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What changed in Zeo Energy Corp.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Zeo Energy Corp.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+462 added−403 removedSource: 10-K (2026-04-01) vs 10-K (2025-05-28)

Top changes in Zeo Energy Corp.'s 2025 10-K

462 paragraphs added · 403 removed · 265 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

47 edited+52 added−22 removed88 unchanged
Biggest changeIn 2024, in the face of a challenging economic environment for our industry, we believe that our lean operations have permitted us to minimize losses. Our Sales Model. Our sales methodology produces a high volume of sales. We believe our internal sales process drives a high volume of sales per sales representative and results in low customer acquisition costs.
Biggest changeWe believe our internal sales process drives a high volume of sales per sales representative and results in low customer acquisition costs. The success of our sales processes starts with quality, hands-on training for each sales representative.
In the scheduled meetings, a more experienced sales representative or sales manager provides a homeowner additional information about system design, energy savings and other benefits, pricing, incentives and financing options. 6 We believe that the key elements to our successful business model include (i) effective training and time spent with senior sales managers, (ii) our use of our customer relationship management software platform which concurrently tracks key performance indicators across the sales cycle, and (iii) our multi-step setter-closer sales model, which enables senior sales personnel to focus on greater sales success in presentations, while setters focus on developing and filtering quality, qualified leads, all of which then contributes to maximizing the percentage of leads converted into sales and sales into installations because of satisfied customers throughout the process.
In the scheduled meetings, a more experienced sales representative or sales manager provides a homeowner additional information about system design, energy savings and other benefits, pricing, incentives and financing options. 7 We believe that the key elements to our successful business model include (i) effective training and time spent with senior sales managers, (ii) our use of our customer relationship management software platform which concurrently tracks key performance indicators across the sales cycle, and (iii) our multi-step setter-closer sales model, which enables senior sales personnel to focus on greater sales success in presentations, while setters focus on developing and filtering quality, qualified leads, all of which then contributes to maximizing the percentage of leads converted into sales and sales into installations because of satisfied customers throughout the process.
In general, litigation claims or regulatory proceedings can be expensive and time consuming to bring or defend against, which may result in the diversion of management’s attention and resources from our business and business goals and could result in settlement or damages that could significantly affect financial results and the conduct of our business. 10
In general, litigation claims or regulatory proceedings can be expensive and time consuming to bring or defend against, which may result in the diversion of management’s attention and resources from our business and business goals and could result in settlement or damages that could significantly affect financial results and the conduct of our business.
State and local tax exemptions can have sunset dates or triggers for loss of the exemption, and the exemptions can be changed by state legislatures and other regulators. 9 A majority of states have adopted net metering policies, including our sales areas of Florida, Texas, Missouri, Ohio and Illinois.
State and local tax exemptions can have sunset dates or triggers for loss of the exemption, and the exemptions can be changed by state legislatures and other regulators. A majority of states have adopted net metering policies, including our sales areas of Florida, Texas, Missouri, Ohio and Illinois.
As utility companies offer increasingly renewable portfolios to retail customers, those customers might be less inclined to have a residential solar energy system installed on their home or business, which could adversely affect our growth. 7 We also compete with solar energy companies with vertically integrated business models like our own, many of which are larger than we are.
As utility companies offer increasingly renewable portfolios to retail customers, those customers might be less inclined to have a residential solar energy system installed on their home or business, which could adversely affect our growth. 8 We also compete with solar energy companies with vertically integrated business models like our own, many of which are larger than we are.
For more information on risks relating to increased competition in our industry, see “ Risk Factors — Risks Related to the Solar Industry — We face competition from electric utilities, retail electric providers, independent power producers, renewable energy companies and other market participants. ” Intellectual Property We protect our intellectual property rights by relying on common law protections and through contractual arrangements.
For more information on risks relating to increased competition in our industry, see “Risk Factors — Risks Related to the Solar Industry — We face competition from electric utilities, retail electric providers, independent power producers, renewable energy companies and other market participants.” Intellectual Property We protect our intellectual property rights by relying on common law protections and through contractual arrangements.
Approximately 30% of Zeo’s customers who have entered into leasing agreements have done so with third-party leasing companies established and managed by White Horse Energy, LC (“ White Horse Energy ”), a holding company of which Mr. Bridgewater, Zeo’s Chairman and Chief Executive Officer is the owner and manager.
Approximately 19% of Zeo’s customers who have entered into leasing agreements have done so with third-party leasing companies established and managed by White Horse Energy, LC (“ White Horse Energy ”), a holding company of which Mr. Bridgewater, Zeo’s Chairman and Chief Executive Officer is the owner and manager.
Zeo has entered into leasing arrangements with several other unrelated third parties to offer customers a choice of purchase or lease options, and continues to explore similar arrangements with other unrelated third-parties. 4 Supply The main components of our residential solar energy systems are solar panels, inverters and racking systems.
Zeo has entered into leasing arrangements with several other unrelated third parties to offer customers a choice of purchase or lease options, and continues to explore similar arrangements with other unrelated third-parties. 5 Supply The main components of our residential solar energy systems are solar panels, inverters and racking systems.
After the site survey, we prepare formal design and engineering documents and apply for applicable permits from local government authorities. After required permits are obtained, we schedule and install the solar energy system and any other equipment purchased on the customer’s home. 3 Purchase Contract Warranties.
After the site survey, we prepare formal design and engineering documents and apply for applicable permits from local government authorities. After required permits are obtained, we schedule and install the solar energy system and any other equipment purchased on the customer’s home. 4 Purchase Contract Warranties.
Prior to 2024, we have generally increased the number of solar energy systems we sell and install by growing and training our internal seasonal sales force, and we plan to continue to do so, as well as increasing our number of external dealers.
Prior to 2025, we have generally increased the number of solar energy systems we sell and install by growing and training our internal seasonal sales force, and we plan to continue to do so, as well as increasing our number of external dealers.
Increase capacity for efficient growth by investing in people and systems. In 2024, we experienced a decrease in sales and installations that generally affected the solar industry during the same period.
Increase capacity for efficient growth by investing in people and systems. In 2025, we experienced a decrease in sales and installations that generally affected the solar industry during the same period.
Government Incentives There are U.S. federal, state and local governmental bodies that provide incentives to owners, distributors, installers and manufacturers of solar energy systems to promote solar energy.
Government Incentives There are U.S. federal, state and local governmental bodies that provide incentives to owners, distributors, installers and manufacturers of solar energy systems and energy storage systems, to promote solar energy and energy resilience.
The number of active dealers that have entered into a current arrangement to sell our solar panel systems was approximately 20 as of December 31, 2024 compared to approximately 30 as of December 31, 2023. The percentage of sales that originate with our external dealers increases during the fall and winter months when our internal sales efforts are diminished.
The number of active dealers that have entered into a current arrangement to sell our solar panel systems was approximately 10 as of December 31, 2025 compared to approximately 20 as of December 31, 2024. The percentage of sales that originate with our external dealers increases during the fall and winter months when our internal sales efforts are diminished.
The team included approximately 290 sales agents as of both December 31, 2024 and December 31, 2023. Our sales agents are engaged through full-time contracts lasting from April through August, which is our primary selling season. Sales made through our internal sales team have lower customer acquisition costs than sales sourced through our external dealers.
The team included approximately 260 sales agents as of both December 31, 2025 and December 31, 2024. Our sales agents are engaged through full-time contracts lasting from April through August, which is our primary selling season. Sales made through our internal sales team have lower customer acquisition costs than sales sourced through our external dealers.
For more information on risks related to our supply chain, see “ Risk Factors — Risks Related to Zeo’s Operations — Due to the limited number of suppliers in our industry, the acquisition of any of these suppliers by a competitor or any shortage, delay, price change, announcement and imposition of tariffs or duties or other limitation in our ability to obtain components or technologies we use could result in sales and installation delays, cancellations and loss of customers ” and “ Risk Factors — Risks Related to Zeo’s Operations — Increases in the cost or reductions in supply of solar energy system and energy storage system components due to tariffs or trade restrictions announced or imposed by the U.S. government could have an adverse effect on our business, financial condition and results of operations. ” 5 Seasonality Historically, our sales volume and installation activity has been highest during late spring and summer.
For more information on risks related to our supply chain, see “Risk Factors — Risks Related to Zeo Energy’s Operations — Due to the limited number of suppliers in our industry, the acquisition of any of these suppliers by a competitor or any shortage, delay, price change, announcement and imposition of tariffs or duties or other limitation in our ability to obtain components or technologies we use could result in sales and installation delays, cancellations and loss of customers” and “Risk Factors — Risks Related to Zeo Energy’s Operations — Increases in the cost or reductions in supply of solar energy system and energy storage system components due to tariffs or trade restrictions announced or imposed by the U.S. government could have an adverse effect on our business, financial condition and results of operations.” 6 Seasonality Historically, our sales volume and installation activity has been highest during late spring and summer.
As of December 31, 2024, approximately 63% of the systems we installed in 2024 are leased by the customer. The lease term between the leasing company and the customer is 25 years. The customer agrees to pay the leasing company a predetermined monthly fee for the electricity produced by the solar energy system.
As of December 31, 2025, approximately 74% of the systems we installed in 2025 are leased by the customer. The lease term between the leasing company and the customer is 25 years. The customer agrees to pay the leasing company a predetermined monthly fee for the electricity produced by the solar energy system.
Though we are not responsible for a manufacturer’s compliance with warranty obligations, we assist customers in contacting the manufacturer if a warranty issue arises. We provide customers at least a ten-year limited warranty for our installation work and at least a five-year limited warranty against roof penetrations.
Though we are not responsible for a manufacturer’s compliance with warranty obligations, we assist customers in contacting the manufacturer if a warranty issue arises. We provide customers at least a ten-year limited warranty for our installation work and at least a five-year limited warranty against roof penetrations. Purchase Contracts and Financed Sales.
ITEM 1. BUSINESS. Mission 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.
ITEM 1. BUSINESS. Mission Our company and personnel are passionate about delivering cost savings and increased independence and reliability to energy consumers. Our mission is to expedite the U.S.’ transition to renewable energy by offering our customers an affordable and sustainable means of achieving energy independence.
During 2024, we purchased at least approximately 70% of the equipment that we installed through Greentech. We believe our relationship with Greentech, and the volume of business we do through them, has established us as a preferred customer and enables us to procure components at attractive terms.
During 2025, we purchased approximately 46% of the equipment that we installed through Greentech. We believe our relationship with Greentech, and the volume of business we do through them, has established us as a preferred customer and enables us to procure components at attractive terms.
In November 2024, we also began serving customers for whom Lumio HX, Inc. had begun but not completed residential energy systems prior to completion of its bankruptcy, primarily in California, Maryland, New Jersey, North Carolina, Oklahoma, and South Carolina.
In November 2024, we also began serving customers for whom Lumio HX, Inc. (as described under Recent Developments below) had begun but not completed residential energy systems prior to completion of its bankruptcy, primarily in California, Maryland, New Jersey, North Carolina, Oklahoma, and South Carolina.
In 2024, approximately 58% of the total systems we installed were sold through our internal sales team. Sales Through External Dealers We also install systems sold by external sales dealers that act as our sales representatives with potential customers.
