Cover
Cover - USD ($) | 12 Months Ended | ||
Jan. 01, 2022 | Apr. 01, 2022 | Jul. 03, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Jan. 1, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --01-01 | ||
Entity File Number | 1-9009 | ||
Entity Registrant Name | TOFUTTI BRANDS INC. | ||
Entity Central Index Key | 0000730349 | ||
Entity Tax Identification Number | 13-3094658 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 50 Jackson Drive | ||
Entity Address, City or Town | Cranford | ||
Entity Address, State or Province | NJ | ||
Entity Address, Postal Zip Code | 07016 | ||
City Area Code | (908) | ||
Local Phone Number | 272-2400 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | TOFB | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 7,347,419 | ||
Entity Common Stock, Shares Outstanding | 5,153,706 | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Name | Mazars USA LLP | ||
Auditor Location | Edison, NJ | ||
Auditor Firm ID | 339 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Current assets: | ||
Cash | $ 1,698 | $ 1,459 |
Accounts receivable, net of allowance for doubtful accounts and sales promotions of $435 and $407, respectively | 1,336 | 2,078 |
Inventories | 1,874 | 1,997 |
Prepaid expenses and other current assets | 98 | 88 |
Total current assets | 5,006 | 5,622 |
Equipment, net | 135 | |
Operating lease right-of-use assets | 203 | 224 |
Deferred tax assets | 112 | 83 |
Other assets | 21 | 19 |
Total assets | 5,342 | 6,083 |
Current liabilities: | ||
SBA loan payable | 165 | 112 |
Income taxes payable | 46 | 117 |
Accounts payable | 122 | 219 |
Accrued expenses | 347 | 535 |
Total current liabilities | 680 | 983 |
Convertible note payable-long term-related party | 500 | |
SBA loan payable, net of current portion | 53 | |
Operating lease liabilities, net of current portion | 95 | 123 |
Total liabilities | 775 | 1,659 |
Stockholders’ equity: | ||
Preferred stock - par value $.01 per share; authorized 100,000 shares, none issued and outstanding | ||
Common stock - par value $.01 per share; authorized 15,000,000 shares, 5,153,706 shares issued and outstanding | 52 | 52 |
Additional paid-in capital | 207 | 207 |
Retained earnings | 4,308 | 4,165 |
Total stockholders’ equity | 4,567 | 4,424 |
Total liabilities and stockholders’ equity | $ 5,342 | $ 6,083 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts and sales promotions on accounts receivable | $ 435 | $ 407 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 5,153,706 | 5,153,706 |
Common stock, shares outstanding | 5,153,706 | 5,153,706 |
Statements of Income
Statements of Income - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Income Statement [Abstract] | ||
Net sales | $ 12,590 | $ 13,815 |
Cost of sales | 9,248 | 9,562 |
Gross profit | 3,342 | 4,253 |
Operating expenses: | ||
Selling and warehousing | 1,206 | 1,187 |
Marketing | 281 | 258 |
Product development costs | 124 | 240 |
General and administrative | 1,489 | 1,692 |
Total operating expenses | 3,100 | 3,377 |
Income before interest expense and income taxes | 242 | 876 |
Interest expense | 25 | 25 |
Income before provision for income taxes | 217 | 851 |
Provision for income taxes | 74 | 255 |
Net income | $ 143 | $ 596 |
Weighted average common shares outstanding: | ||
Basic | 5,154 | 5,154 |
Diluted | 5,154 | 5,456 |
Net income per common share: | ||
Basic | $ 0.03 | $ 0.12 |
Diluted | $ 0.03 | $ 0.11 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 28, 2019 | $ 52 | $ 207 | $ 3,569 | $ 3,828 |
Balance, shares at Dec. 28, 2019 | 5,153,706 | |||
Net income | 596 | 596 | ||
Ending balance, value at Jan. 02, 2021 | $ 52 | 207 | 4,165 | 4,424 |
Balance, shares at Jan. 02, 2021 | 5,153,706 | |||
Net income | 143 | 143 | ||
Ending balance, value at Jan. 01, 2022 | $ 52 | $ 207 | $ 4,308 | $ 4,567 |
Balance, shares at Jan. 01, 2022 | 5,153,706 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 143 | $ 596 |
Adjustments to reconcile net income to net cash flows provided by operating activities: | ||
Depreciation | 10 | 10 |
Non-cash change in right of use assets and lease liabilities | (7) | (5) |
Loss on sale and disposal of equipment | 75 | |
Provision for bad debts and sales promotions | 20 | 50 |
Deferred taxes | (29) | 134 |
Change in assets and liabilities: | ||
Accounts receivable | 722 | (309) |
Inventories | 123 | (68) |
Prepaid expenses | (10) | 32 |
Other assets | (2) | 11 |
Income taxes payable | (71) | 117 |
Accounts payable and accrued expenses | (285) | 212 |
Net cash flows provided by operating activities | 689 | 780 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sale of equipment | 50 | |
Net cash flows provided by investing activities | 50 | |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES: | ||
Payment of convertible note payable | (500) | |
Borrowings from SBA loan | 165 | |
Net cash flows (used in) provided by financing activities | (500) | 165 |
NET CHANGE IN CASH | 239 | 945 |
CASH AT BEGINNING OF YEAR | 1,459 | 514 |
