and dill, garlic and
     herb and garden veggie. The plain version is also available in food service
     30 lb. bulk boxes,  while  certain  select  flavors are  available in 5 lb.
     containers.

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



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     no  cholesterol.  The  12 oz.  retail  packages  are  available  in  plain,
     guacamole,  salsa and  cherries  'n'  berries.  The plain  version  is also
     available in food service 30 lb. bulk boxes.

o    TOFUTTI BETTER THAN  MOZZARELLA  CHEESE(TM) is the first totally dairy free
     mozzarella  cheese  that  tastes  and  performs  just like real  mozzarella
     cheese.  Complementing BETTER THAN MOZZARELLA CHEESE is TOFUTTI BETTER THAN
     CHEDDAR  CHEESE(TM),  which tastes like real cheddar cheese.  Both products
     are key  ingredients in some of the Company's  frozen food products and are
     also available in food service 20 lb. bulk boxes.

o    TOFUTTI  SOY-CHEESE  SLICES(TM)  offer the  consumer a delicious  non-dairy
     alternative to regular Cheese Slices.  Available in individually  wrapped 8
     oz. packages,  TOFUTTI SOY-CHEESE SLICES are sold in all health food stores
     and select supermarkets and come in three flavors: American, Mozzarella and
     Roasted Garlic.

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

o    TOFUTTI PIZZA BAGELS feature  TOFUTTI'S  dairy free BETTER THAN  MOZZARELLA
     CHEESE and tomato  sauce on a tasty bagel.  PIZZA  BAGELS are  available in
     supermarket and health food store freezer cases.

o    TOFUTTI  QUIT  BEEF'N(TM)  veggie  burgers  offer the  consumer a delicious
     tasting  veggie  burger  that also has the fiber and protein of soy that is
     recommended  for a healthy diet.  With TOFUTTI'S  totally dairy free BETTER
     THAN CHEDDAR CHEESE, QUIT BEEF'N Veggie  Cheeseburgers offer the consumer a
     healthy, totally dairy free cheeseburger.

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

o    TOFUTTI POTATO PANCAKES offer the consumer a snack or dinner side dish that
     combines a delicious  mixture of potato and our non-dairy sour cream,  SOUR
     SUPREME.

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.




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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 TOFIGGI(R) fig bars. Like all TOFUTTI products,  TOFUTTI
     COOKIES  are  completely  dairy  and  cholesterol  free and can be found in
     select supermarkets and health food stores.

o    TOFUTTI  SOY  LAVASCH(R)   flatbread   crackers,   made  with  all  natural
     ingredients  and TOFUTTI BETTER THAN CREAM CHEESE,  offer consumers a tasty
     snack that tastes  delicious with spreads or simply plain. SOY LAVASCH come
     in 5 oz. retail packages and are available in four flavors:  Onion & Poppy,
     Garlic & Dill, Hot & Spicy and Herb & Chive.

o    A new and exciting snack product,  TOFUTTI TOTALLY NUTS,  homestyle roasted
     soy beans offers consumers a healthy yet delicious snack alternative. Three
     flavors:  Homestyle,  Onion and Garlic, and Barbecue,  are available in 6.5
     oz.  retail  packages  for  sale  to our  natural  and  specialty  products
     customers.  TOFUTTI  Chocolate  Dipped  Soy  Nuts  come in 3.5  oz.  retail
     packages.

o    We are now offering a pure soy protein  nutriceutical  supplement,  TOFUTTI
     ULTRA SOY PROTEIN POWER.  It is an all natural  instant powder mix, high in
     isoflavones  and amino  acids  which are  necessary  for  maintaining  good
     health. Available in 16 oz. containers,  ULTRA SOY PROTEIN POWER is sold at
     most health food stores.

MARKETING AND DISTRIBUTION

     TOFUTTI  products  are sold and  distributed  across the United  States and
internationally,   and  can  be  found  in  gourmet   specialty  shops,   kosher
supermarkets,  natural/health food stores, and national and regional supermarket
chains.  Generally,  most of our products are sold by  independent  unaffiliated
food  brokers to  distributors  and  sometimes on a direct basis to retail chain
accounts.  Food brokers act as our agents within  designated  territories or for
specific accounts and receive commissions, which average 5% of net sales.

     The Mattus Ice Cream  Company  distributes  our  non-dairy  frozen  dessert
products to supermarket  accounts in the metropolitan New York area. Total sales
to Mattus in the New York  metropolitan  area were  $1,040,000 or 9% of sales in
1999,  as compared  with sales of $864,000 or 10% of sales in 1998. We currently
sell our frozen  dessert  products in most major  markets in the United  States,
including Atlanta, Boston, Cincinnati,  Chicago, Cleveland, Denver, Detroit, Los
Angeles, Miami, New York, Orlando, Philadelphia, Phoenix, San Francisco, Seattle
and Tampa.

     We distribute our products through twenty-six  distributors in the national
health  food  market.  Our  sales  to  health  food  distributors  in 1999  were
$5,910,000  or 50% of sales,  as compared to $4,231,000 or 47% of sales in 1998.
In 1999,  sales to Trader  Joe's,  a West Coast based  health  food  supermarket
chain,  rose to $2,071,000 or 17% of sales,  as compared to $1,418,000 or 16% of
sales in 1998. Overall, West Coast sales were $3,195,000 or 27% of our



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sales in 1999, as compared to $2,221,000 or 25% of sales in 1998. We continue to
have a strong  presence  in the kosher  market,  with sales of $758,000 or 6% of
sales in 1999, as compared with sales of $605,000 or 7% of sales in 1998. During
1999, our sales to food service  accounts grew to $1,007,000 or 8% of sales,  as
compared with sales of $705,000 or 8% of sales in 1998.

     During 1999,  we shipped  TOFUTTI  non-dairy  products to  distributors  in
Australia,  Belgium,  Bermuda, Canada, England, France, Germany, Israel, Kuwait,
Mexico, the Netherlands,  Panama,  Portugal,  Spain,  Sweden and the United Arab
Emirates.  Sales to foreign  distributors  totaled $1,304,000 or 11% of sales in
1999, as compared to $1,060,000 or 12% of sales in 1998.  The increase in export
sales was due  primarily to an increase in sales to our  European,  Canadian and
Australian distributors.  Our future export sales could be adversely affected by
an increase in the value of the U.S.  dollar,  which  could  increase  the local
currency price of our products.

     We expect the  favorable  sales trend in the  national  health  food,  West
Coast, kosher, food service and international markets to continue in 2000.

COMPETITION

     TOFUTTI  frozen  desserts  compete  with all forms of ice  cream  products,
yogurt-based  desserts and other soya-based frozen desserts.  We believe that we
are a leader in the non-dairy  frozen  dessert  product market and have the most
complete line of non-dairy  frozen dessert  products.  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 we compete  are
substantially larger and have significantly greater resources than us. Our other
products  also  face  substantial  competition,  from both  non-dairy  and dairy
competitive products marketed by companies with significantly  greater resources
than we have.

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 our current
products.  In 1999 and 1998, our research and development expenses were $376,000
and  $342,000,  respectively.  These  amounts do not  include any portion of Mr.
Mintz's salary.

PRODUCTION

     All of our  products  are  manufactured  by  co-packers  to whom we  supply
certain  key  ingredients  for  the  manufacturing   processes.  Our  co-packers
manufacture and package our 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,  we have more than one  co-packer.  We
currently  have a total of  eighteen  co-packers,  including  one in the  United
Kingdom that manufactures some of our non-dairy frozen dessert products.



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

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

     KOF-K Kosher Supervision  ("KOF-K") of Teaneck, New Jersey provides us with
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. We
believe that our ability to  successfully  market and distribute our products is
dependent  upon its  continued  compliance  with the  requirements  of  rabbinic
certification.  All TOFUTTI products meet the requirements for  certification as
kosher-parve.

TRADEMARKS AND PATENTS

     We have registered our trademark,  TOFUTTI(R), and other trademarks for our
frozen  desserts  and other  products  in the United  States  and  approximately
thirty-six foreign  countries.  We believe our trademarks are an important means
of establishing consumer recognition for our products.

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

GOVERNMENT REGULATION

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

     Our United  States  product  labels are subject to regulation by the United
States Food and Drug Administration  ("FDA"). Such regulations include standards
for product descriptions,  nutritional claims, label format, minimum type sizes,
content and location of nutritional information panels, nutritional comparisons,
and  ingredient  content  panels.  Our  labels,  ingredients  and  manufacturing
processes are subject to  inspection by the FDA. In 1994,  federal laws relating
to food product labeling were amended to require food product companies to make



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numerous changes in their product labeling. We believe that we are in compliance
with current labeling requirements.

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

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

EMPLOYEES

     On January 1, 2000, we employed ten persons on a full-time basis,  compared
with nine persons as of December 26, 1998.  We consider our  relations  with our
employees to be good.


Item 2.  Description of Properties

     Our facilities are located in a modern one-story facility in Cranford,  New
Jersey.  The 6,200 square foot facility  houses our  administrative  offices,  a
warehouse,   walk-in  freezer  and  refrigerator,   and  a  product  development
laboratory  and test kitchen.  On January 3, 1994,  we signed a five-year  lease
extension  which  expired  July 1, 1999.  Our annual  rental under the lease was
$74,000 in 1999.  We are currently in  negotiations  to extend the lease and are
reasonably  certain that such lease  extension  will be granted.  Our management
believes  that  the  Cranford  facility  will  continue  to  satisfy  our  space
requirements for the foreseeable future.


Item 3.  Legal Proceedings

     We are not a party to any material litigation.




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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

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


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

March 29, 1998........................         $1-9/16           $  15/16
June 27, 1998.........................          2                 1-1/4
September 26, 1998....................          1-7/16              7/8
December 26, 1998.....................          1-5/16              7/8
April 3, 1999.........................          1-3/8               7/8
July 3, 1999..........................          3-3/4             1-1/16
October 2, 1999.......................          3                 2-1/4
January 1, 2000.......................          2-9/16            1-9/16

     As of March 24, 2000, there were approximately 926 holders of record of our
Common  Stock.  We have not paid and have no present  intention  of paying  cash
dividends on our Common Stock in the foreseeable future.


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

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

The  discussion  and analysis  which  follows in this Annual Report and in other
reports  and  documents  and  in  oral  statements  made  on our  behalf  by our
management and others may contain trend analysis



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and other  forward-looking  statements  within the meaning of Section 21E of the
Securities  Exchange Act of 1934 which reflect our current views with respect to
future events and financial  results.  These  include  statements  regarding our
earnings,  projected  growth and  forecasts,  and similar  matters which are not
historical  facts. We remind  stockholders that  forward-looking  statements are
merely  predictions and therefore are inherently  subject to  uncertainties  and
other  factors  which could cause the actual  future events or results to differ
materially  from  those  described  in  the  forward-looking  statements.  These
uncertainties and other factors include, among other things, business conditions
and  growth in the food  industry  and  general  economies,  both  domestic  and
international; lower than expected customer orders; competitive factors; changes
in product mix or distribution channels; and resource constraints encountered in
developing new products. The forward-looking statements contained in this Annual
Report and made  elsewhere by or on our behalf  should be considered in light of
these factors.

