Zeo Energy Corp 10-Q for FY2026 Q2
Zeo Energy Corp. (ZEO)
About this 10-Q
Zeo Energy Corp filed this 10-Q on August 14, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).
Headline figures
Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $16.17M
- down 10.7% from $18.1M a year earlier
- Net loss
- $2.34M
- compared with a net loss of $2.42M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
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For the transition period from to
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As of August 12, 2026,
ZEO ENERGY CORP.
Quarterly Report on Form 10-Q
Period Ended June 30, 2026
TABLE OF CONTENTS
i
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
ZEO ENERGY CORP.
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1
ZEO ENERGY CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of allowance of $ | ||||||||
| Accounts receivable – related party | ||||||||
| Inventories | ||||||||
| Contract assets | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Other assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Finance lease right-of-use assets | ||||||||
| Note receivable – related party | ||||||||
| Goodwill | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Customer advances – related party | ||||||||
| Contract liabilities | ||||||||
| Current portion of operating lease obligations | ||||||||
| Current portion of finance lease obligations | ||||||||
| Current portion of long-term debt | ||||||||
| Total Current Liabilities | ||||||||
| Operating lease obligations, net of current portion | ||||||||
| Finance lease obligations, net of current portion | ||||||||
| Long-term debt, net of current portion | ||||||||
| Convertible note, net | ||||||||
| Derivative liability | ||||||||
| Warrant liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| Redeemable Noncontrolling Interests | ||||||||
| Class A convertible preferred units, | ||||||||
| Class B units, | ||||||||
| Stockholders’ Equity | ||||||||
| Class V common stock, $ | ||||||||
| Class A common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive income (loss) | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | ||||||||
| TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
ZEO ENERGY CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues | ||||||||||||||||
| Revenue, net | $ | $ | $ | $ | ||||||||||||
| Related party revenue, net | ||||||||||||||||
| Total Net Revenues | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Other income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ||||||||||
| Gain on change in fair value of derivative liability | ||||||||||||||||
| Gain (loss) on change in fair value of warrant liabilities | ( | ) | ( | ) | ||||||||||||
| Total Other Income (Expense) | ( | ) | ||||||||||||||
| NET LOSS BEFORE INCOME TAXES | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax benefit (provision) | ( | ) | ( | ) | ( | ) | ||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Less: Net loss attributable to redeemable non-controlling interests | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| NET LOSS ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| LOSS PER CLASS A COMMON SHARE | ||||||||||||||||
| BASIC AND DILUTED | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| WEIGHTED-AVERAGE CLASS A COMMON SHARES OUTSTANDING | ||||||||||||||||
| BASIC | ||||||||||||||||
| DILUTED | ||||||||||||||||
| COMPREHENSIVE INCOME | ||||||||||||||||
| Foreign currency translation adjustments | ||||||||||||||||
| NET COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
ZEO ENERGY CORP.
CONDENSED CONSOLIDATED STATEMENTS
OF CHANGES IN REDEEMABLE
NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(UNAUDITED)
| Redeemable Noncontrolling Interests | Accumulated | |||||||||||||||||||||||||||||||||||||||||||||||
| Class A Convertible Preferred Units | Class B Units | Class V Common Stock | Class A Common Stock | Additional Paid-in | Other Comprehensive | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||||||||||||||||
| Units | Amount | Units | Amount | Shares | Amount | Shares | Amount | Capital | Loss | Deficit | Equity | |||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock issued upon vesting of restricted stock awards | – | – | – | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
| Tax withholding paid related to stock-based compensation | – | – | – | – | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Class A common stock issued to employees for services | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock issued in exchange for OpCo Class B units and corresponding Class V common stock | – | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Class A common stock issued in connection with a committed equity facility, net of offering costs | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock issued for a commitment fee | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||
| Dividends paid to preferred unit holders | – | ( | ) | – | – | – | ||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||
| Subsequent measurement of redeemable noncontrolling interests | – | – | ( | ) | – | – | ||||||||||||||||||||||||||||||||||||||||||
| Net income loss | – | – | ( | ) | – | – | – | – | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock issued upon vesting of restricted stock awards | – | – | – | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
| Tax withholding paid related to stock-based compensation | – | – | – | – | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||
| Subsequent measurement of redeemable noncontrolling interests | – | – | – | – | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Net loss | – | – | ( | ) | – | – | – | – | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||
4
ZEO ENERGY CORP.
CONDENSED CONSOLIDATED STATEMENTS
OF CHANGES IN REDEEMABLE
NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025
(UNAUDITED)
| Redeemable Noncontrolling Interests | Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||
| Class A Convertible Preferred Units | Class B Units | Class V Common Stock | Class A Common Stock | Additional Paid-in | Other Comprehensive | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||||||||||||||||||
| Units | Amount | Units | Amount | Shares | Amount | Shares | Amount | Capital | Loss | Deficit | (Deficit) | ||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||
| Class A common stock issued to employees for services | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||
| Reverse recapitalization related deferred taxes and adjustments | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Class A common stock issued in exchange for OpCo Class B units and corresponding Class V common stock | – | ( | ) | ( |
) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Subsequent measurement of redeemable noncontrolling interests | – | – | ( |
) | – | – | |||||||||||||||||||||||||||||||||||||||||
| Net loss | – | – | ( |
) | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||
| Class A common stock issued upon vesting of restricted stock awards | – | – | – | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Class A common stock issued in exchange for OpCo Class B units and corresponding Class V common stock | – | – | ( |
) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Subsequent measurement of redeemable noncontrolling interests | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Net loss | – | – | ( |
) | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
ZEO ENERGY CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustment to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of debt discount | ||||||||
| Interest added to note receivable – related party | ( | ) | ( | ) | ||||
| Gain on change in fair value of derivative liability | ( | ) | ||||||
| (Gain) loss on change in fair value of warrant liabilities | ( | ) | ||||||
| Stock-based compensation | ||||||||
| Class A common stock issued to employees for services | ||||||||
| Provision for credit losses | ||||||||
| Non-cash operating lease expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Accounts receivable – related party | ||||||||
| Inventories | ( | ) | ||||||
| Contract assets | ( | ) | ||||||
| Contract assets – related party | ( | ) | ||||||
| Prepaids and other current assets | ||||||||
| Other assets | ( | ) | ||||||
| Accounts payable | ||||||||
| Accrued expenses and other current liabilities | ( | ) | ||||||
| Customer advances – related party | ( | ) | ||||||
| Contract liabilities | ( | ) | ||||||
| Contract liabilities – related party | ( | ) | ||||||
| Operating lease payments | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchases of property and equipment | ( | ) | ( | ) | ||||
| Investment in note receivable – related party | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Net proceeds from Class A common stock issued in connection with a committed equity facility | ||||||||
| Net proceeds from convertible note | ||||||||
| Debt issuance costs paid | ( | ) | ||||||
| Repayments of finance lease liabilities | ( | ) | ( | ) | ||||
| Repayments of debt | ( | ) | ( | ) | ||||
| Dividends paid to OpCo Class A preferred unit holders | ( | ) | ||||||
| Tax withholdings paid related to stock-based compensation | ( | ) | ||||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Effect of foreign exchange on cash | ( | ) | ||||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | ( | ) | ( | ) | ||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of the period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Net loss attributable to redeemable noncontrolling interest | $ | $ | ||||||
| OpCo Class A preferred dividends | $ | $ | ||||||
| Subsequent measurement of redeemable noncontrolling interest | $ | $ | ||||||
| Class A common stock issued upon vesting of restricted stock awards | $ | $ | ||||||
| Class A common stock issued in exchange for Class V common stock | $ | $ | ||||||
| Fair value of Class A common stock issued in exchange for OpCo Class B units | $ | $ | ||||||
| Class A common stock issued for commitment fee | $ | $ | ||||||
| Reverse recapitalization related deferred taxes and adjustments | $ | $ | ||||||
| Fair value of derivative liability recognized upon issuance of convertible note | $ | $ | ||||||
| Original issue discount on convertible note | $ | $ | ||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Zeo Energy Corp.
Notes to the CONDENSED Consolidated Financial Statements
June 30, 2026
(UNAUDITED)
NOTE 1—BASIS OF PRESENTATION AND OTHER INFORMATION
Zeo Energy Corp. (together with its consolidated subsidiaries, the “Company” or “Zeo”) is a diversified clean energy company providing residential, commercial, industrial, and utility-scale solutions that seek to reduce costs and carbon emissions. As further described in Note 3, Zeo, based in Florida, operates Sunergy Renewables, LLC and its subsidiaries (collectively, “Sunergy”), a residential solar, distributed energy, and efficiency solutions business. It also operates Heliogen, Inc. and its subsidiaries (“Heliogen”), a long-duration energy generation and storage business focused on delivering renewable power for energy-intensive applications such as data centers and industrial facilities.
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all the information and footnotes required by U.S. GAAP for complete financial statements. The December 31, 2025 consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. The interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on April 1, 2026. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements, consisting solely of normal recurring adjustments, have been made. Operating results for the six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation of the condensed consolidated financial statements. These reclassifications had no impact on previously reported net loss, total assets, total liabilities, stockholders’ equity, or cash flows from operating activities.
Embedded Derivative Liabilities
The Company evaluates the embedded features of its financial instruments, including convertible notes payable, in accordance with ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815, “Derivatives and Hedging.” Certain conversion options and redemption features are required to be bifurcated from their host instrument and accounted for separately as derivative financial instruments when certain criteria are met. The Company applies significant judgment to identify and evaluate complex terms and conditions for its financial instruments to determine whether such instruments are derivatives or contain features that qualify as embedded derivatives. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the condensed consolidated statements of operations each period.
Recently Adopted Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-04, “Debt—Debt with Conversion and Other Options,” which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The new guidance is effective for annual reporting periods beginning after December 15, 2025 and can be applied either prospectively or retrospectively. Early adoption is permitted. The adoption of ASU 2024-04 did not have a material impact on the Company’s condensed consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets,” which introduces a practical expedient for the application of the current expected credit loss model to current accounts receivable and contract assets. The amendment is effective for interim and annual periods beginning after December 15, 2025, with early adoption permitted. This amendment is to be applied on a prospective basis. The adoption of ASU 2025-05 did not have a material impact on the Company’s condensed consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization included in each relevant expense caption presented on the statement of operations. The standard also requires a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, as well as the total amount of selling expenses and an entity’s definition of selling expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact ASU 2024-03 will have on its condensed consolidated financial statements.
7
In May 2025, the FASB issued ASU 2025-03, “Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity,” which requires entities to consider existing factors in ASC 805 when identifying the accounting acquirer in a transaction effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity that meets the definition of a business. ASU 2025-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact ASU 2025-03 will have on its condensed consolidated financial statements.
In May 2025, the FASB issued ASU 2025-04, “Compensation—Stock Compensation (ASC Topic 718) and Revenue from Contracts with Customers (ASC Topic 606),” which clarifies the accounting for share-based payments granted to customers, including classification of performance conditions, treatment of forfeitures, and application of the variable consideration constraint. The guidance will first be effective in annual disclosures for the year ending December 31, 2027, and may be applied prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact ASU 2025-04 will have on its condensed consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” This guidance removes references to project stages throughout ASC 350-40 and clarifies the threshold entities apply to begin capitalizing costs. Under the new standard, cost capitalization should only commence when an entity has committed to funding a software project and it is probable the project will be completed and the software will be used for its intended purpose. The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Entities may apply the guidance using a prospective, retrospective or modified transition approach. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact ASU 2025-06 will have on its condensed consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements.” ASU 2025-11 clarifies and improves existing interim reporting guidance by consolidating disclosure requirements within Topic 270 and introducing a disclosure principle requiring entities to disclose events and changes occurring after the most recent annual reporting period that are expected to have a material effect on the entity’s financial condition or results of operations. The ASU does not introduce significant changes to recognition or measurement guidance. The amendments in ASU 2025-11 are effective for interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted. ASU 2025-11 allows for either a prospective or retrospective approach on adoption. The Company is currently evaluating the impact ASU 2025-11 will have on its condensed consolidated financial statements.
The Company currently believes there are no other issued and not yet effective accounting standards that are materially relevant to its condensed consolidated financial statements.
NOTE 2—LIQUIDITY AND GOING CONCERN ASSESSMENT
As of June 30, 2026, the Company had cash and
cash equivalents of $
The Company has operational plans to increase revenue and move towards the goal of positive cash flow from operations in the foreseeable future. The operational plan includes increasing the number of sales agents to increase revenue and improving efficiency in the operations of the Company through centralization of field offices and labor and productivity improvement in the corporate operations through the implementation of a new CRM software.
The Company is also working internally and with
third parties to address short-term cash needs through the use of the common stock purchase agreement (the “White Lion ELOC”)
with White Lion Capital LLC (“White Lion”), which provides the Company the right to sell up to $
The Company’s condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the generation of revenue, access to capital markets or other funding sources, realization of assets and the satisfaction of liabilities in the normal course of business.
8
NOTE 3—DISAGGREGATION OF REVENUES AND SEGMENT REPORTING
Disaggregation of Revenues
The Company’s revenues are disaggregated based on revenue type, including (i) solar system installations, (ii) roofing installations, and (iii) energy storage solutions.
The Company’s net revenues for the three and six months ended June 30, 2026 and 2025 are disaggregated as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Solar system installations, net | $ | $ | $ | $ | ||||||||||||
| Roofing installations | ||||||||||||||||
| Total net revenues | $ | $ | $ | $ | ||||||||||||
For the three months ended June 30, 2026 and 2025,
the Company had one and two customers, respectively, that accounted for more than 10% of total net revenues. Aggregate revenue from these
customers was $
For the six months ended June 30, 2026 and 2025,
the Company had two customers that accounted for more than 10% of total net revenues. Aggregate revenue from these customers was $
Segment Reporting
The Company operates in
Prior to the acquisition of Heliogen on August 8, 2025, the Company operated as a single operating and reportable segment consisting of its solar installation and related services operations.
Corporate public company costs and other activities that are not allocated to Heliogen are included within the Sunergy segment.
9
Segment information for the three months ended June 30, 2026 and 2025 is as follows:
| Three Months Ended June 30, 2026 | ||||||||||||
| Sunergy | Heliogen | Total | ||||||||||
| Net revenues | $ | $ | $ | |||||||||
| Operating expenses | ||||||||||||
| Cost of revenues (1) | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Sales and marketing (2) | ||||||||||||
| General and administrative | ||||||||||||
| Total operating expenses | ||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||
| Other income (expense) | ||||||||||||
| Other income | ||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||
| Gain on change in fair value of derivative liability | ||||||||||||
| Gain on change in fair value of warrant liabilities | ||||||||||||
| Total other income (expense) | ||||||||||||
| Net loss before income taxes | ( | ) | ( | ) | ( | ) | ||||||
| Income tax provision | ( | ) | ( | ) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Three Months Ended June 30, 2026 | ||||||||||||
| Sunergy | Heliogen | Total | ||||||||||
| (1) Cost of revenues | ||||||||||||
| Direct labor | $ | $ | $ | |||||||||
| Materials | ||||||||||||
| Other | ||||||||||||
| Total cost of revenues | $ | $ | $ | |||||||||
| (2) Sales and marketing | ||||||||||||
| Commissions expense | $ | $ | $ | |||||||||
| Other sales and marketing | ||||||||||||
| Total sales and marketing | $ | $ | $ | |||||||||
Three Months Ended June 30, 2025 |
||||||||||||
| Sunergy | Heliogen | Total | ||||||||||
| Net revenues | $ | $ | $ | |||||||||
| Operating expenses | ||||||||||||
| Cost of revenues (1) | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Sales and marketing (2) | ||||||||||||
| General and administrative | ||||||||||||
| Total operating expenses | ||||||||||||
| Loss from operations | ( |
) | ( |
) | ||||||||
| Other income (expense) | ||||||||||||
| Other income | ||||||||||||
| Interest expense | ||||||||||||
| Loss on change in fair value of warrant liabilities | ( |
) | ( |
) | ||||||||
| Total other income (expense) | ( |
) | ( |
) | ||||||||
| Net loss before income taxes | ( |
) | ( |
) | ||||||||
| Income tax provision | ||||||||||||
| Net loss | $ | ( |
) | $ | $ | ( |
) | |||||
10
Three Months Ended June 30, 2025 | ||||||||||||
| Sunergy | Heliogen | Total | ||||||||||
| (1) Cost of revenues | ||||||||||||
| Direct labor | $ | $ | $ | |||||||||
| Materials | ||||||||||||
| Other | ||||||||||||
| Total cost of revenues | $ | $ | $ | |||||||||
| (2) Sales and marketing | ||||||||||||
| Commissions expense | $ | $ | $ | |||||||||
| Other sales and marketing | ||||||||||||
| Total sales and marketing | $ | $ | $ | |||||||||
Segment information for the six months ended June 30, 2026 and 2025 is as follows:
Six Months Ended June 30, 2026 | ||||||||||||
| Sunergy | Heliogen | Total | ||||||||||
| Net revenues | $ | $ | $ | |||||||||
| Operating expenses | ||||||||||||
| Cost of revenues (1) | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Sales and marketing (2) | ||||||||||||
| General and administrative | ||||||||||||
| Total operating expenses | ||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||
| Other income (expense) | ||||||||||||
| Other income | ||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||
| Gain on change in fair value of derivative liability | ||||||||||||
| Loss on change in fair value of warrant liabilities | ( | ) | ( | ) | ||||||||
| Total other income (expense) | ||||||||||||
| Net loss before income taxes | ( | ) | ( | ) | ( | ) | ||||||
| Income tax provision | ( | ) | ( | ) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Six Months Ended June 30, 2026 | ||||||||||||
| Sunergy | Heliogen | Total | ||||||||||
| (1) Cost of revenues | ||||||||||||
| Direct labor | $ | $ | $ | |||||||||
| Materials | ||||||||||||
| Other | ||||||||||||
| Total cost of revenues | $ | $ | $ | |||||||||
| (2) Sales and marketing | ||||||||||||
| Commissions expense | $ | $ | $ | |||||||||
| Other sales and marketing | ||||||||||||
| Total sales and marketing | $ | $ | $ | |||||||||
11
Six Months Ended June 30, 2025 | ||||||||||||
| Sunergy | Heliogen | Total | ||||||||||
| Net revenues | $ | $ | $ | |||||||||
| Operating expenses | ||||||||||||
| Cost of revenues (1) | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Sales and marketing (2) | ||||||||||||
| General and administrative | ||||||||||||
| Total operating expenses | ||||||||||||
| Loss from operations | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||
| Other income | ||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||
| Gain on change in fair value of warrant liabilities | ||||||||||||
| Total other income (expense) | ||||||||||||
| Net loss before income taxes | ( | ) | ( | ) | ||||||||
| Income tax provision | ( | ) | ( | ) | ||||||||
| Net loss | $ | ( | ) | $ | $ | ( | ) | |||||
Six Months Ended June 30, 2025 | ||||||||||||
| Sunergy | Heliogen | Total | ||||||||||
| (1) Cost of revenues | ||||||||||||
| Direct labor | $ | $ | $ | |||||||||
| Materials | ||||||||||||
| Other | ||||||||||||
| Total cost of revenues | $ | $ | $ | |||||||||
| (2) Sales and marketing | ||||||||||||
| Commissions expense | $ | $ | $ | |||||||||
| Other sales and marketing | ||||||||||||
| Total sales and marketing | $ | $ | $ | |||||||||
12
NOTE 4—PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets as of June 30, 2026 and December 31, 2025 consisted of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Prepaid expenses | $ | $ | ||||||
| Deferred installation and material costs | ||||||||
| Receivable related to Lumio asset purchase | ||||||||
| Tax receivables | ||||||||
| Employee receivables and advances on sales commissions | ||||||||
| Other current assets | ||||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||
NOTE 5—PROPERTY AND EQUIPMENT
Property and equipment as of June 30, 2026 and December 31, 2025 consisted of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Internally-developed software | $ | $ | ||||||
| Office furniture and equipment | ||||||||
| Vehicles | ||||||||
| Leasehold improvements | ||||||||
| Total property and equipment | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
Depreciation expense for the three months ended
June 30, 2026 and 2025 was $
During the six months ended June 30, 2026, the
Company committed to a plan to abandon certain internally-developed software that had been placed into service. In accordance with ASC
350-40, the Company reassessed the remaining useful life of the software and accelerated the depreciation to reflect the shortened period
of expected use. As a result, the Company recognized additional depreciation expense of $
NOTE 6—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities as of June 30, 2026 and December 31, 2025 consisted of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Accrued payroll liabilities | $ | $ | ||||||
| Accrued commissions | ||||||||
| Accrued taxes | ||||||||
| Accrued credit cards | ||||||||
| Accrued interest | ||||||||
| Other accrued liabilities | ||||||||
| Total accrued expenses and other current liabilities | $ | $ | ||||||
13
NOTE 7—LEASES
Operating Leases
Operating lease right-of-use (“ROU”) assets and liabilities as of June 30, 2026 and December 31, 2025 consisted of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Operating lease right-of-use assets | $ | $ | ||||||
| Operating lease liabilities, current portion | ||||||||
| Operating lease liabilities, long-term | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
| Weighted-average remaining lease term (years) | ||||||||
| Weighted-average discount rate | % | % | ||||||
The components of operating lease expense consist of the following for the three and six months ended June 30, 2026 and 2025:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Fixed operating lease expense | $ | $ | $ | $ | ||||||||||||
| Short-term and variable operating lease expense | ||||||||||||||||
| Total operating lease expense | $ | $ | $ | $ | ||||||||||||
For the three months ended June 30, 2026 and 2025,
cash paid for amounts included in the measurement of operating lease liabilities totaled $
As of June 30, 2026, maturities of operating lease liabilities were as follows:
| Year Ending December 31, | Amount | |||
| 2026 (remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| Total | ||||
| Less: imputed interest | ( | ) | ||
| Total operating lease liabilities | $ | |||
14
Finance Leases
Finance lease ROU assets and liabilities as of June 30, 2026 and December 31, 2025 consisted of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Finance lease right-of-use assets | $ | $ | ||||||
| Finance lease liabilities, current portion | ||||||||
| Finance lease liabilities, long-term | ||||||||
| Total finance lease liabilities | $ | $ | ||||||
| Weighted-average remaining lease term (years) | ||||||||
| Weighted-average discount rate | % | % | ||||||
For the three months ended June 30, 2026 and 2025,
finance lease costs included in depreciation and amortization in the condensed consolidated statements of operations were $
For the six months ended June 30, 2026 and 2025,
finance lease costs included in depreciation and amortization in the condensed consolidated statements of operations were $
As of June 30, 2026, maturities of finance lease liabilities were as follows:
| Year Ending December 31, | Amount | |||
| 2026 (remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| Total | ||||
| Less: imputed interest | ( | ) | ||
| Total finance lease liabilities | $ | |||
NOTE 8—DEBT
White Lion Convertible Note
On June 9, 2026, the Company entered into a Note
Purchase Agreement (the “Note Purchase Agreement”) with White Lion, pursuant to which the Company agreed to issue, and White
Lion agreed to purchase, at one or more closings, unsecured convertible promissory notes in an aggregate funded amount of up to $
15
The Convertible Note matures on June 9, 2028 and
accrues interest at
Conversions are subject to a beneficial ownership
limitation of
Concurrently with the Note Purchase Agreement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with White Lion, pursuant to which the Company agreed to file, within 30 days following the first closing, a registration statement covering the resale by White Lion of the shares issuable upon conversion, and which contains customary damages provisions for failure to file or to have the registration statement declared effective within the specified periods. The Company did not file the registration statement within the 30-day period. White Lion subsequently waived this covenant with the expectation that the registration statement will be filed no later than August 31, 2026.
The Company evaluated the Convertible Note and
its embedded features in accordance with ASC 480 and ASC 815. The Company determined that the Convertible Note is not within the scope
of ASC 480 and that certain embedded features, specifically (i) the conversion option, whose conversion price varies with the market price
of the Class A common stock and is subject to the Floor Price, the Nasdaq Minimum Price ceiling, and potential removal of the Floor Price,
(ii) the contingent default provision, under which the principal amount would increase to
The initial fair value of the derivative liability
was determined using a Monte Carlo simulation valuation model, considering various potential outcomes and scenarios. The model used the
following assumptions: (i) dividend yield of
The debt discount is amortized to interest expense over the term of the Convertible Note using the effective interest method. The bifurcated embedded derivative liability is remeasured at fair value each reporting period, with changes in fair value recognized in the condensed consolidated statements of operations.
For the three and six months ended June 30, 2026,
the Company recognized $
16
NOTE 9—FAIR VALUE MEASUREMENTS
The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and contract assets and liabilities, approximate fair value due to the short-term nature of these instruments.
The carrying amounts of lease liabilities, note receivable – related party, and notes payable also approximate fair value as these instruments bear interest rates that are consistent with current market rates for similar instruments. The Convertible Note is carried at amortized cost, net of unamortized debt discount, as described in Note 8—Debt.
Recurring Fair Value Measurements
The Company measures certain financial instruments at fair value on a recurring basis. As of June 30, 2026, the Company’s financial instruments measured at fair value on a recurring basis consist of the derivative liability and warrant liabilities.
The fair value of financial instruments measured at fair value on a recurring basis as of June 30, 2026 consisted of the following:
| Fair Value Measurements as of June 30, 2026 | ||||||||||||||||
| Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Derivative liability | $ | $ | $ | $ | ||||||||||||
| Warrant liabilities | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
The following table presents changes in the Company’s Level 3 derivative liability measured at fair value on a recurring basis:
| Amount | ||||
| Derivative Liability | ||||
| Balance as of December 31, 2025 | $ | |||
| Initial fair value of embedded derivative liability upon issuance of convertible note | ||||
| Gain on change in fair value of derivative liability | ( | ) | ||
| Balance as of June 30, 2026 | $ | |||
The fair value of the derivative liability as
of June 30, 2026 was determined using a Monte Carlo simulation valuation model with the following assumptions: (i) dividend yield of
17
The following table presents changes in the Company’s warrant liabilities measured at fair value on a recurring basis:
| Warrant Liabilities | Amount | |||
| Balance as of December 31, 2025 | $ | |||
| Loss on change in fair value of warrant liabilities | ||||
| Balance as of June 30, 2026 | $ | |||
NOTE 10—RELATED PARTY TRANSACTIONS
Solar Leasing Arrangements
Certain customers of the Company finance their solar energy system purchases through Solar Leasing I, LLC (“SLI”), a related party managed by the Company’s CEO. These arrangements are substantially similar to those with unrelated third-party financing providers.
For the three months ended June 30, 2026 and 2025,
the Company recognized related party revenue of $
In August 2024, the Company entered into a guarantee
of SLI’s obligations under a Business Loan Agreement between SLI and a bank for borrowings up to $
As of June 30, 2026 and December 31, 2025, the
Company had received customer advances of $
Note Receivable
During 2025, SLI paid a discretionary rebate to the Company following
a fair-market-value assessment of certain lease assets. The Company subsequently transferred the rebate proceeds as a subordinated loan,
recorded as a note receivable from White Horse, with an outstanding principal balance of $
On January 30, 2026, the Company increased the
subordinated loan to White Horse from $
For the three months ended June 30, 2026 and 2025, the Company recognized
interest income of $
18
Tax Receivable Agreement
In connection with the consummation of the Sunergy
business combination on March 13, 2024, the Company entered into a tax receivable agreement (the “TRA”) with ESGEN OpCo, LLC
(“OpCo”) and certain OpCo members (the “TRA Holders”). Pursuant to the TRA, the Company is required to pay the
TRA Holders
As of June 30, 2026, the Company had not recorded
a liability related to the TRA because realization of the related tax benefits was not considered more likely than not. The estimated
unrecorded TRA liability was approximately $
NOTE 11—COMMITMENTS AND CONTINGENCIES
Litigation
From time to time, the Company may be involved in various claims, lawsuits, and legal proceedings arising in the ordinary course of business. The Company records a liability for loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated in accordance with ASC 450.
On July 3, 2025, the Company filed a civil complaint
in the California Superior Court, Riverside County, in an action captioned Zeo Energy Corp. v. SolWerks, Inc. and SolKraft, Inc., Case
No. CVME2507379. The complaint asserts a claim for breach of contract and nonpayment of no less than $
As of June 30, 2026 and December 31, 2025, the Company was not aware of any other pending or threatened legal proceedings against the Company that it believes would have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. Legal costs associated with loss contingencies are expensed as incurred.
NOTE 12—REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
The table below reflects share information about the Company’s capital stock as of June 30, 2026:
| Par Value | Authorized | Issued | Treasury Stock | Outstanding | ||||||||||||||||
| Class A common stock | $ | |||||||||||||||||||
| Class V common stock | $ | |||||||||||||||||||
| Preferred stock | $ | |||||||||||||||||||
| Class A convertible preferred units | $ | |||||||||||||||||||
| Class A units | $ | |||||||||||||||||||
| Class B units | $ | |||||||||||||||||||
| Total shares | ||||||||||||||||||||
19
Class A common stock, Class V common stock, and preferred stock represent capital stock of Zeo. Class A convertible preferred units, Class A units, and Class B units represent limited liability company interests of OpCo. Class A convertible preferred units are held by the Sponsor and are classified as redeemable noncontrolling interests on the condensed consolidated balance sheet. Class B units are exchangeable for shares of Class A common stock on a one-for-one basis, together with cancellation of an equal number of shares of Class V common stock, and are classified as redeemable noncontrolling interests on the condensed consolidated balance sheet. Class A units are held by Zeo as managing member of OpCo and are eliminated in consolidation.
Class A Common Stock
During the six months ended June 30, 2026,
During the six months ended June 30, 2026,
On January 27, 2026, the Company entered into
the White Lion ELOC with White Lion, pursuant to which the Company has the right, but not the obligation, to sell to White Lion up to
$
On February 5, 2026,
On March 13, 2026,
On June 11, 2026,
20
Redeemable Noncontrolling Interests
During the six months ended June 30, 2026,
As of June 30, 2026 and December 31, 2025, the
noncontrolling interest holders owned approximately
The OpCo amended and restated agreement provides, among other things, for the issuance of corresponding economic, non-voting Class B units of OpCo. Holders of exchangeable OpCo units may cause OpCo to redeem one or more units, together with the cancellation of a corresponding number of shares of the Company’s Class V common stock, for shares of the Company’s Class A common stock on a one-for-one basis, subject to certain restrictions. Under certain circumstances, the Company may be required to redeem OpCo units. Subject to certain conditions, the Class A convertible preferred OpCo units may be redeemed by the Company following the first anniversary of closing and converted by the Sponsor into exchangeable OpCo units, which may then be exchanged for Class A common stock.
The Class A convertible preferred units accrue
dividends at a rate of
NOTE 13—STOCK-BASED COMPENSATION
2024 Omnibus Incentive Plan
On March 6, 2024, the shareholders of ESGEN approved
the Zeo 2024 Omnibus Incentive Equity Plan (the “Incentive Plan”), which became effective upon the closing of the Sunergy
business combination. A total of
The Plan Share Reserve automatically increases
on the first day of each fiscal year beginning in 2025 through 2029 by a number of shares equal to the lesser of (i)
The following table summarizes restricted stock awards activity under the Incentive Plan for the six months ended June 30, 2026:
| Restricted Stock Awards | Weighted- Average Grant Date Fair Value | |||||||
| Outstanding at December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ( | ) | ||||
| Forfeited | ( | ) | ( | ) | ||||
| Outstanding at June 30, 2026 | $ | |||||||
21
On April 1, 2026, the Company granted an aggregate
of
| ● | One-third (1/3) 12 months following the grant date; | |
| ● | One-third (1/3) 24 months following the grant date; and | |
| ● | One-third (1/3) 36 months following the grant date |
On April 1, 2026, the Company granted an aggregate
of
| ● | One-third (1/3) approximately four months following the grant date; | |
| ● | One-third (1/3) approximately 16 months following the grant date; and | |
| ● | One-third (1/3) approximately 28 months following the grant date |
On May 26, 2026, the Company granted an aggregate
of
| ● | One-half (1/2) approximately two months following the grant date; | |
| ● | One-half (1/2) approximately 14 months following the grant date; and |
On June 11, 2026, the Company granted an aggregate
of
The following table summarizes stock-based compensation expense and remaining unrecognized stock-based compensation expense for grants outstanding under the Incentive Plan during the six months ended June 30, 2026 and 2025:
| Stock-Based Compensation Expense | ||||||||||||||||
| Six Months Ended June 30, | Unrecognized | Weighted- Average Remaining | ||||||||||||||
| Grant Date | 2026 | 2025 | Expense | Life | ||||||||||||
| March 13, 2024 | $ | $ | $ | |||||||||||||
| February 5, 2025 | ||||||||||||||||
| July 5, 2025 | ||||||||||||||||
| November 5, 2025 | ||||||||||||||||
| April 1, 2026 | ||||||||||||||||
| May 26, 2026 | ||||||||||||||||
| June 11, 2026 | ||||||||||||||||
| Total | $ | $ | $ | |||||||||||||
During the three months ended June 30, 2026 and
2025, the Company recognized $
22
Sun Managers, LLC Management Incentive Plan
Sun Managers intends to grant Class B units (as defined in the SM LLCA) in Sun Managers through the Sun Managers, LLC Management Incentive Plan (the “Management Incentive Plan”) adopted by Sun Managers to certain eligible employees or service providers of OpCo, Sunergy or their subsidiaries, in the discretion of Timothy Bridgewater, as manager of Sun Managers. Such Class B units may be subject to a vesting schedule, and once such Class B units become vested, there may be an exchange opportunity through which the grantees may request (subject to the terms of the Management Incentive Plan and the OpCo amended and restated limited liability company agreement in its entirety (the “OpCo A&R LLC Agreement”)) the exchange of their Class B units into Seller OpCo Units (together with an equal number of Zeo Class V shares), which may then be converted into Zeo Class A common Stock (subject to the terms of the Management Incentive Plan and the OpCo A&R LLC Agreement).
Although Sun Managers is the legal issuer of the
awards, all compensatory payments made by Sun Managers to individuals providing services to or for the benefit of the Company or its subsidiaries
(including equity interests in Sun Managers) are treated as compensation paid by the Company under ASC 718. In accordance with the OpCo
A&R LLC Agreement, the Company allocates
On March 31, 2025, Sun Managers granted an aggregate
of
On March 31, 2026, Sun Managers granted an aggregate
of
Seasonal Manager Stock Compensation Plan
Beginning January 1, 2025, certain eligible sales
managers may earn shares of the Company’s Class A common stock under the Seasonal Manager Stock Compensation Plan, which operates
under the umbrella of the Management Incentive Plan. Managers are eligible to earn
The managers become eligible to receive certain grants of vested shares under the Seasonal Manager Stock Compensation Plan as follows:
| ● | ||
| ● | The remaining |
On March 31, 2026, Sun Managers granted an aggregate
of
| ● | One-half (1/2) immediately on the grant date; and | |
| ● | One-half (1/2) 12 months following the grant date |
The following table summarizes stock-based compensation expense and remaining unrecognized stock-based compensation expense for grants outstanding under the Seasonal Manager Compensation Plan during the six months ended June 30, 2026 and 2025:
| Stock-Based Compensation Expense | ||||||||||||||||
| Six Months Ended June 30, | Unrecognized | Weighted- Average Remaining | ||||||||||||||
| Grant Date | 2026 | 2025 | Expense | Life | ||||||||||||
| March 31, 2025 | $ | ( | ) | $ | $ | |||||||||||
| March 31, 2026 | ||||||||||||||||
| Total | $ | $ | $ | |||||||||||||
23
During the three months ended June 30, 2026 and
2025, the Company recognized $
The negative compensation expense for the six months ended June 30, 2026 related to the awards granted on March 31, 2025 reflects the reversal of previously recognized stock-based compensation expense for awards forfeited upon the termination of three sales managers prior to vesting.
NOTE 14—INCOME TAXES
The Company accounts for income taxes in accordance with ASC 740, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements. Deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and are measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to reverse.
The Company’s effective tax rate was a provision
of (
The Company evaluated the realizability of its deferred tax assets based on all available positive and negative evidence. Based on this evaluation, the Company determined that it is not more likely than not that its deferred tax assets will be realized and therefore recorded a full valuation allowance against its deferred tax assets as of June 30, 2026 and December 31, 2025.
The components of deferred tax assets were as follows:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Deferred tax assets: | ||||||||
| Net operating losses and tax credit carry-forward | $ | $ | ||||||
| Accrued stock compensation | ||||||||
| Section 743(b) | ||||||||
| Other | ||||||||
| Investment in Sunergy | ||||||||
| Total deferred tax assets | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax assets | $ | $ | ||||||
NOTE 15—NET LOSS PER SHARE
Basic net loss per share is calculated by dividing net loss attributable to Class A common stockholders by the weighted-average number of Class A common shares outstanding during the period. Diluted net loss per share is calculated by adjusting the weighted-average number of Class A common shares outstanding for the potentially dilutive effect of securities that could be converted into or settled in shares of Class A common stock. Potentially dilutive securities include exchangeable OpCo units, convertible debt, and other instruments that may be settled in shares of Class A common stock.
The Company applies the treasury stock method to restricted stock awards and warrants, which assumes that all Class A common share equivalents have been exercised at the beginning of the period and that the proceeds from those exercises are assumed to be used to repurchase Class A common shares at the average closing market price during the period. The Company applies the if-converted method to securities that are convertible or exchangeable into Class A common shares.
24
The following table presents the computation of the basic loss per share of Class A common stock for the three and six months ended June 30, 2026 and 2025:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Numerator | ||||||||||||||||
| Net loss attributable to Class A common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Denominator | ||||||||||||||||
| Weighted-average Class A common shares outstanding – basic | ||||||||||||||||
| Loss per Class A common share – basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The following table presents the reconciliation of net loss attributable to Class A common stockholders to net loss used in computing diluted net loss per share of Class A common stock for the three and six months ended June 30, 2026 and 2025:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net loss attributable to Class A common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss adjustments attributable to Class A common stockholders | ( | ) | ( | ) | ||||||||||||
| Adjusted net loss attributable to Class A common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted-average Class A common shares outstanding – basic | ||||||||||||||||
| Effect of dilutive securities | ||||||||||||||||
| Weighted-average Class A common shares outstanding – diluted | ||||||||||||||||
| Loss per Class A common share – diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
For the three and six months ended June 30, 2026,
the Convertible Note issued in June 2026 (See Note 8—Debt for additional information) was dilutive under the if-converted
method. The net loss adjustment of $
As of June 30, 2026,
NOTE 16—SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date these condensed consolidated financial statements were issued.
At the Company’s annual meeting of stockholders held on August 7, 2026, stockholders approved, in accordance with Nasdaq Listing Rule 5635(d), the potential issuance of shares of Class A common stock upon conversion of the Convertible Note in excess of the Conversion Cap. See Note 8—Debt for additional information.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Unless the context requires otherwise, references herein to the “Company,” “our,” “us” or “we” refer to Zeo Energy Corp. and its consolidated subsidiaries. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “aim,” “goal” and “continue,” or the derivatives of such terms or other similar expressions about the future. Such statements include, but are not limited to, our expectations regarding revenue generation, our ability to obtain financing when needed, or ability to source and financing our growth and expansion, including via acquisitions, and all other statements other than statements of historical fact included in this Form 10-Q. Factors that might cause or contribute to such a discrepancy include, but are not limited to, the risk factors detailed in our SEC filings. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
Our company and personnel are passionate about delivering cost savings and increased independence and reliability to energy consumers. Our mission is to expedite the country’s transition to renewable energy by offering our customers an affordable and sustainable means of achieving energy independence. We are a vertically integrated company offering energy solutions and services that include sale, design, procurement, installation, and maintenance of residential solar energy systems. Many of our solar energy system customers also purchase other energy efficient-related equipment or services or roofing services from us. The majority of our customers are located in Florida, Texas, Ohio, Illinois, and Virginia. We have an expanding base of customers in California, Colorado, Minnesota, Utah, and Pennsylvania. Sunergy was created on October 1, 2021 through the contribution of Sun First Energy, LLC, a solar sales management company, and Sunergy Solar, LLC, a solar installation company based in Florida, to Sunergy Renewables, LLC.
Through our Heliogen segment, acquired in August 2025, we are also developing concentrated solar power and long-duration energy generation and storage technology solutions for commercial and industrial applications.
We believe that we have built (and continue to build) the infrastructure and capabilities necessary to rapidly acquire and serve customers in a low-cost and scalable manner. Today, our scalable regional operating platform provides us with a number of advantages, including the marketing of our solar service offerings through multiple channels, including our diverse sales partner network and direct-to-consumer vertically integrated sales and installation operations. We believe that this multi-channel model supports rapid sales and installation growth, allowing us to achieve capital-efficient growth in the regional markets we serve.
Since our founding, we have continued to invest in a platform of services and tools to enable large scale operations for us and our partner network, which includes sales partners, installation partners and other strategic partners. The platform includes processes and software, as well as the capacity for the fulfillment and acquisition of marketing leads. We believe our platform empowers our in-house sales team and external sales dealers to profitably serve our regional and underpenetrated markets and helps us compete effectively against larger, more established industry players without making significant investment in technology and infrastructure.
We have focused to date on a simple, capital light business strategy utilizing, as of June 30, 2026, approximately 260 sales agents and approximately 10 independent sales dealers to produce our sales pipeline. We engineer and design projects and process building permit applications on behalf of our customers to timely install their systems and assist their connections to the local utility power grid. Most of the equipment we install is drop-shipped to the installation site by our regional distributors, requiring minimal inventory to be held by the Company during any given period. We depend on our distributors to timely handle logistics and related requirements in moving equipment to the installation sites. In addition to our main offering of residential solar energy systems, we sell and install products such as roofing, insulation, energy efficient appliances and battery storage systems for the residential market.
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Our core solar service offerings are paid for by customer purchases and financed through either third-party long-term lenders or third-party operators who offer leasing products that provide customers with simple, predictable pricing for solar energy that is insulated from rising retail electricity prices. Most of our customers finance their purchases with affordable loans or leases that require minimal or no upfront capital or down payment.
Recent Developments
White Lion Convertible Note
On June 9, 2026, we entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with White Lion Capital LLC (“White Lion”), pursuant to which we agreed to issue, and White Lion agreed to purchase, at one or more closings, unsecured convertible promissory notes in an aggregate funded amount of up to $7,500,000 (each a “Convertible Note”). At the first closing on June 9, 2026, we issued to White Lion a Convertible Note in the principal amount of $1,670,000, reflecting an original issue discount of $170,000, for gross proceeds of $1,500,000. We incurred $57,132 of debt issuance costs, resulting in net proceeds of $1,442,868. Additional closings for up to $6,000,000 of gross proceeds may occur at any time prior to June 9, 2027 upon the mutual written agreement of us and White Lion, subject to customary closing conditions.
The Convertible Note matures on June 9, 2028 and accrues interest at 5% per annum. The Convertible Note is convertible, in whole or in part, into shares of Class A common stock at the option of White Lion at a conversion price per share equal to the greater of (i) $0.50 (the “Floor Price”) and (ii) the lesser of (A) the Nasdaq Minimum Price (as defined under Nasdaq rules, $0.80 as of the issuance date) and (B) 95% of the lowest daily volume-weighted average price of the Class A common stock during the five trading days ending on the latest complete trading day prior to conversion. The conversion price is subject to customary adjustments for stock splits and similar events and to adjustment upon certain dilutive issuances below the then-effective conversion price. The Floor Price will no longer apply if (i) we complete a subsequent equity raise with a party other than White Lion at a price below $0.50, (ii) the average of the daily volume-weighted average prices of the Class A common stock for thirty consecutive trading days is less than $0.50, or (iii) an event of default occurs.
Conversions are subject to a beneficial ownership limitation of 4.99% (or, at White Lion’s election, 9.99%) and, pursuant to applicable Nasdaq rules, shares issuable upon conversion may not exceed 19.99% of our outstanding Class A common stock immediately prior to the first closing (the “Conversion Cap”) unless stockholder approval is obtained. We were obligated to seek stockholder approval for issuances above the Conversion Cap within 60 days of June 9, 2026. At our annual meeting of stockholders held on August 7, 2026, stockholders approved the issuance of shares of Class A common stock in excess of the Conversion Cap in accordance with Nasdaq Listing Rule 5635(d). The Convertible Note is subject to customary events of default; upon an event of default, subject to applicable cure periods, the principal amount would automatically increase to 120% of the then-outstanding principal, plus accrued and unpaid interest, and would become immediately due and payable. We may prepay the Convertible Note at any time, in whole or in part, without premium or penalty, upon at least five business days’ written notice, during which period White Lion may exercise its conversion rights. We are also subject to a “most favored nation” provision in favor of White Lion and restrictions on entering into variable rate transactions and equity lines of credit with parties other than White Lion without White Lion’s consent. In addition, White Lion has the right to require that up to 20% of the proceeds from sales under the White Lion ELOC, warrant exercises, or other securities issuances be applied to repay the Convertible Note.
Concurrently with the Note Purchase Agreement, we entered into a Registration Rights Agreement with White Lion, pursuant to which we agreed to file, within 30 days following the first closing, a registration statement covering the resale by White Lion of the shares issuable upon conversion, and which contains customary damages provisions for failure to file or to have the registration statement declared effective within the specified periods. We did not file the registration statement within the 30-day period. White Lion subsequently waived this covenant with the expectation that the registration statement will be filed no later than August 31, 2026.
Nasdaq Listing Rule Notice
On April 23, 2026, we received a letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price of the Company’s Class A common stock for the last 30 consecutive business days, we no longer meet Nasdaq Listing Rule 5550(a)(2), which requires listed companies to maintain a minimum bid price of at least $1 per share. Nasdaq Listing Rule 5810(c)(3)(A) provides a compliance period of 180 calendar days, or until October 20, 2026, in which to regain compliance with the minimum bid price requirement. If we evidence a closing bid price of at least $1 per share for a minimum of 10 consecutive business days during the 180-day compliance period, we will automatically regain compliance. In the event we do not regain compliance with the $1 bid price requirement by October 14, 2026, we may be eligible for consideration of a second 180-day compliance period if the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq’s Capital Market is met, other than the minimum bid price requirement. In addition, we would also be required to notify Nasdaq of our intent to cure the minimum bid price deficiency.
Key Operating and Financial Metrics and Outlook
We regularly review a number of metrics, including the following key operating and financial metrics, to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions. We believe the operating and financial metrics presented below are useful in evaluating our operating performance, as they are similar to measures by our public competitors and are regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA and Adjusted EBITDA margin are “non-GAAP” measures, as they are not financial measures calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and should not be considered as substitutes for net (loss) income or net (loss) income margin, respectively, calculated in accordance with GAAP. See “Non-GAAP Financial Measures” below for additional information on non-GAAP financial measures and a reconciliation of these non-GAAP measures to the most comparable GAAP measures.
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The following table sets forth these metrics for the periods presented:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net revenues | $ | 16,169,463 | $ | 18,101,930 | $ | 29,354,407 | $ | 26,885,625 | ||||||||
| Contribution profit | 3,408,450 | 2,736,435 | 5,650,579 | (34,390 | ) | |||||||||||
| Contribution margin | 21.1 | % | 15.1 | % | 19.2 | % | (0.1 | )% | ||||||||
| Loss from operations | (2,988,955 | ) | (2,853,506 | ) | (7,754,079 | ) | (16,364,904 | ) | ||||||||
| Net loss | (2,749,966 | ) | (2,679,464 | ) | (7,441,277 | ) | (15,998,827 | ) | ||||||||
| Adjusted EBITDA | (2,106,556 | ) | 1,626,586 | (4,957,061 | ) | (3,881,085 | ) | |||||||||
| Adjusted EBITDA margin | (13.0 | )% | 9.0 | % | (16.9 | )% | (14.4 | )% | ||||||||
Contribution Profit and Contribution Margin
We define contribution profit as revenue, net less direct costs of revenue, commissions expense and depreciation and amortization, and define contribution margin, expressed as a percentage, as the ratio of contribution profit to revenue, net. Contribution profit and margin can be used to understand our financial performance and efficiency and allows investors to evaluate our pricing strategy and compare against competitors. Our management uses these metrics to make strategic decisions, identify areas for improvement, set targets for future performance and make informed decisions about how to allocate resources going forward. See “— Non-GAAP Financial Measures” for a reconciliation of Gross Profit to Contribution Profit and Contribution Margin.
Adjusted EBITDA and Adjusted EBITDA Margin
We define Adjusted EBITDA, a non-GAAP financial measure, as net income (loss) before interest and other income (expense), net, income tax provision (benefit), depreciation and amortization, gain (loss) on change in fair value of derivative liability, gain (loss) on change in fair value of warrant liabilities, stock-based compensation, and transaction-related expenses. Adjusted EBITDA margin reflects our Adjusted EBITDA as a percentage of revenues. See “— Non-GAAP Financial Measures” for a reconciliation of GAAP net loss to Adjusted EBITDA and Adjusted EBITDA Margin.
Key Factors that May Influence Future Results of Operations
Our financial results of operations may not be comparable from period to period due to several factors. Key factors affecting the results of our operations are summarized below.
Expansion of Residential Sales into New Markets. Our future revenue growth is, in part, dependent on our ability to expand our product offerings and services in the select residential markets where we operate primarily in Florida, Texas, Ohio, Illinois, and Virginia. We primarily generate revenue from our product offerings and services in the residential housing market. To continue our growth, we intend to expand our presence in the residential market into additional states based on markets underserved by national sales and installation providers that also have favorable incentives and net metering policies, and where homeowners have favorable financing options. We believe that our entry into new markets will continue to facilitate revenue growth and customer diversification.
Expansion of New Products and Services. In 2026, we continued our roofing replacements to facilitate our solar installations and to repair rooftops. We will continue to provide roofing services in all markets in which we install solar systems. Roofing facilitates a faster processing time for our solar installations in cases where the customer is in need of a roof replacement prior to installing a solar system. In addition, to provide more financing options for our prospective residential solar energy customers, we have programs in place that allow our customers to choose a leasing option to finance their systems from a third party.
Following the acquisition of Heliogen in August 2025, we have been working to integrate Heliogen’s concentrated solar power and energy storage technology into our clean-energy platform to complement our existing solar operations, create operational synergies, and broaden market reach. We continue to pursue engineering services agreements to support long-duration energy storage projects.
Adding New Customers and Expansion of Sales with Existing Customers. We intend to increase external sales dealers in order to target new customers in the markets we serve. We provide competitive compensation packages to our in-house sales teams and external sales dealers, which incentivizes the acquisition of new customers.
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Inflation. We are seeing an increase in the costs of labor and components as the result of higher inflation rates. In particular, we are experiencing an increase in raw material costs and supply chain constraints, and trade tariffs imposed on certain products from China. We also see an increase in materials used to achieve the required minimum domestic content to maximize incentive tax credits. These increases in material and labor costs may continue to put pressure on our operating margins. We do not have information that allows us to quantify the specific amount of cost increases attributable to inflationary pressures.
Interest rates. Interest rates increased sharply in 2022 but have been relatively stable since. The majority of homeowners have opted to enter into a lease contract with a third-party operator as a means of financing the installation of a solar system. The lease contract provides a lower monthly cost to the homeowner than a conventional loan product in a higher interest rate environment. We do not have information that allows us to quantify the adverse effects attributable to increased interest rates.
Managing our Supply Chain. We rely on contract manufacturers and suppliers to produce our components. Our suppliers are generally meeting our materials needs. Our ability to grow depends, in part, on the ability of our contract manufacturers and suppliers to provide high quality services and deliver components and finished products on time and at reasonable costs. In the event we are unable to mitigate the impact of delays and/or price increases in raw materials, electronic components and freight, it could delay the installation of our systems, which would adversely impact our cash flows and results of operations, including revenue and contribution margin.
Components of Condensed Consolidated Statements of Operations
Net Revenues
Our primary source of revenue is the sale of our residential solar systems. Our systems are fully functional at the time of installation and require an inspection prior to interconnection to the utility power grid. We sell our systems primarily direct to end user customers for use in their residences. Upon passing installation inspection, we satisfy our performance obligation and recognize revenue. Most of the Company’s customers finance their obligations with third parties. Most finance arrangements are by way of a lease contract with a third-party operator. Some customers utilize debt financing. In these situations, the finance company deducts their financing fees and remits the net amount to the Company. Revenue is recorded net of these financing fees (and/or dealer fees).
The volume of sales and installations of rooftop solar systems, our primary product, increases from April to September when a majority of our sales teams are most active in our areas of service. In addition to sales of solar systems, “adders” or accessories to a sale may include roofing, energy efficient appliances, smart home security systems, upgraded insulation and/or energy storage systems. Adders represented less than 10% of total net revenues for each of the six months ended June 30, 2026 and 2025.
Our revenue is affected by changes in the volume, system size and average selling prices of our solutions and related accessories, supply and demand, sales incentives and fluctuating interest rates that increase or decrease the monthly payments for customers purchasing systems through third party financing. Less than 5% of our sales were paid in cash by the customer in each of the six months ended June 30, 2026 and 2025. Our revenue growth is dependent on our ability to compete effectively in the marketplace by remaining cost competitive, developing and introducing new sales teams within existing and new territories, scaling our installation teams to keep up with demand and maintaining a strong internal operations team to process orders while working with building departments and utilities to permit and interconnect our customers to the utility grid.
Revenues improved during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, driven by increased solar system installation activity. While higher consumer financing rates continue to present headwinds for the residential solar industry broadly, the Company has managed these pressures through expanded sales efforts and continued growth in its installation volume.
Cost of Revenues
Cost of revenues consists primarily of product costs (including solar panels, inverters, metal racking, connectors, shingles, wiring, warranty costs and logistics costs), installation labor and permitting costs.
Cost of revenues increased during the six months ended June 30, 2026 in association with the increase in revenues.
Net revenues less cost of revenues may vary from period-to-period and is primarily affected by our average selling prices, financing or dealer fees, fluctuations in equipment costs and our ability to effectively and timely deploy our field installation teams to project sites once permitting departments have approved the design and engineering of systems on customer sites.
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Operating Expenses
Operating expenses consist of sales and marketing and general and administrative expenses. Personnel-related costs are the most significant component of each of these expense categories and include salaries, benefits and payroll taxes.
Sales and marketing expenses consist primarily of personnel-related expenses including sales commissions, as well as advertising, travel, trade shows, marketing, and other indirect costs. We expect to continue to make the necessary investments to enable us to execute our strategy to increase our market penetration geographically and enter into new markets by expanding our base sales teams, installers and strategic sales dealer and partner network.
General and administrative expenses consist primarily of personnel-related expenses for our non-direct labor operations, executive, finance, human resources, information technology, software, facilities costs and fees for professional services. Fees for professional services consist primarily of outside legal, accounting and information technology consulting costs.
Depreciation and amortization consist primarily of depreciation of our vehicles, furniture and fixtures, software and amortization of our acquired intangibles.
Other Income (Expense)
Other income (expense) primarily consists of changes in fair value of our warrant liabilities and the embedded derivative liability related to the Convertible Note, interest expense on the Convertible Note (including amortization of the debt discount) and under our equipment and vehicle term loans, and interest income on our cash and note receivable balances.
Results of Operations
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
The following table sets forth a summary of our condensed consolidated statements of operations for the periods presented:
| Three Months Ended June 30, | Change | |||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||
| Net revenues | $ | 16,169,463 | $ | 18,101,930 | $ | (1,932,467 | ) | (10.7 | )% | |||||||
| Operating expenses | ||||||||||||||||
| Cost of revenues | 8,545,576 | 7,284,487 | 1,261,089 | 17.3 | % | |||||||||||
| Depreciation and amortization | 248,171 | 3,175,452 | (2,927,281 | ) | (92.2 | )% | ||||||||||
| Sales and marketing | 4,416,419 | 5,629,040 | (1,212,621 | ) | (21.5 | )% | ||||||||||
| General and administrative | 5,948,252 | 4,866,457 | 1,081,795 | 22.2 | % | |||||||||||
| Total operating expenses | 19,158,418 | 20,955,436 | (1,797,018 | ) | (8.6 | )% | ||||||||||
| Loss from operations | (2,988,955 | ) | (2,853,506 | ) | (135,449 | ) | (4.7 | )% | ||||||||
| Other income (expense): | ||||||||||||||||
| Other income | 101,200 | 53,328 | 47,872 | 89.8 | % | |||||||||||
| Interest expense | (32,429 | ) | 29,989 | (62,418 | ) | 208.1 | % | |||||||||
| Gain on change in fair value of derivative liability | 232,500 | – | 232,500 | – | ||||||||||||
| Gain (loss) on change in fair value of warrant liabilities | 34,500 | (96,269 | ) | 130,769 | 135.8 | % | ||||||||||
| Total other income (expense) | 335,771 | (12,952 | ) | 348,723 | 2,692.4 | % | ||||||||||
| Net loss before income taxes | $ | (2,653,184 | ) | $ | (2,866,458 | ) | $ | 213,274 | 7.4 | % | ||||||
Net Revenues
Net revenues decreased by approximately $1.9 million from $18.1 million for the three months ended June 30, 2025 to $16.2 million for the three months ended June 30, 2026. The decrease in revenue was primarily driven by a decrease in related party revenue from Solar Leasing I, LLC (“SLI”), partially offset by an increase in revenue from unrelated third-party customers. There were no revenues generated from the Heliogen segment during the three months ended June 30, 2026 or 2025.
Cost of Revenues
Cost of revenues increased by $1.2 million from $7.3 million for the three months ended June 30, 2025 to $8.5 million for the three months ended June 30, 2026, primarily driven by an increase in labor costs in the markets in which we operate and an increase in the cost of materials to conform to domestic content requirements of our customers during the current period. As a percentage of net revenues, cost of revenues increased from 40.2% for the three months ended June 30, 2025 to 52.9% for the three months ended June 30, 2026, reflecting a compression in gross margin year-over-year primarily driven by higher material costs, offset by some improvements to labor and other costs.
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Depreciation and Amortization
Depreciation and amortization decreased by $3.0 million, from $3.2 million for the three months ended June 30, 2025 to $0.2 million for the three months ended June 30, 2026. The decrease was primarily related to $2.9 million in amortization of the customer-related intangible asset acquired in connection with the Lumio asset acquisition, which was fully amortized during 2025.
Sales and Marketing
Sales and marketing expenses decreased by $1.2 million from $5.6 million for the three months ended June 30, 2025 to $4.4 million for the three months ended June 30, 2026. The decrease was primarily driven by lower sales commissions, reflecting both the decrease in installation revenues and changes to the Company’s commission structure, as well as lower payroll and lead generation costs following the elimination of the inside sales team early in the second quarter of 2026.
General and Administrative Expenses
General and administrative expenses increased by $1.1 million from $4.9 million for the three months ended June 30, 2025 to $5.9 million for the three months ended June 30, 2026. The increase was primarily driven by increased bad debt expense and professional fees, offset by decreased stock-based compensation expense and transaction-related expenses compared to the prior period.
Other Income (Expense)
Other income (expense), net increased by $0.3 million from other expense, net of $12,952 for the three months ended June 30, 2025 to other income, net of $0.3 million for the three months ended June 30, 2026. The increase was primarily a result of a gain on change in fair value of derivative liability and warrant liabilities during the three months ended June 30, 2026, compared to a loss on change in fair value of warrant liabilities during the three months ended June 30, 2025.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
The following table sets forth a summary of our condensed consolidated statements of operations for the periods presented:
| Six Months Ended June 30, | Change | |||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||
| Net revenues | $ | 29,354,407 | $ | 26,885,625 | $ | 2,468,782 | 9.2 | % | ||||||||
| Operating expenses | ||||||||||||||||
| Cost of revenues | 16,125,622 | 12,074,166 | 4,051,456 | 33.6 | % | |||||||||||
| Depreciation and amortization | 1,329,699 | 8,076,181 | (6,746,482 | ) | (83.5 | )% | ||||||||||
| Sales and marketing | 7,428,189 | 7,766,132 | (337,943 | ) | (4.4 | )% | ||||||||||
| General and administrative | 12,224,976 | 15,334,050 | (3,109,074 | ) | (20.3 | )% | ||||||||||
| Total operating expenses | 37,108,486 | 43,250,529 | (6,142,043 | ) | (14.2 | )% | ||||||||||
| Loss from operations | (7,754,079 | ) | (16,364,904 | ) | 8,610,825 | 52.6 | % | |||||||||
| Other income (expense): | ||||||||||||||||
| Other income | 169,637 | 135,691 | 33,946 | 25.0 | % | |||||||||||
| Interest expense | (43,282 | ) | (288 | ) | (42,994 | ) | 14,928.5 | % | ||||||||
| Gain on change in fair value of derivative liability | 232,500 | – | 232,500 | – | ||||||||||||
| Gain (loss) on change in fair value of warrant liabilities | (41,400 | ) | 567,180 | (608,580 | ) | (107.3 | )% | |||||||||
| Total other income (expense) | 317,455 | 702,583 | (385,128 | ) | (54.8 | )% | ||||||||||
| Net loss before income taxes | $ | (7,436,624 | ) | $ | (15,662,321 | ) | $ | 8,225,697 | 52.5 | % | ||||||
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Net Revenues
Net revenues increased by approximately $2.5 million from $26.9 million for the six months ended June 30, 2025 to $29.4 million for the six months ended June 30, 2026. The increase in revenue was primarily driven by growth in solar system installations during the current period, partially offset by a decrease in related party revenue from SLI. There were no revenues generated from the Heliogen segment during the six months ended June 30, 2026 and 2025.
Cost of Revenues
Cost of revenues increased by $4.0 million from $12.1 million for the six months ended June 30, 2025 to $16.1 million for the six months ended June 30, 2026, primarily driven by the increase in solar system installation activity during the current period. As a percentage of net revenues, cost of revenues increased from 44.9% for the six months ended June 30, 2025 to 54.9% for the six months ended June 30, 2026, reflecting a compression in gross margin year-over-year primarily driven by higher material costs, offset by some improvements to labor and other costs.
Depreciation and Amortization
Depreciation and amortization decreased by $6.7 million, from $8.1 million for the six months ended June 30, 2025 to $1.3 million for the six months ended June 30, 2026. The decrease was primarily related to $7.6 million in amortization of the customer-related intangible asset acquired in connection with the Lumio asset acquisition, which was fully amortized during 2025. This was partially offset by $0.8 million of accelerated depreciation associated with the abandonment of internally developed software during the six months ended June 30, 2026.
Sales and Marketing
Sales and marketing expenses decreased by $0.4 million from $7.8 million for the six months ended June 30, 2025 to $7.4 million for the six months ended June 30, 2026. The decrease was primarily driven by lower sales commissions, reflecting changes to the Company’s commission structure, as well as lower payroll and lead generation costs following the elimination of the inside sales team early in the second quarter of 2026, notwithstanding the increase in installation revenues during the period.
General and Administrative Expenses
General and administrative expenses decreased by $3.1 million from $15.3 million for the six months ended June 30, 2025 to $12.2 million for the six months ended June 30, 2026. The decrease was primarily driven by decreased bad debt expense, stock-based compensation expense and transaction-related expenses compared to the prior period, offset by increased professional fees during the current period.
Other Income (Expense)
Other income, net decreased by $0.4 million from $0.7 million for the six months ended June 30, 2025 to $0.3 million for the six months ended June 30, 2026. The decrease was primarily a result of a significant gain on change in fair value of warrant liabilities during the six months ended June 30, 2025, compared to a loss on change in fair value of warrant liabilities during the six months ended June 30, 2026, partially offset by a gain on change in fair value of derivative liability recognized during the current period.
Liquidity and Capital Resources
Our operations have historically been funded through a combination of revenue generation, proceeds from financing activities, and in 2025, net cash acquired in connection with the Heliogen acquisition. Our primary short-term requirements for liquidity and capital are to fund general working capital and capital expenses, including through our common stock purchase agreement with White Lion (the “White Lion ELOC”). Our principal long-term working capital uses include ensuring revenue growth, expanding our sales and marketing efforts and potential acquisitions.
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In June 2026, we issued a convertible promissory note to White Lion in the principal amount of $1.7 million for net proceeds of approximately $1.4 million, and up to $6 million of additional gross proceeds may be funded at one or more additional closings, although any additional closing requires the mutual written agreement of us and White Lion. See Note 8—Debt to the condensed consolidated financial statements.
As of June 30, 2026 and December 31, 2025, our cash and cash equivalents balances were $2.5 million and $6.1 million, respectively. The Company maintains its cash in checking, savings, and money market accounts.
Our future capital requirements depend on many factors, including our revenue growth rate, the timing and extent of our spending to support further sales and marketing, the degree to which we are successful in launching new business initiatives, the costs associated with these initiatives, the growth of our business generally and our access to third party financing.
We have operational plans to increase revenue and move towards the goal of profitable operations in the foreseeable future, which plans are expected to improve cash flows. Our operational plan includes an increase in the number of sales agents to increase revenue and improved efficiency in our operations through centralization of field offices and labor and productivity improvement in the corporate operations through the implementation of a new CRM software.
We are also working internally and with third parties to address short-term cash needs, including through the use of the White Lion ELOC, which provides us with the right to sell up to $30.0 million in shares of our Class A common stock, subject to market liquidity and contractual limitations. The White Lion ELOC is limited to selling shares equal to 4.99% of the outstanding shares at the time of sale, and this limitation resets once White Lion liquidates its holdings in the open market. The amount we can raise under the White Lion ELOC in any period is practically limited by the trading volume and market price of our Class A common stock and the number of shares registered for resale; based on the shares currently registered and recent market prices, we estimate that approximately $6.5 million is currently accessible under the facility. We believe we also have other opportunities to raise capital, such as through revenue generating initiatives, private placements, public offerings or repricing of outstanding warrants. In addition, we may utilize a universal shelf registration statement to gain access to funding for our company.
We currently believe that our existing cash and working capital balances, anticipated future cash flows from operations, borrowings under our debt agreements, and access to equity capital markets (including the White Lion ELOC) will be sufficient to meet our currently contemplated business needs for the next twelve months. In the event we pursue and complete significant transactions or acquisitions in the future, additional funds will be required to meet our strategic needs, which will require us to raise additional funds in the debt or equity markets.
While our plan and expectation is to raise additional capital in 2026, and while we are routinely active in discussions and planning for financing, there can be no assurance that we will be successful in such pursuits, and our fundraising efforts are subject to a variety of uncertainties. Moreover, even if we are able to raise additional capital, other than the White Lion ELOC, we do not know with precision what the terms of any such financing would be. Any future sale of our equity securities would dilute the ownership and control of your shares and could be at prices below prices at which investors acquired our shares or at which our shares currently trade. The sale of convertible debt securities or additional equity securities could result in additional dilution to our shareholders. Also, the incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations and liquidity and ability to pay dividends. Our inability to raise capital, coupled with our inability to generate adequate cash from operations, could require us to significantly modify our operational plans, and any failure to raise additional funds on favorable terms when needed could have a material adverse effect on our business, liquidity and financial condition.
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Cash Flows
The following table summarizes our cash flows for the periods presented:
| For the Six Months Ended June 30, | ||||||||||||
| 2026 | 2025 | Change | ||||||||||
| Net cash used in operating activities | $ | (1,314,288 | ) | $ | (4,549,934 | ) | $ | 3,235,646 | ||||
| Net cash used in investing activities | (3,556,315 | ) | (807,025 | ) | (2,749,290 | ) | ||||||
| Net cash provided by (used in) financing activities | 1,185,387 | (208,465 | ) | 1,393,852 | ||||||||
Cash Flows from Operating Activities
Net cash used in operating activities was approximately $1.3 million during the six months ended June 30, 2026 compared to approximately $4.5 million during the six months ended June 30, 2025. The $3.2 million improvement in operating cash flows was driven primarily by the lower net loss in the current period and favorable working capital changes, including a $3.7 million increase in customer advances – related party and a $1.0 million increase in accounts payable. These improvements were partially offset by a $2.0 million increase in accounts receivable, including accounts receivable – related party, and a $1.1 million decrease in contract liabilities. Non-cash charges also decreased significantly year-over-year, with depreciation and amortization of $1.3 million, stock-based compensation of $1.3 million, and provision for credit losses of $0.5 million in the current period, compared to $8.1 million, $3.3 million, and $3.3 million, respectively, in the prior year period. In addition, the Heliogen segment, which was acquired in the quarter ended September 30, 2025, incurred a net loss of $1.8 million for the six months ended June 30, 2026 that is included in net loss, compared to no impact on net loss for the six months ended June 30, 2025.
Cash Flows from Investing Activities
Net cash used in investing activities was approximately $3.6 million for the six months ended June 30, 2026, relating to a $3.2 million investment in the note receivable – related party and $0.4 million of purchases of property and equipment. Net cash used in investing activities was approximately $0.8 million for the six months ended June 30, 2025, relating to purchases of property and equipment.
Cash Flows from Financing Activities
Net cash provided by financing activities was approximately $1.2 million for the six months ended June 30, 2026, consisting primarily of $1.4 million of net proceeds from the Convertible Note, partially offset by dividends paid to OpCo Class A preferred unit holders, repayments of debt and finance lease liabilities, and tax withholdings paid related to stock-based compensation. Net cash used in financing activities was approximately $0.2 million for the six months ended June 30, 2025, relating to repayments of debt and finance lease liabilities.
Current Indebtedness
As of June 30, 2026, our outstanding indebtedness consisted of the Convertible Note in the principal amount of $1.7 million (with a net carrying amount of $0.5 million after unamortized debt discount), vehicle loans of less than $0.1 million, and finance lease liabilities of $0.3 million. See Note 8—Debt to the condensed consolidated financial statements for additional information regarding the Convertible Note.
Non-GAAP Financial Measures
The non-GAAP financial measures in this Quarterly Report have not been calculated in accordance with GAAP and should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, GAAP results. In addition, Adjusted EBITDA and Adjusted EBITDA Margin should not be construed as indicators of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that they fail to address. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions. Therefore, its use can make it difficult to compare our current results with our results from other reporting periods and with the results of other companies.
Our management uses these non-GAAP financial measures, in conjunction with GAAP financial measures, as an integral part of managing our business and to, among other things: (i) monitor and evaluate the performance of our business operations and financial performance; (ii) facilitate internal comparisons of the historical operating performance of our business operations; (iii) facilitate external comparisons of the results of our overall business to the historical operating performance of other companies that may have different capital structures and debt levels; (iv) review and assess the operating performance of our management team; (v) analyze and evaluate financial and strategic planning decisions regarding future operating investments; and (vi) plan for and prepare future annual operating budgets and determine appropriate levels of operating investments. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends, and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors.
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Contribution Profit and Contribution Margin
We define contribution profit as revenue, net less direct costs of revenue, commissions expense and depreciation and amortization, and define contribution margin, expressed as a percentage, as the ratio of contribution profit to revenue, net. Contribution profit and margin can be used to understand our financial performance and efficiency and allows investors to evaluate our pricing strategy and compare against competitors. Our management uses these metrics to make strategic decisions, identify areas for improvement, set targets for future performance and make informed decisions about how to allocate resources going forward.
The following table provides a reconciliation of contribution profit for the periods presented:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net revenues | $ | 16,169,463 | $ | 18,101,930 | $ | 29,354,407 | $ | 26,885,625 | ||||||||
| Cost of revenues | 8,545,576 | 7,284,487 | 16,125,622 | 12,074,166 | ||||||||||||
| Gross profit | $ | 7,623,887 | $ | 10,817,443 | $ | 13,228,785 | $ | 14,811,459 | ||||||||
| Adjustments: | ||||||||||||||||
| Depreciation and amortization | 248,171 | 3,175,452 | 1,329,699 | 8,076,181 | ||||||||||||
| Commissions expense | 3,967,266 | 4,905,556 | 6,248,507 | 6,769,668 | ||||||||||||
| Total contribution profit | $ | 3,408,450 | $ | 2,736,435 | $ | 5,650,579 | $ | (34,390 | ) | |||||||
| Gross margin | 47.1 | % | 59.8 | % | 45.1 | % | 55.1 | % | ||||||||
| Contribution margin | 21.1 | % | 15.1 | % | 19.2 | % | (0.1 | )% | ||||||||
Adjusted EBITDA
We define Adjusted EBITDA, a non-GAAP financial measure, as net income (loss) before interest and other income (expense), net, income tax provision (benefit), depreciation and amortization, gain (loss) on change in fair value of derivative liability, gain (loss) on change in fair value of warrant liabilities, stock-based compensation, and transaction-related expenses. We utilize Adjusted EBITDA as an internal performance measure in the management of our operations because we believe the exclusion of these items allows for a more relevant comparison of our results of operations to other companies in our industry. Adjusted EBITDA should not be viewed as a substitute for net income (loss) calculated in accordance with GAAP, and other companies may define Adjusted EBITDA differently. Adjusted EBITDA margin reflects our Adjusted EBITDA as a percentage of revenues. The following table provides a reconciliation of net income (loss) to Adjusted EBITDA for the periods presented:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net loss | $ | (2,749,966 | ) | $ | (2,679,464 | ) | $ | (7,441,277 | ) | $ | (15,998,827 | ) | ||||
| Adjustments: | ||||||||||||||||
| Other income | (101,200 | ) | (53,328 | ) | (169,637 | ) | (135,691 | ) | ||||||||
| Interest expense | 32,429 | (29,989 | ) | 43,282 | 288 | |||||||||||
| Gain on change in fair value of derivative liability | (232,500 | ) | – | (232,500 | ) | – | ||||||||||
| (Gain) loss on change in fair value of warrant liabilities | (34,500 | ) | 96,269 | 41,400 | (567,180 | ) | ||||||||||
| Income tax provision (benefit) | 96,782 | (186,994 | ) | 4,653 | 336,506 | |||||||||||
| Stock-based compensation | 634,228 | 1,078,202 | 1,328,596 | 3,335,340 | ||||||||||||
| Transaction-related expenses | – | 226,438 | 138,723 | 1,072,298 | ||||||||||||
| Depreciation and amortization | 248,171 | 3,175,452 | 1,329,699 | 8,076,181 | ||||||||||||
| Adjusted EBITDA | $ | (2,106,556 | ) | $ | 1,626,586 | $ | (4,957,061 | ) | $ | (3,881,085 | ) | |||||
| Net loss margin | (17.0 | )% | (14.8 | )% | (25.3 | )% | (59.5 | )% | ||||||||
| Adjusted EBITDA margin | (13.0 | )% | 9.0 | % | (16.9 | )% | (14.4 | )% | ||||||||
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Critical Accounting Estimates
For a description of our critical accounting policies and estimates, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on April 1, 2026. There have been no material changes to our critical accounting policies and estimates since our Annual Report on Form 10-K for the year ended December 31, 2025, besides the following:
Embedded Derivative Liabilities
We evaluate the embedded features of our financial instruments, including convertible notes payable, in accordance with ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815, “Derivatives and Hedging.” Certain conversion options and redemption features are required to be bifurcated from their host instrument and accounted for separately as derivative financial instruments when certain criteria are met. We apply significant judgment to identify and evaluate complex terms and conditions for our financial instruments to determine whether such instruments are derivatives or contain features that qualify as embedded derivatives. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the condensed consolidated statements of operations each period.
The fair value of the bifurcated embedded derivative liability related to the Convertible Note is estimated using a Monte Carlo simulation model. The model requires significant judgment, including assumptions regarding expected volatility of our Class A common stock, the risk-free interest rate, the expected timing of the commencement and pace of conversion, and the simulated path of the conversion price, which is subject to the Floor Price and a pricing ceiling and may vary with the market price of our Class A common stock. Changes in these assumptions, particularly expected volatility and the assumed timing of conversion, could materially affect the estimated fair value of the derivative liability and the related change in fair value recognized in our condensed consolidated statements of operations. As of June 30, 2026, the estimated fair value of the embedded derivative liability was $699,100, and the change in fair value recognized for the three and six months ended June 30, 2026 was a gain of $232,500. See Note 8—Debt and Note 9—Fair Value Measurements for additional information.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
As a smaller reporting company, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2026, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of June 30, 2026, as a result of material weaknesses in the Company’s internal control over financial reporting related to ineffective controls over period end financial disclosure and reporting processes, including not timely performing certain reconciliations and the completeness and accuracy of those reconciliations, and lack of effectiveness of controls over accurate accounting and financial reporting and reviewing the underlying financial statement elements resulting in material adjustments that impacted revenue, expenses, assets, and liabilities in the financial statements, and recording incorrect journal entries that also did not have the sufficient review and approval. The control deficiencies resulted in and could result in a future misstatement in our accounts or disclosures that would result in a material misstatement to our financial statements that would not be prevented or detected. Accordingly, we determined that these control deficiencies constitute material weaknesses.
These material weaknesses in internal control over financial reporting have been disclosed in the Company’s quarterly reports on Form 10-Q for 2026 and annual report on Form 10-K for the year ended December 31, 2025. We are still in the process of remediating these material weaknesses. Notwithstanding the identified material weaknesses, management, including our principal executive officer and principal financial officer, believes the condensed consolidated financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in accordance with GAAP.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Please refer to our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on April 1, 2026.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
Except as set forth below, the risks described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 could materially and adversely affect our business, financial condition, results of operations, cash flows, future prospects, and the trading price of our Class A common stock. The risks and uncertainties described therein are not the only ones we face. Additional risks and uncertainties that we are unaware of or that we currently deem immaterial may also become important factors that adversely affect our business.
Our Class A common stock will be subject to potential delisting if we do not maintain the listing requirements of Nasdaq.
Our Class A common stock is listed on Nasdaq. Nasdaq has rules for continued listing, including, without limitation, minimum market capitalization and other requirements. Failure to maintain our listing, or de-listing from Nasdaq, would make it more difficult for shareholders to dispose of our Class A common stock and more difficult to obtain accurate price quotations on our Class A common stock. This could have an adverse effect on the price of our Class A common stock. Our ability to issue additional securities for financing or other purposes, or otherwise to arrange for any financing we may need in the future, may also be materially and adversely affected if our Class A common stock is not traded on a national securities exchange.
On April 23, 2026, the Company received a letter from the Listing Qualifications Staff of Nasdaq indicating that, based upon the closing bid price of the Company’s Class A common stock for the last 30 consecutive business days, the Company no longer meets Nasdaq Listing Rule 5550(a)(2), which requires listed companies to maintain a minimum bid price of at least $1 per share. Nasdaq Listing Rule 5810(c)(3)(A) provides a compliance period of 180 calendar days, or until October 20, 2026, in which to regain compliance with the minimum bid price requirement. If the Company evidences a closing bid price of at least $1 per share for a minimum of 10 consecutive business days during the 180-day compliance period, the Company will automatically regain compliance. In the event the Company does not regain compliance with the $1 bid price requirement by October 14, 2026, the Company may be eligible for consideration of a second 180-day compliance period if the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq’s Capital Market is met, other than the minimum bid price requirement. In addition, the Company would also be required to notify Nasdaq of its intent to cure the minimum bid price deficiency.
You should carefully read and consider such risks, together with all of the other information in our Annual Report on Form 10-K for the year ended December 31, 2025, in this Quarterly Report on Form 10-Q (including the disclosures in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our interim condensed consolidated financial statements and related notes), and in the other documents that we file with the SEC.
Item 2. Unregistered Sale of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During the quarterly period ended June 30, 2026,
37
Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Form 10-Q.
| * | Filed herewith. |
| ** | Furnished herewith. |
38
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ZEO Energy Corp. | ||
| Date: August 14, 2026 | /s/ Timothy Bridgewater | |
| Name: | Timothy Bridgewater | |
| Title: | Chief Executive Officer | |
| Date: August 14, 2026 | /s/ Cannon Holbrook | |
| Name: | Cannon Holbrook | |
| Title: | Chief Financial Officer | |
39
Exhibit 31.1
CERTIFICATION
PURSUANT TO RULE 13a-14(a) OR 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Timothy Bridgewater, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 of Zeo Energy Corp.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 14, 2026 | ||
| By: | /s/ Timothy Bridgewater | |
| Name: | Timothy Bridgewater | |
| Title: | Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION
PURSUANT TO RULE 13a-14(a) OR 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Cannon Holbrook, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 of Zeo Energy Corp.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 14, 2026 | |
| /s/ Cannon Holbrook | |
| Cannon Holbrook | |
| Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Zeo Energy Corp. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2026, as filed with the Securities and Exchange Commission (the “Report”), I, Timothy Bridgewater, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report. |
| Date: August 14, 2026 | |
| /s/ Timothy Bridgewater | |
| Timothy Bridgewater | |
| Chief Executive Officer |
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Zeo Energy Corp. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2026, as filed with the Securities and Exchange Commission (the “Report”), I, Cannon Holbrook, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report. |
| Date: August 14, 2026 | |
| /s/ Cannon Holbrook | |
| Cannon Holbrook | |
| Chief Financial Officer |