CASH AT END OF YEAR | 1,698 | 1,459 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Income taxes paid | 180 | |
Interest paid- related party | $ 25 | $ 25 |
DESCRIPTION OF THE BUSINESS AND
DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jan. 01, 2022 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1: DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Operating Segments Fiscal Year Estimates and Uncertainties Accounts Receivable Inventories The Company purchased approximately 50 40 11 16 Equipment, net TOFUTTI BRANDS INC. NOTES TO FINANCIAL STATEMENTS (In thousands, except for share and per share data) Revenue Recognition Under ASC 606, revenue is recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). In evaluating our contracts with our customers under ASC 606, we have determined that there is no future performance obligation once delivery has occurred. The Company primarily sells dairy free, vegan cheeses, frozen desserts and other food products. The Company recognizes revenue when control over the products transfers to its customers, deemed to be the performance obligation, which generally occurs upon delivery or shipment of the products. The Company accounts for product shipping, handling and insurance as fulfillment activities with revenues for these activities recorded within net revenue and costs recorded within cost of sales. Revenues are recorded net of trade and sales incentives and estimated product returns. Known or expected pricing or revenue adjustments, such as trade discounts, rebates or returns, are estimated at the time of sale. The Company bases these estimates of expected amounts principally on historical utilization and redemption rates. Estimates that affect revenue, such as trade incentives and product returns, are monitored and adjusted each period until the incentives or product returns are realized. Key sales terms, such as pricing and quantities ordered, are established on a frequent basis such that most customer arrangements and related incentives have a one year or shorter duration. As such, we do not capitalize contract inception costs and we capitalize product fulfillment costs in accordance with U.S. GAAP and our inventory policies. The Company generally does not have any unbilled receivables at the end of a period. Concentration of Credit/Sales Risk 250 The Company performs ongoing evaluations of its customers’ financial condition and does not require collateral. Management believes that credit risk beyond the established allowances at January 1, 2022 is limited. During the fiscal years ended January 1, 2022 and January 2, 2021, the Company derived approximately 87 89 55 54 45 54 Income Taxes likelihood greater than 50 percent TOFUTTI BRANDS INC. NOTES TO FINANCIAL STATEMENTS (In thousands, except for share and per share data) Earnings Per Share 282,486 500,000 282,486 282,486 SCHEDULE OF EARNINGS PER SHARE, BASIC AND DILUTED Fiscal Year Ended January 1, 2022 Fiscal Year Ended January 2, 2021 Net income, numerator, basic computation $ 143 $ 596 Interest expense - 25 Net income, numerator, diluted computation $ 143 $ 621 Weighted average shares - denominator basic computation 5,154 5,154 Effect of convertible note - 282 Weighted average shares, as adjusted - denominator diluted computation 5,154 5,436 Earnings per common share: Basic $ 0.03 $ 0.12 Diluted $ 0.03 $ 0.11 Fair Value of Financial Instruments Small Business Administration (SBA) Loan - On May 2, 2020 the Company received a loan of $ 165 from the SBA pursuant to the Paycheck Protection Program at an interest rate of 1 %. Interest and payments were deferred until March 4, 2021. The current portion of the loan was $ 165 as of January 1, 2022 and the loan will expire on May 2, 2022 . On January 12, 2022, the Company was informed by the SBA that the entire amount of the loan had been forgiven. The Company will record forgiveness of debt income of $ 165 TOFUTTI BRANDS INC. NOTES TO FINANCIAL STATEMENTS (In thousands, except for share and per share data) Freight Costs 1,059 1,037 Advertising Costs 190 209 Product Development Costs 124 240 Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. The amendments in this Update require a new topic to be added (Topic 326) to the Accounting Standards Codification (“ASC”) and removes the thresholds that entities apply to measure credit losses on financial instruments measured at amortized cost, such as loans, trade receivables, reinsurance recoverables, off-balance-sheet credit exposures, and held-to-maturity securities. Under current U.S. GAAP, entities generally recognize credit losses when it is probable that the loss has been incurred. The guidance under ASU 2016-13 will remove all current recognition thresholds and will require entities under the new current expected credit loss (“CECL”) model to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that an entity expects to collect over the instrument’s contractual life. The new CECL model is based upon expected losses rather than incurred losses. Additionally, the credit loss recognition guidance for available-for-sale securities is amended and will require that credit losses on such debt securities should be recognized as an allowance for credit losses rather than a direct write-down of amortized cost balance. As the Company is a smaller reporting company, the ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the effect that this new guidance will have on our financial statements and related disclosures. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Jan. 01, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 2: INVENTORIES Inventories consist of the following: SCHEDULE OF INVENTORIES January 1, 2022 January 2, 2021 Finished products $ 1,218 $ 1,320 Raw materials and packaging 656 677 Inventories, net $ 1,874 $ 1,997 TOFUTTI BRANDS INC. NOTES TO FINANCIAL STATEMENTS (In thousands, except for share and per share data) |
EQUIPMENT
EQUIPMENT | 12 Months Ended |
Jan. 01, 2022 | |
Property, Plant and Equipment [Abstract] | |
EQUIPMENT | NOTE 3: EQUIPMENT Equipment consists of the following: SCHEDULE OF EQUIPMENT January 1, 2022 January 2, 2021 Manufacturing equipment installed at co-packer $ - $ 150 Less: accumulated depreciation 15 Equipment, net $ - $ 135 Depreciation expense for both the years ended January 1, 2022 and January 2, 2021 was $ 10 During September 2021, the Company sold manufacturing equipment with a cost of $ 102 15 50 75 |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Jan. 01, 2022 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 4: NOTES PAYABLE Small Business Administration (SBA) Loan On May 2, 2020 the Company received from the SBA a loan of $ 165 1 165 165 Related Party On January 6, 2016, David Mintz, the Company’s former Chairman and Chief Executive, provided the Company with a loan of $ 500 . The loan was extended until December 31, 2021 and was, at the option of the holder, convertible into the Company’s common stock at a conversion price of $ 1.77 per share, the closing price of the Company’s common stock on the date of the extension of the promissory note. Interest expense incurred to the related party was $ 25 for both fiscal years ended January 1, 2022 and January 2, 2021. On December 22, 2021, the entire loan of $ 500 plus accrued interest of $ 25 was paid by the Company to Mr. Mintz’s estate. SCHEDULE OF RELATED PARTY NOTES PAYABLE January 1, 2022 January 2, 2021 Note payable-related party $ — $ 500 Less current maturity — — Note payable related party, net of current maturity $ — $ 500 TOFUTTI BRANDS INC. NOTES TO FINANCIAL STATEMENTS (In thousands, except for share and per share data) |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Jan. 01, 2022 | |
Share-based Payment Arrangement [Abstract] | |
SHARE BASED COMPENSATION | NOTE 5: SHARE BASED COMPENSATION On June 10, 2014, the shareholders of the Company approved the 2014 Equity Incentive Plan (the “2014 Plan”). The 2014 Plan provides for grants of various types of awards that are designed to attract and retain highly qualified personnel who will contribute to the success of the Company and to provide incentives to participants in the 2014 Plan that are linked directly to increases in shareholder value which will therefore inure to the benefit of all shareholders of the Company. The 2014 Plan made 250,000 |
REVENUE
REVENUE | 12 Months Ended |
Jan. 01, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 6: REVENUE Performance obligations relating to the delivery of food products are satisfied when the goods are shipped to the customer and net of all applicable discounts, as follows: Payment term discounts, off-invoice allowance, manufacturer chargeback, freight allowance, spoilage discounts, and product returns. SCHEDULE OF REVENUE January 1, 2022 January 2, 2021 Revenues by geographical region are as follows: January 1, 2022 January 2, 2021 Revenues by geography: Americas $ 11,864 $ 13,272 Europe 183 147 Middle East 334 331 Asia Pacific and Africa 209 65 Revenues $ 12,590 $ 13,815 Approximately 87 89 January 1, 2022 January 2, 2021 Net sales by major product category: January 1, 2022 January 2, 2021 Cheeses $ 10,761 $ 11,669 Frozen Desserts and Foods 1,829 2,146 Revenues $ 12,590 $ 13,815 TOFUTTI BRANDS INC. NOTES TO FINANCIAL STATEMENTS (In thousands, except for share and per share data) |
LEASES
LEASES | 12 Months Ended |
Jan. 01, 2022 | |
Leases | |
