What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-14 compared with 2024-11-12 · 98 added, 436 removed, 222 unchanged (71% of the section changed)

1 unchanged sentence

Preliminary Note

The following Management’s Discussion and Analysis (“MD&A”), prepared as of November 12, 2024, should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements of Sadot Group Inc.

("Sadot Group"), for the three and nine months ended September 30, 2024 together with the audited financial statements of the Company for the year ended December 31, 2023 and the accompanying MD&A for that fiscal year appearing in our Annual Report on 2023 Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 20, 2024.

The following Management’s Discussion and Analysis (“MD&A”), prepared as of May 14, 2025, should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements of Sadot Group Inc.

("Sadot Group"), for the three months ended March 31, 2025, together with the audited financial statements of the Company for the year ended December 31, 2024 and the accompanying MD&A for that fiscal year appearing in our Annual Report on 2023 Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 11, 2025.

Unless otherwise indicated or the context otherwise requires, all references to the terms “Company,” “company,” "Sadot", “we,” “us,” “our”, “Group” and similar terms refer to Sadot Group Inc., together with its consolidated subsidiaries.

19 unchanged sentences

In late 2022, Sadot Group began a transformation from a U.S.-centric restaurant business into a global organization focused on the Agri-Foods supply-chain.

As of September 30, 2024, Sadot Group consisted of two distinct operating units.

As of March 31, 2025, Sadot Group consisted of 1 distinct operating unit and 1 discontinued operations.

Sadot LLC (“Sadot Agri-Foods”):

7 unchanged sentences

SuperFit Foods was sold in August 2024.

The restaurants were founded on the belief of taking every-day menu options and converting them into “healthier for you” menu choices.

Consumers are demanding healthier choices, customization, flavor and convenience.

Each of our 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.

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

Please see Note 3 – Assets held for sale and Note 4 – Discontinued operations for further details.

Key Financial Definitions

1 unchanged sentence

Governmental and other economic factors affecting our operations may vary.

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

$’000 $’000 $’000 $’000

Three Months Ended March 31,

Commodity sales 132,168 106,507

Company restaurant sales, net of discounts 479 1,937 2,628 6,725

Franchise royalties and fees 321 245 1,319 767

Franchise advertising fund contributions 12 16 40 52

Other revenues 16 — 16 13

Cost of goods sold (126,156) (103,697)

Gross profit 6,012 2,810

Impairment of goodwill — (828) — (828)

Impairment of intangible assets — (810) — (810)

Depreciation and amortization expenses (27) (91)

Franchise advertising fund expenses (12) (16) (40) (52)

Pre-opening expenses — (335) — (371)

Post-closing expenses (91) (60) (120) (173)

Stock-based expenses (1,428) (796)

3 unchanged sentences

EBITDA attributable to Sadot Group Inc.

2,933 (4,426) 6,667 (4,204)

The breakout of our main revenue streams by business segment is shown below:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Sadot agri-foods 99.6 % 98.8 % 99.2 % 98.6 %

Sadot food service 0.4 % 1.2 % 0.8 % 1.4 %

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

Our revenues are derived from four primary sources:

Commodity sales, Company restaurant sales, Franchise revenues and vendor rebates from Franchisees.

Commodity sales revenues are comprised of revenues generated from the purchase and sales of physical food and feed commodities, carbon associated commodities and other commodities related to our trading and farming operations.

Franchise revenues are comprised of Franchise royalty revenues collected based on 2% to 6% of franchisee net sales and other franchise revenues which include initial and renewal franchisee fees.

Vendor rebates are received based on volume purchases or services from franchise owned locations.

In addition, we have Other revenues which consists of gift card breakage, which is recognized when we determine that there is no further legal obligation to remit the unredeemed gift card balance.

Our revenues are derived from Commodity sales.

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

Cost of Goods Sold

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

Impairment of Goodwill

Impairment of goodwill consist of an amount by which the carry amount of the goodwill assets exceeds its fair value.

This is recognized by us when the carry amount of goodwill is greater than the projected future discounted cash flows, as the asset is not fully recoverable.

Impairment of Intangible Assets

Impairment of intangible assets consist of an amount by which the carry amount of the intangible assets exceeds its fair value.

This is recognized by us when the carry amount of an intangible asset is greater than the projected future undiscounted cash flows, as the asset is not fully recoverable.

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

Reclassification

During the three months ended March 31, 2025, the Company reclassified gains previously recognized in Other income related to the fair value remeasurement of certain financial instruments into Cost of goods sold ("COGS").

The reclassification was made to better reflect the nature and function of these instruments, which are economically linked to the Company’s inventory procurement, sales activities and to be consistent with our competitors.

Management determined that presenting the related gains in COGS more accurately reflects the impact of these instruments on the Company’s gross margin and provides more decision-useful information to financial statement users.

This change in presentation had no impact on net income, total comprehensive income, or earnings per share for the period.

Depreciation and Amortization Expenses

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

Franchise Advertising Expenses

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

The Company records the related advertising expenses as incurred under Sales, general and administrative expenses.

Pre-opening Expenses

Pre-opening expense primarily consist of expenses associated with opening a Company-operated location and expenses related to Company-operated locations or new business operations prior to the location opening or the transaction is finalized.

Post-closing Expenses

Post-closing expense primarily consist of expenses associated with closing a Company-operated location and expenses related to Company-operated locations after the location has closed.

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

Stock-Based Expenses

1 unchanged sentence

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

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

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

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

As of April 1, 2023, the consulting agreement was amended to calculate consulting fees on 40.0% of the Net income generated by Sadot LLC.

Stock-based expenses were $1.7 million and $4.4 million, for the three and nine months ended September 30, 2024 and $1.1 million and $5.7 million, for the three and nine months ended September 30, 2023, respectively, and are recorded in the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).

Stock-based expenses were $1.4 million, for the three months

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

Sales, General and Administrative Expenses

1 unchanged sentence

We incur incremental Sales, general and administrative expenses as a result of being a publicly listed company on the NASDAQ capital market.

A certain portion of these expenses are related to the preparation of an initial stock offering and subsequent capital raises and should be considered one-time expenses.

Other (Expense) / Income

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

Gain on fair value remeasurement consists of the fair value remeasurement recorded on a recurring basis on the forward sales contract which was deemed to be a derivative within the scope of ASC 815.

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

Income Tax Benefit / (Expense)

1 unchanged sentence

Net Income (Loss) Attributable to Non-controlling Interests

Net loss attributable to non-controlling interests were $0.1 million and $0.2 million for the three and nine months ended September 30, 2024, and $0.1 million and $0.1 million for the three and nine months ended September 30, 2023, respectively.

Net loss attributable to non-controlling interests were $0.1 million and $48.0 thousand for the three months ended March 31, 2025 and 2024, respectively.

During the year ended December 31, 2023 the Company created a joint-venture in which the Company has a 70% interest and the third-party equity ownership has a 30% Non-controlling interest.

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The following table presents a reconciliation of EBITDA from the most comparable U.S.

GAAP measure, Net loss, and the calculations of the Net loss Margin and EBITDA Margin for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

$’000 $’000 $’000 $’000

GAAP measure, Net loss and the calculations of the Net loss Margin and EBITDA Margin for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

Net income / (loss) 820 (313)

6 unchanged sentences

EBITDA attributable to Sadot Group Inc.

2,933 (4,426) 6,667 (4,204)

Gross Profit 6,012 2,810

Gross Profit attributable to Sadot Group Inc.

2,532 3,017 4,804 10,766

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

1 unchanged sentence

EBITDA margin attributable to Sadot Group Inc.

1.5 % (2.4) % 1.4 % (0.8) %

Unaudited Condensed Consolidated Results of Operations - Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023

The following table represents selected items in our Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss) for the three months ended September 30, 2024 and 2023, respectively:

