What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-14 compared with 2026-05-15 · 528 added, 435 removed, 97 unchanged (91% of the section changed)

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

Management’s Discussion and Analysis of Financial Condition

and Results of Operations

Preliminary Note

The following Management’s Discussion and Analysis

(“MD&A”), prepared as of May 15, 2026, 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, 2026, together with the audited financial

statements of the Company for the year ended December 31, 2025 and the accompanying MD&A for that fiscal year appearing in our Annual

Report on 2024 Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 29, 2026.

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.

The following Management’s Discussion and Analysis (“MD&A”),

prepared as of August 14, 2026, should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements of Sadot

(“Sadot Group”), for the three and six months ended June 30, 2026, together with the audited financial statements

of the Company for the year ended December 31, 2025 and the accompanying MD&A for that fiscal year appearing in our Annual Report

on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on April

Unless otherwise indicated or the context otherwise requires, all references to the terms “Company,” “company,”

“Sadot”, “we,” “us,” “our”, “Group” and similar terms refer to Sadot Group

Inc., together with its consolidated subsidiaries.

Our website address is http://sadotgroupinc.com.

information on, or that can be accessed through, our website is not part of this Report.

The SEC also maintains an Internet website that

contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

filings with the SEC are also available to the public through the SEC’s website at www.sec.gov.

The information on, or

that can be accessed through, our website is not part of this Report.

The SEC also maintains an Internet website that contains reports,

proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Our filings with the

SEC are also available to the public through the SEC’s website at www.sec.gov.

This MD&A is the responsibility of management.

Prior to its release, the Company’s Board of Directors (the “Board”) approved this MD&A on the Audit Committee’s

recommendation.

Prior to its release,

the Company’s Board of Directors (the “Board”) approved this MD&A on the Audit Committee’s recommendation.

The Company presents its financial statements in U.S.

Amounts in this MD&A are stated in U.S.

Dollars unless

otherwise indicated.

Dollars unless otherwise indicated.

Forward-Looking Statements

This Report contains forward-looking statements as

defined in the federal securities laws.

Forward-looking statements generally relate to future events or our future financial or operating

These forward-looking statements are not guarantees of future performance, conditions, or results, and involve a number of

known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of Sadot Group Inc’s

management’s control.

The words “may,” “will,” “expect,” “believe,” “anticipate,”

“project,” “plan,” “forecast,” “model,” “proposal,” “should,”

“may,” “intend,” “estimate,” and “continue,” and similar expressions (or the negative

versions of such words or expressions), are intended to identify forward-looking statements.

These forward-looking statements include,

without limitation, information concerning Sadot’s possible or assumed future results of operations, business strategies, debt levels,

competitive position, industry environment and possible growth opportunities.

We caution you that these statements are not guarantees

of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our

control, which may influence the accuracy of the statements and the projections upon which the statements are based.

Reference is made

to “Factors That May Affect Future Results and Financial Condition” in this Item 2 for a discussion of some of the uncertainties,

risks and assumptions associated with these statements.

Readers are cautioned not to place undue reliance on these forward-looking statements,

which speak only as of the date hereof.

We undertake no obligation to update or revise any forward-looking statements except as required

This Report contains forward-looking statements as defined in the federal

securities laws.

Forward-looking statements generally relate to future events or our future financial or operating performance.

forward-looking statements are not guarantees of future performance, conditions, or results, and involve a number of known and unknown

risks, uncertainties, assumptions and other important factors, many of which are outside of Sadot Group Inc’s management’s

The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,”

“plan,” “forecast,” “model,” “proposal,” “should,” “may,” “intend,”

“estimate,” and “continue,” and similar expressions (or the negative versions of such words or expressions), are

intended to identify forward-looking statements.

These forward-looking statements include, without limitation, information concerning

Sadot’s possible or assumed future results of operations, business strategies, debt levels, competitive position, industry environment

and possible growth opportunities.

We caution you that these statements are not guarantees of future performance or events and are subject

to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the

statements and the projections upon which the statements are based.

Reference is made to “Factors That May Affect Future Results

and Financial Condition” in this Item 2 for a discussion of some of the uncertainties, risks and assumptions associated with these

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

We undertake no obligation to update or revise any forward-looking statements except as required by law.

Sadot Group Inc.

is our parent company and is headquartered

in Burleson, Texas.

During the three months ended March 31, 2026, we reported zero commodity sales revenue compared to $132.2 million

in the prior-year period.

This reflects the significant streamlining of our operations, including the closure of certain international

offices and the completion of the sale of our Sadot Food Services segment on December 4, 2025.

As of March 31, 2026, Sadot Group consisted of one

distinct operating unit and one discontinued operation.

LLC (“Sadot Agri-Foods”):

Sadot Group’s operating unit was intended to

be a global Agri-Foods company engaged in farming, commodity trading and shipping of food

and feed (e.g., soybean meal, wheat and corn) via dry bulk cargo ships across the globe.

Sadot Agri-Foods competes with the ABCD commodity companies (ADM, Bunge, Cargill, Louis-Dreyfus)

as well as many regional organizations.

Sadot Agri-Foods operates, through a majority owned

subsidiary, a roughly 5,000 acre 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.

judgment related to the farm was issued during the fourth quarter of 2025.

While the company

has appealed this ruling, it has recognized an impairment of $11.8 million on the Zambia

farm to reflect the associated financial impact.

In addition, the Company had a deposit on

farmland in Indonesia which was written off during the fourth quarter of 2025.

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.

Our business involved

farming, commodity trading, and shipping of food and feed products, such as soybean meal,

wheat, and corn, via dry bulk cargo ships across global markets.

We have recently encountered

substantial operational issues that have severely impacted our ability to conduct these activities

These challenges include, but are not limited to, disruptions in our supply

chain, such as delays in sourcing raw materials, logistical bottlenecks in shipping and transportation,

and inefficiencies in our farming operations due to difficult regulatory environments including

a legal system, adverse weather conditions, labor shortages, inefficient regulatory environments,

various court proceedings or equipment failures.

Additionally, geopolitical tensions, trade

restrictions, fluctuating commodity prices, and increased competition in the agri-foods sector

have compounded these issues, leading to halted or suspended trading activities and an inability

to fulfill contracts or secure new ones.

Between November 2022 and October 2025, Aggia LLC

FZ (“Aggia”) was providing consultancy in connection with the food supply chain

activities which were designed to become the most important focus of the Company.

as a result of disappointing performances in 2025, the Company decided to end the relationship

On November 20, 2025, the Company entered into a Settlement Agreement and Mutual

Release (the “Settlement Agreement”) with Aggia.

Pursuant to the Settlement Agreement,

the Company and Aggia agreed to terminate the Services Agreement dated as of November 14,

2022, as amended (collectively, the “Agreement Documents”), and to fully settle,

compromise, and discharge all claims, debts, obligations, and liabilities arising out of

or related to the Agreement Documents.

