PART I - FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) The unaudited condensed consolidated financial statements for Sadot Group Inc. as of June 30, 2025, reflect a strategic shift towards the Agri-Foods sector, with the restaurant business classified as discontinued operations Condensed Consolidated Balance Sheets The balance sheet as of June 30, 2025, shows a decrease in total assets to $130.6 million from $164.7 million at year-end 2024, primarily due to a reduction in 'Other current assets' Condensed Consolidated Balance Sheet Highlights (in $'000) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Assets | | | | | Cash | 422 | 1,786 | (1,364) | | Accounts receivable, net | 44,136 | 18,014 | 26,122 | | Total current assets | 118,719 | 152,679 | (33,960) | | Total assets | 130,629 | 164,654 | (34,025) | | Liabilities & Equity | | | | | Accounts payable and accrued expenses | 34,419 | 28,019 | 6,400 | | Total current liabilities | 94,526 | 132,170 | (37,644) | | Total liabilities | 94,690 | 132,281 | (37,591) | | Total stockholders' equity | 35,939 | 32,373 | 3,566 | Condensed Consolidated Statements of Operations For the three months ended June 30, 2025, commodity sales decreased 34% year-over-year to $114.3 million, leading to a net income of $0.3 million, down from $2.3 million in Q2 2024 Statement of Operations Summary (in $'000, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Commodity sales | 114,338 | 173,293 | 246,506 | 279,800 | | Gross profit | 4,987 | 5,788 | 10,999 | 8,598 | | Income from operations | 1,770 | 2,074 | 3,246 | 2,605 | | Net income | 286 | 2,317 | 1,106 | 2,004 | | Net income attributable to Sadot Group Inc. | 389 | 2,369 | 1,327 | 2,104 | | Diluted EPS (Continuing Operations) | $0.08 | $0.45 | $0.23 | $0.62 | Condensed Consolidated Statements of Changes in Stockholders' Equity Total stockholders' equity increased from $32.4 million at year-end 2024 to $35.9 million as of June 30, 2025, driven by net income, stock-based compensation, and convertible loan conversions - Key equity changes in the first six months of 2025 include the conversion of $1.55 million in convertible loans into 1,239,111 shares of common stock21 - The number of common shares issued and outstanding increased from 5,225,147 at the end of 2024 to 6,810,403 as of June 30, 202521 Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, the company experienced a significant negative shift in operating cash flow, using $5.4 million compared to providing $10.5 million in the same period of 2024 Cash Flow Summary (in $'000) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash from operating activities | (5,367) | 10,461 | | Net cash from investing activities | — | 3 | | Net cash from financing activities | 3,978 | (1,940) | | Net Increase (Decrease) in Cash | (1,364) | 8,602 | | Cash – end of period | 422 | 9,956 | Notes to the Condensed Consolidated Financial Statements (Unaudited) The notes detail the company's transformation into a global Agri-Foods business, with its former restaurant segment now classified as discontinued operations and held for sale - The company transformed from a U.S. restaurant business to a global Agri-Foods supply chain organization in late 2022. The restaurant segment (Sadot Food Services) is now classified as held for sale and reported as discontinued operations2932 - The company is experiencing delays in converting receivables into cash, which may impact liquidity. It utilizes a factoring agreement to manage short-term needs, under which it can sell eligible receivables for an 85% upfront advance333536 - Gains from the fair value remeasurement of certain financial instruments were reclassified from 'Other income' to 'Cost of goods sold' to better reflect their economic link to inventory and sales activities43 - Subsequent to the quarter end, the company invested $13.4 million in a carbon credit project, raised $2.5 million through a public stock offering, amended several convertible notes, closed its Sadot Korea subsidiary, and appointed a new CFO266267278279 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's transformation into a global Agri-Foods business, with the restaurant operations discontinued, focusing on strategic shifts and liquidity Q2 2025 vs Q2 2024 Performance (in $'000) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Commodity Sales | 114,338 | 173,293 | (58,955) | (34.0)% | | Gross Profit | 4,987 | 5,788 | (801) | (13.8)% | | Income from Operations | 1,770 | 2,074 | (304) | (14.7)% | | Net Income (to Sadot) | 389 | 2,369 | (1,980) | (83.6)% | YTD 2025 vs YTD 2024 Performance (in $'000) | Metric | YTD 2025 | YTD 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Commodity Sales | 246,506 | 279,800 | (33,294) | (11.9)% | | Gross Profit | 10,999 | 8,598 | 2,401 | 27.9% | | Income from Operations | 3,246 | 2,605 | 641 | 24.6% | | Net Income (to Sadot) | 1,327 | 2,104 | (777) | (36.9)% | - The decrease in commodity sales is attributed to a strategic decision to not pursue trades with unfavorable margins309322 - Working capital increased to $24.2 million from $20.5 million at year-end 2024, and the current ratio improved to 1.26 from 1.16. However, the company notes operational challenges in converting receivables to cash332335 Quantitative and Qualitative Disclosures About Market Risk The company states that this section is not applicable - The company has determined that quantitative and qualitative disclosures about market risk are not applicable for this reporting period350 Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of June 30, 2025, and concluded they were effective - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures are effective351 - There were no changes during the period that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting352 PART II - OTHER INFORMATION Legal Proceedings The company is involved in two significant legal matters, a dispute with Cropit Farming Limited in Zambia and a complaint from Lombard Trading International Corp. in Florida - Sadot LLC is in a legal dispute with Cropit Farming Limited in Zambia over the validity of agreements, with claims and counterclaims filed. Damages sought by Cropit are approximately $6.7 million355356 - The company is defending against a complaint from Lombard Trading International Corp. alleging unjust enrichment and fraud related to a commodities transaction, with the plaintiff seeking $7.4 million in damages360 - Management believes it has strong defensible positions in these matters and has not recorded any material liabilities, as a loss is not considered probable or reasonably estimable at this time358359 Risk Factors This section refers to the risk factors detailed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - For a discussion of risk factors, the company refers investors to its Annual Report on Form 10-K for the year ended December 31, 2024, filed on March 11, 2025361 Unregistered Sales of Equity Securities and Use of Proceeds During the first half of 2025, the company issued numerous unregistered shares of its common stock, primarily for note conversions, consultant compensation, and related-party consulting fees - The company issued common stock for services rendered to consultants and board members362364366 - A significant number of shares were issued in exchange for the conversion or repayment of notes payable throughout the period368369370 - On March 31, 2025, the company vested 79,342 shares of common stock to Aggia as consulting fees earned during Q1 2025367 Defaults Upon Senior Securities The company reported no defaults upon senior securities - There were no defaults upon senior securities during the reporting period379 Mine Safety Disclosures The company states that this section is not applicable - This item is not applicable to the company380 Other Information This section details significant leadership and board changes during and shortly after the quarter, including new CEO and CFO appointments and board resignations - Chagay Ravid was appointed as the new Chief Executive Officer on May 28, 2025386 - Paul Sansom was appointed Chief Financial Officer, effective August 1, 2025, following the resignation of Jennifer Black388 - The company experienced several changes to its Board of Directors, including the passing of one member and the resignation of two others, including the Chairman381383 Exhibits This section provides a list of all exhibits filed with the Form 10-Q, including agreements, corporate governance documents, and certifications
Sadot (SDOT) - 2025 Q2 - Quarterly Report