Sadot Group Inc. 10-Q

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Issuance of Stock On November 20, 2025, the Company entered into a Settlement Agreement and Mutual Release (the “Settlement Agreement”) with Aggia LLC FZ (“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. In full and complete satisfaction of the debt and termination of the Agreement Documents, the Company agreed to issue to Aggia, or to Aggia’s designees, an aggregate of 1,050,000 shares of the Company’s common stock, par value $0.0001 per share (the “Settlement Shares”) and make a payment of $75,000. The Company issued 257,000 Settlement Shares (the “Initial Shares”) following the execution of the Settlement Agreement. The issuance of the remaining 793,000 Settlement Shares (the “Subsequent Shares”) is subject to obtaining requisite shareholder approval. If shareholder approval is not obtained by March 31, 2026, the obligation to issue the Subsequent Shares will be suspended until such approval is obtained, and the Company will continue to seek approval at subsequent meetings. The Company committed it will not issue any Subsequent Shares under the Settlement Agreement unless and until the requisite shareholder approval under Nasdaq Rule 5635(d) has been obtained. Apart from the initial issuance of Initial Shares (which is below the 19.99% threshold), no further Settlement Shares will be issued without such shareholder approval. Shareholder approval to issue the remaining 793,000 shares was obtained during the Company’s shareholder meeting on April 13, 2026. The Company issued these shares in May 2026. The Settlement Shares were allocated pro-rata among Aggia’s designated assignees as set forth in the Settlement Agreement. The Settlement Agreement also terminates any related ancillary documents, including promissory notes issued thereunder (which will be deemed canceled and satisfied in full upon issuance of the Settlement Shares), and eliminates any ongoing obligations under the Agreement Documents, such as services, compensation, board nomination rights, managing member representative roles, non-compete, confidentiality, or other covenants. The Settlement Agreement includes mutual releases of all claims related to the Agreement Documents and prior transactions between the parties, as well as customary representations and warranties, confidentiality provisions, governing law (State of Texas), dispute resolution (exclusive jurisdiction in federal or state courts in Dallas County, Texas, with jury trial waiver), and other miscellaneous terms. On February 6, 2026, the Company entered into a Securities Purchase Agreement with accredited investors to issue 8% Unsecured Original Issue Discount Debentures in the aggregate principal amount of $1,086,956.52 (funded amount of $1,000,000 after giving effect to the 8% original issue discount). The Debentures mature on the earlier of May 30, 2026, or the closing of any debt or equity financing resulting in gross proceeds of at least $5,000,000. The Company has the option to prepay the Debentures at any time at the principal amount. As additional consideration, the Company issued 300,000 shares of common stock to the Purchasers. Following the May 27, 2026 reverse stock split on a 1-for-20 basis, these common shares were adjusted to 15,000 shares on a post-split basis. On February 11, 2026, the Company issued 10,000 shares of Series A Preferred Stock to Stanley Hills, LLC for $145,244. On March 2, 2026, the parties amended the Series A Preferred Stock terms, reducing the stated value from $14.5244 per share to $5.1596 per share and voting rights from 14.5244 votes per share to 5.1596 votes per share. The Series A Preferred Stock was not subject to the reverse stock split and remains 10,000 shares. On June 2, 2026, the Company completed the acquisition of certain assets from Anira Consulting FZC, including the TradeOS technology platform and related intellectual property, for an aggregate purchase price of $11,500,000 (subsequently adjusted from the original $12,000,000). The Company issued 135,000 shares of common stock valued at $3.00 per share ($405,000), 1,000 shares of Series B Non-Voting Non-Convertible Preferred Stock with a stated value of $6,595 per share ($6,595,000), and a non-convertible promissory note in the principal amount of $4,500,000 bearing zero interest and maturing on June 2, 2028. The Company has the right to prepay the note at a discount of 1% for each full calendar month remaining until maturity. 84 On June 6, 2026, the Company issued 132,803 shares of common stock to Anat Attia in satisfaction of a $1,042,500 option fee under a Written Option Agreement. The option grants the Company an exclusive, irrevocable six-month option to acquire 100% of the membership interests in seven California-based real estate limited liability companies holding an aggregate of 147 residential units with an agreed equity value of $69,500,000. The option fee is creditable against the exercise price. The shares were issued at $7.85 per share, representing 17.71% of outstanding common stock at issuance and below the 19.99% Nasdaq threshold. On July 14, 2026, the Company completed the acquisition of intellectual property marketed as “TradeIQ” from Litial Ltd for an aggregate purchase price of $6,000,000, consisting of $50,000 in cash (payable in two tranches), 200,000 shares of common stock valued at $10.00 per share ($2,000,000), and 3,950 shares of Series C Non-Voting Non-Convertible Preferred Stock with a stated value of $1,000 per share ($3,950,000). The Series C Preferred Stock accrues cumulative cash dividends at 6% per annum on stated value (increasing to 9% upon specified events of default), ranks senior to common stock as to dividends and liquidation, is perpetual and non-mandatory redemption, is redeemable at