Sadot Group Raises $354K Convertible Debt at 12% Cost, Dilution Risk

Sadot Group (Nasdaq: SDOT) filed an 8-K reporting a private placement of convertible promissory notes executed on 20 Jun 2025.

Rhea-AI Filing Summary

Sadot Group (Nasdaq: SDOT) filed an 8-K reporting a private placement of convertible promissory notes executed on 20 Jun 2025. Two accredited investors purchased notes with $354,200 face value for $307,990 cash (12% original-issue discount plus a one-time 12% interest charge). The notes mature 30 Apr 2026 and require five payments starting 30 Dec 2025 (first: $198,351; next four: $49,588). Pre-payment is allowed within 180 days at 95-98% of principal. After 180 days and only upon default, holders may convert at the higher of $1.00 or 75% of the lowest ten-day bid, subject to a 4.99% ownership cap and 19.99% issuance limit without shareholder approval. Default accelerates repayment at 150–175% of amounts owed and triggers 22% default interest. The sale relied on the Rule 506 exemption, and no general solicitation occurred. Exhibits 4.1 and 10.1 contain the note and purchase agreement.

Positive

• $307,990 in fresh capital improves short-term liquidity without immediate share issuance
• Company can extinguish the notes within 180 days at up to a 5% discount, avoiding long-term dilution if cash flow stabilises

Negative

• Effective financing cost >24% plus 22% default rate and 150–175% acceleration signal distressed-style terms
• Conversion at 75% of market after default introduces significant dilution risk and potential share price pressure
• First amortization payment of $198,351 due 30 Dec 2025 may strain liquidity given company’s limited cash inflow

Insights

Capital Markets Analyst

Costly convertible raises cash but heightens dilution and default risk

The company secures only $308k yet accepts a steep 12% original-issue discount plus 12% instant interest—an effective annualized cost exceeding 24% before any default penalties. The large first amortization payment ($198k) concentrates cash-flow pressure just six months out, signalling potential liquidity stress. Although conversion is delayed until a default, the 25% discount to market price and low $1.00 floor can create a heavy stock overhang if performance falters. Default accelerates repayment at up to 175% of principal and layers on a 22% rate, terms normally seen in distressed funding. Overall, the structure suggests limited traditional financing options and exposes shareholders to punitive dilution and covenant-driven volatility.

Portfolio Manager

Short-term liquidity boost offset by aggressive creditor protections

The note provides immediate working capital without upfront equity dilution and includes flexible pre-payment at a slight discount—features that could help bridge near-term funding gaps if operations improve quickly. However, creditor-friendly triggers—rapid acceleration, high default interest and restrictive issuance caps—limit management’s room to manoeuvre. Given the modest size of proceeds, the downside from a misstep may outweigh the liquidity benefit. Investors should monitor cash burn and December’s payment schedule to gauge refinancing risk.

8-K Event Classification

2 items: 3.02, 9.01

2 items

Item 3.02 Unregistered Sales of Equity Securities Securities

The company sold equity securities in a private placement or other unregistered transaction.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, or exhibit attachments filed with this report.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How much capital did SDOT raise in the June 2025 private placement?

Sadot Group received $307,990 in cash for notes with $354,200 principal value.

What are the key terms of Sadot Group's June 2025 convertible notes?

Notes carry a 12% original-issue discount, one-time 12% interest, mature 30 Apr 2026 and are convertible post-default at ≥$1.00 or 75% of the 10-day low.

When does SDOT start repaying the June 2025 notes?

The first payment of $198,351 is due on 30 Dec 2025, followed by four monthly payments of $49,588.

What events trigger default under the June 2025 notes?

Missed payments, failure to issue conversion shares, covenant breaches, bankruptcy, delisting or SEC reporting lapses each constitute an event of default.

Can Sadot Group prepay the notes without penalty?

Yes. Within 60 days the company may repay at 95% of principal, 97% between days 61-120 and 98% between days 121-180.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Accepted by SEC EDGAR 06/26/2025 - 04:36 PM Learn about SEC filing dates

0001701756false00017017562023-03-212023-03-21

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities and Exchange Act of 1934

Date of Report (Date of earliest event reported): June 20, 2025

Commission File Number 001-39223

SADOT GROUP INC.

(Exact name of small business issuer as specified in its charter)

Nevada						47-2555533
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

295 E. Renfro Street, Suite 209, Burleson Texas 76028

(Address of principal executive offices)

(832) 604-9568

(Issuer’s telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.0001 par value

SDOT

The Nasdaq Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 3.02 Unregistered Sales of Equity Securities

On June 20, 2025, Sadot Group Inc. (the “Company”) entered into a Securities Purchase Agreement (the "Purchase Agreement") with two accredited investors. Pursuant to the Purchase Agreement, the Company issued and sold to the lenders convertible promissory notes (the "June 2025 Notes") in the aggregate principal amount of $354,200, which includes an original issue discount of $46,210, for an aggregate purchase price of $307,990. The June 2025 Notes bear a one-time interest charge of 12% applied on the issuance date and mature on April 30, 2026. The Company is obligated to make five monthly payments starting December 30, 2025, with the first payment of $198,351 and the subsequent four payments of $49,588 each. A five-day grace period applies to each payment, and a missed payment constitutes an event of default thereunder. The Company may prepay the June 2025 Notes in full during specified periods with no penalty, at a prepayment percentage of 95% within the first 60 days, 97% from days 61 to 120, and 98% from days 121 to 180 following the issuance date, in each case of the principal amount of the June 2025 Notes, together with accrued but unpaid interest. Following an event of default and after 180 days from the issuance date, the lenders may convert all or part of the outstanding principal and accrued but unpaid interest into shares of the Company’s common stock at a conversion price equal to the greater of $1.00 or 75% of the lowest closing bid price during the ten trading days prior to the conversion date. Conversion is subject to a 4.99% beneficial ownership limitation, which cannot be waived, and a 19.99% issuance cap unless shareholder approval is obtained. Upon an event of default, the June 2025 Notes become immediately due, and the Company must pay 150% of the outstanding principal, accrued interest, default interest (22% per annum), and other amounts owed. If a conversion-related default occurs post-event of default, this percentage increases to 175%. Events of default include failure to pay principal or interest, failure to issue conversion shares, breaches of covenants, bankruptcy, delisting from major exchanges, and failure to comply with reporting requirements under the Securities and Exchange Act of 1934.

The Purchase Agreement and the June 2025 Note are filed as Exhibits 10.1 and 4.1 to this Current Report on Form 8-K.

The offer and sale of securities listed above were made to an accredited investor and the Company relied upon the exemptions contained in Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 506 of Regulation D promulgated there under with regard to those sales. No advertising or general solicitation was employed in offering the securities. The offers and sales were made to one party, an accredited investor, and transfer of the securities issued was restricted by the Company in accordance with the requirements of the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits

(d)Index of Exhibits

Exhibit No.						Description
4.1						Form of Promissory Note dated June 20, 2025
10.1						Form of Securities Purchase Agreement between Sadot Group Inc. and accredited investors dated June 20, 2025
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			SADOT GROUP INC.
			By:			/s/ Chagay Ravid
			Name:			Chagay Ravid
			Title:			Chief Executive Officer
Date: June 26, 2025