Financial Data and Key Metrics Changes - STADOT AgriFoods revenue was $132.2 million in Q1 2025, an increase of $25.7 million or 24.1% compared to Q1 2024 [6][7] - Net income attributable to Sadat Group improved to $900,000 in Q1 2025 from a net loss of $300,000 in Q1 2024, representing an improvement of $1.2 million [7] - EBITDA rose to $2.5 million compared to $100,000 in the prior period [7] - Basic and diluted earnings per share were positive at $0.018 per share compared to a negative $0.06 per share in the prior year [7] - SG&A expenses increased to $3.1 million, up over $1.7 million compared to last year [7][8] - Cash balance stood at $1.9 million with a working capital surplus of $21.9 million [8] Business Line Data and Key Metrics Changes - The company completed 76 transactions in Q1 across 17 different countries, indicating a broad operational reach [6] - The increase in SG&A expenses was primarily due to reclassifying some costs from cost of goods sold to SG&A, reflecting a more accurate cost structure [8] Market Data and Key Metrics Changes - Sadat Group's revenue is largely generated outside the United States, with minimal impact from U.S. tariffs [15][16] - The company has conducted agri commodity trades with 33 countries, indicating a diverse market presence [15] Company Strategy and Development Direction - The company aims to reinvest cash into the Agri Food commodity trading business to drive revenue growth and acquire strategic assets [8] - Sadat Group is focusing on improving gross margins by targeting higher-margin products like containerized specialty crops [20] - The company is exploring opportunities in the pet food ingredients processing business as part of its growth strategy [20][21] Management's Comments on Operating Environment and Future Outlook - Management believes that tariffs will not have a significant material impact on Sadat's business due to its global trading model [15][18] - The company is adapting to shifts in demand, particularly from China, by sourcing products from alternative markets [19] - Management acknowledges the need to improve the balance sheet and income statements within a controlled growth plan [10][11] Other Important Information - The restaurant division reported a positive net income of $107,000 in Q1, with ongoing expansion plans for the Pokemoto chain [23][24] - The sale of the restaurant division is progressing, with multiple interested parties and a new Letter of Intent being finalized [23] Q&A Session Summary Question: Can you comment with an update on the general tariff environment and how it affects Sadat's business? - Management stated that tariffs will not have a significant material impact on Sadat due to its global operations and revenue generation primarily outside the U.S. [15][18] Question: How have the tariffs between the U.S. and China impacted the business directly? - Management noted a shift in China's demand for products like soybeans from U.S. sources to other markets, which Sadat is studying to capitalize on new opportunities [19] Question: The company's gross margins have been less than 1%. How are you going to improve those margins? - Management is focusing on higher-margin products like specialty crops and has signed a management services agreement for a pet food ingredients processing business [20][21] Question: Please provide an update on the sale of the restaurant process. - Management indicated that while the sale is taking longer than expected, progress is being made with multiple interested parties and ongoing expansion of the Pokemoto chain [23][24]

Financial Data and Key Metrics Changes - STADOT AgriFoods revenue was $132.2 million in Q1 2025, an increase of $25.7 million or 24.1% compared to Q1 2024 [6] - Net income attributable to Sadat Group improved to $900,000 in Q1 2025 from a net loss of $300,000 in Q1 2024, marking an improvement of $1.2 million [7] - EBITDA rose to $2.5 million compared to $100,000 in the prior period [7] - Basic and diluted earnings per share were $0.018 compared to a loss of $0.06 per share in the prior year [7] - SG&A expenses increased to $3.1 million, up over $1.7 million compared to last year [7][8] - Cash balance was $1.9 million with a working capital surplus of $21.9 million [8] Business Line Data and Key Metrics Changes - The company completed 76 transactions in Q1 across 17 different countries, indicating a broad operational reach [6] - The increase in SG&A expenses was primarily due to reclassifying some costs from cost of goods sold to SG&A, reflecting a more accurate cost structure [8] Market Data and Key Metrics Changes - Sadat Group's revenue is largely generated outside the United States, with minimal impact from U.S. tariffs [16] - The company has conducted agri commodity trades with 33 countries, indicating a diverse market presence [16] Company Strategy and Development Direction - The company aims to reinvest cash into the Agri Food commodity trading business to drive revenue growth and acquire strategic assets [8] - The new CEO plans to improve the balance sheet and income statements within a controlled growth plan, focusing on operational efficiencies and cost-cutting [12][13] Management's Comments on Operating Environment and Future Outlook - Management believes that tariffs will not have a significant material impact on Sadat's business due to its global