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What changed in Sadot Group Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Sadot Group Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+256 added−378 removedSource: 10-K (2025-03-11) vs 10-K (2024-03-20)

Top changes in Sadot Group Inc.'s 2024 10-K

256 paragraphs added · 378 removed · 149 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

74 edited+48 added−159 removed174 unchanged
Biggest changeIf, for any reason, NASDAQ should delist our securities from trading on its exchange and we are unable to obtain listing on another reputable national securities exchange, a reduction in some or all of the following may occur, each of which could materially adversely affect our stockholders. 26 Table of Contents As previously reported, 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 is 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”).
Biggest changeIf, for any reason, NASDAQ should delist our securities from trading on its exchange and we are unable to obtain listing on another reputable national securities exchange, a reduction in some or all of the following may occur, each of which could materially adversely affect our stockholders.
Our farming operations are currently solely located in the Mkushi region of Zambia. In this region, adverse weather during the fertilizer application, planting, and harvest seasons can have negative impacts on our crop yields.
Our farming operations are currently solely located in the Mkushi region of Zambia. In this region, adverse weather during the fertilizer application, planting, and harvest seasons can have negative impacts on our crop yields and planting cycles.
Either of these factors could render some of our inventory obsolete or reduce its value. 19 Table of Contents We face increasing exposure to country risk in countries that face financial, political, and economic unrest through unsecured credit, inventory, forward contract risk or payment origination that could adversely affect our future results of operations, financial position, and cash flows.
Either of these factors could render some of our inventory obsolete or reduce its value. 12 Table of Contents We face increasing exposure to country risk in countries that face financial, political, and economic unrest through unsecured credit, inventory, forward contract risk or payment origination that could adversely affect our future results of operations, financial position, and cash flows.
Because the purchase price per share to be paid by Yorkville for the shares of common stock that we may elect to sell to Yorkville under the SEPA, if any, will fluctuate based on the market prices of our common stock during the applicable the pricing period (three consecutive trading days commencing on the date that we direct Yorkville to purchase amounts of our Common Stock) or the purchase price pursuant to a Yorkville Advance, it is not possible for us to predict, as of the date of this report and prior to any such sales, the number of shares of common stock that we will sell to Yorkville under the SEPA, the purchase price per share that Yorkville will pay for shares purchased from us under the SEPA, or the aggregate gross proceeds that we will receive from those purchases by Yorkville under the SEPA, if any.
Because the purchase price per share to be paid by Yorkville for the shares of common stock that we may elect to sell to Yorkville under the SEPA, if any, will fluctuate based on the market prices of our common stock during the applicable the pricing period (three consecutive trading days commencing on the date that we direct Yorkville to purchase amounts of our Common Stock), it is not possible for us to predict, as of the date of this report and prior to any such sales, the number of shares of common stock that we will sell to Yorkville under the SEPA, the purchase price per share that Yorkville will pay for shares purchased from us under the SEPA, or the aggregate gross proceeds that we will receive from those purchases by Yorkville under the SEPA, if any.
The purchase price for each Convertible Note representing a Pre-Paid Advance is 94.0% of the principal amount of the Pre-Paid Advance. Interest shall accrue on the outstanding balance of any Convertible Note 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 purchase price for each Convertible Note representing a Pre-Paid Advance is 94.0% of the principal amount of the Pre-Paid Advance. Interest shall accrued on the outstanding balance of any Convertible Note 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 market price of our Common Stock has been highly volatile and could fluctuate widely in price in response to various potential factors, many of which will be beyond our control, including the following: • services by us or our competitors; • additions or departures of key personnel; • our ability to execute our business plan; • operating results that fall below expectations; • loss of any strategic relationship; • industry developments; • economic and other external factors; and • period-to-period fluctuations in our financial results.
The market price of our Common Stock has been highly volatile and could fluctuate widely in price in response to various potential factors, many of which will be beyond our control, including the following: • services by us or our competitors; • additions or departures of key personnel; 21 Table of Contents • our ability to execute our business plan; • operating results that fall below expectations; • loss of any strategic relationship; • industry developments; • economic and other external factors; and • period-to-period fluctuations in our financial results.
Brazil is experiencing a slowing GDP growth rate coupled with relatively high interest rates, which may result in an uncertain economic and political environment that could inturn lead to reduced demand for our refined and specialty oils and milling products in the country.
Brazil is experiencing a slowing GDP growth rate coupled with relatively high interest rates, which may result in an uncertain economic and political environment that could in turn lead to reduced demand for our refined and specialty oils and milling products in the country.
Our management may use the proceeds for working capital and general corporate purposes that may not improve our financial condition or advance our business objectives. 31 Table of Contents Item 1.B. Unresolved Staff Comments Not applicable. Item 1.C.
Our management may use the proceeds for working capital and general corporate purposes that may not improve our financial condition or advance our business objectives. 25 Table of Contents Item 1.B. Unresolved Staff Comments Not applicable. Item 1.C.
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. 9 Table of Contents We require significant capital in relation to our Sadot operations, including continuing access to credit markets, to operate our current business and fund our growth strategy.
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 require significant capital in relation to our Sadot operations, including continuing access to credit markets, to operate our current business and fund our growth strategy.
While we have implemented cybersecurity and data protection 22 Table of Contents measures, our efforts to minimize the risks and impacts of cyberattacks and protect our information technology systems may be insufficient and we may experience significant breaches or other failures or disruptions that could compromise our systems and the information we store and, ultimately, affect our business operations and results of operations.
While we have implemented cybersecurity and data protection measures, our efforts to minimize the risks and impacts of cyberattacks and protect our information technology systems may be insufficient and we may experience significant breaches or other failures or disruptions that could compromise our systems and the information we store and, ultimately, affect our business operations and results of operations.
It is not possible to predict the actual number of shares we will sell under the SEPA to Yorkville at any one time or in total, or the actual gross proceeds resulting from those sales. We generally have the right to control the timing and amount of any sales of our shares of common stock to Yorkville under the SEPA.
It is not possible to predict the actual number of shares we will sell under the SEPA to Yorkville at any one time or in total, or the actual gross proceeds resulting from those sales. 23 Table of Contents We generally have the right to control the timing and amount of any sales of our shares of common stock to Yorkville under the SEPA.
Acquisitions may involve unanticipated delays, costs and other problems. Due diligence performed prior to an 20 Table of Contents acquisition may not identify a material liability or issue that could impact our reputation or adversely affect results of operations resulting in a reduction of the anticipated acquisition benefits.
Acquisitions may involve unanticipated delays, costs and other problems. Due diligence performed prior to an acquisition may not identify a material liability or issue that could impact our reputation or adversely affect results of operations resulting in a reduction of the anticipated acquisition benefits.
If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile. 24 Table of Contents As an emerging growth company, our auditor is not required to attest to the effectiveness of our internal controls.
If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile. As an emerging growth company, our auditor is not required to attest to the effectiveness of our internal controls.
In certain areas in which we trade (both origination and destination) country risk is more prevalent given the country’s political and/or economic situations like Russia’s invasion of Ukraine. The addition of purchases and sales of grain in vessel sized quantities to support the Sadot Agri-Foods business including farming operations increases the size and potential severity of our country risk.
In certain areas in which we trade (both origination and destination) country risk is more prevalent given the country’s political and/or economic situations. The addition of purchases and sales of grain in vessel sized quantities to support the Sadot Agri-Foods business including farming operations increases the size and potential severity of our country risk.
Any such damage or interruption could have a material adverse effect on our business, cause us to face significant fines, customer notice obligations or costly 21 Table of Contents litigation, harm our reputation with our customers or prevent us from paying our collective suppliers or employees or receiving payments on a timely basis.
Any such damage or interruption could have a material adverse effect on our business, cause us to face significant fines, customer notice obligations or costly litigation, harm our reputation with our customers or prevent us from paying our collective suppliers or employees or receiving payments on a timely basis.
Litigation of this type could result in 27 Table of Contents substantial costs and diversion of management’s attention and resources, which could seriously hurt our business. Any adverse determination in litigation could also subject us to significant liabilities.
Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could seriously hurt our business. Any adverse determination in litigation could also subject us to significant liabilities.
In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for 25 Table of Contents that customer.
In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer.
In connection with the SEPA, and subject to the condition set forth therein, Yorkville has agreed to advance us the Pre-Paid Advance which shall be evidenced by convertible promissory notes (the “Convertible Notes”) to be issued to Yorkville at a purchase price equal to 94.0% of the principal amount of each Pre-Paid Advance.
In connection with the SEPA, and subject to the condition set forth therein, Yorkville advanced us the Pre-Paid Advance evidenced by convertible promissory notes (the “Convertible Notes”) issued to Yorkville at a purchase price equal to 94.0% of the principal amount of each Pre-Paid Advance.
Risks Related to Ownership of Our Common Stock and Lack of Liquidity As a smaller reporting company, we are exempt from certain disclosure requirements, which could make our Common Stock less attractive to the potential investors. 23 Table of Contents Rule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that: • had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or • in the case of an initial registration statement under the Securities Act, or the Exchange Act of 1934, as amended, which we refer to as the Exchange Act, for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or • in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available.
Rule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that: • had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or • in the case of an initial registration statement under the Securities Act, or the Exchange Act of 1934, as amended, which we refer to as the Exchange Act, for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or 19 Table of Contents • in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available.
Our CEO has more than 15 years of experience in leading and managing risk oversight for large organizations and our CFO has several years of experience in leading and managing risk oversight for public organizations. 32 Table of Contents
Our CEO has more than 20 years of experience in leading and managing risk oversight for large organizations and our CFO has several years of experience in leading and managing risk oversight for public organizations. 26 Table of Contents
Our global operations function with trained individuals necessary for the warehousing, and shipping of raw materials for products used in other areas of manufacturing or sold as inputs or products to third-party customers. Our Company has various methods and tactics to mitigate potential shortfalls.
Our global operations function with trained individuals necessary for the warehousing, and shipping of raw materials for products used in other areas of manufacturing or sold as inputs or products to third-party customers. Our Company has various methods and tactics to mitigate potential shortfalls. Matters relating to employment and labor law may adversely affect our business.
If the service providers to which we outsource these functions do not perform effectively or are negatively impacted by the COVID-19 pandemic, we may not be able to achieve the expected cost savings and may have to incur additional costs in connection with such failure to perform.
If the service providers to which we outsource these functions do not perform effectively, we may not be able to achieve the expected cost savings and may have to incur additional costs in connection with such failure to perform.
Significant additional government regulations and new laws, including mandating increases in minimum wages, changes in exempt and non-exempt status, or mandated benefits such as health insurance could materially affect our 15 Table of Contents business, financial condition, operating results or cash flow.
Significant additional government regulations and new laws, including mandating increases in minimum wages, changes in exempt and non-exempt status, or mandated benefits such as health insurance could materially affect our business, financial condition, operating results or cash flow. Furthermore, if our or our franchisees’ employees unionize, it could materially affect our business, financial condition, operating results or cash flow.
We have registered Sadot, Muscle Maker Grill ® , Pokemoto ® , SuperFit Foods and certain other names used by our restaurants as trademarks or service marks with the United States Patent and Trademark Office. The Muscle Maker Grill ® trademark is also registered in some form in one foreign country.
We have registered Sadot ® , Pokémoto ® , Muscle Maker Grill ® and other certain names used by our restaurants as trademarks or service marks with the United States Patent and Trademark Office and Muscle Maker Grill ® in one foreign country.
Government policies including, but not limited to, antitrust and competition law, trade restrictions, food safety regulations, sustainability requirements and traceability, can impact our ability to execute this strategy successfully. 18 Table of Contents Upon the expansion of our operations internationally, we could be adversely affected by violations of the U.S.
Government policies including, but not limited to, antitrust and competition law, trade restrictions, food safety regulations, sustainability requirements and traceability, can impact our ability to execute this strategy successfully. Upon the expansion of our operations internationally, we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery and anti-kickback laws.