We have attempted to identify  additional  significant  uncertainties  and other
factors  affecting  forward-looking  statements  in Exhibit 99  incorporated  by
reference   to   this   Annual   Report   ("Additional   Information   Regarding
Forward-Looking   Statements").   We  will  provide  copies  of  Exhibit  99  to
stockholders  free of charge upon receipt of a written request  submitted to our
Secretary c/o Tofutti Brands Inc., 50 Jackson Drive, Cranford, New Jersey 07016.
Stockholders  may also obtain copies of Exhibit 99 for a nominal charge from the
Public Reference Section of the Securities and Exchange  Commission at 450 Fifth
Street,  N.W.,   Washington,   D.C.  20549  or  at  the  Commission's   website:
http://www.sec.gov.

Fifty-three  Weeks Ended  January 1, 2000 Compared  with  Fifty-two  Weeks Ended
December 26, 1998

     Our fiscal year is usually the fifty-two week period which ends on the last
Saturday in December.  The 1999 fiscal year was a fifty-three  week period which
ended on January 1, 2000.

     Net sales for the fifty-three weeks ended January 1, 2000 were $11,912,000,
an increase of $2,921,000 or 32% from the sales level realized for the fifty-two
weeks ended  December 26, 1998.  In the 1999 period,  non-dairy  frozen  dessert
product sales and food product sales  increased by  $1,858,000  and  $1,063,000,
respectively,  from the 1998 period.  The increase in non-dairy  frozen  dessert
sales was  attributable  to an  increase  in sales of all  categories  of frozen
dessert  products,   while  the  increase  in  food  product  sales  was  mostly
attributable  to an  increase  in sales of BETTER  THAN  CREAM  CHEESE  and SOUR
SUPREME.  Our gross profit in 1999  increased by $1,390,000 or 44% due primarily
to the sales increase,  while our gross profit percentage  increased from 35% in
1998 to 38% in 1999.  The increase in the gross profit  percentage  is primarily
the result of the large increase in frozen  dessert  sales,  for which we have a
higher gross profit margin.  Although our gross profit  percentage  increased in
1999,  it was still  adversely  affected  by the  start-up  manufacturing  costs
associated with our new products and the increased cost of allowances associated
with the introduction of those new products.  We anticipate that while our gross
profit will increase due to increased sales in 2000, our gross profit percentage
will not improve due to manufacturing  start-up costs and promotional allowances
associated with the planned introduction of new products in 2000.

     Based on recent sales trends,  we expect  continued  sales increases in our
frozen dessert and food product lines and in most customer categories.



                                      -10-

<PAGE>



     Selling  expenses  increased  $253,000 or 20% to $1,521,000 for the current
fiscal period from  $1,268,000  for the  comparable  1998 period.  A decrease of
$75,000 in bad debt  expense was offset by  increases  in  warehouse  ($24,000),
freight ($104,000), commission ($63,000) and trade show expenses ($104,000). The
increase in  warehouse  expense is  attributable  to an increase in inventory to
support our increased level of operations.  The increased freight and commission
expenses, both variable expenses, are attributable to the increase in sales. The
increase in trade show expense is due to our  attendance at numerous trade shows
throughout  the year.  We believe  that  attendance  at these  shows is the most
effective  and  economical  way to market and sell our  products.  Marketing and
sales  promotion  expenses  increased by $11,000 in 1999 to  $199,000,  a slight
increase from 1998.  This slight  increase was due  principally  to increases in
magazine advertising, point-of-sale material and coupon expenses.

     Research and development expenses increased to $376,000 in 1999 as compared
to  $342,000  in 1998.  This  increase  was due to the hiring of one  additional
employee and additional  research and development  expenses  associated with our
new  products.  These  additional  expenses  consist  mainly of  start-up  costs
incurred at new co-packing  facilities,  including additional Kosher supervision
costs. Our management  expects that research and development costs will continue
at a slightly higher level for 2000.

     General and administrative  expenses were $1,043,000 for the 1999 period as
compared with $853,000 for the comparable  period in 1998. The $190,000 increase
was due largely to increased salary, utilities, and outside services expenses.

     Interest income was $17,000 for the  fifty-three  week period ended January
1, 2000 due to increased  cash flow which resulted in the purchase of short-term
investments.  Interest  expense was $5,000 and $7,000 for the  fifty-three  week
period ended  January 1, 2000 and the fifty-two  week period ended  December 26,
1998, respectively. Our management anticipates an increase in interest income in
fiscal year 2000 as our cash balances have increased.

     As a result of  reductions  in deferred  tax assets and a current  year tax
increase,  we recorded  income tax expense of $586,000 in the 1999 period versus
an income tax benefit of $45,000 in 1998.

     Based on the foregoing, we had net income of $850,000 or $0.12 per share on
a diluted basis in the fifty-three week period ended January 1, 2000 as compared
with net  income of  $560,000  or $0.08  per  share on a  diluted  basis for the
fifty-two week period ended December 26, 1998.

Income Taxes

     In  previous  years,  our tax year  ended on July  31st.  Due to the timing
difference  between the end of the fiscal and tax year, we had to make estimates
as to our  state and  federal  tax  liabilities  in our  quarterly  and year end
reports. On March 7, 2000, the IRS approved a change of our tax year to December
31.  We will  file a short  year tax  return  for the  period  August 1, 1999 to
January 1, 2000.