trading model [16][18] - The company is studying shifts in trade flows, particularly from the U.S. to other markets like Brazil, to capitalize on new opportunities [19] - There is a focus on improving gross margins through higher-margin products like containerized specialty crops [20] Other Important Information - The restaurant division reported a positive net income of $107,000 in Q1, with ongoing expansion plans [24] - The sale of the restaurant chain is progressing, with multiple interested parties and new locations opening [23][24] Q&A Session Summary Question: Can you comment with an update on the general tariff environment and how it affects Sadat's business? - Management stated that tariffs will not significantly impact Sadat due to its global operations and revenue generation outside the U.S. [16] Question: How have the tariffs between the U.S. and China impacted the business directly? - The company has a flexible trading model and is studying shifts in demand, particularly from China to other markets [19] Question: The company's gross margins have been less than 1%. How are you going to improve those margins? - The focus is on higher-margin products like pulses and specialty crops, along with a management services agreement for a pet food ingredients processing business [20][21] Question: Please provide an update on the sale of the restaurant process. - The sale is taking longer than expected, but there are multiple interested parties, and the restaurant division continues to expand [23][24]

[Form 8-K Filing Summary (April 28, 2025)](index=1&type=section&id=Form%208-K%20Filing) [Results of Operations, Financial Condition, and Regulation FD Disclosure](index=2&type=section&id=Item%202.02%20%26%207.01) Sadot Group Inc. released an updated investor presentation on April 28, 2025, detailing financial results and condition, furnished under Regulation FD and not deemed 'filed' - The company released an updated investor presentation on its website on April 28, 2025[5](index=5&type=chunk) - The presentation is furnished as Exhibit 99.1 to the Form 8-K and is incorporated by reference into Item 7.01[5](index=5&type=chunk) - The information in the report and exhibit is being furnished and is not deemed "filed" under the Securities Exchange Act of 1934, nor is it subject to the liabilities of Section 18[6](index=6&type=chunk) [Non-GAAP Financial Information](index=2&type=section&id=Non-GAAP%20Financial%20Information) The company utilizes non-GAAP financial measures like EBITDA and EBITDA Margin in its investor presentation, defining EBITDA as adjusted net profit/loss, while cautioning about their limitations and comparability - The company utilizes non-GAAP financial measures, including **EBITDA** and **EBITDA Margin**, in its presentation[7](index=7&type=chunk) - EBITDA is defined as Net Profit/Loss, adjusted for depreciation, amortization, interest income/(expense), and income taxes[7](index=7&type=chunk) - The company warns that its non-GAAP measures have limitations and may not be comparable to similar measures disclosed by other issuers[7](index=7&type=chunk) [Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits filed with the Current Report on Form 8-K, primarily Exhibit 99.1, the investor presentation, and the interactive data file Exhibit List | Exhibit No. | Description | | :--- | :--- | | 99.1 | Investor Presentation in use beginning April 18, 2025 | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

[Financial Information](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Q1 2025 financial statements reflect a strategic shift to agri-foods, with decreased assets, a net income turnaround, and negative operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets and liabilities significantly decreased, while stockholders' equity slightly increased Condensed Consolidated Balance Sheet Highlights (in $'000) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | 71,802 | 152,679 | | **Total Assets** | **83,744** | **164,654** | | **Total Current Liabilities** | 49,934 | 132,170 | | **Total Liabilities** | **50,039** | **132,281** | | **Total Stockholders' Equity** | **33,705** | **32,373** | - The significant decrease in current assets and liabilities is primarily linked to the settlement and revaluation of derivative contracts previously held on the balance sheet[11](index=11&type=chunk)[119](index=119&type=chunk)[146](index=146&type=chunk) [Condensed Consolidated Statement of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) Q1 2025 saw a net income turnaround driven by increased commodity sales and gross profit, despite rising operating expenses Statement of Operations Highlights (in $'000) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Commodity sales** | 132,168 | 106,507 | | **Gross profit** | 6,012 | 2,810 | | **Income from operations** | 1,476 | 530 | | **Net income / (loss)** | 820 | (313) | | **Net income / (loss) attributable to Sadot Group Inc.