Three Months Ended September 30, Variance

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

Three Months Ended March 31, Variance

2025 2024 $ %

1 unchanged sentence

Commodity sales 132,168 106,507 25,661 24.1 %

Company restaurant sales, net of discounts 479 1,937 (1,458) (75.3) %

Franchise royalties and fees 321 245 76 31.0 %

Franchise advertising fund contributions 12 16 (4) (25.0) %

Other revenues 16 — 16 NM

Cost of goods sold (126,156) (103,697) (22,459) 21.7 %

Gross profit 6,012 2,810 3,202 114.0 %

Impairment of goodwill — (828) 828 (100.0) %

Impairment of intangible assets — (810) 810 (100.0) %

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

Franchise advertising fund expenses (12) (16) 4 (25.0) %

Pre-opening expenses — (335) 335 (100.0) %

Post-closing expenses (91) (60) (31) 51.7 %

Stock-based expenses (1,428) (796) (632) 79.4 %

Sales, general and administrative expenses (3,081) (1,393) (1,688) 121.2 %

Loss from operations (3,647) (3,972) 325 (8.2) %

Other income — 1 (1) (100.0) %

Income from operations 1,476 530 946 178.5 %

Interest expense, net (1,541) (228) (1,313) 575.9 %

Change in fair value of stock-based compensation 778 476 302 63.4 %

Warrant modification expense — (958) 958 (100.0) %

Gain / (loss) on fair value remeasurement 5,461 (349) 5,810 1664.8 %

Income / (Loss) Before Income Tax 1,097 (5,282) 6,379 120.8 %

Income for continuing operations before income tax 713 778 (65) 8.4 %

Income tax expense — (1) 1 (100.0) %

5 unchanged sentences

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

Three Months Ended September 30,

Three Months Ended March 31,

Commodity sales 100.0 % 100.0 %

Company restaurant sales, net of discounts 0.2 % 1.1 %

Franchise royalties and fees 0.2 % 0.1 %

Franchise advertising fund contributions — % — %

Other revenues — % — %

Cost of goods sold (95.5) % (97.4) %

Gross profit 4.5 % 2.6 %

Impairment of goodwill — % (0.5) %

Impairment of intangible assets — % (0.4) %

Depreciation and amortization expenses — % (0.1) %

Franchise advertising fund expenses — % — %

Pre-opening expenses — % (0.2) %

Post-closing expenses — % — %

Stock-based expenses (1.1) % (0.7) %

Sales, general and administrative expenses (2.3) % (1.3) %

Loss from operations (1.7) % (2.2) %

Other income — % — %

Interest income / (expense), net (0.9) % (0.2) %

Income from operations 1.2 % 0.5 %

Interest expense, net (1.2) % (0.2) %

Change in fair value of stock-based compensation 0.6 % 0.4 %

Warrant modification expense — % (0.5) %

Gain / (loss) on fair value remeasurement 2.7 % (0.2) %

Income / (Loss) Before Income Tax 0.5 % (2.9) %

Income for continuing operations before income tax 0.5 % 0.7 %

Income tax expense — % — %

Net income / (loss) 0.5 % (2.9) %

Net income / (loss) attributable to non-controlling interest 0.1 % 0.1 %

Net income for continuing operations 0.5 % 0.7 %

Net income / (loss) for discontinued operations 0.1 % (1.0) %

Net loss attributable to non-controlling interest 0.2 % — %

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

0.7 % (0.2) %

Three Months Ended September 30, Variance

Three Months Ended March 31, Variance

2025 2024 $ %

1 unchanged sentence

Commodity sales 132,168 106,507 25,661 24.1 %

Company restaurant sales, net of discounts 479 1,937 (1,458) (75.3) %

Franchise royalties and fees 321 245 76 31.0 %

Franchise advertising fund contributions 12 16 (4) (25.0) %

Other revenues 16 — 16 NM

Cost of goods sold (126,156) (103,697) (22,459) 21.7 %

1 unchanged sentence

NM= not meaningful

Our gross (loss) profit totaled $2.5 million profit for the three months ended September 30, 2024, compared to $2.9 million profit for the three months ended September 30, 2023.

The $0.4 million decrease is primarily attributed to a decrease in

Company restaurant sales, net of discount partially offset by an increase in Commodity sales, and increase in Cost of goods sold.

We generated Commodity sales of $200.9 million for the three months ended September 30, 2024 compared to $180.0 million for the three months ended September 30, 2023.

Our gross (loss) profit totaled $6.0 million profit for the three months ended March 31, 2025, compared to $2.8 million profit for the three months ended March 31, 2024.

The $3.2 million increase is primarily attributed to an increase in Commodity sales partially offset by an increase in Cost of goods sold.

We generated Commodity sales of $132.2 million for the three months ended March 31, 2025, compared to $106.5 million for the three months ended March 31, 2024.

This represented an increase of $25.7 million, which is attributable to an increase in operations in 2025 as a direct result of our expansion into new markets, which were not operating in 2024.

We generated Company restaurant sales, net of discounts, of $0.5 million for the three months ended September 30, 2024, compared to $1.9 million for the three months ended September 30, 2023.

This represented an decrease of $1.5 million, or 75.3%, which is mainly attributable to the conversion of certain corporate owned locations to franchise locations and closing underperforming locations.

Franchise royalties and fees for the three months ended September 30, 2024 totaled $0.3 million compared to $0.2 million for the three months ended September 30, 2023.

This represents an increase of $0.1 million, or 31.0%.

In 2024, the franchise fees were higher, primarily due to an increase in Pokemoto franchises.

Franchise advertising fund contributions for the three months ended September 30, 2024 totaled $12.0 thousand compared to $16.0 thousand for the three months ended September 30, 2023.

The Company recognizes these sales-based advertising contributions from franchisees as franchise revenue when the underlying franchisee Company incurs the corresponding advertising expense.

The decrease of $4.0 thousand or 25.0%, is a direct result of the decrease in Muscle Maker Grill restaurant national advertising services.

There were $16.0 thousand other revenues for the three months ended September 30, 2024.

There were no Other revenues for the three months ended September 30, 2023.

Other revenues consisted of gift card breakage recognized and Ad-fund liability that was forfeited when a franchise closed.

Cost of goods sold for the three months ended September 30, 2024 totaled $199.3 million compared to $179.3 million for the three months ended September 30, 2023.

The $20.0 million or 11.2% change is a direct result of the increase in sales.

Impairment of Goodwill

Three Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Impairment of goodwill — (828) 828 (100.0) %

There was no Impairment of goodwill for the three months ended September 30, 2024.

We had an Impairment of goodwill for the three months ended September 30, 2023 of $0.8 million.

The Impairment of goodwill in the prior period was due to the structural change of the company's operations and the closing or marketing for sale our company owned restaurant stores.

Impairment of Intangible Assets

Three Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Impairment of intangible assets — (810) 810 (100.0) %

There was no Impairment of intangible assets for the three months ended September 30, 2024.

We had an Impairment of intangible assets for the three months ended September 30, 2023 of $0.8 million.

The Impairment of intangible assets in the prior period was due to the structural change of the company's operations and the closing or marketing for sale our company owned restaurant stores.

Cost of goods sold for the three months ended March 31, 2025, totaled $126.2 million compared to $103.7 million for the three months ended March 31, 2024.

The $22.5 million or 21.7% change is a direct result of the increase in sales, partially offset by the reclass of gain on derivative contracts.

Depreciation and Amortization Expenses

Three Months Ended September 30, Variance

Three Months Ended March 31, Variance

2025 2024 $ %

1 unchanged sentence

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

Depreciation and amortization expenses for the three months ended September 30, 2024 totaled $49.0 thousand compared to $0.4 million, for the three months ended September 30, 2023.

The $0.4 million decrease is mainly attributed to moving Sadot food service assets to Assets Held For Sale and no longer amortizing or depreciating the assets and the closing and refranchising of corporate locations and the disposal of the corresponding assets.

Franchise Advertising Fund Expenses

Three Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Franchise advertising fund expenses (12) (16) 4 (25.0) %

Franchise advertising fund expenses for the three months ended September 30, 2024 totaled $12.0 thousand compared to $16.0 thousand , for the three months ended September 30, 2023.

The $4.0 thousand or 25.0% decrease is mainly attributed to the decrease in Muscle Maker Grill restaurant national advertising services.

Pre-Opening Expenses

Three Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Pre-opening expenses — (335) 335 (100.0) %

There were no Pre-opening expenses for the three months ended September 30, 2024 compared to $0.3 million for the three months ended September 30, 2023.

The increase in Pre-opening expenses resulted from expenses incurred at the farm from the time that the purchase documents were signed and local government approval was obtained.

