UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-40927

ZEO ENERGY CORP.

(Exact name of registrant as specified in its charter)

Delaware		98-1601409
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7625 Little Rd, Suite 200A, New Port Richey, FL		34654
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (727) 375-9375

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share	ZEO	The Nasdaq Stock Market LLC
Warrants, each exercisable for one share of Class A Common Stock at a price of $11.50, subject to adjustment	ZEOWW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☒

Smaller reporting company ☒

Emerging growth company ☒

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of May 13, 2026, 35,139,912 shares of Class A Common Stock, par value $0.0001, were issued and outstanding and 22,880,000 shares of Class V Common Stock, par value $0.0001, were issued and outstanding.

ZEO ENERGY CORP.

Quarterly Report on Form 10-Q

Period Ended March 31, 2026

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION		1
Item 1. Financial Statements		1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3. Quantitative and Qualitative Disclosures about Market Risk		28
Item 4. Control and Procedures		28
PART II – OTHER INFORMATION		29
Item 1. Legal Proceedings		29
Item 1A. Risk Factors		29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		29
Item 3. Defaults Upon Senior Securities		29
Item 4. Mine Safety Disclosures		29
Item 5. Other Information		29
Item 6. Exhibits		30
SIGNATURES		31

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

ZEO ENERGY CORP.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

		Page
Financial Statements (Unaudited)		1
Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025		2
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025		3
Condensed Consolidated Statements of Changes in Redeemable Non-Controlling Interests and Stockholders’ Equity for the Three Months Ended March 31, 2026 and 2025		4
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025		6
Notes to Condensed Consolidated Financial Statements		7-18

ZEO ENERGY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2026			2025
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	1,731,160		$	6,137,939
Accounts receivable, net of allowance of $4,978,233 and $4,777,550, respectively		10,360,929			8,158,909
Accounts receivable – related parties		765,757			611,807
Inventories		854,733			852,179
Contract assets		2,337,408			2,598,623
Prepaid expenses and other current assets		3,982,540			4,192,590
Total Current Assets		20,032,527			22,552,047

Other assets		67,667			92,712
Property and equipment, net		1,988,422			2,830,490
Operating lease right-of-use assets		732,192			897,476
Finance lease right-of-use assets		276,421			310,539
Note receivable – related party		6,343,069			3,153,485
Goodwill		27,091,695			27,091,695
TOTAL ASSETS	$	56,531,993		$	56,928,444

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	5,010,855		$	3,769,078
Accrued expenses and other current liabilities		1,847,476			2,421,237
Accrued expenses and other current liabilities – related parties		3,849,754			49,269
Contract liabilities		623,591			1,301,393
Current portion of operating lease obligations		611,704			684,819
Current portion of finance lease obligations		145,767			142,095
Current portion of long-term debt		24,183			23,526
Total Current Liabilities		12,113,330			8,391,417

Operating lease obligations, net of current portion		196,281			304,295
Finance lease obligations, net of current portion		171,017			208,865
Long-term debt, net of current portion		49,288			55,586
Warrant liabilities		567,180			491,280
TOTAL LIABILITIES		13,097,096			9,451,443

Redeemable Noncontrolling Interests
Class A convertible preferred units, 1,500,000 units issued and outstanding as of March 31, 2026 and December 31, 2025		17,479,714			17,207,469
Class B units, 21,380,000 and 22,880,000 units issued and outstanding as of March 31, 2026 and December 31, 2025, respectively		12,272,120			24,939,200

Stockholders’ Equity
Class V common stock, $0.0001 par value, 100,000,000 authorized shares; 22,880,000 and 24,380,000 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively		2,288			2,438
Class A common stock, $0.0001 par value, 300,000,000 authorized shares; 35,139,912 and 33,180,843 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively		3,514			3,318
Additional paid-in capital		65,063,624			63,394,456
Accumulated other comprehensive loss		8,251			(4,895	)
Accumulated deficit		(51,394,614	)		(58,064,985	)
TOTAL STOCKHOLDERS’ EQUITY		13,683,063			5,330,332
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY	$	56,531,993		$	56,928,444

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

ZEO ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended March 31,
	2026			2025
Revenues
Revenue, net	$	12,155,521		$	6,216,391
Related party revenue, net		1,029,423			2,567,304
Total Net Revenues		13,184,944			8,783,695

Operating Expenses
Cost of revenues		7,580,046			4,789,679
Depreciation and amortization		1,081,528			4,900,729
Sales and marketing		3,011,770			3,112,799
General and administrative		6,276,724			9,491,886
Total Operating Expenses		17,950,068			22,295,093

LOSS FROM OPERATIONS		(4,765,124	)		(13,511,398	)

Other Income (Expense)
Other income		68,437			82,363
Interest expense		(10,853	)		(30,277	)
Gain (loss) on change in fair value of warrant liabilities		(75,900	)		663,449
Total Other Income (Expense)		(18,316	)		715,535

NET LOSS FROM OPERATIONS BEFORE INCOME TAXES		(4,783,440	)		(12,795,863	)
Income tax benefit (provision)		92,129			(523,500	)
NET LOSS	$	(4,691,311	)	$	(13,319,363	)

Less: Net loss attributable to redeemable noncontrolling interests		(1,178,637	)		(6,958,098	)
NET LOSS ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS	$	(3,512,674	)	$	(6,361,265	)