In 2025, approximately 89% of the total systems we installed were sold through our internal sales team. 3 Sales Through External Dealers We also install systems sold by external sales dealers that act as our sales representatives with potential customers.
For the twelve months ended December 31, 2024, approximately 32% of our customers who purchased residential solar energy systems from us entered into a loan arrangement with a third party to finance the purchase over an extended period of time.
For the year ended December 31, 2025, approximately 8% of our customers who purchased residential solar energy systems from us entered into a loan arrangement with a third party to finance the purchase over an extended period of time.
As discussed in this Report, we completed the Business Combination with Sunergy on March 13, 2024 and changed our name to “Zeo Energy Corp.” Sunergy was created through the Contribution of Sunergy Solar LLC (“Sunergy Solar”) and Sun First Energy, LLC (“Sun First Energy”) to Sunergy on October 1, 2021.
As discussed in this section, we completed a business combination with Sunergy Renewables, LLC, a Nevada limited liability company, which we refer to as Sunergy, on March 13, 2024 and changed our name to “Zeo Energy Corp.” Sunergy was created through a business contribution of Sunergy Solar LLC (“Sunergy Solar”) and Sun First Energy, LLC (“Sun First Energy”) to Sunergy on October 1, 2021, which we refer to as the Contribution.
However, from time to time, we have been, are and will likely continue to be involved in legal proceedings, administrative proceedings and claims that arise in the ordinary course of business with customers, subcontractors, suppliers, regulatory bodies or others.
Litigation We are not currently a party to any material litigation or governmental or other proceeding. However, from time to time, we have been, are and will likely continue to be involved in legal proceedings, administrative proceedings and claims that arise in the ordinary course of business with customers, subcontractors, suppliers, regulatory bodies or others.
Additionally, Russia’s war against Ukraine caused price and supply pressure on solar energy equipment, as the war has impacted fuel prices and has led to increased demand in European markets for solar energy equipment as consumers and governments in Europe have sought to establish greater energy independence.
Additionally, Russia’s war against Ukraine caused price and supply pressure on solar energy equipment, as the war has impacted fuel prices and has led to increased demand in European markets for solar energy equipment as consumers and governments in Europe have sought to establish greater energy independence. From 2020 through 2022, we experienced periods of temporary delay in obtaining supplies.
In 2020, 2021, and 2022, we experienced periods of temporary delay in obtaining supplies. We believe these delays reduced the number of installations in comparison to what we would have been able to install without the delays. In 2023 and 2024, we did not experience appreciable delays in supply.
We believe these delays reduced the number of installations in comparison to what we would have been able to install without the delays. In 2023 and 2024, we did not experience appreciable delays in supply.
Some leasing companies may contract with ZEO to maintain and service the system on the leasing company’s behalf during the life of the lease.
The leasing company contracts with Zeo to purchase system equipment and install the solar energy system. Some leasing companies may contract with Zeo to maintain and service the system on the leasing company’s behalf during the life of the lease.
These incentives include tax credits offered by the federal government under, among others, the Energy Policy Act of 2005, as amended, and the Inflation Reduction Act of 2022 (“ IRA ”), as well as other tax credits, rebates and Solar Renewable Energy Credits (“ SRECs ”) associated with solar energy generation.
These incentives include tax credits offered by the federal government under, among others, the Energy Policy Act of 2005, as amended, and the IRA, as amended by the new Pub. L. No. 119-21, as well as other tax credits, rebates and SRECs associated with solar energy generation.
Our business model also relies on multiple tax exemptions offered at the state and local levels.
Our business model also may benefit from tax exemptions offered at the state and local levels.
Department of Transportation (“ DOT ”), the U.S. Environmental Protection Agency (“ EPA ”) and comparable state entities that protect and regulate employee health and safety and the protection of the environment.
For example, we and our suppliers and subcontractors are subject to the regulations OSHA, the U.S. Department of Transportation (“ DOT ”), the U.S. Environmental Protection Agency (“ EPA ”) and comparable state entities that protect and regulate employee health and safety and the protection of the environment.
The success of our sales processes starts with quality, hands-on training for each sales representative. Our self-produced digital learning platform presents our sales representatives with sample customer scenarios and guides them in learning effective communication techniques, as well as how to efficiently carry out administrative steps required for completing sales.
Our self-produced digital learning platform presents our sales representatives with sample customer scenarios and guides them in learning effective communication techniques, as well as how to efficiently carry out administrative steps required for completing sales. Each sales representative’s responses to sample customer scenarios are reviewed and critiqued by managers of our internal sales team.
We are additionally serving customers for whom Lumio HX, Inc. had begun but not completed residential energy systems prior to completion of its bankruptcy, in Maryland, New Jersey, North Carolina, Oklahoma, and South Carolina.
We currently operate primarily in Florida, Texas, Arkansas, Missouri, Ohio, and Illinois, and have begun offering solutions and services in California, Colorado, Minnesota, Utah, and Virginia. We are additionally serving customers for whom Lumio HX, Inc. had begun but not completed residential energy systems prior to completion of its bankruptcy, in Maryland, New Jersey, North Carolina, Oklahoma, and South Carolina.
Each sales representative’s responses to sample customer scenarios are reviewed and critiqued by managers of our internal sales team. In our sales model, a majority of personnel knock on doors of potential customers and explain the benefits of solar energy and our offerings with the objective of scheduling a subsequent sales meeting.
In our sales model, a majority of personnel knock on doors of potential customers and explain the benefits of solar energy and our offerings with the objective of scheduling a subsequent sales meeting.
In other states where we operate, for some solar energy system customers that need roofing services, we may contract with roofing companies for the services.
Roofing Services We install roofs in Florida, where our subsidiary, Sunergy Roofing & Construction, Inc., is a licensed roofing contractor. In other states where we operate, for some solar energy system customers that need roofing services, we may contract with roofing companies for the services.
In response to the market uncertainty and price fluctuations caused by these government actions and other supply chain pressures, we carefully and periodically evaluate our suppliers of system components and make purchasing decisions based on our judgments of product quality, warranties, pricing and availability. 8 For more information on risks relating to government tariffs, duties or trade restrictions, see “ Risk Factors — Risks Related to Zeo’s Operations — Increases in the cost or reduction in supply of residential solar energy system and energy storage system components due to tariffs or trade restrictions announced or imposed by the U.S. government could have an adverse effect on our business, financial condition and results of operations. ” Our operations are subject to various national, state and local laws and regulations.
For more information on risks relating to government tariffs, duties or trade restrictions, see “Risk Factors — Risks Related to Zeo Energy’s Operations — Increases in the cost or reduction in supply of residential solar energy system and energy storage system components due to tariffs or trade restrictions announced or imposed by the U.S. government could have an adverse effect on our business, financial condition and results of operations.” Our operations are subject to various national, state and local laws and regulations.
We plan to continue growing our roofing operations, as we believe our roofing services complement our residential solar energy systems and for some customers helps to expedite solar system installations. 2 Subcontractors We use subcontractors to install some of our residential solar energy systems at times when we do not have a sufficient number of our own installation teams to timely complete the project.
Subcontractors We use subcontractors to install some of our residential solar energy systems at times when we do not have a sufficient number of our own installation teams to timely complete the project.
We employ or contract with licensed professionals as needed to comply with regulatory requirements, and as part of our process of installing residential solar energy systems and related equipment, we assist our customers in obtaining interconnection permission from the applicable local electric distribution utility, and applicable permits from other local offices.
We employ or contract with licensed professionals as needed to comply with regulatory requirements, and as part of our process of installing residential solar energy systems and related equipment, we assist our customers in obtaining interconnection permission from the applicable local electric distribution utility, and applicable permits from other local offices. 11 Our operations, as well as those of our suppliers and subcontractors, are subject to stringent and complex U.S. federal, state, territorial and local laws, including regulations governing the occupational health and safety of employees, wage regulations and environmental protection.
Commercial taxpayers, including solar energy system owners and tax-equity partners, may claim a federal investment tax credit equal to 30% of eligible project costs for solar facilities that meet certain requirements. The base credit is scheduled to phase down to 26% for projects beginning construction in 2033 and 22% in 2034, expiring thereafter.
Commercial taxpayers, including solar energy system owners and tax-equity partners, may claim a federal investment tax credit equal to 30% of eligible project costs for solar and energy storage facilities that meet certain requirements. Under the terms of the new Pub. L.
Other Energy Efficient Equipment and Services In 2023, approximately 23% of our customers purchased one or more insulation services, such as adding insulation to a home’s attic or walls.
Other Energy Efficient Equipment and Services In 2025, approximately 5% of our customers purchased one or more energy efficient products or services, including insulation services, such as adding insulation to a home’s attic or walls, hybrid electric water heaters or swimming pool pumps, and battery-based energy storage systems.
In the lease model offered to our customers, the third-party leasing company contracts with the homeowner customer to install a solar energy system owned by the leasing company and leased to the customer. The leasing company contracts with Zeo to purchase system equipment and install the solar energy system.
We installed the first leased solar energy system in April 2023 and during the year ended December 31, 2025, we installed approximately 1,550 leased solar energy systems. In the lease model offered to our customers, the third-party leasing company contracts with the homeowner customer to install a solar energy system owned by the leasing company and leased to the customer.
For the twelve months ended December 31, 2024, a small minority of our orders (less than 5%) were from customers paying in cash for the purchase of residential solar energy systems.
For the year ended December 31, 2025, an immaterial amount of our orders were from customers paying in cash for the purchase of residential solar energy systems.
We believe that our facility space adequately meets our needs and that we will be able to obtain any additional operating space that may be required on commercially reasonable terms. Litigation We are not currently a party to any material litigation or governmental or other proceeding.
We currently lease the office and warehouse spaces that we use in our operations, and we do not own any real property. We believe that our facility space adequately meets our needs and that we will be able to obtain any additional operating space that may be required on commercially reasonable terms.
We rely on a mix of the incentives mentioned above to reduce the net price our customers that are eligible for incentives would otherwise pay for our solar offerings or per kilowatt hour used.
We rely on a mix of the incentives mentioned above to reduce the net price our customers that are eligible for incentives would otherwise pay for our solar offerings or per kilowatt hour used. 12 Employees and Human Capital Management As of December 31, 2025, we had approximately 190 full-time employees that work year-round processing orders, installing and servicing systems and fulfilling administrative tasks.
In Florida, we maintain offices for operations personnel and warehouses, and we have warehouses in Texas and Ohio, and warehouse, sales, marketing, and executive offices in Utah. We currently lease the office and warehouse spaces that we use in our operations, and we do not own any real property.
Facilities Our corporate headquarters are located in Florida under a lease that expires at the end of October 2026. In Florida, we maintain offices for operations personnel and warehouses, and we have warehouses in Texas and Ohio, and warehouse, sales, marketing, and executive offices in Utah.
As described above, in December 2022, we launched a program offering customers the option of leasing residential solar energy systems from third parties that we install on the customer’s home. Strengths Lean Business Model. We have a lean business model, in the four years prior to 2024, we had an increase in revenue and profit every year.
As described above, in December 2022, we launched a program offering customers the option of leasing residential solar energy systems from third parties that we install on the customer’s home. Diversify operations through acquisition . In August of 2025, we acquired Heliogen, Inc. (“Heliogen”). Heliogen had an expertise around commercial and utility scale long-duration storage solutions.
