Sadot Group Inc
For the period ended Jun 30, 2024. Filed Aug 13, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 13, 2024
SDOT$6.33+3.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0001701756-24-000095
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0001701756-24-000112
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 96 previous paragraphs and 112 current paragraphs.
61 unchanged; 25 reworded; 21 added; 10 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 15 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
The following table represents selected items in our Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss) for the three months ended June 30, 2024 and 2023, respectively:
Current report
We generated Commodity sales of $173.3 million for the three months ended June 30, 2024 compared to $157.6 million for the three months ended June 30, 2023. This represented an increase of $15.7 million, which is attributable to an increase in operations in 2024 as a direct result of our Latin American trade operations and farming activity, which was not operating in 2023.
Current report
There were no other revenues for the three months ended June 30, 2024. Other revenue for the three months ended June 30, 2023 were $13.0 thousand. Other revenues consisted of gift card breakage recognized.
Current report
Cost of goods sold for the three months ended June 30, 2024 totaled $172.5 million compared to $157.2 million for the three months ended June 30, 2023. The $15.3 million or 9.7% change is a direct result of the increase in sales.
Current report
The following table represents selected items in our Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss) for the three months ended June 30, 2024, by our operating segments:
Current report
The following table represents selected items in our Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss) for the three months ended June 30, 2023, by our operating segments:
Current report
Unaudited Condensed Consolidated Results of Operations - Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023
Current report
The following table represents selected items in our Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss) for the six months ended June 30, 2024 and 2023, respectively:
Current report
Gross Profits
Current report
Franchise advertising fund contributions for the six months ended June 30, 2024 totaled $28.0 thousand compared to $36.0 thousand for the six months ended June 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 $8.0 thousand or 22.2%, is a direct result of the decrease in Muscle Maker Grill restaurant national advertising services.
Current report
There were no Other revenues for the six months ended June 30, 2024. Other revenues for the six months ended June 30, 2023 were $13.0 thousand. Other revenues consisted of gift card breakage recognized.
Current report
Depreciation and amortization expenses for the six months ended June 30, 2024 totaled $0.4 million compared to $1.1 million, for the six months ended June 30, 2023. The $0.7 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.
Current report
Franchise Advertising Fund Expenses
Current report
Franchise advertising fund expenses for the six months ended June 30, 2024 totaled$28.0 thousand compared to$36.0 thousand, for the six months ended June 30, 2023. The $8.0 thousand decrease or 22.2% is mainly attributed to the decrease in Muscle Maker Grill national advertising services.
Current report
Pre-opening expenses for the six months ended June 30, 2024 totaled nil, a $36.0 thousand decrease when compared to $36.0 thousand for the six months ended June 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.
Current report
Post-Closing Expenses
Current report
Post-closing expenses for the six months ended June 30, 2024 totaled $29.0 thousand, a $0.1 million decrease when compared to $0.1 million for the six months ended June 30, 2023. The decrease in Post-closing expenses resulted from expenses incurred after the closing of underperforming Company-owned stores in 2023.
Current report
Sales, general and administrative expenses for the six months ended June 30, 2024 totaled $4.5 million, compared to $3.9 million, for the six months ended June 30, 2023. The $0.7 million increase was primarily attributable to a increase in consulting fees due to trades in Latin America, entering the Brazil market and increases due to increases in normal operating activities.
Current report
Total Other Income, Net
Current report
Total other income / (expense), net for the six months ended June 30, 2024 totaled $7.5 million compared to $1.1 million, for the six months ended June 30, 2023. The $6.4 million increase in Total other income / (expense), net was attributable toa $6.5 million increase in Gain on fair value remeasurement, $0.8 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 $1.2 million increase in Interest expense, and a $0.2 million decrease in Other income.
Current report
The following table represents selected items in our Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss) for the six months ended June 30, 2024 and 2023, by our operating segments:
Removed paragraphs (10)
Previous report
Depreciation and Amortization Expenses
Previous report
Sales, General and Administrative Expenses
Previous report
The following table represents selected items in our Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss for the three months ended March 31, 2024 and 2023, respectively:
Previous report
Depreciation and Amortization Expenses
Previous report
There were no Pre-opening expenses for the three months ended March 31, 2024, compared to $36.0 thousand for the three months ended March 31, 2023. The decrease in Pre-opening expenses resulted from no locations or operations that were open or preparing to open during the three months ended March 31, 2024.