The Company is assessing the potential business opportunities

surrounding supply chain, before making any decisions as to whether the Company wants to

engage a replacement to the services previously provided by Aggia.

2025, the Company sold the assets relating to its U.S.-centric restaurant business.

Restaurant Group, LLC (“Sadot Food Services”) held three concepts, including

two fast casual restaurant concepts, Pokémoto and Muscle Maker Grill.

the Company operated a subscription-based fresh prep meal concept, SuperFit Foods, which

was sold in August 2024.

Throughout 2024 the remaining corporate owned restaurants were sold

and converted into franchise locations or closed.

On December 4, 2025, the Company and its

wholly-owned subsidiaries, Pokemoto LLC, Poke Co Holdings, LLC, and Muscle Maker Development,

LLC (collectively, the “Sellers”), completed the sale of substantially all of

the assets related to the Pokemoto and Muscle Maker Grill franchise businesses (the “Business”)

to MARV Brands of America LLC, a Delaware limited liability company, and MARV Brands Inc.,

an Ontario business corporation (collectively, the “Buyers”), pursuant to an

Asset Purchase Agreement dated December 4, 2025 (the “Purchase Agreement”).

the terms of the Purchase Agreement, the Buyers acquired the assets of the Business, including

franchise agreements, intellectual property (such as trademarks, recipes, operations manuals,

and brand standards), inventory, marketing funds, gift card balances, and other related assets,

for a total purchase price of $2,900,000 (the “Purchase Price”).

Price consisted of:

is our parent company and is headquartered in Burleson,

During the three and six months ended June 30, 2026, we reported $0.0 million and $0.0 million commodity sales revenue, respectively,

compared to $114.3 million and $246.5 million in the prior-year periods, respectively.

This reflects the significant streamlining of our

operations, including the closure of certain international offices and the completion of the sale of our Sadot Food Services segment on

December 4, 2025.

As of June 30, 2026, Sadot Group consisted of one distinct operating unit

and one discontinued operation.

● Sadot LLC (“Sadot Agri-Foods”):

Sadot Group’s operating unit was intended to be a global Agri-Foods company engaged

in farming, commodity trading and shipping of food and feed (e.g., soybean meal, wheat and corn) via dry bulk cargo ships across the globe.

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

Sadot Agri-Foods operates, through a majority owned subsidiary, a roughly 5,000 acre 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.

A default judgment related to the farm was issued

during the fourth quarter of 2025.

While the Company has appealed this ruling, it has recognized an impairment of $11.8 million on the

Zambia farm to reflect the associated financial impact.

In addition, the Company had a deposit on farmland in Indonesia which was written

off during the fourth quarter of 2025.

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.

Our business involved farming, commodity trading,

and shipping of food and feed products, such as soybean meal, wheat, and corn, via dry bulk cargo ships across global markets.

recently encountered substantial operational issues that have severely impacted our ability to conduct these activities effectively.

challenges include, but are not limited to, disruptions in our supply chain, such as delays in sourcing raw materials, logistical bottlenecks

in shipping and transportation, and inefficiencies in our farming operations due to difficult regulatory environments including a legal

system, adverse weather conditions, labor shortages, inefficient regulatory environments, various court proceedings or equipment failures.

Additionally, geopolitical tensions, trade restrictions, fluctuating commodity prices, and increased competition in the agri-foods sector

have compounded these issues, leading to halted or suspended trading activities and an inability to fulfill contracts or secure new ones.

Between November 2022 and October 2025, Aggia LLC FZ (“Aggia”) was providing consultancy in connection with the food supply

chain activities which were designed to become the most important focus of the Company.

However, as a result of disappointing performances

in 2025, the Company decided to end the relationship with Aggia.

On November 20, 2025, the Company entered into a Settlement Agreement

and Mutual Release (the “Settlement Agreement”) with Aggia.

Pursuant to the Settlement Agreement, the Company and Aggia agreed

to terminate the Services Agreement dated as of November 14, 2022, as amended (collectively, the “Agreement Documents”), and

to fully settle, compromise, and discharge all claims, debts, obligations, and liabilities arising out of or related to the Agreement

The Company is assessing the potential business opportunities surrounding supply chain, before making any decisions as to whether

the Company wants to engage a replacement to the services previously provided by Aggia.

● In 2025, the Company sold the assets relating to its U.S.-centric restaurant business.

Sadot Restaurant Group, LLC (“Sadot Food

Services”) held three concepts, including two fast casual restaurant concepts, Pokémoto and Muscle Maker Grill.

the Company operated a subscription-based fresh prep meal concept, SuperFit Foods, which was sold in August 2024.

Throughout 2024 the

remaining corporate owned restaurants were sold and converted into franchise locations or closed.

On December 4, 2025, the Company and

its wholly-owned subsidiaries, Pokémoto LLC, Poke Co Holdings, LLC, and Muscle Maker Development, LLC (collectively, the “Sellers”),

completed the sale of substantially all of the assets related to the Pokémoto and Muscle Maker Grill franchise businesses (the

“Business”) to MARV Brands of America LLC, a Delaware limited liability company, and MARV Brands Inc., an Ontario business

corporation (collectively, the “Buyers”), pursuant to an Asset Purchase Agreement dated December 4, 2025 (the “Purchase

Under the terms of the Purchase Agreement, the Buyers acquired the assets of the Business, including franchise agreements,

intellectual property (such as trademarks, recipes, operations manuals, and brand standards), inventory, marketing funds, gift card balances,

and other related assets, for a total purchase price of $2,900,000 (the “Purchase Price”).

The Purchase Price consisted of:

(i) a $100,000 earnest money deposit previously paid by the Buyers;

$2,600,000 paid at closing;

and (iii) a $200,000 holdback amount (the “Holdback Amount”)

payable subject to certain conditions, including the delivery of specified missing franchise

and transfer agreements as outlined in a side letter agreement dated December 4, 2025 (the

“Side Letter”).

The Holdback Amount is contingent upon the Sellers delivering

fully executed copies of various missing agreements on or before the holdback payment date.

The deadline for delivery has lapsed and the Company has not delivered all required agreements.

Accordingly, the $200,000 holdback receivable has been written off as of December 31, 2025.

In connection with the closing, the parties also executed a Trademark Assignment Agreement

dated December 4, 2025, pursuant to which the Company and Pokemoto LLC assigned all trademarks

related to the Business to MARV Brands Inc.

The transaction closed on December 4, 2025, and

the Company received the closing payment in accordance with the wire instructions.

allowed the Company to divest its franchise restaurant operations and further focus on its

agri-food operations.

Please see Note 4 – Assets held for sale and Note 5 – Discontinued

operations for further details.

(ii) $2,600,000 paid at closing;

and (iii) a $200,000 holdback amount

(the “Holdback Amount”) payable subject to certain conditions, including the delivery of specified missing franchise and transfer

agreements as outlined in a side letter agreement dated December 4, 2025 (the “Side Letter”).

