SEC Form 10-Q filed by Sadot Group Inc.

5/14/25 4:01:38 PM ET

$SDOT

Restaurants

Consumer Discretionary

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-39223

Sadot Group Inc.

(Exact name of registrant as specified in its charter)


Nevada						47-2555533
(State or other jurisdiction						(I.R.S. Employer
of incorporation)						Identification No.)

295 E. Renfro Street, Suite 209,

Burleson, Texas 76028

(Address of principal executive offices)

Registrant’s telephone number, including area code: (832) 604-9568

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value

SDOT

The NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☒

Emerging growth company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The number of shares if the Registrant’s common stock, $0.0001 par value per share, outstanding as of May 14, 2025, was 6,213,686.

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Sadot Group Inc.

Quarterly Report on Form 10-Q

For the Three Months Ended March 31, 2025

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Page

PART I

FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2025 and December 31, 2024

Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss) (Unaudited) for the Three Months Ended March 31, 2025 and 2024

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) for the Three Months Ended March 31, 2025 and 2024

Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2025 and 2024

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Sadot Group Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


	March 31, 2025	December 31, 2024
	$’000	$’000
ASSETS
Current assets:
Cash	1,940	1,786
Accounts receivable, net of allowance for doubtful accounts of $0.3 million and $0.1 million as of March 31, 2025 and December 31, 2024, respectively	47,751	18,014
Inventory	271	717
Assets held for sale	4,915	5,196
Other current assets	16,925	126,966
Total current assets	71,802	152,679

Property and equipment, net	11,793	11,820


Other non-current assets	149	155
Total assets	83,744	164,654
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses	36,682	28,019
Notes payable, current, net of discount of $0.7 million and $0.9 million as of March 31, 2025 and December 31, 2024, respectively	10,911	7,390

Deferred revenue, current	74	2,251
Liabilities held for sale	2,128	2,333
Other current liabilities	139	92,177
Total current liabilities	49,934	132,170




Other non-current liabilities	105	111
Total liabilities	50,039	132,281
Equity:
Common stock, $0.0001 par value, 20,000,000 shares authorized, 5,412,500 and 5,225,147 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively	1	1
Additional paid-in capital	113,004	112,406
Accumulated deficit	(82,249)	(83,187)
Accumulated other comprehensive loss	(113)	(27)
Total Sadot Group Inc. shareholders' equity	30,643	29,193
Non-controlling interest	3,062	3,180
Total stockholders’ equity	33,705	32,373
Total liabilities and stockholders’ equity	83,744	164,654

See Accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited)

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Sadot Group Inc.

Condensed Consolidated Statement of Operations and Other Comprehensive Income / (Loss)

(Unaudited)


	Three Months Ended March 31,
	2025	2024
	$’000	$’000
Commodity sales	132,168	106,507





Cost of goods sold	(126,156)	(103,697)
Gross profit	6,012	2,810


Depreciation and amortization expenses	(27)	(91)



Stock-based expenses	(1,428)	(796)
Sales, general and administrative expenses	(3,081)	(1,393)
Income from operations	1,476	530


Interest expense, net	(1,541)	(228)
Change in fair value of stock-based compensation	778	476




Income for continuing operations before income tax	713	778
Income tax expense	—	(1)
Net income for continuing operations	713	777
Discontinued Operations:
Income / (loss) for discontinued operations, net of income tax	107	(1,090)
Net income / (loss) for discontinued operations	107	(1,090)
Net income / (loss)	820	(313)
Net loss attributable to non-controlling interest	118	48
Net income / (loss) attributable to Sadot Group Inc.	938	(265)

Net income from continuing operations per share attributable to Sadot Group Inc.:
Basic	0.16	0.20
Diluted	0.16	0.20

Net income / (loss) from discontinued operations per share:
Basic	0.02	(0.26)
Diluted	0.02	(0.26)

Weighted-average # of common shares outstanding:
Basic	5,227,444	4,186,905
Diluted	5,245,864	4,186,905

See Accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited)

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Sadot Group Inc.

Condensed Consolidated Statement of Operations and Other Comprehensive Income / (Loss)

(Unaudited) (Continued)


	Three Months Ended March 31,
	2025	2024
	$’000	$’000
Net income / (loss)	820	(313)
Other comprehensive income / (loss)
Foreign exchange translation adjustment	2	—
Unrealized loss	(88)	(60)
Total other comprehensive loss	(86)	(60)
Total comprehensive income / (loss)	734	(373)
Comprehensive loss attributable to non-controlling interest	118	48
Total Comprehensive income / (loss) attributable to Sadot Group Inc.	852	(325)

See Accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited)

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Sadot Group Inc.

Condensed Consolidated Statement of Changes in Stockholders' Equity

(Unaudited)


	Common Stock		Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income / (Loss)	Non-controlling Interest	Total
	Shares	Amount
		$’000	$’000	$’000	$’000	$’000	$’000
Balance at December 31, 2023	4,046,472	—	107,992	(87,179)	8	3,436	24,257
Common stock compensation to board of directors	10,564	—	42	—	—	—	42
Common stock issued as compensation for services	58,344	—	175	—	—	—	175
Conversion of convertible loan	284,139	—	965	—	—	—	965
Stock based compensation - vesting of options and restricted stock awards	23,913	—	111	—	—	—	111
Unrealized loss, net of income tax	—	—	—	—	(60)	—	(60)
Net loss	—	—	—	(265)	—	(48)	(313)
Balance at March 31, 2024	4,423,432	—	109,285	(87,444)	(52)	3,388	25,177

See Accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited)

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Sadot Group Inc.

Condensed Consolidated Statement of Changes in Stockholders' Equity

(Unaudited) (Continued)


	Common Stock		Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income / (Loss)	Non-controlling Interest	Total
	Shares	Amount
		$’000	$’000	$’000	$’000	$’000	$’000
Balance at December 31, 2024	5,225,147	1	112,406	(83,187)	(27)	3,180	32,373

Common stock issued as compensation for services	113,416	—	315	—	—	—	315

Stock based compensation - vesting of options and restricted stock awards	73,937	—	283	—	—	—	283
Foreign exchange translation adjustment	—	—	—	—	2	—	2
Unrealized loss	—	—	—	—	(88)	—	(88)
Net income / (loss)	—	—	—	938	—	(118)	820
Balance at March 31, 2025	5,412,500	1	113,004	(82,249)	(113)	3,062	33,705

See Accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited)

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Sadot Group Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended March 31,
	2025	2024
	$’000	$’000
Cash Flows from Operating Activities
Net income / (loss)	820	(313)
Adjustments to reconcile net income / (loss) to net cash (used in) / provided by operating activities:


Depreciation and amortization	27	91
Amortization of debt discount	406	—
Stock-based expenses	1,428	796
Gain / (loss) on fair value remeasurement	18,602	(3,259)
Change in fair value of stock-based compensation	(778)	476



Bad debt expense	164	77

Changes in operating assets and liabilities:
Accounts receivable, net	(29,900)	29,668
Inventory	446	(27)
Other current assets	91,387	3,816
Other non-current assets	—	5
Accounts payable and accrued expenses	8,664	(26,646)
Other current liabilities	(92,154)	(3,208)

Other non-current liabilities	115	—

Deferred revenue	(2,177)	1,031
Total adjustments	(3,770)	2,820
Net cash provided by / (used in) operating activities	(2,950)	2,507
Net cash provided by operating activities - discontinued operations	8	104
Cash Flows from Investing Activities



Disposal of property and equipment	—	29
Net cash provided by investing activities	—	29
Net cash provided by investing activities - discontinued operations	—	29
Cash Flows from Financing Activities
Proceeds from notes payable	4,581	1,500

Repayments of notes payable	(1,467)	(4,261)
Net cash provided by / (used in) financing activities	3,114	(2,761)
Net cash used in financing activities - discontinued operations	(20)	(36)
Foreign exchange translation adjustment	2	(12)
Net Increase (Decrease) in Cash	154	(140)
Cash – beginning of period	1,786	1,354
Cash – end of period	1,940	1,214

See Accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited)

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Sadot Group Inc.

Condensed Consolidated Statements of Cash Flows (Continued)

(Unaudited)


	Three Months Ended March 31,
	2025	2024
	$’000	$’000
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	1,807	495

See Accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited)

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

1. Business Organization and Nature of Operations

Sadot Group Inc. ("Sadot Group" or "SGI" or together with its subsidiaries, the “Company”), a Nevada corporation was incorporated in Nevada on October 25, 2019. In late 2022, SGI transformed from a U.S.-centric restaurant business into a global organization focused on the Agri-food commodity supply chain. Sadot Group is headquartered in Burleson, Texas with subsidiary operations throughout the United States, Brazil, Canada, Colombia, India, Israel, South Korea, Singapore, Ukraine, United Arab Emirates and Zambia.

As of March 31, 2025, Sadot Group consisted of one distinct operating unit and one discontinued operations.

Sadot LLC (“Sadot Agri-Foods”): Sadot Group’s largest operating unit is a global Agri-Foods company engaged in farming, commodity trading and shipping of food and feed (e.g., soybean meal, wheat and corn) via dry bulk cargo ships across the globe. Sadot Agri-Foods competes with the ABCD commodity companies (ADM, Bunge, Cargill, Louis-Dreyfus) as well as many regional organizations. Sadot Agri-Foods operates, through a majority owned subsidiary, a roughly 5,000 acre crop producing farm in Zambia with a focus on major commodities such as wheat, soy and corn alongside high-value tree crops such as avocado and mango. In addition, the Company has a deposit on farmland in Indonesia. Sadot Agri-Foods was formed as part of the Company’s diversification strategy to own and operate, through its subsidiaries, the business lines throughout the food supply chain. Sadot Agri-Foods seeks to diversify over time into a sustainable and forward-looking global agri-foods company.

Sadot Restaurant Group, LLC ("Sadot Food Services"): had three unique “healthier for you” concepts, including two fast casual restaurant concepts, Pokémoto and Muscle Maker Grill, During 2024, the Company operated a subscription-based fresh prep meal concept, SuperFit Foods, which was sold in August 2024. Throughout 2024 the remaining corporate owned restaurants were sold and converted into franchise locations or closed. As of the end of 2024 the Company only operates as the franchisor for Pokémoto and Muscle Maker Grill restaurants.This entire operating segment was identified as held for sale and reported as discontinued operations. Please see Note 3 – Assets held for sale and Note 4 – Discontinued operations for further details.

Sadot Group Inc. and its subsidiaries are hereinafter referred to as the “Company”.

Recent Corporate Developments

On March 26, 2025, SGI launched Sadot South Korea, marking a significant step in Sadot’s strategic expansion into Northeast Asia, using South Korea’s strong logistics and trade infrastructure as a hub for global agri-trade activities.

Liquidity

The Company's primary source of liquidity is cash on hand. As of March 31, 2025, the Company had a cash balance, a working capital surplus and an accumulated deficit of $1.9 million, $21.9 million, and $82.2 million, respectively. During the three months ended March 31, 2025, the Company generated Net income of $0.8 million. The Company had Net cash used in operations of $2.9 million for the three months ended March 31, 2025. While the Company maintains a base of current assets, including inventories and receivables, the timing and certainty of converting these assets into cash has presented operational challenges.

The Company continues to manage its liquidity needs through ongoing collection efforts, working capital optimization strategies, and active engagement with financing partners. While there is uncertainty around the precise timing of cash inflows, management believes that its current asset base, proceeds from our factoring arrangement and access to additional sources of liquidity, if necessary, provide flexibility to support ongoing operations in the near term.

Under the factoring agreement, certain eligible receivables may be sold with recourse in exchange for an upfront advance of 85% of the net invoice value, with the remaining amount remitted upon collection, less applicable fees and reserves.

While the Company maintains sufficient working capital through its accounts receivable and factoring capacity, we are currently experiencing delays in converting receivables into cash, which may impact the timing of our available liquidity. We continue to actively manage collections and factoring utilization to address short-term liquidity needs and ensure ongoing operational funding.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Working Capital

We measure our liquidity in a number of ways, including the following:


	As of
	March 31, 2025	December 31, 2024
	$’000	$’000
Cash	1,940	1,786
Accounts Receivable, net	47,751	18,014
Inventory	271	717
Other current assets(1)	16,925	126,966
Assets held for sale(2)	4,915	5,196
Total current assets	71,802	152,679
Accounts payable and accrued expenses	36,682	28,019
Notes payable, net	10,911	7,390
Other current liabilities(3)	213	94,428
Liabilities held for sale(4)	2,128	2,333
Total current liabilities	49,934	132,170
Working capital(5)	21,868	20,509
Current ratio(6)	1.44	1.16

(1) Consists of VAT, prepaid expenses, derivative assets, unrealized gain on derivative contracts, deposit on farmland and deposit on acquisition

(2) See Note 3 for additional information

(3) Consists of Operating lease liability, current, Deferred revenue, current and Other current liabilities

(4) See Note 3 for additional information

(5) Working Capital is defined as Total current assets less Total current liabilities

(6) Current ratio is defined as Total current assets divided by Total current liabilities

2. Significant Accounting Policies

Basis of Presentation

The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the Unaudited Condensed Consolidated Financial Statements of the Company as of March 31, 2025, and for the three months ended March 31, 2025, and 2024. The results of operations for the three months ended March 31, 2025, and 2024 are not necessarily indicative of the operating results for the full year. It is suggested that these Unaudited Condensed Consolidated Financial Statements be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2024, filed with the Securities and Exchange Commission (“SEC”) on March 11, 2025. The Balance Sheet as of December 31, 2024, has been derived from the Company’s audited Financial Statements.

Principles of Consolidation

The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries and majority-owned subsidiary. Any intercompany transactions and balances have been eliminated in consolidation.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Reclassifications

Certain prior period balances have been reclassified in order to conform to current period presentation. These reclassifications have no effect on the previously reported results of operations or loss per share.

Reclassification of Fair Value Gains from Other Income

During the three months ended March 31, 2025, the Company reclassified gains previously recognized in Other income related to the fair value remeasurement of certain financial instruments into Cost of goods sold ("COGS"). The reclassification was made to better reflect the nature and function of these instruments, which are economically linked to the Company’s inventory procurement, sales activities and to be consistent with our competitors. Management determined that presenting the related gains in COGS more accurately reflects the impact of these instruments on the Company’s gross margin and provides more decision-useful information to financial statement users. This change in presentation had no impact on net income, total comprehensive income, or earnings per share for the period.

The table below summarizes the effect of the reclassification on the Unaudited Condensed Consolidated Statement of Income and Other Comprehensive Income / (Loss) for the three months ended March 31, 2024:


	As Previously Reported	Reclassification	As Reclassified	% Change
	$’000	$’000	$’000	%
Cost of goods sold	(106,945)	3,248	(103,697)	(3.0)	%
Gross profit / (loss)	(438)	3,248	2,810	741.6	%
Gain on fair value remeasurement	3,259	(3,259)	—	(100.0)	%
Loss on hedge contracts	(11)	11	—	(100.0)	%
Net Income	(313)	—	(313)	—	%

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant estimates include:

•the assessment of recoverability of long-lived assets, including property and equipment, goodwill and intangible assets;

•the estimated useful lives of intangible and depreciable assets;

•estimates and assumptions used to value warrants and options;

•the recognition of revenue; and

•the recognition, measurement and valuation of current and deferred income taxes.

Estimates and assumptions are periodically reviewed, and the effects of any material revisions are reflected in the financial statements in the period that they are determined to be necessary. Actual results could differ from those estimates and assumptions.

Cash and Cash Equivalents

The Company considers all highly-liquid instruments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents as of March 31, 2025 or December 31, 2024.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Accounts Receivable

Accounts Receivable consists of receivables related to Sadot Agri-Foods of $47.8 million and $18.0 million net of doubtful accounts of $0.3 million and $0.1 million as of March 31, 2025, and December 31, 2024, respectively.

From time to time the Company may set aside and/or assign accounts receivables towards the acquisition of various assets. The net Accounts Receivable balance of $47.8 million and $18.0 million at March 31, 2025 and December 31, 2024, includes $13.4 million in receivables that the Company plans to assign to a third party, which is expected to be paid in assets other than cash. The Company and the third party are in negotiations regarding the timing and nature of the assets to be received, and the Company continues to evaluate the balance for expected losses. As of March 31, 2025, the Company deemed it would receive assets valued at the full balance.

Accounts receivable is stated at historical carrying amounts net of write-offs and allowances for uncollectible accounts. The Company establishes allowances for uncollectible trade accounts receivable based on lifetime expected credit losses using an aging schedule for each pool of accounts receivable. Pools are determined based on risk characteristics such as the type of receivable and geography. A default rate is derived using a provision matrix which is evaluated on a regular basis by management and based on past experience and other factors. The default rate is then applied to the pool to determine the allowance for expected credit losses. Given the short-term nature of the Company's trade accounts receivable, the default rate is only adjusted if significant changes in the credit profile of the portfolio are identified (e.g., poor crop years, credit issues at the country level, systematic risk), resulting in historic loss rates that are not representative of forecasted losses. Uncollectible accounts are written off when a settlement is reached for an amount that is less than the outstanding historical balance or when the Company has determined that collection of the balance is unlikely.

Factoring Agreements

As of March 31, 2025, the Company’s total borrowings include $3.8 million related to a factoring arrangement under which the Company transfers certain trade receivables to a third-party financial institution with recourse. The Company retains the risk of nonpayment on the transferred receivables, so the arrangement does not meet the criteria for sale accounting under ASC 860, Transfers and Servicing, and is accounted for as a secured borrowing.

Under this arrangement, the Company received $3.5 million in cash advances, which are included in Notes Payable on the Unaudited Condensed Consolidated Balance Sheets. The transferred receivables, with a carrying value of $4.1 million as of March 31, 2025, remain recorded in Accounts receivable, as the Company has not surrendered control over the assets. The difference of $0.6 million primarily reflects the advances held by the factor of $0.3 million and factoring fees of $0.3 million.

Factoring fees incurred in connection with the arrangement are deferred and amortized over the expected life of the borrowing as Interest expense, net in the Unaudited Condensed Consolidated Statements of Income and Other Comprehensive Income / (Loss). The Company continues to service the receivables under the arrangement but has no obligation to repurchase the receivables except in cases of customer nonpayment. The Company remains exposed to credit losses related to factored receivables and maintains an allowance for doubtful accounts as appropriate.

As of March 31, 2025, the Company has pledged $4.1 million of accounts receivable as collateral under this facility.

Inventory

Inventory, which are stated at the lower of cost or net realizable value, related to Sadot Agri-foods was $0.3 million and $0.7 million as of March 31, 2025 and December 31, 2024, respectively. Cost is determined using the first-in, first-out method.

Assets held for sale

In the first quarter of 2024, the Company classified its Sadot food services segment as held for sale.

Assets and liabilities of disposal group(s) are classified as held for sale when:

•management, having the authority to approve action, commits to a plan to sell,

•the disposal group(s) are available for immediate sale in present condition,

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

•an active program to locate a buyer and other actions required to complete the plan to sell have been initiated,

•the sale is probable and expected to be completed within one year,

•the sale is actively marketed at a reasonable price reflecting its current fair value,

•and it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

The Company initially measures a disposal group that is classified as held for sale at the lower of its carrying value or fair value less cost to sell. Any impairment loss resulting from this initial measurement is recognized in the period in which the held for sale criteria described above, is met. Conversely, gains are not recognized on the sale of a disposal group until the date of sale. The Company assesses the fair value of a disposal group, less costs to sell, at each reporting period that it remains as held for sale, with any changes as a result of the assessment adjusting the carrying value of the disposal group, but not in excess of the cumulative loss previously recognized on the disposal group.

Following their classification as held for sale, assets are not depreciated or amortized. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognized. Refer to Note 3 – Assets held for sale for more details.

Property and Equipment

Property and equipment are stated at cost less accumulated Depreciation and amortization expenses. Major improvements are capitalized, and minor replacements, maintenance and repairs are charged to expense as incurred. Depreciation and amortization expenses are calculated on the straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the estimated useful life or the lease term of the related asset. The estimated useful lives are as follows:


Furniture and Equipment			3 – 7 years
Leasehold Improvements			1 – 8 years
Vehicles			5 - 10 years
Land Improvements			3 -20 years

Intangible Assets

The Company accounts for recorded intangible assets in accordance with the Accounting Standards Codification (“ASC’) 350 “Intangibles – Goodwill and Other”. In accordance with ASC 350, the Company does not amortize intangible assets having indefinite useful lives. The Company’s goodwill has an indefinite life and is not amortized. The Company's goodwill and intangible assets with a finite life are evaluated for impairment at least annually, or more often whenever changes in facts and circumstances may indicate that the carrying value may not be recoverable. ASC 350 requires that goodwill and intangible assets be tested for impairment at the reporting unit level (operating segment or one level below an operating segment). Application of the impairment testing requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill and intangible assets to reporting units, and determining the fair value. Significant judgment is required to estimate the fair value of reporting units which includes estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value and/or impairment. In the first quarter of 2024, the intangible assets were moved to assets held for sale. See Note 3 – Assets held for sale for additional information.

Impairment of Long-Lived Assets

When circumstances, such as adverse market conditions, indicate that the carrying value of a long-lived asset may be impaired, the Company performs an analysis to review the recoverability of the asset’s carrying value, which includes estimating the undiscounted cash flows (excluding interest charges) from the expected future operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects of demand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized to the extent that the carrying value exceeds the estimated fair value. Any impairment losses are recorded as operating expenses, which reduce net income.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Convertible Instruments

The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for in accordance with Topic 815 of the Financial Accounting Standards Board (“FASB”).

If the instrument is determined not to be a derivative liability, the Company then evaluates for the existence of a beneficial conversion feature by comparing the market price of the Company’s common stock as of the commitment date to the effective conversion price of the instrument.

As of March 31, 2025 and December 31, 2024, the Company deemed the conversion feature related to notes payable was not required to be bifurcated and recorded as a derivative liability.

Related Parties

A party is considered to be related to the Company if the party directly, indirectly, or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

Revenue Recognition

The Company’s revenues consist of Commodity sales, Restaurant sales, Franchise royalties and fees, Franchise advertising fund contributions, and Other revenues. The Company recognizes revenues according to Topic 606 of FASB, “Revenue from Contracts with Customers”. Under the guidance, revenue is recognized in accordance with a five-step revenue model, as follows: (1) identifying the contract with the customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations; and (5) recognizing revenue when (or as) the entity satisfies a performance obligation. In applying this five-step model, we made significant judgments in identifying the promised goods or services in our contracts with franchisees that are distinct, and which represent separate performance obligations.

Seasonality

Commodity Sales

Commodity sale revenue is generated by Sadot Agri-Foods and is recognized when the commodity is delivered as evidenced by the bill of lading, physical delivery or completion of the sale contract and the invoice is prepared and submitted to the customer. During the three months ended March 31, 2025 and 2024, the Company recorded Commodity sales revenues of $132.2 million and $106.5 million, respectively, which is included in Commodity sales on the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).

Deferred Revenue

Deferred revenue primarily includes initial franchise fees received by the Company and revenue from forward sales contracts and prepayments received for future trades. Deferred revenue related to Sadot Food Services is recognized in income over the life of the franchise. If a franchise location closes or a franchise agreement is terminated for any reason,

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

the remaining deferred revenue will be recognized in full at that time. Deferred revenue related to Sadot Agri-Foods is recognized at the completion of each commodity forward sales contract agreement.

Stock-Based Expenses

Stock-based expenses include all expenses that are paid with stock. This includes stock-based consulting fees due to Aggia and other consultants, stock compensation paid to the Company's board of directors, and stock compensation paid to employees. The consulting fees due to Aggia are related to ongoing Sadot Agri-Foods and expansion of the global agri-foods business. Based on the initial Services Agreement with Aggia LLC FZ, a Company formed under the laws of United Arab Emirates (“Aggia”), the consulting fees were calculated at approximately 80.0% of the Net Income generated by Sadot Agri-Foods through March 31, 2023. As of April 1, 2023, the consulting agreement was amended to calculate consulting fees on 40.0% of the Net income generated by Sadot LLC. See Note 17 – Commitments and contingencies for further details. Stock-based expenses for the three months ended March 31, 2025 and 2024 were $1.4 million and $0.8 million, respectively, and are recorded in the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).

Net Income (Loss) per Share

Basic earnings (loss) per common share is computed by dividing net income (loss) attributable to Sadot Group Inc. by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per common share is computed by dividing net income (loss) attributable to Sadot Group Inc. by the weighted average number of common shares outstanding during the period plus any potentially dilutive common shares, resulting from the exercise of warrants, option, calculated using the treasury stock method or the conversion of convertible notes payable, calculated using the if-converted method.

The following securities are excluded from the calculation of weighted average diluted common shares at March 31, 2025 and 2024, respectively, because their inclusion would have been anti-dilutive:


	Three Months Ended March 31,
	2025	2024
Warrants	1,586,449	1,705,637
Options	80,456	81,250
RSAs	494,047	924,369
Convertible debt	914,634	911,262
Total potentially dilutive shares	3,075,586	3,622,518

The following table sets forth the computation of basic and dilutive net income / (loss) per share attributable to the Company’s stockholders:

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)


	Three Months Ended March 31,
	2025	2024
(In thousands, except for share count and per share data)
Net income / (loss) attributable to Sadot Group Inc.	938	(265)
Weighted-average shares outstanding:
Basic	5,227,444	4,186,905

Effect of potentially dilutive RSAs	18,420	—

Diluted	5,245,864	4,186,905

Net income for continuing operations per share attributable to Sadot Group Inc.:
Basic	0.16	0.20
Diluted	0.16	0.20

Net income / (loss) from discontinued operations per share attributable to Sadot Group Inc.:
Basic	0.02	(0.26)
Diluted	0.02	(0.26)

Net income / (loss) per share attributable to Sadot Group Inc.:
Basic	0.18	(0.06)
Diluted	0.18	(0.06)

Major Vendors

The following table sets forth the major vendors to purchase commodities for resale, purchase inputs for farming operations and distribute food products to their Company-owned restaurants:


	Three Months Ended March 31,
	2025		2024
Number of vendors	3		5
Type	Commodities		Commodities
% of purchases	97	%	95	%

Major Customers

The following table sets forth the major customers:


	Three Months Ended March 31,
	2025		2024
Number of customers	1		4
Type	Commodities		Commodities
% of sales	92	%	79	%

Derivative Instruments

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The Company recognizes all derivatives in the balance sheet at fair value. During the three months ended March 31, 2025 and 2024, the Company’s derivatives were comprised of Forward sales contracts for soybeans, carbon offset units, and futures and options of food and feed related commodities, traded on the Chicago Mercantile Exchange ("CME"). Derivatives that do not meet the requirements for hedge accounting to be applied per FASB ASC 815, Derivatives and Hedging, are adjusted to fair value through earnings. If the derivative does meet the criteria in ASC 815 to use hedge accounting, depending upon the nature of the hedge, the effective portion of changes in the fair value of the hedged assets, liabilities or firm commitments through earnings (fair value hedge), or recognized in other comprehensive income until the hedged item is recognized in earnings (cash flow hedge). The ineffective portion of a derivative’s change in fair value, if any, is immediately recognized in earnings. When a hedged item in a fair value hedge is sold, the adjustment in the carrying amount of the hedged item is recognized in earnings.

Refer to Fair Value of Financial Instruments below, Note 17 – Commitments and contingencies and Note 20 – Financial instruments for additional information regarding the Company’s derivative instruments.

Fair Value of Financial Instruments

The Company measures the fair value of financial assets and liabilities based on the guidance of the FASB ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”).

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 — quoted prices in active markets for identical assets or liabilities.

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable.

Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value measurement.

See Note 19 – Fair value measurement for a summary of financial liabilities held at carrying amount including unrealized gain on derivative contracts and the unrealized loss on derivative contracts. For details related to the fair value of the unrealized gain on derivative contracts and unrealized loss on derivative contracts measured using Level 2 inputs, refer to Note 17 – Commitments and contingencies and Note 20 – Financial instruments.

Income Taxes

The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities and net operating loss and credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to impact taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Tax benefits claimed or expected to be claimed on a tax return are recorded in the Company’s financial statements. A tax benefit from an uncertain tax position is only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Uncertain tax positions have had no impact on the Company’s financial condition, results of operations or cash flows. The Company does not expect any significant changes in its unrecognized tax benefits within years of the reporting date.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as Sales, general and administrative expenses in the Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).

Currency Translation Differences

Transactions in foreign currencies are remeasured in the functional currency of the related consolidated company at the average foreign exchange rates for income and expenses. Monetary assets and liabilities denominated in foreign currencies at the reporting date are remeasured to the functional currency at the foreign exchange rate ruling as of the reporting period end date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are remeasured to the functional currency at foreign exchange rates ruling at the dates the fair value was determined. Foreign exchange differences arising on remeasurement are recognized in the Unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Income / (Loss) under Foreign exchange translation adjustment.

The assets and liabilities of foreign operations, including farm operations and fair value adjustments arising on consolidation, are translated to the Company’s reporting currency, United States Dollars, at foreign exchange rates at the reporting date. On a monthly basis, for subsidiaries whose functional currency is a currency other than the U.S. dollar, subsidiary statements of income and cash flows must be translated into U.S. dollars for consolidation purposes based on weighted-average exchange rates in each monthly period. As a result, fluctuations of local currencies compared to the U.S. dollar during each monthly period impact our consolidated statements of income and cash flows for each reported period (per quarter and year-to-date) and also affect comparisons between those reported periods.

Non-controlling Interests

The Company consolidates entities in which the Company has a controlling financial interest. The Company consolidates subsidiaries in which the Company holds, directly or indirectly, more than 50% of the voting rights. Non-controlling interests represent third-party equity ownership interests in the Company’s farming consolidated entity. The Company evaluates its ownership, contractual and other interests in entities to determine if it has any variable interest in a VIE (“variable interest entities”). These evaluations are complex and involve judgment and the use of estimates and assumptions based on available historical information, among other factors. The Company considers itself to control an entity if it is the majority owner of or has voting control over such entity. The Company also assesses control through means other than voting rights (“variable interest entities” or “VIEs”) and determines which business entity is the primary beneficiary of the VIE. Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. Changes in consolidation status are applied prospectively. The Company has no VIEs at March 31, 2025 and December 31, 2024. The amount of net loss attributable to Non-controlling interests is disclosed in the Unaudited Condensed Consolidated Statements of Income and Other Comprehensive Income / (Loss).

Discontinued Operations

As part of the Company’s stated strategy to pivot its focus to the global food supply chain sector, the Company spent 2024 fully engaged in the restructuring of Sadot Food Services. By refranchising company-owned units and closing underperforming locations while growing Pokémoto through franchising, the Company continued its restructuring efforts with the goal of reducing annualized restaurant operating expenses and overhead while potentially increasing franchise royalty revenue at Pokémoto. In early Q4 of 2024 the Company was able to close its last two corporate owned stores and reclassified the rest of Sadot Food Services to discontinued operations. The amount of loss from discontinued operations is disclosed in the Unaudited Condensed Consolidated Statements of Income and Other Comprehensive Income / (Loss). For details related to Discontinued operations, see Note 4 – Discontinued operations.

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (Topic 280). The standard requires incremental disclosures related to reportable segments, including disaggregated expense information and the title and position of the company's chief operating decision maker ("CODM"), as identified for purposes of segment determination. The ASU is effective for fiscal years beginning after December 15,

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

2023, and interim periods within fiscal years beginning after December 15, 2024. Entities must adopt the changes to the segment reporting guidance on a retrospective basis. Early adoption is permitted. The adoption of this guidance on December 31, 2024 did not have a material impact on the Company's Consolidated Financial Statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, which focuses on income tax disclosures by requiring public business entities, on an annual basis, to disclose specific categories in the rate reconciliation, provide information for reconciling items that meet a quantitative threshold, and certain information about income taxes paid. The standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments should be applied on a prospective basis. Retrospective application is permitted. The adoption of this guidance on December 31, 2024 did not have a material impact on the Company's Consolidated Financial Statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) ("ASU 2024-03"). The standard is intended to enhance transparency of income statement disclosures, primarily through additional disaggregation of relevant expense captions. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods within fiscal years beginning after December 15, 2027. Entities can adopt the change prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of the standard on its consolidated financial statements.

Subsequent Events

The Company evaluated events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation and transactions, the Company did not identify any subsequent events that would have required adjustment or disclosure in the Financial Statements, except as disclosed in Note 23 – Subsequent events.

3. Assets Held For Sale

2024 Disposal group held for sale

After launching Sadot Agri-Foods, the Company made the decision to explore the option of selling a portion of our restaurant operations. During the first quarter of 2024, the Company entered into an agreement with a brokerage firm to have the exclusive rights to offer and sell the Muscle Maker Grill and Pokémoto franchise business and potentially some of the corporate-owned restaurants. Accordingly, the assets and liabilities related to the restaurant operations were classified as held for sale in the Company’s Consolidated Balance Sheets. Throughout most of 2024, the Company considered retaining some Company owned stores due to location and potential training centers that posed challenges for sale.

However, in the fourth quarter of 2024, the Company closed its last two corporate owned stores, and have a sale pending for the franchise business. Given the sale or pending sale of all of the restaurant operations as of December 31, 2024, we have deemed this to be a strategic shift in business structure as it will eliminate one of our two business segments, which triggered accounting for the restaurant operations as discontinued operations. The Company performed an impairment test on the net assets of the restaurant operations as of March 31, 2025, noting the carrying amount was less than the fair value less cost to sell.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The following presents the major classes of assets and liabilities for the Sadot Food Services reporting unit held for sale:


	As of
	March 31, 2025	December 31, 2024
	$’000	$’000
Cash	33	266
Accounts receivable, net of allowance for doubtful accounts of $21.2 thousand and $0.2 million as of March 31, 2025 and December 31, 2024, respectively	136	170

Other current assets	45	52

Property and equipment, net	6	6
Goodwill	1,798	1,798
Other non-current assets	182	189
Intangible assets, net	2,715	2,715
Assets held for sale	4,915	5,196

Accounts payable and accrued expenses	423	149
Notes payable, current	70	79
Operating lease liability, current	—	138
Deferred revenue, current	124	125
Other current liabilities	—	243
Notes payable, non-current	531	542

Deferred revenue, non-current	980	1,057
Liabilities held for sale	2,128	2,333

Sadot Food Services had the following pre-tax income and losses:


	Three Months Ended March 31,
	2025	2024
	$’000	$’000
Sadot Food Services Net Income / (Loss) Before Income Tax	107	(1,090)

Sadot Food Services was comprised of two fast casual restaurant concepts, Pokémoto and Muscle Maker Grill, as well as a subscription-based fresh prep meal concept, SuperFit Foods. On August 1, 2024, SuperFit Foods was sold for $0.2 million with a minimal gain on the sale.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

4. Discontinued Operations

Discontinued operations were as follows:


	Three Months Ended March 31,
	2025	2024
	$’000	$’000
Revenues	394	1,429
Cost of goods sold	—	(1,331)
Gross profit	394	98


Depreciation and amortization expenses	—	(189)
Franchise advertising fund expenses	(22)	(15)

Post-closing expenses	40	(19)

Sales, general and administrative expenses	(300)	(703)
Income / (loss) from discontinued operations	112	(828)

Interest expense, net	(5)	(262)




Income / (loss) from discontinued operations before income tax	107	(1,090)
Income tax benefit / (expense) from discontinued operations	—	—
Income / (loss) from discontinued operations	107	(1,090)

5. Allowance for Credit Losses on Accounts Receivable

For the periods ended March 31, 2025 and December 31, 2024, a summary of the activity in the allowance for credit losses on accounts receivable appears below:


	As of
	March 31, 2025	December 31, 2024
	$’000	$’000
Balance at beginning of period	105	173
Adjustments related to Sadot food services	—	54
Adjustments related to Sadot agri-foods	164	28
Transferred to assets held for sale	—	(150)
Balance at end of period	269	105

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

6. Other Current Assets

At March 31, 2025 and December 31, 2024, the Company’s other current assets consists of the following:


	As of
	March 31, 2025	December 31, 2024
	$’000	$’000
Prepaid expenses	1,877	1,911
Other receivables	80	82
Derivative assets, current	—	93,520
Derivative contracts	—	18,602
Notes receivable, current	6,279	6,999
Deposit on farmland	5,852	5,852
Deposit on acquisition	2,837	—
Other Current Assets	16,925	126,966

Deposit on farmland consists of funds paid as a deposit with the intent to acquire farmland in Indonesia by Sadot Agri-Foods. Deposit on acquisition consists of funds paid as a deposit related to a potential strategic transaction. The deposits were made in accordance with the terms of a preliminary agreement and are refundable under certain conditions. The transactions remains subject to customary closing conditions, including regulatory approvals and final documentation.

7. Other Non-Current Assets

At March 31, 2025 and December 31, 2024, the Company’s other non-current assets consist of the following:


	As of
	March 31, 2025	December 31, 2024
	$’000	$’000
Security deposits	22	23


Right to use assets	127	132
Other non-current assets	149	155

8. Property and Equipment, Net

As of March 31, 2025 and December 31, 2024, Property and equipment consist of the following:


	As of
	March 31, 2025	December 31, 2024
	$’000	$’000
Furniture and equipment	232	232
Vehicles	215	215
Leasehold improvements	11	11
Land and land improvements	11,766	11,766
Construction in process	6	6
Property and equipment, gross	12,230	12,230
Less: accumulated depreciation	(437)	(410)
Property and equipment, net	11,793	11,820

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Depreciation expense amounted to $27.0 thousand and $0.2 million for the three months ended March 31, 2025 and 2024, respectively. The Company wrote off Property and equipment related to closed locations and future locations that were terminated due to a change of business focus and recorded a loss on disposal of nil and $0.1 million during the three months ended March 31, 2025 and 2024, respectively, in the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income / (Loss).

9. Goodwill and Other Intangible Assets, Net

The Company’s intangible assets include trademarks, franchisee agreements, franchise license, domain names, customer list, proprietary recipes and non-compete agreements. Intangible assets are amortized over useful lives ranging from 5 to 10 years. In 2024, the Company moved the remaining intangible assets to Assets held for sale and as a result of the reclassification, the Company stopped amortizing these assets. See Note 3 – Assets held for sale for additional information.

A summary of the intangible assets is presented below:


	Intangible assets, net at December 31, 2023	Impairment of intangible assets	Amortization expense	Transfer to assets held for sale	Intangible assets, net at March 31, 2024	Intangible assets, net at December 31, 2024	Impairment of intangible assets	Amortization expense	Transfer to assets held for sale	Intangible assets, net at March 31, 2025
	$’000	$’000	$’000	$’000	$’000	$’000	$’000	$’000	$’000	$’000







Trademark Pokémoto	83	—	(9)	(74)	—	—	—	—	—	—
Franchisee License Pokémoto	2,045	—	(69)	(1,976)	—	—	—	—	—	—
Proprietary Recipes Pokémoto	705	—	(40)	(665)	—	—	—	—	—	—

	2,833	—	(118)	(2,715)	—	—	—	—	—	—

Amortization expense related to intangible assets was nil and $0.1 million for the three months ended March 31, 2025 and 2024, respectively.