Post-Closing Expenses

Three Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Post-closing expenses (91) (60) (31) 51.7 %

Post-closing expenses for the three months ended September 30, 2024 totaled $91.0 thousand compared to $60.0 thousand for the three months ended September 30, 2023.

The increase in Post-closing expenses resulted from closing more corporate owned locations in the third quarter of 2024 compared to 2023.

Depreciation and amortization expenses for the three months ended March 31, 2025, totaled $27.0 thousand compared to $0.1 million, for the three months ended March 31, 2024.

The $0.1 million decrease is mainly attributed to Farm related assets being fully depreciated in 2024.

Stock-Based Expenses

Three Months Ended September 30, Variance

Three Months Ended March 31, Variance

2025 2024 $ %

1 unchanged sentence

Stock-based expenses (1,428) (796) (632) 79.4 %

Stock-based expenses for the three months ended September 30, 2024, totaled $1.7 million compared to $1.1 million for the three months ended September 30, 2023.

The $0.6 million increase in Stock-based expenses is primarily the result of consulting fees due to Aggia for Sadot Agri-Foods and Farming operations and the vesting of restricted stock for employees, board of directors and consultants.

Based on the servicing agreement with Aggia, the consulting fees are calculated at approximately 40.0% of the Net income generated by Sadot LLC which is a decrease from 80.0% in 2023.

Stock-based expenses for the three months ended March 31, 2025, totaled $1.4 million compared to $0.8 million for the three months ended March 31, 2024.

The $0.6 million increase in Stock-based expenses is primarily the result of consulting fees due to Aggia for Sadot Agri-Foods and the vesting of restricted stock for employees, board of directors and consultants.

Based on the servicing agreement with Aggia, the consulting fees are calculated at approximately 40.0% of the Net income generated by Sadot Agri-Foods.

Thi s expense is paid in the vesting in restricted stock that was issued to Aggia in 2025.

Sales, General and Administrative Expenses

Three Months Ended September 30, Variance

Three Months Ended March 31, Variance

2025 2024 $ %

1 unchanged sentence

Sales, general and administrative expenses (3,081) (1,393) (1,688) 121.2 %

Sales, general and administrative expenses for the three months ended September 30, 2024 totaled $4.2 million compared to $3.3 million for the three months ended September 30, 2023.

The $0.9 million increase was primarily attributable to an increase in consulting fees due to trades in Latin America, entering the Brazil and Canada markets and increases due to increases in normal operating activities.

Sales, general and administrative expenses for the three months ended March 31, 2025, totaled $3.1 million compared to $1.4 million for the three months ended March 31, 2024.

The $1.7 million increase was primarily attributable to an increase in consulting fees due to trades in Latin America, Brazil and Canada markets, entering the South Korea market and increases due to increases in normal operating activities.

Other Income / (Expense)

Three Months Ended September 30, Variance

Three Months Ended March 31, Variance

2025 2024 $ %

1 unchanged sentence

Total other income / (expense), net (763) 248 (1,011) (408) %

Other income for the three months ended September 30, 2024 totaled $4.7 million compared to $1.3 million loss for the three months ended September 30, 2023.

The $6.1 million increase was primarily attributable to a $5.8 million increase in the gain on the fair value remeasurement as a result of the mark to market adjustment of derivatives, a $1.0 million decrease in warrant modification expense, and a $0.7 million increase in change in fair value of stock-based compensation partially offset by a $1.4 million increase in interest expense.

Three Months Ended September 30, 2024

Other income for the three months ended March 31, 2025, totaled $0.8 million compared to $0.2 million loss for the three months ended March 31, 2024.

The $1.0 million decrease was primarily attributable to a $0.3 million increase in change in fair value of stock-based compensation and a $1.3 million increase in interest expense.

Three Months Ended March 31, 2025

Sadot food service Sadot agri-foods Corporate adj.

1 unchanged sentence

Commodity sales — 132,168 — 132,168

Company restaurant sales, net of discounts 479 — — 479

Franchise royalties and fees 321 — — 321

Franchise advertising fund contributions 12 — — 12

Cost of goods sold — (126,156) — (126,156)

1 unchanged sentence

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

Franchise advertising fund expenses (12) — — (12)

Post-closing expenses (91) — — (91)

Stock-based expenses — — (1428) (1,428)

3 unchanged sentences

Change in fair value of stock-based compensation — — 778 778

Gain on fair value remeasurement — 5,461 — 5,461

Income / (Loss) Before Income Tax (665) 3,869 (2,107) 1,097

Income tax expense — — (3) (3)

Net income / (loss) (665) 3,869 (2,110) 1,094

Total assets 5,431 164,638 958 171,027

Three Months Ended September 30, 2023

Sadot food service Sadot agri-foods Corporate adj.

$’000 $’000 $’000 $’000

Commodity sales — 179,975 — 179,975

Company restaurant sales, net of discounts 1,937 — — 1,937

Franchise royalties and fees 245 — — 245

Franchise advertising fund contributions 16 — — 16

Other revenues — — — —

Cost of goods sold (2,167) (177,101) — (179,268)

Gross profit 31 2,874 — 2,905

Impairment of goodwill (828) — — (828)

Impairment of intangible assets (810) — — (810)

Depreciation and amortization expenses (382) (61) — (443)

Franchise advertising fund expenses (16) — — (16)

Pre-opening expenses — (335) — (335)

Post-closing expenses (60) — — (60)

Stock-based expenses — — (1,075) (1,075)

Sales, general and administrative expenses (278) (553) (2,479) (3,310)

Income / (loss) from operations (2,343) 1,925 (3,554) (3,972)