States where we sell now or in the future may change, eliminate or reduce net metering benefits. On April 26, 2022, the Florida governor vetoed legislation that would have established a date for reducing and ending net metering in Florida.
States where we sell now or in the future may change, eliminate or reduce net metering benefits.
None of our employees are covered by collective bargaining agreements, and we have not experienced any work stoppages due to labor disputes. Facilities Our corporate headquarters are located in Florida under a lease that expires at the end of October 2026.
We also engage sales agents as independent contractors as described in “ Business - Internal Direct Sales Force ” above. None of our employees are covered by collective bargaining agreements, and we have not experienced any work stoppages due to labor disputes.
Removed
The Contribution established our vertically integrated company offering residential solar energy solutions. The number of our installations, sales support, and administrative personnel was approximately 190 as of December 31, 2024.
Added
The Contribution established our vertically integrated company offering residential solar energy solutions. Many of our solar energy system customers also purchase other energy efficiency-related equipment or services or roofing services from us.
Removed
Recent Developments On October 25, 2024, the Company closed an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Lumio Holdings, Inc., a Delaware corporation (“Lumio”), and Lumio HX, Inc., a Delaware corporation (together with Lumio, the “Sellers”), pursuant to which, subject to the terms and conditions set forth in the Asset Purchase Agreement, the Company agreed to acquire certain assets of the Sellers on an as-is, where-is basis, including uninstalled residential solar energy contracts, certain inventory, intellectual property and intellectual property rights, equipment, records, goodwill and other intangible assets (collectively, the “Assets”), free and clear of any liens other than certain specified liabilities of the Sellers that are being assumed (collectively, the “Liabilities” and such acquisition of the Assets and assumption of the Liabilities together, the “Transaction”) for a total purchase price of (i) $4 million in cash and (ii) 6,206,897 shares of the Company’s Class A Common Stock, par value $0.0001, to be paid to LHX Intermediate, LLC, a Delaware limited liability company (“LHX”).
Added
The number of our installations, sales support, and administrative personnel was approximately 190 as of December 31, 2024. Recent Developments White Lion Transaction On January 27, 2026, we entered into the Common Stock Purchase Agreement (the “White Lion Purchase Agreement”) with White Lion. We also entered into a Registration Rights Agreement with White Lion on January 27, 2026 (the “RRA”).
Removed
The Assets included certain uninstalled or partially completed residential solar energy contracts through which a customer purchased the solar energy system, and additional uninstalled or partially completed residential solar energy projects where a third party leasing company (either Palmetto Solar, LLC d/b/a LightReach, or Sunnova Energy Corporation) owns the solar energy system and leases the output of the system to a customer living in the home where the system is installed.
Added
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.
Removed
Various of these Lumio projects are located in states where the Company has not previously operated, principally in California, Maryland, New Jersey, North Carolina, Oklahoma, and South Carolina, and the Company has newly established operations or is in the process of establishing operations in these states. 1 On December 24, 2024 (the “Issue Date”), the Company issued a Promissory Note (the “Promissory Note”) to LHX pursuant to which the Company could borrow up to an aggregate principal amount of $4,000,000 (the “Loan”).
Added
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 the earlier of (i) White Lion having purchased shares of Class A Common Stock equal to $30.0 million and (ii) January 27, 2029 (the “White Lion Commitment Period”). 1 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.
Removed
Subject to the terms and conditions set forth in the Promissory Note, the Loan shall be provided to the Company in three tranches: (i) $2,500,000 upon execution of the Promissory Note (the “Initial Advance”), (ii) $750,000 if the Company achieves the Tranche 2 Milestone within 60 days from the Initial Advance (the “Tranche 2 Advance”) and (iii) $750,000 if the Company achieves the Tranche 3 Milestone within 60 days from the Tranche 2 Advance.
Added
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).
Removed
“Tranche 2 Milestone” means the submission by the Company to the applicable regulatory bodies at least 340 permits to install solar energy systems sold through the Company’s year-round sales program.
Added
The Company may also deliver a 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.
Removed
“Tranche 3 Milestone” means the completion by the Company of the installation of at least 296 solar energy systems sold through the Company’s year-round sales program.” LHX may also waive any milestone described above and advance the applicable amounts to the Company.
Added
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.
Removed
On April 15, 2025, the Promissory Note was amended to provide that the Tranche 2 Advance will be delivered if a Tranche 2 Milestone is met within 120 days of the Initial Advance, and the Tranche 3 Advance will be delivered if a Tranche 3 Milestone is met within 120 days of the Tranche 2 Advance.
Added
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.
Removed
The Loan will be repaid in full (the “Repayment”) by issuing to LHX or its designee of a number of the Company’s shares of Class A Common Stock equal to the quotient of (i) the outstanding and unpaid amount of the Loan, divided by (ii) $1.35 (the “Share Issuance”).
Added
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.
Removed
The Repayment shall take place immediately following the later of: (x) the day falling on the first anniversary of the Issue Date (or the immediately previous business day) and (y) the date on which the stockholders of the Company approve the Share Issuance.
Added
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.
Removed
The Promissory Note contains customary representations, warranties and covenants of the parties, including an obligation of the Company to file a registration statement registering the resale of the shares issuable in the Share Issuance and to use reasonable efforts to have such registration statement declared effective as soon as practicable thereafter.
Added
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.
Removed
In connection with the Promissory Note, on December 24, 2024, LHX entered into a Voting Agreement with the Company and certain stockholders of the Company (the “Voting Agreement”), pursuant to which such stockholders agreed to vote (or cause to be voted), in person or by proxy, all the shares of Class A Common Stock and Class V Common Stock owned by such stockholders (i) in favor of the nomination and appointment of LHX’s designee to the board of directors of the Company, (ii) in favor of the issuance by the Company to LHX of shares of Class A Common Stock in connection with an option that may be granted to LHX to purchase up to 4,000,000 shares of Class A Common Stock, subject to the terms and conditions therein and (iii) in favor of the Share Issuance, when required pursuant to the Promissory Note.
Added
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).
Removed
Products and Services Residential Solar Energy Systems Zeo’s primary business activity is selling and installing residential solar energy systems that homeowners use to supplement the amount of usable electricity required to power their homes. We currently operate primarily in Florida, Texas, Arkansas, Missouri, Ohio, and Illinois, and have begun offering solutions and services in California, Colorado, Minnesota, Utah, and Virginia.
Added
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.
Removed
In 2023, in approximately 53% of our sales our customers purchased adders that consisted of equipment designed to increase energy efficiency, including items such as hybrid electric water heaters or swimming pool pumps. During 2023, 1% of our customers purchased battery-based energy storage systems.
Added
In consideration for the commitments of White Lion, as described above, the Company is contractually committed to issue to White Lion $100,000 worth of Class A Common Stock (the “Commitment Shares”).
Removed
These battery-based energy storage systems store energy generated from their residential solar energy systems to be used when the system generates less usable electricity than the home requires (such as at night or on cloudy days). Roofing Services We install roofs in Florida, where our subsidiary, Sunergy Roofing & Construction, Inc., is a licensed roofing contractor.
Added
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.
Removed
In most of our purchase and installation agreements that we used prior to 2023, we provided a 25-year limited warranty for installation work and against roof penetrations. Purchase Contracts and Financed Sales.
Added
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.
Removed
We installed the first leased solar energy system in April 2023 and during the twelve months ended December 30, 2024, we installed approximately 1,150 leased solar energy systems.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

159 edited+84 added−55 removed427 unchanged
Biggest changeSpecifically, a material weakness exists 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, and recording incorrect journal entries that also did not have the sufficient review and approval.
Biggest changeA material weakness is a deficiency, or combination of deficiencies, in internal controls over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. ● Specifically, a material weakness exists 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, and recording incorrect journal entries that also did not have the sufficient review and approval. 45 These control deficiencies could result in a misstatement in our accounts or disclosures that would result in a material misstatement to our financial statements that would not be prevented or detected.
To the extent OpCo has available cash, we intend to cause OpCo to make generally pro rata distributions to the holders of OpCo Units, including us, in an amount sufficient to cause each OpCo unitholder to receive a distribution at least equal to (i) such OpCo unitholder’s allocable share of net taxable income as calculated with certain assumptions, multiplied by an assumed tax rate, and (ii) with respect to us, any payments required to be made by us under the Tax Receivable Agreement.
To the extent OpCo has available cash, we intend to cause OpCo to make generally pro rata distributions to the holders of OpCo Units, including us, in an amount sufficient to cause each OpCo unitholder to receive a distribution at least equal to (i) such OpCo unitholder’s allocable share of net taxable income as calculated with certain assumptions, multiplied by an assumed tax rate, and (ii) with respect to us, any payments required to be made by us under the Tax Receivable Agreement.
These risks include the following, among others: ● failure to satisfy the required conditions and otherwise complete a planned acquisition, joint venture or other strategic transaction on a timely basis or at all; ● legal or regulatory proceedings, if any, relating to a planned acquisition, joint venture or other strategic transaction and the outcome of such legal proceedings; ● difficulty in assimilating the operations, systems, and personnel of the acquired company; ● difficulty in effectively integrating the acquired technologies or products with our current products and technologies; 22 ● difficulty in maintaining controls, procedures and policies during the transition and integration; ● disruption of our ongoing business and distraction of our management and employees from other opportunities and challenges due to integration issues; ● difficulty integrating the acquired company’s accounting, management information and other administrative systems; ● inability to retain key technical and managerial personnel of the acquired business; ● inability to retain key customers, vendors and other business partners of the acquired business; ● inability to achieve the financial and strategic goals for the acquired and combined businesses; ● incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our results of operations; ● significant post-acquisition investments that may lower the actual benefits realized through the acquisition; ● potential failure of the due diligence processes to identify significant issues with product quality, legal, and financial liabilities, among other things; ● moderating and anticipating the impacts of inherent or emerging seasonality in acquired customer agreements; ● potential inability to assert that internal controls over financial reporting are effective; and ● potential inability to obtain, or obtain in a timely manner, approvals from governmental authorities, which could delay or prevent such acquisitions.
These risks include the following, among others: ● failure to satisfy the required conditions and otherwise complete a planned acquisition, joint venture or other strategic transaction on a timely basis or at all; ● legal or regulatory proceedings, if any, relating to a planned acquisition, joint venture or other strategic transaction and the outcome of such legal proceedings; ● difficulty in assimilating the operations, systems, and personnel of the acquired company; ● difficulty in effectively integrating the acquired technologies or products with our current products and technologies; ● difficulty in maintaining controls, procedures and policies during the transition and integration; ● disruption of our ongoing business and distraction of our management and employees from other opportunities and challenges due to integration issues; ● difficulty integrating the acquired company’s accounting, management information and other administrative systems; ● inability to retain key technical and managerial personnel of the acquired business; ● inability to retain key customers, vendors and other business partners of the acquired business; ● inability to achieve the financial and strategic goals for the acquired and combined businesses; ● incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our results of operations; ● significant post-acquisition investments that may lower the actual benefits realized through the acquisition; ● potential failure of the due diligence processes to identify significant issues with product quality, legal, and financial liabilities, among other things; ● moderating and anticipating the impacts of inherent or emerging seasonality in acquired customer agreements; ● potential inability to assert that internal controls over financial reporting are effective; and ● potential inability to obtain, or obtain in a timely manner, approvals from governmental authorities, which could delay or prevent such acquisitions.
In addition to the other risks described in this “ Risk Factors ” section, the following factors could cause our operating results to fluctuate: ● expiration or initiation of any governmental rebates or incentives; ● significant fluctuations in customer demand for our solar energy services, solar energy systems and energy storage systems; ● our subcontractors’ ability to complete installations in a timely manner; ● our and our subcontractors’ ability to gain interconnection permission for an installed solar energy system from the relevant utility; ● the availability, terms and costs of suitable financing; ● our ability to continue to expand our operations and the amount and timing of expenditures related to this expansion; ● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital-raising activities or commitments; ● changes in our pricing policies or terms or those of our competitors, including electric utilities; ● actual or anticipated developments in our competitors’ businesses, technology or the competitive landscape; and ● natural disasters or other weather or meteorological conditions.
In addition to the other risks described in this “ Risk Factors ” section, the following factors could cause our operating results to fluctuate: ● expiration or initiation of any governmental rebates or incentives; ● significant fluctuations in customer demand for our solar energy services, solar energy systems and energy storage systems; ● our subcontractors’ ability to complete installations in a timely manner; ● our and our subcontractors’ ability to gain interconnection permission for an installed solar energy system from the relevant utility; ● the availability, terms and costs of suitable financing; 32 ● our ability to continue to expand our operations and the amount and timing of expenditures related to this expansion; ● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital-raising activities or commitments; ● changes in our pricing policies or terms or those of our competitors, including electric utilities; ● actual or anticipated developments in our competitors’ businesses, technology or the competitive landscape; and ● natural disasters or other weather or meteorological conditions.
Among other things, our governing documents include provisions regarding: ● the ability of the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; ● the limitation of the liability of, and the indemnification of, Zeo’s directors and officers; ● the exclusive right of the Board to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on the Board; ● the requirement that, subject to the special rights of the holders of one or more series of preferred stock, special meetings of the stockholders may be called only (i) by or at the direction of the Board, the Chairperson of the Board or the Chief Executive Officer, in each case, in accordance with our bylaws or (ii) for so long as the holders of shares of the Class V Common Stock beneficially own, directly or indirectly, a majority of the total voting power of stock entitled to vote generally in election of directors, by or at the request of stockholders collectively holding shares of capital stock of Zeo representing a majority of the total voting power of stock entitled to vote generally in election of directors, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; 49 ● controlling the procedures for the conduct and scheduling of the Board and stockholder meetings; ● the requirement for the affirmative vote of holders of at least 2/3 of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend, alter, change or repeal certain provisions of the Charter, which could preclude stockholders from bringing matters before annual or special meetings of stockholders, delay changes in Zeo and inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt; ● the ability of the Board to amend our bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend our bylaws to facilitate an unsolicited takeover attempt; and ● advance notice procedures with which stockholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders, delay changes in the Board and discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of Zeo.
Among other things, our governing documents include provisions regarding: ● the ability of the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; ● the limitation of the liability of, and the indemnification of, Zeo’s directors and officers; 52 ● the exclusive right of the Board to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on the Board; ● the requirement that, subject to the special rights of the holders of one or more series of preferred stock, special meetings of the stockholders may be called only (i) by or at the direction of the Board, the Chairperson of the Board or the Chief Executive Officer, in each case, in accordance with our bylaws or (ii) for so long as the holders of shares of the Class V Common Stock beneficially own, directly or indirectly, a majority of the total voting power of stock entitled to vote generally in election of directors, by or at the request of stockholders collectively holding shares of capital stock of Zeo representing a majority of the total voting power of stock entitled to vote generally in election of directors, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; ● controlling the procedures for the conduct and scheduling of the Board and stockholder meetings; ● the requirement for the affirmative vote of holders of at least 2/3 of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend, alter, change or repeal certain provisions of the Charter, which could preclude stockholders from bringing matters before annual or special meetings of stockholders, delay changes in Zeo and inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt; ● the ability of the Board to amend our bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend our bylaws to facilitate an unsolicited takeover attempt; and ● advance notice procedures with which stockholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders, delay changes in the Board and discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of Zeo.
Although we may incur substantial costs in protecting our intellectual property, we cannot be certain that we have adequately protected or will be able to adequately protect it because, among other reasons: ● others may not be deterred from misappropriating our intellectual property despite the existence of laws or contracts prohibiting such misappropriation and information security measures designed to deter or prevent misappropriation of our intellectual property; ● we have not obtained intellectual property assignment agreements from our founders or from a contract developer of certain software that we intend to use; 23 ● foreign intellectual property laws and associated foreign legal enforcement regimes may not adequately protect our intellectual property rights; and ● policing unauthorized use of our intellectual property may be difficult, expensive, and time-consuming, the remedy obtained may be inadequate to restore protection of our intellectual property, and moreover, we may be unable to determine the extent of any unauthorized use.
Although we may incur substantial costs in protecting our intellectual property, we cannot be certain that we have adequately protected or will be able to adequately protect it because, among other reasons: ● others may not be deterred from misappropriating our intellectual property despite the existence of laws or contracts prohibiting such misappropriation and information security measures designed to deter or prevent misappropriation of our intellectual property; ● we have not obtained intellectual property assignment agreements from our founders or from a contract developer of certain software that we intend to use; ● foreign intellectual property laws and associated foreign legal enforcement regimes may not adequately protect our intellectual property rights; and ● policing unauthorized use of our intellectual property may be difficult, expensive, and time-consuming, the remedy obtained may be inadequate to restore protection of our intellectual property, and moreover, we may be unable to determine the extent of any unauthorized use.
You may not be able to resell your shares of Class A Common Stock at an attractive price due to a number of factors such as the following: ● results of operations that vary from the expectations of securities analysts and investors; ● results of operations that vary from those of Zeo’s competitors; ● changes in expectations as to Zeo’s future financial performance, including financial estimates and investment recommendations by securities analysts and investors; ● declines in the market prices of stocks generally; ● strategic actions by Zeo or its competitors; ● announcements by Zeo or its competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments; ● any significant change in Zeo’s management; ● changes in general economic or market conditions (including changes in interest rates or inflation) or trends in Zeo’s industry or markets; ● changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to Zeo’s business; ● future sales of Class A Common Stock or other securities; ● dilution as a result of future exercises of Warrants, conversion of the Convertible OpCo Preferred Units or exchanges of the Exchangeable OpCo Units; 45 ● investor perceptions of the investment opportunity associated with Class A Common Stock relative to other investment alternatives; ● the public’s response to press releases or other public announcements by Zeo or third parties, including Zeo’s filings with the SEC; ● litigation involving Zeo, Zeo’s industry, or both, or investigations by regulators into the Board, Zeo’s operations or those of Zeo’s competitors; ● guidance, if any, that Zeo provides to the public, any changes in this guidance or Zeo’s failure to meet this guidance; ● the development and sustainability of an active trading market for Class A Common Stock; ● actions by institutional or activist stockholders; ● changes in accounting standards, policies, guidelines, interpretations or principles; and ● other events or factors, including those resulting from pandemics, natural disasters, war, acts of terrorism or responses to these events.
You may not be able to resell your shares of Class A Common Stock at an attractive price due to a number of factors such as the following: ● results of operations that vary from the expectations of securities analysts and investors; ● results of operations that vary from those of Zeo’s competitors; 48 ● changes in expectations as to Zeo’s future financial performance, including financial estimates and investment recommendations by securities analysts and investors; ● declines in the market prices of stocks generally; ● strategic actions by Zeo or its competitors; ● announcements by Zeo or its competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments; ● any significant change in Zeo’s management; ● changes in general economic or market conditions (including changes in interest rates or inflation) or trends in Zeo’s industry or markets; ● changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to Zeo’s business; ● future sales of Class A Common Stock or other securities; ● dilution as a result of future exercises of Warrants, conversion of the Convertible OpCo Preferred Units or exchanges of the Exchangeable OpCo Units; ● investor perceptions of the investment opportunity associated with Class A Common Stock relative to other investment alternatives; ● the public’s response to press releases or other public announcements by Zeo or third parties, including Zeo’s filings with the SEC; ● litigation involving Zeo, Zeo’s industry, or both, or investigations by regulators into the Board, Zeo’s operations or those of Zeo’s competitors; ● guidance, if any, that Zeo provides to the public, any changes in this guidance or Zeo’s failure to meet this guidance; ● the development and sustainability of an active trading market for Class A Common Stock; ● actions by institutional or activist stockholders; ● changes in accounting standards, policies, guidelines, interpretations or principles; and ● other events or factors, including those resulting from pandemics, natural disasters, war, acts of terrorism or responses to these events.
Risks we face in conducting business internationally include: ● multiple, conflicting and changing laws and regulations relating to employment, safety, environmental protection, international trade, and other government approvals, permits, and licenses and regulatory requirements; ● financial risks, such as longer sales and payment cycles, greater difficulty enforcing rights and remedies and capital controls or other restrictions on the transfer of funds; ● currency fluctuations, government-fixed foreign exchange rates, the effects of currency hedging activity and the potential inability to hedge currency fluctuations; ● the effects of Russia’s war against Ukraine and other political and economic instability, including wars, acts of terrorism, political unrest, boycotts, curtailments of trade, nationalization of assets, and other business restrictions; ● trade barriers such as import and export requirements or restrictions, licensing requirements, tariffs, taxes and other restrictions and expenses for which we may have responsibility, which could increase the prices of our products; and ● liabilities associated with compliance with laws (for example, the Foreign Corrupt Practices Act in the United States and similar laws outside of the United States). ● the effects of Russia’s war on Ukraine, which, while we believe Russia’s war on Ukraine has contributed to price increases for components that we purchase, we believe that the increases to the cost of our components were also due to a combination of other factors, including supply chain constraints, increased demand for solar systems in the U.S. and Europe, tariffs and trade regulations, rising inflation, and higher labor, material, and shipping costs.
Risks we face in conducting business internationally include: ● multiple, conflicting and changing laws and regulations relating to employment, safety, environmental protection, international trade, and other government approvals, permits, and licenses and regulatory requirements; 34 ● financial risks, such as longer sales and payment cycles, greater difficulty enforcing rights and remedies and capital controls or other restrictions on the transfer of funds; ● currency fluctuations, government-fixed foreign exchange rates, the effects of currency hedging activity and the potential inability to hedge currency fluctuations; ● the effects of Russia’s war on Ukraine and other political and economic instability, including wars, acts of terrorism, political unrest, boycotts, curtailments of trade, nationalization of assets, and other business restrictions; ● trade barriers such as import and export requirements or restrictions, licensing requirements, tariffs, taxes and other restrictions and expenses for which we may have responsibility, which could increase the prices of our products; and ● liabilities associated with compliance with laws (for example, the Foreign Corrupt Practices Act in the United States and similar laws outside of the United States). ● the effects of Russia’s war on Ukraine, which, while we believe Russia’s war on Ukraine has contributed to price increases for components that we purchase, we believe that the increases to the cost of our components were also due to a combination of other factors, including supply chain constraints, increased demand for solar systems in the U.S. and Europe, tariffs and trade regulations, rising inflation, and higher labor, material, and shipping costs.