** | 938 | (265) | | **Diluted EPS from continuing operations** | $0.16 | $0.20 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 operating activities used cash due to increased receivables, while financing activities provided inflow, slightly increasing the cash balance Cash Flow Summary (in $'000) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash provided by / (used in) operating activities** | (2,950) | 2,507 | | **Net cash provided by investing activities** | — | 29 | | **Net cash provided by / (used in) financing activities** | 3,114 | (2,761) | | **Net Increase (Decrease) in Cash** | 154 | (140) | | **Cash – end of period** | 1,940 | 1,214 | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's transformation to agri-foods, reclassification of fair value gains, liquidity reliance on factoring, legal proceedings, and related-party transactions - The company has transformed from a U.S. restaurant business into a global agri-food commodity supply chain organization. The restaurant segment is now classified as discontinued operations held for sale[28](index=28&type=chunk)[31](index=31&type=chunk)[101](index=101&type=chunk) - The company reclassified fair value gains on certain financial instruments from 'Other income' to 'Cost of goods sold' to better reflect their economic link to inventory and sales activities. For Q1 2024, this increased gross profit by **$3.25 million**[44](index=44&type=chunk)[45](index=45&type=chunk) - The company is involved in two significant legal proceedings: one initiated by Cropit Farming in Zambia seeking **$6.7 million** in damages, and another by Lombard Trading in Florida seeking **$7.4 million**. The company is vigorously defending against both claims[165](index=165&type=chunk)[167](index=167&type=chunk)[172](index=172&type=chunk) - Significant related-party transactions exist with Aggia LLC, which owns **11.2%** of the company. In Q1 2025, this included **$1.0 million** in stock-based consulting fees and **$0.8 million** in reimbursed operating costs[230](index=230&type=chunk)[231](index=231&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=54&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A discusses the company's agri-foods transformation, increased commodity sales and gross profit, but highlights liquidity pressures from receivables and rising operating expenses [Results of Operations](index=58&type=section&id=Results%20of%20Operations) Q1 2025 results show increased commodity sales and gross profit driven by market expansion, despite substantial rises in SG&A and net interest expenses Results of Operations Comparison (in $'000) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Variance $ | Variance % | | :--- | :--- | :--- | :--- | :--- | | **Commodity sales** | 132,168 | 106,507 | 25,661 | 24.1% | | **Gross profit** | 6,012 | 2,810 | 3,202 | 114.0% | | **Sales, general and administrative expenses** | (3,081) | (1,393) | (1,688) | 121.2% | | **Income from operations** | 1,476 | 530 | 946 | 178.5% | | **Net income / (loss) attributable to Sadot Group Inc.** | 938 | (265) | 1,203 | 454.0% | - The increase in commodity sales is attributed to expanded operations in new markets that were not active in the prior year[272](index=272&type=chunk) - The increase in SG&A expenses was primarily due to higher consulting fees related to trades in Latin America, Brazil, and Canada, and entry into the South Korean market[276](index=276&type=chunk) [Liquidity and Capital Resources](index=66&type=section&id=Liquidity%20and%20Capital%20Resources) Working capital increased, but liquidity is challenged by delayed receivables conversion, necessitating reliance on factoring and potential future capital raises Working Capital (in $'000) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | 71,802 | 152,679 | | **Total current liabilities** | 49,934 | 132,170 | | **Working capital** | **21,868** | **20,509** | | **Current ratio** | 1.44 | 1.16 | - The company faces liquidity challenges due to delays in converting receivables into cash, despite having sufficient working capital on paper[281](index=281&type=chunk)[283](index=283&type=chunk) - The company relies on a factoring agreement for liquidity, where it can sell certain receivables with recourse for an **85%** upfront advance[283](index=283&type=chunk) - Management states the need to raise additional capital, warning that failure to do so could require selling business lines or assets and could result in significant shareholder dilution[285](index=285&type=chunk)[286](index=286&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable, indicating no material market risk disclosures are required for this smaller reporting company filing - Not applicable for this filing[297](index=297&type=chunk) [Controls and Procedures](index=69&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[298](index=298&type=chunk) - No material changes were made to the internal control over financial reporting during the first quarter of 2025[299](index=299&type=chunk) [Other Information](index=70&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=70&type=section&id=Item%201.