In 2023, certain of our raw material input costs increased materially and at a rapid rate. We expect the pressures of input cost inflation to continue into 2024. Further the United States has reported and is continuing to report weaker GDP growth, with some economists forecasting a continuation of these conditions in 2024.
We expect the pressures of input cost inflation to continue into 2024. Further, the United States has reported and is continuing to report weaker GDP growth, with some economists forecasting a continuation of these conditions in 2024.
Our headquarters, Company-operated and franchised restaurant locations, third-party sole distributor and our facilities, as well as certain of our vendors and customers, are located in areas which have been and could be subject to natural disasters such as floods, blizzards, hurricanes, tornadoes, fires or earthquakes.
Our headquarters, trade offices, franchised restaurant locations, and farms, as well as certain of our vendors and customers, are located in areas which have been and could be subject to natural disasters such as floods, droughts, blizzards, hurricanes, tornadoes, fires or earthquakes.
In addition, the Sadot Group, Muscle Maker Grill, Pokemoto and SuperFit Foods logos, recipes, trade dress, packaging, website names and addresses ( www.sadotgroupinc.com , www.musclemakergrill.com , www.pokemoto.com and www.superfitfoods.com ) and Facebook, Instagram, Linkedin, Twitter and other social media and internet accounts are our intellectual property.
In addition, the Sadot, Muscle Maker Grill and Pokémoto logos, recipes, website name and addresses ( www.sadotgroupinc.com , www.musclemakergrill.com and www.pokemoto.com ) and Facebook, Instagram, Linkedin, Twitter and other social media and internet accounts are our intellectual property as well as Muscle Maker Grill and Pokémoto recipes and trade dress.
Additionally, acquisitions may involve integration risks such as: internal control effectiveness, system integration risks, the risk of impairment charges related to goodwill and other intangibles, ability to retain acquired employees and other unanticipated risks.
Additionally, acquisitions may involve integration risks such as: internal control effectiveness, system integration risks, the risk of impairment charges related to goodwill and other intangibles, ability to retain acquired employees and other unanticipated risks. Failure to manage our growth effectively could harm our business and operating results.
To the extent that such economic and political 10 Table of Contents conditions negatively impact consumer and business confidence and consumption patterns or volumes, our business and results of operations could be significantly and adversely affected. We face intense competition in our markets, which could negatively impact our business.
To the extent that such economic and political conditions negatively impact consumer and business confidence and consumption patterns or volumes, our business and results of operations could be significantly and adversely affected.
We are subject to global and regional economic downturns and related risks. The level of demand for our products is affected by global and regional demographic and macroeconomic conditions, including population growth rates and changes in standards of living.
Noncompliance with these provisions could result in default and acceleration of long-term debt payments. We are subject to global and regional economic downturns and related risks. The level of demand for our products is affected by global and regional demographic and macroeconomic conditions, including population growth rates and changes in standards of living.
Our Company may fail to realize the benefits of or experience delays in the execution of its growth strategy, which encompasses organic and inorganic initiatives, including those outside the U.S. and in businesses where our Company does not currently have a large presence .
The extent to which we efficiently manage available capacity at our facilities will affect our profitability. 13 Table of Contents Our Company may fail to realize the benefits of or experience delays in the execution of its growth strategy, which encompasses organic and inorganic initiatives, including those outside the U.S. and in businesses where our Company does not currently have a large presence .
These advantages may allow them to implement their operational strategies more quickly or effectively than we can or benefit from changes in technologies, which could harm our competitive position. These competitive advantages may be exacerbated in a difficult economy, thereby permitting our competitors to gain market share.
These advantages may allow them to implement their operational strategies more quickly or effectively than we can or benefit from changes in technologies, which could harm our competitive position.
The resale of shares of Common Stock by Yorkville in the public market or otherwise, or the perception that such sales could occur, could also harm the prevailing market price of our shares of Common Stock. 29 Table of Contents Following these issuances described above and as restrictions on resale end and registration statements are available for use, the market price of our shares of Common Stock could decline if the holders of restricted shares sell them or are perceived by the market as intending to sell them.
Following these issuances described above and as restrictions on resale end and registration statements are available for use, the market price of our shares of Common Stock could decline if the holders of restricted shares sell them or are perceived by the market as intending to sell them.
Adverse crop conditions in the Mkushi region can increase the input costs or lower the market value of our products relative to other market participants that do not have the same geographic concentration. Additionally, the potential physical impacts of climate change are uncertain and may vary by region.
Adverse crop conditions in the Mkushi region can increase the input costs or lower the market value of our products relative to other market participants that do not have the same geographic concentration.
In addition, the risk of cybersecurity incidents, including cyberattacks against the Ukrainian government and other countries in the region, has increased in connection with the ongoing Ukraine-Russia war, driven by justifications such as retaliation for the sanctions imposed in conjunction with the war, or in response to certain companies’ continued operations in Russia.
New technology that could result in greater operational efficiency may further expose our computer systems to the risk of cyberattacks. 17 Table of Contents In addition, the risk of cybersecurity incidents, including cyberattacks against the Ukrainian government and other countries in the region, has increased in connection with the ongoing Ukraine-Russia war, driven by justifications such as retaliation for the sanctions imposed in conjunction with the war, or in response to certain companies’ continued operations in Russia.
Our current brand campaign, “Great Food with Your Health in Mind”, “get in the aloha state of mind” and “meal prep and chill” have also been approved for registration with the United States Patent and Trademark Office.
Our brand campaign, Great Food with Your Health in Mind ™ and Get in the Aloha State of Mind ™ have also been approved for registration with the United States Patent and Trademark Office.
Moreover, these rules and regulations have increased and will continue to increase our legal and financial compliance costs and will make some activities more time-consuming and costlier.
Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations have increased and will continue to increase our legal and financial compliance costs and will make some activities more time-consuming and costlier.
If franchisees do not operate to our expectations, our image and reputation, and the image and reputation of other franchisees, may suffer materially and system-wide sales could decline significantly, which would reduce our royalty and other revenues, and the impact on profitability could be greater than the percentage decrease in royalties and fees.
If franchisees do not operate to our expectations, our image and reputation, and the image and reputation of other franchisees, may suffer materially and system-wide sales could decline significantly, which would reduce our royalty and other revenues, and the impact on profitability could be greater than the percentage decrease in royalties and fees. 16 Table of Contents The failure to enforce and maintain our trademarks and protect our other intellectual property could materially adversely affect our business, including our ability to establish and maintain brand awareness.
In the event Aggia were to terminate their agreement, our food origination and trading operations would be negatively impacted and we may be forced to curtail or cease operations in this business segment.
In the event Aggia were to terminate their agreement, our food origination and trading operations would be negatively impacted and we may be forced to curtail or cease operations in this business segment. 15 Table of Contents We face increasing competition and pricing pressure from other companies in our industries.
Provisions in our articles of incorporation and bylaws and Nevada law may discourage, delay or prevent a change of control of our Company and, therefore, may depress the trading price of our stock. Our articles of incorporation and bylaws contain certain provisions that may discourage, delay or prevent a change of control that our stockholders may consider favorable.
Our articles of incorporation and bylaws contain certain provisions that may discourage, delay or prevent a change of control that our stockholders may consider favorable.
However, our right to sell shares under the SEPA is subject to certain conditions that may not be satisfied. Accordingly, we may not be able to utilize this facility to raise additional capital when, or in the amounts, we may require. In addition, under the SEPA, we have received $4.0 in Pre-Paid Advance.
However, our right to sell shares under the SEPA is subject to certain conditions that may not be satisfied. Accordingly, we may not be able to utilize this facility to raise additional capital when, or in the amounts, we may require. As an early-stage growth company, our ability to access capital is critical.
Additionally, weak global economic conditions and adverse conditions in global financial and capital markets, including rising interest rates and constraints on the availability of credit, have in the past adversely affected, and may in the future adversely affect, the financial condition and creditworthiness of the financial institutions that serve as our lenders and as counterparties to the over-the-counter derivative instruments we use to manage risks and some of our customers, suppliers, and other counterparties, which in turn may negatively impact our financial condition and results of operations.
Further, deteriorating economic and political conditions in our major markets, such as inflation, increased unemployment, decreases in disposable income, declines in consumer confidence, uncertainty about economic stability, or economic slowdowns or recessions, could cause a decrease in demand for our products. 8 Table of Contents Additionally, weak global economic conditions and adverse conditions in global financial and capital markets, including rising interest rates and constraints on the availability of credit, have in the past adversely affected, and may in the future adversely affect, the financial condition and creditworthiness of the financial institutions that serve as our lenders and as counterparties to the over-the-counter derivative instruments we use to manage risks and some of our customers, suppliers, and other counterparties, which in turn may negatively impact our financial condition and results of operations.
The interests of our franchisees may conflict with ours or yours in the future and we could face liability from our franchisees or related to our relationship with our franchisees.
Any of these competitive factors may materially adversely affect our business, financial condition or results of operations. The interests of our franchisees may conflict with ours or yours in the future and we could face liability from our franchisees or related to our relationship with our franchisees.
Pursuant to the SEPA, we will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold to Yorkville.
Investors who buy shares at different times will likely pay different prices. 24 Table of Contents Pursuant to the SEPA, we will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold to Yorkville.
If we are unable to obtain sufficient funding or do not have access to capital, we may not be able to execute our business plans and our prospects, financial condition and results of operations could be materially adversely affected. 30 Table of Contents The extent to which we rely on Yorkville as a source of funding will depend on a number of factors, including the prevailing market price of our common stock, our ability to meet the conditions necessary to deliver Advance Notices under the SEPA, the impacts of the Exchange Cap and the Ownership Limitation and the extent to which we are able to secure funding from other sources.
The extent to which we rely on Yorkville as a source of funding will depend on a number of factors, including the prevailing market price of our common stock, our ability to meet the conditions necessary to deliver Advance Notices under the SEPA, the impacts of the Exchange Cap and the Ownership Limitation and the extent to which we are able to secure funding from other sources.
Failure to manage our growth effectively could harm our business and operating results. Our growth plan includes expansion into multiple verticals of the food supply chain, including expansion into new commodity trade routes and geographies, farming & warehousing, logistics & transportation, food processing, restaurant franchising, sustainability and carbon offsets.
Our growth plan includes expansion into multiple verticals of the food supply chain, including expansion into new commodity trade routes and geographies, farming & warehousing, logistics & transportation, food processing, restaurant franchising, sustainability and carbon offsets. Our existing management systems, financial and management controls and information systems may be inadequate to support our planned expansion.
As a result of a Yorkville Advance, the amounts payable under the Convertible Notes will be offset by such amount subject to each Yorkville Advance. Any issuance of shares of common stock pursuant to this facility will dilute the percentage ownership of stockholders and may dilute the per share projected earnings (if any) or book value of our common stock.
Any issuance of shares of common stock pursuant to this facility will dilute the percentage ownership of stockholders and may dilute the per share projected earnings (if any) or book value of our common stock.
Foreign Corrupt Practices Act, and other similar anti-bribery and anti-kickback laws and regulations, generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. We cannot assure you that we will be successful in preventing our franchisees or other agents from taking actions in violation of these laws or regulations.
We have expanded our operations outside the United States for both our restaurant divisions and Sadot. The U.S. Foreign Corrupt Practices Act, and other similar anti-bribery and anti-kickback laws and regulations, generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business.
Our SuperFit Foods division outsources home and pick up location deliveries to independent contractors. Our Pokemoto division outsources online ordering and loyalty programs to. Our Sadot Agri-Foods operations rely on Aggia LLC FZ as third-party consultants to execute commodity trades and conduct farming operations. In the future, we may outsource other functions to achieve cost savings and efficiencies.
We also outsource certain information technology support services and benefit plan administration. Our Sadot Agri-Foods operations rely on Aggia LLC FZ as third-party consultants to execute commodity trades and conduct farming operations. In the future, we may outsource other functions to achieve cost savings and efficiencies.