                                      -11-

<PAGE>



Liquidity and Capital Resources

     At January 1, 2000,  our  working  capital was  $3,058,000,  an increase of
$1,068,000 from December 26, 1998. Our current and quick acid test ratios,  both
measures  of  liquidity,  were 7.5 and 6.3,  respectively,  at  January  1, 2000
compared  to 7.6 and 5.6 at  December  26,  1998.  At January 1, 2000,  accounts
receivable decreased by $124,000 from December 26, 1998,  principally reflecting
the improvement in cash collections.  At January 1, 2000,  inventories decreased
by $17,000  from  December  26, 1998.  Prepaid  expenses  decreased by $5,000 to
$8,000 at January 1, 2000 from  December  26, 1998 due to the  utilization  of a
prepaid  1999 New Jersey  income tax  payment.  Current  deferred tax assets and
non-current   deferred  tax  assets   decreased   by  $155,000   and   $177,000,
respectively,  at January 1, 2000 compared to December 26, 1998 as a result of a
reduction in the valuation  allowance  and the  recording of federal  income tax
expense.  At January 1, 2000, accounts payable and accrued expenses decreased by
$51,000 from $180,000 to $129,000. Accrued compensation increased by $115,000 to
$200,000 at January 1, 2000  reflecting an increase in annual  bonuses to two of
our  executive  officers.  The increase in income  taxes  payable of $103,000 to
$122,000 at January 1, 2000  represents  an  additional  provision for state and
federal income taxes.

     We do not have any material capital commitments and contemplate no material
capital  expenditures in the foreseeable future. We believe that we will be able
to fund our operations during 2000 from current resources.

Inflation and Seasonality

     We do not believe that our operating results have been materially  affected
by inflation during the preceding two years. There can be no assurance, however,
that our operating results will not be affected by inflation in the future.  Our
business is not subject to substantial seasonal variations.

Market Risk

     We invest our excess cash in bank  certificates  of deposit and the highest
rated money market  funds.  The bank  certificate  of deposits are usually for a
term of not more than six months and never for more than $100,000 per account.



                                      -12-

<PAGE>




Item 7.  Financial Statements


                          Index to Financial Statements


         Independent Auditors' Reports....................................F-1-2

         Financial Statements:

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

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

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

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

                  Notes to Financial Statements...........................F-7-13







                                      -13-

<PAGE>



                          INDEPENDENT AUDITORS' REPORT





To The Board of Directors and Stockholders
Tofutti Brands Inc.

We have  audited the  accompanying  balance  sheet of Tofutti  Brands Inc. as of
January 1, 2000 and the related  statements of income,  changes in stockholders'
equity  and cash  flows  for the  fifty-three  week  period  then  ended.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with 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 audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Tofutti  Brands Inc. as of
January  1, 2000 and the  results of its  operations  and its cash flows for the
fifty-three  week period then  ended,  in  conformity  with  generally  accepted
accounting principles.




                                                /s/Wiss & Company
                                                WISS & COMPANY, LLP

Livingston, New Jersey
March 9, 2000



                                       F-1

<PAGE>



                          Independent Auditors' Report





The Board of Directors and Stockholders
Tofutti Brands Inc.:

We have  audited the  accompanying  balance  sheet of Tofutti  Brands Inc. as of
December  26,  1998,   and  the  related   statements  of  income,   changes  in
stockholders'  equity,  and cash flows for the fifty-two week period then ended.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audit.

We conducted our audit in accordance with 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 audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Tofutti  Brands Inc. as of
December 26, 1998,  and the results of its operations and its cash flows for the
fifty-two  week  period  then  ended  in  conformity  with  generally   accepted
accounting principles.




/s/KPMG LLP


Short Hills, New Jersey
March 16, 1999



                                       F-2

<PAGE>



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

<TABLE>
<CAPTION>
                                                                     January 1,             December 26,
                                                                       2000                      1998
                                                                       ----                      ----
<S>                                                                   <C>                      <C>
Assets
Current assets:
     Cash and cash equivalents                                        $1,693                   $ 407
     Accounts receivable, net of allowance for doubtful
        accounts of $200 and $120, respectively                          831                     955
     Short-term investments                                              253                       -
     Inventories                                                         566                     583
     Prepaid expenses                                                      8                      13
     Deferred income taxes                                               180                     335
                                                                         ---                   -----
                Total current assets                                   3,531                   2,293
                                                                       -----                   -----

Other assets:                                                                                      -
     Deferred income taxes                                                 3                     180
     Other assets                                                        141                     119
                                                                        ----                   -----
                                                                        $144                    $299
                                                                        ----                    ----

                                                                      $3,675                  $2,592
                                                                      ======                  ======

Liabilities and Stockholders' Equity
Current liabilities:
     Note payable                                                     $   22                  $   19
     Accounts payable and accrued expenses                               129                     180
     Accrued compensation                                                200                      85
     Income taxes payable                                                122                      19
                                                                         ---                     ---
                  Total current liabilities                              473                     303

Note payable, less current maturities                                      8                      29
                                                                         ---                     ---

Commitments and contingencies                                             --                      --
Stockholders' equity:
     Preferred stock - par value $.01 per share;
       authorized 100,000 shares, none issued                             --                      --
     Common stock - par value $.01 per share;
       authorized 15,000,000 shares, issued and
       outstanding 6,299,567 shares at January 1, 2000
       and 6,183,567 shares at December 26, 1998                          63                      62

     Additional paid-in capital                                        3,714                   3,631
     Accumulated deficit                                                (583)                 (1,433)
                                                                      ------                  ------
                  Total stockholders' equity                           3,194                   2,260
                                                                       -----                   -----

                 Total liabilities and stockholders' equity           $3,675                  $2,592
                                                                      ======                  ======
</TABLE>

                 See accompanying notes to financial statements.