Our ability to operate profitably depends on a number of factors, including but not limited to: ● growing our customer base; ● reducing our operating costs by lowering our customer acquisition costs and optimizing our design and installation processes and supply chain logistics even as we expand into additional geographic markets; 14 ● maintaining or further lowering our cost of capital; ● reducing the cost of components for our solar service offerings; ● growing and maintaining our sales network; ● maintaining high levels of product quality, performance, and customer satisfaction; and ● growing our direct-to-consumer business to scale.
Our ability to operate profitably depends on a number of factors, including but not limited to: ● growing our customer base; ● reducing our operating costs by lowering our customer acquisition costs and optimizing our design and installation processes and supply chain logistics even as we expand into additional geographic markets; ● maintaining or further lowering our cost of capital; ● reducing the cost of components for our solar service offerings; ● growing and maintaining our sales network; ● maintaining high levels of product quality, performance, and customer satisfaction; and ● growing our direct-to-consumer business to scale.
Factors affecting the trading price of Class A Common Stock may include: ● actual or anticipated fluctuations in Zeo’s quarterly financial results or the quarterly financial results of companies perceived to be similar to it; ● changes in the market’s expectations about its operating results; 48 ● success of competitors; ● its operating results failing to meet market expectations in a particular period; ● changes in financial estimates and recommendations by securities analysts concerning Zeo or the solar energy industry and market in general; ● operating and stock price performance of other companies that investors deem comparable to Zeo; ● its ability to market new and enhanced products on a timely basis; ● changes in laws and regulations affecting its business; ● commencement of, or involvement in, litigation involving Zeo; ● changes in its capital structure, such as future issuances of securities or the incurrence of additional debt; ● the volume of shares of its common stock available for public sale; ● any significant change in its board or management; ● sales of substantial amounts of common stock by its directors, executive officers or significant stockholders or the perception that such sales could occur; and ● general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.
Factors affecting the trading price of Class A Common Stock may include: ● actual or anticipated fluctuations in Zeo’s quarterly financial results or the quarterly financial results of companies perceived to be similar to it; ● changes in the market’s expectations about its operating results; 51 ● success of competitors; ● its operating results failing to meet market expectations in a particular period; ● changes in financial estimates and recommendations by securities analysts concerning Zeo or the solar energy industry and market in general; ● operating and stock price performance of other companies that investors deem comparable to Zeo; ● its ability to market new and enhanced products on a timely basis; ● changes in laws and regulations affecting its business; ● commencement of, or involvement in, litigation involving Zeo; ● changes in its capital structure, such as future issuances of securities or the incurrence of additional debt; ● the volume of shares of its common stock available for public sale; ● any significant change in its board or management; ● sales of substantial amounts of common stock by its directors, executive officers or significant stockholders or the perception that such sales could occur; and ● general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.
We may find it necessary to rely on an increasingly expensive spot market and other alternative sources to make up any shortfall in shipping needs. 16 If we cannot obtain substitute materials or components on a timely basis or on acceptable terms, we could be prevented from installing our solar energy systems within the time frames required in our customer contracts.
We may find it necessary to rely on an increasingly expensive spot market and other alternative sources to make up any shortfall in shipping needs. If we cannot obtain substitute materials or components on a timely basis or on acceptable terms, we could be prevented from installing our solar energy systems within the time frames required in our customer contracts.
See “ Risk Factors — Increases in the cost or reduction in supply of solar energy system and energy storage system components due to tariffs or trade restrictions announced or imposed by the U.S. government could have an adverse effect on our business, financial condition and results of operations. ” Risks Related to Operations We may be unable to sustain our net losses.
See “ Risk Factors — Increases in the cost or reduction in supply of solar energy system and energy storage system components due to tariffs or trade restrictions announced or imposed by the U.S. government could have an adverse effect on our business, financial condition and results of operations. ” 18 Risks Related to Operations We may be unable to sustain our net losses.
Securities litigation against Zeo could result in substantial costs and damages and divert Zeo’s management’s attention from other business concerns, which could seriously harm Zeo’s business, results of operations, financial condition or cash flows. 46 Zeo may also be called on to defend itself against lawsuits relating to its business operations. Some of these claims may seek significant damages amounts.
Securities litigation against Zeo could result in substantial costs and damages and divert Zeo’s management’s attention from other business concerns, which could seriously harm Zeo’s business, results of operations, financial condition or cash flows. Zeo may also be called on to defend itself against lawsuits relating to its business operations. Some of these claims may seek significant damages amounts.
The adverse effects of such a curtailment or prohibition without compensation could adversely impact our business, results of operations, future growth and cash flows. Our headquarters and other facilities, the facilities of certain subcontractors and suppliers, and our customers are concentrated in certain regions, putting us at risk of region-specific disruptions, including hurricanes or other extreme weather events.
The adverse effects of such a curtailment or prohibition without compensation could adversely impact our business, results of operations, future growth and cash flows. 25 Our headquarters and other facilities, the facilities of certain subcontractors and suppliers, and our customers are concentrated in certain regions, putting us at risk of region-specific disruptions, including hurricanes or other extreme weather events.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages or claims related to our data privacy and security obligations. Terrorist attacks or cyberattacks against centralized utilities could adversely affect our business.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages or claims related to our data privacy and security obligations. 29 Terrorist attacks or cyberattacks against centralized utilities could adversely affect our business.
As a result, we may face reputational challenges with our customers and other stakeholders if we are unable to sufficiently verify the origins for all conflict minerals used in our products. 37 Compliance with health and safety laws and regulations can be complex, and noncompliance with these laws and regulations may result in potentially significant monetary damages and fines .
As a result, we may face reputational challenges with our customers and other stakeholders if we are unable to sufficiently verify the origins for all conflict minerals used in our products. Compliance with health and safety laws and regulations can be complex, and noncompliance with these laws and regulations may result in potentially significant monetary damages and fines .
The market price of the shares of Class A Common Stock may decline for a number of reasons, including if: ● investors react negatively to the prospects of Zeo’s business; ● Zeo’s business and prospects is not consistent with the expectations of financial or industry analysts; or ● Zeo does not achieve the perceived benefits of the Business Combination as rapidly or to the extent anticipated by financial or industry analysts.
The market price of the shares of Class A Common Stock may decline for a number of reasons, including if: ● investors react negatively to the prospects of Zeo’s business; ● Zeo’s business and prospects is not consistent with the expectations of financial or industry analysts; or ● Zeo does not achieve the perceived benefits of the Merger or the Business Combination as rapidly or to the extent anticipated by financial or industry analysts.
An accumulation of delays or cancellations of anticipated sales could materially and adversely affect our financial results, as we may have incurred sales-related, design-related, and other expenses and generated no revenue. We may not realize the anticipated benefits of past or future investments, strategic transactions, or acquisitions, and integration of these acquisitions may disrupt our business and management.
An accumulation of delays or cancellations of anticipated sales could materially and adversely affect our financial results, as we may have incurred sales-related, design-related, and other expenses and generated no revenue. 26 We may not realize the anticipated benefits of past or future investments, strategic transactions, or acquisitions, and integration of these acquisitions may disrupt our business and management.
Our inability to do any of the foregoing could have a material adverse effect on our business, results of operations, cash flows and financial condition. Inflation could result in decreased value from future contractual payments and higher expenses for labor and equipment, which, in turn, could adversely impact our reputation, business, financial condition, cash flows and results of operations.
Our inability to do any of the foregoing could have a material adverse effect on our business, results of operations, cash flows and financial condition. 33 Inflation could result in decreased value from future contractual payments and higher expenses for labor and equipment, which, in turn, could adversely impact our reputation, business, financial condition, cash flows and results of operations.
We do not have information that allows us to quantify the specific amount of price increases attributable to Russia’s war on Ukraine. ● Disruptions to global shipping . Historically, we have relied on foreign suppliers and manufacturers for a number of solar energy system components, instruments and technologies that we purchase.
We do not have information that allows us to quantify the specific amount of price increases attributable to Russia’s war on Ukraine. 20 ● Disruptions to global shipping. Historically, we have relied on foreign suppliers and manufacturers for a number of solar energy system components, instruments and technologies that we purchase.
To mitigate the foregoing risks, we have identified additional leasing partners and are negotiating business arrangements with them to increase the number of leasing parties we have the ability to work with. 30 We intend to seek out additional third-party investors to provide financing for customers wishing to lease their solar energy systems.
To mitigate the foregoing risks, we have identified additional leasing partners and are negotiating business arrangements with them to increase the number of leasing parties we have the ability to work with. We intend to seek out additional third-party investors to provide financing for customers wishing to lease their solar energy systems.
Because distributions of OpCo will be used to fund Tax Receivable Agreement payments by us, OpCo’s liquidity will be affected negatively by the Tax Receivable Agreement in a material respect. 50 We are required to make payments under the Tax Receivable Agreement for certain tax benefits that we may claim, and the amounts of such payments could be significant.
Because distributions of OpCo will be used to fund Tax Receivable Agreement payments by us, OpCo’s liquidity will be affected negatively by the Tax Receivable Agreement in a material respect. We are required to make payments under the Tax Receivable Agreement for certain tax benefits that we may claim, and the amounts of such payments could be significant.
If we were to experience a change of control or the Tax Receivable Agreement was otherwise terminated as of the Closing Date, we estimate that the early termination payment would be approximately $18.6 million. The foregoing amount is merely an estimate, and the actual payment could differ materially.
If we were to experience a change of control or the Tax Receivable Agreement was otherwise terminated as of the Closing, we estimate that the early termination payment would be approximately $18.6 million. The foregoing amount is merely an estimate, and the actual payment could differ materially.
Time-of-use rates could also result in higher costs for our customers whose electricity requirements are not fully met by our offerings during peak periods. Sales and installation of solar energy systems depend heavily on suitable meteorological and environmental conditions.
Time-of-use rates could also result in higher costs for our customers whose electricity requirements are not fully met by our offerings during peak periods. 17 Sales and installation of solar energy systems depend heavily on suitable meteorological and environmental conditions.
There is substantial risk of serious illness, injury, or death if proper safety procedures are not followed. Our operations are subject to regulation under the U.S. Occupational Safety and Health Act (“ OSHA ”), Department of Transportation regulations, and equivalent state laws.
There is substantial risk of serious illness, injury, or death if proper safety procedures are not followed. Our operations are subject to regulation under the U.S. Occupational Safety and Health Act (“ OSHA ”), Department of Transportation (“ DOT ”) regulations, and equivalent state laws.
Public stockholders may not be able to experience the same positive rates of return on securities they purchase due to the low price at which the Sponsor and the other Initial Shareholders purchased shares of our Class A Common Stock and Warrants.
Public stockholders may not be able to experience the same positive rates of return on securities they purchase due to the low price at which the Sponsor and the other Initial Stockholders purchased shares of our Class A Common Stock and Warrants.
It is probable that we will be required to expand our employee base and hire additional employees to support our operations as a public company, which would increase our operating costs in future periods. 40 We incur significant costs as a result of operating as a public company.
It is probable that we will be required to expand our employee base and hire additional employees to support our operations as a public company, which would increase our operating costs in future periods. We incur significant costs as a result of operating as a public company.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq. Changing laws and regulations could create uncertainty for Zeo regarding compliance matters and result in higher costs.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq. 47 Changing laws and regulations could create uncertainty for Zeo regarding compliance matters and result in higher costs.
