Sadot Group Inc.

Previous wording

The following Management’s Discussion and Analysis (“MD&A”), prepared as of May 14, 2025, should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements of Sadot Group Inc. ("Sadot Group"), for the three months ended March 31, 2025, together with the audited financial statements of the Company for the year ended December 31, 2024 and the accompanying MD&A for that fiscal year appearing in our Annual Report on 2023 Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 11, 2025. Unless otherwise indicated or the context otherwise requires, all references to the terms “Company,” “company,” "Sadot", “we,” “us,” “our”, “Group” and similar terms refer to Sadot Group Inc., together with its consolidated subsidiaries.

Current wording

The following Management’s Discussion and Analysis (“MD&A”), prepared as of August 14, 2025, 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, 2025, together with the audited financial statements of the Company for the year ended December 31, 2024 and the accompanying MD&A for that fiscal year appearing in our Annual Report on 2023 Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 11, 2025. Unless otherwise indicated or the context otherwise requires, all references to the terms “Company,” “company,” "Sadot", “we,” “us,” “our”, “Group” and similar terms refer to Sadot Group Inc., together with its consolidated subsidiaries.

Previous wording

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

Current wording

Our revenues are derived from Commodity sales. Commodity sales revenues are comprised of revenues generated from the purchase and sales of physical food and feed commodities related to our trading, farming operations and management fees received for performing certain management services under contract.

Previous wording

During the three months ended March 31, 2025, the Company reclassified gains previously recognized in Other income related to the fair value remeasurement of certain financial instruments into Cost of goods sold ("COGS"). The reclassification was made to better reflect the nature and function of these instruments, which are economically linked to the Company’s inventory procurement, sales activities and to be consistent with our competitors. Management determined that presenting the related gains in COGS more accurately reflects the impact of these instruments on the Company’s gross margin and provides more decision-useful information to financial statement users. This change in presentation had no impact on net income, total comprehensive income, or earnings per share for the period.

Current wording

During the three and six months ended June 30, 2025, the Company reclassified gains previously recognized in Other income related to the fair value remeasurement of certain financial instruments into Cost of goods sold ("COGS"). The reclassification was made to better reflect the nature and function of these instruments, which are economically linked to the Company’s inventory procurement, sales activities and to be consistent with our competitors. Management determined that presenting the related gains in COGS more accurately reflects the impact of these instruments on the Company’s gross margin and provides more decision-useful information to financial statement users. This change in presentation had no impact on net income, total comprehensive income, or earnings per share for the period.

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 are related to ongoing Sadot Agri-Foods and expansion of the global agri-foods commodities business. Based on the initial Services Agreement with Aggia LLC FZ, a Company formed under the laws of United Arab Emirates (“Aggia”), the consulting fees were calculated at approximately 80.0% of the Net Income generated by Sadot Agri-Foods through March 31, 2023. As of April 1, 2023, the consulting agreement was amended to calculate consulting fees on 40.0% of the Net income generated by Sadot LLC. Stock-based expenses were $1.4 million, for the three months ended March 31, 2025 and $0.8 million, for the three months ended March 31, 2024, respectively, and are recorded in the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).

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 are related to ongoing Sadot Agri-Foods and expansion of the global agri-foods commodities business. Based on the initial Services Agreement with Aggia LLC FZ, a Company formed under the laws of United Arab Emirates (“Aggia”), the consulting fees were calculated at approximately 80.0% of the Net Income generated by Sadot Agri-Foods through March 31, 2023. As of April 1, 2023, the consulting agreement was amended to calculate consulting fees on 40.0% of the Net income generated by Sadot LLC. Aggia waived the consulting fee of 40% on Net income generated by Sadot LLC for the three months ended June 30, 2025. Stock-based expenses were $0.4 million and $1.9 million, for the three months ended June 30, 2025 and 2024 and $1.8 million and $2.7 million, for the six months ended June 30, 2025 and 2024, respectively, and are recorded in the accompanying Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income / (Loss).

Previous wording

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

Current wording

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

Previous wording

Net loss attributable to non-controlling interests were $0.1 million and $48.0 thousand for the three months ended March 31, 2025 and 2024, respectively. During the year ended December 31, 2023 the Company created a joint-venture in which the Company has a 70% interest and the third-party equity ownership has a 30% Non-controlling interest.

Current wording

Net loss attributable to non-controlling interests were $0.1 million and $0.1 million for the three months ended June 30, 2025 and 2024, respectively. and $0.2 million and $0.1 million for the six months ended June 30, 2025 and 2024, respectively. During the year ended December 31, 2023 the Company created a joint-venture in which the Company has a 70% interest and the third-party equity ownership has a 30% Non-controlling interest.

Previous wording

The following table presents a reconciliation of EBITDA from the most comparable U.S. GAAP measure, Net loss and the calculations of the Net loss Margin and EBITDA Margin for the three months ended March 31, 2025 and 2024:

Current wording

The following table presents a reconciliation of EBITDA from the most comparable U.S. GAAP measure, Net income and the calculations of the Net income Margin and EBITDA Margin for the three and six months ended June 30, 2025 and 2024:

Previous wording

Our gross (loss) profit totaled $6.0 million profit for the three months ended March 31, 2025, compared to $2.8 million profit for the three months ended March 31, 2024. The $3.2 million increase is primarily attributed to an increase in Commodity sales partially offset by an increase in Cost of goods sold.

