2. Liquidity, Going Concern, and Management Plans

The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company’s primary source of liquidity is cash on hand, working capital and borrowings. As of June 30, 2026, the Company had a working capital deficit (defined as total current assets less total current liabilities) of $13.6 million, representing an increase of $41.2 million compared to working capital deficit of $54.8 million as of December 31, 2025. This working capital deficit reflects that the Company’s current liabilities exceed its current assets. The Company believes that its existing cash on hand and expected future cash flows will be insufficient to fund its operations and meet its repayment obligations over the next 12 months. Accordingly, the Company intends to seek additional capital, including through potential public market financings. Subsequent to quarter-end, on July 16, 2026, the Company entered into a securities purchase agreement providing for the issuance of up to $100.0 million of senior secured convertible notes, of which $4.0 million in principal amount was issued at the initial closing, and an equity purchase facility agreement providing for sales of up to $100.0 million of newly issued shares of common stock, in each case subject to the conditions and limitations described in Note 22 – Subsequent Events.

The Company’s current assets have historically consisted primarily of accounts receivable. Substantially all accounts receivable are fully reserved through an allowance for credit losses, and the accounts receivable of Sadot Latam LLC were derecognized on June 26, 2026 in connection with the deconsolidation of that entity. The Company’s ability to continue as a going concern is dependent upon its ability to raise additional capital, which is necessary to fund its working capital requirements and ultimately achieve profitable operations.

In addition, most of the Company’s outstanding debt obligations matured on December 31, 2025 and remained in default as of June 30, 2026. During the six months ended June 30, 2026, certain notes that had been extended through June 4, 2026 were settled through the issuance of common stock during April and May 2026. Subsequent to June 30, 2026, the Company settled additional defaulted notes through the issuance of common stock. These maturities and defaults continue to contribute to the Company’s liquidity requirements and increase uncertainty regarding its ability to meet obligations as they become due. Please see Note 14 – Notes Payable for further details regarding outstanding debt obligations and default status.

On June 26, 2026, the Company completed the sale of one hundred percent (100%) of the membership interests of Sadot Latam LLC and ceased to consolidate that entity. While the deconsolidation reduced the Company’s recorded liabilities, it did not generate meaningful cash proceeds, and the Company remains dependent upon raising additional capital to fund its working capital requirements. Cash consideration received at closing was $1,000. Additionally, cash of $271,933 held by Sadot Latam LLC became the property of the buyers upon the transfer of the membership interest and ceased to be included in the Company’s consolidated cash balances as a result of the deconsolidation. Please see Note 6 – Disposition and Deconsolidation of Sadot Latam LLC for further details. As of the disposition date, Sadot Latam had no accrued payroll, accrued employee benefit balances, or other employee-related liabilities and no employee transfers, severance, retention, or transaction bonuses, or other employee benefit obligations arose from the disposition.

Management performed a going concern assessment for a period of twelve months from the date of approval of these Unaudited Condensed Consolidated Financial Statements to assess whether conditions exist that raise substantial doubt regarding the Company’s ability to continue as a going concern.

While there is no assurance that the borrowings will provide us with funding for a time period that allows us to continue operations and other strategic alternatives, management believes it remains appropriate to prepare our financial statements on a going concern basis.

Management believes that if the Company is successful in raising additional capital through public market financings or other strategic alternatives, there will be sufficient liquidity to meet obligations as they become due. However, there can be no assurance that such plans will be realized or that additional financing will be available on acceptable terms. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements have been issued.

The accompanying Unaudited Condensed Consolidated Financial Statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. If the Company does not raise sufficient capital in a timely manner, among other things, the Company may be forced to scale back further or cease its operations altogether.

Working Capital

We measure our liquidity in a number of ways, including the following:

(1) See Note 9 - Other Current Assets.

(2) Consists of operating lease liabilities.

(3) Working Capital is defined as Total current assets less Total current liabilities

(4) Current ratio is defined as Total current assets divided by Total current liabilities