Sadot Group Inc.

Previous wording

The following discussion and analysis of the results of operations and financial condition of Sadot Group Inc. (“Sadot Group”), together with its subsidiaries (collectively, the “Company”) as of December 31, 2024 and 2023 and for the years ended December 31, 2024 and 2023 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Annual Report on Form 10-K following Item 16. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,” “we,” “our,” and similar terms refer to Sadot Group. refers to the names under which our corporate and franchised restaurants do business depending on the concept. This Annual Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Annual Report may not occur. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “plan,” “forecast,” “model,” “proposal,” “should,” “may,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions, are intended to identify forward-looking statements. 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 7 for a discussion of some of the uncertainties, risks and assumptions associated with these statements.

Current wording

The following discussion and analysis of the results of operations and financial condition of Sadot Group Inc. (“Sadot Group”), together with its subsidiaries (collectively, the “Company”) as of December 31, 2025 and 2024 and for the years ended December 31, 2025 and 2024 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Annual Report on Form 10-K following Item 16. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,” “we,” “our,” and similar terms refer to Sadot Group. refers to the names under which our corporate and franchised restaurants do business depending on the concept. This Annual Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Annual Report may not occur. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “plan,” “forecast,” “model,” “proposal,” “should,” “may,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions, are intended to identify forward-looking statements. 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. These risks and uncertainties include, among others, our liquidity and capital resources, our ability to obtain additional financing or refinance existing obligations, our ability to generate sufficient cash flows from operations, and conditions that raise substantial doubt about the Company’s ability to continue as a going concern. Reference is made to “Factors That May Affect Future Results and Financial Condition” in this Item 7 for a discussion of some of the uncertainties, risks and assumptions associated with these statements.

Previous wording

Sadot Restaurant Group, LLC ("Sadot Food Services"): had three unique “healthier for you” concepts, including two fast casual restaurant concepts, Pokémoto and Muscle Maker Grill, During 2024, 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. As of the end of 2024 the Company only operates as the franchisor for Pokémoto and Muscle Maker Grill restaurants. The restaurants were founded on the belief of taking every-day menu options and converting them into “healthier for you” menu choices with the goal of satisfying consumers demand for healthier choices, customization, flavor and convenience. This entire operating segment was identified as held for sale and reported as discontinued operations.

Current wording

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. During 2024, 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”). 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; (ii) $2,600,000 paid at closing; and (iii) a $200,000 holdback amount (the “Holdback Amount”) payable subject to certain conditions,

Previous wording

On October 9, 2024, the Company filed a Certificate of Change Pursuant to NRS 78.209 with the Nevada Secretary of State to effect a reverse stock split of the Company’s common stock at a ratio of one for- ten (the “Reverse Stock Split”), which became effective 12:01 am eastern on October 18, 2024. As a result of the Reverse Stock Split, every 10 shares of the Company’s common Stock issued and outstanding on the effective date were consolidated into one issued and outstanding share. All stockholders where were entitled to receive fractional share interest. There was no change in the par value of the Company’s common stock.

Current wording

On September 9, 2025, the Company filed a Certificate of Change Pursuant to NRS 78.209 with the Nevada Secretary of State to effect a reverse stock split of the Company’s common stock at a ratio of one-for-ten (the “Reverse Stock Split”), which became effective 12:01 am eastern on September 15, 2025. The Company did so to regain compliance with Nasdaq. As a result of the Reverse Stock Split, every 10 shares of the Company’s common stock issued and outstanding on the effective date were consolidated into one issued and outstanding share. All shareholders who would have otherwise received fractional shares as a result of the Reverse Stock Split received cash in lieu of any fractional share interests There was no change in the par value of the Company’s common stock. The Company previously effected a 1-for-10 reverse stock split effective October 18, 2024. All share and per share amounts included in these consolidated financial statements have been adjusted to reflect both reverse stock splits. Please see Note 18 – Commitments and contingencies for further details.

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 years ended December 31, 2024 and 2023, $6.7 million and $6.2 million, respectively, are recorded as Stock-based expenses in the accompanying 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 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.

Previous wording

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

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

Previous wording

Net loss attributable to non-controlling interests was $0.3 million for the year ended December 31, 2024. 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 was $0.5 million and $0.3 million for the years ended December 31, 2025 and 2024, 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. 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. The Company is appealing the judgment.