Current wording

Our gross (loss) profit totaled $5.0 million profit for the three months ended June 30, 2025, compared to $5.8 million profit for the three months ended June 30, 2024. The $0.8 million decrease is primarily attributed to a decrease in Commodity sales partially offset by a decrease in Cost of goods sold.

Previous wording

We generated Commodity sales of $132.2 million for the three months ended March 31, 2025, compared to $106.5 million for the three months ended March 31, 2024. This represented an increase of $25.7 million, which is attributable to an increase in operations in 2025 as a direct result of our expansion into new markets, which were not operating in 2024.

Current wording

We generated Other revenues of $0.1 million for the three months ended June 30, 2025, compared to nil for the three months ended June 30, 2024. This represented an increase of $0.1 million, which is attributable to management fees income due to a new management service offered.

Previous wording

Cost of goods sold for the three months ended March 31, 2025, totaled $126.2 million compared to $103.7 million for the three months ended March 31, 2024. The $22.5 million or 21.7% change is a direct result of the increase in sales, partially offset by the reclass of gain on derivative contracts.

Current wording

Cost of goods sold for the three months ended June 30, 2025, totaled $109.4 million compared to $167.5 million for the three months ended June 30, 2024. The $58.1 million or 34.7% change is a direct result of the decrease in sales, reclassifying Sadot Agri Foods consulting fees to sales, general and administrative cost in 2025 and the reclass of gain on derivative contracts.

Previous wording

Stock-based expenses for the three months ended March 31, 2025, totaled $1.4 million compared to $0.8 million for the three months ended March 31, 2024. The $0.6 million increase in Stock-based expenses is primarily the result of consulting fees due to Aggia for Sadot Agri-Foods and the vesting of restricted stock for employees, board of directors and consultants. Based on the servicing agreement with Aggia, the consulting fees are calculated at approximately 40.0% of the Net income generated by Sadot Agri-Foods. This expense is paid in the vesting in restricted stock that was issued to Aggia in 2025.

Current wording

Stock-based expenses for the three months ended June 30, 2025, totaled $0.4 million compared to $1.9 million for the three months ended June 30, 2024. The $1.5 million decrease in Stock-based expenses is primarily the result Aggia waiving the 40% of the Net income due to them for consulting fees. Based on the servicing agreement with Aggia, the consulting fees are calculated at approximately 40.0% of the Net income generated by Sadot Agri-Foods. This expense is paid in the vesting in restricted stock that was issued to Aggia in 2024 and this was waived by Aggia for the three months ended June 30, 2025

Previous wording

Sales, general and administrative expenses for the three months ended March 31, 2025, totaled $3.1 million compared to $1.4 million for the three months ended March 31, 2024. The $1.7 million increase was primarily attributable to an increase in consulting fees due to trades in Latin America, Brazil and Canada markets, entering the South Korea market and increases due to increases in normal operating activities.

Current wording

Sales, general and administrative expenses for the three months ended June 30, 2025, totaled $2.8 million compared to $1.7 million for the three months ended June 30, 2024. The $1.1 million increase was primarily attributable to an increase in consulting fees as a result of reclassifying Sadot Agri Foods consulting fees from cost of goods sold in 2025.

Previous wording

Other income for thethree months ended March 31, 2025, totaled $0.8 million compared to $0.2 million loss for the three months ended March 31, 2024. The $1.0 million decrease was primarily attributable to a $0.3 million increase in change in fair value of stock-based compensation and a $1.3 million increase in interest expense.

Current wording

Other income for thethree months ended June 30, 2025, totaled $1.4 million expense compared to $0.2 million income for the three months ended June 30, 2024. The $1.6 million decrease in income was primarily attributable to a $1.2 million decrease in income due to the change in fair value of stock-based compensation due to Aggia waiving its consulting fees and vesting of stock, a $0.2 million increase in expense due to the on Loss on extinguishment of debt and a $0.2 million increase in interest expense.

Previous wording

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

Current wording

(1) Consists of VAT, prepaid expenses, derivative assets, derivative contracts, Notes receivable, current, deposit on farmland and deposit on acquisition.

Previous wording

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

Current wording

(3) Consists of Operating lease liability, current, derivative liability, current and derivative contracts

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, 2025, current ratio, which equals Total current assets divided by Total current liabilities, was 1.44, an increase of 0.28, compared to current ratio of 1.16 at December 31, 2024. At March 31, 2025, working capital, which equals Total current assets less Total current liabilities, was $21.9 million an increase of $1.4 million, compared to working capital of $20.5 million at December 31, 2024. The increase in current ratio and working capital was primarily due to an increase in Accounts receivable and a decrease in Other current liabilities, partially offset by an increase in Accounts payable and accrued expenses, a decrease in Other current assets, and a decrease in Assets held for sale. While the Company maintains a base of current assets, including inventories and receivables, the timing and certainty of converting these assets into cash has presented operational challenges.

