What changed in this filing

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Item 1. Financial Statements

2024-08-13 compared with 2024-05-15 · 360 added, 265 removed, 921 unchanged (40% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets:

Cash 9,956 1,354

Accounts receivable, net of allowance for doubtful accounts of $ 0.2 million and $ 0.2 million as of March 31, 2024 and December 31, 2023, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 0.3 million and $ 0.2 million as of June 30, 2024 and December 31, 2023, respectively

24,907 52,920

9 unchanged sentences

Total assets 165,774 178,091

Liabilities and Stockholders’ Equity

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable and accrued expenses 30,548 50,167

Notes payable, current, net of discount of $ 0.1 million and $ 0.2 million as of March 31, 2024 and December 31, 2023, respectively

Notes payable, current, net of discount of $ 0.1 million and $ 0.2 million as of June 30, 2024 and December 31, 2023, respectively

Operating lease liability, current 21 385

8 unchanged sentences

Total liabilities 137,721 153,834

Commitments and Contingencies

Stockholders’ equity:

Common stock, $ 0.0001 par value, 200,000,000 shares authorized, 44,234,315 and 40,464,720 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

Common stock, $ 0.0001 par value, 200,000,000 shares authorized, 45,965,155 and 40,464,720 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 109,962 107,988

8 unchanged sentences

Sadot Group Inc.

Condensed Consolidated Statement of Operations and Other Comprehensive Loss

Three Months Ended March 31,

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

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

$’000 $’000 $’000 $’000

Commodity sales 173,293 157,559 279,800 367,925

2 unchanged sentences

Franchise advertising fund contributions 13 20 28 36

Other revenues — 13 — 13

Cost of goods sold ( 172,527 ) ( 157,239 ) ( 280,804 ) ( 365,535 )

Gross (loss) profit ( 340 ) 4,673

Gross profit 2,512 3,078 2,170 7,749

Depreciation and amortization expenses ( 92 ) ( 441 ) ( 372 ) ( 1,074 )

5 unchanged sentences

Loss from operations ( 1,953 ) ( 360 ) ( 5,500 ) ( 1,967 )

Interest (expense) / income, net ( 490 ) 3

Other income 19 251 19 251

Interest expense ( 761 ) ( 22 ) ( 1,251 ) ( 19 )

Change in fair value of stock-based compensation 1,214 324 1,691 865

Gain on fair value remeasurement 3,275 — 6,534 —

Loss on sale of trading securities ( 11 ) —

Loss Before Income Tax ( 312 ) ( 1,063 )

Gain on sale of trading securities 528 — 518 —

Income / (Loss) Before Income Tax 2,322 193 2,011 ( 870 )

Income tax expense ( 5 ) ( 3 ) ( 7 ) ( 6 )

Net loss ( 313 ) ( 1,066 )

Net income / (loss) 2,317 190 2,004 ( 876 )

Net loss attributable to non-controlling interest 52 — 100 —

Net loss attributable to Sadot Group Inc.

Net income / (loss) attributable to Sadot Group Inc.

2,369 190 2,104 ( 876 )

Net Income / (Loss) Per Share attributable to Sadot Group Inc.:

Basic 0.05 0.01 0.05 ( 0.03 )

Diluted 0.05 0.01 0.04 ( 0.03 )

Weighted-Average # of Common Shares Outstanding:

Basic 44,234,315 33,362,887 43,058,217 31,407,362

Diluted 50,092,282 33,567,719 48,987,759 31,407,362

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

Sadot Group Inc.

Condensed Consolidated Statement of Operations and Other Comprehensive Loss

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

(Unaudited) (Continued)

Three Months Ended March 31,

Net loss ( 313 ) ( 1,066 )

Other comprehensive income

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

$’000 $’000 $’000 $’000

Net income / (loss) 2,317 190 2,004 ( 876 )

Other comprehensive income / (loss)

Foreign exchange translation adjustment 3 — 3 —

Unrealized loss, net of income tax ( 126 ) — ( 186 ) —

Total other comprehensive loss ( 123 ) — ( 183 ) —

Total comprehensive loss ( 373 ) ( 1,066 )

Comprehensive loss attributable to non-controlling interest 48 —

Total Comprehensive loss attributable to Sadot Group Inc.

Total comprehensive income / (loss) 2,194 190 1,821 ( 876 )

Comprehensive income attributable to non-controlling interest 52 — 100 —

Total Comprehensive income / (loss) attributable to Sadot Group Inc.

2,246 190 1,921 ( 876 )

4 unchanged sentences

Capital Accumulated

Deficit Accumulated Other Comprehensive Loss Non-controlling Interest Total

Deficit Accumulated Other Comprehensive Income / (Loss) Non-controlling Interest Total

Shares Amount

6 unchanged sentences

Balance at March 31, 2023 32,167 3 98,988 ( 80,421 ) — — 18,570

Common stock compensation to board of directors 30 — 32 — — — 32

Common stock issued as compensation for services 3,714 1 4,348 — — — 4,349

Stock-based compensation - options — — 27 — — — 27

Net income — — — 190 — — 190

Balance at June 30, 2023 35,911 4 103,395 ( 80,231 ) — — 23,168

Balance at December 31, 2023 40,465 4 107,988 ( 87,179 ) 8 3,436 24,257

6 unchanged sentences

Balance at March 31, 2024 44,234 4 109,281 ( 87,444 ) ( 52 ) 3,388 25,177

Common stock compensation to board of directors — — — — — — —

Common stock issued as compensation for services 1,399 1 535 — — — 536

Stock based compensation - vesting of options and restricted stock awards 332 — 146 — — — 146

Foreign exchange translation adjustment — — — — 3 — 3

Unrealized loss, net of income tax — — — — ( 126 ) — ( 126 )

Net income / (loss) — — — 2,369 — ( 52 ) 2,317

Balance at June 30, 2024 45,965 5 109,962 ( 85,075 ) ( 175 ) 3,336 28,053

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

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows from Operating Activities

Net loss ( 313 ) ( 1,066 )

Adjustments to reconcile net loss to net cash used in operating activities:

Net income / (loss) 2,004 ( 876 )

Adjustments to reconcile net income / (loss) to net cash used in operating activities:

Depreciation and amortization 372 1,074

2 unchanged sentences

Unrealized loss, net of income tax ( 186 ) —

Foreign exchange translation adjustment 3 —

Loss on disposal of assets 188 53

8 unchanged sentences

Other current liabilities 46,241 22

Contract liability, non-current ( 46,048 ) —

Operating right to use assets and lease liabilities, net ( 68 ) ( 21 )

6 unchanged sentences

Disposal of property and equipment 57 110

Net cash provided by (used in) investing activities 51 ( 196 )

Net cash used in investing activities ( 646 ) ( 4,025 )

Cash Flows from Financing Activities

1 unchanged sentence

Repayments of notes payable ( 5,375 ) ( 69 )

Net cash used in financing activities ( 2,790 ) ( 34 )

Net Decrease in Cash ( 140 ) ( 3,512 )

Net cash (used in) provided by financing activities ( 1,795 ) 3,431

Net Increase (Decrease) in Cash 8,602 ( 4,808 )

Cash – beginning of period 1,354 9,898

3 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Continued)

Three Months Ended March 31,

Six Months Ended June 30,

Supplemental Disclosures of Cash Flow Information:

6 unchanged sentences

Sadot Group Inc.

("Sadot Group" or "SGI" or together with its subsidiary, the “Company”) (f/k/a Muscle Maker, Inc.) , a Nevada corporation was incorporated in Nevada on October 25, 2019.

In late 2022, SGI has transformed from a U.S.-centric restaurant business into a global organization focused on the Agri-food commodity supply chain.

("Sadot Group" or "SGI" or together with its subsidiaries, the “Company”) (f/k/a Muscle Maker, Inc.), a Nevada corporation was incorporated in Nevada on October 25, 2019.

In late 2022, SGI transformed from a U.S.-centric restaurant business into a global organization focused on the Agri-food commodity supply chain.

Effective July 27, 2023, we changed our company name from Muscle Maker, Inc., to Sadot Group Inc.

Sadot Group is headquartered in Ft.

Worth, Texas with subsidiary operations throughout the United States, Brazil, Colombia, Dubai, India, Israel, Singapore, Ukraine and Zambia.

As of March 31, 2024, SGI consisted of two distinct operating units:

Worth, Texas with subsidiary operations throughout the United States, Brazil, Canada, Colombia, Dubai, India, Israel, Singapore, Ukraine and Zambia.

As of June 30, 2024, SGI consisted of two distinct operating units:

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 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 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 to/from markets such as Argentina, Australia, Bangladesh, Brazil, Canada, China, Columbia, Costa Rica, Dominican Republic, 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, Venezuela, Vietnam and Yemen, among others.

Sadot Agri-Foods competes with the ABCD commodity companies (ADM, Bunge, Cargill, Louis-Dreyfus) as well as many regional organizations.

Sadot Agri-Foods operates, through a majority owned subsidiary, a roughly 5,000 acre crop producing farm in Zambia with a focus on major commodities such as wheat, soy and corn alongside high-value tree crops such as avocado and mango.

Sadot Agri-Foods was formed as part of the Company’s diversification strategy to own and operate, through its subsidiaries, the business lines throughout the food value chain.

Sadot Agri-Foods was formed as part of the Company’s diversification strategy to own and operate, through its subsidiaries, the business lines throughout the food supply chain.

