Sadot Group, Inc. (formerly Muscle Maker, Inc.) reported significant financial developments in its latest 10-Q filing for the quarter ending September 30, 2024. The company, which has transitioned from a U.S.-centric restaurant business to a global agri-food commodity supply chain, experienced notable changes in revenue, profitability, and strategic operations.

For the three months ended September 30, 2024, Sadot Group generated commodity sales of $200.9 million, an increase of 11.6% from $179.975 million in the same period of 2023. However, total revenue for the nine months decreased to $480.7 million from $547.9 million year-over-year, reflecting a 12.3% decline. The company’s gross profit for the quarter was $2.5 million, down from $2.9 million in the prior year, while gross profit for the nine months fell to $4.6 million from $10.7 million, a decrease of 56.5%.

Despite the drop in gross profit, Sadot Group reported a net income of $1.1 million for the third quarter, a significant turnaround from a net loss of $5.3 million in the same quarter of 2023. For the nine-month period, the company achieved a net income of $3.1 million, compared to a net loss of $6.2 million in the previous year. This improvement was attributed to a gain on fair value remeasurement of $11.995 million, contrasting with a loss of $0.349 million in the prior year.

The company’s operational strategy included the sale of its SuperFit Foods brand in August 2024 and the classification of its food services segment as held for sale, indicating a shift in focus towards its agri-foods operations. As of September 30, 2024, total assets were reported at $171.0 million, a slight decrease from $178.1 million at the end of 2023. Current assets increased significantly to $159.0 million, driven by a rise in other current assets to $113.2 million.

In terms of liabilities, total current liabilities rose to $140.1 million from $104.6 million at the end of 2023. The company’s accumulated deficit improved to $(83.9 million) from $(87.2 million) at the end of the previous fiscal year.

Strategically, Sadot Group executed a reverse stock split effective October 18, 2024, consolidating every 10 shares into one to comply with Nasdaq's minimum bid price requirement. Following this action, the company regained compliance with Nasdaq listing rules.

Overall, Sadot Group's financial performance reflects a complex transition period, with strategic divestitures and a focus on enhancing its agri-foods segment amid fluctuating market conditions.