Previous report
Stock-Based Expenses
Previous report
Sales, General and Administrative Expenses
Previous report
The following table represents selected items in our Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss for the three months ended March 31, 2024, by our operating segments:
Previous report
The following table represents selected items in our Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss for the three months ended March 31, 2023, by our operating segments:
Previous report
(1) Consists of Prepaid expenses and other current assets, Prepaid forward on carbon offsets, Forward sales derivatives and Notes receivable, current
Reworded paragraphs (25)
Previous wording
The following Management’s Discussion and Analysis (“MD&A”), prepared as of May 15, 2024, 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, 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. Unless otherwise indicated or the context otherwise requires, all references to the terms “Company,” “company,” "Sadot", “Muscle Maker,” “we,” “us,” “our”, “Group” and similar terms refer to Sadot Group Inc., together with its consolidated subsidiaries.
Current wording
The following Management’s Discussion and Analysis (“MD&A”), prepared as of August 13, 2024, should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements of Sadot Group Inc. ("Sadot Group"), for the three and six months ended June 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. Unless otherwise indicated or the context otherwise requires, all references to the terms “Company,” “company,” "Sadot", “Muscle Maker,” “we,” “us,” “our”, “Group” and similar terms refer to Sadot Group Inc., together with its consolidated subsidiaries.
Previous wording
Sadot LLC (“Sadot Agri-Foods”): Sadot Group’s largest operating unit is a global Agri-Foods company engaged in farming, commodity trading and shipping of food and feed (e.g., soybean meal, wheat and corn) via dry bulk cargo ships to/from markets such as Argentina, Australia, Bangladesh, Brazil, Canada, China, Columbia, Ecuador, Egypt, Guinea, Honduras, India, Indonesia, Ivory Coast, Japan, Kenya, Malaysia, Morocco, Mozambique, Nigeria, Philippines, Poland, Romania, Saudi Arabia, South Korea, Sri Lanka, Ukraine, United States and Vietnam, among others. Sadot Agri-Foods competes with the ABCD commodity companies (ADM, Bunge, Cargill, Louis-Dreyfus) as well as many regional organizations. Sadot Agri-Foods operates, through a majority owned subsidiary, a roughly 5,000 acre crop producing farm in Zambia with a focus on major commodities such as wheat, soy and corn alongside high-value tree crops such as avocado and mango. Sadot Agri-Foods was formed as part of the Company’s diversification strategy to own and operate, through its subsidiaries, the business lines throughout the food value chain. Sadot Agri-Foods seeks to diversify over time into a sustainable and forward-looking global agri-foods company.
Current wording
Sadot LLC (“Sadot Agri-Foods”): Sadot Group’s largest operating unit is a global Agri-Foods company engaged in farming, commodity trading and shipping of food and feed (e.g., soybean meal, wheat and corn) via dry bulk cargo ships to/from markets such as Argentina, Australia, Bangladesh, Brazil, Canada, China, Columbia, Costa Rica, Dominican Republic, Ecuador, Egypt, Guinea, Honduras, India, Indonesia, Ivory Coast, Japan, Kenya, Malaysia, Morocco, Mozambique, Nigeria, Philippines, Poland, Romania, Saudi Arabia, South Korea, Sri Lanka, Ukraine, United States, Venezuela, Vietnam and Yemen, among others. Sadot Agri-Foods competes with the ABCD commodity companies (ADM, Bunge, Cargill, Louis-Dreyfus) as well as many regional organizations. Sadot Agri-Foods operates, through a majority owned subsidiary, a roughly 5,000 acre crop producing farm in Zambia with a focus on major commodities such as wheat, soy and corn alongside high-value tree crops such as avocado and mango. Sadot Agri-Foods was formed as part of the Company’s diversification strategy to own and operate, through its subsidiaries, the business lines throughout the food supply chain. Sadot Agri-Foods seeks to diversify over time into a sustainable and forward-looking global agri-foods company.