%20Legal%20Proceedings) The company is defending against two significant legal proceedings, one in Zambia for $6.7 million and another in Florida for $7.4 million, both related to commodity transactions - Cropit Farming Limited has sued Sadot LLC in Zambia, seeking rescission of agreements and damages of approximately **$6.7 million**. Sadot LLC has denied the allegations and filed counterclaims[302](index=302&type=chunk)[303](index=303&type=chunk) - Lombard Trading International Corp. has sued the company in Florida for **$7.4 million** related to a commodities transaction, alleging unjust enrichment, fraud, and theft. The company denies the allegations[307](index=307&type=chunk) - Management believes it has strong defensible positions in both matters and has not recorded any material liabilities, as a loss is not considered probable or reasonably estimable at this time[305](index=305&type=chunk)[306](index=306&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued unregistered common stock in Q1 2025, primarily for consulting services and to its related party, Aggia - On March 25, 2025, the company issued **34,074** shares of common stock to consultants for services rendered[314](index=314&type=chunk) - On March 31, 2025, the company vested **79,342** shares of common stock to its related party, Aggia, as consulting fees earned during Q1 2025[315](index=315&type=chunk) - The company also issued shares in Q1 2024 for board compensation, conversion of notes payable, and other consulting services[309](index=309&type=chunk)[310](index=310&type=chunk)[312](index=312&type=chunk) [Other Information](index=71&type=section&id=Item%205.%20Other%20Information) The company experienced significant changes in its board and executive leadership, including director resignations, a board member's passing, and a CEO transition - Two directors, Kevin Mohan and Chairman Mark McKinney, resigned from the Board effective May 8, 2025[319](index=319&type=chunk) - Board member Marvin Yeo passed away unexpectedly on April 27, 2025[320](index=320&type=chunk) - CEO Catia Jorge resigned effective June 1, 2025, and David Hanna was appointed Interim CEO for a **90-day** period[321](index=321&type=chunk)

Financial Data and Key Metrics Changes - For Q4 2024, the company generated consolidated revenue of $216.2 million, achieving net income of $0.7 million and EBITDA of $2.2 million [9][10] - For the full year ended December 31, 2024, consolidated revenue was $700.9 million, with net income of $4 million and EBITDA of $8.9 million, representing substantial improvements from 2023 [10][20] - Q4 net income improved by $2.6 million and EBITDA improved by $4.3 million compared to Q4 2023 [11] - Full year net income improved by $11.8 million and EBITDA improved by $15.1 million over 2023 [11] Business Line Data and Key Metrics Changes - Sadot agri foods revenue was $216.2 million in Q4 and $700.9 million for the full year, with 75 trade-related transactions in Q4 across 20 countries and 144 transactions for the full year across 33 countries [19][20] - SG&A expenses were reduced by $1.3 million to $9 million in Q4 due to reclassifying certain expenses to discontinued operations [21] Market Data and Key Metrics Changes - The company is exposed to market risk primarily due to the volatility in prices of food and feed commodities, and it manages these risks through forward sales contracts and hedges [22][23] - The mark-to-market gain on derivative transactions contributed approximately $5.1 million in income for Q4 and $17.1 million for the year [23] Company Strategy and Development Direction - The company aims to drive operational efficiencies, strengthen investor relations, expand into new markets, diversify its commodity portfolio, and pursue strategic growth initiatives [28][29] - The CEO emphasized the opportunity to grow Sadot into a significant player in the nearly $2 trillion global agri commodities market [17][30] Management's Comments on Operating Environment and Future Outlook - Management believes positive changes are occurring across the business, with a focus on scaling operations and optimizing the supply chain to maximize margins [24][28] - The CEO noted that the current tariff situation between the U.S. and Canada is not expected to materially affect operations [25][26] Other Important Information - The company completed its Form 10-K filing with the SEC on March 11, 2025, detailing its financial results [19] - The CEO introduced herself and highlighted her extensive experience in the agri commodities sector, indicating a strong leadership direction for the company [12][14] Q&A Session Summary Question: Update on the sale of the restaurants - The restaurant sale process is ongoing, with multiple parties in advanced stages of negotiations, and the focus is on divesting the restaurants to concentrate on the global food supply chain [35][36] Question: Impact of tariffs on Sadot - Most trades are initiated outside the U.S. and are not subject to recent U.S. trade tariffs, and the company has a flexible trading model to capitalize on changes in trade flows [38] Question: Changes in board and executive management - Recent changes align with the company's divestment from the U.S. restaurant business and focus on the global agri commodities supply chain, bringing in industry-specific experts [40][42] Question: Enhancing investor relations and public relations efforts - The company plans to increase investor relations efforts, enhance shareholder communication, and drive awareness through various channels [45][48] Question: Next steps for Sadot and market focus - The company will strengthen its presence in Brazil and Argentina while expanding into growing consumption markets like MENA and Asia [52] Question: Growing in a competitive market - The CEO sees tremendous opportunity due to the company's size, team, and global presence, with plans to streamline operations and increase shareholder value [54]