Sadot Agri-Foods seeks to diversify over time into a sustainable and forward-looking global agri-foods company.

Sadot Restaurant Group, LLC ("Sadot Food Services") has three unique “healthier for you” concepts, including two fast casual restaurant concepts, Pokémoto and Muscle Maker Grill, as well as one subscription-based fresh prep meal concept, SuperFit Foods.

Sadot Restaurant Group, LLC ("Sadot Food Services"):

has three unique “healthier for you” concepts, including two fast casual restaurant concepts, Pokémoto and Muscle Maker Grill, as well as 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 with the goal of satisfying consumers demand for 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.This entire operating segment was identified as held for sale.

We believe our concepts deliver highly differentiated customer experiences.

This entire operating segment was identified as held for sale.

Please see Note 3 – Assets held for sale for further details.

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The Company's primary source of liquidity is cash on hand.

As of March 31, 2024, the Company had a cash balance, a working capital surplus and an accumulated deficit of $ 1.2 million, $ 13.2 million, and $ 87.4 million, respectively.

During the three months ended March 31, 2024, the Company incurred a Pre-tax net loss of $ 0.3 million.

The Company had Net

As of June 30, 2024, the Company had a cash balance, a working capital surplus and an accumulated deficit of $ 10.0 million, $ 16.1 million, and $ 85.1 million, respectively.

During the three and six months ended June 30, 2024, the Company generated Pre-tax net income of $ 2.3 million and $ 2.0 million,

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

cash provided by operations of $ 2.6 million for the three months ended March 31, 2024.

respectively.

The Company had Net cash provided by operations of $ 11.0 million for the six months ended June 30, 2024.

The Company believes that our existing cash on hand, current accounts receivable and future cash flows from our commodity trading, farming and franchise operations, will be sufficient to fund our operations, anticipated capital expenditures and repayment obligations over the next 12 months.

2 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Cash 9,956 1,354

2 unchanged sentences

Other current assets 110,004 56,016

58,584 56,016

Assets held for sale (4)

8 unchanged sentences

Current ratio (3)

(1) Consists of Prepaid expenses and other current assets, Prepaid forward on carbon offsets, Forward sales derivatives and Notes receivable, current

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

7 unchanged sentences

Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for annual financial statements.

In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the Unaudited Condensed Consolidated Financial Statements of the Company as of March 31, 2024, and for the three months ended March 31, 2024, and 2023.

The results of operations for the three months ended March 31, 2024, and 2023 are not necessarily indicative of the operating results for the full year.

In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the Unaudited Condensed Consolidated Financial Statements of the Company as of June 30, 2024, and for the three and six months ended June 30, 2024, and 2023.

The results of operations for the three and six months ended June 30, 2024, and 2023 are not necessarily indicative of the operating results for the full year.

It is suggested that these Unaudited Condensed Consolidated Financial Statements be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2023.

22 unchanged sentences

The Company considers all highly-liquid instruments with an original maturity of three months or less when purchased to be cash equivalents.

There were no cash equivalents as of March 31, 2024 or December 31, 2023.

Inventory, which are stated at the lower of cost or net realizable value, related to our raw materials, supplies and harvested crops related to our farming operations of $ 2.4 million and $ 2.4 million as of March 31, 2024, and December 31, 2023, respectively.

There were no cash equivalents as of June 30, 2024 or December 31, 2023.

Inventory, which are stated at the lower of cost or net realizable value, related to our raw materials, supplies and harvested crops related to our farming operations were $ 2.5 million and $ 2.6 million as of June 30, 2024, and December 31, 2023, respectively.

Cost is determined using the first-in, first-out method.

Accounts Receivable

Accounts Receivable consists of receivables related to Sadot Agri-Foods of $ 23.1 million and $ 52.9 million net of doubtful accounts of $ 0.2 million and $ 0.2 million as of March 31, 2024, and December 31, 2023, respectively.

Accounts Receivable consists of receivables related to Sadot Agri-Foods of $ 24.9 million and $ 52.9 million net of doubtful accounts of $ 0.3 million and $ 0.2 million as of June 30, 2024, and December 31, 2023, respectively.

Accounts receivable is stated at historical carrying amounts net of write-offs and allowances for uncollectible accounts.

54 unchanged sentences

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

As of March 31, 2024 and December 31, 2023, the Company deemed the conversion feature related to notes payable was not required to be bifurcated and recorded as a derivative liability.

As of June 30, 2024 and December 31, 2023, the Company deemed the conversion feature related to notes payable was not required to be bifurcated and recorded as a derivative liability.

Related Parties

19 unchanged sentences

Commodity sale revenue is generated by Sadot Agri-Foods and is recognized when the commodity is delivered as evidenced by delivery and the invoice is prepared and submitted to the customer.

During the three months ended March 31, 2024 and 2023, the Company recorded Commodity sales revenues of $ 106.5 million and $ 210.4 million, respectively, which is included in Commodity sales on the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss.

During the three and six months ended June 30, 2024, the Company recorded Commodity sales revenues of $ 173.3 million and $ 279.8 million, and $ 157.6 million and $ 367.9 million for the three and six months ended June 30, 2023, respectively, which is included in Commodity sales on the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).

Restaurant Sales

Retail store revenue at Sadot Food Service is recognized when payment is tendered at the point of sale, net of sales tax, discounts and other sales-related taxes.

The Company recorded retail store revenues of $ 1.2 million during the three months ended March 31, 2024 and $ 2.3 million for the three months ended March 31, 2023, respectively, which is included in Restaurant sales on the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss.

During the three and six months ended June 30, 2024, the Company recorded retail store revenues of $ 1.0 million and $ 2.1 million, and $ 2.5 million and $ 4.8 million during the three and six months ended June 30, 2023, respectively, which is included in Restaurant sales on the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).

The Company sells gift cards which do not have an expiration date, and it does not deduct dormancy fees from outstanding gift card balances.

4 unchanged sentences

The Company recognizes the royalties as the underlying sales occur.

The Company recorded revenue from royalties of $ 0.2 million during the three months ended March 31, 2024 and $ 0.2 million during the three months ended March 31, 2023, respectively, which is included in Franchise royalties and fees on the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss.

The Company recorded revenue from royalties of $ 0.2 million and $ 0.5 million during the three and six months ended June 30, 2024 and $ 0.2 million and $ 0.3 million during the three and six months ended June 30, 2023, respectively, which is included in Franchise royalties and fees on the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).

The Company provides the franchisees with management expertise, training, pre-opening assistance, and restaurant operating assistance in exchange for the multi-unit development fees and initial franchise fees.

4 unchanged sentences

If a franchise location closes or a franchise agreement is terminated for any reason, the unrecognized revenue will be recognized in full at that time.

The Company recorded revenue from initial franchise fees of $ 26.9 thousand and $ 0.1 million during the three months ended March 31, 2024 and 2023, respectively, which is included in Franchise royalties and fees on the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss.

The Company recorded revenue from initial franchise fees of $ 0.5 million and $ 0.5 million, during the three and six months ended June 30, 2024 and $ 23.0 thousand and $ 0.1 million, for the three and six months ended June 30, 2023, respectively, which is included in Franchise royalties and fees on the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).

The Company has supply agreements with certain food and beverage vendors.

1 unchanged sentence

Rebates earned on purchases by franchise stores are recorded as revenue during the period in which the related food and beverage purchases are made.

The Company recorded revenue from rebates of $ 22.9 thousand during the three months ended March 31, 2024 and $ 26.0 thousand for the three months ended March 31, 2023, respectively, which is included in Franchise royalties and fees on the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss.

The Company recorded revenue from rebates of $ 23.0 thousand and $ 45.9 thousand during the three and six months ended June 30, 2024 and $ 30.0 thousand and $ 0.1 million for the three and six months ended June 30, 2023, respectively, which is included in Franchise royalties and fees on the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).

Rebates earned on purchases by Company-owned stores are recorded as a reduction of Food and beverage costs during the period in which the related food and beverage purchases are made.

Franchise Advertising Fund Contributions

Under the Company’s franchise agreements, the Company and its franchisees are required to contribute a certain percentage of revenues to a national advertising fund.

The Company’s national advertising services are provided on a

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

system-wide basis and therefore, not considered distinct performance obligations for individual franchisees.

Franchise Advertising Fund Contributions

Under the Company’s franchise agreements, the Company and its franchisees are required to contribute a certain percentage of revenues to a national advertising fund.

The Company’s national advertising services are provided on a system-wide basis and therefore, not considered distinct performance obligations for individual franchisees.

In accordance with Topic 606, the Company recognizes these sales-based advertising contributions from franchisees as franchise revenue when the underlying franchisee Company incurs the corresponding advertising expense.

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Conversely, when an advertising contribution fund is under-spent at a period-end, the Company will accrue advertising costs up to advertising contributions recorded in revenue.

The Company recorded contributions from franchisees of $ 15.0 thousand during the three months ended March 31, 2024 and $ 16.0 thousand for the three months ended March 31, 2023, which are included in Franchise advertising fund contributions on the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss.

The Company recorded contributions from franchisees of $ 13.0 thousand and $ 28.0 thousand during the three and six months ended June 30, 2024 and $ 20.0 thousand and $ 36.0 thousand for the three and six months ended June 30, 2023, which are included in Franchise advertising fund contributions on the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).

Deferred Revenue

Deferred revenue primarily includes initial franchise fees received by the Company and revenue from forward sales contracts.