Other income 1 — — 1

Interest expense, net (2) (5) (294) (301)

Change in fair value of stock-based compensation — — 297 297

Warrant modification expense — — (958) (958)

Loss on fair value remeasurement — (349) — (349)

Income / (Loss) Before Income Tax (2,344) 1,571 (4,509) (5,282)

Income tax expense — — (13) (13)

Net (loss) / income (2,344) 1,571 (4,522) (5,295)

Total assets 8,798 80,166 1,704 90,668

Unaudited Condensed Consolidated Results of Operations - Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

The following table represents selected items in our Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss) for the nine months ended September 30, 2024 and 2023, respectively:

Nine Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Commodity sales 480,706 547,900 (67,194) (12.3) %

Company restaurant sales, net of discounts 2,628 6,725 (4,097) (60.9) %

Franchise royalties and fees 1,319 767 552 72.0 %

Franchise advertising fund contributions 40 52 (12) (23.1) %

Other revenues 16 13 3 23.1 %

Cost of goods sold (480,074) (544,803) 64,729 (11.9) %

Gross profit 4,635 10,654 (6,019) (56.5) %

Impairment of goodwill — (828) 828 (100.0) %

Impairment of intangible assets — (810) 810 (100.0) %

Depreciation and amortization expenses (421) (1,517) 1,096 (72.2) %

Franchise advertising fund expenses (40) (52) 12 (23.1) %

Pre-opening expenses — (371) 371 (100.0) %

Post-closing expenses (120) (173) 53 (30.6) %

Stock-based expenses (4,430) (5,667) 1,237 (21.8) %

Sales, general and administrative expenses (8,770) (7,175) (1,595) 22.2 %

Loss from operations (9,146) (5,939) (3,207) 54.0 %

Other income 19 252 (233) (92.5) %

Interest expense, net (2,969) (320) (2,649) 827.8 %

Change in fair value of stock-based compensation 2,691 1,161 1,530 131.8 %

Warrant modification expense — (958) 958 (100.0) %

Gain / (loss) on fair value remeasurement 11,995 (349) 12,344 3537.0 %

Gain on sale of trading securities 518 — 518 NM

Income / (Loss) Before Income Tax 3,108 (6,153) 9,261 150.5 %

Income / (loss) for continuing operations before income tax — 3,447 (2734) 713

Income tax expense — — — —

Net income / (loss) for continuing operations — 3,447 (2734) 713

Income for discontinued operations, net of income tax 107 — — 107

Net income / (loss) 107 3,447 (2734) 820

2 unchanged sentences

107 3,565 (2734) 938

NM= not meaningful

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

Nine Months Ended September 30,

Commodity sales 99.3 % 98.7 %

Company restaurant sales, net of discounts 0.5 % 1.2 %

Franchise royalties and fees 0.2 % 0.1 %

Franchise advertising fund contributions — % — %

Other revenues — % — %

Cost of goods sold (99.0) % (98.1) %

Gross profit 1.0 % 1.9 %

Impairment of goodwill — % (0.1) %

Impairment of intangible assets — % (0.1) %

Depreciation and amortization expenses (0.1) % (0.3) %

Franchise advertising fund expenses — % — %

Pre-opening expenses — % (0.1) %

Post-closing expenses — % — %

Stock-based expenses (0.9) % (1.0) %

Sales, general and administrative expenses (1.8) % (1.3) %

Loss from operations (1.9) % (1.1) %

Other income — % — %

Interest income / (expense), net (0.6) % (0.1) %

Change in fair value of accrued compensation 0.6 % 0.2 %

Warrant modification expense — % (0.2) %

Gain / (Loss) on fair value remeasurement 2.5 % (0.1) %

Gain on sale of trading securities 0.1 % — %

Income / (Loss) Before Income Tax 0.6 % (1.1) %

Income tax expense — % — %

Net income / (loss) 0.6 % (1.1) %

Net income / (loss) attributable to non-controlling interest 0.1 % — %

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

0.7 % (1.1) %

Gross Profits

Nine Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Commodity sales 480,706 547,900 (67,194) (12.3) %

Company restaurant sales, net of discounts 2,628 6,725 (4,097) (60.9) %

Franchise royalties and fees 1,319 767 552 72.0 %

Franchise advertising fund contributions 40 52 (12) (23.1) %

Other revenues 16 13 3 23.1 %

Cost of goods sold (480,074) (544,803) 64,729 (11.9) %

Gross profit 4,635 10,654 (6,019) (56.5) %

NM= not meaningful

Our gross profit totaled $4.6 million for the nine months ended September 30, 2024, compared to $10.7 million for the nine months ended September 30, 2023.

The $6.0 million decrease is primarily attributed to a decrease in Company restaurant sales, net of discount and a decrease in Commodity sales, partially offset by a decrease in Cost of goods sold.

We generated Commodity sales of $480.7 million for the nine months ended September 30, 2024.

Commodity sales for the nine months ended September 30, 2023 was $547.9 million.

This represented a decrease of $67.2 million, which is attributable to a decline in global prices of staple commodities, market seasonality, the largest global consumer being out of the market for the beginning of 2024.

We generated Company restaurant sales, net of discounts, of $2.6 million for the nine months ended September 30, 2024, compared to $6.7 million for the nine months ended September 30, 2023.

This represented an decrease of $4.1 million, or 60.9%, which is mainly attributable to the conversion of certain corporate owned locations to franchise locations and closing underperforming locations.

Franchise royalties and fees for the nine months ended September 30, 2024 totaled $1.3 million compared to $0.8 million for the nine months ended September 30, 2023.