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. On June 30, 2025, current ratio, which equals Total current assets divided by Total current liabilities, was 1.26, an increase of 0.10, compared to current ratio of 1.16 on December 31, 2024. On June 30, 2025, working capital, which equals Total current assets less Total current liabilities, was $24.2 million an increase of $3.7 million, compared to working capital of $20.5 million on December 31, 2024. The increase in current ratio and working capital was primarily due to an increase in Accounts receivable and a decrease in Other current liabilities, partially offset by an increase in Accounts payable and accrued expenses, a decrease in Other current assets, and a decrease in Assets held for sale. While the Company maintains a base of current assets, including inventories and receivables, the timing and certainty of converting these assets into cash has presented operational challenges.

Previous wording

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

Current wording

While the Company maintains sufficient working capital through its accounts receivable and factoring capacity, we are currently experiencing delays in converting receivables into cash, which may impact the timing of our available liquidity. We continue to actively manage collections and factoring utilization to address short-term liquidity needs and ensure ongoing operational funding.

Previous wording

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

Current wording

Sources and Uses of Cash for the Six Months Ended June 30, 2025 and 2024

Previous wording

For the three months ended March 31, 2025, Net cash used in operating activities from continuing operation was $3.0 million compared to $2.5 million provided by operating activities for the three months ended March 31, 2024. Net cash provided by operating activities from discontinued operations was $8.0 thousand and $0.1 million, respectively, for the three months ended March 31, 2025 and 2024. Our Net cash used for the three months ended March 31, 2025, was primarily attributable to our Net income of $0.8 million, adjusted for net non-cash income in the aggregate amount of $19.8 million and $23.6 million of Net cash used by changes in the levels of operating assets and liabilities. Our Net cash provided for the three months ended March 31, 2024, was primarily attributable to our Net loss of $0.3 million, adjusted for net non-cash income in the aggregate amount of $1.8 million and $4.6 million of Net cash used in changes in the levels of operating assets and liabilities.

Current wording

For the six months ended June 30, 2025, Net cash used in operating activities from continuing operation was $5.4 million compared to $10.5 million provided by operating activities for the six months ended June 30, 2024. Net cash provided by operating activities from discontinued operations was $0.1 million and $0.1 million, respectively, for the six months ended June 30, 2025 and 2024. Our Net cash used for the six months ended June 30, 2025, was primarily attributable to our Net income of $1.1 million, adjusted for net non-cash income in the aggregate amount of $2.8 million and $9.3 million of Net cash used by changes in the levels of operating assets and liabilities. 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 $1.6 million and $6.9 million of Net cash used in changes in the levels of operating assets and liabilities.

Previous wording

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

Current wording

For the six months ended June 30, 2025, Net cash used in investing activities was nil . For the six months ended June 30, 2024, Net cash provided by investing activities from continuing operations was $3.0 thousand, consisting of $7.0 thousand, which was used in the purchase of property and equipment, partially offset by $10.0 thousand, which was provided by the disposal of property and equipment. Net cash provided by investing activities from discontinued operations was $29.0 thousand.

Previous wording

For the three months ended March 31, 2025, Net cash provided by financing activities from continuing operations was $3.1 million, consisting of proceeds from notes payable of $4.6 million partially offset by repayments of various other notes payable of $1.5 million. Net cash used in financing activities from discontinued operations was $20.0 thousand and $36.0 thousand, respectively, for the three months ended March 31, 2025 and 2024. For the three months ended March 31, 2024, Net cash used in financing activities was $2.8 million, consisting of repayments of various other notes payable of $4.3 million partially offset by $1.5 million of proceeds from notes payable.

Current wording

For the six months ended June 30, 2025, Net cash provided by financing activities from continuing operations was $4.0 million, consisting of proceeds from notes payable of $10.0 million partially offset by repayments of various other notes payable of $6.0 million. Net cash used in financing activities from discontinued operations was $42.0 thousand and $0.1 million, respectively, for the six months ended June 30, 2025 and 2024. For the six months ended June 30, 2024, Net cash used in financing activities was $1.9 million, consisting of repayments of various other notes payable of $5.4 million partially offset by $3.5 million of proceeds from notes payable.

Previous wording

In November 2023, the FASB issued ASU 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (Topic 280). The standard requires incremental disclosures related to reportable segments, including disaggregated expense information and the title and position of the company's chief operating decision maker ("CODM"), as identified for purposes of segment determination. The ASU is effective for fiscal years beginning after December 15,

Current wording

In November 2023, the FASB issued ASU 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (Topic 280). The standard requires incremental disclosures related to reportable segments, including disaggregated expense information and the title and position of the company's chief operating decision maker ("CODM"), as identified for purposes of segment determination. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Entities must adopt the changes to the segment reporting guidance on a retrospective basis. Early adoption is permitted. The adoption of this guidance on December 31, 2024 did not have a material impact on the Company's Consolidated Financial Statements and related disclosures.