In contrast to the stated goals of President Biden’s administration, the administration of the newly-elected President Trump, is less likely to create or support incentives to reduce greenhouse gas emissions. In January the newly-elected President Trump announced the United States will exit the Paris Agreement.
In contrast to the stated goals of President Biden’s administration, the administration of the newly-elected President Donald Trump, is less likely to create or support incentives to reduce greenhouse gas emissions. In January the newly-elected President Trump announced the United States will exit the Paris Agreement.
Any widespread product failures or operating deficiencies may damage our market reputation and adversely impact our financial results. Product liability claims against us or accidents could result in adverse publicity and potentially significant monetary damages.
Any widespread product failures or operating deficiencies may damage our market reputation and adversely impact our financial results. 24 Product liability claims against us or accidents could result in adverse publicity and potentially significant monetary damages.
Former President Biden committed the United States to a goal of reducing greenhouse gas emissions by 50 – 52% below 2005 levels by 2030, a target consistent with the Paris Agreement’s goal of “net-zero” greenhouse gas emissions by 2050.
Former President Joe Biden committed the United States to a goal of reducing greenhouse gas emissions by 50 – 52% below 2005 levels by 2030, a target consistent with the Paris Agreement’s goal of “net-zero” greenhouse gas emissions by 2050.
As utility companies offer increasingly renewable portfolios to retail customers, those customers might be less inclined to have a solar energy system installed on their home or business, which could adversely affect our growth. 12 We have historically provided our services only to residential customers, but we may expand to other markets, including commercial and industrial customers.
As utility companies offer increasingly renewable portfolios to retail customers, those customers might be less inclined to have a solar energy system installed on their home or business, which could adversely affect our growth. 16 We have historically provided our services only to residential customers, but we may expand to other markets, including commercial and industrial customers.
The IRA implemented a corporate alternative minimum tax of 15% of financial statement income (subject to certain adjustments) for companies that report over $1 billion in profits to shareholders; similar to existing law, business credits (including solar energy credits) are limited to 75% of income in excess of $25,000 (with no limit against the first $25,000).
The IRA implemented a corporate alternative minimum tax of 15% of financial statement income (subject to certain adjustments) for companies that report over $1 billion in profits to stockholders; similar to existing law, business credits (including solar energy credits) are limited to 75% of income in excess of $25,000 (with no limit against the first $25,000).
The payments under the Tax Receivable Agreement following the exercise of the OpCo Exchange Rights or a Mandatory Exchange will not be conditioned upon a TRA Holder having a continued ownership interest in us or OpCo. 51 In certain cases, payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits, if any, Zeo realizes in respect of the tax attributes subject to the Tax Receivable Agreement.
The payments under the Tax Receivable Agreement following the exercise of the OpCo Exchange Rights or a Mandatory Exchange will not be conditioned upon a TRA Holder having a continued ownership interest in us or OpCo. 54 In certain cases, payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits, if any, Zeo realizes in respect of the tax attributes subject to the Tax Receivable Agreement.
We may also compete based on other value-added benefits, such as reliability and carbon-friendly power. If we cannot offer compelling value to our customers based on these factors, our business may not grow. 11 Electric utilities generally have substantially greater financial, technical, operational and other resources than we do.
We may also compete based on other value-added benefits, such as reliability and carbon-friendly power. If we cannot offer compelling value to our customers based on these factors, our business may not grow. 15 Electric utilities generally have substantially greater financial, technical, operational and other resources than we do.
Stock Compensation – Review with the CEO and legal counsel the list of stock grants which have been made and ask if there have been any other grants made which should be included in the analysis. 4. Classification of expenses – Review the expense classification with the executive team to determine all expenses are properly classified. 5.
Stock-Based Compensation – Review with the CEO and legal counsel the list of stock grants which have been made and ask if there have been any other grants made which should be included in the analysis. 46 4. Classification of Expenses – Review the expense classification with the executive team to determine all expenses are properly classified. 5.
The tariffs described above, the adoption and expansion of trade restrictions, the occurrence of a trade war or other governmental action related to tariffs, trade agreements or related policies have the potential to adversely impact our supply chain and access to equipment, our costs and ability to economically serve certain markets.
The tariffs and other government actions described above, the adoption and expansion of trade restrictions, the occurrence of a trade war or other governmental action related to tariffs, trade agreements or related policies have the potential to adversely impact our supply chain and access to equipment, our costs and ability to economically serve certain markets.
The global shipping industry also experienced unprecedented increases in shipping rates from the trans-Pacific and other ocean carriers due to various factors, including limited availability of shipping capacity. In 2023 and 2024, we did not experience any appreciable delays in supply.
The global shipping industry also experienced unprecedented increases in shipping rates from the trans-Pacific and other ocean carriers due to various factors, including limited availability of shipping capacity. In 2024 and 2025, we did not experience any appreciable delays in supply.
In March 2022, the Department of Commerce announced it is initiating country-wide circumvention inquiries to determine whether imports of solar cell and panels produced in Cambodia, Malaysia, Thailand and Vietnam that use components from China are circumventing anti-dumping and countervailing duty orders on solar cells and panels from China.
In March 2022, the Department of Commerce announced it is initiating country-wide circumvention inquiries to determine whether imports of solar cell and panels produced in Cambodia, Malaysia, Thailand and Vietnam that use components from China are circumventing antidumping and countervailing duty orders on solar cells and panels from China.
In addition, tariffs on solar cells, panels and inverters in China may put upward pressure on prices of these products in other jurisdictions from which we or our subcontractors currently purchase equipment, which could reduce our ability to offer competitive pricing to potential customers.
In addition, tariffs on solar cells, panels and inverters in China may put upward pressure on prices of these products in other jurisdictions from which we or our subcontractors currently purchase equipment, which could reduce our ability to offer competitive pricing to potential customers. 39 Pub. L.
We are subject to a number of federal and state laws and regulations, including the federal Occupational Safety and Health Act and comparable state statues, establishing requirements to protect the health and safety of workers.
We are subject to a number of federal and state laws and regulations, including the federal Occupational Safety and Health Act and comparable state statutes, establishing requirements to protect the health and safety of workers.
Manufacturers of the equipment we sell currently provide a manufacturer’s warranty for 25 years. If there is a covered failure of equipment, the manufacturer will pay for replacement or repair. These warranties are subject to liability and other limits.
Manufacturers of the equipment we sell currently provide a manufacturer’s warranty for twenty-five years. If there is a covered failure of equipment, the manufacturer will pay for replacement or repair. These warranties are subject to liability and other limits.
As of the date of this Report, the tariff rates on imports from China have been set at substantial levels, and rates for other countries remain subject to ongoing review and potential implementation. Less than 10% of the solar components and equipment we purchase for the solar systems we install are manufactured in the United States.
As of the date of this Report, the tariff rates on imports from China have been set at substantial levels, and rates for other countries remain subject to ongoing review and potential implementation. Less than 10% of the solar components and equipment we purchase for the solar systems we install are manufactured in the U.S..
Additionally, management has considered and reviewed the errors which occurred in revenue and cost of goods sold cutoff, accounts payable, accrued liabilities, stock compensation, expense classification, prepaid expenses, operating lease cash flow classification and finance lease arrangements. Management has determined that controls are not designed effectively in these areas.
Additionally, our management has considered and reviewed the errors which occurred in revenue and cost of revenues cutoff, accounts payable, accrued liabilities, stock compensation, expense classification, prepaid expenses, operating lease cash flow classification and finance lease arrangements. Our management has determined that controls are not designed effectively in these areas.
As a result of disclosure of information in this Report and in filings required of a public company, our business and financial condition will become more visible, which may result in threatened or actual litigation, including by competitors.
As a result of disclosure of information therein and in filings required of a public company, our business and financial condition will become more visible, which may result in threatened or actual litigation, including by competitors.
Risks Related to Regulation and Policy Increases in the cost or reduction in supply of solar energy system and energy storage system components due to tariffs or trade restrictions announced or imposed by the U.S. government could have an adverse effect on our business, financial condition and results of operations.
Increases in the cost or reduction in supply of solar energy system and energy storage system components due to tariffs or trade restrictions announced or imposed by the U.S. government could have an adverse effect on our business, financial condition and results of operations.
Approximately 44% of those leases are owned by Solar, and if (i) Solar terminates their relationship with us, (ii) Solar does not have sufficient assets in the future to provide financing for customers wishing to lease their solar energy systems, (iii) we cannot enter into new arrangements with other third-party investors to provide financing for customers wishing to lease their solar energy systems, or (iv) we cannot maintain current or enter into new arrangements with other third party leasing companies, we may be unable to continue to increase the size of our residential lease program, which could have a material, adverse effect on our business, results of operations, cash flows, and financial condition in the future.
Approximately 44% of those leases are owned by Solar, and if (i) Solar terminates their relationship with us, (ii) Solar does not have sufficient assets in the future to provide financing for customers wishing to lease their solar energy systems, (iii) we cannot enter into new arrangements with other third-party investors to provide financing for customers wishing to lease their solar energy systems, or (iv) we cannot maintain current or enter into new arrangements with other third party leasing companies, we may be unable to continue to increase the size of our residential lease program, which could have a material, adverse effect on our business, results of operations, cash flows, and financial condition in the future. 35 We typically bear the cost of maintenance and repair on solar energy systems we install that are owned and leased by third-party leasing companies.
Similarly, if state or local legislatures or tax administrators impose property taxes on third-party owners of solar energy systems, solar companies like us would be subject to higher costs. In general, we rely on certain state and local tax exemptions that apply to the sale of equipment, sale of power, or both.
Similarly, if state or local legislatures or tax administrators impose property taxes on third-party owners of solar energy systems, solar companies like us would be subject to higher costs. In general, we benefit from certain state and local tax exemptions that apply in some jurisdictions to the sale of equipment, sale of power, or both.
The Department of Commerce also upheld prior determinations that “critical circumstances” for certain importers, potentially exposing shipments made prior to the preliminary determinations to retroactive duty collection. This demonstrates that application of AD, CVD, and other trade measures can be complex, potentially involving the stacking of multiple tariff rates on single imported products and applying liabilities retroactively.
The Department of Commerce also upheld prior determinations that “critical circumstances” for certain importers, potentially exposing shipments made prior to the preliminary determinations subject to retroactive duty collection. This demonstrates that application of antidumping, countervailing duties, and other trade measures can be complex, potentially involving the stacking of multiple tariff rates on single imported products and applying liabilities retroactively.
The sale of substantial amounts of shares Class A Common Stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of the Class A Common Stock.
The sale of shares of our Class A Common Stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our Class A Common Stock.
We also compete with solar companies that are marketed to potential customers by dealers, and we may also face competition from new entrants into the market as a result of the passage of the IRA and its impacts and benefits to the solar industry.
We also compete with solar companies that are marketed to potential customers by dealers, and we may also face competition from new entrants into the market as a result of the passage of the Inflation Reduction Act of 2022 (the “ IRA ”) and its impacts and benefits to the solar industry.
While it is difficult to predict specific outcomes at this time, we expect a period of regulatory and policy uncertainty in the near term. Our business model also relies on multiple tax exemptions offered at the state and local levels.