the Company’s option, and is non-voting and non-convertible. The common shares are subject to a 180-day lock-up and thereafter a daily leak-out limitation tied to trading volume. On July 16, 2026, we entered into the Note Purchase Agreement with the Note Investor, pursuant to which we agreed to issue and sell to the Note Investor Notes in the aggregate original principal amount of up to $100,000,000, at a purchase price of $900 per $1,000 of principal amount. The Notes are issuable in one or more closings, consisting of an initial closing of $4,000,000 in aggregate principal amount of Notes (the “Initial Notes”), a second closing of up to $1,000,000 in aggregate principal amount of Notes, and one or more additional closings of up to $2,000,000 in aggregate principal amount of Notes per closing and up to $95,000,000 in aggregate principal amount of Notes in the aggregate, in each case subject to the conditions set forth in the Note Purchase Agreement, including, in certain cases, the effectiveness of a registration statement covering the resale of the shares of Common Stock issuable pursuant to the terms of the Notes. On July 16, 2026, the initial closing occurred and we issued and sold the Initial Notes, generating gross proceeds of $3,600,000 and net proceeds to the Company of $2,565,000 after deducting transaction costs, legal fees, and placement agent fees totaling $1,035,000. The fixed conversion price under the Initial Notes is initially $17.81 per share, subject to adjustment. The Notes also contain a variable price mechanism that may result in the issuance of a substantially greater number of shares than would result from conversion at the fixed conversion price. On July 28, 2026, the Company filed a registration statement on Form S-1 seeking to register for resale of up to 6,008,772 shares of Common Stock, consisting of up to 2,500,000 shares issuable under the Equity Purchase Facility Agreement and up to 3,508,772 shares issuable upon conversion of, or otherwise pursuant to the terms of, the Notes. On July 16, 2026, we also entered into the Equity Purchase Facility Agreement with the EPFA Investor, pursuant to which we have the right, but not the obligation, to issue and sell to the EPFA Investor, from time to time in our sole discretion, and the EPFA Investor is obligated to purchase, up to an aggregate of $100,000,000 of newly issued shares of Common Stock, subject to the conditions and limitations set forth therein. The purchase price per Advance Share issued pursuant to any Advance will be determined pursuant to the terms of the Equity Purchase Facility Agreement. The Company may, in its sole discretion, select the amount of the Advance requested by the Company in each Advance Notice. There is no mandatory minimum amount for each Advance and are no non-usage fees for not obtaining Advances, however, each requested Advance may not exceed the Maximum Advance Amount (as defined in the Equity Purchase Facility Agreement). We are under no obligation to sell any Advance Shares under the Equity Purchase Facility Agreement. 85 On July 22, 2026, the Company entered into a debt settlement and share issuance agreement with Rocket Capital NY LLC settling all claims relating to a merchant cash advance arrangement dated March 14, 2025, including litigation proceedings between the parties. The Company and Rocket Capital agreed to settle the matter by the Company issuing 26,581 shares of Common Stock to Rocket Capital. Upon receipt of the shares, the settled debt will be extinguished in full, the parties will exchange releases, and the litigation will be dismissed with prejudice. Rocket Capital agreed not to sell on any trading day more than 15% of that day’s Nasdaq trading volume in the Company’s Common Stock. No cash consideration was paid. On July 23, 2026, we entered into a debt settlement and share issuance agreement with Jennifer Black, our former Chief Financial Officer and the holder of a promissory note originally issued in October 2024 (as amended, the “Black Note”), which matured unpaid on December 31, 2025 and thereafter accrued default interest at 22% per annum. In full settlement and discharge of an agreed settled debt amount of $466,617.73 (comprising $414,635.00 of outstanding principal and $51,982.73 of default interest through July 27, 2026), we agreed to issue Ms. Black 26,199 shares of Common Stock, and, in settlement of $409,082.17 of unpaid severance and other compensation, we agreed to issue her an unsecured, non-convertible, non-transferable promissory note in the principal amount of $409,082.17, maturing one year from issuance and bearing interest at 10.0% per annum (12.0% after maturity). The agreement provides for mutual releases (preserving specified indemnification, insurance and expense-reimbursement rights of Ms. Black), and Ms. Black agreed not to sell on any trading day more than 15% of that day’s Nasdaq trading volume in our Common Stock. The issuance of the above securities is exempt from the registration requirements under Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 506 as promulgated under Regulation D. 86 Item 3. Defaults Upon Senior Securities As of June 30, 2026, the Company’s outstanding net notes payable included approximately $4.2 million of obligations in default. Subsequent to quarter-end, in July 2026, the Company settled certain of these defaulted obligations through debt-to-equity conversions. As of the filing date, approximately $ 1.5 million of the Company’s total outstanding notes payable remain in default. See Note 2 – Liquidity, Going Concern, and Management Plans and the related disclosures in Item 2 (MD&A) for further discussion of the defaults, the Company’s liquidity position, and management’s plans to address these matters. Item 4. Mine Safety Disclosures Not applicable.