A summary of the goodwill assets is presented below:


	Muscle Maker Grill	Pokémoto	SuperFit Food	Total
	$’000	$’000	$’000	$’000
Goodwill, net at December 31 2023	—	1,798	—	1,798
Impairment of goodwill	—	(1,798)	—	(1,798)
Goodwill, net at March 31, 2024	—	—	—	—
Goodwill, net at December 31, 2024	—	—	—	—
Transfer to assets held for sale	—	—	—	—
Goodwill, net at March 31, 2025	—	—	—	—

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

10. Accounts Payables and Accrued Expenses

Accounts payables and accrued expenses consist of the following:


	As of
	March 31, 2025	December 31, 2024
	$’000	$’000
Accounts payable	3,365	2,187
Accrued payroll and bonuses	812	690
Accrued expenses	3,032	51
Accrued interest expenses	2	7
Accrued professional fees	157	249
Accounts payable commodities	29,312	24,833

Sales taxes payable	2	2
	36,682	28,019

11. Notes Payable

Line of Credit

On September 22, 2023, the Company entered into the Standby Equity Purchase Agreement (“SEPA”) with YA II PN, LTD, a Cayman Islands exempt limited partnership (“Yorkville”) pursuant to which the Company has the right to sell to Yorkville up to $25 million of its shares of common stock, subject to certain limitations and conditions set forth in the SEPA, from time to time during the term of the SEPA. Sales of the shares of common stock to Yorkville under the SEPA, and the timing of any such sales, are at the Company’s option, and the Company is under no obligation to sell any shares of common stock to Yorkville under the SEPA except in connection with notices that may be submitted by Yorkville, in certain circumstances as described below.

Upon the satisfaction of the conditions to Yorkville’s purchase obligation set forth in the SEPA, including having a registration statement registering the resale of the shares of common stock issuable under the SEPA declared effective by the SEC, the Company will have the right, but not the obligation, from time to time at its discretion until the SEPA is terminated to direct Yorkville to purchase a specified number of shares of common stock (“Advance”) by delivering written notice to Yorkville ( “Advance Notice”). While there is no mandatory minimum amount for any Advance, it may not exceed an amount equal to 100% of the average of the daily traded amount during the five consecutive trading days immediately preceding an Advance Notice.

The shares of common stock purchased pursuant to an Advance delivered by the Company will be purchased at a price equal to 97% of the lowest daily VWAP of the shares of common stock during the three consecutive trading days commencing on the date of the delivery of the Advance Notice, other than the daily VWAP on a day in which the daily VWAP is less than a minimum acceptable price as stated by the Company in the Advance Notice or there is no VWAP on the subject trading day. The Company may establish a minimum acceptable price in each Advance Notice below which the Company will not be obligated to make any sales to Yorkville. “VWAP” is defined as the daily volume weighted average price of the shares of common stock for such trading day on the Nasdaq Stock Market during regular trading hours as reported by Bloomberg L.P. Accordingly, as may otherwise be limited by Yorkville’s 4.99% beneficial ownership limitation, assuming the Company submits an Advance requiring Yorkville to provide $100,000 in funding and assuming an applicable VWAP of $11.00 and, in turn, a purchase price of $10.67 (97% of the VWAP), the Company would be required to issue 9,372 shares of common stock and Yorkville would receive a profit of approximately $0.3201 per share, or approximately $2,999.98, if it sold all of such shares at $11.00 per share.

In connection with the SEPA, and subject to the condition set forth therein, Yorkville agreed to advance to the Company in the form of convertible promissory notes (the “Convertible Notes”) an aggregate principal amount of $4.0 million (the “Pre-Paid Advance”). The Pre-Paid Advance was disbursed on September 22, 2023 in the principal amount of $3.0 million and the balance of $1.0 million on October 30, 2023. The purchase price for the Pre-Paid Advance is 94.0% of the principal

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

amount of the Pre-Paid Advance. Interest shall accrue on the outstanding balance of any Pre-Paid Advance at an annual rate equal to 6.0%, subject to an increase to 18% upon an event of default as described in the Convertible Notes. The maturity date is 12-months after the initial closing of the Pre-Paid Advance. Yorkville may convert the Convertible Notes into shares of the Company’s common stock at a conversion price equal to the lower of $11.1495 or 95% of the lowest daily VWAP during the seven consecutive trading days immediately preceding the conversion (the “Conversion Price”), which in no event may the Conversion Price be lower than $3.30 (the “Floor Price”). In addition, upon the occurrence and during the continuation of an event of default, the Convertible Notes shall become immediately due and payable and the Company shall pay to Yorkville the principal and interest due thereunder. In no event shall Yorkville be allowed to effect a conversion if such conversion, along with all other shares of common stock beneficially owned by Yorkville and its affiliates would exceed 49.9% of the outstanding shares of the common stock of the Company. If any time on or after October 22, 2023 (i) the daily VWAP is less than the Floor Price for seven trading days during a period of nine consecutive trading days (“Floor Price Trigger”), or (ii) the Company has issued in excess of 99% of the shares of common stock available under the Exchange Cap (“Exchange Cap Trigger” and collectively with the Floor Price Trigger, the “Trigger”), then the Company shall make monthly payments to Yorkville beginning on the seventh trading day after the Trigger and continuing monthly in the amount of $500,000 plus an 8.0% premium and accrued and unpaid interest. The Exchange Cap Trigger will not apply in the event the Company has obtained the approval from its stockholders in accordance with the rules of Nasdaq Stock Market for the issuance of shares of common stock pursuant to the transactions contemplated in the Convertible Note and the SEPA in excess of 19.99% of the aggregate number of shares of common stock issued and outstanding as of the effective date of the SEPA (the “Exchange Cap”). The Note was paid in full in 2024.

Factoring agreement

As of March 31, 2025, $3.8 million of the Company’s total $10.9 million in notes payable relates to a factoring arrangement accounted for as a secured borrowing. Under the arrangement, accounts receivables with a carrying value of $4.1 million were pledged as collateral. The Company remains exposed to credit risk on the pledged receivables.

Notes Payable

The Company repaid a total amount of $1.5 million and $4.3 million during the three months ended March 31, 2025 and 2024, respectively, of the notes payable. The company entered into new loans in the amount of $4.6 million and $1.5 million for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, the Company had an aggregate amount of $10.9 million in notes payable, net. The notes had interest rates ranges between 3.75% - 39.00% per annum, due on various dates through December 2025.

As of March 31, 2025, the Company has outstanding short-term secured debt in the form of notes payable totaling $1.8 million, which is included in the $10.9 million in notes payable, net. The effective interest rate on the short-term secured debt ranges between 21.20% - 39.00%.

The maturities of notes payable as of March 31, 2025, are as follows:


			Principal Amount
			$’000
4/1/25-3/31/26			11,647
4/1/26-3/31/27			—
4/1/27-3/31/28			—
Thereafter			—
Total maturities			11,647
Less discount			(736)
Notes payable, net			10,911

12. Leases

The Company’s leases consist of restaurant locations and corporate offices. We determine if a contract contains a lease at inception. The leases generally have remaining terms of 1-5 years and most leases included the option to extend the lease for an additional 5 years.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The total lease cost associated with right of use assets and operating lease liabilities was $14.0 thousand and nil for the three months ended March 31, 2025 and 2024, respectively, and has been recorded in the Unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Income / (Loss) as Cost of goods sold.

Right to use asset and operating lease liabilities decreased due to the refranchising, selling and closure of all of our corporate owned locations by March 31, 2025.

The assets and liabilities related to the Company’s leases were as follows:


	As of
	March 31, 2025	December 31, 2024
	$’000	$’000
Assets
Total lease assets	127	132
Transferred to assets held for sale	—	—
Right to use asset	127	132
Liabilities
Total lease liabilities	129	272
Transferred to liabilities held for sale	—	(138)
Operating leases – current	24	23
Operating leases – non-current	105	111

The table below presents the future minimum lease payments under the noncancellable operating leases as of March 31, 2025:


			Total
			$’000
Fiscal Year:
04/01/2025-3/31/2026			45
04/01/2026-03/31/2027			45
04/01/2027-03/31/2028			45
04/01/2028-03/31/2029			45
04/01/2029-03/31/2030			—
Thereafter			—
Total lease payments			180
Less imputed interest			(51)
Present value of lease liabilities			129

The Company’s lease term and discount rates were as follows:


	As of March 31, 2025
Weighted-average remaining lease term (in years)
Operating leases	4.03
Weighted-average discount rate
Operating leases	18.0	%

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

13. Deferred Revenue

The Company's deferred revenue consists of the following:


	As of
	March 31, 2025	December 31, 2024
	$’000	$’000
Deferred revenues, net	74	2,251
Less: deferred revenue, current	(74)	(2,251)
Deferred revenues, non-current	—	—

Deferred revenue related to commodity forward sales contracts and prepayments on future trades were $0.1 million and $2.3 million, as of March 31, 2025 and December 31, 2024, respectively.

14. Other Current Liabilities

Other current liabilities consist of the following:


	As of
	March 31, 2025	December 31, 2024
	$’000	$’000




Derivative contracts	115	60
Operating lease liability, current	24	23
Derivative liability, current	—	92,094
	139	92,177

15. Other Non-Current Liabilities

Other non-current liabilities consist of the following:


	As of
	March 31, 2025	December 31, 2024
	$’000	$’000

Operating lease liability, non-current	105	111
	105	111

16. Income Taxes

The income tax expense for the periods shown consist of the following:


	Three Months Ended March 31,
	2025	2024
	$’000	$’000











Income tax expense	—	1

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The Company’s effective tax rate for the periods shown, are as follows:


	As of
	March 31, 2025		December 31, 2024











Effective income tax rate	—	%	0.1	%

In accordance with ASC 740-270, “Income Taxes – Interim Reporting”, the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and apply that rate to year-to-date ordinary income or loss. The resulting tax expense (or benefit) is adjusted for the tax effect of specific events, if any, required to be discretely recognized in the interim period as they occur. The Company recorded no income tax expense for the three months ended March 31, 2025, resulting in an effective tax rate of 0%.

The 0% effective tax rate for the current period is primarily attributable to the continued utilization of net operating loss carryforwards. The deferred tax asset ("DTA") related to these NOLs is subject to a full valuation allowance which was previously recorded. As a result, although there is current period income, the corresponding income tax expense is offset by a reduction in the valuation allowance, resulting in no net income tax expense. The Company continues to maintain a full valuation allowance against its deferred tax assets as it has not yet concluded that it is more likely than not that the deferred tax assets will be realized

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a corporate tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as unrecognized benefits. A liability is recognized (or amount of net operating loss carryforward or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC Topic 740. The Company believes there are no uncertain tax positions in prior year tax filings and therefore it has not recorded a liability for unrecognized tax benefits.

In accordance with ASC Topic 740, interest costs related to unrecognized tax benefits are required to be calculated (if applicable) and would be classified as “Interest expense, net”. Penalties if incurred would be recognized as a component of “Selling, general and administrative” expenses.

The Company files corporate income tax returns in the United States (federal) and in various state and local jurisdictions. In most instances, the Company is no longer subject to federal, state and local income tax examinations by tax authorities for years prior to 2015.

17. Commitments and Contingencies

Forward Purchase and Sales Contracts

On November 24, 2023, the Company through Sadot Agri-Foods, entered into a forward sale contract for the sale of 70,000 Metric Tons (“MTs”) of soybeans. Sadot Agri-Foods will provide 70,000 MTs to a third-party in May 2025, which is the executed contract date. The acquisition price for these MTs is $662 per MT, or $46.3 million in the aggregate. This contract was determined to be a derivative in accordance with ASC 815. On March 20, 2025, the Company settled this contract for a realized gain of $10.5 million, of which $9.3 million were recorded as unrealized gains in prior periods, with a total impact of $1.2 million in the current quarter.

On December 6, 2023, the Company through Sadot Agri-Foods, entered into a forward sale contract for the sale of 70,000 Metric Tons (“MTs”) of soybeans. Sadot Agri-Foods will provide 70,000 MTs to a third-party in November/December 2024, which is the executed contract date. The acquisition price for these MTs is $674 per MT, or $47.2 million in the aggregate. This contract was determined to be a derivative in accordance with ASC 815. On March 20, 2025, the Company settled this contract for a realized gain of $11.1 million, of which $9.3 million were recorded as unrealized gains in prior periods, with a total impact of $1.8 million in the current quarter.

Refer to Note 2 – Significant accounting policies, Note 19 – Fair value measurement and Note 20 – Financial instruments for additional information regarding the Derivative liability.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Consulting Agreements

On November 14, 2022 (the “Effective Date”), the Company, Sadot LLC and Aggia LLC FC, a company formed under the laws of United Arab Emirates (“Aggia”) entered into a Services Agreement (the “Services Agreement”) whereby Sadot LLC engaged Aggia to provide certain advisory services to Sadot Agri-Food for creating, acquiring and managing Sadot Agri Foods' business of wholesaling food and engaging in the purchase and sale of physical food commodities.