Financial Data and Key Metrics Changes - For Q4 2024, the company generated consolidated revenue of $216.2 million, achieving net income of $0.7 million and EBITDA of $2.2 million [9][10] - For the full year ended December 31, 2024, consolidated revenue was $700.9 million, with net income of $4 million and EBITDA of $8.9 million, representing substantial improvements from 2023 [10][20] - Q4 net income improved by $2.6 million and EBITDA improved by $4.3 million compared to Q4 2023 [11] - Full year net income improved by $11.8 million and EBITDA improved by $15.1 million compared to 2023 [11] Business Line Data and Key Metrics Changes - The company completed 75 trade-related transactions in Q4 across 20 different countries and 144 transactions for the full year across 33 countries [19] - SG&A expenses were reduced by $1.3 million to $9 million in Q4, mainly due to reclassifying certain expenses to discontinued operations [21] Market Data and Key Metrics Changes - The company had a cash balance of $1.8 million and a working capital surplus of $20.5 million [22] - The mark-to-market gain on derivative transactions contributed approximately $5.1 million in income for Q4 and $17.1 million for the year [23] Company Strategy and Development Direction - The company aims to drive operational efficiencies, strengthen investor relations, expand into new markets, diversify its commodity portfolio, and pursue strategic growth initiatives [28][29] - The CEO emphasized the opportunity to grow within the nearly $2 trillion global agri commodities market [17][30] Management's Comments on Operating Environment and Future Outlook - Management believes positive changes are occurring across the business and remains focused on advancing core agri commodity operations [24][30] - The CEO noted that the current tariff situation between the U.S. and Canada is not expected to materially affect operations [25][26] Other Important Information - The company is in the process of divesting its restaurant business, which is a top priority to focus on the global food supply chain [36] - The company is evaluating its current IR and PR strategy to enhance awareness and communication with investors [48] Q&A Session Summary Question: Update on the sale of the restaurants - The restaurant sale process is moving forward, with multiple parties in advanced stages of negotiations [36] Question: Impact of tariffs on Sadot - Most trades are initiated outside the U.S. and are not subject to recent U.S. trade tariffs, making tariffs a non-material event [38] Question: Changes in board and executive management - Recent changes align with the company's focus on the global agri commodities supply chain and bring in industry-specific experts [40] Question: Enhancing IR and PR efforts - Plans include more frequent announcements, non-deal roadshows, and evaluating the current IR and PR strategy [46][48] Question: Next steps for Sadot and market focus - The company will strengthen its presence in Brazil and Argentina while expanding into growing consumption markets like MENA and Asia [52] Question: Growing in a competitive market - The CEO sees opportunities due to the company's size, team, and global presence, focusing on streamlining operations [54]

Financial Performance - Q4 2024 net income increased to $0.7 million, compared to a net loss of $1.9 million in the prior year period [4] - FY 2024 net income reached $4.0 million, a significant improvement from a net loss of $7.8 million in FY 2023 [4] - Net income for 2024 was $3,736,000 compared to a net loss of $8,042,000 in 2023 [22] - The company reported a diluted EPS of $0.86 for FY 2024, compared to a diluted EPS loss of $2.24 in 2023 [4] - Net income margin attributable to Sadot Group Inc. improved to 0.5% in 2024 from a loss margin of (1.1)% in 2023 [22] EBITDA and Revenue - FY 2024 EBITDA rose to $8.9 million, compared to a loss of $6.2 million in the prior year [4] - EBITDA for 2024 was $8,647,000, a significant improvement from a negative EBITDA of $6,446,000 in 2023 [22] - EBITDA margin attributable to Sadot Group Inc. increased to 1.3% in 2024 from (0.9)% in 2023 [22] - Consolidated revenue for FY 2024 was $700.9 million, down from $717.5 million in FY 2023 [15] Operational Changes - The company converted all owned locations to franchise operations, resulting in operational savings [5] - Sadot Group launched operations in Canada and entered the pet food ingredient market in 2024 [5][6] - The company completed 144 transactions of over 1.7 million metric tons of agri-commodities across 33 countries in 2024 [5] Leadership and Management - Catia Jorge was appointed CEO, bringing extensive experience from Cargill and Olam to lead the company's growth [5] Assets and Expenses - Total current assets increased to $152.7 million in FY 2024 from $112.9 million in FY 2023 [13] - Depreciation and amortization expenses decreased to $259,000 in 2024 from $1,143,000 in 2023 [22] - Interest expense, net rose significantly to $4,649,000 in 2024 from $468,000 in 2023 [22] Future Outlook - The company anticipates future growth but acknowledges risks and uncertainties that may affect actual results [23] - Forward-looking statements are based on reasonable assumptions but are subject to various risks [23] Investor Relations - Investor relations contact is available at IR@sadotco.com [24]

Business Transformation and Operations - Sadot Group transformed from a U.S.-centric restaurant business into a global Agri-Foods supply-chain organization in late 2022[18]. - As of December 31, 2024, Sadot Group consists of one distinct operating unit and one discontinued operation[19]. - Sadot Agri-Foods operates a 5,000-acre crop-producing farm in Zambia, focusing on major commodities such as wheat, soy, and corn[21]. - The company signed a consulting agreement with Buenaventura Trading LLC for $0.5 million annually, updated to $0.9 million in December 2024[22]. - Sadot Group sold its subscription-based meal concept, SuperFit Foods, in August 2024, and now only operates as a franchisor for Muscle Maker Grill and Pokémoto[27]. - The company is diversifying its operations geographically and across products to hedge against market volatility and increase profit margins[32]. - The Brazilian subsidiary, Sadot Brazil, was formed in December 2023 to enhance sourcing capabilities in a key agricultural production region[24]. - Sadot Group's strategy focuses on enhancing its global operations in the Agri-Foods supply chain, including farming, trading, and shipping[28]. Risks and Challenges - The company faces challenges from weak global economic conditions, including rising interest rates and reduced demand for agricultural commodities[48]. - The company is exposed to adverse weather conditions, pandemics, and political events that could disrupt operations and affect the availability and pricing of agricultural commodities[49]. - The farming operations are solely located in the Mkushi region of Zambia, where adverse weather can negatively impact crop yields and increase input costs[51]. - The company faces significant risks from international operations, including adverse trade policies, inflation, and currency exchange rate fluctuations, particularly with the Brazilian Real and Zambian Kwacha[55][57]. - The availability and prices of agricultural commodities are subject to wide fluctuations due to factors such as climate change, government programs, and competition, which could adversely affect operating results[68]. - The company has increased its international supply chain operations, which exposes it to additional country risk due to political and economic unrest in trading regions[73]. - Seasonal fluctuations in agricultural production can lead to variations in financial performance, with potential material adverse effects during periods of reduced market demand[77][78]. - Advances in technology may reduce dislocations and arbitrage opportunities in agricultural markets, potentially impacting earnings for agricultural merchandisers[70]. Food Safety and Security - The company is enhancing food safety and security procedures to mitigate risks associated with product adulteration in the supply chain[76]. Financial Strategy and Capital Management - The company’s strategy includes expanding the volume and diversity of crops, global reach, and sustainable agriculture programs, which may be impacted by government policies and regulations[64]. - The company is focusing on expanding into multiple verticals of the food supply chain, including logistics, food processing, and sustainability initiatives[82]. - The growth strategy includes both organic and inorganic initiatives, with potential risks of increased costs and delayed synergies in new geographies[81]. - The company may face challenges in effectively integrating acquired businesses, which could lead to unforeseen operational difficulties and expenditures[83]. - There is a risk of not realizing anticipated benefits from acquisitions, joint ventures, or divestitures, which could adversely affect financial results[85]. - The company relies on third-party vendors for certain operations, which exposes it to risks of business disruption and increased costs if these vendors do not perform effectively[90]. - The company’s food origination and trading operations could be negatively impacted if the consulting agreement with Aggia LLC FZ were to terminate[91]. Competitive Landscape - The competitive landscape is intense, with significant pressure from larger competitors that could impact sales and profit margins[92]. - Franchisees operate independently, which may lead to inconsistencies in quality and operational standards, potentially harming the company's reputation[96]. - The company faces risks related to the protection of its intellectual property, which is crucial for brand awareness and market acceptance[99]. Information Technology and Cybersecurity - Information technology systems are critical for operations, and any interruptions or security breaches could adversely affect business operations[101]. - Increased global cybersecurity vulnerabilities pose significant risks to the company's IT systems and data integrity, with potential costs for protection against breaches[102]. - The ongoing Ukraine-Russia war has heightened the risk of cyberattacks, which could adversely affect the company's operations in the region[103]. - The company has implemented various security measures, including training programs and disaster recovery plans, but these may not fully prevent adverse events[104]. - A breach of IT systems could lead to material disruptions in business operations and significant costs, impacting financial reporting and business opportunities[105]. - The company is subject to evolving data privacy regulations, which could result in legal claims and regulatory fines, adversely affecting its financial condition[106]. Human Capital and Labor - Human capital requirements may not be sufficient to support global operations, potentially impacting warehousing and shipping processes[107]. - Changes in labor laws and regulations could materially affect the company's operating costs and financial condition[108]. - The company relies on its executive officers and key employees, and their loss could harm business strategy and financial results[113]. Market Conditions and Stock Performance - Risk management strategies may not fully hedge against fluctuations in commodity prices and other market risks, potentially impairing financial position[114]. - As a smaller reporting company, the company is exempt from certain disclosure requirements, which could make its common stock less attractive to investors[115]. - The company entered into a SEPA with Yorkville to issue and sell up to $25 million of common stock, with an initial advance of $3 million[138]. - The company intends to retain future earnings for business operations and expansion, with no dividends expected in the foreseeable future[132]. - The company may face difficulties in trading its common stock if it becomes subject to penny stock rules, which apply to stocks priced under $5.00[134]. - The company has registered 34,315,083 shares for resale under the SEPA, which includes 227,273 commitment shares and up to 34,087,810 shares that may be sold at the company's discretion[144]. - The company may incur dilution of existing shareholders' ownership due to the issuance of shares under the SEPA, potentially affecting the market price of its common stock[147]. - The company is subject to market conditions and other factors that will determine the timing and amount of shares sold to Yorkville under the SEPA[141]. - The company may not be able to raise the full $25 million under the SEPA due to limitations such as the Ownership Limitation and Exchange Cap[143]. - The company’s stock price has been highly volatile, influenced by various factors including market conditions and operational performance[128]. - The company does not control the research and reports published by analysts, which can significantly impact its share price and trading volume[131]. - The company may face challenges in maintaining its listing on NASDAQ, which could adversely affect stockholder's ability to sell their securities[133]. - The company has entered into a SEPA allowing the right to sell up to $25.0 million of common stock, subject to certain conditions[155]. - The company expects to continue incurring operating losses as it implements its business plans, with significant capital expenditures anticipated for the foreseeable future[154]. - Capital expenditures will be directed towards servicing Sadot Agri-Foods, Sadot restaurant group, and Sadot farming operations[154]. - The company acknowledges limited historical data on demand for its Agri-Foods and farming operations, leading to uncertainty in capital requirements[154]. - Additional equity or equity-linked securities sales could dilute stockholders, while incurring debt may increase obligations and restrict operations[157]. - The ability to access capital is critical for the company to execute its business plans, with plans to seek additional equity and/or debt financing[156]. - Management will have broad discretion over the use of proceeds from the SEPA, which may not necessarily improve financial condition[158]. - The company may need to significantly reduce spending or alter corporate structure if unable to raise sufficient funds on favorable terms[157]. - Future growth opportunities may arise, potentially requiring additional capital[154]. - The company plans to continue seeking other funding sources, including credit facilities and debt securities[156].

Financial Performance - Consolidated revenues for Q3 2024 reached $201.7 million, a 10.7% increase compared to the prior year period[2] - Net income improved to $1.2 million, a significant turnaround from a loss of $5.2 million in the prior year, marking a $6.3 million improvement[2] - Year-to-date consolidated revenues totaled $484.7 million, down from $555.4 million in the prior year[3] - Year-to-date net income increased to $3.3 million, up from a loss of $6.1 million in the prior year, representing a $9.3 million improvement[3] - EBITDA for Q3 2024 was $2.9 million, compared to a negative $4.4 million in the prior year, reflecting a $7.4 million improvement[2] - Basic EPS improved to $0.25 compared to a negative $1.39 in the prior year period[2] - Net income for the nine months ended September 30, 2024, was $3,099,000, a significant improvement from a net loss of $6,171,000 in the same period of 2023[17] - EBITDA for the nine months ended September 30, 2024, was $6,498,000, compared to a loss of $4,316,000 in the same period of 2023, indicating a positive trend in operational performance[20] - Gross profit for the nine months ended September 30, 2024, was $4,635,000, down from $10,654,000 in the same period of 2023, reflecting challenges in revenue generation[20] - The net income margin attributable to Sadot Group Inc. for the nine months ended September 30, 2024, was 0.6%, an improvement from a margin of -1.1% in the same period of 2023[20] - The EBITDA margin attributable to Sadot Group Inc. for the nine months ended September 30, 2024, was 1.4%, compared to -0.8% in the same period of 2023[20] Cash Flow and Working Capital - The company reported a net cash provided by operating activities of $6,980,000 for the nine months ended September 30, 2024, compared to a cash used of $8,679,000 in the same period of 2023[17] - Working capital surplus increased to $18.9 million from $8.3 million at the end of 2023[2] - Cash at the end of the period for September 30, 2024, was $962,000, down from $2,422,000 at the end of September 30, 2023[17] - The company experienced a significant change in accounts receivable, with a net increase of $20,275,000 for the nine months ended September 30, 2024, compared to a decrease of $61,155,000 in the same period of 2023[17] - The company reported a total adjustment of $3,881,000 for the nine months ended September 30, 2024, compared to an adjustment of -$2,508,000 in the same period of 2023[17] Business Operations - The company completed 24 transactions of over 0.5 million metric tons of agri-commodities across 14 countries during Q3 2024[5] - Revenue growth in the core commodity trading business was 11.6% year-over-year in the latest three-month period[4] - The company is negotiating for the acquisition of an agricultural farming property in Indonesia[6] Forward-Looking Statements - The company cautions that forward-looking statements may involve risks and uncertainties that could cause actual results to differ materially from expectations[21]

Financial Data and Key Metrics Changes - Consolidated revenues for Q3 2024 increased by 10.7% to $201.7 million compared to $182.2 million in Q3 2023 [8][15] - Net income improved significantly to $1.2 million in Q3 2024, a turnaround from a net loss of $5.2 million in Q3 2023, representing an improvement of approximately $6.3 million year-over-year [9][16] - EBITDA for Q3 2024 was positive at $2.9 million, compared to a negative $4.4 million in the same period last year, marking a $7.4 million improvement [10][16] - Year-to-date net income through Q3 2024 stands at $3.3 million, a significant improvement from a net loss of $6.1 million for the same period in 2023 [10] Business Line Data and Key Metrics Changes - The core agri commodity group, Sadot Agri-Foods, generated 99.6% of consolidated revenue, amounting to $200.9 million, reflecting an 11.6% increase year-over-year [8][15] - Legacy restaurant operations, now 100% franchised, contributed $0.8 million in revenue from royalties and company operations in Q3 [15] Market Data and Key Metrics Changes - The company is actively expanding its operations into new geographical markets, including recent expansions into Brazil and Canada [21] - The Canadian trading division has facilitated sales of 11 specialty crop commodities, contributing approximately $20 million in transactions [27] Company Strategy and Development Direction - The company aims to diversify into various verticals within the global food supply chain, including farming, logistics, and processing [21] - Plans to expand farm operations into new geographies and leverage farm assets for trading are underway [21] - The company is negotiating the acquisition of agricultural property in Indonesia, which would enhance its portfolio of farming assets [12][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to operate profitably within the global agri commodities market, which is valued at nearly $2 trillion [11] - The company is focused on enhancing revenue streams, increasing working capital surplus, and achieving profitability [20][22] Other Important Information - SG&A expenses increased to $4.2 million, primarily due to investments in expanding Sadot Agri-Food trading offices [17] - The company reported a mark-to-market gain of approximately $5.5 million from derivative transactions in Q3 [19] Q&A Session Summary Question: Update on progress in Canada - The Canadian trading division has exceeded initial expectations, facilitating sales of 11 specialty crop commodities and engaging in approximately $20 million of transactions [27] Question: Details on the deposit for farmland in Indonesia - The company placed a deposit for approximately 9,500 acres of farmland in Indonesia, which includes vanilla plants and coconut trees, with potential for other crops [29][30] Question: Status of restaurant sales - The company is advancing steadily with multiple interested groups in various stages of due diligence for the sale of Pokémoto and Muscle Maker, having transitioned to a 100% franchise model [31][32] Question: Gross margin improvement - Gross margins are in line with industry standards, and increased trading activity in Canada is expected to enhance margins [36][37] Question: Rationale for the Indonesian farm purchase - The Indonesian farm will offer niche products and allow for geographical diversification, enhancing the company's trading capabilities [39][40] Question: Drivers of SG&A increase - SG&A expenses are rising due to the need to build teams in new geographical areas, with some one-time expenses expected [43][44] Question: Yorkville debt retirement transaction - The company has fully paid off its obligations to Yorkville, and they no longer own any stock [55] Question: Timeline for restaurant deal closing - The company anticipates a formal LOI soon, with incentives provided to close the deal by the end of the year [56][57]