This represents an increase of $0.6 million, or 72.0%.

In 2024, the franchise fees were higher, primarily due to a termination of one Muscle Maker Grill development agreement in 2024 that escalated the revenue recognition and an increase in Pokemoto franchises.

Franchise advertising fund contributions for the nine months ended September 30, 2024 totaled $40.0 thousand compared to $52.0 thousand for the nine months ended September 30, 2023.

The Company recognizes these sales-based advertising contributions from franchisees as franchise revenue when the underlying franchisee Company incurs the corresponding advertising expense.

The decrease of $12.0 thousand or 23.1%, is a direct result of the decrease in Muscle Maker Grill restaurant national advertising services.

Other revenues for the nine months ended September 30, 2024 were $16.0 thousand.

Other revenues for the nine months ended September 30, 2023 were $13.0 thousand.

Other revenues consisted of gift card breakage recognized and Ad-fund liability that was forfeited when a franchise closed.

Cost of goods sold for the nine months ended September 30, 2024, totaled $480.1 million.

The Cost of goods sold for the nine months ended September 30, 2023 was $544.8 million.

The $64.7 million change is primarily due to a direct result of the decrease in sales.

Impairment of Goodwill

Nine Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Impairment of goodwill — (828) 828 (100.0) %

There was no Impairment of goodwill for the nine months ended September 30, 2024.

We had an Impairment of goodwill for the nine months ended September 30, 2023 of $0.8 million.

The Impairment of goodwill in the prior period was due to the structural change of the company's operations and the closing or marketing for sale our company owned restaurant stores.

Impairment of Intangible Assets

Nine Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Impairment of intangible assets — (810) 810 (100.0) %

There was no Impairment of intangible assets for the nine months ended September 30, 2024.

We had an Impairment of intangible assets for the nine months ended September 30, 2023 of $0.8 million.

The Impairment of intangible assets in the prior period was due to the structural change of the company's operations and the closing or marketing for sale our company owned restaurant stores.

Depreciation and Amortization Expenses

Nine Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Depreciation and amortization expenses (421) (1,517) 1,096 (72.2) %

Depreciation and amortization expenses for the nine months ended September 30, 2024 totaled $0.4 million compared to $1.5 million, for the nine months ended September 30, 2023.

The $1.1 million decrease is mainly attributed to moving Sadot food service assets to Assets Held For Sale and no longer amortizing or depreciating the assets and the closing and refranchising of corporate locations and the disposal of the corresponding assets.

Franchise Advertising Fund Expenses

Nine Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Franchise advertising fund expenses (40) (52) 12 (23.1) %

Franchise advertising fund expenses for the nine months ended September 30, 2024 totaled $40.0 thousand compared to $52.0 thousand , for the nine months ended September 30, 2023.

The $12.0 thousand decrease or 23.1% is mainly attributed to the decrease in Muscle Maker Grill national advertising services.

Pre-Opening Expenses

Nine Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Pre-opening expenses — (371) 371 (100.0) %

Pre-opening expenses for the nine months ended September 30, 2024 totaled nil, a $371.0 thousand decrease when compared to $371.0 thousand for the nine months ended September 30, 2023.

The decrease in pre-opening expense resulted from expenses incurred at the farm in 2023 from the time that the purchase documents were signed and local government approval was obtained and expenses incurred prior to the opening of our new Company-owned stores.

Post-Closing Expenses

Nine Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Post-closing expenses (120) (173) 53 (30.6) %

Post-closing expenses for the nine months ended September 30, 2024 totaled $120.0 thousand, a $0.1 million decrease when compared to $0.2 million for the nine months ended September 30, 2023.

The decrease in Post-closing expenses resulted from expenses incurred after the closing of underperforming Company-owned stores in 2023.

Stock-Based Expenses

Nine Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Stock-based expenses (4,430) (5,667) 1,237 (21.8) %

Stock-based expenses for the nine months ended September 30, 2024, totaled $4.4 million compared to $5.7 million for the nine months ended September 30, 2023.

The $1.2 million decrease in Stock-based expenses is primarily the result of consulting fees due to Aggia for Sadot Agri-Foods and Farming operations.

Based on the servicing agreement with Aggia, the consulting fees are calculated at approxim ately 80.0% and 40.0% of the Net income generated by Sadot LLC for the first quarter of 2023 and the second and third quarter of 2023, respectively.

Sales, General and Administrative Expenses

Nine Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Sales, general and administrative expenses (8,770) (7,175) (1,595) 22.2 %

Sales, general and administrative expenses for the nine months ended September 30, 2024 totaled $8.8 million, compared to $7.2 million, for the nine months ended September 30, 2023.

The $1.6 million increase was primarily attributable to an increase in consulting fees due to trades in Latin America, entering the Brazil and Canada markets and increases due to increases in normal operating activities.

Total Other Income, Net

Nine Months Ended September 30, Variance

2024 2023 $ %

$’000 $’000 $’000

Total other income / (expense), net 12,254 (214) 12,468 (5826.2) %

Total other income / (expense), net for the nine months ended September 30, 2024 totaled $12.3 million compared to $0.2 million loss, for the nine months ended September 30, 2023.

The $12.5 million increase in Total other income / (expense), net was attributable to a $12.3 million increase in Gain on fair value remeasurement, $1.5 million in the Change in fair value of accrued compensation and a $0.5 million increase in Gain on sale of trading securities, partially offset by a $2.6 million increase in Interest expense, and a $0.2 million decrease in Other income.

Nine Months Ended September 30, 2024

Sadot food service Sadot agri-foods Corporate adj.