                                       F-3

<PAGE>



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


<TABLE>
<CAPTION>
                                             Fifty-three weeks            Fifty-two weeks
                                                   ended                       ended
                                              January 1, 2000            December 26, 1998
                                              ---------------            -----------------

<S>                                              <C>                           <C>
Net sales                                        $11,912                       $8,991
Cost of sales                                      7,349                        5,818
                                                   -----                        -----
      Gross profit                                 4,563                        3,173

Operating expenses:
  Selling                                          1,521                        1,268
  Marketing and sales promotion                      199                          188
  Research and development                           376                          342
  General and administrative                       1,043                          853
                                                   -----                          ---
                                                   3,139                        2,651
                                                   -----                        -----

Operating income                                   1,424                          522

Interest income (expense)                             12                           (7)
                                                   -----                          ---
Income before income tax (expense) benefit         1,436                          515

Income tax (expense) benefit                        (586)                          45
                                                    ----                         ----

Net income                                          $850                         $560
                                                    ====                         ====

Weighted Average Common Shares Outstanding:
   Basic                                           6,245                        6,184
                                                   =====                        =====
   Diluted                                         7,368                        6,610
                                                   =====                        =====

Net income per share:
   Basic                                            $.14                         $.09
                                                    ====                         ====
   Diluted                                          $.12                         $.08
                                                    ====                         ====

</TABLE>



                 See accompanying notes to financial statements.



                                       F-4

<PAGE>



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


<TABLE>
<CAPTION>
                                                 Common Stock              Additional                                 Total
                                            -----------------------         Paid-In          Accumulated          Stockholders'
                                            Shares           Amount         Capital            Deficit                Equity
                                            ------           ------         -------            -------                ------
<S>                                       <C>                 <C>            <C>               <C>                    <C>
Balances, December 27, 1997               6,183,567           $62            $3,631            $(1,993)               $1,700
Net Income                                       --            --                --                560                   560
                                          ---------           ---            ------             ------                 -----
Balances, December 26, 1998               6,183,567            62             3,631             (1,433)                2,260
Issuance of Common Stock for
 Stock Options                              116,000             1                83                 --                    84
Net Income                                       --            --                --                850                   850
                                                ---           ---            ------              -----                 -----
Balances, January 1, 2000                 6,299,567           $63            $3,714              $(583)               $3,194
                                          =========           ===            ======              =====                ======



</TABLE>



















                 See accompanying notes to financial statements.



                                       F-5

<PAGE>



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

<TABLE>
<CAPTION>
                                                                 Fifty-three                Fifty-two
                                                                weeks ended                 weeks ended
                                                                  January 1,                December 26,
                                                                     2000                       1998
                                                                     ----                       ----
<S>                                                                <C>                         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                        $850                      $ 560
   Adjustments to reconcile net income to net
    cash flows from operating activities:
   Provision for bad debts                                             60                        135
   Accrued interest on investments                                     (3)                        --
   Deferred taxes                                                     332                        (65)
   Change in assets and liabilities:
       Accounts receivable                                             64                       (171)
       Inventories                                                     17                        (42)
       Prepaid expenses                                                 5                         (6)
       Accounts payable and accrued expenses                          (51)                       (58)
       Accrued compensation                                           115                         35
       Income taxes payable                                           103                          5
                                                                     ----                        ---

   Net cash flows from operating activities                         1,492                        393
                                                                    -----                        ---

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of investments                                           (250)                        --
   Other assets                                                       (22)                       (22)
                                                                    -----                       ----
   Net cash flows from investing activities                          (272)                       (22)
                                                                    -----                       ----

CASH FLOWS FROM FINANCING ACTIVITIES:
   Note payable                                                       (18)                       (18)
   Issuance of common stock                                            84                         --
                                                                     ----                       ----
   Net cash flows from financing activities                            66                        (18)
                                                                     ----                       ----

NET CHANGE IN CASH AND CASH EQUIVALENTS                             1,286                        353

CASH AND CASH EQUIVALENTS, AT BEGINNING
      OF PERIOD                                                       407                         54
                                                                      ---                        ---
CASH AND CASH EQUIVALENTS, AT END OF
      PERIOD                                                       $1,693                       $407
                                                                   ======                       ====

SUPPLEMENTAL CASH FLOW INFORMATION:
   Interest paid                                                     $  5                        $ 7
                                                                     ====                        ===
   Income taxes paid                                                 $151                        $15
                                                                     ====                        ===
</TABLE>

                 See accompanying notes to financial statements.



                                       F-6

<PAGE>



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

NOTE 1:  DESCRIPTION  OF THE  BUSINESS  AND  SUMMARY OF  SIGNIFICANT  ACCOUNTING
         POLICIES

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

Fiscal  Year - The Company  operates  on a fiscal  year  ending on the  Saturday
closest to December  31.  Fiscal  years for the  financial  statements  included
herein  ended on  January 1, 2000  (fifty-three  weeks) and  December  26,  1998
(fifty-two weeks).

Estimates and  Uncertainties  - 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.

Revenue  Recognition  -  Revenue  is  recognized  when  goods are  shipped  from
production facilities or outside warehouses.

Concentration  of Credit/Sales  Risk - Financial  instruments  that  potentially
subject the Company to concentration  of credit risk consists  primarily of cash
and  unsecured  trade  receivables.  The Company  maintains its cash balances in
financial  institutions  which are  insured  by the  Federal  Deposit  Insurance
Corporation  (FDIC) up to $100,000  each.  At times  during the year amounts may
exceed the FDIC limit.

The Company performs ongoing  evaluations of its customers'  financial condition
and does not require  collateral.  Management  feels that credit risk beyond the
established allowances at January 1, 2000 is limited.

During the  fifty-three  and  fifty-two  week periods  ended January 1, 2000 and
December 26, 1998, the Company derived approximately 89% and 88%,  respectively,
of its net sales domestically.  The remaining sales in both periods were exports
to various other  countries.  The Company had sales to two individual  customers
representing  17% and 13% of net sales  during 1999 and 16% and 10% of net sales
during 1998.

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

Short-Term  Investments - The Company's  investments  represent  certificates of
deposit  that have a maturity  of less than one year,  which the Company has the
positive intent and ability to hold to maturity.




                                       F-7

<PAGE>


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

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

Property and Equipment - Property and equipment are stated at cost.  The Company
provides for depreciation using the straight-line method by charges to income at
rates based on the estimated useful lives of the assets.

