Sadot Group Inc. (SDOT) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This Quarterly Report on Form 10-Q covers the three months ended March 31, 2026. Sadot Group Inc. is a Nevada corporation operating primarily through its Sadot Agri-Foods unit, which focuses on global commodity trading and farming. The Company recently exited its restaurant business (Sadot Food Services), which was sold in December 2025 and is now reported as discontinued operations. The Company is currently classified as a smaller reporting company.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Commodity Sales | $0 | $132.2 million |
| Net Loss (Attributable to Sadot) | $(4.9) million | $0.9 million (Income) |
| Operating Loss | $(2.5) million | $1.5 million (Income) |
| Cash and Restricted Cash | $0.68 million | $1.94 million |
| Working Capital Deficit | $(57.8) million | $(54.8) million |
| Total Notes Payable (Net) | $11.1 million | $10.2 million |
| Current Ratio | 0.04 | 0.05 |
Material Changes vs. Prior Period
- Cessation of Revenue: Commodity sales dropped to zero from $132.2 million in Q1 2025 due to a lack of working capital to fund new trades and significant operational disruptions.
- Profitability Reversal: The Company swung from a net income of $0.9 million in Q1 2025 to a net loss of $4.9 million in Q1 2026. This was driven by the loss of revenue and increased non-operating expenses.
- Debt and Defaults: Substantially all outstanding debt obligations (approx. $11.1 million) matured on December 31, 2025, and remain unpaid, placing the Company in default. Interest expense increased to $1.8 million.
- Asset Impairments and Losses: The Company recorded a $0.1 million loss on lease abandonment, a $0.1 million loss on litigation, and a $0.3 million loss on debt extinguishment. Additionally, a $11.8 million impairment was recognized in late 2025 regarding the loss of the Zambia farm interest.
- Discontinued Operations: The restaurant segment was fully divested in Q4 2025. Q1 2026 reflects a minor loss of $0.03 million from discontinued operations compared to $0.1 million income in Q1 2025.
Outlook, Risks, and Contingencies
- Going Concern: Management has expressed substantial doubt about the Company's ability to continue as a going concern within one year. The Company requires additional financing to meet obligations and fund operations.
- NASDAQ Compliance: On May 5, 2026, the Company received notice of non-compliance with the minimum shareholders' equity requirement (negative equity of ~$54.7 million). The Company has 45 days to submit a compliance plan.
- Legal Proceedings:
- Zambia Farm: An adverse judgment resulted in the loss of a 5,000-acre farm. The Company is appealing and seeking $3.5 million in recovery.
- Nuval Trade S.A.: A partial arbitration award of approximately $12.9 million (including interest) was issued against a subsidiary; this liability has been accrued.
- Factoring Dispute: A dispute exists with a factoring company regarding amounts owed on a $3.9 million receivable pledge.
- Capital Structure: Shareholders approved an increase in authorized common stock from 2 million to 250 million shares in April 2026 to facilitate future financing. The Company also issued Series A Preferred Stock and 8% OID Debentures in early 2026.
Investor Verification Checklist
- Verify the status of the NASDAQ compliance plan submission deadline (June 22, 2026) and the likelihood of regaining listing status.
- Confirm the liquidity runway given the $0.68 million cash balance against $57.8 million in working capital deficit and defaulted debt.
- Review the accrued liability of $12.9 million related to the Nuval Trade arbitration and the Company's ability to satisfy this judgment.
- Assess the outcome of the Zambia farm appeal and the potential recovery of the $3.5 million claim.
- Monitor the debt restructuring efforts for the $11.1 million in defaulted notes payable to avoid acceleration or foreclosure.