LEASES | NOTE 7: LEASES The Company’s facilities are located in a one-story facility in Cranford, New Jersey. The 6,200 79 78 459 468 Under Topic 842, operating lease expense is generally recognized evenly over the term of the lease. The Company has operating leases primarily consisting of facilities with remaining lease terms of approximately two to four years. The Company does not have the option to terminate the leases early. The standard requires a lessee to record a right-of-use asset and a corresponding lease liability at the inception of the lease. The current portion of lease liabilities is included in accrued expenses on the balance sheets. Leases with an initial term of twelve months or less are not recorded on the balance sheet. For lease agreements entered into or reassessed after the adoption of Topic 842, the Company has combined the lease and non-lease components in determining the lease liabilities and ROU assets. The Company’s lease agreements generally do not provide an implicit borrowing rate; therefore, an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments. The Company used the incremental borrowing rate on December 29, 2018 of 5.5 ROU lease assets and lease liabilities for our operating leases were recorded in the balance sheet as follows: SCHEDULE OF ROU LEASE ASSETS AND LIABILITIES FOR OPERATING LEASES As of As of January 1, 2022 January 2, 2021 Operating lease right-of-use assets $ 203 $ 224 Current portion of lease liabilities 123 113 Operating lease liabilities, net of current portion 95 123 Total lease liabilities $ 218 $ 236 Weighted average remaining lease term (in years) 3.0 2.1 Weighted average discount rate 5.5 % 5.5 % TOFUTTI BRANDS INC. NOTES TO FINANCIAL STATEMENTS (In thousands, except for share and per share data) Future lease payments included in the measurement of lease liabilities on the balance sheet as of January 1, 2022, for the following three fiscal years and thereafter are as follows: SCHEDULE OF FUTURE MINIMUM RENTAL COMMITMENTS As of January 1, 2022 2022 $ 114 2023 110 Total future minimum lease payments 224 Present value adjustment (6 ) Total $ 218 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jan. 01, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 8: INCOME TAXES The components of income tax expense for the fiscal years ended January 1, 2022 and January 2, 2021 are as follows: SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) January 1, 2022 January 2, 2021 Current: Federal $ 64 $ 35 State 39 82 103 117 Deferred: Federal (22 ) 97 State (7 ) 41 (29 ) 138 Total income tax expense $ 74 $ 255 A reconciliation between the expected federal tax expense at the statutory tax rate of 21 SCHEDULE OF RECONCILIATION BETWEEN THE EXPECTED FEDERAL TAX EXPENSE AT STATUTORY TAX RATE January 1, 2022 January 2, 2021 Federal income tax $ 46 $ 179 State income taxes, net of federal income tax benefit 18 76 Permanent items 3 — Other 7 — Total income tax expense $ 74 $ 255 TOFUTTI BRANDS INC. NOTES TO FINANCIAL STATEMENTS (In thousands, except for share and per share data) Deferred tax assets for the fiscal years ended January 1, 2022 and January 2, 2021 consist of the following components: SCHEDULE OF DEFERRED TAX ASSETS January 1, January 2, Allowance for doubtful accounts $ 88 $ 83 Right of use asset (57 ) (67 ) Lease liabilities 61 67 Inventory 1 — Fixed assets 19 — Deferred tax asset, net $ 112 $ 83 At January 1, 2022 the Company had $ 0 0 The Company will recognize a tax provision in the financial statements for an uncertain tax position only if management’s assessment is that the position is “more likely than not” (i.e., a likelihood greater than 50 percent The following table indicates the changes to the Company’s uncertain tax positions for the fiscal years ended January 1, 2022 and January 2, 2021: SCHEDULE OF CHANGES TO COMPANY'S UNCERTAIN TAX POSITIONS Balance at December 28, 2019 $ 172 Increase due to reserves and tax positions related to current year — Balance at January 2, 2021 $ 172 Increase due to reserves and tax positions related to current year 8 Balance at January 1, 2022 $ 180 The Company accounts for penalties or interest related to uncertain tax positions as part of its provision for income taxes. The amount of uncertain tax positions that would affect the effective tax rate if they were recognized is $ 180 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jan. 01, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9: COMMITMENTS AND CONTINGENCIES The Company sells its products throughout the United States and in approximately fifteen foreign countries and may be impacted by public health crises beyond its control. This could disrupt its operations and negatively impact sales of its products. The Company’s customers, suppliers and co-packers may experience similar disruption. In December 2019, a novel strain of the Coronavirus, COVID-19, was reported to have surfaced in Wuhan, China, which has evolved into a pandemic. This situation and preventative or protective actions that governments have taken to counter the effects of the pandemic have resulted in a period of business disruption, including delays in shipments of products and raw materials. COVID-19 has spread to over 180 countries, including the United States, and efforts to contain the spread of COVID-19 have intensified. To the extent the impact of COVID-19 continues or worsens, the demand for the Company’s products may be negatively impacted, and it and its co-packers may have difficulty obtaining the materials necessary for the production of its products. In addition, the production facilities