NOTE 4: STOCK-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. Such grants can be, but are not limited to, options, stock appreciation rights, restricted stock, performance grants, stock bonuses, and any other type of award that is consistent with the purposes of the 2014 Plan. Employees and officers of the Company are eligible to receive incentive stock options while corporate directors are only eligible to receive non-qualified options.

The 2014 Plan made 250,000 shares of common stock available for awards. The 2014 Plan also permits performance-based 2014 awards paid under it to be tax deductible under Section 162(m) of the Internal Revenue Code of 1986, as amended, as “performance-based compensation.” No stock options were issued in 2025 and 2024, and 250,000 non-qualified options were outstanding as of December 27, 2025 and December 28, 2024, respectively. The exercise price of all options granted in 2022 is $0.95 per share, the market price at the close of business on the date of the grant. All outstanding options will expire on December 21, 2027.

TOFUTTI BRANDS INC.

NOTES TO FINANCIAL STATEMENTS

(In thousands, except for share and per share data)

The following is a summary of stock option activity from December 31, 2023 to December 27, 2025:

 SCHEDULE OF STOCK OPTION ACTIVITY

The following table summarizes information about stock options outstanding at December 27, 2025:

 SCHEDULE OF INFORMATION ABOUT STOCK OPTIONS

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing formula. Expected volatilities and risk-free interest rates are based upon the expected life of the grant. The interest rates used are the U.S. Treasury yield curve in effect at the time of the grant.

At the date of grant, expected volatility was 82.65%, a risk-free rate of 3.79%, 0% expected dividends, and an expected term of five years.

As of December 27, 2025, and December 28, 2024, the intrinsic value of the options outstanding and exercisable options was $0 and $54 respectively, and there was $0 of total unrecognized compensation cost as of December 27, 2025. Total stock-based compensation for the fifty-two weeks ended December 27, 2025 and December 28, 2024, was $0 and $54, respectively, which is recorded in general and administrative expenses on the statement of operations.