Income Taxes - Deferred tax assets and liabilities are recognized for the future
tax  consequences  attributable to differences  between the financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
bases.  Deferred tax assets and liabilities are measured using enacted tax rates
expected  to apply to  taxable  income  in the  years in which  those  temporary
differences are expected to be recovered or settled.  The effect on deferred tax
assets and  liabilities  of a change in tax rates is recognized in income in the
period that includes the enactment date.

Net Income Per Share and Stock Based  Compensation  - Basic  earnings per common
share has been computed by dividing net income by the weighted average number of
common  shares  outstanding.  Diluted  earnings  per share has been  computed by
dividing net income by the weighted average number of common shares outstanding,
including the dilutive effects of stock options.

The Company  accounts for  stock-based  compensation  using the intrinsic  value
method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for
Stock  Issued  to   Employees,"   and  related   Interpretations.   Accordingly,
compensation  cost for stock  options is measured as the excess,  if any, of the
quoted  market  price at the date of the grant over the amount an employee  must
pay to acquire the stock. Because the Company grants options at a price equal to
the market price of the stock at the date of grant, no  compensation  expense is
recorded.  As required by Statement of Financial  Accounting  Standards No. 123,
"Accounting for Stock-Based  Compensation" (SFAS No. 123), the Company discloses
pro forma net income and earnings per share as if the fair value method had been
applied (see Note 4).

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

Cash,  accounts  receivable,  accounts payable,  accrued expenses,  income taxes
payable and note  payable as of January 1, 2000 and December 26, 1998 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.

Reclassifications - Certain reclassifications of the December 26, 1998 financial
statements have been made to conform to the January 1, 2000 presentation.




                                       F-8

<PAGE>


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


NOTE 2: INVENTORIES

Inventories consist of the following:

                                                  January 1,        December 26,
                                                    2000               1998
                                                    ----               ----
Finished products                                   $352              $ 352
Raw materials and packaging                          214                231
                                                     ---              -----
                                                    $566              $ 583
                                                    ====              =====




NOTE 3: 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  or
termination  of the policy prior to death,  the Company is to receive a complete
refund of all its premiums paid plus interest at 4%.

NOTE 4: STOCK OPTIONS

The 1993 Stock  Option Plan (the "1993  Plan")  provides for the granting to key
employees of incentive  stock options,  within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended, and for the granting of non-qualified
stock  options to key  employees  and  consultants.  The 1993 Plan is  currently
administered  by  the  Board  of  Directors,  which  determines  the  terms  and
conditions of the options  granted  under the 1993 Plan,  including the exercise
price,  number of shares subject to the option and the  exercisability  thereof.
Options are generally  exercisable in cumulative  installments of 33-1/3% or 50%
per year  commencing  one year after the date of grant and annually  thereafter,
with contract  lives of generally  five years from the date of grant. A total of
2,900,000 shares have been reserved for issuance under the 1993 Plan. At January
1, 2000,  2,383,000  shares  were  subject to  outstanding  options  and 221,000
additional shares were available for future grant.




                                       F-9

<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 27, 1997 to
January 1, 2000:

<TABLE>
<CAPTION>
                                                INCENTIVE OPTIONS                    NON-QUALIFIED OPTIONS
                                                -----------------       --------------------------------------------
                                                                        Weighted                           Weighted
                                                                         Average                           Average
                                                                        Exercise                           Exercise
                                                    Shares               Price ($)         Shares          Price ($)
                                                    ------              ----------         ------          ---------
<S>                     <C> <C>                    <C>                    <C>              <C>               <C>
Outstanding at December 27, 1997                   1,118,000              0.765            102,000           0.790
Exercisable at December 27, 1997                          --                --                  --             --
Canceled in 1998                                      (6,000)             0.6875                --             --
                                                   ---------                               -------
Outstanding at December 26, 1998                   1,112,000              0.766            102,000           0.790
Granted in 1999                                    1,186,000              1.116             99,000           1.0625
Exercised in 1999                                    (96,000)             0.716            (20,000)          0.750
                                                   ---------                               -------
Outstanding at January 1, 2000                     2,202,000              0.9560           181,000           0.944
                                                   =========                               =======
Exercisable at January 1, 2000                     1,411,000              0.866            115,000           0.876
                                                   =========                               =======
Exercisable at December 26, 1998                     404,000              0.764             41,000           0.790
                                                   =========                               =======
</TABLE>

The fair value of each stock option granted during 1999 is estimated on the date
of grant  using  the  Black-Scholes  option  pricing  model  with the  following
assumptions:

                                                            1999
                                                            ----
Expected life (years)                                       4.0
Expected volatility                                         197%
Expected dividend yield                                     0.0%
Risk-free interest rate                                     5.5%
Weighted average fair value of
   options granted during the year                          $.85

There were no stock options granted during 1998.



                                      F-10

<PAGE>


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


The following table summarizes  information  about stock options  outstanding at
January 1, 2000:



                                       Weighted Average         Weighted
       Range of           Number        Remaining Life           Average
   Exercise Prices     Outstanding        (in years)         Exercise Price
   ---------------     -----------        ----------         --------------
    $.6875--1.031       1,098,000             2.3                 $0.77
   $1.0625-$1.1688      1,285,000             4.3                 $1.11


Set forth below are the Company's net income and net income per share, presented
both "as reported" and "pro forma," as if compensation  cost had been determined
consistent with the fair value provisions of SFAS 123:


                                                          2000            1998
                                                          ----            ----
Net income available for common stockholders:
   As reported                                            $850            $560
   Pro forma                                               336             390
Basic earnings per share:
   As reported                                             .14             .09
   Pro forma                                               .05             .06
Diluted earnings per share:
   As reported                                             .12             .08
   Pro forma                                               .05             .06


NOTE 5: COMMITMENTS AND CONTINGENCIES

The Company  leases a warehouse  and  administrative  facility in Cranford,  New
Jersey under an operating  lease which  expired on July 1, 1999.  The Company is
currently in negotiations to extend the lease and management  believes that such
lease  extension,  which will not exceed five years,  will be  consummated.  The
Company's  annual rental under its existing  lease is $74.  Management  does not
expect its future rental expense to be materially  different  after the expected
consummation of the aforementioned extension.