of the Company’s co-packers may be closed for sustained periods of time and industry-wide shipment of products may be negatively impacted. COVID-19 has also impacted the Company’s sales efforts as its ability to make sales calls is constrained. The Company’s ability to promote sales through promotional activities has also been constrained as many supermarkets are understaffed and unable to change pricing for items in stock, resulting in the cancelation of all sales promotional discounts for the foreseeable future. Trade food shows and sales conferences, major events used to introduce and sell the Company’s products, have been postponed indefinitely. The length and severity of the pandemic could also affect the Company’s regular sales, which could in turn result in reduced sales and a lower gross margin. |
DESCRIPTION OF THE BUSINESS A_2
DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jan. 01, 2022 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business |
Operating Segments | Operating Segments |
Fiscal Year | Fiscal Year |
Estimates and Uncertainties | Estimates and Uncertainties |
Accounts Receivable | Accounts Receivable |
Inventories | Inventories The Company purchased approximately 50 40 11 16 |
Equipment, net | Equipment, net TOFUTTI BRANDS INC. NOTES TO FINANCIAL STATEMENTS (In thousands, except for share and per share data) |
Revenue Recognition | Revenue Recognition Under ASC 606, revenue is recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). In evaluating our contracts with our customers under ASC 606, we have determined that there is no future performance obligation once delivery has occurred. The Company primarily sells dairy free, vegan cheeses, frozen desserts and other food products. The Company recognizes revenue when control over the products transfers to its customers, deemed to be the performance obligation, which generally occurs upon delivery or shipment of the products. The Company accounts for product shipping, handling and insurance as fulfillment activities with revenues for these activities recorded within net revenue and costs recorded within cost of sales. Revenues are recorded net of trade and sales incentives and estimated product returns. Known or expected pricing or revenue adjustments, such as trade discounts, rebates or returns, are estimated at the time of sale. The Company bases these estimates of expected amounts principally on historical utilization and redemption rates. Estimates that affect revenue, such as trade incentives and product returns, are monitored and adjusted each period until the incentives or product returns are realized. Key sales terms, such as pricing and quantities ordered, are established on a frequent basis such that most customer arrangements and related incentives have a one year or shorter duration. As such, we do not capitalize contract inception costs and we capitalize product fulfillment costs in accordance with U.S. GAAP and our inventory policies. The Company generally does not have any unbilled receivables at the end of a period. |
Concentration of Credit/Sales Risk | Concentration of Credit/Sales Risk 250 The Company performs ongoing evaluations of its customers’ financial condition and does not require collateral. Management believes that credit risk beyond the established allowances at January 1, 2022 is limited. During the fiscal years ended January 1, 2022 and January 2, 2021, the Company derived approximately 87 89 55 54 45 54 |
Income Taxes | Income Taxes likelihood greater than 50 percent TOFUTTI BRANDS INC. NOTES TO FINANCIAL STATEMENTS (In thousands, except for share and per share data) |
Earnings Per Share | Earnings Per Share 282,486 500,000 282,486 282,486 SCHEDULE OF EARNINGS PER SHARE, BASIC AND DILUTED Fiscal Year Ended January 1, 2022 Fiscal Year Ended January 2, 2021 Net income, numerator, basic computation $ 143 $ 596 Interest expense - 25 Net income, numerator, diluted computation $ 143 $ 621 Weighted average shares - denominator basic computation 5,154 5,154 Effect of convertible note - 282 Weighted average shares, as adjusted - denominator diluted computation 5,154 5,436 Earnings per common share: Basic $ 0.03 $ 0.12 Diluted $ 0.03 $ 0.11 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
Small Business Administration (SBA) Loan | Small Business Administration (SBA) Loan - On May 2, 2020 the Company received a loan of $ 165 from the SBA pursuant to the Paycheck Protection Program at an interest rate of 1 %. Interest and payments were deferred until March 4, 2021. The current portion of the loan was $ 165 as of January 1, 2022 and the loan will expire on May 2, 2022 . On January 12, 2022, the Company was informed by the SBA that the entire amount of the loan had been forgiven. The Company will record forgiveness of debt income of $ 165 TOFUTTI BRANDS INC. NOTES TO FINANCIAL STATEMENTS (In thousands, except for share and per share data) |
Freight Costs | Freight Costs 1,059 1,037 |
Advertising Costs | Advertising Costs 190 209 |
Product Development Costs | Product Development Costs 124 240 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. The amendments in this Update require a new topic to be added (Topic 326) to the Accounting Standards Codification (“ASC”) and removes the thresholds that entities apply to measure credit losses on financial instruments measured at amortized cost, such as loans, trade receivables, reinsurance recoverables, off-balance-sheet credit exposures, and held-to-maturity securities. Under current U.S. GAAP, entities generally recognize credit losses when it is probable that the loss has been incurred. The guidance under ASU 2016-13 will remove all current recognition thresholds and will require entities under the new current expected credit loss (“CECL”) model to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that an entity expects to collect over the instrument’s contractual life. The new CECL model is based upon expected losses rather than incurred losses. Additionally, the credit loss recognition guidance for available-for-sale securities is amended and will require that credit losses on such debt securities should be recognized as an allowance for credit losses rather than a direct write-down of amortized cost balance. As the Company is a smaller reporting company, the ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the effect that this new guidance will have on our financial statements and related disclosures. |
DESCRIPTION OF THE BUSINESS A_3
DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF EARNINGS PER SHARE, BASIC AND DILUTED | SCHEDULE OF EARNINGS PER SHARE, BASIC AND DILUTED Fiscal Year Ended January 1, 2022 Fiscal Year Ended January 2, 2021 Net income, numerator, basic computation $ 143 $ 596 Interest expense - 25 Net income, numerator, diluted computation $ 143 $ 621 Weighted average shares - denominator basic computation 5,154 5,154 Effect of convertible note - 282 Weighted average shares, as adjusted - denominator diluted computation 5,154 5,436 Earnings per common share: Basic $ 0.03 $ 0.12 Diluted $ 0.03 $ 0.11 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORIES | Inventories consist of the following: SCHEDULE OF INVENTORIES January 1, 2022 January 2, 2021 Finished products $ 1,218 $ 1,320 Raw materials and packaging 656 677 Inventories, net $ 1,874 $ 1,997 |
EQUIPMENT (Tables)
EQUIPMENT (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF EQUIPMENT | Equipment consists of the following: SCHEDULE OF EQUIPMENT January 1, 2022 January 2, 2021 Manufacturing equipment installed at co-packer $ - $ 150 Less: accumulated depreciation 15 Equipment, net $ - $ 135 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF RELATED PARTY NOTES PAYABLE | SCHEDULE OF RELATED PARTY NOTES PAYABLE January 1, 2022 January 2, 2021 Note payable-related party $ — $ 500 Less current maturity — — Note payable related party, net of current maturity $ — $ 500 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF REVENUE | SCHEDULE OF REVENUE January 1, 2022 January 2, 2021 Revenues by geographical region are as follows: January 1, 2022 January 2, 2021 Revenues by geography: Americas $ 11,864 $ 13,272 Europe 183 147 Middle East 334 331 Asia Pacific and Africa 209 65 Revenues $ 12,590 $ 13,815 January 1, 2022 January 2, 2021 Net sales by major product category: January 1, 2022 January 2, 2021 Cheeses $ 10,761 $ 11,669 Frozen Desserts and Foods 1,829 2,146 Revenues $ 12,590 $ 13,815 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Leases | |
SCHEDULE OF ROU LEASE ASSETS AND LIABILITIES FOR OPERATING LEASES | ROU lease assets and lease liabilities for our operating leases were recorded in the balance sheet as follows: SCHEDULE OF ROU LEASE ASSETS AND LIABILITIES FOR OPERATING LEASES As of As of January 1, 2022 January 2, 2021 Operating lease right-of-use assets $ 203 $ 224 Current portion of lease liabilities 123 113 Operating lease liabilities, net of current portion 95 123 Total lease liabilities $ 218 $ 236 Weighted average remaining lease term (in years) 3.0 2.1 Weighted average discount rate 5.5 % 5.5 % |
SCHEDULE OF FUTURE MINIMUM RENTAL COMMITMENTS | Future lease payments included in the measurement of lease liabilities on the balance sheet as of January 1, 2022, for the following three fiscal years and thereafter are as follows: SCHEDULE OF FUTURE MINIMUM RENTAL COMMITMENTS As of January 1, 2022 2022 $ 114 2023 110 Total future minimum lease payments 224 Present value adjustment (6 ) Total $ 218 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jan. 01, 2022 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) | The components of income tax expense for the fiscal years ended January 1, 2022 and January 2, 2021 are as follows: SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) January 1, 2022 January 2, 2021 Current: Federal $ 64 $ 35 State 39 82 103 117 Deferred: Federal (22 ) 97 State (7 ) 41 (29 ) 138 Total income tax expense $ 74 $ 255 |