While it is difficult to predict specific outcomes at this time, we expect a period of regulatory and policy uncertainty in the near term. Our business model also benefits from tax exemptions offered at the state and local levels.
Notably, however, on June 6, 2022, the President of the United States issued an emergency declaration establishing a tariff exemption of two years for solar panels and cells imported from Cambodia, Malaysia, Thailand and Vietnam, delaying the possibility of the imposition of dumping duties until the end of such two-year period.
On June 6, 2022, the President of the U.S. issued an emergency declaration establishing a tariff exemption of two years for solar panels and cells imported from Cambodia, Malaysia, Thailand and Vietnam, delaying the possibility of the imposition of dumping duties until the end of such two-year period.
During 2024, the majority of our customers who entered into leasing agreements have done so with third-party leasing companies Palmetto Solar, LLC d/b/a LightReach, Sunnova Energy Corporation (“Sunnova”), or third party leasing companies established and managed by White Horse Energy.
During 2024 and 2025, the majority of our customers who entered into leasing agreements have done so with third-party leasing companies such as Palmetto Solar, LLC d/b/a LightReach (“Solar”), Sunnova Energy Corporation (“Sunnova”), Goodleap LLC or a third party leasing company established and managed by White Horse Energy.
Members of our management team have interests in or are employed by other business ventures that may divert their attention from our business. Members of our management team presently have, and may in the future have additional, ownership interests in, employment by and/or fiduciary or contractual obligations to other entities with which they are affiliated with (such as Solar).
Members of our management team presently have, and may in the future have additional, ownership interests in, employment by and/or fiduciary or contractual obligations to other entities with which they are affiliated with (such as Solar). Such other ventures and entities could divert the attention of our management from our business or create conflicts of interests.
Certain existing securityholders purchased, or may purchase, securities in the Company at a price below the current trading price of such securities, and may experience a positive rate of return based on the current trading price. Future investors in the Company may not experience a similar rate of return.
Risks Related to Ownership of Zeo Securities Certain existing securityholders purchased, or may purchase, securities in the Company at a price below the current trading price of such securities, and may experience a positive rate of return based on the current trading price. Future investors in the Company may not experience a similar rate of return.
Importers must now post cash deposits at rates that differ markedly by country and by exporter or producer, with non-cooperating parties facing particularly high rates. These duties may be stacked on top of other existing tariffs.
As a result of Department of Commerce determinations, Importers must now post cash deposits at rates that differ markedly by country and by exporter or producer, with non-cooperating parties facing particularly high rates. These duties may be stacked on top of other existing tariffs.
The new tariffs, and continued volatility in trade policy may impact our gross margins and growth, due to factors such as increased procurement and installation costs, profit margin compression or the need to pass increased costs to consumers, supply chain disruption, and competitive disadvantages relative to market participants with more favorable supply arrangements. 31 Trade policy may evolve further in ways that are adverse to our business.
The new tariffs, and continued volatility in trade policy may impact our gross margins and growth, due to factors such as increased procurement and installation costs, profit margin compression or the need to pass increased costs to consumers, supply chain disruption, and competitive disadvantages relative to market participants with more favorable supply arrangements.
Revenue and cost of goods sold cut off – Review revenue and related cost of goods sold with executive team to determine if revenue and related cost of goods sold is properly recognized. We cannot assure you that these measures will significantly improve or remediate the material weaknesses described above.
Revenue and Cost of Revenues Cutoff – Review revenue and related cost of revenues with executive team to determine if revenue and related cost of revenues is properly recognized. We cannot assure you that these measures will significantly improve or remediate the material weaknesses described above.
Our economic model and projected returns on our solar energy systems require achievement of certain production results from our systems and, in some cases, we guarantee these results to our consumers. If the solar energy systems underperform for any reason, our business could suffer.
Our economic model and projected returns on our solar energy systems require achievement of certain production results from our systems and, in some cases, we guarantee these results to our consumers. If the solar energy systems underperform for any reason, our business could suffer. Any of these events or conditions could harm our business, financial condition, and results of operations.
Certain stockholders in the Company, including certain of the selling securityholders, acquired, or may acquire, shares of our Class A Common Stock or Warrants at prices below the current trading price of our Class A Common Stock or Warrants, as applicable, and may experience a positive rate of return based on the current trading price.
Certain stockholders in the Company acquired, or may acquire, shares of our Class A Common Stock at prices below the current trading price of our Class A Common Stock, and may experience a positive rate of return based on the current trading price.
Our business currently depends on the availability of utility rebates, tax credits and other benefits, tax exemptions and exclusions, and other financial incentives on the federal, state, and/or local levels.
Risks Related to Regulation and Policy Our business currently depends on the availability of utility rebates, tax credits and other benefits, tax exemptions and exclusions, and other financial incentives on the federal, state, and/or local levels.
(d/b/a Greentech Renewables) (“ Greentech ”), from which we purchased at least approximately 70% of the equipment that we installed in 2024.
(d/b/a Greentech Renewables) (“ Greentech ”), from which we purchased at least approximately 46% of the equipment that we installed in 2025.
This uncertainty may trigger unplanned costs, tighten margins, and slow growth for the company. 33 While we believe the tariffs and trade regulations described above have contributed to price increases for components that we purchase, we believe that these price increases are also due to a combination of other factors, including supply chain constraints, increased demand for solar systems in the U.S. and Europe, rising inflation, and higher labor, material, and shipping costs.
While we believe the tariffs and trade regulations described above have contributed to price increases for components that we purchase, we believe that these price increases are also due to a combination of other factors, including supply chain constraints, increased demand for solar systems in the U.S. and Europe, rising inflation, and higher labor, material, and shipping costs.
We rely on these incentives to lower our cost of capital and to attract investors, all of which enable us to lower the price we charge customers for our solar service offerings. These incentives have had a significant impact on the development of solar energy, but they could change at any time, as further described below.
We rely on these incentives to lower our cost of capital and to attract investors, all of which enable us to lower the price we charge customers for our solar service offerings. These incentives could change at any time, as further described below.
Such failures or disruptions could result in delayed or cancelled orders. System failures and disruptions could also impede the manufacturing and shipping of products, delivery of online services, transactions processing and financial reporting.
Such failures or disruptions could result in delayed or cancelled orders. System failures and disruptions could also impede the manufacturing and shipping of products, delivery of online services, transactions processing and financial reporting. Such system failures or network disruptions could damage our business operations, financial conditions or reputation.
Violation of labor or other laws by our suppliers and subcontractors or the divergence of a supplier’s or subcontractor’s labor or other practices from those generally accepted as ethical in the United States or other markets in which we do business could also attract negative publicity for us and harm our business, brand and reputation in the market.
Violation of labor or other laws by our suppliers and subcontractors or the divergence of a supplier’s or subcontractor’s labor or other practices from those generally accepted as ethical in the United States or other markets in which we do business could also attract negative publicity for us and harm our business, brand and reputation in the market. 22 We use subcontractors to perform certain services, which makes us vulnerable to the extent we rely on them.
Treasury regulations provide for certain safe harbors from treatment as a publicly traded partnership, and we intend to operate such that redemptions or other transfers of OpCo Units qualify for one or more of such safe harbors.
Under certain circumstances, transfers of OpCo Units could cause OpCo to be treated as a publicly traded partnership. Applicable U.S. Treasury regulations provide for certain safe harbors from treatment as a publicly traded partnership, and we intend to operate such that redemptions or other transfers of OpCo Units qualify for one or more of such safe harbors.
Although we carry general liability insurance, our insurance may not cover potential claims or may not be adequate to indemnify us for all liability that may be imposed. We cannot predict how the courts will rule in any potential lawsuit against us.
Lawsuits are time-consuming and expensive to resolve and divert management’s time and attention. Although we carry general liability insurance, our insurance may not cover potential claims or may not be adequate to indemnify us for all liability that may be imposed. We cannot predict how the courts will rule in any potential lawsuit against us.
Due to the limited number of suppliers in our industry, the acquisition of any of these suppliers by a competitor or any shortage, delay, price change, announcement or imposition of tariffs or duties or other limitation in our ability to obtain components or technologies we use could result in sales and installation delays, cancellations and loss of customers.
This would limit our growth potential and our opportunities to generate significant additional revenue or cash flows. 19 Due to the limited number of suppliers in our industry, the acquisition of any of these suppliers by a competitor or any shortage, delay, price change, announcement or imposition of tariffs or duties or other limitation in our ability to obtain components or technologies we use could result in sales and installation delays, cancellations and loss of customers.
We have incurred, and will continue to incur, significant expenses to comply with such laws and regulations, and increased regulation of matters relating to our interactions with customers could require us to modify our operations and incur significant additional expenses, which could have an adverse effect on our business, financial condition, and results of operations. 36 Any investigations, actions, adoption or amendment of regulations relating to the marketing of our products could divert management’s attention from our business, require us to modify our operations and incur significant additional expenses, which could have an adverse effect on our business, financial condition, and results of operations or could reduce the number of our potential customers.
Any investigations, actions, adoption or amendment of regulations relating to the marketing of our products could divert management’s attention from our business, require us to modify our operations and incur significant additional expenses, which could have an adverse effect on our business, financial condition, and results of operations or could reduce the number of our potential customers.
If imposed, these or similar tariffs could put upward pressure on prices of these solar products, which could reduce our ability to offer competitive pricing to potential customers. 32 In addition, in December 2021, the U.S.
If imposed, these or similar tariffs could put upward pressure on prices of these solar products, which could reduce our ability to offer competitive pricing to potential customers.
Most purchasers of our systems have entered into such third-party arrangements to finance their systems over an extended period of time. 19 Credit markets are unpredictable, and if they become more challenging, customers may be unable or unwilling to finance the cost of our products or the parties that have historically provided this financing may cease to do so, or only do so on terms that are substantially less favorable for our customers, either of which could materially and adversely affect our revenue and growth.
Credit markets are unpredictable, and if they become more challenging, customers may be unable or unwilling to finance the cost of our products or the parties that have historically provided this financing may cease to do so, or only do so on terms that are substantially less favorable for our customers, either of which could materially and adversely affect our revenue and growth.
These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
These sales, or the possibility that these sales may occur, also might make it more difficult for the us to sell equity securities in the future at a time and at a price that it deems appropriate. In the future, we may issue our securities to raise capital or in connection with investments or acquisitions.
Since such actions increase the cost of imported solar products, to the extent we or our subcontractors use imported solar products or domestic producers are able to raise their prices for their solar products, the overall cost of the solar energy systems will increase, which could inhibit our ability to offer competitive pricing in certain markets.
Since such actions, as they are and may further be modified or increased by subsequent U.S. government administrations, increase the cost of imported solar products, to the extent we or our subcontractors use imported solar products or domestic producers are able to raise their prices for their solar products, the overall cost of the solar energy systems will increase, which could inhibit our ability to offer competitive pricing in certain markets.
If an active market for Class A Common Stock develops and continues, the trading price of the Class A Common Stock could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond its control.
The trading price of the Class A Common Stock could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control.
Although outcomes of such actions vary, any current or future claims or regulatory actions initiated by or against us, whether successful or not, could result in significant costs, costly damage awards or settlement amounts, injunctive relief, increased costs of business, fines or orders to change certain business practices, significant dedication of management time or diversion of significant operational resources, or otherwise harm our business.