As consideration for Aggia providing the services to Sadot Agri-Food, the Company agreed to issue shares of common stock of the Company, par value $0.0001 per share, to Aggia subject to Sadot Agri-Food generating net income measured on a quarterly basis at per share price of $15.6250, subject to equitable adjustments for any combinations or splits of the common stock occurring following the Effective Date. Upon Sadot Agri-Food generating net income for any fiscal quarter, the Company shall issue Aggia a number of shares of common stock equal to the net income for such fiscal quarter divided by the per share price (the “Shares”). The Company may only issue authorized, unreserved shares of common stock. The Company will not issue Aggia in excess of 1,442,428 shares representing 49.9% of the number of issued and outstanding shares of common stock as of the Effective Date. In the event that the shares cap has been reached, then the remaining portion of the net income, if any, not issued as shares shall accrue as debt payable by Sadot Group to Aggia until such debt has reached a maximum of $71.5 million. The Company will prepare the shares earned calculation after the annual audit or quarter review is completed by the auditors. The shares will be issued within 10 days of the final calculation.

On July 14, 2023 (the “Addendum Date”), effective April 1, 2023, the parties entered into Addendum 2 to the Services Agreement (“Addendum 2”) pursuant to which the parties amended the compensation that Aggia is entitled.

Pursuant to Addendum 2, on the Addendum Date, the Company issued 885,546 shares (the “Shares”) of common stock, par value $0.0001 per share, of the Company, which such Shares represent 1,442,428 Shares that Aggia is entitled to receive pursuant to the Services Agreement less the 556,882 Shares that have been issued to Aggia pursuant to the Services Agreement as of the Addendum Date. The Company will not issue Aggia in excess of 1,442,428 Shares representing 49.9% of the number of issued and outstanding shares of common stock as of the effective date of the Services Agreement. The Shares shall be considered issued and outstanding as of the Addendum Date and Aggia shall hold all rights associated with such Shares. The Shares vest on a progressive schedule, at a rate equal to the net income of Sadot Agri-Foods, calculated quarterly divided by $31.25, which for accounting purposes shall equal 40% of the net income of Sadot Agri-Foods, calculated quarterly divided by $12.50. During the 30 day period after July 14, 2028 (the “Share Repurchase Date”), Aggia may purchase any Shares not vested. All Shares not vested or purchased by Aggia, shall be repurchased by the Company from Aggia at per share price of $0.001 per share. Further, the parties clarified that the Lock Up Agreement previously entered between the Company and Aggia dated November 16, 2022 shall be terminated on May 16, 2024 provided that any Shares that have not vested or been purchased by Aggia may not be transferred, offered, pledged, sold, subject to a contract to sell, granted any options for the sale of or otherwise disposed of, directly or indirectly. Following the Share Repurchase Date, in the event that there is net income for any fiscal quarter, then an amount equal to 40% of the net income shall accrue as debt payable by Sadot Group to Aggia (the “Debt”), until such Debt has reached a maximum of $71.5 million.

Additionally, for the three months ended March 31, 2025, the Company reimbursed Aggia for all operating costs related to Sadot Agri-Foods' of $0.8 million. For the three months ended March 31, 2024, operating costs related to Sadot Agri-Foods' of $1.1 million.

Sales Taxes

The Company had accrued a sales tax liability for approximately $2.0 thousand and $2.0 thousand as of March 31, 2025, and December 31, 2024, respectively. All current state and local sales taxes from January 1, 2018, for open Company-owned locations have been fully paid and in a timely manner.

Litigations, Claims and Assessments

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

parties are invalid under Zambian law, and seeks rescission of these agreements, return of assets, and damages of approximately $6.7 million USD and 0.2 million Zambian Kwacha ($6.0 thousand USD as of March 31, 2025).

Sadot LLC has filed a response denying all allegations and has asserted substantial counterclaims. The counterclaims seek a declaration that the agreements are valid and enforceable, specific performance of the agreements, injunctive relief to protect contractual rights, damages for breach of contract, reputational damages, damages for loss of use of land, punitive damages of approximately 5.0 million Zambian Kwacha ($0.2 million USD as of March 31, 2025), interest, and costs.

The matter was scheduled for a Status Conference on May 9, 2025, which has been adjourned to June 13, 2025. Sadot LLC is preparing to file an application to stay proceedings and refer the matter to arbitration pursuant to the dispute resolution mechanism in the parties' agreement, as well as seeking injunctive relief to protect its interests in the joint venture.

Management, in consultation with legal counsel, believes Sadot LLC has reasonably favorable prospects of success with respect to this matter and intends to vigorously defend against the claims while pursuing its counterclaims. Based on current information, management does not believe that the ultimate resolution of this matter will have a material adverse effect on the Company's financial position or results of operations. However, litigation is inherently unpredictable, and we cannot provide assurances regarding the outcome.

The Company has not recorded any material liabilities in connection with this matter as a loss is neither probable nor reasonably estimable at this time. The Company will continue to evaluate this matter and will establish reserves if and when appropriate.

On November 7, 2024, Lombard Trading International Corp. filed an Amended Complaint against the Company and Sadot Latam, LLC in the 11th Judicial Circuit of Florida in and for Miami-Dade County, Florida (Case No.: 2024-020971-CA-01). The Amended Complaint alleges unjust enrichment, conversion, fraud, conspiracy and civil theft related to a commodities transaction. The plaintiff claims that the Company failed to pay upon delivery of certain goods and is seeking damages in the amount of $7.4 million. The Company has not received the goods and has not received the Bills of Lading that were contractually required for the transaction to be completed. The Company denies these allegations and intends to vigorously defend against the claims. While the Company believes it has meritorious defenses, it cannot predict the outcome of this matter or reasonably estimate the potential loss at this time. Therefore, no contingent liability has been recorded as of March 31, 2025.

In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. In the opinion of management after consulting legal counsel, such matters are currently not expected to have a material impact on the Company’s financial statements.

The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements after consulting legal counsel.

NASDAQ Notice

On November 7, 2023, the Company received notice from The Nasdaq Stock Market (“Nasdaq”) that the closing bid price for the Company’s common stock had been below $1.00 per share for the previous 30 consecutive business days, and that the Company was therefore not in compliance with the minimum bid price requirement for continued inclusion on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the “Rule”).

The notice indicated that the Company will have 180 calendar days, until May 6, 2024, to regain compliance with this requirement. On April 29, 2024, the Company submitted a request to Nasdaq requesting an additional 180 days to regain compliance. On May 7, 2024, the Company received notice from Nasdaq that the request for an additional 180 days to regain compliance was approved. The Company was eligible to regain compliance with the $1.00 minimum bid listing requirement if the closing bid price of its common stock is at least $1.00 per share for a minimum of ten (10) consecutive business days during the 180-day compliance period. To qualify, the Company was required to meet the continued listing requirement for market value of the Company's publicly held shares and all other Nasdaq initial listing standards, except the bid price requirement, and was required to provide written notice to Nasdaq of its intention to cure the deficiency during the second compliance period.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

On October 9, 2024, the Company filed a Certificate of Change Pursuant to NRS 78.209 with the Nevada Secretary of State to effect the Reverse Stock Split, which became effective 12:01 am eastern on October 18, 2024. As a result of the Reverse Stock Split, every 10 shares of the Company’s common stock issued and outstanding on the effective date were consolidated into one issued and outstanding share. All stockholders who would be entitled to receive fractional shares as a result of the Reverse Stock Split received one whole share for their fractional share interest. There was no change in the par value of our common stock.

The Company effectuated a Reverse Stock Split to raise the per share bid price of the Company’s Common Stock above $1.00 per share with the goal of bringing the Company back into compliance with Nasdaq Listing Rule 5550(a)(2). The Company received notice from Nasdaq on November 1, 2024, indicating that the Company regained compliance with the minimum bid price requirement under the Rule.

The Company’s common stock began trading on a split-adjusted basis on Nasdaq at the commencement of trading on October 18, 2024 under the Company’s existing symbol “SDOT.” The Company’s common stock has been assigned a new CUSIP number of 627333305 in connection with the Reverse Stock Split.

18. Reportable Operating Segments

See Note 1 – Business organization and nature of operations for descriptions of our operating segments.

The Company’s reportable segments are determined based on the management approach, consistent with the way the Chief Operating Decision Maker (CODM) evaluates financial performance and allocates resources. The CODM, identified as the Chief Executive Officer, regularly reviews discrete financial information for the Sadot Food Services and Sadot Agri-Foods segments to assess performance and make operational decisions.

The following table sets forth the results of operations for the relevant segments for the three months ended March 31, 2025:


	For the Three Months Ended March 31, 2025
	Sadot food service	Sadot agri-foods	Corporate adj.	Total segments
	$’000	$’000	$’000	$’000
Commodity sales	—	132,168	—	132,168




Cost of goods sold	—	(126,156)	—	(126,156)
Gross profit	—	6,012	—	6,012
Depreciation and amortization expenses	—	(26)	(1)	(27)


Stock-based expenses	—	—	(1,428)	(1,428)
Sales, general and administrative expenses	—	(1,785)	(1,296)	(3,081)
Income / (loss) from operations	—	4,201	(2,725)	1,476

Interest income / (expense), net	—	(754)	(787)	(1,541)
Change in fair value of stock-based compensation	—	—	778	778


Income / (loss) for continuing operations before income tax	—	3,447	(2,734)	713
Income tax expense	—	—	—	—
Net income / (loss) for continuing operations	—	3,447	(2,734)	713
Income for discontinued operations, net of income tax	107	—	—	107
Net income / (loss)	107	3,447	(2,734)	820
Net loss attributable to non-controlling interest	—	118	—	118
Net income / (loss) attributable to Sadot Group Inc.	107	3,565	(2,734)	938
Total assets	4,915	77,001	1,828	83,744

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The following table sets forth the results of operations for the relevant segments for the three months ended March 31, 2024:


	For the Three Months Ended March 31, 2024
	Sadot food service	Sadot agri-foods	Corporate adj.	Total segments
	$’000	$’000	$’000	$’000
Commodity sales	—	106,507	—	106,507




Cost of goods sold	—	(103,697)	—	(103,697)
Gross profit	—	2,810	—	2,810


Depreciation and amortization expenses	—	(91)	—	(91)



Stock-based expenses	—	—	(796)	(796)
Sales, general and administrative expenses	—	(731)	(662)	(1,393)
Income / (loss) from operations	—	1,988	(1,458)	530

Interest income / (expense), net	—	(407)	179	(228)
Change in fair value of stock-based compensation	—	—	476	476



Income / (loss) for continuing operations before income tax	—	1,581	(803)	778
Income tax expense	—	—	(1)	(1)
Net income / (loss) for continuing operations	—	1,581	(804)	777
Loss for discontinued operations, net of income tax	(1,090)	—	—	(1,090)
Net income / (loss)	(1,090)	1,581	(804)	(313)
Net loss attributable to non-controlling interest	—	48	—	48
Net income / (loss) attributable to Sadot Group Inc.	(1,090)	1,629	(804)	(265)
Total assets	6,950	142,673	904	150,527

In 2024, assets related to our Sadot food services segment met the criteria for classification as Assets held for sale. For additional information, see Note 2 – Significant accounting policies, Note 3 – Assets held for sale and Note 4 – Discontinued operations.

The Company will continue to evaluate its operating segments and update as necessary.

19. Fair Value Measurement

The following tables presents information about the Company's assets and liabilities that are measured at fair value on a recurring basis at March 31, 2025 and December 31, 2024 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.


	March 31, 2025
	Level 1	Level 2	Level 3	Total
	$’000	$’000	$’000	$’000




Financial liabilities:

Derivative contracts	—	115	—	115
	—	115	—	115

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)


	December 31, 2024
	Level 1	Level 2	Level 3	Total
	$’000	$’000	$’000	$’000
Financial assets:
Derivative asset	—	93,520	—	93,520
Derivative contracts	—	18,602	—	18,602
	—	112,122	—	112,122
Financial liabilities:
Derivative liability	—	92,094	—	92,094
Derivative contracts	—	60	—	60
	—	92,154	—	92,154

There were no transfers between fair value levels during the three months ended March 31, 2025.

See Note 17 – Commitments and contingencies and Note 20 – Financial instruments for details related to the Derivative liability being fair valued using Level 2 inputs.

Derivative Liability

The Derivative liability is primarily related to open hedging positions as of March 31, 2025. The fair value of the Derivative liability is based on quoted prices for similar assets and liabilities in active market or inputs that are observable which represent Level 2 measurements within the fair value hierarchy and is based on observable prices for similar assets sourced by an independent marketplace. Please refer to Note 2 – Significant accounting policies for additional information on ASC 815 leveling.

20. Financial Instruments

Inherent in our business is the risk of matching the timing of our purchase and sales contracts. The prices of food and feed commodities (e.g., soybeans, wheat, corn, etc.) and carbon offset units we buy and sell are based on a constantly moving terminal market price determined by various exchanges (e.g., CME, Chicago Board of Trade ("CBOT") and Dalian Commodity Exchange ("DCE"), etc.). Were we not to hedge such exposures, we could be exposed to significant losses due to the continually changing commodity prices.