Deferred revenue primarily includes initial franchise fees received by the Company and revenue from forward sales contracts and prepayments received for future trades.

Deferred revenue related to Sadot food services is recognized in income over the life of the franchise.

If a franchise location closes or a franchise agreement is terminated for any reason, the remaining deferred revenue will be recognized in full at that time.

Deferred revenue related to Sadot Agri-Foods is recognized at the completion of the commodity forward sales contract agreements.

Deferred revenue related to Sadot Agri-Foods is recognized at the completion of each commodity forward sales contract agreement.

Stock-Based Expenses

1 unchanged sentence

This includes stock-based consulting fees due to Aggia and other consultants, stock compensation paid to the Company's board of directors, and stock compensation paid to employees.

The consulting fees due to Aggia related to ongoing Sadot Agri-Foods and expansion of the global agri-commodities business.

The consulting fees due to Aggia related to ongoing Sadot Agri-Foods and expansion of the global agri-foods business.

Based on the initial Services Agreement with Aggia LLC FZ, a Company formed under the laws of United Arab Emirates (“Aggia”), the consulting fees were calculated at approximately 80.0 % of the Net Income generated by Sadot Agri-Foods through March 31, 2023.

1 unchanged sentence

See Note 15 – Commitments and contingencies for further details.

For the three months ended March 31, 2024 and 2023, $ 0.8 million and $ 3.4 million, respectively, are recorded as Stock-based expenses in the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss.

The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award.

For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally recorded on the grant date and re-measured on financial reporting dates and vesting dates until the service period is complete.

The fair value amount of the award is then recognized over the period services are required to be provided in exchange for the award, usually the vesting period .

Stock-based expenses for the three and six months ended June 30, 2024 were $ 1.9 million and $ 2.7 million, and for the three and six months ended June 30, 2023 were $ 1.2 million and $ 4.6 million, respectively, and are recorded in the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).

Advertising costs are charged to expense as incurred.

Advertising costs of $ 0.1 million for the three months ended March 31, 2024 and $ 0.1 million for the three months ended March 31, 2023, respectively, are included in Sales, general and administrative expenses.

For the three months ended March 31, 2024 and 2023, $ 24.8 thousand and $ 40.0 thousand, respectively, are included in Cost of goods sold in the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss.

Net Loss per Share

Basic loss per common share is computed by dividing net loss attributable to Sadot Group Inc.

Advertising costs of $ 0.1 million and $ 0.1 million for the three and six months ended June 30, 2024 and $ 32.0 thousand and $ 0.1 million for the three and six months ended June 30, 2023, respectively, are included in Sales, general and administrative expenses.

For the three and six months ended June 30, 2024, $ 24.9 thousand, $ 49.7 thousand and for the three and six months ended June 30, 2023, $ 0.1 million and $ 0.1 million, respectively, are included in Cost of goods sold in the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).

Net Income (Loss) per Share

Basic earnings (loss) per common share is computed by dividing net income (loss) attributable to Sadot Group Inc.

by the weighted average number of common shares outstanding during the period.

Diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of potential common shares, assuming all dilutive potential common shares were issued.

Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

Diluted earnings (loss) per common share is computed by dividing net income (loss) attributable to Sadot Group Inc.

by the weighted average number of common shares outstanding during the period plus any potentially dilutive common shares, resulting from the exercise of warrants, option, calculated using the treasury stock method or the conversion of convertible notes payable, calculated using the if-converted method.

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The following securities are excluded from the calculation of weighted average diluted common shares at March 31, 2024 and 2023, respectively, because their inclusion would have been anti-dilutive:

The following securities are excluded from the calculation of weighted average diluted common shares at June 30, 2024 and 2023, respectively, because their inclusion would have been anti-dilutive:

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Warrants 16,021,747 18,033,640 16,021,747 18,033,640

3 unchanged sentences

Total potentially dilutive shares 25,598,038 26,865,605 25,526,463 27,070,437

The following table sets forth the computation of basic and dilutive net loss per share attributable to the Company’s

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

stockholders:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

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

Net loss attributable to Sadot Group Inc.

Net income / (loss) attributable to Sadot Group Inc.

2,369 190 2,104 ( 876 )

2 unchanged sentences

Effect of potentially dilutive stock options — 204,832 — —

Effect of potentially dilutive RSAs — — 71,575 —

Effect of potentially dilutive convertible debt 5,857,967 — 5,857,967 —

Diluted 50,092,282 33,567,719 48,987,759 31,407,362

Net loss per share attributable to Sadot Group Inc.:

Net income / (loss) per share attributable to Sadot Group Inc.:

Basic 0.05 0.01 0.05 ( 0.03 )

Diluted 0.05 0.01 0.04 ( 0.03 )

The Company engages various vendors to purchase commodities for resale, purchase inputs for farming operations and distribute food products to their Company-owned restaurants.

Purchases from the Company’s five largest commodity suppliers totaled 95 % for the three months ended March 31, 2024.

Purchases from the Company’s largest commodity supplier totaled 98 % for the three months ended March 31, 2023.

Major Vendors

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

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Number of vendors 4 3 4 4

Type Commodities Commodities Commodities Commodities

% of purchases 95 % 96 % 88 % 92 %

Derivative Instruments

The Company is exposed to market risks primarily related to the volatility in the price of carbon credits and soybeans.

To manage these risks, the Company enters into forward sales contracts to sell carbon offset units from time to time.

The Company evaluates its contracts to determine if such contracts qualify as derivatives under FASB Accounting ASC 815, “Derivatives and Hedging” (“ASC 815”).

Derivative instruments are recorded as either assets or liabilities measured at their fair values.

As the Company’s existing contracts do not qualify for hedge accounting treatment, any changes in fair value are recorded as Gain / (loss) on fair value remeasurement within “Other income / (expense)” in the Unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Loss for each reporting period.

Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument is probable within the next 12 months from the balance sheet date.

The Company does not offset its derivative assets and liabilities within the Unaudited Condensed Consolidated Balance Sheets.

Changes in the fair value of derivative instruments are recorded as an adjustment to operating activities in the condensed consolidated statement of cash flows.

Refer to Fair Value of Financial Instruments below, Note 15 – Commitments and contingencies and Note 18 – Financial instruments for additional information regarding the Company’s derivative instruments.

The Company is exposed to market risks primarily related to the volatility in the price of carbon offset units and food and feed commodities (e.g., soybeans, wheat and corn).

To manage these risks, the Company enters into forward sales contracts and hedges from time to time.

The Company evaluates its contracts to determine if such contracts qualify as derivatives

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Derivatives are initially measured at fair value and then are subsequently remeasured to fair value at the reporting date.

under FASB Accounting ASC 815, “Derivatives and Hedging” (“ASC 815”).

Derivative instruments are recorded as either assets or liabilities measured at their fair values.

The Company’s existing forward sales contracts for carbon offset units and soybeans do not qualify for hedge accounting treatment.

Forward sales contracts are derivatives that were purchased and sold at a later date at a fixed or determinable price for a specified period.

Changes in fair value are recognized in Gain / (loss) on fair value remeasurement in the Consolidated Statement of Operations and Other Comprehensive Loss, as appropriate.

We use derivative financial instruments primarily for purposes of hedging exposures to fluctuations in agricultural commodity prices.

Forward sales contract are initially measured at fair value and any changes in fair value of the forward sales contracts are recorded as Gain / (loss) on fair value remeasurement in the Unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Income / (Loss) for each reporting period.

The Company also enters into hedging transactions to mitigate exposures to fluctuations in agricultural commodity prices.

We enter into these derivative contracts for periods consistent with the related underlying exposures, and the contracts do not constitute positions independent of those exposures.

We do not enter into derivative contracts for speculative purposes and do not use leveraged instruments.

We record all open contract positions on our Consolidated Balance Sheets at fair value and typically do not offset these assets and liabilities.

There were two open positions at March 31, 2024.

Cash flows from derivative contracts are included in Net cash provided by operating activities.

There were two open hedge positions at June 30, 2024.

Hedging transaction are initially measured at fair value and then are subsequently remeasured to fair value at the reporting date.

Changes in fair value are recognized in Unrealized gain or loss, until the hedge is completed and at that time the gain or loss is recognized in Gain/ (Loss) on the sale of trading securities in the Consolidated Statement of Operations and Other Comprehensive Income / (Loss).

The Company does not offset its derivative assets and liabilities within the Unaudited Condensed Consolidated Balance Sheets.

Changes in the fair value of derivative instruments and cash flows from derivative contracts are included in Net cash provided by (used in) operating activities in the Condensed Consolidated Statement of Cash Flows.

Fair Value of Financial Instruments

9 unchanged sentences

The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”).

Under ASC 740, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities and net operating loss and credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to impact taxable income.

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

differences are expected to impact taxable income.

Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

3 unchanged sentences

The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.

Uncertain tax positions have had no impact on the Company’s

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

financial condition, results of operations or cash flows.

Uncertain tax positions have had no impact on the Company’s financial condition, results of operations or cash flows.

The Company does not expect any significant changes in its unrecognized tax benefits within years of the reporting date.

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

Currency Translation Differences

3 unchanged sentences

Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined.

Foreign exchange differences arising on translation are recognized in the Unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Loss.

Foreign exchange differences arising on translation are recognized in the Unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Income / (Loss).

The assets and liabilities of foreign operations, including farm operations and fair value adjustments arising on consolidation, are translated to the Company’s reporting currency, United States Dollars, at foreign exchange rates at the reporting date.

7 unchanged sentences

The Company consolidates subsidiaries in which the Company holds, directly or indirectly, more than 50% of the voting rights.

Non-controlling interests represent third-party equity ownership interests in the Company’s consolidated entities.

The amount of net income attributable to Non-controlling interests is disclosed in the Unaudited Condensed Consolidated Statements of Income and Other Comprehensive Loss.

Non-controlling interests represent third-party equity ownership interests in the Company’s farming consolidated entity.

The amount of net income attributable to Non-controlling interests is disclosed in the Unaudited Condensed Consolidated Statements of Income and Other Comprehensive Income / (Loss).

Recent Accounting Pronouncements

5 unchanged sentences

The adoption of this guidance did not have a material impact on the Company’s Unaudited Condensed Consolidated Financial Statements and related disclosures.

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

5 unchanged sentences

In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06 Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity.

Among other changes, ASU 2020-06 removes the liability and equity separation model for convertible instruments with a cash conversion feature, and

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

as a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt.

Among other changes, ASU 2020-06 removes the liability and equity separation model for convertible instruments with a cash conversion feature, and as a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt.

Similarly, the embedded conversion feature will no longer be amortized into income as interest expense over the life of the instrument.

22 unchanged sentences

For more details over the resulting impairment test performed prior to measuring the disposal group at the lower of their carrying amount or fair value less cost to sell, see Note 8 – Goodwill and other intangible assets, net.

The following presents the major classes of assets and liabilities for the Sadot food services reporting unit held for sale as of March 31, 2024:

The following presents the major classes of assets and liabilities for the Sadot food services reporting unit held for sale as of June 30, 2024:

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

March 31, 2024

Accounts receivable, net 260

June 30, 2024

Accounts receivable, net of allowance for doubtful accounts of $ 0.1 million

Inventory 110

7 unchanged sentences

Accounts payable and accrued expenses 410

Notes payable, current, net 121

Notes payable, current 105

Operating lease liability, current 236

5 unchanged sentences

Liabilities held for sale 3,111

Sadot Food Services had the following pre-tax losses for each quarter ended March 31:

Sadot Food Services Net Loss Before Income Tax $’000

Sadot Food Services had the following pre-tax losses:

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

$’000 $’000 $’000 $’000

Sadot Food Services Net Loss Before Income Tax ( 962 ) ( 474 ) ( 1,545 ) ( 1,197 )

Allowance for Credit Losses on Accounts Receivable

At March 31, 2024 and December 31, 2023, a summary of the activity in the allowance for credit losses on accounts receivable appears below:

March 31, 2024 December 31, 2023

For the periods ended June 30, 2024 and December 31, 2023, a summary of the activity in the allowance for credit losses on accounts receivable appears below:

June 30, 2024 December 31, 2023

Balance at beginning of period 173 23

1 unchanged sentence

Adjustments related to Sadot agri-foods 199 78

Transferred to assets held for sale ( 115 ) —

Balance at end of period 277 173

2 unchanged sentences

Other Current Assets

In the first quarter of 2024, the Company transferred $ 0.1 million of other current assets to Assets held for sale.

In the first two quarters of 2024, the Company transferred $ 0.1 million of other current assets to Assets held for sale.

See Note 3 – Assets held for sale for additional information.

At March 31, 2024 and December 31, 2023, the Company’s other current assets consists of the following:

March 31, 2024 December 31, 2023

At June 30, 2024 and December 31, 2023, the Company’s other current assets consists of the following:

June 30, 2024 December 31, 2023

Prepaid expenses 1,306 766

3 unchanged sentences

Notes receivable, current — 148

Deposit on farmland 672 —

Prepaid forward on carbon offsets 6,424 6,424

1 unchanged sentence

Other Non-Current Assets

In the first quarter of 2024, the Company transferred $ 0.1 million of other non-current assets to Assets held for sale.

In the first two quarters of 2024, the Company transferred $ 0.1 million of other non-current assets to Assets held for sale.

See Note 3 – Assets held for sale for additional information.

At March 31, 2024 and December 31, 2023, the Company’s other non-current assets consists of the following:

March 31, 2024 December 31, 2023

At June 30, 2024 and December 31, 2023, the Company’s other non-current assets consists of the following:

June 30, 2024 December 31, 2023

Security deposit 14 76

5 unchanged sentences

Property and Equipment, Net

In the first quarter of 2024, the Company transferred $ 0.6 million of Property and equipment to Assets held for sale.

In the first two quarters of 2024, the Company transferred $ 0.5 million of Property and equipment, net to Assets held for sale.

See Note 3 – Assets held for sale for additional information.

As of March 31, 2024 and December 31, 2023, Property and equipment consist of the following:

March 31, 2024 December 31, 2023

As of June 30, 2024 and December 31, 2023, Property and equipment consist of the following:

June 30, 2024 December 31, 2023

Furniture and equipment 230 1,026

6 unchanged sentences

Property and equipment, net 11,888 12,883

Depreciation expense amounted to $ 0.2 million for the three months ended March 31, 2024 and $ 0.3 million during the three months ended March 31, 2023, respectively.

The Company wrote off Property and equipment related to closed locations and future locations that were terminated due to a change of business focus and recorded a loss on disposal of $ 0.1 million and nil for the three months ended March 31, 2024 and 2023, respectively, in the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income.

Depreciation expense amounted to $ 0.1 million and $ 0.3 million for the three and six months ended June 30, 2024 and $ 0.2 million and $ 0.5 million during the three and six months ended June 30, 2023, respectively.

The Company wrote off Property and equipment related to closed locations and future locations that were terminated due to a change of business focus and recorded a loss on disposal of $ 0.1 million and $ 0.2 million during the three and six months ended June 30, 2024 and $ 0.5 million and $ 0.5 million for the three and six months ended June 30, 2023, respectively, in the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income / (Loss).

Goodwill and Other Intangible Assets, Net

1 unchanged sentence

Intangible assets are amortized over useful lives ranging from 5 to 10 years.

In the first quarter of 2024, the Company moved the remaining intangible assets to assets held for sale and as a result of the reclassification, the Company stopped amortizing these assets.

In the first two quarters of 2024, the Company moved the remaining intangible assets to assets held for sale and as a result of the reclassification, the Company stopped amortizing these assets.

See Note 3 – Assets held for sale for additional information.

22 unchanged sentences

4,611 — ( 592 ) 4,019 2,833 — ( 118 ) ( 2,715 ) —

Amortization expense related to intangible assets was $ 0.1 million and $ 0.3 million for the three months ended March 31, 2024 and 2023, respectively.

Amortization expense related to intangible assets was nil and $ 0.1 million for the three and six months ended June 30, 2024 and $ 0.3 million and $ 0.6 million for the three and six months ended June 30, 2023, respectively.

A summary of the goodwill assets is presented below:

3 unchanged sentences

Impairment of goodwill — — — —

Goodwill, net at March 31, 2023 570 1,798 258 2,626

Goodwill, net at June 30, 2023 570 1,798 258 2,626

Goodwill, net at December 31 2023 — 1,798 — 1,798

Transfer to assets held for sale — ( 1,798 ) — ( 1,798 )

Goodwill, net at March 31, 2024 — — — —

Goodwill, net at June 30, 2024 — — — —

Sadot Group, Inc.

1 unchanged sentence

Accounts Payables and Accrued Expenses

In the first quarter of 2024, the Company transferred $ 0.3 million of Accounts payables and accrued expenses to Assets held for sale.

In the first two quarters of 2024, the Company transferred $ 0.4 million of Accounts payables and accrued expenses to Assets held for sale.

See Note 3 – Assets held for sale for additional information.

Accounts payables and accrued expenses consist of the following:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Accounts payable 3,622 3,488

20 unchanged sentences

In connection with the SEPA, and subject to the condition set forth therein, Yorkville has agreed to advance to the Company in the form of convertible promissory notes (the “Convertible Notes”) an aggregate principal amount of $ 4.0 million (the “Pre-Paid Advance”).

The Pre-Paid Advance was disbursed on September 22, 2023 with respect to $ 3.0 million and the balance of $ 1.0 million will be disbursed upon the registration statement registering the resale of the shares of common stock issuable under the SEPA being declared effective.

The Pre-Paid Advance was disbursed on September 22, 2023 in the principal amount of $ 3.0 million and the balance of $ 1.0 million on October 30, 2023.

The purchase price for the Pre-Paid Advance is 94.0 % of the principal amount of the Pre-Paid Advance.

Interest shall accrue on the outstanding balance of any Pre-Paid Advance at an annual rate equal to 6.0 %, subject to an increase to 18 % upon an event of default as described in the Convertible Notes.

The maturity date will be 12 -months after the initial closing of the Pre-Paid Advance.

Yorkville may convert the Convertible Notes into shares of the Company’s common stock at a conversion price equal to the lower of $ 1.11495 or 95 % of the lowest daily VWAP during the seven consecutive trading days immediately proceeding the conversion (the “Conversion Price”), which in no event may the Conversion Price be lower than $ 0.33 (the “Floor Price”).

The maturity date is 12 -months after the initial closing of the Pre-Paid Advance.

Yorkville may convert the Convertible Notes into shares of the Company’s common stock at a conversion price equal to the lower of $ 1.11495 or 95 % of the lowest daily VWAP during the seven consecutive trading days immediately preceding the conversion (the “Conversion Price”), which in no event may the Conversion Price be lower than $ 0.33 (the “Floor Price”).