LOSS PER CLASS A COMMON SHARE – BASIC AND DILUTED	$	(0.11	)	$	(0.48	)
WEIGHTED-AVERAGE CLASS A COMMON SHARES OUTSTANDING – BASIC AND DILUTED		33,377,040			13,252,964

COMPREHENSIVE LOSS
Foreign currency translation adjustments		(13,146	)		–
NET COMPREHENSIVE LOSS	$	(3,499,528	)	$	(6,361,265	)

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

ZEO ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE
NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED MARCH 31, 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		1,500,000	$	16,130,871		33,730,000		$	115,693,900			35,230,000		$	3,523			13,252,964	$	1,326	$	14,523,963		$	–	$	(103,440,891	)	$	(88,912,079	)
Stock-based compensation		–		–		–			–			–			–			–		–		2,137,247			–		–			2,137,247
Class A common stock issued to employees for services		–		–		–			–			–			–			43,500		4		63,505			–		–			63,509
Reverse recapitalization related deferred taxes and adjustments		–		–		–			–			–			–			–		–		(238,491	)		–		–			(238,491	)
Class A common stock issued in exchange for OpCo Class B units and corresponding Class V common stock		–		–		(8,500,000	)		(18,785,000	)		(8,500,000	)		(850	)		8,500,000		850		18,785,000			–		–			18,785,000
Subsequent measurement of redeemable noncontrolling interests		–		–		–			(51,448,264	)		–			–			–		–		–			–		51,448,264			51,448,264
Net income (loss)		–		405,237		–			(7,363,336	)		–			–			–		–		–			–		(6,361,265	)		(6,361,265	)
Balance, March 31, 2025		1,500,000	$	16,536,108		25,230,000		$	38,097,300			26,730,000		$	2,673			21,796,464	$	2,180	$	35,271,224		$	–	$	(58,353,892	)	$	(23,077,815	)

ZEO ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE
NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 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		1,500,000	$	17,207,469			22,880,000		$	24,939,200			24,380,000		$	2,438			33,180,843	$	3,318	$	63,394,456		$	(4,895	)	$	(58,064,985	)	$	5,330,332
Stock-based compensation		–		–			–			–			–			–			–		–		663,053			–			–			663,053
Class A common stock issued upon vesting of restricted stock awards		–		–			–			–			–			–			120,051		12		(12	)		–			–			–
Tax withholding paid related to stock-based compensation		–		–			–			–			–			–			–		–		(11,609	)		–			–			(11,609	)
Class A common stock issued to employees for services		–		–			–			–			–			–			31,793		3		31,312			–			–			31,315
Class A common stock issued in exchange for OpCo Class B units and corresponding Class V common stock		–		–			(1,500,000	)		(873,000	)		(1,500,000	)		(150	)		1,500,000		150		873,000			–			–			873,000
Class A common stock issued in connection with a committed equity facility, net of offering costs		–		–			–			–			–			–			241,000		24		13,431			–			–			13,455
Class A common stock issued for a commitment fee		–		–			–			–			–			–			66,225		7		99,993			–			–			100,000
Dividends paid to preferred unit holders		–		(160,153	)		–			–			–			–			–		–		–			–			–			–
Foreign currency translation		–		–			–			–			–			–			–		–		–			13,146			–			13,146
Subsequent measurement of redeemable noncontrolling interests		–		–			–			(10,183,045	)		–			–			–		–		–			–			10,183,045			10,183,045
Net income (loss)		–		432,398			–			(1,611,035	)		–			–			–		–		–			–			(3,512,674	)		(3,512,674	)
Balance, March 31, 2026		1,500,000	$	17,479,714			21,380,000		$	12,272,120			22,880,000		$	2,288			35,139,912	$	3,514	$	65,063,624		$	8,251		$	(51,394,614	)	$	13,683,063

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

ZEO ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended March 31,
	2026			2025

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(4,691,311	)	$	(13,319,363	)
Adjustment to reconcile net loss to net cash used in operating activities
Depreciation and amortization		1,081,528			4,885,729
Amortization of debt discount		–			15,000
(Gain) loss on change in fair value of warrant liabilities		75,900			(663,449	)
Stock-based compensation		663,053			2,193,630
Class A common stock issued to employees for services		31,315			63,509
Provision for credit losses		200,683			3,538,569
Non-cash operating lease expense		165,284			180,643
Changes in operating assets and liabilities:
Accounts receivable		(2,402,703	)		1,742,908
Accounts receivable – related parties		(153,950	)		(94,441	)
Inventories		(2,554	)		25,075
Contract assets		261,215			32,609
Prepaids and other current assets		204,075			1,138,288
Other assets		25,045			–
Interest receivable – related parties		(39,584	)		(37,656	)
Accounts payable		1,254,681			788,747
Accrued expenses and other current liabilities		(467,073	)		(1,465,223	)
Accrued expenses and other current liabilities – related parties		3,800,485			(1,038,972	)
Contract liabilities		(677,802	)		(82,190	)
Contract liabilities – related parties		–			(2,000	)
Operating lease payments		(181,129	)		(164,851	)
Net cash used in operating activities		(852,842	)		(2,263,438	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(205,342	)		(372,578	)
Investment in note receivable – related party		(3,150,000	)		–
Net cash used in investing activities		(3,355,342	)		(372,578	)

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from Class A common stock issued in connection with a committed equity facility		13,455			–
Repayments of finance lease liabilities		(34,176	)		(31,696	)
Repayments of debt		(5,641	)		(72,300	)
Dividends paid to OpCo Class A preferred unit holders		(160,153	)		–
Tax withholdings paid related to stock-based compensation		(11,609	)		–
Net cash used in financing activities		(198,124	)		(103,996	)

Effect of foreign exchange on cash		(471	)		–

NET CHANGE IN CASH AND CASH EQUIVALENTS		(4,406,779	)		(2,740,012	)
Cash and cash equivalents, beginning of period		6,137,939			5,634,115
Cash and cash equivalents, end of the period	$	1,731,160		$	2,894,103

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	$	10,853		$	25,785
Cash paid for income taxes	$	–		$	–

NON-CASH INVESTING AND FINANCING ACTIVITIES
Net loss attributable to redeemable noncontrolling interest	$	1,611,035		$	7,363,336
OpCo Class A preferred dividends	$	432,398		$	405,237
Subsequent measurement of redeemable noncontrolling interest	$	10,183,045		$	51,448,264
Class A common stock issued upon vesting of restricted stock awards	$	12		$	–
Class A common stock issued in exchange for Class V common stock	$	150		$	850
Fair value of Class A common stock issued in exchange for OpCo Class B units	$	873,000		$	18,785,000
Class A common stock issued for commitment fee	$	100,000		$	–
Reverse recapitalization related deferred taxes and adjustments	$	–		$	238,491

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

Zeo Energy Corp.

Notes to the CONDENSED Consolidated Financial Statements

March 31, 2026

(UNAUDITED)

NOTE 1—BASIS OF PRESENTATION AND OTHER INFORMATION

The accompanying unaudited condensed consolidated financial statements of Zeo Energy Corp. (the “Company” or “Zeo”) 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 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 do not include all disclosures required by U.S. GAAP. The interim unaudited condensed consolidated financial statements should be read in conjunction with those consolidated financial statements included in the Form 10-K, 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 three months ended March 31, 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.

Recently Adopted Accounting Pronouncements

In November 2024, the FASB issued 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 reporting annual 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 Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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.

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 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 March 31, 2026, the Company had cash and cash equivalents of $1.7 million, positive working capital of $7.9 million, and total stockholders’ equity of $13.7 million. For the three months ended March 31, 2026, the Company incurred a net loss of $4.7 million and $0.9 million of cash used in operating activities. Management has assessed the going concern assumptions of the Company during the preparation of these condensed consolidated financial statements.

The Company has operational plans to increase revenue and move towards the goal of profitable operations in 2026, which plans are expected to improve cash flows. The operational plan includes an increase in the number of sales agents to increase revenue and improved 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 with White Lion Capital LLC (the “White Lion ELOC”), which provides the Company the right to sell up to $30.0 million in shares of 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 resets once White Lion Capital LLC liquidates their holdings in the open market (see Note 10—Redeemable Noncontrolling Interests and Equity for additional information). The Company also has other opportunities to raise capital, such as through revenue generating initiatives, private placements, public offerings or repricing of outstanding warrants. In addition, in June 2026 the Company will become eligible to utilize a universal shelf registration statement to raise funding for the Company.

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.

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 months ended March 31, 2026 and 2025 are disaggregated as follows:

	Three Months Ended March 31,
	2026		2025
Solar system installations, net	$	13,045,024	$	8,374,912
Roofing installations		139,920		408,783
Energy storage solutions		–		–
Total net revenues	$	13,184,944	$	8,783,695

For the three months ended March 31, 2026 and 2025, the Company had two and four customers, respectively, that accounted for more than 10% of revenue. Aggregate revenue from these customers was $7,973,865 and $7,276,203 for the three months ended March 31, 2026 and 2025, respectively.

Segment Reporting

The Company operates in two operating and reportable segments: (1) Sunergy, which includes the design, procurement, installation, and servicing of residential solar photovoltaic systems and related roofing services; and (2) Heliogen, which includes concentrated solar power and long-duration energy generation and storage technology solutions for commercial and industrial applications.

The Chief Operating Decision Maker (“CODM”) evaluates segment performance and allocates resources based on the operating results of each reportable segment, including revenues, cost of revenues, operating expenses, and net loss.

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.

Segment information for the three months ended March 31, 2026 and 2025 is as follows:

	Three Months Ended March 31, 2026
	Sunergy			Heliogen			Total
Net revenues	$	13,184,944		$	–		$	13,184,944
Operating expenses
Cost of revenues ⁽¹⁾		7,580,046			–			7,580,046
Depreciation and amortization		1,081,528			–			1,081,528
Sales and marketing ⁽²⁾		3,009,169			2,601			3,011,770
General and administrative		5,336,035			940,689			6,276,724
Total operating expenses		17,006,778			943,290			17,950,068

Loss from operations		(3,821,834	)		(943,290	)		(4,765,124	)

Other income (expense)
Other income		59,580			8,857			68,437
Interest expense		(10,853	)		–			(10,853	)
Loss on change in fair value of warrant liabilities		(75,900	)		–			(75,900	)
Total other income (expense)		(27,173	)		8,857			(18,316	)

Net loss before income taxes		(3,849,007	)		(934,433	)		(4,783,440	)
Income tax provision		92,129			–			92,129
Net loss	$	(3,756,878	)	$	(934,433	)	$	(4,691,311	)

	Three Months Ended March 31, 2026
	Sunergy		Heliogen		Total
(1) Cost of revenues
Direct labor	$	2,069,421	$	–	$	2,069,421
Materials		4,860,545		–		4,860,545
Other		650,080		–		650,080
Total cost of revenues	$	7,580,046	$	–	$	7,580,046

(2) Sales and marketing
Commissions expense	$	2,278,640	$	2,601	$	2,281,241
Other sales and marketing		730,529		–		730,529
Total sales and marketing	$	3,009,169	$	2,601	$	3,011,770

	Three Months Ended March 31, 2025
	Sunergy			Heliogen		Total
Net revenues	$	8,783,695		$	–	$	8,783,695
Operating expenses
Cost of revenues ⁽¹⁾		4,789,679			–		4,789,679
Depreciation and amortization		4,900,729			–		4,900,729
Sales and marketing ⁽²⁾		3,112,799			–		3,112,799
General and administrative		9,491,886			–		9,491,886
Total operating expenses		22,295,093			–		22,295,093

Loss from operations		(13,511,398	)		–		(13,511,398	)

Other income (expense)
Other income		82,363			–		82,363
Interest expense		(30,277	)		–		(30,277	)
Loss on change in fair value of warrant liabilities		663,449			–		663,449
Total other income (expense)		715,535			–		715,535

Net loss before income taxes		(12,795,863	)		–		(12,795,863	)
Income tax provision		(523,500	)		–		(523,500	)
Net loss	$	(13,319,363	)	$	–	$	(13,319,363	)

	Three Months Ended March 31, 2025
	Sunergy		Heliogen		Total
(1) Cost of revenues
Direct labor	$	1,719,462	$	–	$	1,719,462
Materials		2,224,562		–		2,224,562
Other		845,655		–		845,655
Total cost of revenues	$	4,789,679	$	–	$	4,789,679

(2) Sales and marketing
Commissions expense	$	1,864,112	$	–	$	1,864,112
Other sales and marketing		1,248,687		–		1,248,687
Total sales and marketing	$	3,112,799	$	–	$	3,112,799

NOTE 4—PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets as of March 31, 2026 and December 31, 2025 consisted of the following:

	March 31, 2026		December 31, 2025
Prepaid expenses	$	566,182	$	539,844
Deferred installation and material costs		1,459,347		1,770,057
Receivable related to Lumio asset purchase		1,004,489		1,004,489
Tax receivables		369,025		307,542
Employee receivables and advances on sales commissions		126,778		105,928
Other current assets		456,719		464,730
Total prepaid expenses and other current assets	$	3,982,540	$	4,192,590

NOTE 5—PROPERTY AND EQUIPMENT

Property and equipment as of March 31, 2026 and December 31, 2025 consisted of the following:

	March 31,			December 31,
	2026			2025
Internally-developed software	$	1,125,043		$	2,211,626
Office furniture and equipment		384,368			384,368
Vehicles		2,482,078			2,477,033
Leasehold improvements		10,000			10,000
Total property and equipment		4,001,489			5,083,027
Less: accumulated depreciation		(2,013,067	)		(2,252,537	)
Total property and equipment, net	$	1,988,422		$	2,830,490

Depreciation expense for the three months ended March 31, 2026 and 2025 was $1,047,410 and $219,259, respectively.

During the three months ended March 31, 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 amortization to reflect the shortened period of expected use. As a result, the Company recognized additional depreciation expense of $833,014 during the three months ended March 31, 2026, which reduced the net carrying value of the internally-developed software to zero. The gross cost of $1,286,879 and related accumulated depreciation were removed from the condensed consolidated balance sheet upon retirement of the asset.

NOTE 6—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities as of March 31, 2026 and December 31, 2025 consisted of the following:

	March 31, 2026		December 31, 2025
Accrued payroll liabilities	$	635,513	$	506,829
Accrued commissions		144,492		998,964
Accrued taxes		383,779		414,490
Accrued credit cards		288,331		250,055
Other accrued liabilities		395,361		250,899
Total accrued expenses and other current liabilities	$	1,847,476	$	2,421,237

Accrued expenses and other current liabilities – related parties as of March 31, 2026 and December 31, 2025 consisted of the following:

	March 31, 2026		December 31, 2025
Customer advances	$	3,849,754	$	49,269
Total accrued expenses and other current liabilities – related parties	$	3,849,754	$	49,269

NOTE 7—LEASES

Operating Leases

Operating leases as of March 31, 2026 and December 31, 2025 consisted of the following:

	March 31, 2026			December 31, 2025
Operating lease right-of-use assets	$	732,192		$	897,476

Operating lease liabilities, current portion		611,704			684,819
Operating lease liabilities, long-term		196,281			304,295
Total operating lease liabilities	$	807,985		$	989,114

Weighted-average remaining lease term (years)		1.40			1.58
Weighted-average discount rate		4.96	%		4.97	%

The components of operating lease expense consist of the following for the three months ended March 31, 2026 and 2025:

	March 31, 2026		March 31, 2025
Fixed operating lease expense	$	176,917	$	196,574
Short-term and variable operating lease expense		284,856		11,989
Total net operating lease expense	$	461,773	$	208,563

For the three months ended March 31, 2026 and 2025, cash paid for amounts included in the measurement of operating lease liabilities totaled $192,763 and $180,784, respectively.

As of March 31, 2026, future minimum lease payments under operating lease liabilities were as follows:

Year Ending December 31,	Amount
2026 (remaining)	$	525,100
2027		244,051
2028		69,147
Total		838,298
Less: imputed interest		(30,313	)
Total operating lease liabilities	$	807,985

Finance Leases

Finance leases ROU assets and liabilities as of March 31, 2026 and December 31, 2025 consisted of the following:

	March 31, 2026			December 31, 2025
Finance lease right-of-use assets	$	276,421		$	310,539

Finance lease liabilities, current portion		145,767			142,095
Finance lease liabilities, long-term		171,017			208,865
Total finance lease liabilities	$	316,784		$	350,960

Weighted-average remaining lease term (years)		2.03			2.28
Weighted-average discount rate		9.76	%		9.76	%

Finance lease costs included in depreciation and amortization in the condensed consolidated statements of operations were $34,118 and $34,119 for the three months ended March 31, 2026 and 2025, respectively. Interest expense related to finance leases was $8,717 and $11,174 for the three months ended March 31, 2026 and 2025, respectively. For the three months ended March 31, 2026 and 2025, cash paid for amounts included in the measurement of finance lease liabilities and interest expense totaled $42,893 and $42,870, respectively.

As of March 31, 2026, future minimum lease payments under finance leases were as follows:

Year Ending December 31,	Amount
2026 (remaining)	$	128,677
2027		171,570
2028		52,603
Total		352,850
Less: imputed interest		(36,066	)
Total finance lease liabilities	$	316,784

NOTE 8—RELATED PARTY TRANSACTIONS

Solar Leasing Arrangements

Certain customers of the Company finance their solar energy system purchases through Solar Leasing I, LLC (“SLI”). These arrangements are substantially similar to those with unrelated third-party financing providers.

For the three months ended March 31, 2026 and 2025, the Company recognized related party revenue of $1,029,423 and $2,567,304, respectively. As of March 31, 2026 and December 31, 2025, the Company had accounts receivable of $765,757 and $611,807, respectively, due from SLI related to these arrangements.

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 $10 million. The loan is also personally guaranteed by the Company’s CEO, who serves as the manager of SLI through White Horse Energy, LLC (“White Horse”). As of March 31, 2026 and December 31, 2025, the outstanding balance under the loan was $9,937,246 and $9,976,752, respectively.

Note Receivable

During 2025, SLI performed a fair-market-value assessment of certain lease assets. As a result of this assessment, SLI paid a discretionary rebate of $3,150,000 to the Company based on the excess of fair value over the carrying value of the assets. The Company subsequently transferred the rebate proceeds as a subordinated loan, recorded as a note receivable from White Horse.

On January 30, 2026, the Company increased the subordinated loan in the form of a note receivable with White Horse Energy, LLC from $3.0 million to $6.15 million under the same terms as the original note.

For the three months ended March 31, 2026 and 2025, the Company recognized interest income of $39,584 and $37,656, respectively, related to the note receivable, which is included in other income in the condensed consolidated statements of operations. As of March 31, 2026, the outstanding principal balance of the loan was $6,150,000 with accrued interest of $193,069. As of December 31, 2025, the outstanding principal balance of the loan was $3,000,000 with accrued interest of $153,485. The outstanding principal and accrued interest balances are included in note receivable – related parties in the condensed consolidated balance sheets.

Tax Receivable Agreement

In connection with the consummation of the Sunergy business combination on March 13, 2024, the Company entered into a TRA with OpCo and certain OpCo members (the “TRA Holders”). Pursuant to the TRA, the Company is required to pay the TRA Holders 85% of the net cash savings, if any, in U.S. federal, state, and local income and franchise taxes that the Company actually realizes, or is deemed to realize in certain circumstances, as a result of increases in tax basis and certain other tax attributes arising from the Sunergy business combination and related transactions.

As of March 31, 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 $4.6 million as of March 31, 2026 and $5.7 million as of December 31, 2025. If realization of the related tax benefits becomes more likely than not in future periods, the Company will record a liability related to the TRA with a corresponding charge to expense in the condensed consolidated statements of operations.

NOTE 9—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 $955,914 for residential solar installation services performed between 2020 and 2024. The Company is the successor-in-interest to Lift Energy Construction, Inc. and Lumio HX, Inc., having acquired all rights under the parties’ Master Installation Agreement and related accounts receivable pursuant to a November 1, 2024 bankruptcy sales order. The parties are currently engaged in discovery and the defendants have asserted no counterclaims at this time. The Company anticipates recovery from SolKraft; however, it is too early to assess the likely outcome or range of potential recovery as of March 31, 2026.

As of March 31, 2026 and December 31, 2025, the Company was not aware of any 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 10—REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

The table below reflects share information about the Company’s capital stock as of March 31, 2026:

	Par Value		Authorized		Issued		Treasury Stock		Outstanding
Class A common stock	$	0.0001		300,000,000		35,139,912		–		35,139,912
Class V common stock	$	0.0001		100,000,000		22,880,000		–		22,880,000
Preferred stock	$	0.0001		10,000,000		–		–		–
Class A convertible preferred units	$	0.0001		1,500,000		1,500,000		–		1,500,000
Class A units	$	0.0001		5,026,964		5,026,964		–		5,026,964
Class B units	$	0.0001		33,730,000		21,380,000		–		21,380,000
Total shares				450,256,964		85,926,876		–		85,926,876

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 three months ended March 31, 2026, 1,500,000 shares of Class A common stock were issued in exchange for OpCo Class B units and the cancellation of corresponding shares of Class V common stock.

During the three months ended March 31, 2026, 31,793 shares of Class A common stock were issued to an employee for services valued at $31,315.

On January 27, 2026, the Company entered into the White Lion ELOC with White Lion Capital LLC (“White Lion”), pursuant to which the Company has the right, but not the obligation, to sell to White Lion up to $30.0 million in aggregate gross purchase price of newly issued shares of Class A common stock, subject to certain limitations and conditions, over a period ending on the earlier of January 27, 2029 or the purchase of the full commitment amount. The Company’s ability to issue shares under the White Lion ELOC is subject to certain limitations, including Nasdaq stockholder approval requirements and beneficial ownership limitations under the agreement. As a result, the actual amount available under the facility may be significantly less than the stated $30.0 million commitment amount depending on the Company’s stock price and shares available for issuance. Specifically, the White Lion ELOC is limited to selling shares equal to 4.99% of the outstanding shares at the time of sale and resets once White Lion Capital LLC liquidates their holdings in the open market. In consideration for the commitment, the Company agreed to issue 66,225 shares of Class A common stock to White Lion with a fair value of $100,000. Concurrently, the Company entered into a Registration Rights Agreement with White Lion. During the three months ended March 31, 2026, the Company sold 241,000 shares of Class A common stock under the White Lion ELOC for gross proceeds of $272,020. Offering costs of $258,565, including registration and legal costs associated with the facility, were offset against the proceeds, resulting in net proceeds of $13,455.

On March 13, 2026, 46,175 shares of Class A common stock, net of tax withholding, were issued upon vesting of restricted stock awards granted in March 2024. See Note 11—Stock-Based Compensation for additional information.

On February 5, 2026, 73,876 shares of Class A common stock, net of tax withholding, were issued upon vesting of restricted stock awards granted in February 2025. See Note 11—Stock-Based Compensation for additional information.

Redeemable Noncontrolling Interests

During the three months ended March 31, 2026, 1,500,000 OpCo units were exchanged for shares of the Company’s Class A common stock. As a result, as of March 31, 2026, 21,380,000 OpCo units remained outstanding. The prior investors’ interests in OpCo represent redeemable noncontrolling interests. Holders of OpCo units may exchange their units, together with the cancellation of a corresponding number of shares of Class V common stock, for shares of the Company’s Class A common stock on a one-for-one basis, or cash proceeds of equal value at the time of redemption. Any redemption of OpCo units for cash must be funded through a private or public offering of Class A common stock and is subject to approval by the Company’s Board of Directors. Future exchanges of OpCo units may generate incremental tax attributes and related cash tax savings for the Company. Pursuant to the TRA, the Company is generally required to pay the TRA holders 85% of the net cash tax savings realized as a result of increases in tax basis and certain other tax attributes arising from such exchanges. See Note 8—Related Party Transactions for additional information regarding the TRA.

As of March 31, 2026 and December 31, 2025, the noncontrolling interest holders owned approximately 37.8% and 40.8%, respectively, of the outstanding OpCo common units.

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 distributions at a rate of 10% per annum. During the three months ended March 31, 2026, the Company recognized $432,398 of preferred unit distributions and paid cash distributions of $160,153 to holders of the Class A preferred units. The financial results of OpCo are consolidated with those of the Company, with the redeemable noncontrolling interests’ share of net loss presented separately in the condensed consolidated financial statements.

NOTE 11—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 3,220,400 shares of Class A common stock were initially reserved for issuance under the Incentive Plan (the “Plan Share Reserve”). Each award granted under the Incentive Plan reduces the Plan Share Reserve by the number of shares underlying the award.

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) 2% of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or (ii) a lesser number of shares determined by the Board of Directors. The purpose of the Incentive Plan is to enable the Company and its subsidiaries to attract and retain key personnel and to align the interests of directors, officers, employees, consultants, and advisors with those of the Company’s stockholders through equity-based compensation.

The following table summarizes restricted stock unit activity under the Incentive Plan for the three months ended March 31, 2026:

	RSUs			Weighted- Average Grant Date Fair Value
Outstanding at December 31, 2025		975,002		$	2.97
Granted		–			–
Vested		(130,000	)		(4.26	)
Forfeited		(30,000	)		(2.57	)
Outstanding at March 31, 2026		815,002		$	2.78

The following table summarizes equity compensation expense and remaining unrecognized compensation cost for grants outstanding under the Incentive Plan during the three months ended March 31, 2026 and 2025:

	Stock-Based Compensation Expense
	Three Months Ended March 31,				Unrecognized		Weighted- Average Remaining
Grant Date	2026		2025		Expense		Life
March 13, 2024	$	87,359	$	718,674	$	329,886		0.87
February 5, 2025		177,648		189,499		1,160,229		1.85
July 5, 2025		19,492		–		178,891		2.27
November 5, 2025		8,974		–		94,633		2.60
Total	$	293,473	$	908,173	$	1,763,639		1.06

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). Grants under the Management Incentive Plan will be made after ESGEN Closing.

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 100% of all related expense and deduction items to Sun Managers. These compensatory payments are accounted for as capital contributions from Sun Managers to the Company, with no new equity units issued in return.

On March 31, 2026, Sun Managers granted an aggregate of 527,953 restricted shares of Zeo Class A common stock under the Management Incentive Plan to five employees. The restricted shares vested immediately upon grant. During the three months ended March 31, 2026, the Company recognized $303,045 in equity compensation expense related to these awards.

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 40 shares per kW installed for projects sold by the manager’s organization, provided they exceed 1,500 kW installed during a calendar year, and as long as the manager sells 700kW the subsequent calendar year. The number of shares awarded may be reduced if the average price for Zeo stock during the quarter in which installations are completed exceeds $5 per share, the number of shares granted per kW will be correspondingly decreased.

The managers become eligible to receive certain grants of vested shares under the Seasonal Manager Stock Compensation Plan as follows:

	●	50% of the shares for which Manager becomes eligible during a calendar year will be granted in Q1 (prior to the end of March) of the following calendar year (the “Tranche 1 Grant”) if Manager remains eligible at the time of the grant.

	●	The remaining 50% of the shares for which Manager becomes eligible during a calendar year are granted in the Q1 of the second year following the calendar year in which eligibility is earned (the “Tranche 2 Grant”) if Manager remains eligible at the time of the grant.

On March 31, 2026, Sun Managers granted an aggregate of 355,264 restricted shares of Zeo Class A common stock under the Management Incentive Plan to six sales managers. The restricted shares vest in two equal installments as follows.

	●	One-half (1/2) immediately on the grant date; and

	●	One-half (1/2) 12 months following the grant date.

The following table summarizes equity compensation expense and remaining unrecognized compensation cost for grants outstanding under the Seasonal Manager Compensation Plan during the three months ended March 31, 2026 and 2025:

	Stock-Based Compensation Expense
	Three Months Ended March 31,					Unrecognized		Weighted- Average Remaining
Grant Date	2026			2025		Expense		Life
March 31, 2025	$	(35,426	)	$	436,323	$	–		–
March 31, 2026		101,961			–		101,961		1.00
Total	$	66,535		$	436,323	$	101,961		1.00

The negative compensation expense for the three months ended March 31, 2026 reflects the forfeiture and recapture of previously recognized compensation cost resulting from the termination of three sales managers prior to vesting.

NOTE 12—FAIR VALUE MEASUREMENTS

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, inventories, prepaid expenses and other current assets, 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 and notes payable also approximate fair value as these instruments bear interest rates that are consistent with current market rates for similar instruments.

Recurring Fair Value Measurements

The Company measures certain financial instruments at fair value on a recurring basis. As of March 31, 2026, the Company’s financial instruments measured at fair value on a recurring basis consist of warrant liabilities.

The fair value of financial instruments measured at fair value on a recurring basis as of March 31, 2026 consisted of the following:

	Fair Value Measurements as of March 31, 2026
Description	Level 1		Level 2		Level 3		Total
Warrant liabilities	$	567,180	$	–	$	–	$	567,180

The following table presents changes in the Company’s warrant liabilities measured at fair value on a recurring basis:

	Amount
Warrant Liabilities
Balance as of December 31, 2025	$	491,280
Loss on change in fair value of warrant liabilities		75,900
Extinguishment of warrant liabilities upon settlement		–
Balance as of March 31, 2026	$	567,180

NOTE 13—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 2.3% benefit and (3.9)% provision for the three months ended March 31, 2026 and 2025, respectively. The effective tax rate differs from the U.S. federal statutory tax rate primarily due to the noncontrolling interest ownership in OpCo, which is treated as a partnership for U.S. federal income tax purposes, as well as changes in the valuation allowance on deferred tax assets.

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 certain deferred tax assets will be realized and therefore recorded a valuation allowance against those deferred tax assets as of March 31, 2026 and December 31, 2025.

Due to the Company’s Up-C organizational structure, a portion of the Company’s earnings is attributable to noncontrolling interests in OpCo, which is treated as a partnership for U.S. federal income tax purposes. Accordingly, income attributable to these noncontrolling interests is generally not subject to corporate-level income taxes, which reduces the Company’s overall effective tax rate.

The components of the deferred income tax assets and liabilities were as follows:

	March 31, 2026			December 31, 2025
Deferred tax assets:
Net operating losses and tax credit carry-forward	$	1,364,033		$	986,740
Accrued stock compensation		406,435			386,841
Section 743(b)		3,815,762			4,196,394
Other		3,363			3,363
Investment in Sunergy		4,972,025			5,824,820
Total deferred tax assets		10,561,618			11,398,158
Valuation allowance		(10,561,618	)		(11,398,158	)
Net deferred tax assets	$	–		$	–

NOTE 14—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 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 into Class A common shares.

For the three months ended March 31, 2026 and 2025, the Company reported a net loss. Accordingly, all potentially dilutive securities were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive, and diluted net loss per share equals basic net loss per share. As of March 31, 2026 and 2025, 37,495,002 and 43,221,852 potential common share equivalents, respectively, consisting of convertible OpCo Class A Preferred Units, exchangeable OpCo Class B units, convertible notes, warrants, and restricted stock awards, were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive.

The following table presents the computation of the basic and diluted loss per share of Class A common stock for the three months ended March 31, 2026 and 2025:

	Three Months Ended March 31,
	2026			2025
Numerator
Net loss attributable to Class A common stockholders	$	(3,512,674	)	$	(6,361,265	)
Denominator
Weighted-average Class A common shares outstanding – basic and diluted		33,377,040			13,252,964
Loss per Class A common share – basic and diluted	$	(0.11	)	$	(0.48	)

NOTE 15—SUBSEQUENT EVENTS

On April 23, 2026, the Company 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, 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 it meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq’s Capital Market, 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.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

References to the “Company,” “our,” “us” or “we” refer to Zeo Energy Corp. 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 rapidly growing solar sales management company, and Sunergy Solar, LLC, a large solar installation company based in Florida, to Sunergy Renewables, LLC.

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 March 31, 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.

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 Financing Transaction

On January 27, 2026, we entered into the White Lion Purchase Agreement with White Lion. We also entered into a Registration Rights Agreement (“RRA”) with White Lion on January 27, 2026. Pursuant to the White Lion Purchase Agreement, the Company has the right, but not the obligation, to require White Lion to purchase, from time to time, up to $30.0 million in aggregate gross purchase price of newly issued shares of our Class A Common Stock, subject to certain limitations and conditions set forth in the White Lion Purchase Agreement. Subject to the satisfaction of certain customary conditions, the Company’s right to sell shares to White Lion commenced on the date of the execution of White Lion Purchase Agreement and extends until White Lion Commitment Period.

During the White Lion Commitment Period, subject to the terms and conditions of the White Lion Purchase Agreement, the Company may notify White Lion when the Company exercises its right to sell shares of its Class A Common Stock. The Company may deliver a Rapid Purchase Notice (as such term is defined in the White Lion Purchase Agreement), where the Company can require White Lion to purchase up to a number of shares of Class A Common Stock equal to the 20% of Average Daily Trading Volume (as such term is defined in the White Lion Purchase Agreement). The Company may also deliver an Accelerated Purchase Notice (as such term is defined in the White Lion Purchase Agreement), where the Company may require White Lion to purchase up to a number of shares of Class A Common Stock equal to 20% of the Average Daily Trading Volume. White Lion may waive such limits under any notice at its discretion and purchase additional shares.

The price to be paid by White Lion for any shares that the Company requires White Lion to purchase will depend on the type of purchase notice that the Company delivers. For shares being issued pursuant to Accelerated Purchase Notice, the purchase price per share will be equal to the lowest traded price of Class A Common Stock during one (1) hour period following the White Lion’s written consent of the acceptance of the notice. For shares being issued pursuant to a Rapid Purchase Notice, the purchase price per share will be equal to the average of the three (3) lowest traded prices on the date that the notice is delivered.

No purchase notice shall result in White Lion beneficially owning (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 thereunder) more than 4.99% of the number of shares of the Class A Common Stock outstanding immediately prior to the issuance of shares of Class A Common Stock issuable pursuant to a purchase notice.

The Company may deliver purchase notices under the White Lion Purchase Agreement, subject to market conditions, and in light of our capital needs, from time to time and under the limitations contained in the White Lion Purchase Agreement. Any proceeds that the Company receives under the White Lion Purchase Agreement are expected to be used for working capital and general corporate purposes.

The White Lion Purchase Agreement may be terminated by the Company at any time and for any reason, in its sole discretion, subject to the Company having delivered the applicable Commitment Shares (as defined below). The White Lion Purchase Agreement will also terminate automatically upon the earlier of the expiration of the White Lion Commitment Period or the occurrence of certain bankruptcy or insolvency-related events involving the Company.

In consideration for the commitments of White Lion, as described above, the Company is contractually committed to issue to White Lion the Commitment Shares. The Commitment Shares are deemed fully earned and non-refundable as of the execution date of the White Lion Purchase Agreement; however, if the White Lion Purchase Agreement is terminated by the Company as a result of a material breach by White Lion, the Company may pursue all remedies available at law or in equity, including reimbursement or recovery of such Commitment Shares, to the extent permitted by applicable law.

Concurrently with the White Lion Purchase Agreement, the Company entered into the RRA with White Lion. The Purchase Agreement and the RRA contain customary representations, warranties, conditions and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.

White Horse Energy Transaction

On January 30, 2026, Sunergy, a subsidiary of the Company, increased the subordinated loan in the form of a note receivable with White Horse Energy, LLC from $3.0 million to $6.15 million under the same terms as the original note.

Nasdaq Listing Rule Notice

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 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” for additional information on non-GAAP financial measures and a reconciliation of these non-GAAP measures to the most comparable GAAP measures.

The following table sets forth these metrics for the periods presented:

	Three Months Ended March 31,
	2026			2025
Net revenues	$	13,184,944		$	8,783,695
Contribution profit		2,242,129			(2,770,825	)
Contribution margin		17.0	%		(31.5	)%
Loss from operations		(4,765,124	)		(13,511,398	)
Net loss		(4,691,311	)		(13,319,363	)
Adjusted EBITDA		(2,850,505	)		(5,507,671	)
Adjusted EBITDA margin		(21.6	)%		(62.7	)%

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. Contribution margin reflects our Contribution profit as a percentage of revenues. 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 earnings (loss) before interest expense, income tax expense (benefit), depreciation and amortization, other income (expenses), net, and stock compensation, as adjusted to exclude merger 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, Illinois, Virginia and Ohio. 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. 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 on homes in Florida damaged by severe weather. We plan to expand our roofing business in all markets we enter in the future. 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, the Company has been working to integrate Heliogen’s concentrated solar power and energy storage technology into its clean-energy platform to complement its existing solar operations, create operational synergies, and broaden market reach. The Company continues 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 our in-house sales force and external sales dealers in order to target new customers in the Southern U.S. regional residential markets. We provide competitive compensation packages to our in-house sales teams and external sales dealers, which incentivizes the acquisition of new customers.

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 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

SEC Form 10-Q filed by Zeo Energy Corporation