We use commodity futures contracts to manage our exposure to this commodity price risk. It is generally our policy to hedge such risks to the extent practicable. We enter into hedges to limit our exposure to volatile price fluctuations that we believe would impact our gross margins on firm purchase and sales commitments. As an example, if we enter into fixed price contracts with our suppliers and variable priced sales contracts with our customers, we will generally enter into a futures contract to sell the commodity for future delivery in the month when we expect the commodity price to be fixed according to the sales contract terms. We repurchase this position once the pricing has been fixed with our customer. If the underlying commodity price increases, we suffer a hedging loss and have an unrealized loss on derivative contracts, but the sales price to the customer is based on a higher market price and offsets the loss. Conversely, if the commodity price decreases, we have a hedging gain and recognize an unrealized gain on derivative contracts, but the sales price to the customer is based on the lower market price and offsets the gain.

In accordance with FASB ASC 815, Derivatives and Hedging, we designate these derivative contracts as fair value hedges and recognize them on our balance sheet at fair value. We also recognize offsetting changes in the fair value of the related firm purchase and sales commitment to which the hedge is attributable in earnings upon revenue recognition, which occurs at the time of delivery to our customers.

The potential for losses related to our hedging activities, given our hedging methodology, arises from the exchanges for our commodity hedges or customer defaults. In the event of a customer default, we might be forced to sell the commodities in the open market and absorb losses for the commodities. Our results of operations could be materially impacted by any counterparty or customer default, as we might not be able to collect money owed to us and/or our hedge might effectively be cancelled.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

We use hedges for no purpose other than to avoid exposure to changes in commodity prices between when we buy a shipment of commodities from a supplier and when we deliver it to a customer. Our derivatives are not for purposes of trading in the futures market. We earn our gross profit margin through our business operations and not from the movement of commodity prices.

The Company’s assets and liabilities related to unrealized gains or losses on fair value hedges measured at fair value at March 31, 2025 and December 31, 2024 are as follows:

Derivatives designated as fair value hedges

Balance Sheet Location

March 31, 2025

December 31, 2024

Asset (liability) derivatives:

$’000

Derivative contracts

Other current liabilities

(115)

(60)

Total

(115)

(60)

The table below summarizes the realized gain or (loss) on the Company’s derivative instruments that are designated as fair value hedges and their location in the Unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Income / (Loss):


		Three Months Ended March 31,
Derivatives in hedging relationships	Location of Gain / (Loss) Recognized	2025	2024
		$’000	$’000
Derivative contracts	Cost of goods sold	(136)	(11)

Total		(136)	(11)

From time to time we may enter into forward sales contracts that do not meet the definition or qualify for hedge accounting. Forward sales contracts are derivatives that were entered into to sell goods at a later date at a fixed or determinable price for a specific period. Forward sales contracts are recognized on the balance sheet at the value of the contract and the difference in the fair value and derivative liability is recorded as an unrealized gain on derivative contracts or unrealized loss on derivative contracts. If the underlying commodity price increases, we suffer a mark to market loss and have a derivative liability. Conversely, if the commodity price decreases, we have a hedging gain and recognize a unrealized gain on derivative contract.

As part of our business we also engage in the purchase, sale and distribution of food and feed products. If we do not have a matching sales contract related to such products, (for example, any commodity products that are unsold in our inventory), we have price risk that we currently do not or are unable to hedge. As such, any decline in pricing for such products may adversely impact our profitability.

The follow table sets forth the fair value of derivatives not designated as hedging instruments as of March 31, 2025 and December 31, 2024:

Derivatives

Balance Sheet Location

March 31, 2025

December 31, 2024

Asset (liability) derivatives:

$’000

Derivative contracts

Other current assets

—

18,602

Derivative asset

Other current assets

—

93,520

Derivative liability

Other current liabilities

—

(92,094)

Total

—

20,028

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The table below summarizes the realized gain or (loss) on the Company’s derivative instruments that are not designated as hedges and their location in the Unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Income / (Loss):


		Three Months Ended March 31,
Derivatives	Location of Gain / (Loss) Recognized	2025	2024
		$’000	$’000
Derivative contracts	Cost of goods sold	3,028	3,259
Total		3,028	3,259

See Note 17 – Commitments and contingencies for additional information.

21. Equity

Stock Option and Stock Issuance Plan

2021 Plan

The Company’s board of directors and shareholders approved and adopted on October 7, 2021 the 2021 Equity Incentive Plan (“2021 Plan”), effective on September 16, 2020, under which stock options and restricted stock may be granted to officers, directors, employees and consultants in the form of non-qualified stock options, incentive stock-options, stock appreciation rights, restricted stock awards, restricted stock units, stock bonus awards, performance compensation awards (including cash bonus awards) or any combination of the foregoing. Under the 2021 Plan, the Company reserved 150,000 shares of common stock for issuance. As of March 31, 2025, 65,643 shares have been issued and 71,857 options to purchase shares have been awarded under the 2021 Plan.

2023 Plan

The Company’s board of directors and shareholders approved and adopted on February 28, 2023, the 2023 Equity Incentive Plan (“2023 Plan”) under which stock options and restricted stock may be granted to officers, directors, employees and consultants in the form of non-qualified stock options, incentive stock-options, stock appreciation rights, restricted stock awards, restricted stock Units, stock bonus awards, performance compensation awards (including cash bonus awards) or any combination of the foregoing. Under the 2023 Plan, the Company reserved 250,000 shares of common stock for issuance. As of March 31, 2025, 242,404 shares have been issued and 6,893 option to purchase shares have been awarded under the 2023 Plan.

2024 Plan

The Company’s board of directors and shareholders approved and adopted on December 20, 2023, the 2024 Equity Incentive Plan (“2024 Plan”) under which stock options and restricted stock may be granted to officers, directors, employees and consultants in the form of non-qualified stock options, incentive stock-options, stock appreciation rights, restricted stock awards, restricted stock Units, stock bonus awards, performance compensation awards (including cash bonus awards) or any combination of the foregoing. Under the 2024 Plan, the Company reserved 750,000 shares of common stock for issuance. As of March 31, 2025, 593,614 shares have been issued under the 2024 Plan.

Common Stock Issuances

On January 4, 2024, the Company authorized the issuance of 10,564 shares of common stock to the members of the board of directors as compensation earned during the fourth quarter of 2023.

On January 8, 2024, the Company authorized the issuance of 27,694 shares of common stock in connection with the conversion of notes payable.

On January 11, 2024, the Company authorized the issuance of 27,891 shares of common stock in connection with the conversion of notes payable.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

On January 22, 2024, the Company authorized the issuance of 30,577 shares of common stock in connection with the conversion of notes payable.

On January 29, 2024, the Company authorized the issuance of 30,443 shares of common stock in connection with the conversion of notes payable.

On February 16, 2024, the Company authorized the issuance of 300 shares of common stock to a consultant for services rendered.

On February 16, 2024, the Company authorized the issuance of 30,572 shares of common stock in connection with the conversion of notes payable.

On March 15, 2024, the Company authorized the issuance of 60,885 shares of common stock in connection with the conversion of notes payable.

On March 20, 2024, the Company authorized the issuance of 76,077 shares of common stock in connection with the conversion of notes payable.

On March 28, 2024, the Company authorized the issuance of 7,950 shares of common stock to a consultant for services rendered.

On March 31, 2024, the Company vested 50,094 shares of common stock to Aggia as consulting fees earned during the fourth quarter of 2023.

On March 25, 2025, the Company authorized the issuance of 34,074 shares of common stock to consultants for services rendered.

On March 31, 2025, the Company vested 79,342 shares of common stock to Aggia as consulting fees earned during the first quarter of 2025.

Preferred Stock

Our authorized preferred stock consists of 10,000,000 shares of preferred stock, $0.0001 par value per share. As of March 31, 2025 there are no shares of preferred stock currently issued and outstanding.

Restricted Share Awards

Per Addendum 2, on July 14, 2023, the Company issued Restricted Share Awards ("RSA's") to Aggia. These RSA's are considered issued as of the effective date on April 1, 2023. Pursuant to the Services Agreement these RSA's vest on a progressive schedule, at a rate equal to the Net Income of Sadot Agri-Foods, calculated quarterly divided by $31.250, which for accounting purposes shall equal 40% of the net income of Sadot Agri-Foods, calculated quarterly divided by $12.50. Shares shall be considered issued and outstanding as of the effective date and Aggia shall hold rights associated with such Shares; provided, however, Shares not earned or purchased may not be transferred, offered, pledged, sold, subject to a contract to sell, granted any options for the sale of or otherwise disposed of, directly or indirectly. The total RSA's vested for Aggia for the three months ended March 31, 2025 were 79,342.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

At March 31, 2025, there were 641,711 restricted share awards outstanding awarded to employees, consultants and the board of directors.

A summary of the activity related to the restricted share awards, is presented below:


	Total RSA's	Weighted-average grant date fair value
		$
Unvested at, December 31, 2023	909,877	10.85
Granted	213,600	2.95
Forfeited	—	—
Vested	(74,007)	9.70
Unvested at March 31, 2024	1,049,470	9.32
Unvested at December 31, 2024	640,329	6.49
Granted	157,604	3.04
Forfeited	(2,942)	4.37
Vested	(153,280)	8.08
Unvested at March 31, 2025	641,711	5.86

Change in fair value of stock-based compensation on the Unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Income / (Loss) is made up of the difference between the agreed upon issuance price, per the servicing agreement with Aggia and the market price on the day of issuance. Change in fair value of stock-based compensation was $0.8 million and $0.5 million for the three months ended March 31, 2025, and 2024, respectively.

See Note 17 – Commitments and contingencies for further details on Restricted Share Awards.

Warrant and Option Valuation

The Company has computed the fair value of warrants and options granted using the Black-Scholes option pricing model. The expected term used for warrants and options issued to non-employees is the contractual life. The Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected term of the instrument being valued, of similarly positioned public companies within its industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Options

A summary of option activity is presented below:


	Weighted-average exercise price	Number of options	Weighted-average remaining life (in years)	Aggregate intrinsic value
	$			$’000
Outstanding, December 31, 2023	10.90	82,750	4.26	—
Granted	—	—	N/A	—
Exercised	—	—	N/A	—
Forfeited	15.10	(1,500)	N/A	—
Outstanding, March 31, 2024	11.00	81,250	3.92	—

Exercisable and vested, March 31, 2024	9.70	24,752	3.77	—
Outstanding, December 31, 2024	10.84	81,250	3.17	—
Granted	—	—	N/A	—
Exercised	—	—	N/A	—
Forfeited	15.05	(2,500)	N/A	—
Outstanding, March 31, 2025	10.70	78,750	2.76	—

Exercisable and vested, March 31, 2025	9.97	39,864	2.69	—

Warrants

A summary of warrants activity during the three months ended March 31, 2025 and 2024 is presented below:


	Weighted-average exercise price	Number of warrants	Weighted-average remaining life (in years)	Aggregate intrinsic value
	$			$’000
Outstanding, December 31, 2023	19.69	1,737,989	2.61	—
Granted	—	—	N/A	—
Exercised	—	—	N/A	—
Forfeited	36.60	(32,364)	N/A	—
Outstanding, March 31, 2024	19.40	1,705,625	2.41	—
Exercisable, March 31, 2024	19.40	1,705,625	2.41	—
Outstanding, December 31, 2024	18.62	1,593,020	1.82	—
Granted	—	—	N/A	—
Exercised	—	—	N/A	—
Forfeited	60.00	(12,321)	N/A	—
Outstanding, March 31, 2025	18.30	1,580,699	1.58	—
Exercisable, March 31, 2025	18.30	1,580,699	1.58	—

Stock-Based Compensation Expense

Stock-based compensation related to restricted stock issued to employees, directors and consultants amounted to $1.4 million for the three months ended March 31, 2025, of which $0.2 million, were executive compensation, $0.1 million were given to the board of directors, $0.2 million were given to consultants for services rendered and $1.0 million were stock-based consulting expenses paid to related party.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Stock-based compensation related to restricted stock issued to employees, directors and consultants, warrants and warrants to consultants amounted to $0.8 million for the three months ended March 31, 2024, of which $45.5 thousand, were executive compensation, $36.1 thousand, were given to the board of directors, $0.1 million were given to consultants for services rendered and $0.6 million were stock-based consulting expenses paid to related party.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

22. Related Party Transactions

The Company held a Special Shareholder Meeting on February 28, 2023. At the meeting, the shareholders approved (i) the Services Agreement whereby Sadot LLC engaged Aggia, to provide certain advisory services to Sadot Agri-Foods for managing Sadot Agri-Food’s business of wholesaling food and engaging in the purchase and sale of physical food commodities; (ii) an amendment of the Company’s articles of incorporation to increase the number of authorized shares of common stock from 5,000,000 to 15,000,000; (iii) for purposes of complying with NASDAQ Listing Rule 5635(b), the issuance of the Shares pursuant to the Services Agreement entered between the Company, Sadot LLC and Aggia representing more than 20% of our common stock outstanding, which would result in a “change of control” of the Company under applicable Nasdaq listing rules; (iv) for purposes of complying with NASDAQ Listing Rule 5635(c), the issuance of up to 1,442,428 Shares of Common Stock to Aggia pursuant to the Services Agreement and net income generated thresholds; (v) the right of Aggia to nominate up to eight directors to the Board of Directors subject to achieving net income thresholds as set forth in the Services Agreement; and (vi) the adoption of the 2023 Equity Incentive Plan. The shareholders of the Company subsequently approved an increase in the authorized shares of common stock from 15,000,000 to 20,000,000 at the Company’s Annual Meeting held on December 20, 2023.

As of March 31, 2025, Aggia owned 11.2% of the Company's common stock.

During the three months ended March 31, 2025, the Company recorded Stock-based consulting expense of $1.0 million to its related party, Aggia for consulting services rendered. During the three months ended March 31, 2024, the Company recorded Stock-based consulting expense of $0.6 million to its related party, Aggia for consulting services rendered.

Additionally, for the three months ended March 31, 2025, the Company reimbursed Aggia for all operating costs related to Sadot Agri-Foods of $0.8 million. For the three months ended March 31, 2024, the Company reimbursed Aggia for all operating costs related to Sadot Agri-Foods of $1.1 million.

On September 19, 2024, the Company received a loan from a related party, in an arms length transaction, of $0.6 million, with a discount of $0.1 million, that matures on April 10, 2025. This loan has been extended until July 18, 2025.

On March 26, 2025, SGI launched Sadot South Korea and retained a 70% controlling interest. The entity that owns the 30% non-controlling interest, is 50% owned by one of our board members. In addition she is paid compensation for her services in Sadot South Korea. As of March 31, 2025, 17,037 shares of stock was issued to the board member as compensation for services related to Sadot South Korea from January 6, 2025 through March 31, 2025.

The Company will continue to monitor and evaluate its related party transactions to ensure that they are conducted in accordance with applicable laws and regulations and in the best interests of the Company and its shareholders.

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Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

23. Subsequent Events

Service Agreement

Effective April 1, 2025, Sadot Canada, has entered into a management services agreement with Big Sky Milling. Under the agreement, Sadot Canada will provide full-scale management services to Big Sky Milling, supporting its operations and driving growth across its business. In return, Sadot Canada will earn a monthly service fee for its management services. The agreement also grants Sadot Canada access to Big Sky Milling's state-of-the-art facility in Bowden, Alberta for transloading and toll processing activities in support of its growing export operations, providing access to a strategically located facility in a key growing region in Canada.

On April 30, 2025, the service agreement with Buenaventura to run the day to day operation of Sadot Latam was terminated.

Notes Payable

Two loans, one to a related party, that are secured by the sale of the Sadot Food Services were extended from April 10, 2025, until July 18, 2025, for an additional $1.0 million.

On April 24, 2025, the Company entered into a new merchant cash advance for $1.9 million and paid off the previous advance of $1.0 million.

On April 25, 2025, the company exchanged a note payable of $25.0 thousand for 18,939 shares of common stock.

On April 30, 2025, the company exchanged a note payable of $0.1 million for 49,242 shares of common stock.

On May 6, 2025, the company exchanged a note payable of $0.1 million for 42,735 shares of common stock.

On May 9, 2025, the Company entered into a new merchant cash advance for $0.5 million.

On May 12, 2025, the company exchanged a note payable of $0.1 million for 48,558 shares of common stock.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Preliminary Note

The following Management’s Discussion and Analysis (“MD&A”), prepared as of May 14, 2025, should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements of Sadot Group Inc. ("Sadot Group"), for the three months ended March 31, 2025, together with the audited financial statements of the Company for the year ended December 31, 2024 and the accompanying MD&A for that fiscal year appearing in our Annual Report on 2023 Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 11, 2025. Unless otherwise indicated or the context otherwise requires, all references to the terms “Company,” “company,” "Sadot", “we,” “us,” “our”, “Group” and similar terms refer to Sadot Group Inc., together with its consolidated subsidiaries.

Our website address is http://sadotgroupinc.com. The information on, or that can be accessed through, our website is not part of this Report. The SEC also maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Our filings with the SEC are also available to the public through the SEC’s website at www.sec.gov.

This MD&A is the responsibility of management. Prior to its release, the Company’s Board of Directors (the “Board”) approved this MD&A on the Audit Committee’s recommendation. The Company presents its financial statements in U.S. Dollars. Amounts in this MD&A are stated in U.S. Dollars unless otherwise indicated.

Forward-Looking Statements

This Report contains forward-looking statements as defined in the federal securities laws. Forward-looking statements generally relate to future events or our future financial or operating performance. These forward-looking statements are not guarantees of future performance, conditions, or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of Sadot Group Inc's management’s control. The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “plan,” “forecast,” “model,” “proposal,” “should,” “may,” “intend,” “estimate,” and “continue,” and similar expressions (or the negative versions of such words or expressions), are intended to identify forward-looking statements. These forward-looking statements include, without limitation, information concerning Sadot’s possible or assumed future results of operations, business strategies, debt levels, competitive position, industry environment and possible growth opportunities. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Reference is made to “Factors That May Affect Future Results and Financial Condition” in this Item 2 for a discussion of some of the uncertainties, risks and assumptions associated with these statements.

OVERVIEW

Sadot Group Inc. is our parent company and is headquartered in Burleson, Texas. In late 2022, Sadot Group began a transformation from a U.S.-centric restaurant business into a global organization focused on the Agri-Foods supply-chain. As of March 31, 2025, Sadot Group consisted of 1 distinct operating unit and 1 discontinued operations.

Sadot LLC (“Sadot Agri-Foods”): Sadot Group’s largest operating unit is a global Agri-Foods company engaged in farming, commodity trading and shipping of food and feed (e.g., soybean meal, wheat and corn) via dry bulk cargo ships across the globe. Sadot Agri-Foods competes with the ABCD commodity companies (ADM, Bunge, Cargill, Louis-Dreyfus) as well as many regional organizations. Sadot Agri-Foods operates, through a majority owned subsidiary, a roughly 5,000 acre crop producing farm in Zambia with a focus on major commodities such as wheat, soy and corn alongside high-value tree crops such as avocado and mango. Sadot Agri-Foods was formed as part of the Company’s diversification strategy to own and operate, through its subsidiaries, the business lines throughout the food supply chain. Sadot Agri-Foods seeks to diversify over time into a sustainable and forward-looking global agri-foods company.

Sadot Restaurant Group, LLC ("Sadot Food Services"): has three unique “healthier for you” concepts, including two fast casual restaurant concepts, Pokémoto and Muscle Maker Grill, plus one subscription-based fresh prep meal concept, SuperFit Foods. SuperFit Foods was sold in August 2024. This entire operating segment was identified as held for sale. Please see Note 3 – Assets held for sale and Note 4 – Discontinued operations for further details.

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Key Financial Definitions

We review a number of financial and operating metrics, including the following key metrics and non-GAAP measures, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. Governmental and other economic factors affecting our operations may vary.


	Three Months Ended March 31,
	2025	2024
	$’000	$’000
Commodity sales	132,168	106,507





Cost of goods sold	(126,156)	(103,697)
Gross profit	6,012	2,810


Depreciation and amortization expenses	(27)	(91)



Stock-based expenses	(1,428)	(796)
Sales, general and administrative expenses	(3,081)	(1,393)
Loss from operations	1,476	530

EBITDA	2,388	7
EBITDA attributable to Sadot Group Inc.	2,506	55

Our key business and financial metrics are explained in detail below.

Revenues

Our revenues are derived from Commodity sales. Commodity sales revenues are comprised of revenues generated from the purchase and sales of physical food and feed commodities related to our trading and farming operations.

Cost of Goods Sold

Cost of goods sold includes commodity costs, labor, rent and other operating expenses.

Reclassification

Depreciation and Amortization Expenses

Depreciation and amortization expenses primarily consist of the depreciation of property and equipment.

Stock-Based Expenses

Stock-based expenses include all expenses that are paid with stock. This includes stock-based consulting fees due to Aggia and other consultants, stock compensation paid to our board of directors, and stock compensation paid to employees. The consulting fees due to Aggia are related to ongoing Sadot Agri-Foods and expansion of the global agri-foods commodities business. Based on the initial Services Agreement with Aggia LLC FZ, a Company formed under the laws of United Arab Emirates (“Aggia”), the consulting fees were calculated at approximately 80.0% of the Net Income generated by Sadot Agri-Foods through March 31, 2023. As of April 1, 2023, the consulting agreement was amended to calculate consulting fees on 40.0% of the Net income generated by Sadot LLC. Stock-based expenses were $1.4 million, for the three months

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ended March 31, 2025 and $0.8 million, for the three months ended March 31, 2024, respectively, and are recorded in the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).

Sales, General and Administrative Expenses

Sales, general and administrative expenses include expenses associated with corporate and administrative functions that support our operations, including wages, benefits, travel expense, legal and professional fees, training, investor relations and other corporate costs. We incur incremental Sales, general and administrative expenses as a result of being a publicly listed company on the NASDAQ capital market.

Other (Expense) / Income

Total Other (expense) / income listed below the Loss from operations in the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss) consists of, Other income / (expense), Change in fair value of stock-based compensation, and Interest expense, net.

Income Tax Benefit / (Expense)

Income tax benefit / (expense) represent federal, state and local current and deferred income tax expense.

Net Income (Loss) Attributable to Non-controlling Interests

Net loss attributable to non-controlling interests were $0.1 million and $48.0 thousand for the three months ended March 31, 2025 and 2024, respectively. During the year ended December 31, 2023 the Company created a joint-venture in which the Company has a 70% interest and the third-party equity ownership has a 30% Non-controlling interest.

Non-GAAP Measures

EBITDA and EBITDA Margin are non-GAAP measures. We define EBITDA as Net loss, adjusted for depreciation, amortization, interest income / (expense), and income taxes. We believe that EBITDA and EBITDA Margin, (collectively, the “Non-GAAP Measures”) are useful metrics for investors to understand and evaluate our operating results and ongoing profitability because they permit investors to evaluate our recurring profitability from our ongoing operating activities.

EBITDA and EBITDA Margin, have certain limitations, and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under U.S. GAAP. We caution investors that amounts presented in accordance with our definitions of any of the Non-GAAP Measures may not be comparable to similar measures disclosed by other issuers, because some issuers calculate certain of the Non-GAAP Measures differently or not at all, limiting their usefulness as direct comparative measures.

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Reconciliations of EBITDA and Other Non-GAAP Measures

The following table presents a reconciliation of EBITDA from the most comparable U.S. GAAP measure, Net loss and the calculations of the Net loss Margin and EBITDA Margin for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025		2024
	$’000		$’000
Net income / (loss)	820		(313)
Adjustments to EBITDA:
Depreciation and amortization expenses	27		91
Interest (income) / expense, net	1,541		228
Income tax expense	—		1
EBITDA	2,388		7
EBITDA attributable to non-controlling interest	118		48
EBITDA attributable to Sadot Group Inc.	2,506		55
Gross Profit	6,012		2,810
Gross Profit attributable to Sadot Group Inc.	6,130		2,858

Net income / (loss) margin attributable to Sadot Group Inc.	0.6	%	(0.3)	%
EBITDA margin attributable to Sadot Group Inc.	1.9	%	0.1	%

Unaudited Condensed Consolidated Results of Operations - Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

The following table represents selected items in our Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss) for the three months ended March 31, 2025 and 2024, respectively:


	Three Months Ended March 31,		Variance
	2025	2024	$	%
	$’000	$’000	$’000
Commodity sales	132,168	106,507	25,661	24.1	%




Cost of goods sold	(126,156)	(103,697)	(22,459)	21.7	%
Gross profit	6,012	2,810	3,202	114.0	%


Depreciation and amortization expenses	(27)	(91)	64	(70.3)	%



Stock-based expenses	(1,428)	(796)	(632)	79.4	%
Sales, general and administrative expenses	(3,081)	(1,393)	(1,688)	121.2	%
Income from operations	1,476	530	946	178.5	%


Interest expense, net	(1,541)	(228)	(1,313)	575.9	%
Change in fair value of stock-based compensation	778	476	302	63.4	%



Income for continuing operations before income tax	713	778	(65)	8.4	%
Income tax expense	—	(1)	1	(100.0)	%
Net income / (loss)	713	777	(64)	8.2	%
Net loss attributable to non-controlling interest	118	48	70	145.8	%
Net income / (loss) attributable to Sadot Group Inc.	938	(265)	1,203	454.0	%

NM= not meaningful

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The following table sets forth our results of operations as a percentage of total revenue for each period presented preceding:


	Three Months Ended March 31,
	2025		2024
Commodity sales	100.0	%	100.0	%




Cost of goods sold	(95.5)	%	(97.4)	%
Gross profit	4.5	%	2.6	%


Depreciation and amortization expenses	—	%	(0.1)	%



Stock-based expenses	(1.1)	%	(0.7)	%
Sales, general and administrative expenses	(2.3)	%	(1.3)	%
Income from operations	1.2	%	0.5	%

Interest expense, net	(1.2)	%	(0.2)	%
Change in fair value of stock-based compensation	0.6	%	0.4	%




Income for continuing operations before income tax	0.5	%	0.7	%
Income tax expense	—	%	—	%
Net income for continuing operations	0.5	%	0.7	%
Net income / (loss) for discontinued operations	0.1	%	(1.0)	%
Net loss attributable to non-controlling interest	0.2	%	—	%
Net income / (loss) attributable to Sadot Group Inc.	0.7	%	(0.2)	%

Gross Profit


	Three Months Ended March 31,		Variance
	2025	2024	$	%
	$’000	$’000	$’000
Commodity sales	132,168	106,507	25,661	24.1	%




Cost of goods sold	(126,156)	(103,697)	(22,459)	21.7	%
Gross profit	6,012	2,810	3,202	114.0	%

NM= not meaningful

Our gross (loss) profit totaled $6.0 million profit for the three months ended March 31, 2025, compared to $2.8 million profit for the three months ended March 31, 2024. The $3.2 million increase is primarily attributed to an increase in Commodity sales partially offset by an increase in Cost of goods sold.