In addition, upon the occurrence and during the continuation of an event of default, the Convertible Notes shall become immediately due and payable and the Company shall pay to Yorkville the principal and interest due thereunder.

2 unchanged sentences

The Exchange Cap Trigger will not apply in the event the Company has obtained the approval from its stockholders in accordance with the rules of Nasdaq Stock Market for the issuance of shares of common stock pursuant to the transactions contemplated in the Convertible Note and the SEPA in excess of 19.99 % of the aggregate number of shares of common stock issued and outstanding as of the effective date of the SEPA (the “Exchange Cap”).

No triggering event occurred as of March 31, 2024.

As of March 31, 2024, 3.9 million shares of common stock have been converted leaving an aggregate principle balance remaining of 2.7 million.

No triggering event occurred as of June 30, 2024.

As of June 30, 2024, 3.9 million shares of common stock have been converted leaving an aggregate principle balance remaining of $ 2.0 million.

Notes Payable

During the three months ended March 31, 2024 and 2023, the Company repaid a total amount of $ 4.3 million and $ 0.1 million, respectively, of the notes payable.

As of March 31, 2024, the Company had an aggregate amount of $ 3.6 million in notes payable.

The notes had interest rates ranging between 6.00 % - 24.39 % per annum, due on various dates through September 2024.

In the first quarter of 2024, the Company transferred $ 0.7 million of notes payable to Assets held for sale.

The Company repaid a total amount of $ 2.1 million and $ 6.4 million during the three and six months ended June 30, 2024, and $ 0.1 million and $ 0.1 million, during the three and six months ended June 30, 2023, respectively, of the notes payable.

As of June 30, 2024, the Company had an aggregate amount of $ 3.7 million in notes payable.

The notes had interest rates ranging between 6.00 % - 25.80 % per annum, due on various dates through January 2025.

In the first two quarters of 2024, the Company transferred $ 0.7 million of notes payable to Assets held for sale.

See Note 3 – Assets held for sale for additional information.

The maturities of notes payable as of March 31, 2024, are as follows:

The maturities of notes payable as of June 30, 2024, are as follows:

Principal Amount

2 unchanged sentences

7/1/26-6/30/27 —

1/1/27-12/31/27 —

Total maturities 3,771

1 unchanged sentence

Notes payable, net 3,708

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Leases Held for Sale

The Company’s leases consist of restaurant locations.

The Company’s leases consist of restaurant locations and corporate offices.

We determine if a contract contains a lease at inception.

The leases generally have remaining terms of 1 - 10 years and most leases included the option to extend the lease for an additional 5 years.

The total lease cost associated with right of use assets and operating lease liabilities for the three months ended March 31, 2024 and 2023, was $ 0.1 million and $ 0.1 million, respectively, and has been recorded in the Unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Loss as Cost of goods sold.

In the first quarter of 2024 all of the Company's leased assets of $ 0.9 million and lease liabilities of $ 1.0 million were moved to Assets held for sale.

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The total lease cost associated with right of use assets and operating lease liabilities was $ 0.6 million and $ 0.7 million for the three and six months ended June 30, 2024 and $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2023, respectively, and has been recorded in the Unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Income / (Loss) as Cost of goods sold.

In the first two quarters of 2024 all of the Company's leased assets of $ 0.7 million and lease liabilities of $ 0.8 million were moved to Assets held for sale.

See Note 3 – Assets held for sale for additional information.

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

March 31, 2024 December 31, 2023

Right to use asset 887 1,284

Transferred to assets held for sale ( 887 ) —

June 30, 2024 December 31, 2023

Total lease assets 841 1,284

Transferred to assets held for sale ( 699 ) —

Right to use asset 142 1,284

Total lease liabilities 900 1,412

Transferred to liabilities held for sale ( 756 ) —

Operating leases – current 21 385

Operating leases – non-current 123 1,027

Transferred to liabilities held for sale ( 953 ) —

Total lease liabilities — 1,412

The table below presents the future minimum lease payments under the noncancellable operating leases as of March 31, 2024:

Operating Leases

The table below presents the future minimum lease payments under the noncancellable operating leases as of June 30, 2024:

Total Operating Leases Held for Sale Current Operating Leases

$’000 $’000 $’000

7/1/24-6/30/25 357 ( 312 ) 45

7/1/25-6/30/26 195 ( 150 ) 45

7/1/26-6/30/27 149 ( 104 ) 45

7/1/27-6/30/28 152 ( 107 ) 45

7/1/28-6/30/29 144 ( 110 ) 34

Thereafter 249 ( 249 ) —

1 unchanged sentence

Less imputed interest ( 346 ) 276 ( 70 )

Less assets transferred to held for sale ( 953 )

Present value of lease liabilities 900 ( 756 ) 144

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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

As of March 31, 2024

As of June 30, 2024

Weighted-average remaining lease term (in years)

2 unchanged sentences

Operating leases 12.9 %

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Deferred Revenue

In the first quarter of 2024, the Company transferred $ 1.5 million of deferred revenue to Liabilities held for sale.

In the first two quarters of 2024, the Company transferred $ 1.0 million of deferred revenue to Liabilities held for sale.

See Note 3 – Assets held for sale for additional information.

The Company's deferred revenue consists of the following:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Deferred revenues, net 7,932 2,784

1 unchanged sentence

Deferred revenues, non-current — 1,555

Deferred revenue related to commodity forward sales contracts were $ 2.5 million and $ 1.4 million, as of March 31, 2024 and December 31, 2023, respectively.

Deferred revenue related to deferred franchise fees were nil and $ 1.4 million, as of March 31, 2024 and December 31, 2023, respectively.

Deferred revenue related to commodity forward sales contracts and prepayments on future trades were $ 7.9 million and $ 1.4 million, as of June 30, 2024 and December 31, 2023, respectively.

Deferred revenue related to deferred franchise fees were nil and $ 1.4 million, as of June 30, 2024 and December 31, 2023, respectively.

Other Current Liabilities

In the first quarter of 2024, the Company transferred $ 0.2 million of other current liabilities to Liabilities held for sale.

In the first two quarters of 2024, the Company transferred $ 0.2 million of other current liabilities to Liabilities held for sale.

See Note 3 – Assets held for sale for additional information.

Other current liabilities consist of the following:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Gift card liability — 13

5 unchanged sentences

92,278 46,270

See Note 2 – Significant accounting policies for details related to the gift card liability and advertising fund liability.

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The tax effects of temporary differences that give rise to deferred tax assets and liabilities as of March 31, 2024 and December 31, 2023 are presented below:

March 31, 2024 December 31, 2023

The tax effects of temporary differences that give rise to deferred tax assets and liabilities as of June 30, 2024 and December 31, 2023 are presented below:

June 30, 2024 December 31, 2023

Deferred tax assets:

4 unchanged sentences

163(j) adjustment 361 100

Property and equipment 8 —

Accrued expenses 84 106

12 unchanged sentences

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

Three Months Ended March 31,

Six Months Ended June 30,

State and local:

Current ( 7 ) ( 6 )

Change in valuation allowance — —

3 unchanged sentences

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the periods shown, are as follows:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Federal income tax benefit at statutory rate 21.0 % 21.0 %

13 unchanged sentences

The net operating loss carryforwards generated prior to 2018, if not utilized, will expire from 2035 to 2037 for federal and state purposes.

As of March 31, 2024 and December 31, 2023, the Company has determined that it is more likely than not that the Company will not recognize the future tax benefit of the loss carryforwards and has recognized a valuation allowance of $ 12.8 million and $ 12.8 million, respectively.

The valuation allowance decreased by approximately $ 58.0 thousand.

As of June 30, 2024 and December 31, 2023, the Company has determined that it is more likely than not that the Company will not recognize the future tax benefit of the loss carryforwards and has recognized a valuation allowance of $ 12.7 million and $ 12.8 million, respectively.

The valuation allowance decreased by approximately $ 0.1 million.

Utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, and similar state provisions.

6 unchanged sentences

The acquisition price for these VCUs is $ 35.69 per VCU, or $ 6.4 million in the aggregate, which was paid on September 23, 2023.

The aggregate purchase price paid of $ 6.4 million was recorded on the balance sheet within the “Prepaid forward on carbon offsets” account.

The aggregate purchase price paid of $ 6.4 million was recorded on the balance sheet within the Gain on fair value remeasurement account.

On September 13, 2023, the Company through Sadot Agri-Foods, entered into a separate forward sales agreement pursuant to which the purchaser agreed to acquire 180,000 VCUs between 2025 and 2026 for an acquisition price of $ 44.62 per VCU, or $ 8.0 million.

33 unchanged sentences

Following the Share Repurchase Date, in the event that there is net income for any fiscal quarter, then an amount equal to 40 % of the net income shall accrue as debt payable by Sadot Group to Aggia (the “Debt”), until such Debt has reached a maximum of $ 71.5 million.

Additionally, for the three months ended March 31, 2024, the Company reimbursed Aggia for all operating costs related to Sadot Agri-Foods' operating expenses including labor and operating expenses and general administrative expenses of $ 0.9 million, $ 0.1 million and nil , respectively.

For the three months ended March 31, 2023, operating costs related to Sadot Agri-Foods' operating expenses including labor and operating expenses and general administrative expenses were $ 0.6 million, $ 0.2 million and $ 0.1 million, respectively.