The Holdback Amount is contingent

upon the Sellers delivering fully executed copies of various missing agreements on or before the holdback payment date.

The deadline for

delivery has lapsed and the Company has not delivered all required agreements.

Accordingly, the $200,000 holdback receivable was written

off as of December 31, 2025.

In connection with the closing, the parties also executed a Trademark Assignment Agreement dated December

4, 2025, pursuant to which the Company and Pokémoto LLC assigned all trademarks related to the Business to MARV Brands Inc.

transaction closed on December 4, 2025, and the Company received the closing payment in accordance with the wire instructions.

allowed the Company to divest its franchise restaurant operations and further focus on its agri-food operations.

Please see Note 4 –

Assets Held for Sale and Note 5 – Discontinued Operations for further details.

Key Financial Definitions

We review a number of financial and operating metrics,

including the following key metrics and non-GAAP measures, to evaluate our business, measure our performance, identify trends affecting

our business, formulate business plans, and make strategic decisions.

Governmental and other economic factors affecting our operations

Three Months Ended March 31,

We review a number of financial and operating metrics, including the following

key metrics and non-GAAP measures, to evaluate our business, measure our performance, identify trends affecting our business, formulate

business plans, and make strategic decisions.

Governmental and other economic factors affecting our operations may vary.

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Commodity sales

Other revenues

Cost of goods sold

Gross profit / (loss)

Depreciation and amortization expenses

1 unchanged sentence

Sales, general and administrative expenses

(Loss) / Income from operations

Loss from operations

EBITDA attributable to Sadot Group Inc.

Our key business and financial metrics are explained

in detail below.

Our revenues have historically been derived from Commodity

Revenues from commodity sales have declined substantially since Q2 2025.

We generated no commodity sales revenue in the first quarter

of 2026 as we continue to evaluate and streamline our agri-food operations following the divestiture of our food services business and

the adverse judgment regarding our Zambia farm operations.

The business has experienced significant trading difficulties around capital

to support new trades, disputes on settlement of existing trades and a number of legal disputes on historic trades.

Following the financial

performance during the third quarter of 2025, management of the Company began evaluating alternative business lines to address this situation.

All options are being assessed.

The management continues to focus on monetizing the current assets of Sadot Agri-Foods as efficiently

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

Our revenues have historically been derived from Commodity sales.

from commodity sales have declined substantially since Q2 2025.

We generated no commodity sales revenue in the first two quarters of 2026

as we continue to evaluate and streamline our agri-food operations following the divestiture of our food services business and the adverse

judgment regarding our Zambia farm operations.

The business has experienced significant trading difficulties around capital to support

new trades, disputes on settlement of existing trades and a number of legal disputes on historic trades.

Following the financial performance

during the third quarter of 2025, management of the Company began evaluating alternative business lines to address this situation.

options are being assessed.

The management continues to focus on monetizing the current assets of Sadot Agri-Foods as efficiently as possible.

It should be highlighted that the risk of future impairments on current assets is a possibility going forward.

on assets of the Trading business cannot be excluded in the near future or in the long run.

Impairments on assets of

the Trading business cannot be excluded in the near future or in the long run.

Cost of Goods Sold

Cost of goods sold includes commodity costs, labor,

rent and other operating expenses.

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

Depreciation and Amortization Expenses

Depreciation and amortization expenses primarily consist

of the depreciation of property and equipment.

Depreciation and amortization expenses primarily consist of the depreciation

of property and equipment.

Stock-Based Expenses

Stock-based expenses include all expenses that are

paid with stock.

For the periods ended March 31, 2026 and 2025, $0.4

million and $1.4 million, respectively, are recorded as Stock-based expenses in the accompanying Unaudited Condensed Consolidated Statements

of Operations and Other Comprehensive (Loss) / Income.

Stock-based expenses include all expenses that are paid with stock.

For the periods ended June 30, 2026 and 2025, $(0.3 million) and $0.9 million,

respectively, are recorded as Stock-based expenses in the accompanying Unaudited Condensed Consolidated Statements of Operations and Other

Comprehensive Income / (Loss).

Sales, General and Administrative Expenses

Sales, general and administrative expenses include

expenses associated with corporate and administrative functions that support our operations, including wages, benefits, travel expense,

legal and professional fees, training, investor relations and other corporate costs.

We incur incremental Sales, general and administrative

expenses as a result of being a publicly listed company on the NASDAQ capital market.

Other (Expense) / Income

Total Other (expense) / income listed below the Loss

from operations in the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive (Loss) / Income

consists of Change in fair value of stock-based compensation, loss on debt extinguishment and Interest expense, net.

Sales, general and administrative expenses include expenses associated

with corporate and administrative functions that support our operations, including wages, benefits, travel expense, legal and professional

fees, training, investor relations and other corporate costs.

We incur incremental Sales, general and administrative expenses as a result

of being a publicly listed company on the NASDAQ capital market.

Other Income / (Expense)

Total Other income / (expense) listed below the Loss from operations in

the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss) consists of Change

in fair value of stock-based compensation, loss on debt extinguishment and Interest expense, net.

Loss on debt extinguishment

Loss on debt extinguishment consist of the loss related

to the exchange of stock for debt repayment, which is calculated using the variance between the agreed upon price per share of stock and

the fair value of the stock on the date of the exchange and the gain recognized due to writing off accounts payable that have passed the

statue of limitations and no longer deemed payable.

Loss on debt extinguishment consist of the loss related to the exchange

of stock for debt repayment, which is calculated using the variance between the agreed upon price per share of stock and the fair value

of the stock on the date of the exchange and the gain recognized due to writing off accounts payable that have passed the statute of limitations

and no longer deemed payable.

Income Tax Benefit / (Expense)

Income tax benefit / (expense) represent federal,

state and local current and deferred income tax expense.

Net Income (Loss) Attributable to Non-controlling

Net loss attributable to non-controlling interests

was nil and $0.1 million for the periods ended March 31, 2026 and 2025, respectively.

During the year ended December 31, 2023 the Company

created a joint-venture in Zambia in which the Company has a 70% interest and the third-party equity ownership has a 30% Non-controlling

As described above, following the December 11, 2025 judgment by the High Court for Zambia, the Company lost possession, control,

and ownership of the underlying farmland assets, which have been fully impaired.

However, the Company retains a controlling interest in

the Zambian entity, and therefore continues to consolidate the entity.

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

and deferred income tax expense.

Net Income (Loss) Attributable to Non-controlling Interests

Net loss attributable to non-controlling interests was $0.0 million for

the three and six months ended June 30, 2026 and 2025, respectively.

During the year ended December 31, 2023 the Company created a joint-venture

in Zambia in which the Company has a 70% interest and the third-party equity ownership has a 30% Non-controlling interest.

above, following the December 11, 2025 judgment by the High Court for Zambia, the Company lost possession, control, and ownership of the

underlying farmland assets, which have been fully impaired.

However, the Company retains a controlling interest in the Zambian entity,

and therefore continues to consolidate the entity.

The Company is appealing the judgment.

Useful life of acquired intangible assets

The Company acquired intangible assets with a carrying amount of $11.0

million during the second quarter of 2026, representing a substantial majority of the Company’s total assets as of June 30, 2026.

Determining the useful life of these assets requires significant judgment, including judgments about the expected period over which the

TradeOS platform will contribute to future cash flows, the rate of technological obsolescence in commodity trading and risk management

software, and the level of ongoing development expenditure required to keep the platform commercially viable.

The Company assigned a useful

life of five years.

A shorter useful life would increase amortization expense in each period and reduce the carrying amount of the assets

more rapidly.

Recoverability of intangible assets

The Company assesses the recoverability of its intangible assets whenever

events or changes in circumstances indicate that the carrying amount may not be recoverable.

That assessment relies on estimates of undiscounted

future cash flows expected from the use of the assets.

The Purchased Assets have not yet generated revenue, and the Company’s ability

to realize their carrying amount depends on successfully deploying the TradeOS platform, which in turn depends on the Company obtaining

additional capital.

These estimates are inherently uncertain, and the assumptions underlying them are consistent with those used in the

Company’s going concern assessment.

An adverse change in those assumptions could result in a material impairment charge.

Non-GAAP Measures

EBITDA and EBITDA Margin are non-GAAP measures.

define EBITDA as Net loss, adjusted for depreciation, amortization, interest income / (expense), and income taxes.

We believe that EBITDA

and EBITDA Margin, (collectively, the “Non-GAAP Measures”) are useful metrics for investors to understand and evaluate our

operating results and ongoing profitability because they permit investors to evaluate our recurring profitability from our ongoing operating

EBITDA and EBITDA Margin, have certain limitations,

and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under U.S.

We caution investors that amounts presented in accordance with our definitions of any of the Non-GAAP Measures may not be comparable to

similar measures disclosed by other issuers, because some issuers calculate certain of the Non-GAAP Measures differently or not at all,

limiting their usefulness as direct comparative measures.

Reconciliations of EBITDA and Other Non-GAAP

We define EBITDA as Net

loss, adjusted for depreciation, amortization, interest income / (expense), and income taxes.

We believe that EBITDA and EBITDA Margin,

(collectively, the “Non-GAAP Measures”) are useful metrics for investors to understand and evaluate our operating results

and ongoing profitability because they permit investors to evaluate our recurring profitability from our ongoing operating activities.

EBITDA and EBITDA Margin, have certain limitations, and you should not

consider them in isolation or as a substitute for analysis of our results of operations as reported under U.S.

We caution investors

that amounts presented in accordance with our definitions of any of the Non-GAAP Measures may not be comparable to similar measures disclosed

by other issuers, because some issuers calculate certain of the Non-GAAP Measures differently or not at all, limiting their usefulness

as direct comparative measures.

Reconciliations of EBITDA and Other Non-GAAP Measures

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

GAAP measure, Net income and the calculations of the Net income Margin and EBITDA Margin for the three months ended March 30, 2026

Three Months Ended March 31,

Net (Loss) / Income

GAAP measure, Net income and the calculations of the Net income Margin and EBITDA Margin for the three and six months ended June

30, 2026 and 2025:

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Net income / (loss)

Adjustments to EBITDA:

1 unchanged sentence

Interest expense, net

Income tax expense

Income tax (benefit) / expense

Adjustments to Adjusted EBITDA:

Change in fair value of stock-based compensation

Gain on debt extinguishment

Gain on Deconsolidation of Sadot Latam

Stock-based consulting expenses

Adjusted EBITDA

EBITDA attributable to non-controlling interest

EBITDA attributable to Sadot Group Inc.

Gross profit / (loss)

Gross profit / (loss) attributable to Sadot Group Inc.

Gross Profit attributable to Sadot Group Inc.

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

EBITDA Margin attributable to Sadot Group Inc.

Unaudited Condensed Consolidated Results of

Operations - Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

Unaudited Condensed Consolidated Results of Operations - Three and

Six Months Ended June 30, 2026 Compared to the Three and Six Months Ended June 30, 2025

The following table represents selected items in our Unaudited Condensed

Consolidated Statements of Operations and Other Comprehensive (Loss) / Income for the three months ended March 31, 2026 and 2025, respectively:

Three Months Ended March 31,

Consolidated Statements of Operations and Other Comprehensive Income / (Loss) for the three months ended June 30, 2026 and 2025, respectively:

For the Three Months Ended June 30,

Commodity sales

Other revenues

Cost of goods sold

Gross profit / (loss)

Depreciation and amortization expenses

1 unchanged sentence

Sales, general and administrative expenses

(Loss) / Income from operations

Income (loss) from continuing operations

Interest expense, net

Loss on impairment

Loss on litigation

Loss on debt extinguishment

Change in fair value of stock-based compensation

(Loss) / Income for continuing operations before income tax

Income tax expense

Net (Loss) / Income for continuing operations

Net (Loss) / Income for discontinued operations

Loss on litigation

Gain on Deconsolidation

Income / (loss) on debt extinguishment

Income / (loss) from continuing operations before income tax

Income tax benefit / (expense)

Net income / (loss) from continuing operations

Net income / (loss) from discontinued operations

Net loss attributable to non-controlling interest

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

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

NM= not meaningful

Gross Profit / (Loss)

Three Months Ended March 31,

For the Three Months Ended June 30,

Commodity sales

Other revenues

Cost of goods sold

NM= not meaningful

Our gross (loss) profit totaled $0.0 million and $5.0 million for the three

months ended June 30, 2026 and 2025.

The $5.0 million decrease is primarily attributed to a decrease in Commodity sales partially offset

by a decrease in Cost of goods sold.

We generated Commodity sales of $0.0 million and $114.3 million for the

three months ended June 30, 2026 and 2025, respectively.

This represented a decrease of $114.3 million.

This decrease is due to Sadot

Agri Foods being unable to enter into additional trades because of lack of working capital.

Cost of goods sold for the three months ended June 30, 2026, totaled $0.0

million, compared to 109.4 million for the three months ended June 30, 2025, respectively.

The 100% change is a direct result of the decrease

Depreciation and Amortization Expenses

Three Months Ended June 30,

Depreciation and amortization expenses

Depreciation and amortization expenses for the three months ended June

30, 2026, totaled $175 thousand compared to $27.0 thousand for the three months ended June 30, 2025, respectively.

The $148.0 thousand

increase is attributed to amortization of the TradeOS platform intangible assets acquired during the second quarter of 2026.

Stock-Based Expenses

Three Months Ended June 30,

Stock-based expenses

Stock-based expenses for the three months ended June 30, 2026, totaled

$265 thousand compared to $(419) thousand for the three months ended June 30, 2025, respectively.

The $684 thousand decrease in Stock-based

expenses is primarily the result of the termination of the service agreement with Aggia entered in November 2025.

Sales, General and Administrative Expenses

Three Months Ended June 30,

Sales, general and administrative expenses

Sales, general and administrative expenses for the three and six months

ended June 30, 2026, totaled $0.9 million and $3.1 million, respectively, compared to $2.8 million and $5.9 million for the three and

six months ended June 30, 2025, respectively.

The $1.9 million and $2.8 million, respectively decrease was primarily attributable to lower

personnel-related costs resulting from a reduced staff count, as well as reduced operating and consulting expenses due to Sadot Agri-Foods

being unable to enter into additional trades because of limited working capital availability.

Other Income / (Expense)

Three Months Ended June 30,

Total other income / (expense), net

Other income for the three months ended June 30, 2026, totaled $40.9 million

income compared to $1.4 million expense for the three months ended June 30, 2025, respectively.

The other income was primarily attributable

to the recognition of Gain on Deconsolidation of Sadot Latam of $42.4 million, loss on litigation of $0.5 million, all of which were not

present in the prior year, partially offset by a $0.5 million increase in Interest expense.

Unaudited Condensed Consolidated Results of Operations - Six Months

Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025

For the Six Months Ended June 30,

Commodity sales

Other revenues

Cost of goods sold

Depreciation and amortization expenses

Stock-based expenses

Sales, general and administrative expenses

Income (loss) from continuing operations

Interest expense, net

Change in fair value of stock-based compensation

Loss on litigation

Gain on Deconsolidation

Income / (loss) on debt extinguishment

Income (loss) from continuing operations before income tax

Income tax benefit / (expense)

Net income / (loss) from continuing operations

Net income / (loss) from discontinued operations

Net loss attributable to non-controlling interest

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

NM= not meaningful

Gross Profit / (Loss)

For the Six Months Ended June 30,

Commodity sales

Other revenues

Cost of goods sold

NM= not meaningful

Our gross (loss) profit totaled nil for the three

months ended March 31, 2026, compared to $6.0 million profit for the three months ended March 31, 2025.

The $6.0 million decrease is primarily

attributed to a decrease in Commodity sales partially offset by a decrease in Cost of goods sold.

We generated Commodity sales of nil for the three

months ended March 31, 2026, compared to $132.2 million for the three months ended March 31, 2025.

This represented a decrease of $132.2

This decrease is due to Sadot Agri Foods being unable to enter into additional trades because of lack of working capital.

Cost of goods sold for the three months ended March

31, 2026, totaled nil compared to $126.2 million for the three months ended March 31, 2025.

The $126.2 million or 100.0% change is a direct

result of the decrease in sales.

Our gross (loss) profit totaled $0.0 million and $11.0 million for the

six months ended June 30, 2026 and 2025, respectively.

The $11.0 million decrease is primarily attributed to a decrease in Commodity sales

partially offset by a decrease in Cost of goods sold.

We generated Commodity sales of $0.0 million and $246.5 million for the

six months ended June 30, 2026 and 2025, respectively.

This represented a decrease of $246.5 million.

This decrease is due to Sadot Agri

Foods being unable to enter into additional trades because of lack of working capital.

Cost of goods sold for the six months ended June 30, 2026, totaled $0.0

million, compared to $235.6 million for the six months ended June 30, 2025, respectively.

The 100% change is a direct result of the decrease

Depreciation and Amortization Expenses

Three Months Ended March 31,

Six Months Ended June 30,

Depreciation and amortization expenses

Depreciation and amortization expenses for the three

months ended March 31, 2026, totaled nil compared to $27.0 thousand, for the three months ended March 31, 2025.

The $27.0 thousand decrease

is attributed to Farm related assets being fully depreciated in 2024 and the loss of the corporate office lease and furniture in Burleson.

Depreciation and amortization expenses for the six months ended June 30,

2026, totaled $175.0 thousand compared to $54.0 thousand for the six months ended June 30, 2025, respectively.

The $121.0 thousand increase

is attributed to amortization of the TradeOS platform intangible assets acquired during the second quarter of 2026.

Stock-Based Expenses

Three Months Ended March 31,

Six Months Ended June 30,

Stock-based expenses

Stock-based expenses for the three months ended March

31, 2026, totaled $0.4 million compared to $1.4 million for the three months ended March 31, 2025.

The decrease in Stock-based expenses

Stock-based expenses for the six months ended June 30, 2026, totaled $94

thousand compared to $1.8 million for the six months ended June 30, 2025, respectively.

The $1.8 million decrease in Stock-based expenses

is primarily the result of the termination of the service agreement with Aggia entered in November 2025.

Sales, General and Administrative Expenses

Three Months Ended March 31,

Six Months Ended June 30,

Sales, general and administrative expenses

Sales, general and administrative expenses for the

three months ended March 31, 2026, totaled $2.2 million compared to $3.1 million for the three months ended March 31, 2025.

The $1.0 million

decrease was primarily attributable to lower personnel-related costs resulting from a reduced staff count, as well as reduced operating

and consulting expenses due to Sadot Agri-Foods being unable to enter into additional trades because of limited working capital availability.

Sales, general and administrative expenses for the six months ended June

30, 2026, totaled $3.1 million, respectively, compared to $5.9 million for the six months ended June 30, 2025, respectively.

million decrease was primarily attributable to lower personnel-related costs resulting from a reduced staff count, as well as reduced

operating and consulting expenses due to Sadot Agri-Foods being unable to enter into additional trades because of limited working capital

availability.

Other Income / (Expense)

Three Months Ended March 31,

Six Months Ended June 30,

Total other income / (expense), net

for the three months ended March 31, 2026, totaled $2.3 million expense compared to $0.8 million expense for the three

months ended March 31, 2025.

The other income was primarily attributable to the recognition of impairment of assets of $0.1 million, loss

on litigation of $0.1 million, loss on debt extinguishment of $0.3 million, all of which were not present in the prior year, partially

offset by a $0.3 million increase in Interest expense, net and $0.8 million decrease in change in fair value of stock-based compensation

due to termination of agreement with Aggia.

Other income for the six months ended June 30, 2026 and 2025, totaled $38.6

million and $2.2 million expense, respectively.

The other income was primarily attributable to the recognition of Gain on Deconsolidation

of Sadot Latam of $42.4 million, loss on litigation of $0.6 million, all of which were not present in the prior year, partially offset

by a $0.9 million increase in Interest expense, net.

Liquidity and Capital Resources

As of March 31, 2026, we had a working capital deficit

of $57.8 million (an increase of $3.0 million from $54.8 million at December 31, 2025) and cash of $0.68 million.

Current liabilities

significantly exceed current assets, driven primarily by $49.0 million in accounts payable and accrued expenses and $11.1 million in notes

payable (net of discount).

Substantially all of our outstanding debt obligations

matured on December 31, 2025 and remain unpaid, placing us in default.

These defaults, together with the working-capital deficit, raise

substantial doubt about our ability to continue as a going concern within one year after the date these financial statements are issued.

See Note 2 to the condensed consolidated financial statements for additional information.

On May 5, 2026, we received a notice from Nasdaq indicating

that we no longer satisfy the minimum shareholders’ equity requirement under Nasdaq Listing Rule 5550(b)(1).

We intend to submit

a compliance plan within the required 45-day period and are evaluating strategic options to regain compliance.

As of June 30, 2026, we had a working capital deficit of $13.6 million

(an increase of $41.2 million from $54.8 million as of December 31, 2025) and cash of $0.12 million.

Current liabilities significantly

exceed current assets, driven primarily by $8.5 million in accounts payable and accrued expenses and $5.2 million in current notes payable

(net of discount).

Substantially all of our outstanding debt obligations matured on December

31, 2025 and, except for new obligations settled through the issuance of common stock in April, May, and July 2026, remain unpaid, placing

us in default.

These defaults, together with the working-capital deficit, raise substantial doubt about our ability to continue as a going

concern within one year after the date these financial statements are issued.

See Note 2 to the condensed consolidated financial statements

for additional information.

On May 5, 2026, we received a notice from Nasdaq indicating that we no

longer satisfy the minimum shareholders’ equity requirement under Nasdaq Listing Rule 5550(b)(1).

A compliance plan was submitted

within the required 45-day period.

On August 3, 2026, the Company received a letter (the “Compliance

Letter”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”)

notifying the Company that, based upon the Company’s Current Report on Form 8-K dated July 17, 2026, the Staff has determined that

the Company complies with the minimum stockholders’ equity requirement for continued listing on The Nasdaq Capital Market set forth

in Nasdaq Listing Rule 5550(b)(1).

As previously disclosed, on May 5, 2026, the Staff notified the Company that it did not comply with

the minimum $2.5 million stockholders’ equity requirement of Nasdaq Listing Rule 5550(b)(1) and that it did not otherwise satisfy

the alternative continued listing standards of at least $35 million market value of listed securities set forth in Nasdaq Listing Rule

5550(b)(2) or $500,000 of net income from continuing operations set forth in Nasdaq Listing Rule 5550(b)(3).

The Company thereafter submitted

a plan to regain compliance to the Staff and, in its Current Report on Form 8-K dated July 17, 2026, reported, among other things, the

Company’s pro forma stockholders’ equity after giving effect to the previously disclosed transactions described therein.

Compliance Letter further provides that if the Company fails to evidence compliance with Nasdaq Listing Rule 5550(b)(1) upon filing its

periodic report for the period ended September 30, 2026, the Company may be subject to delisting.

In that event, the Staff would provide

written notification to the Company, and the Company would have the right to appeal the Staff’s determination to a Nasdaq Hearings

There can be no assurance that the Company will evidence compliance with the stockholders’ equity requirement upon the filing

of its periodic report for the period ended September 30, 2026 or that the Company will otherwise maintain compliance with the other continued

listing requirements of The Nasdaq Capital Market.

The Compliance Letter has no immediate effect on the listing or trading of the Company’s

common stock, which continues to trade on The Nasdaq Capital Market under the symbol “SDOT.”

Working Capital

We measure our liquidity in a number of ways, including

the following:

March 31, 2026

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

June 30, 2026

December 31, 2025

8 unchanged sentences

Current ratio (4)

(1) Consists of VAT, prepaid expenses, and current

notes receivable.

(2) Consists of Operating lease liability and other

current liabilities

(3) Working Capital is defined as Total current assets

less Total current liabilities

(4) Current ratio is defined as Total current assets

divided by Total current liabilities

(1) See Note 9 - Other Current Assets.

(2) Consists of Operating lease liabilities

(3) Working Capital is defined as Total current assets less Total current

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

Availability of Additional Funds

Our main financial objectives are to prudently manage

financial risk, ensure access to liquidity and minimize cost of capital in order to efficiently finance our business and maintain balance

sheet strength.

We generally finance our ongoing operations with cash flows generated from operations, borrowings under various credit

facilities and term loans.

At March 31, 2026, current ratio, which equals Total

current assets divided by Total current liabilities, was 0.04, a decrease of 0.01, compared to current ratio of 0.05 at December 31, 2025.

At March 31, 2026, working capital (deficit), which equals Total current assets less Total current liabilities, was $(57.8) million, an

increase of $3.0 million, compared to working capital deficit of $(54.8) million at December 31, 2025.

The decrease in current ratio and

working capital was primarily due to an increase in accounts payable, a decrease in net accounts receivable due to large allowances, partially

offset by a decrease in other current asset and an increase in other current liabilities.

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

and led the business to increase borrowing to cover collection delays.

During the three months ended March 31, 2026 the company increased

its net borrowing by $0.9 million.

The Company is currently experiencing delays in converting

receivables into cash, which has impacted the timing of available liquidity.

Management continues to actively manage collections, review

credit facilities, and negotiate repayment arrangements with certain creditors to support liquidity requirements.

The Company is required to obtain additional financing—whether

through borrowings, private placements, public offerings, or strategic transactions such as mergers or asset sales.

Our main financial objectives are to prudently manage financial risk, ensure

access to liquidity and minimize cost of capital in order to efficiently finance our business and maintain balance sheet strength.

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

As of June 30, 2026, current ratio, which equals Total current assets divided

by Total current liabilities, was 0.01, an decrease of 0.04, compared to current ratio of 0.05 as of December 31, 2025.

As of June 30,

2026, working capital (deficit), which equals Total current assets less Total current liabilities, was $13.6 million, a decrease of $41.2

million, compared to working capital deficit of $54.8 million as of December 31, 2025.

The improvement in the current ratio and the decrease

in the working capital deficit were primarily due to the deconsolidation of Sadot Latam.

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 and led the business

to participate in several transactions during the second quarter of 2026.

The Company is currently experiencing delays in converting receivables

into cash, which has impacted the timing of available liquidity.

Management continues to actively manage collections, review credit facilities,

and negotiate repayment arrangements with certain creditors to support liquidity requirements.

The Company is required to obtain additional financing—whether through

borrowings, private placements, public offerings, or strategic transactions such as mergers or asset sales.

There can be no assurance

5 unchanged sentences

We will need to raise additional capital.

Such additional

capital may not be available nor may the terms of such capital be generally acceptable.

In addition, any future sale of our equity securities

could dilute the ownership and control of your shares and could be at prices substantially below prices at which our shares currently

We may seek to increase our cash reserves through the sale of additional equity or debt securities.

The sale of convertible debt

securities or additional equity securities could result in additional and potentially substantial dilution to our shareholders.

The incurrence

of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict

our operations and liquidity.

Such additional capital may not

be available nor may the terms of such capital be generally acceptable.

In addition, any future sale of our equity securities could dilute

the ownership and control of your shares and could be at prices substantially below prices at which our shares currently trade.

seek to increase our cash reserves through the sale of additional equity or debt securities.

The sale of convertible debt securities or

additional equity securities could result in additional and potentially substantial dilution to our shareholders.

The incurrence of indebtedness

would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations

and liquidity.

