14. Notes Payable

Convertible Notes

During 2024 and early 2025, the Company issued several secured and senior original-issue-discount convertible notes to multiple institutional investors. These instruments were structured with principal amounts in excess of cash proceeds received due to the embedded original issue discount and, in certain cases, were secured by assets of a subsidiary. The notes provided investors with the option to convert outstanding principal (and, when applicable, accrued interest) into shares of common stock at contractually defined conversion prices, subject to customary adjustment mechanisms. The agreements also included typical covenants, events of default, and other investor protection features frequently found in structured convertible financing arrangements.

Note Amendments

As of June 30, 2025, an amendment was executed with the holder of the secured promissory note originally issued on October 22, 2024, which had an original principal balance of $1.4 million. Under the June amendment, the outstanding principal was increased to $2.1 million, and several key terms were revised. Key changes included (i) extending the maturity date to December 31, 2025, (ii) updating the conversion provisions to permit conversion at any time after the original issue date, subject to ownership limitations, (iii) modifying the conversion price to equal the price per share paid in the subsequent financing, and (iv) adding mandatory repayment provisions, including the application of proceeds from capital raises and scheduled monthly principal payments.

The amended instrument was evaluated under ASC 470-50, Debt Modifications and Extinguishments, and the changes were determined to be substantially different from the original terms. Accordingly, the amendment was accounted for as a debt extinguishment, and the original note was derecognized and replaced with a new instrument measured at its fair value as of the amendment date. Unamortized original-issue discount and issuance costs associated with the extinguished note were removed, and the newly issued instrument will be amortized over its revised term ended December 31, 2025.

As of September 24, 2025, the Company entered into several waiver and amendment agreements with certain convertible note holders (the “Waivers”). The Waivers permitted the Company to complete a short-term financing transaction to address liquidity needs and amended the conversion and repayment terms of previously issued secured convertible notes. Key changes included (i) an extension in maturity date of the related note to December 31, 2025, (ii) an increase in the percentage of future capital-raise proceeds required to be applied to debt repayment, and (iii) termination or modification of existing lock-up provisions. (iv) and added prepayment provisions tied to proceeds from that offering and future capital raises.

As of January 30, 2026, the Company entered into extension and amendment agreements with the holders of three outstanding convertible notes originally issued in October and December 2024. Pursuant to the amendments, the maturity dates of the notes were extended from December 4, 2025 to June 4, 2026. As of January 30, 2026 the parties also acknowledged the remaining outstanding principal balances of approximately $1.4 million, $0.3 million and $1.0 million, respectively. In consideration of the extensions and the Company’s existing defaults under the notes, the holders agreed to apply an additional original issue discount of 25% to the remaining outstanding balances as of January 30, 2026, increasing the aggregate principal amounts to approximately $1.9 million, $0.4 million and $1.3 million, respectively. All other terms of the notes remained substantially unchanged.

The Company evaluated the amended instruments under ASC 470-50, Debt Modifications and Extinguishments, and concluded that the changes did not result in substantially different terms. Accordingly, each amendment was accounted for as a modification of existing debt rather than an extinguishment. No gain or loss was recognized in connection with the amendments, and the effective interest rates were recalculated prospectively based on the revised cashflow terms. The carrying amounts of the notes continue to include unamortized original-issue discount and issuance costs, which was amortized through the new maturity date of June 4, 2026.

During April and May 2026, all outstanding convertible notes were converted into shares of the Company’s common stock pursuant to the conversion provisions of the respective note agreements. The conversions resulted in a net gain on extinguishment of debt, which was recognized in the Unaudited Condensed Consolidated Statements of Income and Other Comprehensive Income / (Loss). As of June 30, 2026, no convertible notes remained outstanding.

Seller Promissory Note - Purchased Assets

In connection with the acquisition of the Purchased Assets described in Note 12 — Intangible Assets, Net, the Company issued a promissory note to the seller. Pursuant to Amendment No. 2 to the SPA dated July 29, 2026, and effective as of the June 2, 2026 closing date, the principal amount of the note was reduced by $500,000, and the Company issued an amended and restated non-convertible promissory note in the principal amount of $4.5 million. The note bears no stated interest and matures on June 2, 2028.

Because the note does not bear interest, it was recorded at present value in accordance with ASC 835-30 using an imputed interest rate of 12%. The discount is amortized to interest expense over the term of the note using the effective interest method.

Factoring agreement

As of June 30, 2026, the Company has no factoring arrangements as these arrangements were part of Sadot Latam which is deconsolidated.

Notes Payable

Overview

The Company’s notes payable consist of (i) convertible notes, (ii) non-convertible notes payable, and (iii) obligations under a factoring agreement accounted for as a secured borrowing. Only certain notes contain features that permit settlement in shares of the Company’s common stock.

Summary of Notes Payable

As of June 30, 2026:

As of December 31, 2025:

As of June 30, 2026, notes payable consisted of current and long-term obligations. Current notes payable represent obligations due within the next twelve months or obligations for which the Company does not have the ability to defer settlement beyond twelve months. Long-term notes payable represent obligations with contractual maturities extending beyond twelve months from the balance sheet date. As of December 31, 2025, all notes payable were classified as current.

Non-convertible Notes Payable

The Company’s non-convertible notes payable consist of short-term borrowings that do not include conversion features and are repayable in cash under contractual terms. As of June 30, 2026, net non-convertible notes payable totaled approximately $9.3 million. The outstanding notes have maturity dates ranging from October 2, 2025 through June 2, 2028. As of December 31, 2025, non-convertible borrowings, including short-term secured debt, totaled $4.1 million. Interest rates on notes payable ranged from 3.75% to 46.00% per annum during 2026 and 2025.

Notes Payable

The Company repaid a total amount of $3.6 million and $3.8 million of the notes payable during the three and six months ended June 30, 2026, respectively, of which $0.0 million and $0.2 million was repaid in cash and $0.00 million and $3.6 million was converted into stock, respectively. During the year ended December 31, 2025 the Company repaid a total amount of $12.1 million of the notes payable, of which $10.4 million was repaid in cash and $1.7 million was converted into stock. The company entered into new loans in the amount of $1.0 million and $6.0 million during the three and six months ended June 30, 2026, respectively, and $11.7 million for the year ended December 31, 2025, respectively.

As of June 30, 2026, the Company had an aggregate amount of $9.3 million in notes payable, net. The notes had interest rates ranging between 0.00% to 46.00% per annum, due on various dates through June 30, 2028.

As of June 30, 2026, the Company has outstanding short-term debt in the form of notes payable totaling $5.2 million, which is included in the $9.3 million in notes payable, net. The effective interest rate on the short-term debt is 3.75% to 46.00%.

Certain of the Company’s notes payable are secured by assets of the Company and its subsidiaries, and the lenders have recourse to such assets in the event of default.

The maturities of notes payable as of June 30, 2026, are as follows: