6-K

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UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

Washington,D.C. 20549

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FORM6-K

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REPORTOF FOREIGN PRIVATE ISSUER

PURSUANTTO RULE 13a-16 OR 15d-16

UNDERTHE SECURITIES EXCHANGE ACT OF 1934

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Forthe month of December 2022

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CommissionFile Number: 001-41416

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ForafricGlobal PLC

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Unit 5.3, Madison Building, Midtown

Queensway, Gibraltar GX11 1AA

011 350 20072505

(Addressof principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Forafric Global PLC (the “Company”) is furnishing this Form 6-K to provide six-months interim consolidated financial statements ended June 30, 2022 and to incorporate such consolidated financial statements into the Company’s registration statements referenced below.

FinancialStatements and Exhibits.

Exhibits.

The following exhibits are attached.

Exhibit	Description
99.1	Unaudited Interim Consolidated Financial Statements as of June 30, 2022 and for the Six Months Ended June 30, 2022 and 2021
99.2	Operating and Financial Review and Prospects in Connection with the Interim Consolidated Financial Statements for the Six Months Ended June 30, 2022 and 2021
101.INS	Inline<br> XBRL Instance Document
101.SCH	Inline<br> XBRL Taxonomy Extension Schema Document
101.CAL	Inline<br> XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline<br> XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline<br> XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline<br> XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

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

	Forafric Global PLC
Date:<br> December 16, 2022	By:	/s/ Saad Bendidi
	Name:	Saad<br> Bendidi
	Title:	Chairman<br> and Director
		(Principal<br> Executive Officer)

Exhibit99.1

FORAFRICGLOBAL PLC AND SUBSIDIARIES

CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS

ASOF JUNE 30, 2022 AND DECEMBER 31, 2021

ANDFOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021

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	Page(s)
Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Operations and Comprehensive Loss	4
Condensed Consolidated Statements of Changes in Stockholders’ Equity	5
Condensed Consolidated Statements of Cash Flows	6
Notes to Condensed Consolidated Financial Statements	7-29

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FORAFRICGLOBAL PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Inthousands, except share and per share data)

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			December<br> 31,
			2021
			AUDITED
ASSETS				****
Current assets:
Cash and cash<br> equivalents	20,696		$	14,393
Restricted cash	15,600			-
Accounts receivable, net<br> of allowance for credit losses of 14,904 and 15,737, respectively	28,770			32,313
Amount due from related<br> parties	955			898
Other receivables	49,649			32,022
Inventories, net	55,754			37,563
Other<br> assets, current	319			359
Total current assets	171,743			117,548
Property, plant, and equipment,<br> net	101,075			109,476
Right-of-use assets	14,482			16,359
Goodwill	46,961			51,571
Intangible assets, net	3,667			3,975
Other<br> assets, noncurrent	2,194			973
Total<br> assets	340,122		$	299,902
LIABILITIES AND STOCKHOLDERS’<br> EQUITY
Current liabilities:
Lines of credit –<br> working capital	50,843		$	79,504
Lines of credit –<br> wheat inventories	126,506			70,361
Accounts payable	35,912			26,196
Accrued expenses	26,742			13,062
Contract liabilities	1,720			1,910
Current portion of long-term<br> debt	6,681			10,845
Forward share purchase<br> agreements derivative liability	5,087			-
Contingent consideration<br> liability	1,311			-
Other<br> liabilities, current	1,578			1,019
Total current liabilities	256,380			202,897
Long-term debt	9,616			14,129
Loan from related party	166			1,234
Stockholder loans	-			15,269
Deferred tax liabilities	17,254			18,721
Total liabilities	283,416			252,250
Stockholders’ equity:
Preferred Shares; 0.001<br> par value; 1,000,000 authorized, — and — issued and outstanding, at June 30, 2022 and December 31, 2021, respectively	-			-
Ordinary shares, 0.001<br> par value; 100,000,000 authorized; 26,811,650 and 20,910,600 issued and outstanding at June 30, 2022 and December 31, 2021, respectively	27			21
Class Z ordinary shares,<br> 0.001 par value; 30,000,000 authorized; — and — issued and outstanding, at June 30, 2022 and December 31, 2021, respectively	-			-
Additional paid-in capital	143,909			119,979
Accumulated deficit	(91,795	)		(83,550	)
Accumulated other comprehensive<br> (loss) income	(2,201	)		3,685
Non-controlling<br> interest	6,766			7,517
Total<br> Stockholders’ equity	56,706			47,652
Total<br> liabilities and Stockholders’ equity	340,122		$	299,902

All values are in US Dollars.

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Theaccompanying notes are an integral part of these condensed consolidated financial statements.

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FORAFRICGLOBAL PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

(Inthousands, except share and per share data)

	Six<br> months ended
	June<br> 30,			June<br> 30,
	2022			2021
Revenues	$	154,992		$	120,985
Cost of sales		139,881			104,869
Gross profit		15,111			16,116
Selling,<br> general and administrative expenses		14,696			10,870
Total<br> operating expenses		14,696			10,870
Operating income		415			5,246
Other expense (income):
Interest income		-			(269	)
Interest expense		4,857			3,431
Change in fair value of<br> derivatives and contingent consideration		405			-
Foreign<br> Exchange loss		1,913			906
Total<br> other expense		7,175			4,068
(Loss) income before taxes		(6,760	)		1,178
Income tax expense		1,605			1,222
Net loss		(8,365	)		(44	)
Net (loss) income attributable<br> to noncontrolling interest		(120	)		205
Net loss attributable<br> to the Company	$	(8,245	)	$	(249	)
Loss per common shares<br> outstanding – basic and diluted	$	(0.39	)	$	(0.00	)
Weighted average number of shares outstanding - basic and diluted		21,566,289			20,910,600
Net loss		(8,365	)		(44	)
Other comprehensive loss net of tax:
Foreign<br> currency translation adjustments		(6,517	)		(240	)
Total other comprehensive<br> loss		(6,517	)		(240	)
Comprehensive loss		(14,882	)		(284	)
less: Comprehensive<br> (loss) income attributable to non-controlling interest		(751	)		157
Comprehensive loss attributable<br> to the Company	$	(14,131	)	$	(441	)

Theaccompanying notes are an integral part of these condensed consolidated financial statements.

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FORAFRICGLOBAL PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

(Inthousands, except share and per share data)

													Accumulated
							Additional						Other			Non-			Total
	Common<br> Stock						paid-in			Accumulated			Comprehensive			Controlling			Stockholders’
	Shares			Amount			capital			Deficit			Income<br> (Loss)			Interest			Equity
Balance,<br> December 31, 2020		120,000,000		$	120,000		$	-		$	(74,397	)	$	6,309		$	82		$	51,994
Retroactive adjustment<br> to reflect recapitalization		(99,089,400	)		(119,979	)		119,979			-			-			-			-
Balance, December 31,<br> 2020 - adjusted		20,910,600		$	21		$	119,979		$	(74,397	)	$	6,309		$	82		$	51,994
Net (loss) income		-			-			-			(249	)		-			205			(44	)
Foreign exchange loss		-			-			-			-			(192	)		(48	)		(240	)
Consolidation of variable<br> interest entities		-			-			-			-			-			4,037			4,037
Balance, June 30, 2021		20,910,600			21			119,979			(74,646	)		6,117			4,276			55,747
Balance, December 31,<br> 2021		120,000,000		$	120,000		$	-		$	(83,550	)	$	3,685		$	7,517		$	47,652
Retroactive adjustment<br> to reflect recapitalization		(99,089,400	)	$	(119,979	)	$	119,979			-			-			-			-
Balance, December 31,<br> 2021 - adjusted		20,910,600		$	21		$	119,979		$	(83,550	)	$	3,685		$	7,517		$	47,652
Merger and recapitalization		1,445,160			2			6,125			-			-			-			6,127
Derivative liability for forward purchase agreement		-			-			(4,685	)		-			-			-			(4,685	)
Issuance of ordinary shares upon exercise of warrants		1,887,460			2			19,439			-			-			-			19,441
Shares issued in PIPE		1,320,000			1			13,861			-			-			-			13,862
Shares issued on convertible bonds		1,248,430			1			11,796			-			-			-			11,797
Consideration payable to selling stockholders		-			-			(20,000	)		-			-			-			(20,000	)
Transaction costs		-			-			(2,606	)		-			-			-			(2,606	)
Net loss		-			-			-			(8,245	)		-			(120	)		(8,365	)
Foreign exchange loss		-			-			-			-			(5,886	)		(631	)		(6,517	)
Balance, June 30, 2022		26,811,650			27			143,909			(91,795	)		(2,201	)		6,766			56,706

Theaccompanying notes are an integral part of these condensed consolidated financial statements.

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FORAFRICGLOBAL PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(Inthousands, except share and per share data)

	Six<br> months ended
	June<br> 30,			June<br> 30,
	2022			2021
Cash flows from operating<br> activities:
Net loss	$	(8,365	)	$	(44	)
Adjustments to reconcile net loss to net cash<br> used in operating activities:
Depreciation of property,<br> plant and equipment		2,185			1,732
Amortization of intangible<br> assets		55			23
Amortization of right-of-use<br> assets		556			603
Bad debt expense		616			94
Change in fair value of<br> derivatives		405			-
Deferred income taxes		237			279
Changes in operating assets and liabilities:					-
Accounts receivable		(2,171	)		2,126
Other receivables		(22,000	)		(14,311	)
Inventories		(22,620	)		(29,760	)
Accounts payable		13,881			1,239
Other<br> payables and liabilities		(12,912	)		(6,371	)
Net cash used in operating activities		(50,133	)		(44,390	)
Cash flows from investing<br> activities:
Acquisition of businesses, net of cash acquired		-			(5,719	)
Purchases of property, plant, and equipment		(3,168	)		(1,452	)
Sales of property, plant, and equipment		100			534
Additions to intangible assets		(124	)		(10	)
Additions to right-of-use<br> assets		(135	)		(706	)
Net cash used in investing activities		(3,327	)		(7,353	)
Cash flows from financing<br> activities:
Proceeds from forward share purchase agreement		19,441			-
Cash acquired in business combination		13,966			-
Conversion of shareholders loan		-			-
Proceeds from convertible bonds issued		11,000			-
Transaction costs		(2,606	)		-
Stockholder loans		(100	)		12,003
Borrowings on financial debt		183,424			180,370
Repayments on financial<br> debt		(147,833	)		(126,449	)
Net cash provided by financing activities		77,292			65,924
Effect of exchange rate<br> changes on cash and cash equivalents		(1,929	)		(60	)
Net increase in cash and restricted cash		21,903			14,121
Cash and restricted<br> cash, beginning of period		14,393			12,683
Cash and restricted<br> cash, end of period	$	36,296		$	26,804
Non-cash financing activities:
Forward share purchase<br> agreements	$	4,685		$	-
Contingent consideration<br> liability	$	1,308		$	-
Conversion of convertible<br> bonds into ordinary shares	$	11,796		$	-
Conversion of stockholder<br> loan	$	15,167		$	-
Supplemental cash flow disclosures:
Interest paid	$	5,288		$	1,795
Income<br> taxes paid	$	1,366		$	489

Theaccompanying notes are an integral part of these condensed consolidated financial statements.

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FORAFRICGLOBAL PLC AND SUBSIDIARIES

NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE30, 2022

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1.NATURE OF OPERATIONS AND BASIS OF PRESENTATION

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Natureof Operations - Forafric Global PLC and Subsidiaries (the “Company”, “we”, “us” or “our”), formerly known as Forafric Agro Holdings Limited, through its subsidiaries is a market leader in the milling industry in Morocco, with a complete offering of flours and semolina, secondary processing products including pasta and couscous, rice, and starches (“Milling Business”).

During 2021, the Company owned common stock representing 100% ownership in Millcorp Geneva SA (“Millcorp”). Millcorp is a trading company that trades grains and oils for use as animal feed (“Grain Trading Business”). On June 1, 2021 (“Separation Date”), the Company distributed its 100% ownership in Millcorp to the Parent Company which resulted in the spin-off of its Grain Trading business (“Restructuring”). The Company did not receive any consideration from the Parent Company for distributing the 100% ownership in Millcorp. The assets, liabilities, and results of operations of Millcorp have been excluded from these condensed consolidated financial statements.

Based on an evaluation of the guidance under Staff Accounting Bulletin (“SAB”) Topic 5.Z.7, Accounting for the spin-off of asubsidiary, it was determined that the Restructuring should be reflected as a change in reporting entity. As such, the accompanying condensed consolidated financial statements of the Company retroactively reflect the Restructuring, including all distributions and transactions in conjunction therewith, and exclude Millcorp for all periods presented. These condensed consolidated financial statements are the consolidated financial statements of the Company and its subsidiaries, each of which is controlled, and is based on the financial position and results of operations of the Company as a standalone company. Intercompany balances and transactions between consolidated entities have been eliminated. Refer to Note 22 — Related Parties for further information regarding the Company’s related party transactions.

On June 9, 2022 (the “Closing Date”), Forafric Agro Holdings Limited (“FAHL”), consummated the previously announced business combination and related transactions pursuant to a securities purchase agreement, dated December 19, 2021 (“Business Combination Agreement”) which provides for the Business Combination (as defined below) between FAHL and Globis Acquisition Corp., a Delaware corporation (“Globis”).

Descriptionof the Business Combination - In accordance with the Business Combination Agreement, the consummation of the following series of separate transactions took place (collectively, the “Business Combination”): (i) Globis formed a new holding company, Globis NV Merger Corp., a Nevada corporation (“Globis Nevada”), which changed its jurisdiction of incorporation by transferring by way of a redomiciliation and domesticating as a Gibraltar private limited company known as “Forafric Global Limited” (the “Redomiciliation”) and, following the Redomiciliation, altered its authorized and issued share capital and thereafter re-registering as a Gibraltar public company limited by shares and changed its name to “Forafric Global PLC” (referred to herein as “New Forafric”); (ii) New Forafric formed a new wholly-owned subsidiary, Globis NV Merger 2 Corp., a Nevada corporation (“Merger Sub”); (iii) Globis merged with and into Merger Sub, with Merger Sub surviving (the “Merger”); (iv) an agent was appointed to act on behalf of Globis stockholders such that, subject to and immediately following the completion of the Merger, the agent entered into a contribution and subscription agreement with New Forafric (the “Contribution Agreement”) pursuant to which the issued and outstanding shares of common stock of Merger Sub issued pursuant to the Merger will be exchanged (the “Exchange”), on a one-for-one basis, for ordinary shares, nominal value $0.001 per share, of New Forafric (the “Ordinary Shares”); and (v) on June 9, 2022, New Forafric acquired 100% of the equity interests in FAHL from Lighthouse Capital Limited (“Seller”) and FAHL became a direct subsidiary of New Forafric.

AccountingTreatment - While the legal acquirer in the Business Combination is Globis, for financial accounting and reporting purposes under accounting principles generally accepted in the United States of America (“U.S. GAAP”), FAHL is the accounting acquirer with the Business Combination accounted for as a “reverse recapitalization.” A reverse recapitalization does not result in a new basis of accounting, and the financial statements of the combined entity represent the continuation of the financial statements of FAHL. Under this accounting method, Globis is treated as the “acquired” company and FAHL is the accounting acquirer, with the transaction treated as a recapitalization of FAHL. Globis’s assets, liabilities and results of operations were consolidated with FAHL beginning on the date of the Business Combination.

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FORAFRIC GLOBAL PLC AND SUBSIDIARIES

NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

Except for certain derivative liabilities. the assets and liabilities of Globis were recognized at historical cost and were not material, with no goodwill or other intangible assets recorded. The derivative liability, which is related to forward share purchase agreements, and the contingent consideration liability were recorded at fair value. The consolidated assets, liabilities, and results of operations of FAHL became the historical financial statements, and operations prior to the closing of the Business Combination presented for comparative purposes are those of FAHL. Pre-Combination shares of common stock were converted to shares of common stock of the combined company using the conversion ratio of 0.1743 and for comparative purposes, the shares and net loss per share of FAHL, prior to the Business Combination, have been retroactively restated using the conversion ratio.

The following table provides a reconciliation of the common shares as of June 30, 2022:

FAHL existing shares at closing date	120,000,000
FAHL existing shares at closing date - converted	20,910,600
Issuance of common stock upon exercise of warrants	1,887,460
Shares issued in PIPE	1,320,000
Shares issued on convertible bonds	1,248,430
Conversion of shareholders loans	1,445,160
Total recapitalization	5,901,050
Total shares outstanding as of June 30, 2022	26,811,650

The following table provides a summary of the significant sources and uses of cash related to the closing of the Business Combination on June 9, 2022:

Amount<br> in Globis trust account at closing	$	118,450
Cash<br> paid to redeeming shareholders		(99,009	)
Amount<br> available after paying redeeming stockholders		19,441
Cash<br> to escrow for Forward Share Purchase Agreements		(16,200	)
Transfer<br> of cash not redeemed		(3,241	)
Remaining<br> balance	$	-

Basisof Presentation - These condensed consolidated financial statements reflect the financial condition, results of operations and cash flows of the Company and have been prepared in accordance with U.S. GAAP.

The condensed consolidated financial statements and notes thereto are unaudited, and as permitted by the interim reporting rules and regulations set forth by the U.S. Securities and Exchange Commission (“SEC”), exclude certain financial information and note disclosures normally included in annual audited financial statements prepared in accordance with U.S. GAAP. The condensed consolidated financial statements reflect all material adjustments of a normal recurring nature that, in the opinion of management, are necessary for a fair presentation of the results for the interim periods. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2021.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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SignificantAccounting Policies – The Company’s accounting policies used in the preparation of these condensed consolidated financial statements do not differ from those used in the audited consolidated financial statements as of and for the year ended December 31, 2021, unless otherwise noted.

Useof Estimates - The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to use judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of net sales and expenses during the reporting period. Significant accounting policy elections, estimates and assumptions include, among others, allowance for credit losses, valuation assumptions of goodwill and intangible assets, useful lives of long-lived assets, and measurement of income tax assets. Given the uncertainty of the global economic environment and the impact of COVID-19, our estimates could be significantly different than future performance. Actual results could differ from these estimates. Historically, the aggregate differences, if any, between our estimates and actual amounts in any year have not had a material effect on our condensed consolidated financial statements.

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FORAFRIC GLOBAL PLC AND SUBSIDIARIES

NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

Principlesof Consolidation – The accompanying condensed consolidated financial statements include all entities controlled by the Company after reflecting the Restructuring previously described.

Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive the benefits from its activities that could potentially be significant to the entity. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. The accounts of subsidiaries are included in the condensed consolidated financial statements from the date that control commences until the date that control ceases.

ForeignCurrency Translation and Transactions - The Company’s functional currency is the Moroccan dirham, and its presentation currency is the United States Dollar (“USD”). The functional currency is translated into U.S. dollars for balance sheet accounts using currency exchange rates in effect as of the balance sheet date, and for revenue and expense accounts using a weighted-average exchange rate during the period. The transactions in foreign currency (that is a different currency than the functional currency of the entity) are converted at the exchange rate prevailing to the date of the transaction. The assets and liabilities denominated in foreign currencies are evaluated in the current period on the date of the closing or at the opening rate, when applicable. The translation adjustments are deferred as a separate component of equity in accumulated other comprehensive income. Gains or losses resulting from transactions denominated in foreign currencies and intercompany debt that is not of a long-term investment nature are included in (Gain) loss on foreign currency exchange in the condensed consolidated statements of operations and comprehensive income (loss).

GovernmentSubsidies – The Moroccan government provides certain subsidy programs based on production of affordable flour and import taxes. Subsidies are paid by the Moroccan government and are predicated on sales of flour and price of imported raw materials. The Company records the flour subsidies as a credit against the related costs that the subsidies were intended to offset in the same periods that the costs were incurred within the consolidated statement of operations. Outstanding government subsidies are included in other receivables on the balance sheet.

CreditRisk – Financial instruments potentially subject to concentration of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. At times during the periods presented, the Company had funds in excess of Deposit Insurance programs in Morocco, on deposit at various financial institutions. Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

The Company’s trade accounts receivable are unsecured and geographically dispersed. No single client’s trade accounts receivable balance as of June 30, 2022 and December 31, 2021 exceeded 10% of the Company’s consolidated accounts receivable, net.

TransactionCosts - The Company incurred significant costs direct and incremental to the Business Combination and therefore to the recapitalization of the Company. Direct transaction costs were allocated between equity and liability instruments measured at fair value on a recurring basis that were newly issued in the recapitalization.

FairValue Measurements – The Company follows the guidance in accounting standards codification (“ASC”) 820, “Fair Value Measurement,” for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).

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FORAFRIC GLOBAL PLC AND SUBSIDIARIES

NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

-	Level<br> 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in<br> which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing<br> basis.
-	Level<br> 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets<br> or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
-	Level<br> 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

The Company’s financial instruments include cash equivalents, restricted cash, accounts receivable from customers, accounts payable and accrued liabilities, all of which are typically short-term in nature. The Company believes that the carrying amounts of these financial instruments reasonably approximate their fair values due to their short-term nature.

The Company measures the derivative liability related to Forward Purchase Agreements (“FPAs”) at fair value on a recurring basis beginning June 9, 2022 (the date of closing of the Business Combination) and June 30, 2022. Refer to Note 14 — Derivative Liability for further information regarding the Company’s Forward Purchase Agreements.

The Company measures the contingent consideration liability at fair value on a recurring basis beginning June 9, 2022 (the date of closing of the Business Combination) and June 30, 2022. Refer to Note 15 — Contingent Consideration Liability for further information.

VariableInterest Entities – Effective on October 7, 2021, the Company completed a share purchase acquisition of Moulins Sanabil SA (“Sanabil SA”) and has been since actively involved in their operations and has the power to direct the activities and significantly impact Sanabil SA’s economic performance. The Company also bears the risk of losses and has the right to receive 60% of the benefits from Sanabil SA. As such, in accordance with ASC 810-10-25-38A through 25-38J, Sanabil SA is considered a VIE of the Company and the financial statements of Sanabil SA were consolidated from the date that the control existed.

Effective on July 30, 2021, the Company completed a share purchase acquisition of Moulin du Sahel Burkina (“MDS Burkina”) and has since significant economic exposure to MDS Burkina. The Company also bears the risk of losses and has the right to receive 78.21% of the benefits from MDS Burkina. As such, in accordance with ASC 810-10-25-38A through 25-38J, MDS Burkina is considered a VIE of the Company and the financial statements of MDS Burkina were consolidated from the date that the control existed.

Effective on April 30, 2021, the Company completed a share purchase acquisition of MDS Mali and has been since actively involved in their operations and has the power to direct the activities and significantly impact MDS Mali’s economic performance. The Company also bears the risk of losses and has the right to receive 70.35% of the benefits from MDS Mali. As such, in accordance with Accounting Standards Codification (“ASC”) 810-10-25-38A through 25-38J, MDS Mali is considered a VIE of the Company and the financial statements of MDS Mali were consolidated from the date that the control existed.

EquityMethod Accounting – As of September 30, 2021, the Company owned 37.10% of the outstanding capital stock of Grands Moulins du Tenere Niger (“GMT Niger”) which was accounted for as an equity method investment. The Company applies the equity method of accounting for the investment, as the Company owns less than a 50% ownership interest and cannot exert significant influence. As such, this entity is not considered a variable interest entity. The equity method investment is included in other assets, noncurrent, on the accompanying consolidated balance sheets.

Non-ControllingInterests – Non-controlling interests on the consolidated statements of operations and comprehensive (loss) income represent the portion of a majority-owned subsidiary’s net income or loss that is attributed by non-controlling stockholders. Non-controlling interests on the consolidated balance sheets represent the portion of equity in a consolidated subsidiary owned by non-controlling stockholders.

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NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

EmergingGrowth Company Status – the Company is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Under the JOBS Act, EGCs can delay adopting new or revised accounting standards issued until such time as those standards apply to private companies. The Company has elected to use this extended transition period. In providing this relief, the JOBS Act does not preclude the Company from adopting a new or revised accounting standard earlier than the time that such standard applies to private companies. The Company will continue to use this relief until the earlier of the date that it (a) is no longer an emerging growth company or (b) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

Liquidityand going concern - We incurred losses and had an accumulated deficit of $91,795 and $83,550 at June 30, 2022 and December 31, 2021, respectively. Historically, the Company’s primary sources of liquidity have been cash and cash equivalents, cash flows from operations, and cash flows from financing activities, including funding under credit agreements.

The Company believes that cash on hand, as well as proceeds from planned debt and equity offerings will provide sufficient liquidity to fund operations for at least one year after the date the financial statements are issued. However, there is no assurance that future funding will be available if and when required or on terms acceptable to the Company. This projection is based on the Company’s current expectations regarding product sales, cost structure, cash burn rate and other operating assumptions.

3.RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

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In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance, which improves the transparency of government assistance received by most business entities by requiring the disclosure of: (1) the types of government assistance received; (2) the accounting for such assistance; and (3) the effect of the assistance on a business entity’s financial statements. This guidance is effective for the Company’s interim and annual reporting periods beginning after December 15, 2021. Refer to Note 7 for additional information disclosed by the Company.

4.CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

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Cash, cash equivalents, and restricted cash consisted of the following:

	June<br> 30,		December<br> 31,
	2022		2021
	(in<br> thousands)
Cash and cash equivalents	$	20,696	$	14,393
Restricted cash		15,600		-
Total	$	36,296	$	14,393

The June 30, 2022 restricted cash balance consisted of cash maintained in escrow related to FPAs. The cash will be released upon: (i) sale of the underlying shares by the FPA-holding stockholders into the open market, thus relieving the Company of its contingent liability to repurchase the respective shares, in which case the cash is released to the Company; or (ii) the FPA-holding stockholders exercising their rights to put the respective shares to the Company, in which case the cash is released to the FPA holders.

In the event that an FPA-holding stockholder chooses not to sell to the Company any shares that he owns as of the three-month anniversary of the Business Combination closing date, all remaining funds from the escrow account shall be released for the Company’s use without restriction. Refer to Note 14 — Derivative Liability for further information regarding the Company’s Forward Purchase Agreements.

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NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

5.LEASES

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The Company has operating leases for real estate and vehicles. The Company has finance leases for equipment and construction land space. Leases are classified as finance leases because ownership of the underlying assets transfers at the end the lease term. Remaining lease terms for these leases range from less than one year to six years.

The Company does not record leases with a term of 12 months or less on the balance sheet.

Supplemental balance sheet information related to leases was as follows:

	Balance<br> Sheet	June<br> 30,		December<br> 31,
	Classification	2022		2021
		(in<br> thousands)
Assets
Operating leases	Right-of-use assets	$	1,659	$	2,077
Finance leases	Right-of-use assets		12,823		14,282
Total assets		$	14,482	$	16,359
Liabilities
Current liabilities
Operating leases	Current portion of long-term debt	$	650	$	685
Finance<br> leases	Current portion of long-term<br> debt		2,117		2,318
Total current liabilities			2,767		3,003
Noncurrent liabilities
Operating leases	Long-term debt		1,108		1,529
Finance<br> leases	Long-term debt		1,639		2,923
Total noncurrent liabilities			2,747		4,452
Total liabilities		$	5,514	$	7,455

Right-of-use assets and their corresponding lease liabilities are measured and recognized based on the present value of the future minimum lease payments over the lease term at the commencement date.

DiscountRates

For the majority of its leases, the Company uses the rate implicit in the lease. For leases without an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments for those leases.

The weighted-average discount rates for the Company’s leases were as follows:

	June<br> 30,			December<br> 31,
	2022			2021
Operating leases		5.0	%		5.0	%
Finance leases		6.1	%		6.2	%

LeasePayments

The Company includes lease payments under options to extend or terminate the lease in the measurement of the right-of-use asset and lease liability when it is reasonably certain that it will exercise such options. Fixed lease costs represent the explicitly quantified lease payments prescribed by the lease agreement and are included in the measurement of the right-of-use asset and corresponding lease liability.

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NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

The weighted-average remaining lease term of the Company’s leases were as follows:

	June 30,	December 31,
	2022	2021
Operating leases	6.4<br> years	6.6<br> years
Finance leases	1.5<br> years	2.0<br> years

The components of lease expense for the six months ended June 30, 2022 and 2021, were as follows:

	June<br> 30,		June<br> 30,
	2022		2021
	(in<br> thousands)
Operating<br> lease cost	$	342	$	367
Finance<br> lease cost:
Amortization<br> of right-of-use assets		214		236
Interest<br> on lease liabilities		157		242
Total<br> lease cost	$	713	$	845

As of June 30, 2022, future maturities of lease liabilities were as follows:

	Operating Leases			Finance Leases
	(in thousands)
Remainder of 2022	$	399		$	1,241
2023		690			2,205
2024		203			456
2025		91			-
2026		71			-
Thereafter		637			-
Total lease payments		2,091			3,902
Less: Interest		(333	)		(146	)
Present value of lease liabilities	$	1,758		$	3,756

Other information related to leases for the six months ended June 30, 2022 and 2021 were as follows:

	June<br> 30,		June<br> 30,
	2022		2021
	(in<br> thousands)
Cash paid for amounts included in the measurement<br> of lease liabilities:
Operating cash flows used for operating<br> leases	$	342	$	367
Operating cash flows for finance leases	$	214	$	115
Financing cash flows for finance leases	$	157	$	124

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NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

6.ACCOUNTS RECEIVABLE

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The gross and realizable value of accounts receivable are detailed as follows:

	June<br> 30,			December<br> 31,
	2022			2021
	(in<br> thousands)
Accounts receivable	$	43,674		$	48,050
Allowance for credit<br> losses		(14,904	)		(15,737	)
Total	$	28,770		$	32,313

Changes in allowances for credit losses consisted of:

	Allowance<br> for
	Accounts<br> Receivable
	(in thousands)
Balance at December 31, 2020		(13,532	)
Current period provision for expected credit<br> losses		(2,794	)
Foreign currency exchange<br> adjustments		589
Balance at December<br> 31, 2021	$	(15,737	)
Current period provision for expected credit<br> losses		(616	)
Foreign currency exchange<br> adjustments		1,449
Balance at June 30,<br> 2022	$	(14,904	)

7.OTHER RECEIVABLES

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Other current receivables consist of:

	June<br> 30,		December<br> 31,
	2022		2021
	(in<br> thousands)
Government subsidies	$	35,997	$	18,824
Value-added tax receivable		3,394		3,916
Advances to suppliers		3,049		1,362
Prepaid expenses		3,877		2,712
Other receivables		3,332		5,208
Total	$	49,649	$	32,022

During the six months ended June 30, 2022, the Company received $17,695 in the aggregate of government subsidies for the production of affordable flour and relief from import tax on foreign sourced raw materials from the Moroccan government.

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8.INVENTORIES, NET

Inventories, net, are detailed as follows:

	June<br> 30,			December<br> 31,
	2022			2021
	(in<br> thousands)
Merchandise	$	20,934		$	9,244
Raw materials and consumable supplies		28,851			24,409
Finished products		6,982			5,024
Inventory reserve		(1,013	)		(1,114	)
Total	$	55,754		$	37,563

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NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

9.PROPERTY, PLANT AND EQUIPMENT

	June<br> 30,			December<br> 31,
	2022			2021
	(in<br> thousands)
Land	$	22,793		$	25,139
Buildings		55,174			60,384
Machinery and equipment		51,452			56,275
Construction in progress		7,944			5,417
Others		9,965			10,863
Total		147,328			158,078
Less accumulated depreciation		(46,366	)		(44,645	)
Foreign exchange difference		113			(3,957	)
Total	$	101,075		$	109,476

Depreciation expense was $2,185 and $1,732 for the six months ended June 2022 and 2021, respectively, included in cost of sales in the in the condensed consolidated statements of operations and comprehensive loss.

10.GOODWILL AND OTHER INTANGIBLE ASSETS

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In connection with the establishment of reporting segments for each reporting period, the Company allocated goodwill between reporting units using a relative fair value allocation approach.

Goodwill on the balance sheet resulted from the acquisition of the following subsidiaries:

-	Tria<br> Group and Maymouna Food Group acquired in 2015,
-	Sanabil<br> SA, MDS Burkina and MDS Mali acquired in 2021.

Changes in the carrying amount of goodwill allocated to its reporting units for the six months ended June 30, 2022 and the year ended December 31, 2021 are as follows:

	Soft			Durum			Couscous
	Wheat			Wheat			and<br> Pasta			Total
	(in<br> thousands)
Balance at December 31, 2020	$	31,058		$	7,641		$	9,373		$	48,072
Business combinations		5,607			-			-			5,607
Foreign currency exchange<br> adjustments		(1,471	)		(286	)		(351	)		(2,108	)
Balance at December 31, 2021	$	35,194		$	7,355		$	9,022		$	51,571
Foreign currency exchange<br> adjustments		(3,132	)		(664	)		(814	)		(4,610	)
Balance at June 30,<br> 2022	$	32,062		$	6,691		$	8,208		$	46,961

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(Continued)

Changes in the carrying amount of intangible assets for the six months ended June 30, 2022 and the year ended December 31, 2021 are as follows:

	Intangible
	Assets
	(in<br> thousands)
Balance at December 31, 2020	$	363
Acquisitions		3,915
Amortization		(111	)
Foreign currency exchange<br> adjustments		(192	)
Balance at December<br> 31, 2021	$	3,975
Acquisitions		118
Amortization		(55	)
Foreign currency exchange<br> adjustments		(371	)
Balance at June 30,<br> 2022	$	3,667

As of June 30, 2022, the weighted-average remaining amortization period for intangibles other than goodwill is 14.5 years and future intangible amortization is expected to total the following:

	(in thousands)
Remainder of 2022	$	142
2023		313
2024		313
2025		313
Thereafter		1,670
Total amortization	$	2,751

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11.ACCRUED EXPENSES

Accrued expenses consist of:

	June<br> 30,		December<br> 31,
	2022		2021
	(in<br> thousands)
Consideration payable to selling<br> stockholder	$	20,000	$	-
Accrued government taxes		3,017		8,647
Accrued interest		2,180		2,611
Accrued salaries and benefits		838		957
Accruals to social agencies		574		582
Other accrued expenses		133		265
Total	$	26,742	$	13,062

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(Continued)

12.LINES OF CREDIT

Linesof Credit – working capital

The Company has entered into unsecured revolving credit agreements with several financial institutions to fund working capital requirements (“WC Lines of Credit”). The WC Lines of Credit provide the Company with the ability to borrow funds under consolidated lines of credit of up to approximately $57,000. Interest rates range from 5.6% to 7.5%. The WC Lines of Credit renew automatically on an annual basis. The Company and certain of its subsidiaries are borrowers under the WC Lines of Credit, and their obligations are cross guaranteed by certain other subsidiaries.

Linesof Credit – wheat inventories

The Company has entered into credit agreements with several financial institutions for asset-based credit facilities in order to fund wheat raw material purchases (“Wheat Credit Facilities”). The Wheat Credit Facilities provide the ability to borrow funds under consolidated lines of credit of up to approximately $127,000, subject to certain borrowing base criteria. The Wheat Credit Facilities are secured by the Company’s inventory. Interest rates range from 1.4% to 7.5% per annum. The Wheat Credit Facilities must be renewed on a semi-annual basis. The Company and certain of its subsidiaries are borrowers under the Wheat Credit Facilities, and their obligations are cross guaranteed by certain other subsidiaries.

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13.LONG-TERM DEBT

The long-term debt of is presented as follows:

	June<br> 30,			December<br> 31,
	2022			2021
	(in<br> thousands)
Convertible bonds	$	-		$	500
Loans		10,783			17,019
Leases		5,514			7,455
Total outstanding debt		16,297			24,974
Less current portion		(6,681	)		(10,845	)
Total long-term debt	$	9,616		$	14,129

The term loans and other financial liabilities are evaluated according to the amortized cost method using the effective interest rate of the loan. The loan issuance costs and premiums are determined at inception and are amortized over the useful life of the loan via the effective interest rate.

ConvertibleBonds

On December 31, 2021 the Company authorized the issuance of convertible bonds of up to $40,000 with an annual interest rate of 6.00% through June 15, 2026. As of March 31, 2022, the Company issued $11,500 in aggregate principal amount of 6.00% convertible bonds (the “Convertible Bonds”). The Convertible Bonds bear cash interest at a rate of 6.00% payable annually on each 12-month anniversary of the date of issuance and on the final redemption date of June 15, 2026, unless earlier redeemed or converted in accordance with the terms of the Convertible Bonds. The Convertible Bonds are unsecured obligations of the Company and are not transferable without the consent of the Company.

The Convertible Bonds will be redeemable, in whole or in part at the Company’s option at any time, and from time to time at a cash redemption price equal to the principal amount of the Convertible Bonds to be redeemed, plus accrued and unpaid interest without premium or penalty.

Pursuant to the terms of the Convertible Bonds, upon consummation of the Business Combination, the Convertible Bonds are subject to mandatory conversion into ordinary shares of New Forafric at a conversion price of $9.45 per share. The ordinary shares will be calculated by dividing the principal amount being converted, together with all accrued but unpaid interest thereon, but the conversion price of $9.45. The conversion price is subject to customary adjustments for stock dividends, stock splits, reclassifications, and the like, and is also subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of common stock, or securities convertible, exercisable or exchangeable for, common stock at a price below the then-applicable conversion price (subject to certain exceptions).

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(Continued)

Upon consummation of the Business Combination, all Convertible Bonds were converted into ordinary shares of the Company.

TermLoans

The Company maintains term loans with several financial institutions (the “Term Loans”). The Term Loans are unsecured and have fixed monthly payments ranging from approximately $66 to $368. Interest on the Term Loans range from 5.8%-8.0% per annum. The Term Loans mature through 2034.

LeaseObligations

The Company owes $5,514 and $7,455 related to its leases as of June 30, 2022 and December 31, 2021, respectively. Lease obligations are payable in monthly installments of principal and interest and are collateralized by the related assets financed. Refer to Note 5 for additional information regarding the Company’s leases.

The scheduled maturities of outstanding debt as of June 30, 2022 are as follows:

	(in<br> thousands)
Remainder of 2022	$	5,332
2023		4,451
2024		2,506
2025		1,131
2026		1,170
Thereafter		1,707
Total outstanding debt	$	16,297

14.FORWARD SHARE PURCHASE AGREEMENTS AND DERIVATIVE LIABILITY

In 2022, the Company entered into separate FPAs with certain investors. The FPAs allow the investors to sell and transfer common stock held by the investors to the Company in exchange for cash. The price to be paid by the Company was $10.80 per share. As required by the FPAs, $16,200 of cash was placed into escrow upon closing of the Business Combination, to be used for the share purchases. If the FPAs were not exercised by the holders within their terms of three months post-Business Combination closing, the associated funds were to be released from escrow to the Company. We account for the FPAs as derivative liabilities, remeasured to fair value on a recurring basis, with changes in the fair value recorded to earnings.

The following table presents a summary of the changes in the fair value of the Forward Share Purchase Agreements derivative liability:

	(in<br> thousands)
June 9, 2022	$	4,685
Change in fair value		402
June 30, 2022	$	5,087

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(Continued)

The FPAs derivative liability was calculated using a Black-Scholes Pricing Model and the following Level 3 inputs:

	June<br> 9, 2022			June<br> 30, 2022
Stock Price	$	9.47		$	8.23
Exercise (Strike) Price	$	10.80		$	10.80
Time to Maturity (in<br> years)		0.25			0.19
Annual Risk Free Rate		1.30	%		1.70	%
Annualized Volatility		122.00	%		122.00	%

15.CONTINGENT CONSIDERATION LIABILITY

In accordance with the terms of the Business Combination Agreement, the Company will pay to the Seller 20% of any cash proceeds received by Company before the five-year anniversary of the Closing resulting from the exercise of Company Warrants outstanding as of the Signing Date.

The contingent consideration liability is included in “Contingent consideration liability” on the consolidated balance sheet. Changes in the fair value of the liability are included in “Change in fair value of derivatives and contingent consideration” on the Consolidated Statements of Operations.

The Company utilized a probability weighted scenario-based model to determine the fair value of the contingent consideration. Based on this valuation model, the Company determined the fair value of the contingent consideration to be $1,308 as of the Closing date and $1,311 as of June 30, 2022. The assumptions used in the analysis are inherently subjective; therefore, the ultimate amount of the liability may differ materially from the current estimate.

The significant unobservable inputs used in the fair value measurement of the contingent consideration liability are measures of the estimated payouts over a five-year period based on internally generated financial projections on a probability-weighted basis and a discount rate which was in a range of 2.35% to 3.07% with a weighted average of 2.99% as of June 30, 2022.

The following table presents a summary of the changes in the fair value of the contingent consideration liability:

	(in<br> thousands)
June 9, 2022	$	1,308
Change in fair value		3
June 30, 2022	$	1,311

16.INCOME TAXES

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The Company’s effective tax rate was -21% and 104% for the six months ended June 30, 2022 and 2021, respectively. The effective tax rate was lower than the Moroccan statutory rate primarily due to unrecognized tax losses and the minimum contribution due to the Moroccan tax authorities levied on turnover and other specific revenue.

During the periods ended June 30, 2022 and December 31, 2021, the Company has $7,206 and $7,265, respectively, as unrecognized net operating losses.

In assessing the realizability of these deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those periods in which temporary differences become deductible and/or net operating loss carryforwards can be utilized. The Company considers the level of historical taxable income, scheduled reversal of temporary differences, tax planning strategies, and projected future taxable income in determining whether a valuation allowance is warranted. The Company maintained a valuation allowance of $7,206 and $7,265 respectively as of June 30, 2022 and December 31, 2021 against its net operating losses.

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NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

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17.VARIABLE INTEREST ENTITIES AND ACQUISITIONS

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Assetacquisitions

During June 2022 and as part of the Company’s growth strategy in the Western African region, the Company acquired the rights to exploit and invest in lands based in the port areas of Ivory Coast, Benin, and Guinea Bissau for a total amount of $ 1.7 million. This transaction has been finalized in July 2022.

The acquired rights are held by companies created by Groupe Sahel. These companies (MDS Côte d’Ivoire, MDS Guinea Bissau and MDS Benin) are non-operating and were created for the sole purpose of holding the above-mentioned rights. Consequently, we considered this investment as asset acquisition and the amount paid is presented as fixed assets in-progress as of June 30, 2022.

SanabilSA

Effective on October 7, 2021, the Company completed a share purchase acquisition of Moulins Sanabil SA (“Sanabil SA”). By way of the acquisition, the Company acquired a 60% stake in a wheat milling business in the region of Meknes, Morocco.

Pursuant to the terms of the agreement, the purchase price of the acquisition was $331, fully paid in cash.

The following table represents the final allocation of the purchase consideration among assets acquired and liabilities assumed at their estimated acquisition date fair values:

Consideration paid:
Cash	$	332
Assumed debt		6,548
Noncontrolling interest		221
Total<br> consideration paid	$	7,101
Net assets acquired:
Current assets	$	4,665
Current liabilities		(4,416	)
Property, plant and equipment		5,413
Tradename		323
Customer relationship		453
Total net assets acquired		6,438
Goodwill		663
Total<br> consideration paid	$	7,101

The valuation of the acquired intangible assets is inherently subjective and relies on significant unobservable inputs. The Company used an income approach to value the acquired customer relationships intangible assets. The method used for the acquired trade name intangible assets was the Relief from Royalty Method. The valuation for each of these intangible assets was based on estimated projections of expected cash flows to be generated by the assets, discounted to the present value at discount rates commensurate with perceived risk. The valuation assumptions take into consideration the Company’s estimates of customer attrition and revenue growth projections. The Company is amortizing the identifiable intangible assets arising from the Sanabil SA acquisition in relation to the expected cash flows from the individual intangible assets over their respective useful lives, which have a weighted average life of 20 years (see Note 10). Goodwill represents Sanabil SA’s market presence and its experienced workforce as well as future potential to generate cash flows and other economic benefits and results from assets that are not separately identifiable as part of the transaction and is not deductible for tax purposes.

The Company incurred no material transaction costs for the acquisition of Sanabil SA.

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(Continued)

The carrying amount of Sanabil SA’s assets and liabilities included in the consolidated financial statements are as follows at June 30, 2022 and December 31, 2021:

	June 30,		December 31,
	2022		2021
	(in thousands)		(in thousands)
Cash	$	1,555	$	2,670
Accounts receivable		1,924		1,944
Inventory		6,373		936
Other current assets		1,595		3,950
Property, plant, and equipment		4,614		5,233
Intangible assets		691		777
Goodwill		589		636
Total assets	$	17,341	$	16,146
Accounts payable	$	6,403	$	3,896
Other current liabilities		1,978		6,807
Long-term debt		1,148		1,061
Total liabilities	$	9,529	$	11,764

ProForma information

The following unaudited pro forma information presents the impact of the results of operations of Sanabil SA on the Company revenue and net income for the six months ended June 30, 2022 and 2021 as if the Sanabil SA acquisition had been completed on January 1, 2021, with adjustments to give effect to pro forma events that are directly attributable to the Sanabil SA acquisition.

The unaudited pro forma information does not reflect any operating efficiencies or potential cost savings that may result from the consolidation of the operations of the Company and Sanabil SA. Accordingly, this unaudited pro forma information is presented for illustrative purposes and are not intended to represent or be indicative of the actual impact on the results of operations of the Company that would have been achieved had the Sanabil SA acquisition occurred at January 1, 2021, nor are they intended to represent or be indicative of impact on future results of operations:

	June 30,		June 30,
.	2022		2021
	(in thousands)		(in thousands)
Revenues	$	11,220	$	9,875
Net income (loss)	$	222	$	(1,047	)

MDSBurkina

Effective on July 30, 2021, the Company completed a share purchase acquisition of MDS Burkina. By way of the acquisition, the Company acquired a 78.21% stake in a wheat milling business in Burkina.

Pursuant to the terms of the agreement, the Company will provide financial investments to MDS Burkina in the form of a cash consideration for a total amount of $6,153 fully paid in cash as of June 30, 2022. The amount invested will be used first to recapitalize the company and finance working capital.

The Company thus agreed to fund MDS Burkina for operational cash flow needs and bear the risk of its losses from operations and MDA Burkina agrees that the Company has rights to 78.21% of MDS Burkina’s net profits, if any.

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FORAFRIC GLOBAL PLC AND SUBSIDIARIES

NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

The following table represents the preliminary allocation of the purchase consideration among assets acquired and liabilities assumed at their estimated acquisition date fair values:

Consideration paid:
Cash	$	6,153
Assumed debt		7,348
Noncontrolling interest		1,714
Total consideration paid	$	15,215
Net assets acquired:
Current assets	$	4,559
Current liabilities		(1,144	)
Property, plant and equipment		9,970
Total net assets acquired		13,385
Goodwill		1,830
Total consideration paid	$	15,215

Goodwill represents MDS Burkina’s market presence and its experienced workforce as well as future potential to generate cash flows and other economic benefits and results from assets that are not separately identifiable as part of the transaction and is not deductible for tax purposes.

The Company incurred no material transaction costs for the acquisition of MDS Burkina.

The carrying amount of MDS Burkina’s assets and liabilities included in the consolidated financial statements are as follows at June 30, 2022 and December 31, 2021:

	June 30,		December 31,
	2022		2021
	(in thousands)		(in thousands)
Cash	$	79	$	170
Accounts receivable		-		189
Inventory		920		1,038
Other current assets		314		2,126
Property, plant, and equipment		8,613		9,449
Goodwill		1,599		1,744
Total assets	$	11,525	$	14,716
Accounts payable	$	265	$	476
Other current liabilities		785		507
Long-term debt		3,501		6,621
Total liabilities	$	4,551	$	7,604

ProForma information

The following unaudited pro forma information presents the impact of the results of operations of MDS Burkina on the Company revenue and net income for the six months ended June 30, 2022 and 2021 as if the MDS Burkina acquisition had been completed on January 1, 2021, with adjustments to give effect to pro forma events that are directly attributable to the MDS Burkina acquisition.

The unaudited pro forma information does not reflect any operating efficiencies or potential cost savings that may result from the consolidation of the operations of the Company and MDS Burkina. Accordingly, this unaudited pro forma information is presented for illustrative purposes and are not intended to represent or be indicative of the actual impact on the results of operations of the Company that would have been achieved had the MDS Burkina acquisition occurred at January 1, 2021, nor are they intended to represent or be indicative of impact on future results of operations:

	June 30,			June 30,
	2022			2021
	(in thousands)			(in thousands)
Revenues	$	1,970		$	-
Net loss	$	(335	)	$	(409	)

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NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

MDSMali

Effective on April 30, 2021, the Company completed a share purchase acquisition of MDS Mali. By way of the acquisition, the Company acquired a 70.35% stake in a wheat milling business in Mali.

Pursuant to the terms of the agreement, the Company will provide financial investments to MDS Mali in the form of a cash consideration for a total amount of $9,579 fully paid in cash as of June 30, 2022. The amount invested will be used first to recapitalize the company and finance working capital.

The following table represents the final allocation of the purchase consideration among assets acquired and liabilities assumed at their estimated acquisition date fair values:

Consideration paid:
Cash	$	9,579
Assumed debt		9,723
Noncontrolling interest		4,037
Total<br> consideration paid	$	23,339
Net assets acquired:
---	---	---	---
Current assets	$	16,715
Current liabilities		(7,293	)
Property, plant and equipment		8,289
Tradename		734
Customer relationship		1,760
Other intangible assets		20
Total net assets acquired		20,225
Goodwill		3,114
Total<br> consideration paid	$	23,339

The valuation of the acquired intangible assets is inherently subjective and relies on significant unobservable inputs. The Company used an income approach to value the acquired customer relationships intangible assets. The method used for the acquired trade name intangible assets was the Relief from Royalty Method. The valuation for each of these intangible assets was based on estimated projections of expected cash flows to be generated by the assets, discounted to the present value at discount rates commensurate with perceived risk. The valuation assumptions take into consideration the Company’s estimates of customer attrition and revenue growth projections.

The Company is amortizing the identifiable intangible assets arising from the MDS Mali acquisition in relation to the expected cash flows from the individual intangible assets over their respective useful lives, which have a weighted average life of 20 years (see Note 9).

Goodwill represents MDS Mali’s market presence and its experienced workforce as well as future potential to generate cash flows and other economic benefits and results from assets that are not separately identifiable as part of the transaction and is not deductible for tax purposes.

The Company incurred no material transaction costs for the acquisition of MDS Mali.

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FORAFRIC GLOBAL PLC AND SUBSIDIARIES

NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

The carrying amount of MDS Mali’s assets and liabilities included in the consolidated financial statements are as follows at June 30, 2022 and December 31, 2021:

	June 30,		December 31,
	2022		2021
	(in thousands)		(in thousands)
Cash	$	1,553	$	1,011
Accounts receivable		1,108		1,790
Inventory		4,319		3,132
Other current assets		2,883		7,571
Property, plant, and equipment		6,564		7,320
Intangible assets		2,066		2,287
Goodwill		2,677		2,919
Total assets	$	21,170	$	26,030
Accounts payable	$	3,382	$	4,493
Other current liabilities		797		1,017
Long-term debt		4,772		7,121
Total liabilities	$	8,951	$	12,631

ProForma information

The following unaudited pro forma information presents the impact of the results of operations of MDS Mali on the Company revenue and net income for the six months ended June 30, 2022 and 2021 as if the MDS Mali acquisition had been completed on January 1, 2021, with adjustments to give effect to pro forma events that are directly attributable to the MDS Mali acquisition.

The unaudited pro forma information does not reflect any operating efficiencies or potential cost savings that may result from the consolidation of the operations of the Company and MDS Mali. Accordingly, this unaudited pro forma information is presented for illustrative purposes and are not intended to represent or be indicative of the actual impact on the results of operations of the Company that would have been achieved had the MDS Mali acquisition occurred at January 1, 2021, nor are they intended to represent or be indicative of impact on future results of operations:

	June 30,			June 30,
	2022			2021
	(in thousands)			(in thousands)
Revenues	$	12,984		$	5,920
Net (loss) income	$	(73	)	$	728

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FORAFRIC GLOBAL PLC AND SUBSIDIARIES

NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

Trigola

Effective on November 5, 2020, pursuant to an investment and shareholders agreement dated November 5, 2020, the Company entered into an agreement with Trigola, an entity incorporated in the Republic of Angola and owned by the Parent for a majority for a share in Trigola’s equity of 75%. Pursuant to the terms of the agreement, the Company will provide financial investments for the construction, commissioning and operation of a new industrial facility for the processing of wheat and the production of wheat flour, management services and other services on an exclusive basis in relation to Trigola’s business. The Company agrees to fund Trigola for operational cash flow needs and bear the risk of Trigola’s losses from operations and Trigola agreed that the Company has rights to 75% of Trigola’s net profits, if any.

The carrying amount of the Trigola’s assets and liabilities included in the consolidated financial statements are as follows at June 30, 2022 and December 31, 2021:

	June 30,		December 31,
	2022		2021
	(in thousands)		(in thousands)
Cash	$	2,020	$	98
Other current assets		115		400
Property, plant, and equipment		5,141		4,124
Total assets	$	7,276	$	4,622
Accounts payable	$	7,292	$	4,122
Other current liabilities		103		161
Total liabilities	$	7,395	$	4,283

The operating results of Trigola included in the consolidated financial statements are as follows for the six months ended June 30, 2022 and 2021:

	June 30,			June 30,
	2022			2021
	(in thousands)			(in thousands)
Revenues	$	-		$	155
Net (loss) income	$	(456	)	$	81

On September 30, 2021, the Company acquired 37.10% of the capital stock of GMT Niger headquartered in Niger, which is a non-operational wheat milling facility. The Company has accounted for this investment as an equity method investment. GMT Niger was non-operational for the six months ending June 30, 2022, as such, no gain or loss representing the Company’s portion of ownership was recorded.

18.STOCKHOLDERS’ EQUITY

---

Capitalstock

---

PreferredShares - The Company is authorized to issue 1,000,000 Preferred Shares with a par value of $.001 per share. The authorized Preferred Shares will be available for issuance by the Board upon the passing of an ordinary resolution of the holders of the ordinary shares. The ordinary resolutions of the stockholders of New Forafric will stipulate the powers, preferences and relative, participating, optional and other rights or special rights, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, as well as any restrictions, of the class of preferred shares as a whole, which has not yet been determined.

OrdinaryShares - The Company is authorized to issue 100,000,000 Ordinary Shares with a par value of $.001 per share. As of June 30, 2022, a total of 26,811,650 ordinary shares were issued and outstanding. In the event of the liquidation of New Forafric, after satisfaction of liabilities to creditors, the assets of New Forafric will be distributed to the holders of the ordinary shares in New Forafric in proportion to their respective shareholdings. This right, as well as the right to receive dividends, may be affected by the grant of preferential dividend or distribution rights to the holders of a class of preferred shares with preferential rights that may be authorized by ordinary resolution in the future. The holders of ordinary shares have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the ordinary shares. The rights, preferences and privileges of holders of the ordinary shares may be subject to those of the holders of any preferred shares New Forafric may issue in the future.

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NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

ClassZ non-redeemable and non-convertible ordinary shares - The Company is authorized to issue 30,000,000 Class Z non-redeemable and non-convertible ordinary shares (“Class Z Ordinary Shares”) with a par value of $.001 per share. As of June 30, 2022, the Company did not have any Class Z Ordinary Shares issued and outstanding. Following the Redomiciliation, Forafric Global Limited will undertake the PLC Re-registration in order to alter its authorized and issued share capital to facilitate its re-registration as a Gibraltar public company limited by shares. In order not to affect the rights of the ordinary shares, the existing shares in issue in the authorized share capital of Forafric Global Limited will be re-classified and re-designated into Class Z non-redeemable and non-convertible ordinary shares. In the event of the liquidation of New Forafric, after satisfaction of liabilities to creditors, the assets of New Forafric will be distributed to the holders of the all classes of issued shares in New Forafric pari passu in proportion to their respective shareholdings. Prior to the allotment and issue of any ordinary shares, the holder of Class Z non-redeemable and non-convertible ordinary shares shall be entitled to the surplus assets of New Forafric that are available for distribution. Following the allotment and issue of any ordinary shares, the holder of Class Z non-redeemable and non-convertible ordinary shares shall only be entitled, on a pro rata basis and pari passu with the holders of all other shares in new Forafric, only the paid-up capital on the Class Z non-redeemable and non-convertible ordinary shares and shall not be entitled to any surplus assets of New Forafric available for distribution. The holders of Class Z non-redeemable and non-convertible ordinary shares have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Class Z non-redeemable and non-convertible ordinary shares. The rights, preferences and privileges of holders of the Class Z non-redeemable and non-convertible ordinary shares may be subject to those of the holders of any Preferred Shares New Forafric may issue in the future.

RedeemableWarrants

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PublicWarrants - At June 30, 2022, there were 11,600,833 public warrants outstanding. Each public redeemable warrant entitles the registered holder to purchase one ordinary share at a price of $11.50 per share. The Company may call the outstanding public warrants for redemption in whole and not in part, at a price of $0.01 per warrant:

-	at<br> any time while the warrants are exercisable;
-	upon<br> not less than 30 days’ prior written notice of redemption to each warrant holder;
-	if,<br> and only if, the reported last sale price of the Ordinary Share equals or exceeds $16.50 per share (as adjusted for stock splits,<br> stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30-day trading period ending on the third<br> business day prior to the notice of redemption to warrant holders, and
-	if,<br> and only if, there is a current registration statement in effect with respect to the Ordinary Share underlying such warrants at the<br> time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of<br> redemption.

If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

PrivateWarrants - At June 30, 2022, there were 4,188,889 private warrants outstanding. Each private warrant entitles the registered holder to purchase one ordinary share at a price of $11.50 per share.

The Company accounts for the Public and Private warrants in accordance with the guidance contained in FASB ASC 815, “Derivatives and Hedging”. Under ASC 815-40 warrants that meet the criteria for equity treatment are recorded in shareholders’ equity. The warrants are subject to re-evaluation of the proper classification and accounting treatment at each reporting period. If the warrants no longer meet the criteria for equity treatment, they will be recorded as a liability and remeasured each period with changes recorded in the statement of operations.

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FORAFRIC GLOBAL PLC AND SUBSIDIARIES

NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

StockholderEarn-Out Rights

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As a part of the Business Combination consideration, the selling stockholder shall be entitled to receive, as additional consideration, and without any action on behalf of the Company or the Company’s stockholders, additional ordinary shares (the “Earnout Shares”), to be issued as follows during the period from and after the Closing until the end of calendar year 2024 (A) 500,000 Earnout Shares, if, during calendar year 2022, Adjusted EBITDA (as defined in the Business Combination Agreement) of the Company is equal to or greater than $27 million, (B) 500,000 Earnout Shares, if, during calendar year 2023, Adjusted EBITDA of the Company is equal to or greater than $33 million, and (C) 1,000,000 Earnout Shares, if, during calendar year 2024, the Buyer Trading Price (as defined in the Business Combination Agreement) during the standard market trading hours of a trading day is greater than or equal to $16.50 for any 20 trading days within any period of 30 consecutive trading days. As of June 30, 2022, there have been no Earnout Shares issued.

The Earnout have been deemed financial instruments to be issued upon the occurrence of contingent earn out provisions. The Earnout Shares are accounted for under ASC Topic 815-40, “Derivatives and Hedging”, pursuant to which the Earnout Shares are considered to be indexed to the Company’s own stock and therefore will be classified as equity instruments.

19. EQUITYINCENTIVE PLAN

---

In connection with the Business Combination, the Stockholders of the Company considered and approved the Forafric 2022 Long Term Employee Share Incentive Plan (the “Equity Incentive Plan”) which provides for the grant of awards, consisting of nominal cost options or phantom options to employees, directors and consultants of the Company or any of its subsidiaries. The maximum number of shares which may be the subject of awards under the Equity Incentive Plan may not exceed 10% of the issued share capital of the Company from time to time and the maximum number of shares reserved and available for issuance shall not exceed 2,645,684. No award can be exercised after the tenth anniversary of the date of grant. With the exception of certain special circumstances, an award can only be exercised while the award holder is employed or engaged by the Company or any of its subsidiaries. Subject to certain provisions, a vested award may be exercised in whole or in part at any time after its date of grant. As of June 30, 2022, no awards have been issued in regard to the 2022 Equity Incentive Plan.

20.EARNINGS PER SHARE

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Basic earnings per share is computed by dividing net income by the number of weighted average common shares outstanding during the reporting period. The Company’s weighted average number of shares outstanding used in calculating earnings per share are 21,566,289 and 20,910,600 for the periods ended June 30, 2022 and 2021, respectively. Because there was no activity to cause dilution in the weighted average common shares, basic and diluted earnings per share are disclosed together in each of the reporting periods.

The computation of diluted loss per share excludes the effect of earnout shares and warrants to purchase the Company’s shares because their inclusion would be anti-dilutive.

**21.**COMMITMENTS AND CONTINGENCIES

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Since February 2022, the quantity of soft wheat available on the international market has decreased by 35% due to the ongoing war in Ukraine, causing the price of raw materials to increase. Despite this situation, we have not had any shortages on raw materials, and do not project to have any issuing fulfilling future orders. We have no firm and irrevocable commitments that will be affected by the war in Ukraine, and we will continue to assess the impact the war may have on our business.

In 2018, The Company entered into a five-year supply agreement with Millcorp, pursuant to which the Company is obligated to obtain at least 80% of the Company’s annual requirements of common wheat, durum wheat, or any other cereal, from Millcorp until March 31, 2023. Millcorp is currently providing 100% of the Company’s imported grain needs. The purchases incurred were $126,065 and $90,302 for the six months ended June 30, 2022 and 2021, respectively.

The Company has commitments with banks to finance its operating activities. The Company has provided collateral and mortgages to banks of $25,464 as of June 30, 2022 and December 31, 2021.

From time to time the Company is involved in litigation incidental to the conduct of its business. These matters may relate to employment and labor claims, patent and intellectual property claims, claims of alleged non-compliance with contract provisions and claims related to alleged violations of laws and regulations. When applicable, the Company records accruals for contingencies when it is probable that a liability will be incurred, and the amount of loss can be reasonably estimated. Defense costs are expensed as incurred and are included in professional fees. While the outcome of lawsuits and other proceedings against the Company cannot be predicted with certainty, in the opinion of management, individually or in the aggregate, no such lawsuits and other proceedings had or are expected to have a material effect on the condensed consolidated financial statements at June 30, 2022.

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FORAFRIC GLOBAL PLC AND SUBSIDIARIES

NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

**22.**SEGMENT INFORMATION

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The Company manages operations on a company-wide basis, thereby making determinations as to the allocation of resources in total rather than on a segment-level basis. The Company has designated reportable segments based on how management views its business. The Company does not segregate assets between segments for internal reporting. Therefore, asset-related information has not been presented. The reportable segments, as presented below, are consistent with the manner in which the Company reports its results to the CODM.

The principal products that comprise each segment are as follows:

SoftWheat – The Soft Wheat segment includes the production and sale of soft wheat yielding flour that is used to make desserts and sauces.

DurumWheat - The Durum Wheat segment includes the production and sale of hard wheat yielding flour that is used to make pasta.

Couscousand Pasta – The Couscous and Pasta segment includes the secondary processing of products including couscous and pasta sold to end customers.

The Company evaluates the performance of its segments based on sales and operating income. Operating income is defined as gross profit less sales & marketing costs, direct selling, general, and administrative expenses, and other operating expenses. The amounts in the following tables are obtained from reports used by senior management and do not include income taxes. Other expenses not allocated include unallocated corporate expenses (other operating expenses). The accounting policies of the Company’s segments are the same as those described in the summary of significant accounting policies set forth in Note 2.

Financial information relating to the Company’s reportable segments is as follows:

	June 30,			June 30,
	2022			2021
	(in thousands)
Sales to external customers:
Soft Wheat	$	115,856		$	81,449
Durum Wheat		22,316			24,994
Couscous & Pasta		16,820			14,542
Total	$	154,992		$	120,985
Direct operating income (loss):
Soft Wheat	$	2,884		$	2,804
Durum Wheat		(653	)		3,405
Couscous & Pasta		(1,816	)		(963	)
Operating income	$	415		$	5,246

GeographicInformation — The Company had net sales from customers outside of Morocco of approximately 12.3% (8.4% in Mali, 1.3% in Burkina and 2.6% in other countries) and 5.1% of total consolidated net sales from continuing operations for the six months ended June 30, 2022 and 2021, respectively. Net sales are determined based on the customer destination where the products are shipped.

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FORAFRIC GLOBAL PLC AND SUBSIDIARIES

NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

Long-lived assets consist of net property, plant, and equipment. The geographic location of long-lived assets is as follows:

	June 30,		December 31,
	2022		2021
	(in thousands)
Morocco	$	78,956	$	88,479
Burkina		8,613		9,449
Mali		6,564		7,320
Angola		5,141		4,124
Other		1,801		104
Total	$	101,075	$	109,476

**23.**RELATED PARTIES

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The following discussion summarizes activity between the Company and related parties.

In 2015, the Company entered into a building lease agreement for the headquarters of Forafric Maroc, a wholly owned subsidiary, with a lease term through 2024. The Company’s Parent owns 100% of the company that owns the building. Total rent is approximately $420 per year.

Millcorp provides 100% of the imported grain to the Company. The purchases incurred were $126,065 and $90,302 for the six months ended June 30, 2022 and 2021, respectively.

The Company’s amounts due from related parties were $955 and $898 as of June 30, 2022 and December 31, 2021, respectively.

As of December 31, 2021, the Company had an interest-free loan with no maturity date to a related party in the amount of $15,269. This loan has been converted into the Company’s shares as a result of the Business Combination at the Closing Date.

The Company has not entered into any significant transactions with other related parties.

**24.**SUBSEQUENT EVENTS

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In preparing the consolidated financial statements through the June 30, 2022, the Company has evaluated subsequent events for recognition and disclosure through December 16, 2022, the date that these consolidated financial statements and accompanying notes were available for issuance.

In July 2022, the Company acquired some agreements to exploit lands based in the port areas of Ivory Coast, Benin, and Guinea Bissau for a total amount of $1,200. This investment aims to optimize Logistics and secure supply in accordance with the Company’s expansion strategy.

On September 8, 2022, the Company entered into a subscription agreement with the Seller , who is the holder of 64.5% of the Company’s outstanding ordinary shares. Pursuant to this subscription agreement, the Company agreed to issue and allot 1,550,000 ordinary shares with a par value of $0.001 for consideration of $12,400. This amount is to be settled in full by the partial off-set of the $20,000 consideration payable owed to the Seller.

Additionally, the Company entered into a warrant agreement with the Seller, pursuant to which the Company agreed to issue 516,666 warrants to the Seller, each of which entitles the holder to purchase one ordinary share of the Company, par value $0.001, at an exercise price of $11.50 per Ordinary Share. The warrants are exercisable in cash for a period of 5 years.

On September 9, 2022, pursuant to the terms of the Company’s FPA’s, certain investors elected to have the Company acquire a total of 1,179,722 ordinary shares at a price of $10.80 per share for an aggregate purchase price of $12,741. During the period of July 1, 2022 through September 9, 2022, $86 has been released from escrow accounts relating to the FPA holders selling shares in the open market.

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Exhibit 99.2

MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTSOF OPERATIONS

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Thefollowing is a discussion of our financial condition and results of operations for the six-month periods ended June 30, 2022 and 2021.Unless otherwise specified herein, references to the “Company”, “FG”, “we” or “our” shallinclude Forafric Global PLC (NASDAQ: AFRI) and its subsidiaries. You should read the following discussion and analysis together withour unaudited interim condensed consolidated financial statements as at June 30, 2022 and for the six-month periods ended June 30, 2022and 2021, and the accompanying notes thereto, included elsewhere in this report. For additional information relating to our management’sdiscussion and analysis of the financial condition and results of operations, please see our Amended Registration Statement for CertainForeign Private Issuers on Form F-1/A (File No. 333-266075), which includes the consolidated audited financial statements for the yearended December 31, 2021 filed with the Securities and Exchange Commission (the “SEC”) on August 17, 2022 (the “RegistrationStatement”). The discussion contains forward-lookingstatements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management.Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors,including those discussed below and in the Registration Statement, particularly in the sections entitled “Risk Factors” and“Cautionary Note Regarding Forward-Looking Statements.” Additionally, our historical results are not necessarily indicativeof the results that may be expected for any period in the future.

Overview

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KeyFactors Affecting Our Performance

---

The key factors affecting the performance of our business, which are discussed in further detail below, are The cost of raw materials, industrial costs and the average selling price of our product, which is based on the price of flour and bran.

Bran is between 20% to 25% of the production of finished products. We have no control over the price of these items.

We do not believe we have a significant impact on the price of our finished products.

Impactof COVID-19

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We do not believe that COVID-19 had any material impact on our sales; since we produce a staple food product, the demand for our product was not materially affected by the pandemic. In response to the pandemic, we have implemented measures to ensure the health and safety of our employees and customers, including allowing our entire workforce to work remotely, restricting physical contact between our employees, and establishing safety protocols for the offices. The only measurable impact that we experienced in 2020 related to the seasonality of our sales and our ability to access foreign currency, and, during 2021 and 2022, increases in raw material, freight and shipping costs, which may be attributable to general increases in shipping and logistics costs during the pandemic as a result of higher global demand for wheat and inflationary pressures; however, due to our ability to increase sale prices and the subsidies provided by the Government of Morocco, these increases in our costs of goods did not have a material adverse impact on our business.

The COVID-19 pandemic could impact our supply chain for products we sell, particularly as a result of mandatory shutdowns in locations where our products are manufactured or held for distribution. We could also see significant disruptions of the operations of our logistics, service providers, delays in shipments and negative impacts to pricing of certain of our products. To date, we have not experienced any significant disruptions of the operations of our logistics, service providers, or delays in shipments, and based on current trends, we do not anticipate supply chain disruptions through the end of 2022.

At this time, we do not foresee supply chain disruptions having a material adverse effect on our business goals, results of operations or capital resources. However, there can be no assurance that if the pandemic worsens, or new variants emerge, that our business will not be negatively affected.

TheWar in Ukraine

On February 24, 2022, Russia launched an invasion in Ukraine. Thus far, the invasion has dramatically reduced the quantity of wheat available on the international market and may continue to disrupt or depress wheat harvests in Ukraine and Ukraine’s ability to export wheat. In addition, as a consequence of the Russian invasion of Ukraine, the United States, the European Union and other countries have imposed sanctions against and penalties for doing business in Russia and with certain Russian-owned businesses. These sanctions may limit Russia’s ability to export wheat. Because Ukraine accounts for approximately 10% of the world’s wheat exports and Russia accounts for approximately 16% of the world’s wheat exports, the continuation of the war between Ukraine and Russia could continue to negatively impact the availability of wheat on the international market, which could in turn affect our ability to obtain raw materials or result in substantial increases in prices of raw materials, which could have a material adverse effect upon our business.

FAHL has not purchased, and has no contracts to purchase raw materials from either Ukraine or Russia in 2022. FAHL has also in recent years diversified its sources of supply, and purchases most of its raw materials from European countries, as well as Argentina and Brazil. The Company believes that as a result, it will have adequate sources of supply of raw materials for the 2022 calendar year. Although wheat prices have continued to rise since the beginning of 2022, the Company has not determined at this time that there is a clear trend that prices will continue to increase at the same pace for the remainder of 2022. Moreover, because its products are staple food products, the Company believes it will be able to increase prices in other markets to offset currently anticipated changes in raw material and logistic costs in 2022.

Because the Company does not currently have any business operations in Russia and is not purchasing raw materials from suppliers in Russia in 2022, the sanctions regime imposed upon Russia does not currently directly impact the Company’s business.

KeyComponents of Results of Operations

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Net sales, cost of goods sold and gross profit figures are calculated with the following method:

Net sales: Total consolidated sales;

Cost of goods sold: includes cost of raw materials, cost of freight, cost of foreign exchange and cost of improvements used in the production; and

Gross profit: the difference between net sales and cost of goods sold.

The key components of our results of operation are:

Priceof raw materials, which is affected by many factors, including global and regional supply, which in turn is impacted by factors such as weather conditions, local planting decisions, crop failure, reduced harvests, governmental policies (including both tariffs and subsidies), and other agricultural conditions, as well as local, regional, and international demand. The price of raw materials almost doubled in 2021, when compared to 2020 because of bad weather conditions in Europe and Canada and because of the War in Ukraine, which dramatically reduced the quantity of wheat available on the international market. The cost of wheat is almost 90% of the total cost in our business and therefore fluctuations in the price of wheat has a direct impact on our performance. This cost can be heavily affected by geopolitical situations, like the war in Ukraine. The cost of raw material also depends on freight cost and currency exchange rate fluctuations.

Industrialcost. The crushing cost is the second main factor affecting our performance. This cost includes equipment, labor and interest expense. To execute our business model, we have to maintain this cost below 30 USD per ton produced. To achieve this performance, we have to monitor energy, equipment usage, logistics, human resources and financial cost.

●	Cost of freight, which is impacted by shipping availability, international demand, labor shortages, strikes, regional conflicts, inadequate<br> or obsolete port infrastructure and other factors.
●	Foreign exchange rates, which are continually fluctuating due to the economies and/or governmental policies of different countries.
●	Human resources productivity, which may be impacted by the training and skills of the available workforce, the nature of tools and<br> facilities in place and availability of financial incentives.
●	Power consumption and costs, which may be affected by governmental policies, including green energy initiatives and the age and efficiency<br> of existing and newly acquired facilities.

Our Results of Operations depends primarily on the cost of raw materials and on our industrial cost.

In our business, we import most of our raw materials from Europe, South America, the Black Sea region and Canada (for durum). Morocco produces some wheat, but the quality is generally not sufficient for industrial usage and therefore we have to mix it with the wheat we import. The variation of the cost of raw materials among these countries has a huge impact on our business and can explain the changes in the results of operation from period to period.

Industrial cost is the second main component of our results of operation. The main components of our industrial costs include human resources, cost of equipment, maintenance, power consumption and financial cost. We launched a successful restructuring plan in 2018 to reduce our industrial cost that reduced the industrial cost by 40% over the last three years. The main economy went from a large decrease of human resource cost (1200 employees in 2018 vs 700 employees in 2022) and a large decrease of logistics cost (we outsourced our logistics).

Resultsof Operations

SixMonths Ended June 30, 2022 Compared to Six Months Ended June 30, 2021

The following table presents our condensed unaudited interim consolidated results of operations for the six months ended June 30, 2022 and 2021:

	Six months ended June 30,
In thousands of USD	2022			2021			Change
Revenues	$	154,992		$	120,985
Cost of sales		139,881			104,869
Gross profit		15,111			16,116			)
Operating expenses:
Selling, general and administrative expenses		14,696			10,870
Total operating expenses		14,696			10,870
Operating income		415			5,246			)
Other expense (income):
Interest income		-			(269	)
Interest expense		4,857			3,431
Change in fair value of derivatives and contingent consideration		405			-
Foreign Exchange loss		1,913			906
Total other expense		7,175			4,068
(Loss) Income before income taxes		(6,760	)		1,178			)
Income tax expense		1,605			1,222
Net loss		(8,365	)		(44	)		)

All values are in US Dollars.

Net sales increased 28.1% to $155.0 million for the six-month period ended June 30, 2022 compared to $121.0 million for the same period in 2021, due to increased sales primarily in our market share in Morocco.

Cost of goods sold increased 33.4% to $139.9 million for the six-month period ended June 30, 2022 compared to $104.9 million for the same period in 2021 as a result of higher volume of commodities acquired and an increase in the average global price of wheat in 2022 compared to 2021.

Gross profit decreased 6.2% to $15.1 million for the six-month period ended June 30, 2022 compared to $16.1 million for the same period in 2021, primarily driven by an increase in the cost of raw materials, freight changes, and changes in the foreign currency markets.

SG&A expenses were $14.7 million for the six-month period ended June 30, 2022 compared to $10.9 million for the same period in 2021, an increase of 35.2%. SG&A expenses increased for the six-months ended June 30, 2022 as a result of an increase in personnel costs and the impact of new business acquisitions.

Other income (expenses) – Other expenses increased to $7.1 million for the six-month period ended June 30, 2022 compared to $4.1 million for the same period in 2021, with the increase in expenses attributable to the increase in interest expense when compared period over period due to the increase in debt on hand as of June 30, 2022 when compared to June 30, 2021.

Segments

The following table presents revenue and operating income by segment for the six months ended June 30, 2022 and 2021:

			2021
In thousands of
Sales to external customers:
Soft Wheat	115,856		$	81,449
Durum Wheat	22,316			24,994
Couscous & Pasta	16,820			14,542
Total	154,992		$	120,985
Direct operating income (loss):
Soft Wheat	2,884			2,804
Durum Wheat	(653	)		3,405
Couscous & Pasta	(1,816	)		(963	)
Operating income	415		$	5,246

All values are in US Dollars.

Net sales of soft wheat products increased 42.2% to $115.9 million for the six-month period ended June 30, 2022 compared to $81.4 million for the same period in 2021, due to increased volume and increased selling prices primarily in Morocco.

Net sales of durum wheat products decreased 10.7% to $22.3 million for the six-month period ended June 30, 2022 compared to $25.0 million for the same period in 2021, due to a decrease in sales volume.

Net sales of couscous and pasta products increased 15.7% to $16.8 million for the six-month period ended June 30, 2022 compared to $14.5 million for the same period in 2021, due to increased sales volume and increased selling prices primarily in Morocco.

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Liquidityand Capital Resources

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WorkingCapital and Working Capital Facilities. Working capital deficits were $84.6 million and $85.3 million at June 30, 2022 and December 31, 2021, respectively.

FG has revolving working capital credit lines available in the amount of $57.0 million and $80.0 million as of June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022, FG had borrowed $50.8 million and had unused availability of $6.2 million under such credit lines. As of December 31, 2021, FG had borrowed $79.5 million and had unused availability of $0.5 million under such credit lines. FG has also entered into credit agreements for asset-based credit facilities in order to fund wheat raw material purchases (“Wheat Credit Facilities”). The Wheat Credit Facilities provide the ability to borrow funds under consolidated lines of credit of up to approximately $127.0 million as of June 30, 2022 and $99.3 million as of December 31, 2021. The Wheat Credit Facilities are secured by the Company’s inventory. The Wheat Credit Facilities must be renewed on a semi-annual basis. As of June 30, 2022, FG had borrowed $126.5 million under the Wheat Credit Facilities, with unused availability of approximately $0.5 million.

As of June 30, 2022, FG has, in addition to its obligations under the working capital credit lines and the Wheat Credit Facilities, $5.5 million in lease obligations. FG believes it has sufficient capital available to it to fulfill such obligations.

Cash, Cash Equivalents, and Restricted Cash– Cash, cash equivalents, and restricted cash were $36.3 million and $14.4 million at June 30, 2022 and December 31, 2021, respectively. Cash balances are managed in accordance with our investment policy, the objectives of which are to preserve the principal value of our cash assets, maintain a high degree of liquidity and deliver competitive returns subject to prevailing market conditions.

The June 30, 2022 restricted cash balance of $15.6 million consisted of cash maintained in escrow related to FPAs. The cash will be released upon: (i) sale of the underlying shares by the FPA-holding stockholders into the open market, thus relieving the Company of its contingent liability to repurchase the respective shares, in which case the cash is released to the Company; or (ii) the FPA-holding stockholders exercising their rights to put the respective shares to the Company, in which case the cash is released to the FPA holders.

Tradeaccounts receivable, net - Trade accounts receivable, net were $28.8 million and $32.3 million at June 30, 2022 and December 31, 2021, respectively.

Inventories- Inventories were $55.8 million and $37.6 million at June 30, 2022 and December 31, 2021, respectively.

FG incurred losses and had an accumulated deficit of $91,795 and $83,550 at June 30, 2022 and December 31, 2021, respectively. Historically, FG’s primary sources of liquidity have been cash and cash equivalents, cash flows from operations, and cash flows from financing activities, including funding under credit agreements.

We believe that cash on hand, as well as proceeds from anticipated debt offerings will provide sufficient liquidity to fund operations for at least one year after the date the financial statements are issued. However, there is no assurance that future funding will be available if and when required or on terms acceptable to FG. This projection is based on our current expectations regarding product sales, cost structure, cash burn rate and other operating assumptions.

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COMMITMENTSAND CONTINGENCIES

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FG has commitments with banks to finance its operating activities. FG has provided collateral and mortgages to banks of $25,464, as of June 30, 2022 and December 31, 2020. From time to time, FG is involved in litigation incidental to the conduct of its business. These matters may relate to employment and labor claims, patent and intellectual property claims, claims of alleged non-compliance with contract provisions and claims related to alleged violations of laws and regulations. When applicable, FG records accruals for contingencies when it is probable that a liability will be incurred, and the amount of loss can be reasonably estimated. Defense costs are expensed as incurred and are included in professional fees. While the outcome of lawsuits and other proceedings against FG cannot be predicted with certainty, in the opinion of management, individually or in the aggregate, no such lawsuits and other proceedings had or are expected to have a material effect on the consolidated financial statements in 2022 and 2021. As of the six months ended June 30, 2022, there were no lawsuits or other proceedings commenced against FG, that in the opinion of management, individually or in the aggregate, had or are expected to have a material effect on the consolidated financial statements of FG as of such date, and, no such lawsuits and other proceedings had or are expected to have a material effect on the consolidated financial statements.

CriticalAccounting Policies and Estimates

Our accounting policies are more fully described in Note 2- Summary of Significant Accounting Policies to our consolidated financial statements included as part of this Report. As disclosed in Note 2, the preparation of financial statements in conformity with GAAP requires management to make substantial judgment or estimation in their application that may significantly affect reported amounts in the financial statements and accompanying notes. Actual results could differ significantly from those estimates. We believe the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments.

Revenue Recognition – FG follows a policy of recognizing revenue at a single point in time when it satisfies its performance obligation by transferring control over a product or service to a customer. The majority of FG’s contracts with customers have one performance obligation and a contract duration of one year or less. FG applies the practical expedient in Accounting Standards Codification (“ASC”) paragraph 606-10-50-14 of ASC Topic 606, Revenue from Contracts with Customers and does not disclose information about remaining performance obligations that have original expected durations of one year or less. Trade discounts or volume rebates are recognized as a deduction in revenue. No payment terms beyond one year are granted at contract inception.

Revenue related to the sale of goods and equipment is measured based on consideration specified in a contract with a customer. FG recognizes revenue from these contracts at a point in time when it satisfies a performance obligation by transferring control of a product to a customer, generally when legal title and risks and rewards transfer to the customer. Sales terms typically provide for transfer of title at the time and point of delivery and acceptance of the product being sold.

Amounts received from customers prior to revenue recognition on a contract are recorded as contract liabilities on the consolidated balance sheets.

Shipping and Handling Costs – Shipping and handling costs related to contracts with customers for the sale of goods are accounted for as a fulfillment activity and are included in cost of sales. Accordingly, amounts billed to customers for such costs are included as a component of revenues.

Taxes Collected from Customers and Remitted to Governmental Authorities – FG does not include taxes assessed by governmental authorities that are (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers, in the measurement of transactions prices or as a component of revenues and cost of sales.

Accounts Receivable and Allowances for Credit Losses – We provide credit terms to customers in-line with industry standards, perform ongoing credit evaluations of our customers, and maintain allowances for potential credit losses based on historical experience recorded. We analyze the aging of customer accounts, customer concentrations, customer creditworthiness, current economic trends and changes in our customer payment patterns when evaluating the adequacy of the allowance for credit losses. Customer balances are written off after all collection efforts are exhausted. Estimated product returns, which have not been material, are deducted from sales at the time of shipment.

Other Receivables – Other receivables include government subsidies for the production and sale of flour. The Moroccan government provides a fixed subsidy based on production and customer. Subsidies are paid by the Moroccan government twice a year based on sales of flour for the previous six months. The Company records the flour subsidies as a credit against the related costs, that the subsidies were intended to offset, in the same periods that the costs were incurred within the consolidated statement of operations.

Income Taxes – The provision for income taxes includes income taxes currently payable in Morocco and local jurisdictions, and those deferred because of temporary differences between the financial statement and tax bases of assets and liabilities. Deferred tax assets or liabilities are computed based on the difference between the financial statement and income tax bases of assets and liabilities using enacted tax rates. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Deferred income tax expenses or credits are based on the changes in the asset or liability from period to period. We account for uncertain tax positions using a “more-likely-than-not” threshold. A tax benefit from an uncertain tax position is recognized if it is more-likely-than-not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position, or the statute of limitations concerning such issues lapses.

Foreign Currency Translation and Transactions - FG’s functional currency is the Moroccan dirham, and its presentation currency is the United States Dollar (“USD”). The functional currency is translated into U.S. dollars for balance sheet accounts using currency exchange rates in effect as of the balance sheet date, and for revenue and expense accounts using a weighted-average exchange rate during the fiscal year. The transactions in foreign currency (that is a different currency than the functional currency of the entity) are converted at the exchange rate prevailing to the date of the transaction. The assets and liabilities denominated in foreign currencies are evaluated in the current period on the date of the closing or at the opening rate, when applicable. The translation adjustments are deferred as a separate component of equity in Accumulated other comprehensive income. Gains or losses resulting from transactions denominated in foreign currencies and intercompany debt that is not of a long-term investment nature are included in (Gain) loss on foreign currency exchange in the consolidated statements of operations and comprehensive income (loss).

Inventories

• Inventories are stated at the lower of cost or net realizable value. FG ‘s inventory is valued using the weighted average cost method. The costs of finished goods inventories include raw materials, labor, and overhead costs.

Property, Plant, and Equipment - Property, plant, and equipment are stated at acquisition cost, plus capitalized interest on borrowings during the actual construction period of major capital projects. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets as follows:

Assets	Useful Lives
Buildings	39<br> years
Machinery<br> and equipment (technical installations)	30-50<br> years
Other<br> assets	5-30<br> years

Building improvements are depreciated over the shorter of the estimated useful life of the assets or the remaining useful life. Leasehold improvements are amortized over the shorter of their useful life or remaining lease term. Expenditures for repairs and maintenance, which do not improve or extend the life of the assets, are expensed as incurred.

We perform impairment tests when circumstances indicate that the carrying value of an asset may not be recoverable. Indicators of impairment include deteriorations in operating cash flows, the anticipated sale or disposal of an asset group, and other significant changes in business conditions. Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. FG’s assessment of recoverability of property, plant and equipment is performed on a reporting unit level. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of such asset to its estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of such asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of by sale are reported at the lower of the carrying amount or fair value, less estimated costs to sell.

Goodwill and Other Intangible Assets - Identifiable intangible assets with finite lives are amortized over their estimated useful lives as follows:

Assets	Useful Lives
Trademarks	Indefinite
Customer<br> relationships	20<br> years
Patents<br> and licenses	5-10<br> years
Computer<br> software	5-10<br> years
Other<br> intangible assets	3-10<br> years

Recognized intangible assets, exclusive of goodwill, are amortized over the useful lives of the assets unless that life is determined to be indefinite. All of our intangible assets, exclusive of goodwill, are finite lived. All amortization expense related to intangible assets is recorded in selling, general, and administrative expense in the consolidated statements of operations. Intangible assets with finite lives are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If an evaluation of the undiscounted cash flows indicates impairment, the asset is written down to its estimated fair value, which is generally based on discounted future cash flows.

Goodwill is evaluated annually in the fourth quarter or more frequently, if events or changes in circumstances require an interim assessment. We assess goodwill for impairment (as of December 31) at the reporting unit level using income and market approaches, employing significant assumptions regarding growth, discount rates, and profitability at each reporting unit. Our estimates under the income approach are determined based on a discounted cash flow model. The market approach uses a market multiple methodologies employing earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and applies a range of multiples to those amounts in determining the indicated fair value. In determining the multiples used in this approach, we obtain the multiples for selected peer companies using the most recent publicly available information. In determining the indicated fair value of each reporting unit, FG concludes based on the income approach, and uses the market approach to corroborate, as FG believes the income approach is the most reliable indicator of the fair value of the reporting units. The resulting value is then compared to the carrying value of each reporting unit to determine if impairment is necessary.

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RecentAccounting Pronouncements

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance, which improves the transparency of government assistance received by most business entities by requiring the disclosure of: (1) the types of government assistance received; (2) the accounting for such assistance; and (3) the effect of the assistance on a business entity’s financial statements. This guidance is effective for the Company’s interim and annual reporting periods beginning after December 15, 2021. Adoption of the guidance had no impact on FG’s results of operations, balance sheet, or cash flows.