$’000 $’000 $’000 $’000

Commodity sales — 480,706 — 480,706

Company restaurant sales, net of discounts 2,628 — — 2,628

Franchise royalties and fees 1,319 — — 1319

Franchise advertising fund contributions 40 — — 40

Other revenues 16 — — 16

Cost of goods sold (3,113) (476,961) — (480,074)

Gross profit 890 3,745 — 4,635

Depreciation and amortization expenses (189) (230) (2) (421)

Franchise advertising fund expenses (40) — — (40)

Pre-opening expenses — — — —

Post-closing expenses (120) — — (120)

Stock-based expenses — — (4,430) (4,430)

Sales, general and administrative expenses (2,252) (4,052) (2,466) (8,770)

Loss from operations (1,711) (537) (6,898) (9,146)

Other income 19 — — 19

Interest income / (expense), net (21) (1,451) (1,497) (2,969)

Change in fair value of stock-based compensation — — 2,691 2,691

Gain on fair value remeasurement — 11,995 — 11,995

Gain on sale of trading securities — 518 — 518

Income / (Loss) Before Income Tax (1,713) 10,525 (5,704) 3,108

Income tax expense — — (9) (9)

Net income / (loss) (1,713) 10,525 (5,713) 3,099

Total assets 4,915 77,001 1,828 83,744

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Sadot food service Sadot agri-foods Corporate adj.

1 unchanged sentence

Commodity sales — 106,507 — 106,507

Company restaurant sales, net of discounts 6,725 — — 6,725

Franchise royalties and fees 767 — — 767

Franchise advertising fund contributions 52 — — 52

Other revenues 13 — — 13

Cost of goods sold — (103,697) — (103,697)

Gross profit — 2,810 — 2,810

Impairment of goodwill (828) — — (828)

Impairment of intangible assets (810) — — (810)

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

Franchise advertising fund expenses (52) — — (52)

Pre-opening expenses (36) (335) — (371)

Post-closing expenses (172) — (1) (173)

Stock-based expenses — — (796) (796)

1 unchanged sentence

Income / (loss) from operations — 1,988 (1,458) 530

Other income 1 — 251 252

Interest income / (expense), net — (407) 179 (228)

Change in fair value of stock-based compensation — — 476 476

Warrant modification expense — — (958) (958)

Loss on fair value remeasurement — (349) — (349)

Income / (Loss) Before Income Tax (3,540) 8,480 (11,093) (6,153)

Income / (loss) for continuing operations before income tax — 1,581 (803) 778

Income tax expense — — (1) (1)

Net income / (loss) for continuing operations — 1,581 (804) 777

Loss for discontinued operations, net of income tax (1,090) — — (1,090)

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

Net loss attributable to non-controlling interest — 48 — 48

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

(1,090) 1,629 (804) (265)

Total assets 6,950 142,673 904 150,527

2 unchanged sentences

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Cash 1,940 1,786

2 unchanged sentences

Other current assets (1)

16,925 126,966

Assets held for sale (2)

3 unchanged sentences

Other current liabilities (3)

94,466 47,884

Liabilities held for sale (4)

1 unchanged sentence

Working capital (5)

21,868 20,509

Current ratio (6)

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

(2) See Note 3 for additional information

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

(4) See Note 3 for additional information

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

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

(4) See Note 3 for additional information

(5) See Note 3 for additional information

Availability of Additional Funds

1 unchanged sentence

We generally finance our ongoing operations with cash flows generated from operations, borrowings under various credit facilities and term loans.

At September 30, 2024, current ratio, which equals Total current assets divided by Total current liabilities, was 1.14, an increase of 0.06, compared to current ratio of 1.08 at December 31, 2023.

The increase in current ratio was primarily due to an increase in other current assets, a decrease in Accounts payable and accrued expenses and increase in Assets held for sale, partially offset by an increase in other current liabilities and a decrease in Accounts receivable.

At September 30, 2024, working capital, which equals Total current assets less Total current liabilities, was $18.9 million an increase of $10.7 million, compared to working capital of $8.3 million at December 31, 2023.

The increase in working capital was primarily due to an increase in other current assets, a decrease in Accounts payable and accrued expenses and an increase in cash, partially offset by an increase in other current liabilities and a decrease in Accounts receivable.

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.

At March 31, 2025, current ratio, which equals Total current assets divided by Total current liabilities, was 1.44, an increase of 0.28, compared to current ratio of 1.16 at December 31, 2024.

At March 31, 2025, working capital, which equals Total current assets less Total current liabilities, was $21.9 million an increase of $1.4 million, compared to working capital of $20.5 million at December 31, 2024.

The increase in current ratio and working capital was primarily due to an increase in Accounts receivable and a decrease in Other current liabilities, partially offset by an increase in Accounts payable and accrued expenses, a decrease in Other current assets, and a decrease in Assets held for sale.

While the Company maintains a base of current assets, including inventories and receivables, the timing and certainty of converting these assets into cash has presented operational challenges.

The Company continues to manage its liquidity needs through ongoing collection efforts, working capital optimization strategies, and active engagement with financing partners.

While there is uncertainty around the precise timing of cash inflows, management believes that its current asset base, proceeds from our factoring arrangement and access to additional sources of liquidity, if necessary, provide flexibility to support ongoing operations in the near term.

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

While the Company maintains sufficient working capital through its accounts receivable and factoring capacity, we are currently experiencing delays in converting receivables into cash, which may impact the timing of our available liquidity.

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

In the event we are required to obtain additional financing, either through borrowings, private placements, public offerings, or some type of business combination, such as a merger, or buyout, and there can be no assurance that we will be successful in such pursuits.

11 unchanged sentences

Any failure to raise additional funds on favorable terms could have a material adverse effect on our liquidity and financial condition.

Sources and Uses of Cash for the Nine Months Ended September 30, 2024 and 2023

For the nine months ended September 30, 2024, Net cash provided by operating activities was $7.0 million compared to a use of $8.7 million for the nine months ended September 30, 2023.

Our Net cash provided for the nine months ended September 30, 2024, was primarily attributable to our Net income of $3.1 million, adjusted for net non-cash income in the aggregate amount of $1.8 million and $2.1 million of Net cash used by changes in the levels of operating assets and liabilities.

Our Net cash used for the nine months ended September 30, 2023, was primarily attributable to our Net loss of $6.2 million, adjusted for net non-cash income in the aggregate amount of $9.0 million and $11.5 million of Net cash used in changes in the levels of operating assets and liabilities.

For the nine months ended September 30, 2024, Net cash used in investing activities was $5.4 million, of which $5.9 million was the deposit on farmland and $38.0 thousand used in the purchase of property and equipment, partially offset by $0.5 million from the disposal of property and equipment.

For the nine months ended September 30, 2023, Net cash used in investing activities was $3.7 million, of which $12.4 million was used to purchase Property and equipment, partially offset by $4.9 million provided by the closing out of the deposit of the farmland and an Investment in a non-controlling interest of $3.7 million for the farm.

For the nine months ended September 30, 2024, Net cash used in financing activities was $1.9 million, consisting of repayments of various other notes payable of $6.5 million partially offset by proceeds from notes payable of $4.6 million.

For the nine months ended September 30, 2023, Net cash provided by financing activities was $4.9 million, consisting of $7.7 million of proceeds from notes payable and $2.2 million proceeds from exercise of warrants, partially offset by repayments of various other notes payable of $5.0 million.

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

For the three months ended March 31, 2025, Net cash used in operating activities from continuing operation was $3.0 million compared to $2.5 million provided by operating activities for the three months ended March 31, 2024.

Net cash provided by operating activities from discontinued operations was $8.0 thousand and $0.1 million, respectively, for the three months ended March 31, 2025 and 2024.

Our Net cash used for the three months ended March 31, 2025, was primarily attributable to our Net income of $0.8 million, adjusted for net non-cash income in the aggregate amount of $19.8 million and $23.6 million of Net cash used by changes in the levels of operating assets and liabilities.

Our Net cash provided for the three months ended March 31, 2024, was primarily attributable to our Net loss of $0.3 million, adjusted for net non-cash income in the aggregate amount of $1.8 million and $4.6 million of Net cash used in changes in the levels of operating assets and liabilities.

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

For the three months ended March 31, 2025, Net cash provided by financing activities from continuing operations was $3.1 million, consisting of proceeds from notes payable of $4.6 million partially offset by repayments of various other notes payable of $1.5 million.

Net cash used in financing activities from discontinued operations was $20.0 thousand and $36.0 thousand, respectively, for the three months ended March 31, 2025 and 2024.

For the three months ended March 31, 2024, Net cash used in financing activities was $2.8 million, consisting of repayments of various other notes payable of $4.3 million partially offset by $1.5 million of proceeds from notes payable.

Critical Accounting Policies and Estimates

5 unchanged sentences

Recently Issued Accounting Pronouncements

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

Measurement of Credit Losses on Financial Instruments, as amended subsequently by ASUs 2018-19, 2019-04, 2019-05, 2019-10, 2019-11 and 2020-03.

The guidance in the ASUs requires that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used.

The standard also establishes additional disclosures related to credit risks.

This standard is effective for fiscal years beginning after December 15, 2022.

The adoption of this guidance on January 1, 2023 did not have a material impact on the Company's Unaudited Condensed Consolidated Financial Statements and related disclosures.

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 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

Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium.

Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share and updates the disclosure requirements in ASC 470-20, making them easier to understand for financial statement preparers and improving the decision-usefulness and relevance of the information for financial statement users.

The Company early adopted the new guidance from January 1, 2023, noting no material impact.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (Topic 280).

The standard requires incremental disclosures related to reportable segments, including disaggregated expense information and the title and position of the company's chief operating decision maker ("CODM"), as identified for purposes of segment determination.

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The ASU is effective for fiscal years beginning after December 15,

2023, and interim periods within fiscal years beginning after December 15, 2024.

Entities must adopt the changes to the segment reporting guidance on a retrospective basis.

Early adoption is permitted.

The Company is currently evaluating the impact of this standard on its consolidated financial statements.

The adoption of this guidance on December 31, 2024 did not have a material impact on the Company's Consolidated Financial Statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, which focuses on income tax disclosures by requiring public business entities, on an annual basis, to disclose specific categories in the rate reconciliation, provide information for reconciling items that meet a quantitative threshold, and certain information about income taxes paid.

2 unchanged sentences

Retrospective application is permitted.

The adoption of this guidance on December 31, 2024 did not have a material impact on the Company's Consolidated Financial Statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) ("ASU 2024-03").

The standard is intended to enhance transparency of income statement disclosures, primarily through additional disaggregation of relevant expense captions.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods within fiscal years beginning after December 15, 2027.

Entities can adopt the change prospectively or retrospectively to any or all prior periods presented in the financial statements.

The Company is currently evaluating the impact of the standard on its consolidated financial statements.

There is a degree of seasonality in the growing cycles, procurement and transportation of crops.

7 unchanged sentences

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 2. Management’s Discussion and Analysis