Previous wording

Our gross profit totaled $5.1 million for the year ended December 31, 2024, compared to $9.6 million for the year ended December 31, 2023. The $4.5 million decrease is primarily attributed to a decrease in Commodity sales and corresponding decrease in Cost of goods sold.

Current wording

Our gross profit totaled $4.6 million for the year ended December 31, 2025, compared to $22.7 million for the year ended December 31, 2024. The $18.2 million decrease is primarily attributed to a decrease in Commodity sales and corresponding decrease in Cost of goods sold.

Previous wording

We generated Commodity sales of $700.9 million for the year ended December 31, 2024, compared to $717.5 million for the year ended December 31, 2023. The $16.6 million decrease or 2.3% is attributable to a 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.

Current wording

We generated Commodity sales of $246.9 million for the year ended December 31, 2025, compared to $700.9 million for the year ended December 31, 2024. The $454.0 million decrease or 64.8% 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. Furthermore, it is attributable to a much stronger scrutinization process which the company adhered to starting in Q3 2025. The Company was seeking to minimize the risks prior to engaging in large transactions unless these transactions can also guarantee a cash profit.

Previous wording

Cost of goods sold for the years ended December 31, 2024 and 2023 totaled $695.8 million and $707.9 million, respectively. The $12.1 million change is a direct result of the decrease in sales.

Current wording

Cost of goods sold for the years ended December 31, 2025 and 2024 totaled $242.4 million and $678.2 million, respectively. The $435.8 million change is primarily due to 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 year ended December 31, 2024, totaled $6.7 million compared to $6.2 million for the year ended December 31, 2023. The increase in Stock-based consulting 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 the first quarter of 2023.

Current wording

Stock-based expenses for the year ended December 31, 2025, totaled $2.1 million compared to $6.7 million for the year ended December 31, 2024. The decrease in Stock-based expenses is primarily the result of the settlement with Aggia entered in November 2025, in which Aggia was willing to waive their previously agreed consulting fees. Based on the original servicing agreement with Aggia, the consulting fees were calculated at approximately 40.0% of the Net income generated by Sadot Agri-Foods. This expense was supposed to be paid in the vesting of restricted stock that was issued to Aggia. In November 2025 the services agreement was terminated pursuant to a settlement agreement which extinguished all remaining obligations under the arrangement.

Previous wording

Other income for the years ended December 31, 2024 and 2023 totaled $17.1 million and $1.7 million, respectively. The other income was primarily attributable to an increase of $15.6 million in the gain on the fair value remeasurement as a result of the mark to market adjustment of derivatives, an increase of $2.8 million in the Change in fair value of stock-based compensation due to the difference in the stock price at the time of the stock issuance and agreed upon price to Aggia, a decrease of $1.0 million in warrant modification expense, and an increase of $0.5 million on the Gain on sale of trading securities, partially offset by a decrease of $0.3 million in Other income and a $4.2 million increase in Interest expense, net.

Current wording

Other (loss) income for the years ended December 31, 2025 and 2024 totaled $(53.0) million and $(0.5) million, respectively. The other income was primarily attributable to the recognition of impairment of significant assets of $31.0 million, loss on litigation of $13.5 million, loss on debt extinguishment of $3.6 million, all of which were not present in the prior year, as well as a decrease of $3.4 million in the change in fair value of accrued compensation due to the difference in the stock price at the time of the stock issuance and agreed upon price to Aggia, partially offset by a $1.0 million increase in Interest expense, net.

Previous wording

(3) Consists of Deferred revenue, current and Other current liabilities. See Note 14 for full list of items in Other current liabilities.

Current wording

(3) Consists of current operating lease liability, current deferred revenue, and other current liabilities.

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 December 31, 2024, current ratio, which equals Total current assets divided by Total current liabilities, was 1.16, an increase of 0.08, compared to current ratio of 1.08 at December 31, 2023. At December 31, 2024, working capital, which equals Total current assets less Total current liabilities, was $20.5 million, a increase of $12.2 million, compared to working capital of $8.3 million at December 31, 2023. The increase in current ratio and working capital was primarily due to an increase in Other current assets, an increase in Assets held for sale, and a decrease in accounts payable, partially offset by a decrease in Accounts receivable, a decrease in Inventory, an increase in Other current liabilities and an increase in Liabilities held for sale. The Company believes that our existing cash on hand, current accounts receivable and future cash flows from our commodity trading, and farming will be sufficient to fund our operations, anticipated capital expenditures and repayment obligations over the next 12 months.

Current wording

At December 31, 2025, current ratio, which equals Total current assets divided by Total current liabilities, was 0.05, a decrease of 1.11, compared to current ratio of 1.16 at December 31, 2024. At December 31, 2025, working capital (deficit), which equals Total current assets less Total current liabilities, was $(54.8) million, a decrease of $75.3 million, compared to working capital of $20.5 million at December 31, 2024. 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 assets, a decrease in assets held for sale, a decrease in inventory, a decrease in other current liabilities and a decrease in liabilities held for sale.

Previous wording

For the years ended December 31, 2024 and 2023, Net cash used in continuing operating activities was $2.8 million and $13.7 million, respectively, in operations and $0.5 million was used in and $0.1 million was provided by operations, respectively, in discontinued operations. Our Net cash used for the year ended December 31, 2024, was primarily attributable to our Net income of $3.7 million, adjusted for net non-cash expense in the aggregate amount of $14.0 million offset by $7.5 million of Net cash used in changes in the levels of operating assets and liabilities. Our Net cash used for the year ended December 31, 2023, was primarily attributable to our Net loss of $8.0 million, adjusted for net non-cash expenses in the aggregate amount of $5.6 million, partially offset by $11.2 million of Net cash used in changes in the levels of operating assets and liabilities.

Current wording

For the years ended December 31, 2025 and 2024, Net cash used in continuing operating activities was $8.7 million and $2.8 million, respectively, in operations and $3.8 million was provided by and $0.5 million was used in operations, respectively, in discontinued operations. Our Net cash used for the year ended December 31, 2025, was primarily attributable to our Net loss of $94.0 million, adjusted for net non-cash expense in the aggregate amount of $85.3 million offset by $13.7 million of Net cash used in changes in the levels of operating assets and liabilities. Our Net cash used for the year ended December 31, 2024, was primarily attributable to our Net loss of $3.7 million, adjusted for net non-cash expenses in the aggregate amount of $14.0 million, partially offset by $7.5 million of Net cash used in changes in the levels of operating assets and liabilities.

Previous wording

For the year ended December 31, 2024, Net cash used in investing activities was $4.0 thousand, of which, $37.0 thousand was used to purchase Property and equipment, partially offset by $33.0 thousand, which was generated on the Disposal of property and equipment. Net cash provided by investing activities for discontinued operations was $1.0 million for year ended December 31, 2024. For the year ended December 31, 2023, Net cash used in investing activities was $3.6 million, of which $7.3 million was used to purchase Property and equipment partially offset by investment from non-controlling interest of $3.7 million, and disposal of property and equipment of $25.0 thousand. Net cash provided by investing activities for discontinued operations was $0.1 million for the year ended December 31, 2023.

Current wording

For the year ended December 31, 2025, Net cash used in investing activities was nil. For the year ended December 31, 2024, Net cash used in investing activities was $4.0 thousand, of which $37.0 thousand was used to purchase Property and equipment partially offset by disposal of property and equipment of $33.0 thousand. Net cash provided by investing activities for discontinued operations was $1.0 million for the year ended December 31, 2024.

Previous wording

For the year ended December 31, 2024, Net cash provided by financing activities was $2.8 million, consisting of proceeds from notes payable of $11.1 million, partially offset by the repayments of notes payable of $8.3 million. Net cash used in financing activities for discontinued operations was $0.1 million for the year ended December 31, 2024. For the year ended December 31, 2023, Net cash provided by financing activities was $8.6 million, consisting of proceeds from notes payable of $12.1 million and proceeds from exercise of warrants of $2.2 million partially offset by the repayments of notes payable of $5.7 million. Net cash used in financing activities for discontinued operations was $0.1 million for the year ended December 31, 2023.

Current wording

For the year ended December 31, 2025, Net cash provided by financing activities was $3.8 million, consisting of proceeds from notes payable of $11.7 million, partially offset by the repayments of notes payable of $9.4 million. Net cash used in financing activities for discontinued operations was nil for the year ended December 31, 2025. For the year ended December 31, 2024, Net cash provided by financing activities was $2.8 million, consisting of proceeds from notes payable of $11.1 million and proceeds from exercise of warrants of $— million partially offset by the repayments of notes payable of $8.3 million. Net cash used in financing activities for discontinued operations was $0.1 million for the year ended December 31, 2024.

Previous wording

We use commodity futures contracts to manage our exposure to this commodity price risk. It is generally our policy to hedge such risks to the extent practicable. We enter into hedges to limit our exposure to volatile price fluctuations that we believe would impact our gross margins on firm purchase and sales commitments. As an example, if we enter into fixed price contracts with our suppliers and variable priced sales contracts with our customers, we will generally enter into a futures contract to sell the commodity for future delivery in the month when we expect the commodity price to be fixed according to the sales contract terms. We repurchase this position once the pricing has been fixed with our customer. If the underlying commodity price increases, we suffer a hedging loss and have a unrealized loss on derivative contracts, but the sales price to the customer is based on a higher market price and offsets the loss. Conversely, if the commodity price decreases, we have a hedging gain and recognize a unrealized gain on derivative contracts, but the sales price to the customer is based on the lower market price and offsets the gain. At December 31, 2024 and 2023 we had a unrealized loss on derivative contracts of $0.1 million and nil, respectively, on the books related to our hedging policy to manage our exposure to commodity price risk.

Current wording

We use commodity futures contracts to manage our exposure to this commodity price risk. It is generally our policy to hedge such risks to the extent practicable. We enter into hedges to limit our exposure to volatile price fluctuations that we believe would impact our gross margins on firm purchase and sales commitments. As an example, if we enter into fixed price contracts with our suppliers and variable priced sales contracts with our customers, we will generally enter into a futures contract to sell the commodity for future delivery in the month when we expect the commodity price to be fixed according to the sales contract terms. We repurchase this position once the pricing has been fixed with our customer. If the underlying commodity price increases, we suffer a hedging loss and have a unrealized loss on derivative contracts, but the sales price to the customer is based on a higher market price and offsets the loss. Conversely, if the commodity price decreases, we have a hedging gain and recognize a unrealized gain on derivative contracts, but the sales price to the customer is based on the lower market price and offsets the gain. At December 31, 2025 and 2024 we had an unrealized loss on derivative contracts of nil and $0.1 million, respectively, on the books related to our hedging policy to manage our exposure to commodity price risk.

Previous wording

From time to time we may enter into forward sales contract that do not meet the definition or qualify for hedge accounting. Forward sales contracts are derivatives that were entered into to sell goods at a later date at a fixed or determinable price for a specific period. Forward sales contracts are recognized on the balance sheet at the value of the contract and the difference in the fair value and derivative liability is recorded as a unrealized gain on derivative contracts or unrealized loss on derivative contracts. If the underlying commodity price increases, we suffer a mark to market loss and have a unrealized loss on derivative contracts. Conversely, if the commodity price decreases, we have a hedging gain and recognize a unrealized gain on derivative contracts. At December 31, 2024 and 2023 we had derivative liabilities of $92.1 million and $92.1 million, with a corresponding unrealized gain on derivative contracts of $18.6 million and $1.5 million, respectively.

Current wording

From time to time we may enter into forward sales contract that do not meet the definition or qualify for hedge accounting. Forward sales contracts are derivatives that were entered into to sell goods at a later date at a fixed or determinable price for a specific period. Forward sales contracts are recognized on the balance sheet at the value of the contract and the difference in the fair value and derivative liability is recorded as a unrealized gain on derivative contracts or unrealized loss on derivative contracts. If the underlying commodity price increases, we suffer a mark to market loss and have a unrealized loss on derivative contracts. Conversely, if the commodity price decreases, we have a hedging gain and recognize a unrealized gain on derivative contracts. At December 31, 2025 and 2024 we had derivative liabilities of nil and $92.1 million, with a corresponding unrealized gain on derivative contracts of nil and $18.6 million, respectively.