Previous wording
Stock-based expenses include all expenses that are paid with stock. This includes stock-based consulting fees due to Aggia and other consultants, stock compensation paid to 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. 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. For the three months ended March 31, 2024 and 2023, consulting fees were $0.8 million and $3.4 million, respectively, and are recorded as Stock-based expenses in the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss.
Current wording
Stock-based expenses include all expenses that are paid with stock. This includes stock-based consulting fees due to Aggia and other consultants, stock compensation paid to 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. 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 $1.9 million and $2.7 million, for the three and six months ended June 30, 2024 and $1.2 million and $4.6 million, for the three and six months ended June 30, 2023, respectively, and are recorded in the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).
Previous wording
Other (expense) / income listed below the Loss from operations in the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive 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.
Current wording
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.
Previous wording
Net Income Attributable to Non-controlling Interests
Current wording
Net Income (Loss) Attributable to Non-controlling Interests
Previous wording
Net loss attributable to non-controlling interests was $48.0 thousand and nil for the three months ended March 31, 2024 and 2023. 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.
Current wording
Net loss attributable to non-controlling interests were $0.1 million and $0.1 million for the three and six months ended June 30, 2024, and nil for the three and six months ended June 30, 2023, 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.
Previous wording
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are non-GAAP measures. We define EBITDA as Net loss, adjusted for depreciation, amortization, interest income / (expense), and income taxes. We define Adjusted EBITDA as Net loss, adjusted for depreciation, amortization, net interest (income) expense, income taxes, impairment expenses, stock-based consulting expense, other income, change in fair value of stock-based compensation, gain on extinguishment, warrant modification expense, and gain on fair value remeasurement derived from amounts presented in the Unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Loss and the associated Notes to the Unaudited Condensed Consolidated Financial Statements. We believe that EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin, (collectively, the “Non-GAAP Measures”) are useful metrics for investors to understand and evaluate our operating results and ongoing profitability because they permit investors to evaluate our recurring profitability from our ongoing operating activities.
Current wording
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are non-GAAP measures. We define EBITDA as Net loss, adjusted for depreciation, amortization, interest income / (expense), and income taxes. We define Adjusted EBITDA as Net loss, adjusted for depreciation, amortization, net interest (income) expense, income taxes, impairment expenses, stock-based consulting expense, other income, change in fair value of stock-based compensation, gain on extinguishment, warrant modification expense, and gain on fair value remeasurement derived from amounts presented in the Unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Income / (Loss) and the associated Notes to the Unaudited Condensed Consolidated Financial Statements. We believe that EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin, (collectively, the “Non-GAAP Measures”) are useful metrics for investors to understand and evaluate our operating results and ongoing profitability because they permit investors to evaluate our recurring profitability from our ongoing operating activities.
Previous wording
The following table presents a reconciliation of EBITDA and Adjusted EBITDA from the most comparable U.S. GAAP measure, Net loss, and the calculations of the Net loss Margin and Adjusted EBITDA Margin for the three months ended March 31, 2024 and 2023:
Current wording
The following table presents a reconciliation of EBITDA and Adjusted EBITDA from the most comparable U.S. GAAP measure, Net loss, and the calculations of the Net loss Margin and Adjusted EBITDA Margin for the three and six months ended June 30, 2024 and 2023:
Previous wording
We generated Company restaurant sales, net of discounts, of $1.2 million for the three months ended March 31, 2024, compared to $2.3 million for the three months ended March 31, 2023. This represented an decrease of $1.1 million, or 49.7%, which is mainly attributable to the conversion of certain corporate owned Pokemoto locations to franchise locations and closing underperforming locations.
Current wording
We generated Company restaurant sales, net of discounts, of $1.0 million for the three months ended June 30, 2024, compared to $2.5 million for the three months ended June 30, 2023. This represented an decrease of $1.5 million, or 60.1%, which is mainly attributable to the conversion of certain corporate owned Pokemoto locations to franchise locations and closing underperforming locations.
Previous wording
Franchise royalties and fees for the three months ended March 31, 2024 totaled $0.3 million compared to $0.3 million for the three months ended March 31, 2023. This represents a decrease of $27.0 thousand, or 9.5%. In 2024, the franchise fees were lower, primarily due to a termination of a Muscle Maker Grill development agreement in 2023 that escalated the revenue recognition. .
Current wording
Franchise royalties and fees for the three months ended June 30, 2024 totaled $0.7 million compared to $0.2 million for the three months ended June 30, 2023. This represents a increase of $0.5 million, or 211.3%. In 2024, the franchise fees were higher, primarily due to a termination of a Muscle Maker Grill development agreement in 2024 that escalated the revenue recognition.
Previous wording
Franchise advertising fund contributions for the three months ended March 31, 2024 totaled $15.0 thousand compared to $16.0 thousand for the three months ended March 31, 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 $1.0 thousand or 6.3%, is a direct result of the decrease in Muscle Maker Grill restaurant national advertising services.
Current wording
Franchise advertising fund contributions for the three months ended June 30, 2024 totaled $13.0 thousand compared to $20.0 thousand for the three months ended June 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 $7.0 thousand or 35.0%, is a direct result of the decrease in Muscle Maker Grill restaurant national advertising services.
Previous wording
Depreciation and amortization expenses for the three months ended March 31, 2024 totaled $0.3 million compared to $0.6 million, for the three months ended March 31, 2023. The $0.4 million decrease is mainly attributed to the closing and refranchising of corporate locations and the disposal of the corresponding assets.
Current wording
Depreciation and amortization expenses for the three months ended June 30, 2024 totaled $0.1 million compared to $0.4 million, for the three months ended June 30, 2023. The $0.3 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.
Previous wording
Franchise advertising fund expenses for the three months ended March 31, 2024 totaled$15.0 thousand compared to$16.0 thousand, for the three months ended March 31, 2023. The $1.0 thousand or 6.3% decrease is mainly attributed to the decrease in Muscle Maker Grill restaurant national advertising services.
Current wording
Franchise advertising fund expenses for the three months ended June 30, 2024 totaled$13.0 thousand compared to$20.0 thousand, for the three months ended June 30, 2023. The $7.0 thousand or 35.0% decrease is mainly attributed to the decrease in Muscle Maker Grill restaurant national advertising services.
Previous wording
Post-closing expenses for the three months ended March 31, 2024 totaled $19.0 thousand compared to $0.1 million for the three months ended March 31, 2023. The decrease in Post-closing expenses resulted from closing fewer corporate owned locations in 2024 compared to 2023.
Current wording
Post-closing expenses for the three months ended June 30, 2024 totaled $10.0 thousand compared to $19.0 thousand for the three months ended June 30, 2023. The decrease in Post-closing expenses resulted from closing fewer corporate owned locations in 2024 compared to 2023.
Previous wording
Stock-based expenses for the three months ended March 31, 2024, totaled $0.8 million compared to $3.4 million for the three months ended March 31, 2023. The $2.6 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 approximately 40.0% of the Net income generated by Sadot LLC which is a decrease from 80.0% in 2023. This expense is paid in the vesting in restricted stock that was issued to Aggia in 2024.
Current wording
Stock-based expenses for the three months ended June 30, 2024, totaled $1.9 million compared to $1.2 million for the three months ended June 30, 2023. The $0.7 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. This expense is paid in the vesting in restricted stock that was issued to Aggia in 2024.
Previous wording
Sales, general and administrative expenses for the three months ended March 31, 2024 totaled $2.1 million compared to $2.1 million for the three months ended March 31, 2023. The $46.0 thousand decrease was primarily attributable to a decrease in normal operating activities.
Current wording
Sales, general and administrative expenses for the three months ended June 30, 2024 totaled $2.4 million compared to $1.8 million for the three months ended June 30, 2023. The $0.6 million increase was primarily attributable to a increase in consulting fees due to trades in Latin America, entering the Brazil market and increases due to increases in normal operating activities.