SCHEDULE OF RECONCILIATION BETWEEN THE EXPECTED FEDERAL TAX EXPENSE AT STATUTORY TAX RATE | A reconciliation between the expected federal tax expense at the statutory tax rate of 21 SCHEDULE OF RECONCILIATION BETWEEN THE EXPECTED FEDERAL TAX EXPENSE AT STATUTORY TAX RATE January 1, 2022 January 2, 2021 Federal income tax $ 46 $ 179 State income taxes, net of federal income tax benefit 18 76 Permanent items 3 — Other 7 — Total income tax expense $ 74 $ 255 |
SCHEDULE OF DEFERRED TAX ASSETS | Deferred tax assets for the fiscal years ended January 1, 2022 and January 2, 2021 consist of the following components: SCHEDULE OF DEFERRED TAX ASSETS January 1, January 2, Allowance for doubtful accounts $ 88 $ 83 Right of use asset (57 ) (67 ) Lease liabilities 61 67 Inventory 1 — Fixed assets 19 — Deferred tax asset, net $ 112 $ 83 |
SCHEDULE OF CHANGES TO COMPANY'S UNCERTAIN TAX POSITIONS | The following table indicates the changes to the Company’s uncertain tax positions for the fiscal years ended January 1, 2022 and January 2, 2021: SCHEDULE OF CHANGES TO COMPANY'S UNCERTAIN TAX POSITIONS Balance at December 28, 2019 $ 172 Increase due to reserves and tax positions related to current year — Balance at January 2, 2021 $ 172 Increase due to reserves and tax positions related to current year 8 Balance at January 1, 2022 $ 180 |
SCHEDULE OF EARNINGS PER SHARE,
SCHEDULE OF EARNINGS PER SHARE, BASIC AND DILUTED (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Accounting Policies [Abstract] | ||
Net income, numerator, basic computation | $ 143 | $ 596 |
Interest expense | 25 | |
Net income, numerator, diluted computation | $ 143 | $ 621 |
Weighted average shares - denominator basic computation | 5,154 | 5,154 |
Effect of convertible note | 282 | |
Weighted average shares, as adjusted - denominator diluted computation | 5,154 | 5,436 |
Basic | $ 0.03 | $ 0.12 |
Diluted | $ 0.03 | $ 0.11 |
DESCRIPTION OF THE BUSINESS A_4
DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | May 02, 2020 | Jan. 01, 2022 | Jan. 02, 2021 |
Product Information [Line Items] | |||
Cash, FDIC insured amount | $ 250,000 | ||
Percentage of tax benefits likelihood | likelihood greater than 50 percent | ||
Weighted average common shares, diluted | 282,486 | 282,486 | |
Conversion of shares into debt, value | $ 500,000,000 | ||
Forgiveness of debt income | $ 165 | ||
Freight costs | 1,059,000 | 1,037,000 | |
Advertising costs | 190,000 | 209,000 | |
Product development costs | 124,000 | $ 240,000 | |
Paycheck Protection Program [Member] | |||
Product Information [Line Items] | |||
Proceeds from Short-term Debt | $ 165,000 | $ 165,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | ||
Debt Instrument, Maturity Date | May 2, 2022 | ||
Forgiveness of debt income | $ 165,000 | ||
Convertible Notes [Member] | |||
Product Information [Line Items] | |||
Weighted average common shares, diluted | 282,486 | ||
Purchase [Member] | Supplier Concentration Risk [Member] | One Supplier [Member] | |||
Product Information [Line Items] | |||
Percentage of concentration risk | 50.00% | 40.00% | |
Purchase [Member] | Supplier Concentration Risk [Member] | Another Supplier [Member] | |||
Product Information [Line Items] | |||
Percentage of concentration risk | 11.00% | 16.00% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer [Member] | |||
Product Information [Line Items] | |||
Percentage of concentration risk | 87.00% | 89.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Customer [Member] | |||
Product Information [Line Items] | |||
Percentage of concentration risk | 55.00% | 54.00% | |
Distributors Sales Revenue Net [Member] | Customer Concentration Risk [Member] | Customer [Member] | |||
Product Information [Line Items] | |||
Percentage of concentration risk | 45.00% | 54.00% |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 1,218 | $ 1,320 |
Raw materials and packaging | 656 | 677 |
Inventories, net | $ 1,874 | $ 1,997 |
SCHEDULE OF EQUIPMENT (Details)
SCHEDULE OF EQUIPMENT (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Property, Plant and Equipment [Abstract] | ||
Manufacturing equipment installed at co-packer | $ 150 | |
Less: accumulated depreciation | 15 | |
Equipment, net | $ 135 |
EQUIPMENT (Details Narrative)
EQUIPMENT (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Jan. 01, 2022 | Jan. 02, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 10 | $ 10 | |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 15 | ||
General and Administrative Expense | 1,489 | $ 1,692 | |
Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Manufacturing costs | $ 102 | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 15 | ||
Proceeds from sale of equipment | $ 50 | ||
General and Administrative Expense | $ 75 |
SCHEDULE OF RELATED PARTY NOTES
SCHEDULE OF RELATED PARTY NOTES PAYABLE (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Debt Disclosure [Abstract] | ||
Note payable-related party | $ 500 | |
Less current maturity | ||
Note payable related party, net of current maturity | $ 500 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | May 02, 2020 | Jan. 06, 2016 | Jan. 01, 2022 | Jan. 02, 2021 | Dec. 22, 2021 |
Short-term Debt [Line Items] | |||||
Loan borrowed | $ 165,000 | $ 112,000 | |||
SBA loan payable | 165 | ||||
Interest Expense, Debt | 25,000 | ||||
David Mintz [Member] | |||||
Short-term Debt [Line Items] | |||||
Proceeds from Related Party Debt | $ 500,000 | ||||
David Mintz [Member] | Promissory Note [Member] | |||||
Short-term Debt [Line Items] | |||||
Debt Instrument, Convertible, Conversion Price | $ 1.77 | ||||
Debt Instrument, Face Amount | $ 500,000 | ||||
Interest Payable | $ 25,000 | ||||
Paycheck Protection Program [Member] | |||||
Short-term Debt [Line Items] | |||||
Proceeds from loan | $ 165,000 | 165,000 | |||
Loan payable interest rate | 1.00% | ||||
Loan borrowed | $ 165,000 | ||||
SBA loan payable | $ 165,000 |
SHARE BASED COMPENSATION (Detai
SHARE BASED COMPENSATION (Details Narrative) | Jan. 01, 2022shares |
2014 Equity Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock available for awards | 250,000 |
SCHEDULE OF REVENUE (Details)
SCHEDULE OF REVENUE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 12,590 | $ 13,815 |
Cheeses [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 10,761 | 11,669 |
Frozen Desserts and Foods [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,829 | 2,146 |
Americas [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 11,864 | 13,272 |
Europe [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 183 | 147 |
Middle East [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 334 | 331 |
Asia Pacific and Africa [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 209 | $ 65 |
REVENUE (Details Narrative)
REVENUE (Details Narrative) | 10 Months Ended | 12 Months Ended |
Jan. 01, 2022 | Jan. 02, 2021 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Americas [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Concentration Risk, Percentage | 87.00% | 89.00% |
SCHEDULE OF ROU LEASE ASSETS AN
SCHEDULE OF ROU LEASE ASSETS AND LIABILITIES FOR OPERATING LEASES (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Leases | ||
Operating lease right-of-use assets | $ 203 | $ 224 |
Current portion of lease liabilities | 123 | 113 |
Operating lease liabilities, net of current portion | 95 | 123 |
Total lease liabilities | $ 218 | $ 236 |
Weighted average remaining lease term (in years) | 3 years | 2 years 1 month 6 days |
Weighted average discount rate | 5.50% | 5.50% |
SCHEDULE OF FUTURE MINIMUM RENT
SCHEDULE OF FUTURE MINIMUM RENTAL COMMITMENTS (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Leases | ||
2022 | $ 114 | |
2023 | 110 | |
Total future minimum lease payments | 224 | |
Present value adjustment | (6) | |
Total | $ 218 | $ 236 |
LEASES (Details Narrative)
LEASES (Details Narrative) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2022USD ($)ft² | Jan. 02, 2021USD ($) | Dec. 29, 2018 | |
Leases | |||
Area of Real Estate Property | ft² | 6,200 | ||
Payments for Rent | $ 79 | $ 78 | |
Outside warehouse expense | $ 459 | $ 468 | |
Incremental borrowing rate, percentage | 5.50% |
SCHEDULE OF COMPONENTS OF INCOM
SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Income Tax Disclosure [Abstract] | ||
Current Federal | $ 64 | $ 35 |
Current State | 39 | 82 |
Current Federal and State | 103 | 117 |
Deferred Federal | (22) | 97 |
Deferred State | (7) | 41 |
Deferred Federal and State | (29) | 138 |
Total income tax expense | $ 74 | $ 255 |
SCHEDULE OF RECONCILIATION BETW
SCHEDULE OF RECONCILIATION BETWEEN THE EXPECTED FEDERAL TAX EXPENSE AT STATUTORY TAX RATE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax | $ 46 | $ 179 |
State income taxes, net of federal income tax benefit | 18 | 76 |
Permanent items | 3 | |
Other | 7 | |
Total income tax expense | $ 74 | $ 255 |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS (Details) - USD ($) $ in Thousands | Jan. 01, 2022 | Jan. 02, 2021 |
Income Tax Disclosure [Abstract] | ||
Allowance for doubtful accounts | $ 88 | $ 83 |
Right of use asset | (57) | (67) |
Lease liabilities | 61 | 67 |
Inventory | 1 | |
Fixed assets | 19 | |
Deferred tax asset, net | $ 112 | $ 83 |
SCHEDULE OF CHANGES TO COMPANY'
SCHEDULE OF CHANGES TO COMPANY'S UNCERTAIN TAX POSITIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2022 | Jan. 02, 2021 | |
Income Tax Disclosure [Abstract] | ||
Beginning Balance | $ 172 | $ 172 |
Increase due to reserves and tax positions related to current year | 8 | |
Ending Balance | $ 180 | $ 172 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) $ in Thousands | 12 Months Ended |
Jan. 01, 2022USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Percentage of tax benefits likelihood | likelihood greater than 50 percent |
Uncertain tax positions that would affect the effective tax rate | $ 180 |
Domestic Tax Authority [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0 |
State and Local Jurisdiction [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 0 |