We generated Commodity sales of $132.2 million for the three months ended March 31, 2025, compared to $106.5 million for the three months ended March 31, 2024. This represented an increase of $25.7 million, which is attributable to an increase in operations in 2025 as a direct result of our expansion into new markets, which were not operating in 2024.

Cost of goods sold for the three months ended March 31, 2025, totaled $126.2 million compared to $103.7 million for the three months ended March 31, 2024. The $22.5 million or 21.7% change is a direct result of the increase in sales, partially offset by the reclass of gain on derivative contracts.

Depreciation and Amortization Expenses


	Three Months Ended March 31,		Variance
	2025	2024	$	%
	$’000	$’000	$’000
Depreciation and amortization expenses	(27)	(91)	64	(70.3)	%

Depreciation and amortization expenses for the three months ended March 31, 2025, totaled $27.0 thousand compared to $0.1 million, for the three months ended March 31, 2024. The $0.1 million decrease is mainly attributed to Farm related assets being fully depreciated in 2024.

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Stock-Based Expenses


	Three Months Ended March 31,		Variance
	2025	2024	$	%
	$’000	$’000	$’000
Stock-based expenses	(1,428)	(796)	(632)	79.4	%

Stock-based expenses for the three months ended March 31, 2025, totaled $1.4 million compared to $0.8 million for the three months ended March 31, 2024. The $0.6 million increase in Stock-based expenses is primarily the result of consulting fees due to Aggia for Sadot Agri-Foods and the vesting of restricted stock for employees, board of directors and consultants. Based on the servicing agreement with Aggia, the consulting fees are calculated at approximately 40.0% of the Net income generated by Sadot Agri-Foods. This expense is paid in the vesting in restricted stock that was issued to Aggia in 2025.

Sales, General and Administrative Expenses


	Three Months Ended March 31,		Variance
	2025	2024	$	%
	$’000	$’000	$’000
Sales, general and administrative expenses	(3,081)	(1,393)	(1,688)	121.2	%

Sales, general and administrative expenses for the three months ended March 31, 2025, totaled $3.1 million compared to $1.4 million for the three months ended March 31, 2024. The $1.7 million increase was primarily attributable to an increase in consulting fees due to trades in Latin America, Brazil and Canada markets, entering the South Korea market and increases due to increases in normal operating activities.

Other Income / (Expense)


	Three Months Ended March 31,		Variance
	2025	2024	$	%
	$’000	$’000	$’000
Total other income / (expense), net	(763)	248	(1,011)	(408)	%

Other income for the three months ended March 31, 2025, totaled $0.8 million compared to $0.2 million loss for the three months ended March 31, 2024. The $1.0 million decrease was primarily attributable to a $0.3 million increase in change in fair value of stock-based compensation and a $1.3 million increase in interest expense.

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	Three Months Ended March 31, 2025
	Sadot food service	Sadot agri-foods	Corporate adj.	Consolidated
	$’000	$’000	$’000	$’000
Commodity sales	—	132,168	—	132,168




Cost of goods sold	—	(126,156)	—	(126,156)
Gross profit	—	6,012	—	6,012


Depreciation and amortization expenses	—	(26)	(1)	(27)



Stock-based expenses	—	—	(1428)	(1,428)
Sales, general and administrative expenses	—	(1,785)	(1296)	(3,081)
Income / (loss) from operations	—	4,201	(2725)	1,476

Interest income / (expense), net	—	(754)	(787)	(1,541)
Change in fair value of stock-based compensation	—	—	778	778



Income / (loss) for continuing operations before income tax	—	3,447	(2734)	713
Income tax expense	—	—	—	—
Net income / (loss) for continuing operations	—	3,447	(2734)	713
Income for discontinued operations, net of income tax	107	—	—	107
Net income / (loss)	107	3,447	(2734)	820
Net loss attributable to non-controlling interest	—	118	—	118
Net income / (loss) attributable to Sadot Group Inc.	107	3,565	(2734)	938
Total assets	4,915	77,001	1,828	83,744

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	Three Months Ended March 31, 2024
	Sadot food service	Sadot agri-foods	Corporate adj.	Consolidated
	$’000	$’000	$’000	$’000
Commodity sales	—	106,507	—	106,507




Cost of goods sold	—	(103,697)	—	(103,697)
Gross profit	—	2,810	—	2,810


Depreciation and amortization expenses	—	(91)	—	(91)



Stock-based expenses	—	—	(796)	(796)
Sales, general and administrative expenses	—	(731)	(662)	(1,393)
Income / (loss) from operations	—	1,988	(1,458)	530

Interest income / (expense), net	—	(407)	179	(228)
Change in fair value of stock-based compensation	—	—	476	476



Income / (loss) for continuing operations before income tax	—	1,581	(803)	778
Income tax expense	—	—	(1)	(1)
Net income / (loss) for continuing operations	—	1,581	(804)	777
Loss for discontinued operations, net of income tax	(1,090)	—	—	(1,090)
Net income / (loss)	(1,090)	1,581	(804)	(313)
Net loss attributable to non-controlling interest	—	48	—	48
Net income / (loss) attributable to Sadot Group Inc.	(1,090)	1,629	(804)	(265)
Total assets	6,950	142,673	904	150,527

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Liquidity and Capital Resources

Working Capital

We measure our liquidity in a number of ways, including the following:


	As of
	March 31, 2025	December 31, 2024
	$’000	$’000
Cash	1,940	1,786
Accounts Receivable, net	47,751	18,014
Inventory	271	717
Other current assets(1)	16,925	126,966
Assets held for sale(2)	4,915	5,196
Total current assets	71,802	152,679
Accounts payable and accrued expenses	36,682	28,019
Notes payable, net	10,911	7,390
Other current liabilities(3)	213	94,428
Liabilities held for sale(4)	2,128	2,333
Total current liabilities	49,934	132,170
Working capital(5)	21,868	20,509
Current ratio(6)	1.44	1.16

(1) Consists of VAT, prepaid expenses, derivative assets, unrealized gain on derivative contracts, deposit on farmland and deposit on acquisition

(2) See Note 3 for additional information

(3) Consists of Operating lease liability, current, Deferred revenue, current and Other current liabilities

(4) See Note 3 for additional information

(5) Working Capital is defined as Total current assets less Total current liabilities

(6) Current ratio is defined as Total current assets divided by Total current liabilities

Availability of Additional Funds

Our main financial objectives are to prudently manage financial risk, ensure access to liquidity and minimize cost of capital in order to efficiently finance our business and maintain balance sheet strength. We generally finance our ongoing operations with cash flows generated from operations, borrowings under various credit facilities and term loans. At March 31, 2025, current ratio, which equals Total current assets divided by Total current liabilities, was 1.44, an increase of 0.28, compared to current ratio of 1.16 at December 31, 2024. At March 31, 2025, working capital, which equals Total current assets less Total current liabilities, was $21.9 million an increase of $1.4 million, compared to working capital of $20.5 million at December 31, 2024. The increase in current ratio and working capital was primarily due to an increase in Accounts receivable and a decrease in Other current liabilities, partially offset by an increase in Accounts payable and accrued expenses, a decrease in Other current assets, and a decrease in Assets held for sale. While the Company maintains a base of current assets, including inventories and receivables, the timing and certainty of converting these assets into cash has presented operational challenges.

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We continue to actively manage collections and factoring utilization to address short-term liquidity needs and ensure ongoing operational funding.

In the event we are required to obtain additional financing, either through borrowings, private placements, public offerings, or some type of business combination, such as a merger, or buyout, and there can be no assurance that we will be successful in such pursuits. We may be unable to acquire the additional funding necessary to continue operating. Accordingly, if we are unable to generate adequate cash from operations, and if we are unable to find sources of funding, it may be necessary for us to sell one or more lines of business or all or a portion of our assets, enter into a business combination or reduce or eliminate operations. These possibilities, to the extent available, may be on terms that result in significant dilution to our shareholders or that result in our shareholders losing all of their investment in our Company.

We will need to raise additional capital. Such additional capital may not be available nor may the terms of such capital be generally acceptable. In addition, any future sale of our equity securities could dilute the ownership and control of your shares and could be at prices substantially below prices at which our shares currently trade. We may seek to increase our cash reserves through the sale of additional equity or debt securities. The sale of convertible debt securities or additional equity securities could result in additional and potentially substantial dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations and liquidity. In addition, our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. Any failure to raise additional funds on favorable terms could have a material adverse effect on our liquidity and financial condition.

Sources and Uses of Cash for the Three Months Ended March 31, 2025 and 2024

For the three months ended March 31, 2025, Net cash used in operating activities from continuing operation was $3.0 million compared to $2.5 million provided by operating activities for the three months ended March 31, 2024. Net cash provided by operating activities from discontinued operations was $8.0 thousand and $0.1 million, respectively, for the three months ended March 31, 2025 and 2024. Our Net cash used for the three months ended March 31, 2025, was primarily attributable to our Net income of $0.8 million, adjusted for net non-cash income in the aggregate amount of $19.8 million and $23.6 million of Net cash used by changes in the levels of operating assets and liabilities. Our Net cash provided for the three months ended March 31, 2024, was primarily attributable to our Net loss of $0.3 million, adjusted for net non-cash income in the aggregate amount of $1.8 million and $4.6 million of Net cash used in changes in the levels of operating assets and liabilities.

For the three months ended March 31, 2025, Net cash used in investing activities was nil .

For the three months ended March 31, 2025, Net cash provided by financing activities from continuing operations was $3.1 million, consisting of proceeds from notes payable of $4.6 million partially offset by repayments of various other notes payable of $1.5 million. Net cash used in financing activities from discontinued operations was $20.0 thousand and $36.0 thousand, respectively, for the three months ended March 31, 2025 and 2024. For the three months ended March 31, 2024, Net cash used in financing activities was $2.8 million, consisting of repayments of various other notes payable of $4.3 million partially offset by $1.5 million of proceeds from notes payable.

Critical Accounting Policies and Estimates

Our accounting policies are more fully described in Note 2 – Significant accounting policies to our consolidated financial statements included as part of this Annual Report on Form 10-K. As disclosed in Note 2, the preparation of financial statements in conformity with U.S. GAAP requires management to make substantial judgment or estimation in their application that may significantly affect reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ significantly from those estimates. We believe the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management's most difficult, subjective and complex judgments.

Recently Issued Accounting Pronouncements

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Seasonality

There is a degree of seasonality in the growing cycles, procurement and transportation of crops. The farming industry in general historically experiences seasonal fluctuations in revenues and net income. Typically, the Company has lower sales and net income during the non-harvest seasons and higher sales and net income during the harvest season and as such, must have sufficient working capital to fund its operations at a reduced level. The failure to generate or obtain sufficient working capital during the winter may have a material adverse effect on the Company.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15€ promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of March 31, 2025. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of such date, our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information requested to be disclosed by us in our reports that we file or submit under the Exchange Act.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are a defendant or plaintiff in various legal actions that arise in the normal course of business. We record legal costs associated with loss contingencies as incurred and have accrued for all probable and estimable settlements.

On March 21, 2025, Cropit Farming Limited ("Cropit") commenced legal proceedings against our subsidiary, Sadot LLC, in the Commercial Registry of the High Court of Zambia. The complaint alleges that certain agreements between the parties are invalid under Zambian law, and seeks rescission of these agreements, return of assets, and damages of approximately $6.7 million USD and 181,003 Zambian Kwacha.

Management, in consultation with legal counsel, believes Sadot LLC has strong defensible positions with respect to this matter and intends to vigorously defend against the claims while pursuing its counterclaims. Based on current information, management does not believe that the ultimate resolution of this matter will have a material adverse effect on the Company's financial position or results of operations. However, litigation is inherently unpredictable, and we cannot provide assurances regarding the outcome.

On November 7, 2024, Lombard Trading International Corp. filed an Amended Complaint against the Company and Sadot Latam, LLC in the 11th Judicial Circuit of Florida in and for Miami-Dade County, Florida (Case No.: 2024-020971-CA-01). The Amended Complaint alleges unjust enrichment, conversion, fraud, conspiracy and civil theft related to a commodities transaction. The plaintiff claims that the Company failed to pay upon delivery of certain goods and is seeking damages in the amount of $7.4 million. The Company denies these allegations and intends to vigorously defend against the claims. While the Company believes it has meritorious defenses, it cannot predict the outcome of this matter or reasonably estimate the potential loss at this time.

Item 1.A. Risk Factors

See Item 7 ("Management's Discussion and Analysis of Financial Condition and Results of Operations - Factors that May Affect Future Results and Financial Condition") of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 11, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuance of Stock