Even if management finds such controls to be effective, our independent registered public accounting firm may decline to attest to the effectiveness of such internal controls and issue a qualified report.
Even if management finds such controls to be effective, our independent registered public accounting firm may decline to attest to the effectiveness of such internal controls and issue a qualified report. 20 Table of Contents As a public company, we will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.
These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our Common Stock, and therefore stockholders may have difficulty selling their shares.
These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our Common Stock, and therefore stockholders may have difficulty selling their shares. 22 Table of Contents Provisions in our articles of incorporation and bylaws and Nevada law may discourage, delay or prevent a change of control of our Company and, therefore, may depress the trading price of our stock.
In addition, we may not realize the anticipated benefits of an acquisition and they may not generate the anticipated financial results. Additional risks may include the inability to effectively integrate the operations, products, technologies and personnel of the acquired companies. The inability to maintain uniform standards, controls, procedures and policies would also negatively impact operations.
There is also the risk that our due diligence efforts may not uncover significant business flaws or hidden liabilities. In addition, we may not realize the anticipated benefits of an acquisition and they may not generate the anticipated financial results. Additional risks may include the inability to effectively integrate the operations, products, technologies and personnel of the acquired companies.
Furthermore, if our or our franchisees’ employees unionize, it could materially affect our business, financial condition, operating results or cash flow. We are also subject in the ordinary course of business to employee claims against us based, among other things, on discrimination, harassment, wrongful termination or violation of wage and labor laws.
We are also subject in the ordinary course of business to employee claims against us based, among other things, on discrimination, harassment, wrongful termination or violation of wage and labor laws. Such claims could also be asserted against us by employees of our franchisees. Moreover, claims asserted against franchisees may at times be made against us as a franchisor.
The success of our business strategy depends on our continued ability to use our existing trademarks and service marks in order to increase brand awareness and develop our branded products.
We maintain the recipe for our healthy inspired recipes, as well as certain proprietary standards, specifications and operating procedures, as trade secrets or confidential proprietary information. The success of our business strategy depends on our continued ability to use our existing trademarks and service marks in order to increase brand awareness and develop our branded products.
In addition, various states in which we operate are considering or have already adopted new immigration laws or enforcement programs, and the United States Congress and Department of Homeland Security from time to time consider and may implement changes to federal immigration laws, regulations or enforcement programs as well.
The ongoing expense of any resulting lawsuits, and any substantial settlement payment or damage award against us, could adversely affect our business, brand image, employee recruitment, financial condition, operating results or cash flows. 18 Table of Contents In addition, various states in which we operate are considering or have already adopted new immigration laws or enforcement programs, and the United States Congress and Department of Homeland Security from time to time consider and may implement changes to federal immigration laws, regulations or enforcement programs as well.
Such violations, or allegations of such violations, could disrupt our business and result in a material adverse effect on our financial condition, results of operations and cash flows.
We cannot assure you that we will be successful in preventing our franchisees or other agents from taking actions in violation of these laws or regulations. Such violations, or allegations of such violations, could disrupt our business and result in a material adverse effect on our financial condition, results of operations and cash flows.
Adverse weather conditions, including as a result of climate change, may adversely affect the availability, quality and price of agricultural commodities and agricultural commodity products, as well as our operations and operating results.
We are exposed to adverse weather conditions, pandemic outbreaks, political events, war and terrorism that could disrupt business and may adversely affect the availability, quality and price of agricultural commodities and agricultural commodity products, as well as our operations and operating results.
The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.
If our shares of Common Stock become subject to the penny stock rules, it would become more difficult to trade our shares. The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.
In addition, the rules of the SEC and those of The NASDAQ Stock Market LLC ("NASDAQ"), NASDAQ Capital Market has imposed various requirements on public companies including requiring establishment and maintenance of effective disclosure and financial controls. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives.
As a public company, we have incurred significant legal, accounting and other expenses that we did not incur as a private company. In addition, the rules of the SEC and those of The NASDAQ Stock Market LLC ("NASDAQ"), NASDAQ Capital Market has imposed various requirements on public companies including requiring establishment and maintenance of effective disclosure and financial controls.
The restaurant industry is intensely competitive, and we compete with many well-established food service companies on the basis of product choice, quality, affordability, service and location.
Competitive pressures in all of our businesses could affect the price of, and customer demand for, our products, thereby negatively impacting our profit margins and resulting in a loss of market share. The restaurant industry is intensely competitive, and we compete with many well-established food service companies on the basis of product choice, quality, affordability, service and location.
We may not respond quickly enough to the changing demands that our expansion will impose on our management, restaurant teams and existing infrastructure, which could harm our business, financial condition and results of operations. We outsource certain aspects of our business to third-party vendors and consultants which subjects us to risks, including disruptions in our business and increased costs.
Managing our growth effectively will require us to continue to enhance these systems, procedures and controls and to hire, train and retain managers and team members. We may not respond quickly enough to the changing demands that our expansion will impose on our management, restaurant teams and existing infrastructure, which could harm our business, financial condition and results of operations.
Such claims could also be asserted against us by employees of our franchisees. Moreover, claims asserted against franchisees may at times be made against us as a franchisor. These claims may divert our financial and management resources that would otherwise be used to benefit our operations.
These claims may divert our financial and management resources that would otherwise be used to benefit our operations.
Any of the following risk factors, either by itself or together with other risk factors, could materially adversely affect our business, results of operations, cash flows and/or financial condition. 8 Table of Contents Risks Related to Our Business and Industry The novel coronavirus (COVID-19) global pandemic has had, and may continue to have, an adverse effect on our business and results of operations.
Any of the following risk factors, either by itself or together with other risk factors, could materially adversely affect our business, results of operations, cash flows and/or financial condition. The risks described below are not the only risks facing the Company.
Our existing management systems, financial and management controls and information systems may be inadequate to support our planned expansion. Managing our growth effectively will require us to continue to enhance these systems, procedures and controls and to hire, train and retain managers and team members.
Managing our growth effectively will require us to continue to enhance these systems, procedures and controls and to hire, train and retain managers and team members. We may not respond quickly enough to the changing demands that our expansion will impose on our management, restaurant teams and existing infrastructure, which could harm our business, financial condition and results of operations.
These effects could be material to our results of operations, liquidity or capital resources. The Company may not be able to effectively integrate businesses it acquires. We continuously look for opportunities to enhance our existing businesses through strategic acquisitions.
The Company may not be able to effectively integrate businesses it acquires. We continuously look for opportunities to enhance our existing businesses through strategic acquisitions. The process of integrating an acquired business into our existing business and operations may result in unforeseen operating difficulties and expenditures as well as require a significant amount of management resources.
These factors may adversely impact our business, results of operations, and financial condition, as well as our competitive position. Our risk management strategies may not be effective. Our business is affected by fluctuations in agricultural commodity cash prices and derivative prices, transportation costs, energy prices, interest rates, foreign currency exchange rates and equity markets.
We also do not maintain any key man life insurance policies for any of our employees. Our risk management strategies may not be effective. Our business is affected by fluctuations in agricultural commodity prices, transportation costs, energy prices, interest rates, and foreign currency exchange rates. We engage in hedging transactions to manage these risks.
There could be significant expenses associated with the defense of any infringement, misappropriation, or other third-party claims. We depend on our executive officers, the loss of whom could materially harm our business. We rely upon the accumulated knowledge, skills and experience of our executive officers, significant employees and expertise of our hired consultants.
There could be significant expenses associated with the defense of any infringement, misappropriation, or other third-party claims.
Our strategy involves expanding the volume and diversity of crops it merchandises and processes, expanding the global reach of our core model, expanding our value-added product portfolio, and expanding the sustainable agriculture programs and partnerships it participates in.
Proposed tariffs on imports into the United States, potential retaliatory tariffs on U.S. exports, and potential renegotiation of trade deals may impact our existing or planned operations or strategic ventures and could adversely affect our business, financial condition, results of operations and cash flows. 11 Table of Contents Our strategy involves expanding the volume and diversity of crops it merchandises and processes, expanding the global reach of our core model, expanding our value-added product portfolio, and expanding the sustainable agriculture programs and partnerships it participates in.
These events also could have indirect consequences such as increases in the costs of insurance if they result in significant loss of property or other insurable damage. Any of these factors, or any combination thereof, could adversely affect our operations. Some of our restaurants are located on military bases.
These events also could have indirect consequences such as increases in the cost of insurance if they result in significant loss of property or other insurable damage and the effect could be material to our results of operations, liquidity or capital resources. 9 Table of Contents We are subject to economic, political, and other risks of doing business globally and in emerging markets.
Without being able to pass along these increases in costs to consumers, we may experience a negative impact on our margins. We will need additional capital to fund our operations, which, if obtained, could result in substantial dilution or significant debt service obligations.
These risks can be impacted by factors beyond management's control. 7 Table of Contents Risks Related to Our Business and Industry We will need additional capital to fund our operations, which, if obtained, could result in substantial dilution or significant debt service obligations.
Interest shall accrue on the outstanding balance of any Convertible Note 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 of each Convertible Note is September 22, 2024, 12-months after the closing of the initial Pre-Paid Advance.
The maturity date of each Convertible Note was September 22, 2024, 12-months after the closing of the initial Pre-Paid Advance. The Convertible Notes were paid off on October 11, 2024.
Any of these competitive factors may materially adversely affect our business, financial condition or results of operations.
Additional risks and uncertainties not currently known or currently viewed to be immaterial may also materially and adversely affect business, financial condition or results of operations.
Our risk monitoring efforts may not be successful at detecting a significant risk exposure. If these controls and strategies are not successful in mitigating our exposure to these fluctuations, it could adversely affect our operating results. Human capital requirements may not be sufficient to effectively support global operations.
These factors may adversely impact our business, results of operations, and financial condition, as well as our competitive position. Human capital requirements may not be sufficient to effectively support global operations.
Removed
The COVID-19 pandemic has had, and continues to have, a significant impact around the world causing a disruption of global financial markets and increased levels of unemployment and economic uncertainty.
Added
We manage this risk with constant monitoring of credit/liquidity metrics, cash forecasting, and routine communications with credit rating agencies regarding risk management practices. If we need to raise additional capital, we do not know what the terms of any such capital raising would be.
Removed
Since early 2020, government officials around the world, including in the countries where we operate, have imposed measures in response to the pandemic, including vaccination and masking requirements, protocols related to workplace activities, travel and large gathering restrictions, social distancing requirements, quarantines and shelter-in-place and stay-at-home orders. Certain of these restrictions remain in place today.
Added
Our indebtedness could negatively affect our financial condition, decrease our liquidity and impair our ability to operate the business.
Removed
The COVID-19 pandemic has curtailed global economic activity and caused significant volatility and disruption in global financial markets.
Added
If cash on hand is insufficient to pay our obligations or margin calls as they come due at a time when we are unable to draw on our credit facility, it could have an adverse effect on our ability to conduct our business.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSadot Zambia owns approximately 5,000 acres of farmland in the Mkushi Region of Zambia which was acquired in August of 2023. Sadot Zambia is 100% owned by Sadot Enterprises Limited, which is 70% owned by Sadot LLC.
Biggest changeSadot Zambia owns approximately 5,000 acres of farmland in the Mkushi Region of Zambia which was acquired in August of 2023. Sadot Zambia is 100% owned by Sadot Enterprises Limited, which is 70% owned by Sadot LLC. As of December 31, 2024, the Company franchised 47 restaurants throughout the United States.
Item 2. Properties As of December 31, 2023, our corporate office is located at 1751 River Run, Ste 200 Fort Worth, TX 76107. We believe our current office space is suitable and adequate for its intended purposes and our near-term expansion plans. We also own 70% of farmland in the Mkushi area in Zambia Africa.
Item 2. Properties As of December 31, 2024, our corporate office is located at 295 E Renfro St., Ste 209 Burleson, TX 76028. We believe our current office space is suitable and adequate for its intended purposes and our near-term expansion plans. We also own 70% of farmland in the Mkushi area in Zambia Africa.