Additionally, for the three and six months ended June 30, 2024, the Company reimbursed Aggia for all operating costs related to Sadot Agri-Foods' operating expenses including labor of $ 0.9 million and $ 1.8 million, operating expenses of $ 0.1 million and $ 0.2 million and general administrative expenses of nil and $ 5.0 thousand.

For the three and six months ended June 30, 2023, operating costs related to Sadot Agri-Foods' operating expenses including labor of $ 0.8 million and $ 1.4 million, operating expenses of $ 0.2 million and $ 0.3 million and general administrative expenses of nil and $ 0.1 million, respectively.

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

During the three months ended March 31, 2024 and 2023, the Company entered into various Pokemoto franchise agreements for a total of 15 and 5 , respectively, potentially new Pokemoto locations with various franchisees.

The Franchisees paid the Company an aggregate of $ 0.2 million for the three months ended March 31, 2024 and this has been recorded in liabilities held for sale as of March 31, 2024.

The Company entered into various Pokemoto franchise agreements for a total of 1 and 15 for the three and six months ended June 30, 2024, and 8 and 13 , for the three and six months ended June 30, 2023 respectively, potentially new Pokemoto locations with various franchisees.

The Franchisees paid the Company an aggregate of nil and $ 0.2 million for the three and six months ended June 30, 2024 and this has been recorded in liabilities held for sale as of June 30, 2024.

See Note 3 – Assets held for sale for additional information.

9 unchanged sentences

ACC has not performed against this agreement.

The Company had accrued a sales tax liability for approximately $ 33.0 thousand and $ 28.0 thousand as of March 31, 2024, and December 31, 2023, respectively.

The Company had accrued a sales tax liability for approximately $ 3.2 thousand and $ 28.0 thousand as of June 30, 2024, and December 31, 2023, respectively.

All current state and local sales taxes from January 1, 2018, for open Company-owned locations have been fully paid and in a timely manner.

1 unchanged sentence

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.

As of December 31, 2023, the Company has accrued for the liability in accounts payable and accrued expenses.

As of June 30, 2024 and December 31, 2023, the Company has accrued for the liability in accounts payable and accrued expenses.

In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business.

9 unchanged sentences

Roper received an additional bonus of $ 0.1 million on March 2, 2023 and an additional $ 25.0 thousand which was paid on March 8, 2024, relating to the appointment of certain directors pursuant to the agreement with Aggia.

Roper is terminated for any reason, he will be entitled to receive accrued salary and vacation pay, accrued bonus payments, all expense reimbursements and shall be entitled to exercise any

Roper is terminated for any reason, he will be entitled to receive

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

equity compensation rights through the last day of the term applicable to such stock option.

accrued salary and vacation pay, accrued bonus payments, all expense reimbursements and shall be entitled to exercise any equity compensation rights through the last day of the term applicable to such stock option.

Roper is terminated by the Company for any reason other than cause or resigns for a good reason, Mr.

39 unchanged sentences

Infante is entitled to a base salary at the annualized rate of $ 0.2 million.

Infante will be eligible for a discretionary performance bonus up to 25 % of her annual salary.

Infante will be entitled to an additional

Infante will be eligible for a

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

bonus of $ 25.0 thousand which was paid on March 8, 2024, relating to the appointment of certain directors pursuant to the agreement with Aggia.

discretionary performance bonus up to 25 % of her annual salary.

Infante will be entitled to an additional bonus of $ 25.0 thousand which was paid on March 8, 2024, relating to the appointment of certain directors pursuant to the agreement with Aggia.

Infante is terminated for any reason, she will be entitled to receive accrued salary and vacation pay, accrued bonus payments, all expense reimbursements and shall be entitled to exercise any equity compensation rights through the last day of the term applicable to such stock option.

18 unchanged sentences

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

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

For the Three Months Ended March 31, 2024

The following table sets forth the results of operations for the relevant segments for the three and six months ended June 30, 2024:

For the Three Months Ended June 30, 2024

Sadot food service Sadot agri-foods Corporate adj.

6 unchanged sentences

Cost of goods sold ( 1,219 ) ( 171,308 ) — ( 172,527 )

Gross (loss) profit 98 ( 438 ) — ( 340 )

Gross profit 527 1,985 — 2,512

Depreciation and amortization expenses — ( 92 ) — ( 92 )

3 unchanged sentences

Sales, general and administrative expenses ( 728 ) ( 847 ) ( 854 ) ( 2,429 )

Income / (loss) from operations ( 224 ) 1,046 ( 2,775 ) ( 1,953 )

Other income 19 — — 19

Interest income / (expense), net ( 757 ) ( 407 ) 403 ( 761 )

Change in fair value of stock-based compensation — — 1,214 1,214

Gain on fair value remeasurement — 3,275 — 3,275

Gain on sale of trading securities — 528 — 528

Income / (Loss) Before Income Tax ( 962 ) 4,442 ( 1,158 ) 2,322

Income tax expense — — ( 5 ) ( 5 )

Net income / (loss) ( 962 ) 4,442 ( 1,163 ) 2,317

Total assets 6,335 152,503 6,936 165,774

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Six Months Ended June 30, 2024

Sadot food service Sadot agri-foods Corporate adj.

Total segments

$’000 $’000 $’000 $’000

Commodity sales — 279,800 — 279,800

Company restaurant sales, net of discounts 2,149 — — 2,149

Franchise royalties and fees 997 — — 997

Franchise advertising fund contributions 28 — — 28

Cost of goods sold ( 2,550 ) ( 278,254 ) — ( 280,804 )

Gross profit 624 1,546 — 2,170

Depreciation and amortization expenses ( 189 ) ( 183 ) — ( 372 )

Franchise advertising fund expenses ( 28 ) — — ( 28 )

Post-closing expenses ( 29 ) — — ( 29 )

Stock-based expenses — — ( 2,717 ) ( 2,717 )

Sales, general and administrative expenses ( 1,431 ) ( 1,577 ) ( 1,516 ) ( 4,524 )

Loss from operations ( 1,053 ) ( 214 ) ( 4,233 ) ( 5,500 )

Other income 19 — — 19

Interest income / (expense), net ( 511 ) ( 813 ) 73 ( 1,251 )

1 unchanged sentence

Gain on fair value remeasurement — 6,534 — 6,534

Loss on sale of trading securities — ( 11 ) — ( 11 )

(Loss) / Income Before Income Tax ( 1,090 ) 1,581 ( 803 ) ( 312 )

Gain on sale of trading securities — 518 — 518

Income / (Loss) Before Income Tax ( 1,545 ) 6,025 ( 2,469 ) 2,011

Income tax expense — — ( 7 ) ( 7 )

Net (loss) / income ( 1,090 ) 1,581 ( 804 ) ( 313 )

Net income / (loss) ( 1,545 ) 6,025 ( 2,476 ) 2,004

Total assets 6,335 152,503 6,936 165,774

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The following table sets forth the results of operations for the relevant segments for the three months ended March 31, 2023:

For the Three Months Ended March 31, 2023

The following table sets forth the results of operations for the relevant segments for the three and six months ended June 30, 2023:

For the Three Months Ended June 30, 2023

Sadot food service Sadot agri-foods Corporate adj.

5 unchanged sentences

Franchise advertising fund contributions 20 — — 20

Other revenues 13 — — 13

Cost of goods sold ( 2,663 ) ( 154,576 ) — ( 157,239 )

Gross (loss) profit 136 4,537 — 4,673

Gross profit 95 2,983 — 3,078

Depreciation and amortization expenses ( 441 ) — — ( 441 )

Franchise advertising fund expenses ( 20 ) — — ( 20 )

Post-closing expenses ( 19 ) — — ( 19 )

Stock-based expenses — — ( 1,175 ) ( 1,175 )

Sales, general and administrative expenses ( 88 ) ( 301 ) ( 1,394 ) ( 1,783 )

Income / (loss) from operations ( 473 ) 2,682 ( 2,569 ) ( 360 )

Other income — — 251 251

Interest expense, net ( 1 ) ( 21 ) — ( 22 )

Change in fair value of stock-based compensation — — 324 324

Income / (Loss) Before Income Tax ( 474 ) 2,661 ( 1,994 ) 193

Income tax expense ( 1 ) — ( 2 ) ( 3 )

Net income / (loss) ( 475 ) 2,661 ( 1,996 ) 190

Total assets 5,947 56,204 10,172 72,323

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Six Months Ended June 30, 2023

Sadot food service Sadot agri-foods Corporate adj.

Total segments

$’000 $’000 $’000 $’000

Commodity sales — 367,925 — 367,925

Company restaurant sales, net of discounts 4,788 — — 4,788

Franchise royalties and fees 522 — — 522

Franchise advertising fund contributions 36 — — 36

Other revenues 13 — — 13

Cost of goods sold ( 5,129 ) ( 360,406 ) — ( 365,535 )

Gross profit 230 7,519 — 7,749

Depreciation and amortization expenses ( 1,074 ) — — ( 1,074 )

Franchise advertising fund expenses ( 36 ) — — ( 36 )

Pre-opening expenses ( 36 ) — — ( 36 )

2 unchanged sentences

Sales, general and administrative expenses ( 171 ) ( 587 ) ( 3,106 ) ( 3,864 )

Loss from operations ( 725 ) 4,251 ( 5,133 ) ( 1,607 )

Interest income, net 3 — — 3

Income / (loss) from operations ( 1,199 ) 6,932 ( 7,700 ) ( 1,967 )

Other income — — 251 251

Interest income / (expense), net 2 — ( 21 ) ( 19 )

Change in fair value of stock-based compensation — — 865 865

Loss Before Income Tax ( 722 ) 4,251 ( 4,592 ) ( 1,063 )

(Loss) / Income Before Income Tax ( 1,197 ) 6,932 ( 6,605 ) ( 870 )

Income tax expense ( 2 ) — ( 4 ) ( 6 )

Net loss ( 723 ) 4,251 ( 4,594 ) ( 1,066 )

Net income / (loss) ( 1,199 ) 6,932 ( 6,609 ) ( 876 )

Total assets 5,947 56,204 10,172 72,323

During the first quarter of Fiscal 2024, assets related to our Sadot food services segment met the criteria for classification as Assets Held for Sale.