In addition, our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties.

We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

Any failure to raise additional

funds on favorable terms could have a material adverse effect on our liquidity and financial condition.

Management has performed a going concern assessment

covering a period of twelve months from the issuance date of these condensed consolidated financial statements.

While there is no assurance

that existing borrowings and the equity line of credit will provide sufficient funding to support operations for the full assessment period,

management believes it remains appropriate to prepare the financial statements on a going-concern basis.

Management believes the actions

described above, if successfully executed, will provide sufficient liquidity to meet obligations as they become due.

However, there can

be no assurance that such plans will be realized or that additional financing will be available on acceptable terms.

Accordingly, substantial

doubt exists about the Company’s ability to continue as a going concern within one year after the date these financial statements

The accompanying unaudited condensed consolidated

financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts or the

amounts and classification of liabilities that might result from the outcome of this uncertainty.

Management has performed a going concern assessment covering a period of

twelve months from the issuance date of these condensed consolidated financial statements.

While there is no assurance that existing borrowings

and the equity line of credit will provide sufficient funding to support operations for the full assessment period, management believes

it remains appropriate to prepare the financial statements on a going-concern basis.

Management believes the actions described above,

if successfully executed, will provide sufficient liquidity to meet obligations as they become due.

However, there can be no assurance

that such plans will be realized or that additional financing will be available on acceptable terms.

Accordingly, substantial doubt exists

about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued.

The accompanying unaudited condensed consolidated financial statements

do not include any adjustments relating to the recoverability or classification of recorded asset amounts or the amounts and classification

of liabilities that might result from the outcome of this uncertainty.

Helena Purchase Agreement Impact on Liquidity

The September 23, 2025 Helena Purchase Agreement provides

potential access to up to $10 million but carries material cash obligations:

$100,000 liquidated damages per 30-day period if the $2 million

Threshold Amount is not met within six months of registration effectiveness, plus 2.0% monthly penalties for registration delays.

cash payments, combined with the Company’s negative working capital ($(6,982) thousand as of December 31, 2025 and debt maturities,

increase liquidity pressure.

The September 23, 2025 Helena Purchase Agreement provides potential access

to up to $10 million but carries material cash obligations:

$100,000 liquidated damages per 30-day period if the $2 million Threshold

Amount is not met within six months of registration effectiveness, plus 2.0% monthly penalties for registration delays.

These cash payments,

combined with the Company’s negative working capital $(54,801) thousand as of December 31, 2025 and debt maturities, increase liquidity

The registration statement was initially filed but subsequently withdrawn.

The original filing deadline was

October 8, with the Form S-1 ultimately filed on November 14 and an effectiveness deadline of December 23.

The original filing deadline was October 8, 2025,

with the Form S-1 ultimately filed on November 14, 2025 and an effectiveness deadline of December 23, 2025.

As a result of not meeting

1 unchanged sentence

on a monthly basis thereafter.

As of March 31, 2026, the Company has accrued approximately $1.2 million related to these penalties, which

As of June 30, 2026, the Company has accrued approximately $1.8 million related to these penalties, which

is included in accrued expenses.

Subsequent to June 30, 2026, a settlement was reached whereby the Company paid Helena for $350 thousand

and the agreement was canceled.

Settlement Agreement Impact on Capital Resources

On November 20, 2025, the Company entered into a settlement

agreement with Aggia LLC FZ that requires a cash payment of $75,000 and the issuance of 1,050,000 shares of common stock.

has issued 257,000 shares to date, with the remaining 793,000 shares subject to shareholder approval under Nasdaq Rule 5635(d).

December 31, 2025, the Company has accrued a liability for the remaining 793,000 shares within accrued expenses.

The settlement also resulted

in the cancellation of outstanding promissory notes previously issued to Aggia.

From a liquidity perspective, the settlement required

a modest cash outflow of $75,000, with no additional contractual cash obligations, and therefore does not represent a significant ongoing

use of cash resources.

However, the settlement impacts capital resources by reducing outstanding debt obligations through the cancellation

of the promissory notes and increasing reliance on equity-based financing.

The issuance of the remaining shares will result in dilution

to existing shareholders and may impact the Company’s ability to raise additional equity capital.

Subsequent to March 31, 2026,

the Company received shareholder approval for the issuance of the remaining 793,000 shares, satisfying the approval requirement under

Nasdaq Rule 5635(d).

Sources and Uses of Cash for the Three Months Ended

March 31, 2026 and 2025

For the three months ended March 31, 2026, Net cash

used in operating activities from continuing operation was $0.8 million compared to $3.0 million provided by operating activities for

the three months ended March 31, 2025.

Net cash used in operating activities from discontinued operations was nil and Net cash provided

by operating activities from discontinued operations was $8.0 thousand, respectively, for the three months ended March 31, 2026 and 2025.

Our Net cash used for the three months ended March 31, 2026, was primarily attributable to our Net loss of $4.9 million, adjusted for

net non-cash income in the aggregate amount of $0.8 million and $3.3 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, 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 in changes in the

levels of operating assets and liabilities.

For the three months ended March 31, 2026 and 2025,

Net cash used in investing activities was nil.

Net cash provided by investing activities from discontinued operations for the three months

ended March 31, 2026 and 2025 was nil and $1.0 million.

For the three months ended March 31, 2026, Net cash

provided by financing activities from continuing operations was $0.8 million, consisting of proceeds from notes payable of $1.0 million,

partially offset by repayments of various other notes payable of $0.2 million.

Net cash used in financing activities from discontinued

operations was nil and $20.0 thousand, respectively, for the three months ended March 31, 2026 and 2025.

For the three months ended March

31, 2025, Net cash used in financing activities was $3.1 million, consisting of repayments of various other notes payable of $1.5 million

partially offset by $4.6 million of proceeds from notes payable.

On November 20, 2025, the Company entered into a settlement agreement with

Aggia LLC FZ that requires a cash payment of $75,000 and the issuance of 1,050,000 shares of common stock.

The Company has issued 257,000

shares in December 2025, with the remaining 793,000 shares issued in May 2026 after we received shareholder approval under Nasdaq Rule

As of June 30, 2026, the Company has no accrued liability as all shares have been issued.

The settlement also resulted in the

cancellation of outstanding promissory notes previously issued to Aggia.

From a liquidity perspective, the settlement required a modest

cash outflow of $75,000, with no additional contractual cash obligations, and therefore does not represent a significant ongoing use of

cash resources.

Sources and Uses of Cash for the Three and Six Months Ended June 30,

2026 and 2025

For the three and six months ended June 30, 2026, Net cash used in operating

activities from continuing operations was $716 thousand and $1.5 million, respectively, compared to $2.4 million and $5.4 million used

in operating activities for the three and six months ended June 30, 2025, respectively.

There were no operating cash flows from discontinued

operations in the 2026 periods;

Net cash provided by operating activities from discontinued operations was $116 thousand and $124 thousand

for the three and six months

ended June 30, 2025, respectively.

