Sadot Group (SDOT) risk factors, FY2024 10-K

Other

1. 01These risks could adversely affect our operations, business strategies, and operating results
2. 02Our Company is subject to numerous laws, regulations, and mandates globally which could adversely affect our operating results and forward strategy
3. 03Government policies, mandates, and regulations specifically affecting the agricultural sector and related industries; regulatory policies or matters that affect a variety of businesses; taxation polices; and political instability could adversely affect our Company’s operating results
4. 04Upon the expansion of our operations internationally, we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery and anti-kickback laws
5. 05We are required to carry significant amounts of inventory across all of our businesses. If a substantial portion of our inventory becomes damaged or obsolete, its value would decrease, and have an adverse impact on the Company’s financial results
6. 06We face increasing exposure to country risk in countries that face financial, political, and economic unrest through unsecured credit, inventory, forward contract risk or payment origination that could adversely affect our future results of operations, financial position, and cash flows
7. 07Our business is seasonal, and our results may fluctuate depending on the harvest cycle of the crops upon which we rely and seasonal fluctuations related to the sale of our consumer products
8. 08We are vulnerable to the effects of supply and demand imbalances in our industries
9. 09Our Company may fail to realize the benefits of or experience delays in the execution of its growth strategy, which encompasses organic and inorganic initiatives, including those outside the U.S. and in businesses where our Company does not currently have a large presence
10. 10Failure to manage our growth effectively could harm our business and operating results
11. 11The Company may not be able to effectively integrate businesses it acquires
12. 12We may not realize the anticipated benefits of acquisitions, divestitures or joint ventures
13. 13We outsource certain aspects of our business to third-party vendors and consultants which subjects us to risks, including disruptions in our business and increased costs
14. 14In the event our consulting agreement with Aggia LLC FZ were to terminate, our food origination and trading operations would be negatively impacted and we may be forced to curtail or cease operations in this business segment
15. 15We face increasing competition and pricing pressure from other companies in our industries. If we are unable to compete effectively with these companies, our sales and profit margins would decrease, and our earnings and cash flows would be adversely affected
16. 16The interests of our franchisees may conflict with ours or yours in the future and we could face liability from our franchisees or related to our relationship with our franchisees
17. 17We have limited control with respect to the operations of our franchisees, which could have a negative impact on our business
18. 18The failure to enforce and maintain our trademarks and protect our other intellectual property could materially adversely affect our business, including our ability to establish and maintain brand awareness
19. 19Third-party claims with respect to intellectual property assets, if decided against us, may result in competing uses or require adoption of new, non-infringing intellectual property, which may in turn adversely affect sales and revenues
20. 20Human capital requirements may not be sufficient to effectively support global operations
21. 21Matters relating to employment and labor law may adversely affect our business
22. 22We depend on our executive officers, the loss of whom could materially harm our business
23. 23Our risk management strategies may not be effective

Risks Related to Ownership of Our Common Stock and Lack of Liquidity

1. 24As a smaller reporting company, we are exempt from certain disclosure requirements, which could make our Common Stock less attractive to the potential investors
2. 25We are an emerging growth company and subject to less rigorous public reporting requirements and cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our Common Stock less attractive to investors
3. 26As an emerging growth company, our auditor is not required to attest to the effectiveness of our internal controls
4. 27As a public company, we will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives
5. 28The Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may limit a stockholder’s ability to buy and sell our stock
6. 29Our stock price may be volatile
7. 30If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline
8. 31We do not intend to pay dividends for the foreseeable future, which could reduce the attractiveness of our stock to some investors
9. 32If we are unable to maintain listing of our securities on the NASDAQ Capital Market or another reputable stock exchange, it may be more difficult for our stockholders to sell their securities
10. 33If our shares of Common Stock become subject to the penny stock rules, it would become more difficult to trade our shares
11. 34Provisions in our articles of incorporation and bylaws and Nevada law may discourage, delay or prevent a change of control of our Company and, therefore, may depress the trading price of our stock
12. 35We may be subject to securities litigation, which is expensive and could divert management attention

Risks Related to the SEPA Offering

1. 36Substantial blocks of our common stock may be sold into the market as a result of the shares sold to Yorkville under the SEPA, which may cause the price of our common stock to decline
2. 37The price of our common stock could decline if there are substantial sales of shares of our common stock, if there is a large number of shares of our common stock available for sale, or if there is the perception that these sales could occur
3. 38It is not possible to predict the actual number of shares we will sell under the SEPA to Yorkville at any one time or in total, or the actual gross proceeds resulting from those sales
4. 39The sale and issuance of our shares of Common Stock to Yorkville will cause dilution to our existing shareholders, and the sale of the shares of Common Stock acquired by Yorkville, or the perception that such sales may occur, could cause the price of our Common Stock to fall
5. 40Investors who buy shares at different times will likely pay different prices
6. 41Our current business plans require a significant amount of capital. If we are unable to obtain sufficient funding or do not have access to capital, we may not be able to execute our business plans and our prospects, financial condition and results of operations could be materially adversely affected
7. 42Management will have broad discretion as to the use of the proceeds from the SEPA, and uses may not improve our financial condition or market value
8. 43Risk Management and Strategy