During the first two quarters of 2024, assets related to our Sadot food services segment met the criteria for classification as Assets Held for Sale.

For additional information, see Note 2 – Significant accounting policies and Note 3 – Assets held for sale.

5 unchanged sentences

Fair Value Measurement

The following tables presents information about the Company's assets and liabilities that are measure at fair value on a recurring basis at March 31, 2024 and December 31, 2023 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.

The following tables presents information about the Company's assets and liabilities that are measure at fair value on a recurring basis at June 30, 2024 and December 31, 2023 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

March 31, 2024

June 30, 2024

Level 1 Level 2 Level 3 Total

Financial liabilities:

$’000 $’000 $’000 $’000

Financial assets:

Forward sales derivative — 8,026 — 8,026

— 8,026 — 8,026

Financial liabilities:

Contract liability — 92,094 — 92,094

Derivative liability — 184 — 184

Forward sales derivatives — 4,750 — 4,750

— 92,278 — 92,278

1 unchanged sentence

Level 1 Level 2 Level 3 Total

Financial liabilities:

$’000 $’000 $’000 $’000

Financial assets:

Forward sales derivative — 1,491 — 1,491

— 1,491 — 1,491

Financial liabilities:

Contract liability — 92,094 — 92,094

Forward sales derivatives — 1,491 — 1,491

— 92,094 — 92,094

There were no transfers between fair value levels during the three months ended March 31, 2024.

There were no transfers between fair value levels during the three and six months ended June 30, 2024.

See Note 19 – Equity for details related to accrued compensation liability being fair valued using Level 1 inputs.

See Note 15 – Commitments and contingencies and Note 18 – Financial instruments for details related to the Derivative liability being fair valued using Level 2 inputs.

Forward Sales Derivative and Derivative Liability

The Forward sales derivative asset and Derivative liability primarily relate to the forward sale contracts.

The fair value of the Forward sales derivative asset and Derivative liability is based on quoted prices for similar assets and liabilities in active market or inputs that are observable which represent Level 2 measurements within the fair value hierarchy and is based on observable prices for similar assets sourced by an independent marketplace.

The Forward sales derivative refers to the forward sales contracts executed in September, November and December 2023.

Refer to 15 – Commitments and contingencies, for a more detailed discussion of the transactions.

During the three months ended March 31, 2024, the fair value increased by $ 3.3 million .

Derivative Liability

The Derivative liability is primarily related to open hedging positions as of June 30, 2024.

The fair value of the Derivative liability is based on quoted prices for similar assets and liabilities in active market or inputs that are observable which represent Level 2 measurements within the fair value hierarchy and is based on observable prices for similar assets sourced by an independent marketplace.

Please refer to Please refer to Note 2 – Significant accounting policies for additional information on ASC 815 leveling.

5 unchanged sentences

Commodity futures, options and swap contracts are either designated as cash-flow hedging instruments or are undesignated.

Changes in the fair value on the portion of the derivative included in the assessment of hedge effectiveness of cash-flow hedges are recorded in other comprehensive income (loss), until earnings are affected by the variability of cash flows.

The change in fair value on undesignated instruments is recorded in Other income / (expense).

There were two current contracts designated as a hedge at March 31, 2024.

We net settle amounts due, if any, under the contract with our counterparty.

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Changes in the fair value on the portion of the derivative included in the assessment of hedge effectiveness of cash-flow hedges are recorded in Other Comprehensive Income / (Loss), until earnings are affected by the variability of cash flows.

The change in fair value on undesignated instruments is recorded through earnings in Unrealized gain / (loss) and gain / (loss) on sale of trading securities.

There were two current contracts designated as a hedge at June 30, 2024.

We net settle amounts due, if any, under the contract with our counterparty.

Additionally, the Company is exposed to market risks primarily related to the volatility in the price of carbon credits.

1 unchanged sentence

The Company evaluates its contracts to determine if such contracts qualify as derivatives under ASC 815.

As the Company’s existing carbon offset contracts do not qualify for hedge accounting treatment, any changes in fair value are recorded as Gain (loss) on fair value remeasurement within Other income / (expense).

The Forward sales derivative asset and Derivative liability primarily relate to the forward sale contracts.

As the Company’s existing carbon offset contracts do not qualify for hedge accounting treatment, any changes in fair value are recorded as Gain (loss) on fair value remeasurement within Gain/loss.

The Forward sales derivative asset and Derivative liability primarily relate to the forward sale contracts and open hedge positions.

The fair value of the Forward sales derivative asset and Derivative liability is based on quoted prices for similar assets and liabilities in active market or inputs that are observable, which represent Level 2 measurements within the fair value hierarchy and is based on observable prices for similar assets sourced by an independent marketplace.

The Forward sales derivative refers to the forward sales contracts executed in September, November and December 2023.

The Forward sales derivative asset refers to the forward sales contracts executed in September, November and December 2023.

Refer to Note 15 – Commitments and contingencies, for a more detailed discussion of the transactions.

During the three months ended March 31, 2024, the fair value increased by $ 3.3 million.

During the three and six months ended June 30, 2024, the fair value increased by $ 3.3 million and $ 6.5 million, respectively.

See Note 2 – Significant accounting policies, Note 15 – Commitments and contingencies and Note 17 – Fair value measurement for further details regarding the Derivative liability.

2 unchanged sentences

Under the 2021 Plan, the Company reserved 1.5 million shares of common stock for issuance.

As of March 31, 2024, 0.7 million shares have been issued and 0.8 million options to purchase shares have been awarded under the 2021 Plan.

As of June 30, 2024, 0.7 million shares have been issued and 0.7 million options to purchase shares have been awarded under the 2021 Plan.

The Company’s board of directors and shareholders approved and adopted on February 28, 2023 the 2023 Equity Incentive Plan (“2023 Plan”) under which stock options and restricted stock may be granted to officers, directors, employees and consultants in the form of non-qualified stock options, incentive stock-options, stock appreciation rights, restricted stock awards, restricted stock Units, stock bonus awards, performance compensation awards (including cash bonus awards) or any combination of the foregoing.

Under the 2023 Plan, the Company reserved 2.5 million shares of common stock for issuance.

As of March 31, 2024, 2.4 million shares have been issued and 0.1 million option to purchase shares have been awarded under the 2023 Plan.

As of June 30, 2024, 2.4 million shares have been issued and 0.1 million option to purchase shares have been awarded under the 2023 Plan.

The Company’s board of directors and shareholders approved and adopted on December 20, 2023 the 2024 Equity Incentive Plan (“2024 Plan”) under which stock options and restricted stock may be granted to officers, directors, employees and consultants in the form of non-qualified stock options, incentive stock-options, stock appreciation rights, restricted stock awards, restricted stock Units, stock bonus awards, performance compensation awards (including cash bonus awards) or any combination of the foregoing.

Under the 2024 Plan, the Company reserved 7.5 million shares of common stock for issuance.

As of March 31, 2024, 2.2 million shares have been issued under the 2024 Plan.

As of June 30, 2024, 2.3 million shares have been issued under the 2024 Plan.

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Common Stock Issuances

1 unchanged sentence

On March 27, 2023, the Company authorized the issuance of 2.8 million shares of common stock to Aggia as consulting fees earned during the fourth quarter of 2022.

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

On April 5, 2023 the Company authorized the issuance of 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 May 10, 2023 the Company authorized the issuance of 0.1 million shares of common stock to a consultant for services rendered.

On May 25, 2023, the Company authorized the issuance of 2.7 million shares of common stock to Aggia as consulting fees earned during the first quarter of 2023.

On January 4, 2024 the Company authorized the issuance 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.

9 unchanged sentences

On March 31, 2024, the Company vested 0.5 million shares of common stock to Aggia as consulting fees earned during the fourth quarter of 2023.

Change in fair value of stock-based compensation on the Unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Loss is made up of the difference between the agreed upon issuance price, per the servicing agreement with Aggia and the market price on the day of issuance.

For the three months ended March 31, 2024 and 2023, Change in fair value of stock-based compensation was $ 0.5 million and $ 0.5 million, respectively.

On June 30, 2024, the Company vested 1.4 million shares of common stock to Aggia as consulting fees earned during the first quarter of 2024.

Restricted Share Awards

1 unchanged sentence

These RSA are considered issued as of the effective date on April 1, 2023.

Pursuant to the Services Agreement these RSA's vest on a progressive schedule, at a rate equal to the Net Income of Sadot Agri-Foods, calculated quarterly divided by $ 3.125 , which for accounting purposes shall equal 40 % of the net income of Sadot Agri-Foods, calculated quarterly divided by $ 1.25 .

Shares shall be considered issued and outstanding as of the Addendum Date and Aggia shall hold rights associated with such Shares;

provided, however, Shares not earned or purchased may not be transferred, offered, pledged, sold, subject to a contract to sell, granted any options for the sale of or otherwise disposed of, directly or indirectly.

The total RSA's vested for Aggia for the three months ended March 31, 2024 were 0.5 million.

Pursuant to the Services Agreement these RSA's vest on a progressive schedule, at a rate equal to the Net Income of Sadot Agri-Foods, calculated quarterly divided by $ 3.125 , which

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

At March 31, 2024, there were 10.5 million restricted share awards outstanding.

for accounting purposes shall equal 40 % of the net income of Sadot Agri-Foods, calculated quarterly divided by $ 1.25 .

Shares shall be considered issued and outstanding as of the Addendum Date and Aggia shall hold rights associated with such Shares;

The total RSA's vested for Aggia for the three and six months ended June 30, 2024 were 1.4 million and 1.9 million, respectively.

At June 30, 2024, there were 8.8 million restricted share awards outstanding.

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

Total RSA's Weighted-average

Outstanding, December 31, 2022 — —

Granted 8,855,452 1.25

Forfeited — —

Vested ( 854,714 ) 1.25

Outstanding at June 30, 2023 8,000,738 1.25

Outstanding at December 31, 2023 9,098,767 1.09

2 unchanged sentences

Vested ( 2,470,976 ) 1.05

Outstanding at March 31, 2024 10,494,638 0.89

Outstanding at June 30, 2024 8,763,791 0.90

Change in fair value of stock-based compensation on the Unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Income / (Loss) is made up of the difference between the agreed upon issuance price, per the servicing agreement with Aggia and the market price on the day of issuance.

Change in fair value of stock-based compensation was $ 1.2 million and $ 1.7 million for the three and six months ended June 30, 2024, and $ 0.3 million and $ 0.9 million, for the three and six months ended June 30, 2023, respectively.

See Note 15 – Commitments and contingencies for further details on Restricted Share Awards.

21 unchanged sentences

Forfeited — — N/A —

Outstanding, March 31, 2023 1.52 1,212,500 5.00 206

Expected to vest, March 31, 2023 1.17 822,481 5.54 —

Exercisable and vested, March 31, 2023 3.00 190,019 1.51 40

Outstanding, June 30, 2023 1.51 1,012,500 4.75 244

Exercisable and vested, June 30, 2023 2.64 235,643 2.92 59

Outstanding, December 31, 2023 1.09 827,500 4.26 —

2 unchanged sentences

Forfeited 1.51 ( 15,000 ) N/A —

Outstanding, March 31, 2024 1.10 812,500 3.92 —

Expected to vest, March 31, 2024 1.14 564,985 3.99 —

Exercisable and vested, March 31, 2024 0.97 247,515 3.77 —

Outstanding, June 30, 2024 1.09 812,500 3.67 —

Exercisable and vested, June 30, 2024 0.98 288,124 3.55 —

The Company has estimated the fair value of the options using the Black-Scholes model using the following assumptions:

Three Months Ended March 31, 2023

Six Months Ended June 30, 2024

Risk free interest rate 1.53 - 4.33 %

11 unchanged sentences

The Additional Warrant is substantially identical to the Original Warrants, except that the exercise price of the Additional Warrant is $ 2.40 .

The Company is obligated to file a registration

The Company is obligated to file a registration statement covering the shares of common stock underlying the warrants within 30 days and to have the registration statement declared effective within 90 days after filing with the Commission.

Sadot Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

statement covering the shares of common stock underlying the warrants within 30 days and to have the registration statement declared effective within 90 days after filing with the Commission.

A summary of warrants activity during the three months ended March 31, 2024 and 2023 is presented below:

A summary of warrants activity during the six months ended June 30, 2024 and 2023 is presented below:

Weighted-average

7 unchanged sentences

Forfeited — — N/A —

Outstanding, March 31, 2023 1.93 18,033,640 3.26 —

Exercisable, March 31, 2023 1.93 18,033,640 3.26 —

Outstanding, June 30, 2023 1.93 18,033,640 3.01 —

Exercisable, June 30, 2023 1.93 18,033,640 3.01 —

Outstanding, December 31, 2023 1.97 17,379,890 2.61 —

2 unchanged sentences

Forfeited 2.91 ( 1,358,143 ) N/A —

Outstanding, March 31, 2024 1.94 17,056,247 2.41 —

Exercisable, March 31, 2024 1.94 17,056,247 2.41 —

Outstanding, June 30, 2024 1.89 16,021,747 2.31 —

Exercisable, June 30, 2024 1.89 16,021,747 2.31 —

Stock-Based Compensation Expense

Stock-based compensation related to restricted stock issued to employees, directors and consultants, warrants and warrants to consultants amounted to $ 0.8 million and $ 3.4 million, respectively for the three months ended March 31, 2024 and 2023, of which $ 45.5 thousand and $ 3.2 thousand were executive compensation, $ 36.1 thousand and $ 28.5 thousand were given to the board of directors, $ 0.1 million and nil were given to consultants for services rendered and $ 0.6 million and $ 3.4 million were stock-based consulting expenses paid to related party.

Stock-based compensation related to restricted stock issued to employees, directors and consultants, warrants and warrants to consultants amounted to $ 1.9 million and $ 2.7 million, respectively for the three and six months ended June 30, 2024, of which $ 0.1 million, $ 0.1 million, were executive compensation, $ 35.2 thousand and $ 0.1 million, were given to the board of directors, $ 0.1 million and $ 0.2 million, were given to consultants for services rendered and $ 1.7 million and $ 2.4 million, were stock-based consulting expenses paid to related party.

Stock-based compensation related to restricted stock issued to employees, directors and consultants, warrants and warrants to consultants amounted to $ 1.2 million and $ 4.6 million respectively for the three and six months ended June 30, 2023, respectively, of which $ 20.3 thousand and $ 40.9 thousand, were executive compensation, $ 45.4 thousand and $ 0.1 million, were given to the board of directors, $ 40.9 thousand and $ 40.9 thousand were given to consultants for services rendered and $ 1.1 million and $ 4.4 million were stock-based consulting expenses paid to related party.

Sadot Group, Inc.

9 unchanged sentences

The shareholders of the Company subsequently approved an increase in the authorized shares of common stock from 150.0 million to 200.0 million at the Company’s Annual Meeting held on December 20, 2023.

As of March 31, 2024, Aggia owned 29.1 % of the Company's common stock.

During the three months ended March 31, 2024 and 2023, the Company recorded Stock-based consulting expense of $ 0.6 million and $ 3.4 million to its related party, Aggia for consulting services rendered.

Additionally, for the three months ended March 31, 2024 and 2023, the Company reimbursed Aggia for all operating costs related to Sadot Agri-Foods of $ 1.1 million and $ 0.6 million, respectively.

As of June 30, 2024, Aggia owned 22.8 % of the Company's common stock.

During the three and six months ended June 30, 2024, the Company recorded Stock-based consulting expense of $ 1.7 million, $ 2.4 million, and $ 1.1 million and $ 4.4 million, for the three and six months ended June 30, 2023 respectively, to its related party, Aggia for consulting services rendered.

Additionally, for the three and six months ended June 30, 2024, the Company reimbursed Aggia for all operating costs related to Sadot Agri-Foods of $ 1.0 million and $ 2.1 million and $ 1.0 million and $ 1.8 million for the three and six months ended June 30, 2023 respectively.

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

2 unchanged sentences

Subsequent Events

Updated SEPA Agreement

On September 26, 2023, the Company, entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd.

(the “Investor”), pursuant to which the Investor has agreed to purchase up to $ 25 million of the Company’s shares of common stock..

Pursuant to the SEPA, the Investor provided pre-advances to the Company in the aggregate amount of $ 4.0 million (each, a “Pre-Advance”), with each Pre-Advance evidenced by a convertible promissory note (each, a “Note”).

The first Pre-Advance, in the principal amount of $ 3.0 million, was on September 23, 2023.

The second Pre-Advance of $ 1.0 million was advanced on October 30, 2023.

On April 10, 2024, the Company and the Investor entered into a letter agreement (the “Letter Agreement”) to amend the terms of the remaining outstanding Note providing that the Company will make payments on May 1, 2024, June 1, 2024 and July 1, 2024 each in the principal amount of $ 350,000 plus an 8 % payment premium and accrued interest.

During the period through August 1, 2024, the Investor agreed that the application of any monthly payments that may become due and payable pursuant to Section 1(c) of the Notes (i.e., as a result of a Floor Price Trigger, or Exchange Cap Trigger) shall be suspended and the Investor shall not effect any Investor Notices of Conversions Notices, unless the Conversion Price is equal to the Fixed Price as such terms are defined in the SEPA, or with the consent of the Company.

Franchise Agreement Terminations

Effective May 2, 2024, the Company terminated its franchise agreement relating to the two Muscle Maker restaurants operating in Kuwait due to the failure to pay the royalty and other fees.

Among other items in addition to terminating the franchise agreement, the Company demanded all amounts due and that the franchise cease all use of the Company's marks.

On August 1, 2024, the Company sold Superfit Foods LLC, which was previously held for sale.

There was no material gain or loss on the transaction.

On July 18, 2024, the Company re-franchised its Bronx, NY Muscle Maker Grill location.

There was no material gain or loss on the transaction.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements