Sadot Group Inc.

From time to time, we are a defendant or plaintiff in various legal actions that arise in the normal course of business. We record legal costs associated with loss contingencies as incurred and have accrued for all probable and estimable settlements.

Cropit Litigation

On March 21, 2025, Cropit Farming Limited ("Cropit") commenced proceedings against our subsidiary, Sadot LLC in the Commercial Registry of the High Court of Zambia seeking rescission of certain joint venture agreements, return of assets, and damages of approximately $6.7 million USD. Sadot LLC has denied all allegations and filed counterclaims seeking declaratory relief, specific performance, injunctive relief, and damages including punitive damages of approximately 0.2 million Zambian Kwacha ($7.6 thousand USD as of September 30, 2025).

Following unsuccessful mediation, Sadot LLC filed for injunctive relief in August 2025 alleging Cropit's material breaches of the 2023 Joint Venture Agreement, including misappropriation of approximately 5.0 million Zambian Kwacha ($0.2 million USD as of September 30, 2025), in company funds, denial of access to farms and financial records, and failure to transfer five parcels of farmland as contractually required.

Sadot LLC also intends to pursue arbitration under ICC rules. Management believes Sadot LLC has reasonably favorable prospects of success and intends to vigorously defend the claims whilst pursuing counterclaims. No material liability has been recorded as a loss is neither probable nor reasonably estimable at this time.

Lombard Litigation

On November 7, 2024, Lombard Trading International Corp. filed an Amended Complaint against Sadot Group Inc. and Sadot Latam LLC in Florida state court (Case No.: 2024-020971-CA-01) alleging unjust enrichment, conversion, fraud, conspiracy and civil theft related to a commodities transaction, seeking damages of $7.4 million. The Company denies all allegations, has not received the goods or the Bills of Lading contractually required for completion of the transaction, and intends to vigorously defend the claims. On August 1, 2025, the court dismissed Lombard's third motion in its entirety. A hearing on the Company's motion to dismiss has been scheduled. No contingent liability has been recorded as of September 30, 2025.

Zen-Noh America Holdings Corp Litigation

Zen-Noh America Holdings Corp. ("Zen-Noh") has commenced Grain and Feed Trade Association ("GAFTA") arbitration proceedings against both Sadot Latam LLC and Sadot Group Inc. The Company believes the proceedings against Sadot Group Inc. have been brought wrongly as it is neither a party to the contract nor acted on it in any capacity. Sadot Latam LLC's defense is assessed as having reasonable prospects of success based on Trans Trade RK SA v State Food and Grain Corporation of Ukraine [2025] EWHC 1803 (Comm), which provides that a seller's right to payment only arises upon proper tender of conforming documents. As conforming documents (including original bills of lading) were never properly tendered, this may lead to a claim by Sadot against Zen-Noh for amounts paid. The parties are exchanging submissions with an award expected in April or May 2026. Management intends to vigorously defend the claims. No contingent liability has been recorded as of September 30, 2025.

Star Fund Litigation

Star Fund LLC ("Star Fund") claims $2.9 million against Sadot Group Inc., Sadot Latam LLC, and Lombard Trading International Corp., alleging Sadot Group Inc. guaranteed Sadot Latam LLC's obligations under a March 2025 factoring agreement. Star Fund advanced approximately $2.5 million against an invoice for a wheat shipment that allegedly failed when the wheat was diverted and Lombard refused payment. Star Fund's case relies solely on an October 2023 board resolution authorizing management to guarantee subsidiary debt up to $10 million with certain specified lenders. Star Fund was not mentioned in the resolution. No actual guaranty document exists, and Sadot Group Inc. was not party to the factoring agreement, promissory note, or underlying invoice. The Company denies all allegations and intends to vigorously defend, including challenging jurisdiction and seeking dismissal on grounds that no guaranty exists. Management believes Sadot Group Inc. has reasonable prospects of success. No contingent liability has been recorded as of September 30, 2025.

In the normal course of business, the Company may be involved in other legal proceedings, claims and assessments arising in the ordinary course of business. In the opinion of management and its legal counsel intend to defend the matters vigorously and cannot determine at this time whether they will result in a material adverse effect on the financial statements.

The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements after consulting legal counsel.