Removed
Currently Operating System-Wide Restaurants As of March 20, 2024, Company-operated, franchised and total system-wide restaurants by jurisdiction are broken out below: State Company-Owned Restaurants Franchised Restaurants Total Restaurants Alabama — 1 1 California — 1 1 Connecticut 1 10 11 Florida 1 3 4 Kansas 1 2 3 Maryland 1 — 1 Massachusetts — 3 3 Mississippi — 1 1 New Jersey — 5 5 New York 2 3 5 Oklahoma 1 — 1 Rhode Island — 1 1 South Carolina — 1 1 Tennessee — 1 1 Texas — 3 3 Virginia — 1 1 Washington — 1 1 Kuwait — 1 1 Kingdom of Saudi Arabia — 1 1 7 39 46

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are currently involved in pending legal proceedings that have been previously disclosed in our filings with the Securities and Exchange Commission under the Securities and Exchange Act of 1934, as amended. Below is a summary of the legal proceedings that have become a reportable event, or which have had developments during the year ended December 31, 2023.
Biggest changeWe are currently involved in pending legal proceedings that have been previously disclosed in our filings with the Securities and Exchange Commission under the Securities and Exchange Act of 1934, as amended. Below is a summary of the legal proceedings that have become a reportable event, or which have had developments during the year ended December 31, 2024.
Removed
On January 23, 2020, the Company was served a judgment issued by the Judicial Council of California in the amount of $0.1 million for a breach of a lease agreement in Chicago, Illinois, in connection with a Company-owned store that was closed in 2018.
Added
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.
Removed
As of December 31, 2023, the Company has accrued for the liability in accounts payable and accrued expenses. 33 Table of Contents Item 4. Mine Safety Disclosures Not applicable. 34 Table of Contents PART II
Added
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.
Added
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 December 31, 2024. Item 4.
Added
Mine Safety Disclosures Not applicable. 27 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe offers, sales, and issuances of the securities described above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder as transactions by an issuer not involving a public offering.
Biggest changeThe Company issued and sold the above securities in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) by virtue of Section 4(a)(2) thereof and/or Rule 506 of Regulation D thereunder. Issuer Purchases of Equity Securities None. Item 6. Reserved Not applicable. 31 Table of Contents
Holders As of February 14, 2024, there were 7,566 holders of record of our common stock. Dividends We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business.
Holders As of November 4, 2024, there were 49,599 holders of record of our common stock. Dividends We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business.
On July 11, 2023, the Company issued of an aggregate of 32.9 thousand shares of common stock to the members of the board of directors as compensation earned during the second quarter of 2023. On July 14, 2023, The Company issued 8.9 million Restricted Share Awards, with an effective issuance date of April 1, 2023.
On July 11, 2023, the Company authorized the issuance of an aggregate of 3,298 shares of common stock to the members of the board of directors as compensation earned during the second quarter of 2023. On July 14, 2023, the Company issued 885,545 Restricted Share Awards to Aggia, with an effective issuance date of April 1, 2023.
On March 27, 2023, the Company issued 2.8 million shares of common stock to a consultant for services rendered. On April 5, 2023 the Company issued 29.7 thousand shares of common stock to the members of the board of directors as compensation earned during the first quarter of 2023.
On March 27, 2023, the Company authorized the issuance of 284,881 shares of common stock to a Aggia for services rendered. On April 5, 2023 the Company authorized the issuance of 2,974 shares of common stock to the members of the board of directors as compensation earned during the first quarter of 2023.
Warrants As of December 31, 2023 and 2022, we had warrants to purchase an aggregate of 17.4 million and 18.0 million shares of common stock, respectively, outstanding with a weighted average exercise price of $1.97 and $1.93 per share, respectively. 35 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plans Equity Compensation Plan Information The following table provides information, as of December 31, 2023, with respect to equity securities authorized for issuance under compensation plans: Plan category No. of securities to be issued upon exercise of outstanding options under the plan Weighted-average exercise price of outstanding options under the plan No. of securities remaining available for future issuance $ 2024 Equity compensation plans approved by security holders — — 7,500,000 2023 Equity compensation plans approved by security holders 68,928 1.51 — 2021 Equity compensation plans approved by security holders 843,572 1.10 — Equity compensation plans not approved by security holders — — — Total 912,500 2.61 7,500,000 Performance Graph As a smaller reporting company, we are not required to provide the performance graph required by Item 201I of Regulation S-K.
Warrants As of December 31, 2024 and 2023, we had warrants to purchase an aggregate of 1,593,020 and 1,738,002 shares of common stock, respectively, outstanding with a weighted average exercise price of $18.62 and $19.69 per share, respectively. 28 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plans Equity Compensation Plan Information The following table provides information, as of December 31, 2024, with respect to equity securities authorized for issuance under compensation plans: Plan category No. of securities to be issued upon exercise of outstanding options under the plan Weighted-average exercise price of outstanding options under the plan No. of securities remaining available for future issuance $ 2024 Equity compensation plans approved by security holders — — 348,064 2023 Equity compensation plans approved by security holders 6,893 15.05 — 2021 Equity compensation plans approved by security holders 74,357 10.45 — Total 81,250 10.84 348,064 Performance Graph As a smaller reporting company, we are not required to provide the performance graph required by Item 201I of Regulation S-K.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The high and low per share closing sales prices of the Company’s stock on the NASDAQ Market (ticker symbol: SDOT (f/k/a GRIL)) for each quarter for the years ended December 31, 2023 and 2022 were as follows: Quarter Ended High Low March 31, 2022 $ 0.76 $ 0.35 June 30, 2022 $ 0.59 $ 0.34 September 30, 2022 $ 0.46 $ 0.35 December 31, 2022 $ 0.92 $ 0.31 March 31, 2023 $ 1.51 $ 0.82 June 30, 2023 $ 1.48 $ 1.07 September 30, 2023 $ 1.36 $ 0.70 December 31, 2023 $ 0.80 $ 0.39 Transfer Agent Our transfer agent is Computershare, Inc., located at, 462 South 4th Street, Suite 1600, Louisville, KY 40202, and its telephone number is 1-877-373-6374.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The high and low per share closing sales prices of the Company’s stock on the NASDAQ Market (ticker symbol: SDOT (f/k/a GRIL)) for each quarter for the years ended December 31, 2024 and 2023 were as follows: Quarter Ended High Low March 31, 2023 $ 15.05 $ 8.20 June 30, 2023 $ 14.80 $ 10.70 September 30, 2023 $ 13.60 $ 6.99 December 31, 2023 $ 7.97 $ 3.90 March 31, 2024 $ 4.24 $ 2.89 June 30, 2024 $ 4.61 $ 2.24 September 30, 2024 $ 6.05 $ 3.27 December 31, 2024 $ 5.25 $ 2.52 Transfer Agent Our transfer agent is Computershare, Inc., located at, 462 South 4th Street, Suite 1600, Louisville, KY 40202, and its telephone number is 1-877-373-6374.
Total RSA vested as a result of the departure of certain members of the board of directors were 0.2 million for 2023. The remaining RSA vest ratably over 12 quarters with the first vesting starting on March 31, 2024.
On December 19, 2023, the Company issued 202,260 RSA's to certain members of the board of directors, consultants and employees. Total RSA vested as a result of the departure of certain members of the board of directors were 17,640 shares for 2023. The remaining RSA vest ratably over 12 quarters with the first vesting starting on March 31, 2024.
On October 20, 2023, the Company issued 0.1 million shares of common stock to consultants for services rendered. On November 6, 2023, the Company issued 0.1 million shares of common stock in connection with the conversion of note payables. On November 14, 2023, the Company issued 0.2 million shares of common stock in connection with the conversion of note payables.
On October 20, 2023, the Company authorized the issuance of 8,550 shares of common stock to consultants for services rendered. On November 6, 2023, the Company authorized the issuance of 8,043 shares of common stock in connection with the conversion of notes payables.
On September 25, 2023, the Company issued 0.2 million shares of common stock in fees to a consultant for services rendered related to the SEPA. On October 2, 2023, the Company issued an aggregate of 0.1 million shares of common stock to the members of the board of directors as compensation earned during the third quarter of 2023.
On September 30, 2023, the Company vested 53,831 shares of common stock to to a consultant for services rendered. On October 2, 2023, the Company authorized the issuance of an aggregate of 6,365 shares of common stock to the members of the board of directors as compensation earned during the third quarter of 2023.
On January 4, 2024, the Company authorized the issuance of an aggregate of 0.1 million shares of common stock to the members of the board of directors as compensation earned during the fourth quarter of 2023.
On December 31, 2023, the Company vested 20,986 shares of common stock to Aggia as consulting fees earned during the fourth quarter of 2023. 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.
The Company accrued for the liability as of December 31, 2023. 37 Table of Contents On January 8, 2024, the Company authorized the issuance of $0.1 million into 0.3 million shares of the Company’s common stock. On January 11, 2024, the Company authorized the issuance of $0.1 million into 0.3 million shares of the Company’s common stock.
The Company accrued for the liability as of December 31, 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.
On November 29, 2022, the Company issued an aggregate of 0.4 million shares of common stock in connection with the exercise of pre-funded warrants. On January 5, 2023, the Company issued an aggregate of 31.3 thousand shares of common stock to the members of the board of directors as compensation earned during the fourth quarter of 2022.
Unregistered Sales of Equity Securities and Use of Proceeds Issuance of Stock On January 5, 2023, the Company authorized the issuance of an aggregate of 3,131 shares of common stock to the members of the board of directors as compensation earned during the fourth quarter of 2022.
On November 29, 2023, the Company issued 0.2 million shares of common stock in connection with the conversion of note payables. On December 13, 2023, the Company issued 0.3 million shares of common stock in connection with the conversion of note payables.
On November 14, 2023, the Company authorized the issuance of 15,911 shares of common stock in connection with the conversion of notes payables. On November 29, 2023, the Company authorized the issuance of 23,732 shares of common stock in connection with the conversion of notes payables.
On July 27, 2023, the Company issued 2.2 million shares of common stock to Altium Growth Fund Ltd. (“Altium”) in exchange for the exercise of warrants. On August 15, 2023, the Company issued 0.1 million shares of common stock to a consultant for services rendered.
On July 27, 2023, the Company authorized the issuance of 215,331 shares of common stock to Altium in exchange for the exercise of warrants.
On January 22, 2024, he Company authorized the issuance of $0.1 million into 0.3 million shares of the Company’s common stock. On January 29, 2024, he Company authorized the issuance of $0.1 million into 0.3 million shares of the Company’s common stock.
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 May 10, 2023 the Company issued 0.1 million shares of common stock to a consultant for services rendered. On May 25, 2023, the Company issued 2.7 million shares of common stock to Aggia as consulting fees earned during the first quarter of 2023.
On May 10, 2023 the Company authorized the issuance of 13,965 shares of common stock to a consultant for services rendered. On May 25, 2023, the Company authorized the issuance of 272,002 shares of common stock to Aggia for services rendered. On June 30, 2023, the Company vested 85,472 shares of common stock to a consultant for services rendered.
On December 19, 2023, the Company issued 0.3 million shares of common stock in connection with the conversion of note payables. On December 19, 2023, the Company issued 2.0 million RSA's to certain members of the board of directors, consultants and employees.
On December 13, 2023, the Company authorized the issuance of 27,132 shares of common stock in connection with the conversion of notes payables. On December 19, 2023, the Company authorized the issuance of 26,791 shares of common stock in connection with the conversion of notes payables.
On January 6, 2022, the Company issued an aggregate of 39.6 thousand shares of common stock to the members of the board of directors as compensation earned during the fourth quarter of 2021. The Company accrued for the liability as of December 31, 2021.
On December 31, 2024, the Company vested 160,413 shares of common stock to Aggia as consulting fees earned during the forth quarter of 2024.
Removed
Unregistered Sales of Equity Securities and Use of Proceeds Issuance of Stock On January 3, 2022, the Company issued an aggregate of 1.2 million shares of common stock in connection with the cashless exercise of the pre-funded warrants. Pursuant to the terms of the pre-funded warrants a total of 1.2 million warrants were exercised.
Added
On August 15, 2023, the Company authorized the issuance of 5,000 shares of common stock to a consultant for services rendered. 29 Table of Contents On September 25, 2023, the Company authorized the issuance of 22,727 shares of common stock in fees to a consultant for services rendered related to the SEPA.
Removed
On January 18, 2022, the Company issued an aggregate of 30.0 thousand shares of common stock of the Company to a consultant that assisted with the acquisition of SuperFit Foods and Pokemoto, with an aggregate fair value amount of $15.6 thousand. The Company accrued for the liability as of December 31, 2021.
Added
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.
Removed
On February 24, 2022, the Company issued an aggregate of 1.2 million shares of common stock in connection with the cashless exercise of the pre-funded warrants. Pursuant to the terms of the pre-funded warrants a total of 1.2 million warrants were exercised.
Added
On March 15, 2024, the Company authorized the issuance of 60,885 shares of common stock in connection with the conversion of notes payable.
Removed
On March 31, 2022, the Company issued an aggregate of 0.1 million shares of common stock to the members of the board of directors as compensation earned during the first quarter of 2022. On April 4, 2022, the Company issued 20.0 thousand shares of common stock to a member of the executive team per the employment agreement.
Added
On March 20, 2024, the Company authorized the issuance of 76,077 shares of common stock in connection with the conversion of notes payable. 30 Table of Contents On March 28, 2024 the Company authorized the issuance of 7,950 shares of common stock to a consultant for services rendered.
Removed
On June 8, 2022, the Company issued 5.0 thousand shares of common stock to a contractor for work done at a Company owned location.
Added
On March 31, 2024, the Company vested 50,094 shares of common stock to Aggia as consulting fees earned during the first quarter of 2024. On June 30, 2024, the Company vested 139,899 shares of common stock to Aggia as consulting fees earned during the second quarter of 2024.
Removed
On July 14, 2022, the Company issued an aggregate of 0.1 million shares of common stock to the members of the board of directors as compensation earned during the second quarter of 2022. 36 Table of Contents On October 12, 2022, the Company issued an aggregate of 0.1 million shares of common stock to the members of the board of directors as compensation earned during the third quarter of 2022.
Added
On August 14, 2024, the Company authorized the issuance of 54,981 shares of common stock in connection with the conversion of notes payable. On August 19, 2024, the Company authorized the issuance of 104,249 shares of common stock in connection with the conversion of notes payable.
Removed
On February 16, 2024, he Company authorized the issuance of $0.1 million into 0.3 million shares of the Company's common stock. On March 15, 2024 the Company authorized the issuance of $0.2 million into 0.6 million shares of the Company's common stock. On October 19, 2022, the Company formed Sadot LLC.
Added
On August 26, 2024 the Company authorized the issuance of 47,500 shares of common stock to a consultant for services rendered. On September 27, 2024, the Company authorized the issuance of 62,549 shares of common stock in connection with the conversion of notes payable.
Removed
On November 14, 2022, the Company, Sadot LLC and Aggia entered into the Services Agreement. The closing date of the Services Agreement was November 16, 2022. The parties entered into Addendum 1 to the Services Agreement on November 17, 2022.
Added
On September 30, 2024, the Company vested 121,149 shares of common stock to Aggia as consulting fees earned during the third quarter of 2024.
Removed
Further, 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.
Added
On December 3, 2024, the Company entered into a Purchase Agreement (the “Purchase Agreement”) and Registration Rights Agreement (the “Registration Rights Agreement”) with institutional investors (“Purchasers”) and issued an aggregate of $3.75 million aggregate principal amount of convertible senior notes due in 2025 (the “Notes”) for aggregate gross proceeds of approximately $3.0 million, before deducting fees to the placement agent and other expenses payable by the Company (the “Offering”).
Removed
Pursuant to Addendum 2, on the Addendum Date, the Company issued 8.9 million shares of common stock of the Company (the “Shares”), which such Shares represent 14.4 million Shares that Aggia is entitled to receive pursuant to the Services Agreement less the 5.6 million Shares that have been issued to Aggia pursuant to the Services Agreement as of the Addendum Date.
Added
RBW Capital Partners LLC, offering all securities through Dominari Securities LLC, served as the exclusive placement agent for the Offering. The Offering closed on December 4, 2024. Pursuant to the Purchase Agreement, the Notes were issued with an original issue discount of 20%. The Notes will mature on December 4, 2025, unless earlier converted upon the satisfaction of certain conditions.
Removed
The Company will not issue Aggia in excess of 14.4 million 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.
Added
The conversion price of the Notes is $4.10 per share of common stock. The Notes include a “Most Favored Nation” clause which grants to the Purchasers the right to claim better conversion terms should the Company provide such to any as long as the Notes are outstanding.
Removed
The Shares vest on a progressive schedule, at a rate equal to the net income of Sadot Agri-Foods, calculated quarterly divided by $3.125, which for accounting purposes shall equal 40.0% of the net income of Sadot Agri-Foods, calculated quarterly divided by $1.25.
Added
The Purchasers will be prohibited from effecting a conversion of the Notes to the extent that, as a result of such conversion, a Purchaser would beneficially own more than 9.99% of the shares of common stock outstanding immediately after giving effect to such conversion.
Removed
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 $0.0001 per share.
Added
The Company agreed to register the shares of common stock underlying the Notes for resale under a Registration Statement on Form S-3, pursuant the Securities Act of 1933.
Removed
The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions.
Added
The Notes contain a covenant prohibiting the Company to incur, guarantee or assume any indebtedness, other than certain permitted indebtedness, create or allow or suffer any mortgage, lien, security interest or other encumbrance on its property or assets , other than permitted liens, redeem, defease, repurchase, repay or make any payments in respect of any indebtedness if at the time such payment is due or is otherwise made or, after giving effect to such payment, an event of default under the Notes has occurred and is continuing, declare or pay any cash dividend or distribution on any stock or other equity interest of the Company, or make, any change in the nature of its business or modify its corporate structure or purpose.
Removed
Each of the recipients of securities in these transactions was an accredited or sophisticated person and had adequate access, through employment, business or other relationships, to information about us.
Added
The Notes contain customary events of default and customary penalties for the Company’s failure to issue conversion shares on a timely basis. The Registration Rights Agreement contains customary penalties for our failure to file the registration statement or cause it to become effective on a timely basis and for certain other events.
Removed
The offers, sales, and issuances of the securities described above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder as transactions by an issuer not involving a public offering.
Removed
The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions.
Removed
Each of the recipients of securities in these transactions was an accredited or sophisticated person and had adequate access, through employment, business or other relationships, to information about us. Issuer Purchases of Equity Securities None. Item 6. Reserved Not applicable. 38 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

54 edited+40 added−49 removed13 unchanged
Biggest change(7,824) (7,962) 138 (1.7) % NM= not meaningful 44 Table of Contents The following table sets forth our results of operations as a percentage of total revenue for each period presented preceding: For the Years Ended December 31, 2023 2022 Commodity sales 98.8 % 93.1 % Company restaurant sales, net of discounts 1.1 % 6.4 % Franchise royalties and fees 0.1 % 0.4 % Franchise advertising fund contributions — 0.1 % Other revenues — — Cost of goods sold (98.6) % (97.3) % Gross profit 1.4 % 2.7 % Impairment of intangible asset (0.1) % (0.2) % Impairment of goodwill (0.1) % — Depreciation and amortization expenses (0.2) % (1.2) % Franchise advertising fund expenses — (0.1) % Pre-opening expenses (0.1) % (0.1) % Post-closing expenses — (0.1) % Stock-based expenses (0.9) % (2.3) % Sales, general and administrative expenses (1.3) % (3.7) % Loss from operations (1.3) % (5.0) % Other income — 1.0 % Interest expense, net (0.1) % (0.2) % Change in fair value of stock-based compensation 0.2 % — Warrant modification expense (0.1) % — Gain on fair value remeasurement 0.2 % — Gain on debt extinguishment — 3.2 % Loss Before Income Tax (1.1) % (4.9) % Income tax benefit / (expense) — — Net loss (1.1) % (4.9) % Net loss attributable to non-controlling interest — — Net loss attributable to Sadot Group, Inc.
Biggest changeGAAP measure, Net loss, and the calculations of the Net loss Margin and EBITDA Margin for the years ended December 31, 2024 and 2023: For the Years Ended December 31, 2024 2023 $’000 $’000 Net income / (loss) 3,736 (8,042) Adjustments to EBITDA: Depreciation and amortization expenses 259 1,143 Interest expense, net 4,649 468 Income tax (benefit) / expense 3 (15) EBITDA 8,647 (6,446) EBITDA attributable to non-controlling interest 256 218 EBITDA attributable to Sadot Group Inc. 8,903 (6,228) Gross Profit 5,116 9,635 Gross Profit attributable to Sadot Group Inc. 5,372 9,853 Net income / (loss) Margin attributable to Sadot Group Inc. 0.5% (1.1)% EBITDA Margin attributable to Sadot Group Inc. 1.3% (0.9)% 35 Table of Contents Consolidated Results of Operations - Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 The following table represents selected items in our Consolidated Statements of Operations for the years ended December 31, 2024 and 2023, respectively: For the Years Ended December 31, Variance 2024 2023 $ % $’000 $’000 $’000 Commodity sales 700,937 717,506 (16,569) (2.3) % Cost of goods sold (695,821) (707,871) 12,050 (1.7) % Gross profit 5,116 9,635 (4,519) (46.9) % Depreciation and amortization expenses (259) (1,143) 884 (77.3) % Pre-opening expenses — (336) 336 (100.0) % Stock-based expenses (6,662) (6,192) (470) 7.6 % Sales, general and administrative expenses (9,659) (8,968) (691) 7.7 % Loss from continuing operations (11,464) (7,004) (4,460) 63.7 % Other income — 308 (308) (100.0) % Interest expense, net (4,649) (468) (4,181) 893.4 % Change in fair value of stock-based compensation 4,116 1,339 2,777 207.4 % Warrant modification expense — (958) 958 (100.0) % Gain on fair value remeasurement 17,111 1,491 15,620 1047.6 % Gain on sale of trading securities 518 — 518 NM Income / (loss) for continuing operations before income tax 5,632 (5,292) 10,924 (206.4) % Income tax benefit / (expense) (3) 15 (18) (120.0) % Net income / (loss) for continuing operations 5,629 (5,277) 10,906 (206.7) % Net loss for discontinued operations (1,893) (2,765) 872 (31.5) % Net loss attributable to non-controlling interest 256 218 38 17.4 % Net income / (loss) attributable to Sadot Group Inc. 3,992 (7,824) 11,816 (151.0) % NM= not meaningful 36 Table of Contents The following table sets forth our results of operations as a percentage of total revenue for each period presented preceding: For the Years Ended December 31, 2024 2023 Commodity sales 100.0 % 100.0 % Cost of goods sold (99.3) % (98.7) % Gross profit 0.7 % 1.3 % Depreciation and amortization expenses — (0.2) % Pre-opening expenses — — Stock-based expenses (1.0) % (0.9) % Sales, general and administrative expenses (1.4) % (1.2) % Loss from continuing operations (1.7) % (1.0) % Other income — — Interest expense, net (0.7) % (0.1) % Change in fair value of stock-based compensation 0.6 % 0.2 % Warrant modification expense — (0.1) % Gain on fair value remeasurement 2.4 % 0.2 % Gain on sale of trading securities 0.1 % — Income / (loss) for continuing operations before income tax 0.7 % (0.7) % Income tax benefit / (expense) — — Net income / (loss) for continuing operations 0.7 % (0.7) % Net loss for discontinued operations (0.3) % (0.4) % Net loss attributable to non-controlling interest — — Net income / (loss) attributable to Sadot Group Inc. 0.4 % (1.1) % Gross Profit For the Years Ended December 31, Variance 2024 2023 $ % $’000 $’000 $’000 Commodity sales 700,937 717,506 (16,569) (2.3) % Cost of goods sold (695,821) (707,871) 12,050 (1.7) % Gross profit 5,116 9,635 (4,519) (46.9) % NM= not meaningful Our gross profit totaled $5.1 million for the year ended December 31, 2024, compared to $9.6 million for the year ended December 31, 2023.
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.
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, all or a portion of our assets, enter into a business combination or reduce or eliminate operations.
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.
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, 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.
We believe that EBITDA, Adjusted EBITDA, and Adjusted 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.
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, Adjusted EBITDA, and Adjusted 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.
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.
(“Sadot Group”), together with its subsidiaries (collectively, the “Company”) as of December 31, 2023 and 2022 and for the years ended December 31, 2023 and 2022 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Annual Report on Form 10-K following Item 16.
(“Sadot Group”), together with its subsidiaries (collectively, the “Company”) as of December 31, 2024 and 2023 and for the years ended December 31, 2024 and 2023 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Annual Report on Form 10-K following Item 16.
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 value chain. Sadot Agri-Foods seeks to diversify over time into a sustainable and forward-looking global agri-foods company. 2.
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. 2.
In addition, any future sale of our equity securities could dilute the ownership and control of your shares and could be at prices substantially 51 Table of Contents 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.
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.
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, Adjusted EBITDA, and Adjusted EBITDA Margin are non-GAAP measures. We define EBITDA as Net loss, adjusted for depreciation, amortization, interest income / (expense), and income taxes.
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. 34 Table of Contents 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.
Reference is made to “Factors That May Affect Future Results and Financial Condition” in this Item 7 for a discussion of some of the uncertainties, risks and assumptions associated with these statements. OVERVIEW Sadot Group Inc. (f/k/a Muscle Maker, Inc.) is our parent company and is headquartered in Ft. Worth, Texas.
Reference is made to “Factors That May Affect Future Results and Financial Condition” in this Item 7 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.
The other income was primarily attributable to an increase of $1.5 million in the gain on the fair value remeasurement as a result of the mark to market adjustment of derivatives, an increase of $1.3 million in the Change in fair value of stock-based compensation due to the difference in the stock price at the time of the stock issuance and agreed upon price to Aggia, an increase of $0.3 million in Other income, an increase of $1.0 million in warrant modification expense, a $0.5 million increase in Interest expense, net , partially offset by a decrease of $0.1 million on the Gain on debt extinguishment. 48 Table of Contents The following table represents selected items in our Consolidated Statements of Operations for the year ended December 31, 2023, by our operating segments: For the Year Ended December 31, 2023 Sadot food service Sadot agri-foods Corporate adj.
The other income was primarily attributable to an increase of $15.6 million in the gain on the fair value remeasurement as a result of the mark to market adjustment of derivatives, an increase of $2.8 million in the Change in fair value of stock-based compensation due to the difference in the stock price at the time of the stock issuance and agreed upon price to Aggia, a decrease of $1.0 million in warrant modification expense, and an increase of $0.5 million on the Gain on sale of trading securities, partially offset by a decrease of $0.3 million in Other income and a $4.2 million increase in Interest expense, net. 39 Table of Contents The following table represents selected items in our Consolidated Statements of Operations for the year ended December 31, 2024, by our operating segments: For the Year Ended December 31, 2024 Sadot food service Sadot agri-foods Corporate adj.
For the year ended December 31, 2023, Net cash used in investing activities was $3.5 million, of which, $7.5 million was used to purchase Property and equipment, partially offset by $0.4 million, which was generated on the Disposal of property and equipment and by investment from non-controlling interest of $3.7 million.
For the year ended December 31, 2023, Net cash used in investing activities was $3.6 million, of which $7.3 million was used to purchase Property and equipment partially offset by investment from non-controlling interest of $3.7 million, and disposal of property and equipment of $25.0 thousand.
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 our board of directors, and stock compensation paid to employees. The consulting fees due to Aggia related to ongoing Sadot Agri-Foods and expansion of the global agri-foods commodities business.
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 related to ongoing Sadot Agri-Foods and expansion of the global Agri-Foods commodities business.
We generally finance our ongoing operations with cash flows generated from operations, borrowings under various credit facilities and term loans. At December 31, 2023, current ratio, which equals Total current assets divided by Total current liabilities, was 1.08, a decrease of 0.53, compared to current ratio of 1.61 at December 31, 2022.
We generally finance our ongoing operations with cash flows generated from operations, borrowings under various credit facilities and term loans. At December 31, 2024, current ratio, which equals Total current assets divided by Total current liabilities, was 1.16, an increase of 0.08, compared to current ratio of 1.08 at December 31, 2023.
For the year ended December 31, 2023, Net cash provided by financing activities was $8.3 million, consisting of proceeds from notes payable of $11.9 million, proceeds from exercise of warrants of $2.2 million, partially offset by the repayments of notes payable of $5.7 million.
For the year ended December 31, 2023, Net cash provided by financing activities was $8.6 million, consisting of proceeds from notes payable of $12.1 million and proceeds from exercise of warrants of $2.2 million partially offset by the repayments of notes payable of $5.7 million.
Our Net cash used for the year ended December 31, 2022, was primarily attributable to our Net loss of $7.9 million, adjusted for net non-cash expenses in the aggregate amount of $6.2 million, partially offset by $1.6 million of Net cash used in changes in the levels of operating assets and liabilities.
Our Net cash used for the year ended December 31, 2023, was primarily attributable to our Net loss of $8.0 million, adjusted for net non-cash expenses in the aggregate amount of $5.6 million, partially offset by $11.2 million of Net cash used in changes in the levels of operating assets and liabilities.
Our Net cash used for the year ended December 31, 2023, was primarily attributable to our Net loss of $8.1 million, adjusted for net non-cash expense in the aggregate amount of $9.5 million offset by $14.9 million of Net cash used in changes in the levels of operating assets and liabilities.
Our Net cash used for the year ended December 31, 2024, was primarily attributable to our Net income of $3.7 million, adjusted for net non-cash expense in the aggregate amount of $14.0 million offset by $7.5 million of Net cash used in changes in the levels of operating assets and liabilities.
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. 53 Table of Contents Item 7.A.
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 7.A. Quantitative and Qualitative Disclosures About Market Risk Not applicable. Item 8.
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. 42 Table of Contents Reconciliations of EBITDA, Adjusted EBITDA and Other Non-GAAP Measures The following table presents a reconciliation of EBITDA and Adjusted EBITDA from the most comparable U.S.
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.
Other (Expense) / Income Other (expense) / income listed below the Loss from operations in the accompanying Consolidated Statements of Operations and Other Comprehensive Loss consists of Gain of fair value remeasurement, Gain in fair value of stock-based compensation, Warrant modification expense, Interest expense, net, Other income and Gain on debt extinguishment.
Total Other (Expense) / Income Accounts Total Other (expense) / income listed below the Loss from operations in the accompanying Consolidated Statements of Operations and Other Comprehensive Income / (Loss) consists of Gain of fair value remeasurement, Other income / (expense), Change in fair value of stock-based compensation, Gain on sale of trading securities and Interest expense, net.
At December 31, 2023, working capital, which equals Total current assets less Total current liabilities, was $8.3 million an increase of $4.2 million, compared to working capital of $4.0 million at December 31, 2022.
At December 31, 2024, working capital, which equals Total current assets less Total current liabilities, was $20.5 million, a increase of $12.2 million, compared to working capital of $8.3 million at December 31, 2023.
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.
There was no change in the par value of the Company’s common stock. 32 Table of Contents 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.
Stock-Based Expenses For the Years Ended December 31, Variance 2023 2022 $ % $’000 $’000 $’000 Stock-based expenses (6,192) (3,716) (2,476) 66.6 % Stock-based consulting expenses for the year ended December 31, 2023, totaled $6.2 million compared to $3.7 million for the year ended December 31, 2022.
Stock-Based Expenses For the Years Ended December 31, Variance 2024 2023 $ % $’000 $’000 $’000 Stock-based expenses (6,662) (6,192) (470) 7.6 % Stock-based expenses for the year ended December 31, 2024, totaled $6.7 million compared to $6.2 million for the year ended December 31, 2023.
Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results.
The events described in forward-looking statements contained in this Annual Report may not occur. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results.
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. If we need to raise additional capital, we do not know what the terms of any such capital raising would be.
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. 42 Table of Contents We will need to raise additional capital. Such additional capital may not be available nor may the terms of such capital be generally acceptable.
Gain / (loss) on fair value remeasurement consists of the fair value remeasurement recorded on a recurring basis on the forward sales contract which was deemed to be a derivative within the scope of ASC 815.
Gain on fair value remeasurement consists of the fair value remeasurement recorded on a recurring basis on the forward sales contract which was deemed to be a derivative within the scope of ASC 815. Income Tax Benefit /(Expense) Income tax benefit / (expense) represent federal, state and local current and deferred income tax expense.
Quantitative and Qualitative Disclosures About Market Risk Not applicable. Item 8. Financial Statements and Supplementary Data The Financial Statements required by this Item 8 are included in this Annual Report following Item 16 hereof. As a smaller reporting company, we are not required to provide supplementary financial information. Item 9.
Financial Statements and Supplementary Data The Financial Statements required by this Item 8 are included in this Annual Report following Item 16 hereof. As a smaller reporting company, we are not required to provide supplementary financial information. Item 9. Changes in and Disagreements with Accountants On Accounting and Financial Disclosure None.
The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended subsequently by ASUs 2018-19, 2019-04, 2019-05, 2019-10, 2019-11 and 2020-03.
Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended subsequently by ASUs 2018-19, 2019-04, 2019-05, 2019-10, 2019-11 and 2020-03.
References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,” “we,” “our,” and similar terms refer to Sadot Group. “Muscle Maker Grill”, “SuperFit Foods” and “Pokemoto” refers to the names under which our corporate and franchised restaurants do business depending on the concept.
References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,” “we,” “our,” and similar terms refer to Sadot Group. refers to the names under which our corporate and franchised restaurants do business depending on the concept. This Annual Report contains forward-looking statements as that term is defined in the federal securities laws.
The new ASU is effective for all entities in fiscal years starting after December 15, 2021. Early adoption is permitted. The Company adopted the new guidance from January 1, 2023, noting no material impact. In November 2023, the FASB issued ASU 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (Topic 280).
The Company early adopted the new guidance from January 1, 2023, noting no material impact. 44 Table of Contents In November 2023, the FASB issued ASU 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (Topic 280).
Sales, General and Administrative Expenses For the Years Ended December 31, Variance 2023 2022 $ % $’000 $’000 $’000 Sales, general and administrative expenses (9,404) (6,035) (3,369) 55.8 % Sales, general and administrative expenses for the years ended December 31, 2023 and 2022 totaled $9.4 million and $6.0 million, respectively.
Sales, General and Administrative Expenses For the Years Ended December 31, Variance 2024 2023 $ % $’000 $’000 $’000 Sales, general and administrative expenses (9,659) (8,968) (691) 7.7 % Sales, general and administrative expenses for the years ended December 31, 2024 and 2023 totaled $9.7 million and $9.0 million, respectively.
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. Effective July 27, 2023, we changed our company name from Muscle Maker, Inc., to Sadot Group, Inc. As of December 31, 2023, Sadot Group consisted of two distinct operating units. 1.
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 December 31, 2024, Sadot Group consisted of one distinct operating unit and one discontinued operations. 1.
Entities must adopt the changes to the segment reporting guidance on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.
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.
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 joint venture, 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 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.
Pre-opening Expenses For the Years Ended December 31, Variance 2023 2022 $ % $’000 $’000 $’000 Pre-opening expenses (371) (117) (254) 217.1 % Pre-opening expenses for the years ended December 31, 2023 and 2022, totaled $0.4 million and $0.1 million, respectively.
Pre-opening Expenses For the Years Ended December 31, Variance 2024 2023 $ % $’000 $’000 $’000 Pre-opening expenses — (336) 336 (100.0) % Pre-opening expenses for the years ended December 31, 2024 and 2023, totaled nil and $0.3 million, respectively.
Sources and Uses of Cash for the Years Ended December 31, 2023 and December 31, 2022 For the years ended December 31, 2023 and 2022, we used Net cash of $13.4 million and $0.2 million, respectively, in operations.
Sources and Uses of Cash for the Years Ended December 31, 2024 and December 31, 2023 For the years ended December 31, 2024 and 2023, Net cash used in continuing operating activities was $2.8 million and $13.7 million, respectively, in operations and $0.5 million was used in and $0.1 million was provided by operations, respectively, in discontinued operations.
For the year ended December 31, 2022, Net cash used in investing activities was $5.4 million, of which $4.9 million was used on a deposit to purchase farmland, $0.6 million was used to purchase Property and equipment, partially offset by $0.1 million collected from loans to franchisees.
For the year ended December 31, 2024, Net cash used in investing activities was $4.0 thousand, of which, $37.0 thousand was used to purchase Property and equipment, partially offset by $33.0 thousand, which was generated on the Disposal of property and equipment. Net cash provided by investing activities for discontinued operations was $1.0 million for year ended December 31, 2024.
The decrease in current ratio was primarily due to an increase in Accounts payable and accrued expenses as well as an increase in Other current liabilities which was primarily driven by increased Deferred revenue, partially offset by the increase in Accounts receivable as well as Other current assets.
The increase in current ratio and working capital was primarily due to an increase in Other current assets, an increase in Assets held for sale, and a decrease in accounts payable, partially offset by a decrease in Accounts receivable, a decrease in Inventory, an increase in Other current liabilities and an increase in Liabilities held for sale.
Revenues Our revenues are derived from four primary sources: Commodity sales, Company restaurant sales, Franchise revenues and vendor rebates from Franchisees. 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.
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.
The increase in pre-opening expense resulted from expenses incurred at the farm in Zambia from the time that we signed the paper work for the purchase of the farm assets and when the purchase was finalized by the Zambian government. 47 Table of Contents Post-Closing Expenses For the Years Ended December 31, Variance 2023 2022 $ % $’000 $’000 $’000 Post-closing expenses (212) (197) (15) 7.6 % Post-closing expenses for the year ended December 31, 2023 totaled $0.2 million compared to $0.2 million for the year ended December 31, 2022.
The decrease in pre-opening expense resulted from expenses incurred in 2023 at the farm in Zambia from the time that we signed the paper work for the purchase of the farm assets and when the purchase was finalized by the Zambian government.
Pre-opening Expenses Pre-opening expense primarily consist of expenses associated with opening a Company-operated location and expenses related to Company-operated locations or new business operations prior to the location opening or the transaction is finalized. Post-closing Expenses Post-closing expense primarily consist of expenses associated with closing a Company-operated location and expenses related to Company-operated locations after the location has closed.
Depreciation and Amortization Expenses Depreciation and amortization expenses primarily consist of the depreciation of property and equipment. Pre-opening Expenses Pre-opening expense primarily consist of expenses associated with expenses related to new business operations prior to the location opening or the transaction is finalized. Stock-based Expenses Stock-based expenses include all expenses that are paid with stock.
(2,765) 9,254 (14,313) (7,824) Total assets 10,416 162,175 5,500 178,091 49 Table of Contents The following table represents selected items in our Consolidated Statements of Operations for the year ended December 31, 2022, by our operating segments: For the Year Ended December 31, 2022 Sadot food service Sadot agri-foods Corporate adj.
(1,893) 15,153 (9,268) 3,992 Total assets 5,196 157,881 1,577 164,654 40 Table of Contents The following table represents selected items in our Consolidated Statements of Operations for the year ended December 31, 2023, by our operating segments: For the Year Ended December 31, 2023 Sadot food service Sadot agri-foods Corporate adj.
Total segments $’000 $’000 $’000 $’000 Commodity sales — 717,506 — 717,506 Company restaurant sales, net of discounts 8,053 — — 8,053 Franchise royalties and fees 1,041 — — 1,041 Franchise advertising fund contributions 73 — — 73 Other revenues 13 — — 13 Cost of goods sold (8,883) (707,872) — (716,755) Gross profit 297 9,634 — 9,931 Impairment of intangible asset (811) — — (811) Impairment of goodwill (828) — — (828) Depreciation and amortization expenses (665) (151) (992) (1,808) Franchise advertising fund expenses (73) — — (73) Pre-opening expenses (36) (335) — (371) Post-closing expenses (211) — (1) (212) Stock-based expenses — — (6,192) (6,192) Sales, general and administrative expenses (437) (1,551) (7,416) (9,404) (Loss) / income from operations (2,764) 7,597 (14,601) (9,768) Other income 1 — 307 308 Interest expense, net (1) (52) (416) (469) Change in fair value of stock-based compensation — — 1,339 1,339 Warrant modification expense — — (958) (958) Gain on fair value remeasurement — 1,491 — 1,491 Gain on debt extinguishment — — — — Loss Before Income Tax (2,764) 9,036 (14,329) (8,057) Income tax benefit / (expense) (1) — 16 15 Net (loss) / income (2,765) 9,036 (14,313) (8,042) Net loss attributable to non-controlling interest — 218 — 218 Net (loss) / income attributable to Sadot Group, Inc.
Total segments $’000 $’000 $’000 $’000 Commodity sales — 717,506 — 717,506 Cost of goods sold — (707,871) — (707,871) Gross profit — 9,635 — 9,635 Depreciation and amortization expenses — (151) (992) (1,143) Pre-opening expenses — (336) — (336) Stock-based expenses — — (6,192) (6,192) Sales, general and administrative expenses — (1,552) (7,416) (8,968) (Loss) / income from operations — 7,596 (14,600) (7,004) Other income — — 308 308 Interest expense, net — (52) (416) (468) Change in fair value of stock-based compensation — — 1,339 1,339 Warrant modification expense — — (958) (958) Gain on fair value remeasurement — 1,491 — 1,491 (Loss) / income before income tax — 9,035 (14,327) (5,292) Income tax (expense) benefit — — 15 15 Net Income / (loss) from continuing operations — 9,035 (14,312) (5,277) Loss on discontinued operations (2,765) — — (2,765) Net (loss) / income (2,765) 9,035 (14,312) (8,042) Net loss attributable to non-controlling interest — 218 — 218 Net (loss) / income attributable to Sadot Group Inc.
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.
We incur incremental Sales, general and administrative expenses as a result of being a publicly listed company on the NASDAQ capital market.
Sadot Restaurant Group ("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. The restaurants were founded on the belief of taking every-day menu options and converting them into “healthier for you” menu choices.
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.
The $5.5 million increase is primarily attributed to an increase in Commodity sales as a direct result of a full years worth of operations of Sadot Agri-Foods. We generated Commodity sales of $717.5 million for the year ended December 31, 2023, compared to $150.6 million for the year ended December 31, 2022.
The $4.5 million decrease is primarily attributed to a decrease in Commodity sales and corresponding decrease in Cost of goods sold. We generated Commodity sales of $700.9 million for the year ended December 31, 2024, compared to $717.5 million for the year ended December 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. For the years ended December 31, 2023 and 2022, $6.2 million and $3.7 million, respectively, are recorded as Stock-based expenses in the accompanying Consolidated Statements of Operations and Other Comprehensive Loss.
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.
The primary increase in Stock-based consulting expenses is the result of consulting fees due to Aggia for Sadot Agri-Foods operations. Based on the service agreement with Aggia, the consulting fees are calculated at approximately 40% of the Net income generated by the Sadot Agri-Foods business segment.
Based on the servicing agreement with Aggia, the consulting fees are calculated at approximately 40.0% of the Net income generated by Sadot LLC which is a decrease from 80.0% in the first quarter of 2023.
Depreciation and Amortization Expenses For the Years Ended December 31, Variance 2023 2022 $ % $’000 $’000 $’000 Depreciation and amortization expenses (1,808) (2,015) 207 (10.3) % Depreciation and amortization expenses for the years ended December 31, 2023 and 2022 totaled $1.8 million and $2.0 million, respectively.
The $12.1 million change is a direct result of the decrease in sales. 37 Table of Contents Depreciation and Amortization Expenses For the Years Ended December 31, Variance 2024 2023 $ % $’000 $’000 $’000 Depreciation and amortization expenses (259) (1,143) 884 (77.3) % Depreciation and amortization expenses for the years ended December 31, 2024 and 2023 totaled $0.3 million and $1.1 million, respectively.
Warrant modification expense consists of the expense incurred and the issuance of new warrants. 41 Table of Contents Income Tax Benefit /(Expense) Income tax benefit / (expense) represent federal, state and local current and deferred income tax expense. Net Income Attributable to Non-controlling Interests Net loss attributable to non-controlling interests was $0.2 million for the year ended December 31, 2023.
Net Loss Attributable to Non-controlling Interests Net loss attributable to non-controlling interests was $0.3 million for the year ended December 31, 2024.
(3,274) 4,452 (9,140) (7,962) Total assets 16,340 7,915 2,975 27,230 50 Table of Contents Liquidity and Capital Resources Working Capital We measure our liquidity in a number of ways, including the following: As of December 31, 2023 December 31, 2022 $’000 $’000 Cash 1,354 9,898 Accounts Receivable, net 52,920 135 Inventory 2,561 298 Other current assets (1) 56,016 317 Total current assets 112,851 10,648 Accounts payable and accrued expenses 50,167 1,953 Accrued stock-based compensation expense, related party — 3,603 Notes payable, net 6,531 222 Other current liabilities (2) 47,884 837 Total current liabilities 104,582 6,615 Working capital (3) 8,269 4,033 Current ratio (4) 1.08 1.61 (1) Consists of Prepaid expenses and other current assets, Prepaid forward on carbon offsets, Forward sales derivatives and Notes receivable, current (2) Consists of Operating lease liability, current, Deferred revenue, current and Other current liabilities (3) Working Capital is defined as Total current assets less Total current liabilities (4) 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.
(2,765) 9,253 (14,312) (7,824) Total assets 10,416 162,175 5,500 178,091 41 Table of Contents Liquidity and Capital Resources Working Capital We measure our liquidity in a number of ways, including the following: As of December 31, 2024 December 31, 2023 $’000 $’000 Cash 1,786 1,354 Accounts Receivable, net 18,014 52,920 Inventory 717 2,561 Other current assets (1) 126,966 56,016 Assets held for sale (2) 5,196 — Total current assets 152,679 112,851 Accounts payable and accrued expenses 28,019 50,167 Notes payable, net 7,390 6,531 Other current liabilities (3) 94,428 47,884 Liabilities held for sale (4) 2,333 — Total current liabilities 132,170 104,582 Working capital (5) 20,509 8,269 Current ratio (6) 1.16 1.08 (1) See Note 6 for full list of items in Other current assets.
Sadot LLC (“Sadot Agri-Foods”): Sadot Group’s largest operating unit is a global agri-commodities company engaged in farming, trading and shipping of food and feed (e.g., soybean meal, wheat and corn) via dry bulk cargo ships to/from markets such as Argentina, Australia, Bangladesh, Brazil, Canada, China, Columbia, Ecuador, Egypt, Guinea, Honduras, India, Indonesia, Ivory Coast, Japan, Kenya, Malaysia, Morocco, Mozambique, Nigeria, Philippines, Poland, Romania, Saudi Arabia, South Korea, Sri Lanka, Ukraine United States and Vietnam, among others.
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.
Total segments $’000 $’000 $’000 $’000 Commodity sales — 150,586 — 150,586 Company restaurant sales, net of discounts 10,300 — — 10,300 Franchise royalties and fees 727 — — 727 Franchise advertising fund contributions 81 — — 81 Other revenues 5 — — 5 Cost of goods sold (11,270) (146,037) — (157,307) Gross profit (157) 4,549 — 4,392 Impairment of intangible asset (347) — — (347) Impairment of goodwill — — — — Depreciation and amortization expenses (2,015) — — (2,015) Franchise advertising fund expenses (81) — — (81) Pre-opening expenses (117) — — (117) Post-closing expenses (197) — — (197) Stock-based expenses — — (3,716) (3,716) Sales, general and administrative expenses (601) (97) (5,337) (6,035) (Loss) / income from operations (3,515) 4,452 (9,053) (8,116) Other income 80 — (34) 46 Interest expense, net 21 — (28) (7) Change in fair value of stock-based compensation — — — — Gain on debt extinguishment 140 — — 140 (Loss) / income before income tax (3,274) 4,452 (9,115) (7,937) Income tax benefit / (expense) — — (25) (25) Net (loss) income (3,274) 4,452 (9,140) (7,962) Net loss attributable to non-controlling interest — — — — Net (loss) / income attributable to Sadot Group, Inc.
Total segments $’000 $’000 $’000 $’000 Commodity sales — 700,937 — 700,937 Cost of goods sold — (695,821) — (695,821) Gross profit — 5,116 — 5,116 Depreciation and amortization expenses — (256) (3) (259) Stock-based expenses — — (6,662) (6,662) Sales, general and administrative expenses — (5,219) (4,440) (9,659) (Loss) / income from operations — (359) (11,105) (11,464) Interest expense, net — (2,370) (2,279) (4,649) Change in fair value of stock-based compensation — — 4,116 4,116 Gain on fair value remeasurement — 17,111 — 17,111 Gain on sale of trading securities — 518 — 518 Income / (loss) for continuing operations before income tax — 14,900 (9,268) 5,632 Income tax (expense) benefit — (3) — (3) Net Income / (loss) from continuing operations — 14,897 (9,268) 5,629 Loss on discontinued operations (1,893) — — (1,893) Net (loss) / income (1,893) 14,897 (9,268) 3,736 Net loss attributable to non-controlling interest — 256 — 256 Net (loss) / income attributable to Sadot Group Inc.
Governmental and other economic factors affecting our operations may vary. 39 Table of Contents For the Years Ended December 31, 2023 2022 $’000 $’000 Commodity sales 717,506 150,586 Company restaurant sales, net of discounts 8,053 10,300 Franchise royalties and fees 1,041 727 Franchise advertising fund contributions 73 81 Other revenues 13 5 Cost of goods sold (716,755) (157,307) Gross profit 9,931 4,392 Impairment of intangible asset (811) (347) Impairment of goodwill (828) — Depreciation and amortization expenses (1,808) (2,015) Franchise advertising fund expenses (73) (81) Pre-opening expenses (371) (117) Post-closing expenses (212) (197) Stock-based expenses (6,192) (3,716) Sales, general and administrative expenses (9,404) (6,035) Loss from operations (9,768) (8,116) Adjusted EBITDA (129) (2,038) Adjusted EBITDA attributable to Sadot Group, Inc. 89 (2,038) The breakout of our main revenue streams by business segment is shown below: For the Years Ended December 31, 2023 2022 Sadot agri-foods 98.7 % 93.1 % Sadot food service 1.3 % 6.9 % Our key business and financial metrics are explained in detail below.
For the Years Ended December 31, 2024 2023 $’000 $’000 Commodity sales 700,937 717,506 Cost of goods sold (695,821) (707,871) Gross profit 5,116 9,635 Depreciation and amortization expenses (259) (1,143) Pre-opening expenses — (336) Stock-based expenses (6,662) (6,192) Sales, general and administrative expenses (9,659) (8,968) Loss from operations (11,464) (7,004) EBITDA 8,647 (6,446) EBITDA attributable to Sadot Group Inc. 8,903 (6,228) Our key business and financial definitions are explained in detail below.
Removed
This Annual Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Annual Report may not occur.
Added
As of the end of 2024 the Company only operates as the franchisor for Pokémoto and Muscle Maker Grill restaurants. The restaurants were founded on the belief of taking every-day menu options and converting them into “healthier for you” menu choices with the goal of satisfying consumers demand for healthier choices, customization, flavor and convenience.
Removed
Consumers are demanding healthier choices, customization, flavor and convenience. Each of our three concepts offers different menus that are tailored to specific consumer segments. We believe our concepts deliver highly differentiated customer experiences.
Added
This entire operating segment was identified as held for sale and reported as discontinued operations.
Removed
Through our subsidiaries, we operate within the global food-supply chain, in an effort to integrate capabilities and create a sustainable and innovative company, that enhances the social, environmental and financial value to our Company.
Added
On October 9, 2024, the Company filed a Certificate of Change Pursuant to NRS 78.209 with the Nevada Secretary of State to effect a reverse stock split of the Company’s common stock at a ratio of one for- ten (the “Reverse Stock Split”), which became effective 12:01 am eastern on October 18, 2024.
Removed
Franchise revenues are comprised of Franchise royalty revenues collected based on 2% to 6% of franchisee net sales and other franchise revenues which include initial and renewal franchisee fees. Vendor rebates are received based on volume purchases or services from franchise owned locations.
Added
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 where were entitled to receive fractional share interest.
Removed
In addition, we have Other revenues which consists of gift card breakage, which is recognized when we determine that there is no further legal obligation to remit the unredeemed gift card balance. Cost of Goods Sold Cost of goods sold includes commodity costs, labor, food and beverage cost, rent and other operating expenses.
Added
Governmental and other economic factors affecting our operations may vary.
Removed
Impairment of Intangible Assets Impairment of intangible assets consist of an amount by which the carry amount of the intangible assets exceeds its fair value.
Added
For the years ended December 31, 2024 and 2023, $6.7 million and $6.2 million, respectively, are recorded as Stock-based expenses in the accompanying Consolidated Statements of Operations and Other Comprehensive Income / (Loss). 33 Table of Contents 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.
Removed
This is recognized by us when the carry amount of an intangible asset is greater than the projected future undiscounted cash flows, as the asset is not fully recoverable. 40 Table of Contents Impairment of Goodwill Impairment of goodwill consist of an amount by which the carry amount of the goodwill assets exceeds its fair value.
Added
Reconciliations of EBITDA and Other Non-GAAP Measures The following table presents a reconciliation of EBITDA from the most comparable U.S.
Removed
This is recognized by us when the carry amount of goodwill is greater than the projected future discounted cash flows, as the asset is not fully recoverable. Depreciation and Amortization Expenses Depreciation and amortization expenses primarily consist of the depreciation of property and equipment and amortization of intangible assets.
Added
The $16.6 million decrease or 2.3% is attributable to a which is attributable to a decline in global prices of staple commodities, market seasonality, the largest global consumer being out of the market for the beginning of 2024. Cost of goods sold for the years ended December 31, 2024 and 2023 totaled $695.8 million and $707.9 million, respectively.
Removed
Franchise Advertising Expenses In accordance with Topic 606, the Company recognizes sales-based advertising contributions from franchisees as franchise revenue when the underlying franchisee incurs the corresponding advertising expense. The Company records the related advertising expenses as incurred under Sales, general and administrative expenses.
Added
The $0.9 million decrease is mainly attributed to moving Sadot Food Service assets to Assets Held For Sale and no longer amortizing or depreciating the assets and the closing and refranchising of corporate locations and the disposal of the corresponding assets.
Removed
A certain portion of these expenses are related to the preparation of an initial stock offering and subsequent capital raises and should be considered one-time expenses.
Added
The increase in Stock-based consulting expenses is primarily the result of consulting fees due to Aggia for Sadot Agri-Foods and Farming operations and the vesting of restricted stock for employees, board of directors and consultants.
Removed
We define Adjusted EBITDA as Net loss, adjusted for depreciation, amortization, net interest (income) expense, income taxes, impairment expenses, stock-based consulting expense, other income, change in fair value of stock-based compensation, gain on extinguishment, warrant modification expense, and gain on fair value remeasurement derived from amounts presented in the Consolidated Statement of Operations and Other Comprehensive Loss and the associated Notes to the Consolidated Financial Statements.
Added
The $0.7 million increase was primarily attributable to an increase in consulting fees due to trades in Latin America, entering the Brazil and Canada markets and increases due to increases in normal operating activities. 38 Table of Contents Total Other Income / (Expense) Accounts, Net For the Years Ended December 31, Variance 2024 2023 $ % $’000 $’000 $’000 Total other income / (expense), net 17,096 1,712 15,384 898.6 % Other income for the years ended December 31, 2024 and 2023 totaled $17.1 million and $1.7 million, respectively.
Removed
GAAP measure, Net loss, and the calculations of the Net loss Margin and Adjusted EBITDA Margin for the years ended December 31, 2023 and 2022: For the Years Ended December 31, 2023 2022 $’000 $’000 Net loss (8,042) (7,962) Adjustments to EBITDA: Depreciation and amortization expenses 1,808 2,015 Interest expense, net 469 7 Income tax (benefit) / expense (15) 25 EBITDA (5,780) (5,915) Adjustments to Adjusted EBITDA: Impairment of intangible asset 811 347 Impairment of goodwill 828 — Other income (308) (46) Change in fair value of stock-based compensation (1,339) — Gain on debt extinguishment — (140) Warrant modification expense 958 — Gain on fair value remeasurement (1,491) — Stock-based consulting expenses 6,192 3,716 Adjusted EBITDA (129) (2,038) Adjusted EBITDA attributable to non-controlling interest 218 — Adjusted EBITDA attributable to Sadot Group, Inc. 89 (2,038) Gross Profit 9,931 4,392 Gross Profit attributable to Sadot Group, Inc. 10,149 4,392 Net loss Margin attributable to Sadot Group, Inc.
Added
(2) See Note 3 for additional information (3) Consists of Deferred revenue, current and Other current liabilities. See Note 14 for full list of items in Other current liabilities.
Removed
(1.1)% (4.9)% Adjusted EBITDA Margin attributable to Sadot Group, Inc. —% (1.3)% 43 Table of Contents Consolidated Results of Operations - Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 The following table represents selected items in our Consolidated Statements of Operations for the years ended December 31, 2023 and 2022, respectively: For the Years Ended December 31, Variance 2023 2022 $ % $’000 $’000 $’000 Commodity sales 717,506 150,586 566,920 376.5 % Company restaurant sales, net of discounts 8,053 10,300 (2,247) (21.8) % Franchise royalties and fees 1,041 727 314 43.2 % Franchise advertising fund contributions 73 81 (8) (9.9) % Other revenues 13 5 8 160.0 % Cost of goods sold (716,755) (157,307) (559,448) 355.6 % Gross profit 9,931 4,392 5,539 126.1 % Impairment of intangible asset (811) (347) (464) 133.7 % Impairment of goodwill (828) — (828) NM Depreciation and amortization expenses (1,808) (2,015) 207 (10.3) % Franchise advertising fund expenses (73) (81) 8 (9.9) % Pre-opening expenses (371) (117) (254) 217.1 % Post-closing expenses (212) (197) (15) 7.6 % Stock-based expenses (6,192) (3,716) (2,476) 66.6 % Sales, general and administrative expenses (9,404) (6,035) (3,369) 55.8 % Loss from operations (9,768) (8,116) (1,652) 20.4 % Other income 308 46 262 569.6 % Interest expense, net (469) (7) (462) 6600.0 % Change in fair value of stock-based compensation 1,339 — 1,339 NM Warrant modification expense (958) — (958) NM Gain on fair value remeasurement 1,491 — 1,491 NM Gain on debt extinguishment — 140 (140) (100.0) % Loss Before Income Tax (8,057) (7,937) (120) 1.5 % Income tax benefit / (expense) 15 (25) 40 (160.0) % Net loss (8,042) (7,962) (80) 1.0 % Net loss attributable to non-controlling interest 218 — 218 NM Net loss attributable to Sadot Group, Inc.
Added
(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.

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