Annual  net  rental  expenses  aggregated  $74 and  $74,  respectively,  for the
fifty-three  week period  ended  January 1, 2000 and the  fifty-two  week period
ended December 26, 1998.




                                      F-11

<PAGE>


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

Litigation - The Company from time to time may be a party to various litigation,
claims or assessments.  Management  believes that the ultimate  outcome of these
matters will not have a material affect on the Company's  financial  position or
results of operations.


NOTE 6: INCOME TAXES

The components of income tax expense (benefit) for the fifty-three and fifty-two
week periods ended January 1, 2000 and December 26, 1998 are as follows:


                                                2000             1998
                                                ----             ----
Current:
           Federal                              $ 80           $  --
           State                                 173              20
                                                 ---              --
                                                 253              20
                                                 ---              --
Deferred:
           Federal                               250             (50)
           State                                  83             (15)
                                                  --             ---
                                                 333             (65)
                                                 ---             ---

Total income tax expense (benefit)              $586            $(45)
                                                ====            ====



Deferred tax assets at January 1, 2000 and December 26, 1998 are as follows:



                                                        2000           1998
                                                        ----           ----
Allowance for doubtful accounts                         $ 24           $ 48
Accruals and reserves                                    159             96
Net operations loss carry forwards and tax credits        --            371
                                                          --            ---
Deferred tax assets                                     $183           $515
                                                        ====           ====












                                      F-12

<PAGE>


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

A  reconciliation  between the  expected  federal tax expense  (benefit)  at the
statutory tax rate of 34% and the Company's actual tax expense (benefit) for the
fifty-three  and  fifty-two  week periods ended January 1, 2000 and December 26,
1998 follows:



                                                 2000              1998
                                                 ----              ----
Income tax expense computed at
federal statutory rate                           $488             $ 175
Permanent and other items                           6                 8
State income taxes, net of federal
  income tax benefit                               92                31
Change in valuation allowance                      --              (259)
                                                   --              -----
      Income tax expense (benefit)               $586             $ (45)
                                                 ====             ======






                                      F-13

<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

         Our Directors and Executive Officers are:


Name                           Age       Position
----                           ---       --------
David Mintz.................    68       Chairman of the Board of Directors,
                                         Chief Executive Officer
Steven Kass.................    48       Chief Financial Officer, Secretary and
                                           Treasurer
Reuben Rapoport.............    69       Director of Product Development and
                                           Director
Franklyn Snitow.............    53       Director
Bernard Koster..............    65       Director
Jeremy Wiesen...............    57       Director

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

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

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

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

     Bernard Koster has been a Director  since March 1993.  Since February 1990,
Mr. Koster has acted as an  independent  business  consultant.  He has also been
counsel to the New Jersey law firm of Litwin and Holsinger since March 1993.




                                      -14-

<PAGE>



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

     All Directors hold office until the next Annual Meeting of Stockholders and
until their  successors  have been elected and qualified.  Officers serve at the
pleasure of the Board of Directors.  There are no family  relationships  between
any of our  Directors  and executive  officers.  All of the  executive  officers
devote their full time to our operations.

     Compliance  with Section  16(a) of The Exchange  Act.  Section 16(a) of the
Securities  Exchange  Act  of  1934,  as  amended,  requires  our  officers  and
directors,  and persons who own more than ten  percent of our 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 us with copies of
all such forms they file.

     To our  knowledge,  based  solely on our review of the copies of such forms
received by us, or written  representations  from certain reporting persons that
no  additional  forms were  required for those  persons,  we believe that during
fiscal  1999 all  persons  subject  to these  reporting  requirements  filed the
required reports on a timely basis.


Item 10. Executive Compensation

         The  following  table  sets  forth  information  concerning  the  total
compensation during the last three fiscal years for our executive officers whose
total salary in fiscal 1999 totaled $100,000 or more:

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

                                              Annual             Long-Term
                                           Compensation        Compensation
                                           ------------        ------------
                                                           Securities Underlying
Name and Principal Position       Year      Salary ($)          Options (#)
---------------------------       ----      ----------          -----------
David Mintz                       1999     $303,000(1)           600,000
Chief Executive Officer           1998      225,000(2)                --
  and Chairman of the Board       1997      180,000(3)           480,000

Steven Kass                       1999      187,000(1)           400,000
Chief Financial Officer           1998      145,000(2)                --
  Secretary and Treasurer         1997      117,500(3)           430,000

---------------
(1)  Includes  bonuses of  $125,000  and  $75,000  for  Messrs.  Mintz and Kass,
     respectively, accrued at year-end and paid on February 11, 2000.



                                      -15-

<PAGE>



(2)  Includes  bonuses  of  $50,000  and  $35,000  for  Messrs.  Mintz and Kass,
     respectively, accrued at year-end and paid on April 1, 1999.

(3)  Includes  bonuses  of  $30,000  and  $20,000  for  Messrs.  Mintz and Kass,
     respectively, accrued at year-end and paid on April 1, 1998.

     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, our Board of Directors adopted a resolution wherein we
were authorized to purchase a $1,000,000 split dollar insurance plan on the life
of a member  of David  Mintz's  family.  Mr.  Mintz is our  Chairman  and  Chief
Executive  Officer.  The  purpose of this  transaction  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 or termination of the policy prior to death,
we will receive a complete refund of all the premiums paid plus interest at 4%.

     There are  currently  no  employment  agreements  between us and any of our
officers.  Neither Mr. Snitow nor Mr. Koster has received any cash  remuneration
for their service as Director in the last three years,  nor has Mr. Wiesen since
his election to the Board in May 1999.

STOCK OPTIONS

     The  following  table  provides  information   concerning  the  grants  and
exercising of stock options  during our last fiscal year to each of the officers
named above in the Summary Compensation Table.

<TABLE>
                                                        OPTIONS GRANTED IN LAST FISCAL YEAR
                                 -----------------------------------------------------------------------------------
                                 Number of            Percent of
                                    Shares           Total Options
                                 Underlying           Granted to
                                  Options            Employees in
Name                             Granted (#)          Fiscal Year      Exercise Price ($/SH)         Expiration Date
----                             -----------          -----------      ---------------------         ---------------
<S>                                <C>                   <C>                 <C>                        <C>  <C>
David Mintz,                       600,000               47%                 $1.1688                    3/18/04
Chief Executive Officer
  and Chairman of the
  Board

Steven Kass,                       400,000               31%                  1.0625                    3/18/04
  Chief Financial Officer,
  Secretary and Treasurer

</TABLE>


                                      -16-


<PAGE>

     The following table provides  information  concerning stock options held in
1999 by each of the executive  officers named above in the Summary  Compensation
Table.

<TABLE>
<CAPTION>
                                                         AGGREGATED OPTION EXERCISES IN LAST
                                                     FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
                                  -----------------------------------------------------------------------------------------------
                                                                             Number of Shares              Value of Unexercised
                                       Shares                             Underlying Unexercised           in the Money Options
                                  Acquired on             Value           Options at FY-End (#)               at FY-End ($)
Name                              Exercise (#)        Realized ($)      Exercisable/Unexercisable       Exercisable/Unexercisable
----                              ------------        ------------      -------------------------       -------------------------
<S>                                    <C>              <C>                    <C>                         <C>
David Mintz,                             --             $    --                680,000 (E)                 $529,000 (E)(1)
Chief Executive Officer                                                        400,000 (U)                  207,000 (U)(1)
  and Chairman of the
  Board

Steven Kass,                           35,000            78,812                 528,000(E)                  461,000 (E)(1)
  Chief Financial Officer,                                                      267,000(U)                  167,000 (U)(1)
  Secretary and Treasurer

</TABLE>
-----------------------
(E)  Exercisable options
(U)  Unexercisable options
(1)  Calculated by subtracting option exercise price from year-end market price.


Item 11. Security Ownership of Certain Beneficial Owners and Management

     The following  table sets forth as of March 24, 2000,  certain  information
regarding  the ownership of our Common  Stock,  $.01 par value,  for each person
known by us to be the beneficial owner of more than 5% of the outstanding shares
of Common Stock,  for each executive  officer named in the Summary  Compensation
Table, for each of our Directors and for our executive officers and directors as
a group:


                                            Amount of
Name                                  Beneficial Ownership     Percent of Class
----                                  --------------------     ----------------
David Mintz........................        3,659,240 (1)            46.8%
Steven Kass........................          528,000 (2)             6.7%
Reuben Rapoport....................          145,000 (3)             1.9%
Jeremy Wiesen......................           88,500 (4)             1.1%
Franklyn Snitow....................           78,000 (5)             1.0%
Bernard Koster.....................           33,000 (6)              *
All Executive Officers and
 Directors as a group (6 persons)..         4,531,740(7)            57.9%
________________


                                      -17-

<PAGE>



     The address of Messrs. Mintz, Kass and Rapoport is c/o Tofutti Brands Inc.,
50 Jackson Drive,  Cranford,  New Jersey 07016. The address of Mr. Snitow is 575
Lexington  Avenue,  New York, New York 10017. The address of Mr. Koster is 7 Old
Smith Road,  Tenafly,  New Jersey  07670.  The address of Mr. Wiesen is 254 East
68th Street,  Apt. 30F, New York,  New York 10021.  Each person listed above has
sole voting and/or investment power of the shares attributed to him.

*    Less than 1%.

(1)  Includes 680,000 shares issuable upon the exercise of currently exercisable
     stock options.

(2)  Issuable upon the exercise of currently 528,000 exercisable stock options.

(3)  Includes 125,000 shares issuable upon the exercise of currently exercisable
     stock options.

(4)  Includes 20,000 shares issuable upon the exercise of currently  exercisable
     stock options.

(5)  Includes 58,000 shares issuable upon the exercise of currently  exercisable
     stock options.

(6)  Includes 30,000 shares issuable upon the exercise of currently  exercisable
     stock options.

(7)  Includes   1,441,000   shares  issuable  upon  the  exercise  of  currently
     exercisable stock options.


Item 12. Certain Relationships and Related Transactions

     None


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 Amended 1993 Stock Option Plan.

23.1      Consent of WISS & COMPANY, LLP.

23.2      Consent of KPMG LLP.

27        Financial Data Schedule (filed via EDGAR only).




                                      -18-

<PAGE>



99        Additional Information Regarding Forward-Looking Statements.
___________

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

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

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


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

     None.



                                      -19-

<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 31, 2000.

                                            TOFUTTI BRANDS INC.
                                              (Registrant)

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


     In accordance  with the  Securities  Exchange Act of 1934,  this Report has
been signed below on March 31, 2000, 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

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



                                      -20-

<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 Amended 1993 Stock Option Plan.

23.1         Consent of WISS & COMPANY, LLP.

23.2         Consent of KPMG LLP.

27           Financial Data Schedule (filed via EDGAR only).

99           Additional Information Regarding Forward-Looking Statements.
___________

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

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

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