Previous wording
Other income for thethree months ended March 31, 2024 totaled $3.2 million compared to $0.5 million for the three months ended March 31, 2023. The $2.7 million increase was primarily attributable to a $3.3 million increase in the gain on the fair value remeasurement as a result of the mark to market adjustment of derivatives partially offset by a $0.5 million increase in interest expense, a $0.1 million decrease in change in fair value of stock-based compensation and a less than $0.1 million increase in loss on sale of trading securities.
Current wording
Other income for thethree months ended June 30, 2024 totaled $4.3 million compared to $0.6 million for the three months ended June 30, 2023. The $3.7 million increase was primarily attributable to a $3.3 million increase in the gain on the fair value remeasurement as a result of the mark to market adjustment of derivatives and an $0.7 million increase in interest expense, a $0.9 million increase in change in fair value of stock-based compensation and a $0.1 million increase in loss on sale of trading securities.
Previous wording
Our gross (loss) profit totaled $0.3 million loss for the three months ended March 31, 2024, compared to $4.7 million profit for the three months ended March 31, 2023. The $5.0 million decrease is primarily attributed to a decrease in Commodity sales which is attributable to a decline in global prices of staple commodities, market seasonality and the largest global consumer being out of the market for the beginning of 2024.
Current wording
Our gross profit totaled $2.2 million for the six months ended June 30, 2024, compared to $7.7 million for the six months ended June 30, 2023. The $5.6 million decrease is primarily attributed to a decrease in Commodity sales which is attributable to a decline in global prices of staple commodities, market seasonality and the largest global consumer being out of the market for the beginning of 2024.
Previous wording
We generated Commodity sales of $106.5 million for the three months ended March 31, 2024 compared to $210.4 million for the three months ended March 31, 2023. This represented a decrease of $103.9 million, which is attributable to a decline in global prices of staple commodities, market seasonality and the largest global consumer being out of the market for the beginning of 2024.
Current wording
We generated Commodity sales of $279.8 million for the six months ended June 30, 2024. Commodity sales for the six months ended June 30, 2023 was $367.9 million. This represented a decrease of $88.1 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 and current harvest season less discounts and shipping delays given.
Previous wording
Cost of goods sold for the three months ended March 31, 2024 totaled $108.3 million compared to $208.3 million for the three months ended March 31, 2023. This represented a decrease of $100.0 million or 48.0% which is a direct result of the decrease in sales.
Current wording
Cost of goods sold for the six months ended June 30, 2024, totaled $280.8 million. The Cost of goods sold for the six months ended June 30, 2023 was $365.5 million. The $84.7 million change is primarily due to a direct result of the decrease in sales.
Previous wording
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, 2024, current ratio, which equals Total current assets divided by Total current liabilities, was 1.17, an increase of 0.09, compared to current ratio of 1.08 at December 31, 2023. The increase in current ratio was primarily due to a decrease in Accounts payable and accrued expenses partially offset by the decrease in Accounts receivable. At March 31, 2024, working capital, which equals Total current assets less Total current liabilities, was $13.2 million an increase of $4.9 million, compared to working capital of $8.3 million at December 31, 2023. The increase in working capital was primarily due to a decrease in Accounts payable and accrued expenses and Notes payable, current. In addition, the Company has access to additional liquidity if it is needed through an executed Standby Equity Purchase Agreement ("SEPA") for up to $25.0 million in capital whereby the Company, once the initial prepayment loan is fully paid off may submit advance requests to the lender and the lender will provide cash in consideration of shares of common stock subject to certain limitations and conditions set forth in the SEPA.
Current wording
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 June 30, 2024, current ratio, which equals Total current assets divided by Total current liabilities, was 1.12, an increase of 0.04, 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 cash, partially offset by an increase in other current liabilities and a decrease in Accounts receivable. At June 30, 2024, working capital, which equals Total current assets less Total current liabilities, was $16.1 million an increase of $7.9 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 and increase in cash, partially offset by an increase in other current liabilities and a decrease in Accounts receivable. In addition, the Company has access to additional liquidity if it is needed through an executed Standby Equity Purchase Agreement ("SEPA") for up to $25.0 million in capital whereby the Company, once the initial prepayment loan is fully paid off may submit advance requests to the lender and the lender will provide cash in consideration of shares of common stock subject to certain limitations and conditions set forth in the SEPA.
Previous wording
Sources and Uses of Cash for the Three Months Ended March 31, 2024 and 2023
Current wording
Sources and Uses of Cash for the Six Months Ended June 30, 2024 and 2023
Previous wording
For the three months ended March 31, 2024, Net cash provided by operating activities was $2.6 million compared to a use of $3.3 million for the three months ended March 31, 2023. 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 $1.3 million offset by $1.6 million of Net cash provided by changes in the levels of operating assets and liabilities. Our Net cash used for the three months ended March 31, 2023, was primarily attributable to our Net loss of $1.1 million, adjusted for net non-cash income in the aggregate amount of $4.6 million, partially offset by $6.8 million of Net cash used in changes in the levels of operating assets and liabilities.
Current wording
For the six months ended June 30, 2024, Net cash provided by operating activities was $11.0 million compared to a use of $4.2 million for the six months ended June 30, 2023. Our Net cash provided for the six months ended June 30, 2024, was primarily attributable to our Net income of $2.0 million, adjusted for net non-cash income in the aggregate amount of $1.2 million and $7.8 million of Net cash provided by changes in the levels of operating assets and liabilities. Our Net cash used for the six months ended June 30, 2023, was primarily attributable to our Net loss of $0.9 million, adjusted for net non-cash income in the aggregate amount of $4.9 million, partially offset by $8.2 million of Net cash used in changes in the levels of operating assets and liabilities.
Previous wording
For the three months ended March 31, 2024, Net cash provided by investing activities was $0.1 million, of which $11.0 thousand was used to purchase Property and equipment, $0.1 million was provided by the Disposal of property and equipment For the three months ended March 31, 2023, Net cash used in investing activities was $0.2 million, of which $0.1 million was used to purchase Property and equipment and $0.1 million was used on the deposit of farmland.
Current wording
For the six months ended June 30, 2024, Net cash used in investing activities was $0.6 million, of which $0.7 million was used on the deposit of farmland, $31.0 thousand was used in the purchase of property and equipment, partially offset by $0.1 million provided by the disposal of property and equipment. For the six months ended June 30, 2023, Net cash used in investing activities was $4.0 million, of which $0.2 million was used to purchase Property and equipment and $3.9 million was used on the deposit of farmland.
Previous wording
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 and proceeds from notes payable of $1.5 million. For the three months ended March 31, 2023, Net cash used in financing activities was $34.0 thousand, consisting of repayments of various other notes payable of $34.0 thousand.
Current wording
For the six months ended June 30, 2024, Net cash used in financing activities was $1.8 million, consisting of repayments of various other notes payable of $5.4 million partially offset by proceeds from notes payable of $3.6 million. For the six months ended June 30, 2023, Net cash provided by financing activities was $3.4 million, consisting of $3.5 million of proceeds from notes payable, partially offset by repayments of various other notes payable of $0.1 million.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Our gross (loss) profit totaled $2.5 million profit for the three months ended June 30, 2024, compared to $3.1 million profit for the three months ended June 30, 2023. The $0.6 million decrease is primarily attributed to a decrease in Company restaurant sales, net of discount partially offset by an increase in Commodity sales.
Current report — wording carried from elsewhere
The following table sets forth our results of operations as a percentage of total revenue for each period presented preceding:
Current report — wording carried from elsewhere
We generated Company restaurant sales, net of discounts, of $2.1 million for the six months ended June 30, 2024, compared to $4.8 million for the six months ended June 30, 2023. This represented an decrease of $2.6 million, or 55.1%, which is mainly attributable to the conversion of certain corporate owned Pokemoto locations to franchise locations and closing underperforming locations.
Current report — wording carried from elsewhere
Franchise royalties and fees for the six months ended June 30, 2024 totaled $1.0 million compared to $0.5 million for the six months ended June 30, 2023. This represents an increase of $0.5 million, or 91.0%. 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.
Current report — wording carried from elsewhere
Stock-based expenses for the six months ended June 30, 2024, totaled $2.7 million compared to $4.6 million for the six months ended June 30, 2023. The $1.9 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.