Our Net cash used for the three and six months ended June 30, 2026, was

primarily attributable to our Net income of $40.1 million and $35.2 million, respectively, which included a non-cash gain on deconsolidation

of subsidiary, offset by net non-cash income in the aggregate amount of $41.5 million and $39.9 million, respectively, and $782 thousand

and $3.3 million, respectively, of Net cash provided by changes in the levels of operating assets and liabilities.

For the six months

ended June 30, 2025, our Net cash used was primarily attributable to Net income of $1.1 million, adjusted for net non-cash expense in

the aggregate amount of $2.8 million, and $9.3 million of Net cash used in changes in the levels of operating assets and liabilities.

For the three and six months ended June 30, 2026, Net cash provided by

investing activities was $16 thousand and $16 thousand, respectively, arising entirely in the second quarter.

Net cash provided by investing

activities for the three and six months ended June 30, 2025 was $nil and $nil, respectively.

For the six months ended June 30, 2026, Net cash provided by financing

activities from continuing operations was $953 thousand, consisting of proceeds from notes payable of $1.0 million and proceeds from the

issuance of preferred stock of $145 thousand, partially offset by repayments of various other notes payable of $182 thousand and payment

of debt issuance costs of $10 thousand.

For the three and six months ended June 30, 2025, Net cash provided by financing activities was

$864 thousand and $4.0 million, respectively, consisting of proceeds from notes payable of $5.4 million and $10.0 million, respectively,

partially offset by repayments of various other notes payable of $4.6 million and $6.0 million, respectively.

Net cash used in financing

activities from discontinued operations was $22 thousand and $42 thousand for the three and six months ended June 30, 2025, respectively;

there were no financing cash flows from discontinued operations in the 2026 periods.

Critical Accounting Policies and Estimates

We prepare our financial statements in accordance

with accounting principles generally accepted in the United States of America.

The preparation of the condensed consolidated financial

statements in accordance with U.S.

GAAP requires management to apply estimates, judgments and assumptions that affect the amounts reported

in the financial statements and accompanying notes.

Estimates that involve a higher degree of judgment include, among others, the determination

of allowance on accounts receivable, assessment of impairment of assets, and provisions related to legal proceedings.

Management evaluates

these estimates on an ongoing basis and updates them as circumstances evolve.

Actual results could differ from those estimates, and such

differences may be material.

We prepare our financial statements in accordance with accounting principles

generally accepted in the United States of America.

The preparation of the condensed consolidated financial statements in accordance with

GAAP requires management to apply estimates, judgments and assumptions that affect the amounts reported in the financial statements

and accompanying notes.

Estimates that involve a higher degree of judgment include, among others, the determination of allowance on accounts

receivable, assessment of impairment of assets, and provisions related to legal proceedings.

Management evaluates these estimates on an

ongoing basis and updates them as circumstances evolve.

Actual results could differ from those estimates, and such differences may be

Recently Issued Accounting Pronouncements

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

The standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The amendments should

be applied on a prospective basis.

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.

is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The amendments should be applied on

a prospective basis.

Retrospective application is permitted.

The adoption of this guidance on January 1, 2025 did not have

a material impact on its condensed 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 adoption of this guidance on January 1, 2025 did not have a material

impact on its condensed 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.

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

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

In September 2025, the FASB issued ASU No.

Derivatives and Hedging and Revenue from Contracts with Customers - Derivatives Scope Refinements and Scope Clarification for Share-Based

Noncash Consideration from a Customer in a Revenue Contract (“ASC 2025-07”) which applies to all entities that enter into

non-exchange-traded contracts with underlyings based on operations or activities specific to one of the parties to the contract.

guidance excludes from derivative accounting non-exchange-traded contracts with underlyings that are based on operations or activities

specific to one of the parties to the contract.

ASU 2025-07 is effective for annual reporting periods beginning after December 15, 2026,

and interim reporting periods within those annual reporting periods.

2025-07, Derivatives and Hedging

and Revenue from Contracts with Customers - Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration

from a Customer in a Revenue Contract (“ASC 2025-07”) which applies to all entities that enter into non-exchange-traded contracts

with underlyings based on operations or activities specific to one of the parties to the contract.

The new guidance excludes from derivative

accounting non-exchange-traded contracts with underlyings that are based on operations or activities specific to one of the parties to

the contract.

ASU 2025-07 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within

those annual reporting periods.

Early adoption is permitted.

The Company is currently evaluating

the impact of the standard on its condensed consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim

Reporting (Topic 270):

The Company is currently evaluating the impact of the standard on its condensed

consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic

Improvements to Interim Disclosure Requirements.

The amendments are intended to enhance interim disclosures through

a more principles-based framework.

The standard is effective for fiscal years beginning after December 15, 2026, including interim periods

within those fiscal years.

The Company has not adopted this guidance as of March 31, 2026 and is currently evaluating the impact of this

guidance on its condensed consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-12, Codification

Improvements, which includes various targeted amendments to the Accounting Standards Codification.

The amendments are intended to enhance interim disclosures through a more principles-based

The standard is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal

The Company has not adopted this guidance as of June 30, 2026 and is currently evaluating the impact of this guidance on its condensed

consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements,

which includes various targeted amendments to the Accounting Standards Codification.

The effective dates vary by amendment.

The Company has not adopted this guidance as of March 31, 2026 and does not expect it to have a material impact on its condensed consolidated

financial statements and related disclosures.

There is a degree of seasonality in the growing cycles,

procurement and transportation of crops.

The farming industry historically experiences seasonal fluctuations in revenues and net income.

Typically, the Company has lower sales and net income during the non-harvest seasons and higher sales and net income during the harvest

season and as such, must have sufficient working capital to fund its operations at a reduced level.

Failure to generate or obtain sufficient

working capital during the winter may have a material adverse effect on the Company.

has not adopted this guidance as of June 30, 2026 and does not expect it to have a material impact on its condensed consolidated financial

statements and related disclosures.

In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation

(Topic 718) and Revenue from Contracts with Customers (Topic 606):

Clarifications to Share-Based Consideration Payable to a Customer .

The amendments expand the definition of a performance condition in Topic 718 to include conditions contingent on the purchase of goods

or services by a customer or a customer’s customer, eliminate the policy election permitting forfeitures to be recognized as they

occur for awards granted to customers that are subject to a service condition, and clarify that the variable consideration guidance in

Topic 606 does not apply to share-based consideration payable to a customer, with the probability of vesting instead assessed under Topic

The amendments are effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years,

and are applied on either a modified retrospective or a full retrospective basis.

Early adoption is permitted.

The Company does not currently

issue share-based consideration to its customers and does not expect adoption to have a material effect on its consolidated financial

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have

or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses,

results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Quantitative and Qualitative Disclosures

About Market Risk

We have no off-balance sheet arrangements that have or are reasonably likely

to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations,

liquidity, capital expenditures or capital resources that is material to investors.

Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

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