Activate the yeast by mixing warm water, yeast, and sugar in a mixing bowl. Let it sit for about 5-10 minutes until frothy.

Mix in flour and salt. Use a wooden spoon or your hands to combine until a dough forms.

Knead the dough on a floured surface for 5-7 minutes until smooth and stretchy.

Place the dough in an oiled bowl, cover with a damp towel, and let it rise in a warm place for 1 hour.

While the dough is rising, mix cream cheese, powdered sugar, and vanilla extract in a bowl until smooth.

Punch down the risen dough and divide it into 12 equal pieces. Roll each piece into a rope and form into a pretzel shape.

Gently twist the ends of the 'U' together and fill with cream cheese filling, pinching to seal.

Bring about 10 cups of water to a simmer in a large pot. Add baking soda, then carefully drop in pretzels, boiling for 30 seconds each side.

Preheat oven to 425°F, brush pretzels with beaten egg, and sprinkle with sea salt.

Bake for 12-15 minutes until golden brown. Let cool before serving.