Although outcomes of such actions vary, any current or future claims or regulatory actions initiated by or against us, whether successful or not, could result in significant costs, costly damage awards or settlement amounts, injunctive relief, increased costs of business, fines or orders to change certain business practices, significant dedication of management time or diversion of significant operational resources, or otherwise harm our business. 31 If we are not successful in any legal proceedings and litigation, we may be required to pay significant monetary damages, which could hurt our results of operations.
In addition, product liability claims, injuries, defects or other problems experienced by other companies in the solar industry could lead to unfavorable market conditions to the industry as a whole and may have an adverse effect on our ability to expand our portfolio of solar energy systems and energy storage systems, thus affecting our business, financial condition and results of operations. 20 Technical and regulatory limitations regarding the interconnection of solar energy systems to the electrical grid may significantly delay interconnections and customer in-service dates, harming our growth rate and customer satisfaction.
In addition, product liability claims, injuries, defects or other problems experienced by other companies in the solar industry could lead to unfavorable market conditions to the industry as a whole and may have an adverse effect on our ability to expand our portfolio of solar energy systems and energy storage systems, thus affecting our business, financial condition and results of operations.
We depend significantly on our brand and reputation for high-quality solar service offerings, engineering and customer service to attract customers, contractors and dealers, and grow our business.
Damage to our brand and reputation or failure to expand our brand would harm our business and results of operations. We depend significantly on our brand and reputation for high-quality solar service offerings, engineering and customer service to attract customers, contractors and dealers, and grow our business.
Any of these events or conditions could harm our business, financial condition, and results of operations. 13 Climate change may have long-term impacts on our business, our industry, and the global economy. Climate change poses a systemic threat to the global economy, and we believe it will continue to do so until our society transitions to renewable energy and decarbonizes.
Climate change may have long-term impacts on our business, our industry, and the global economy. Climate change poses a systemic threat to the global economy, and we believe it will continue to do so until our society transitions to renewable energy and decarbonizes.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Audit Committee oversees management’s implementation of our cybersecurity risk management program, including processes and policies for determining risk tolerance, and reviews management’s strategies for adequately mitigating and managing identified risks relating to cybersecurity threats. 54 The Audit Committee receives updates from members of management on our cybersecurity risks at its quarterly meetings, and reviews metrics about cyber threat response preparedness, program maturity, risk mitigation status, and the current and emerging threat landscape.
Biggest changeThe Audit Committee oversees management’s implementation of our cybersecurity risk management program, including processes and policies for determining risk tolerance, and reviews management’s strategies for adequately mitigating and managing identified risks relating to cybersecurity threats. 60 The Audit Committee receives updates from members of management on our cybersecurity risks at its quarterly meetings, and reviews metrics about cyber threat response preparedness, program maturity, risk mitigation status, and the current and emerging threat landscape.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS. To the knowledge of our management, there is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 55 PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS. To the knowledge of our management, there is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
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However, from time to time, we have been, are and will likely continue to be involved in legal proceedings, administrative proceedings and claims that arise in the ordinary course of business with customers, subcontractors, suppliers, regulatory bodies or others.
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In general, litigation claims or regulatory proceedings can be expensive and time consuming to bring or defend against, which may result in the diversion of management’s attention and resources from our business and business goals and could result in settlement or damages that could significantly affect financial results and the conduct of our business. ITEM 4. MINE SAFETY DISCLOSURES.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion of the Board. (d) Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings None. ITEM 6. [RESERVED]
Biggest change(c) Dividends The Company has not paid any cash dividends on its shares of its common stock to date. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion of the Board.
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(b) Holders On May 19, 2025, there were 86 holders of record of our Class A Common Stock, and one holder of record of our warrants. (c) Dividends The Company has not paid any cash dividends on its shares of its common stock to date.
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(b) Holders On March 27, 2026, there were 692 holders of record of our Class A common stock and 18 holders of record of our public warrants. The number of holders of record does not include beneficial owners whose shares are held in street name by brokers and other nominees.
Added
(d) Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings None. (e) Purchases of Equity Securities None.
Added
(f) Equity Compensation Plan The following table summarizes information about our equity compensation plans as of December 31, 2025: Number of securities to be issued upon exercise of outstanding options and restricted stock awards Weighted-average price of outstanding options and restricted stock awards Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders 975,002 $ 2.97 1,945,400 Equity compensation plans not approved by security holders – – – Total 975,002 $ 2.97 1,945,400 62 ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

56 edited+56 added−60 removed28 unchanged
Biggest changeYear Ended December 31, 2024, Compared to Year Ended December 31, 2023 The following table sets forth a summary of our consolidated statements of operations for the periods presented: Year ended December 31, Change 2024 2023 $ % Revenue, net $ 73,244,083 $ 109,691,001 $ (36,446,918 ) (33.2 )% Costs and expenses: Cost of goods sold (exclusive of depreciation and amortization) 38,021,519 59,436,674 (21,415,155 ) (36.0 )% Depreciation and amortization 4,836,538 1,841,874 2,994,664 162.6 % Sales and marketing 19,587,073 30,324,059 (10,736,986 ) (35.4 )% General and administrative 21,628,725 12,949,067 8,679,658 67.0 % Total operating expenses 84,073,855 104,551,674 (20,447,819 ) (19.6 )% (Loss) income from operations (10,829,772 ) 5,139,327 (15,969,099 ) (310.7 )% Other income (expense), net: Other income (expense), net 233,151 (183,401 ) 416,552 (227.1 )% Change in fair value of warrant liabilities 69,000 - 69,000 - % Interest expense (333,539 ) (110,857 ) (222,682 ) 200.9 % Total other income (expense), net (31,388 ) (294,258 ) 262,870 (89.3 )% Net (loss) income before taxes $ (10,861,160 ) $ 4,845,069 $ (15,706,229 ) (324,2 )% 62 Revenue, net Revenue, net decreased by approximately $36.4 million, from $109.7 million for the year ended December 31, 2023 to $73.2 million for the year ended December 31, 2024.
Biggest changeResults of Operations Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 The following table sets forth a summary of our consolidated statements of operations for the periods presented: Years Ended December 31, Change 2025 2024 $ % Net revenues $ 69,349,938 $ 73,244,083 $ (3,894,145 ) (5.3 )% Costs and expenses: Cost of revenues 31,066,477 38,067,096 (7,000,619 ) (18.4 )% Depreciation and amortization 8,576,502 4,836,538 3,739,964 77.3 % Sales and marketing 22,698,405 19,587,073 3,111,332 15.9 % General and administrative 27,540,686 21,558,136 5,982,550 27.8 % Total operating expenses 89,882,070 84,048,843 5,833,227 6.9 % Loss from operations (20,532,132 ) (10,804,760 ) (9,727,372 ) (90.0 )% Other income (expense): Other income 363,918 141,467 222,451 157.2 % Interest expense (155,490 ) (333,539 ) 178,049 53.4 % Gain on disposal of property and equipment – 91,684 91,684 – Gain on change in fair value of warrant liabilities 957,720 69,000 888,720 1,288.0 % Total other income (expense) 1,166,148 (31,388 ) 1,197,536 3,815.3 % Net loss before taxes $ (19,365,984 ) $ (10,836,148 ) $ (8,529,836 ) (78.7 )% 68 Net Revenues Net revenues decreased by approximately $3.9 million from $73.2 million for the year ended December 31, 2024 to $69.3 million for the year ended December 31, 2025.
The majority of our customers are located in Florida, Texas, Arkansas, Missouri, Ohio, and Illinois, and we have an expanding base of customers in California, Colorado, Minnesota, Missouri, Ohio, Utah, and Virginia.
The majority of our customers are located in Florida, Texas, Arkansas, Missouri, Ohio, and Illinois, and we have an expanding base of customers in California, Colorado, Minnesota, Utah, and Virginia.
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 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.
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 manufacturing and installation of our systems, which would adversely impact our cash flows and results of operations, including revenue and contribution margin.
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.
Our condensed consolidated financial statements may differ based upon different estimates and assumptions. We discuss our significant accounting policies in Note 3, Summary of Significant Accounting Policies, to our condensed consolidated financial statements. Our significant accounting policies are subject to judgments and uncertainties that affect the application of such policies.
Our consolidated financial statements may differ based upon different estimates and assumptions. We discuss our significant accounting policies in Note 3—Summary of Significant Accounting Policies , to our consolidated financial statements. Our significant accounting policies are subject to judgments and uncertainties that affect the application of such policies.
Components of Condensed Consolidated Statements of Operations Revenue, net 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.
Components of 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.
Contributions 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.
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.
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. Tariffs and Inflation.
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.
Our revenue is affected by changes in the volume 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.
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.
General and administrative expenses consist primarily of personnel-related expenses for our executive, finance, human resources, information technology, operations support and software, facilities costs and fees for professional services. Fees for professional services consist primarily of outside legal, accounting and information technology consulting costs.
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.
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.
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.
Our primary short-term requirements for liquidity and capital are to fund general working capital and capital expenses. Our principal long-term working capital uses include ensuring revenue growth, expanding our sales and marketing efforts and potential acquisitions. As of December 31, 2024 and 2023, our cash and cash equivalents balance was approximately $5.6 million and $8.0 million, respectively.
Our primary short-term requirements for liquidity and capital are to fund general working capital and capital expenses. Our principal long-term working capital uses include ensuring revenue growth, expanding our sales and marketing efforts and potential acquisitions. As of December 31, 2025 and December 31, 2024, our cash and cash equivalents balance were $6.1 million and $5.6 million, respectively.
The Company maintains its cash in checking and savings accounts.
The Company maintains its cash in checking, savings, and money market accounts.
We have focused to date on a simple, capital light business strategy utilizing, as of December 31, 2024, approximately 290 sales agents and approximately 22 independent sales dealers to produce our sales pipeline.
We have focused to date on a simple, capital light business strategy utilizing, as of December 31, 2025, approximately 260 sales agents and approximately 10 independent sales dealers to produce our sales pipeline.
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.
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.
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.
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. 67 Revenues declined during the year ended December 31, 2025 because of the effect of higher interest rates on the consumer financing rates.
Depreciation and amortization consist primarily of depreciation of our vehicles, furniture and fixtures, internally developed software and amortization of our acquired intangibles. Other income (expenses), net Other income (expenses), net primarily consists of change in fair value of warrant liabilities and interest income.
Depreciation and amortization consist primarily of depreciation of our vehicles, furniture and fixtures, software and amortization of our acquired intangibles. Other income (expenses), net Other income (expenses), net primarily consists of change in fair value of warrant liabilities and interest expense and fees under our equipment and vehicle term loans.
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.
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 .
Approximately 5% of our sales were paid in cash by the customer in each of the year ended December 31, 2024, and 2023.
Less than 5% of our sales were paid in cash by the customer in each of the years ended December 31, 2025 and 2024.
In addition, to provide more financing options for our prospective residential solar energy customers, we have partnered with several third-party operators which allows our customers to choose a leasing option to finance their systems.
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.
The increase was due to an increase in the amortization of the cost of acquired contracts from the Lumio Asset Purchase Agreement. Sales and Marketing Sales and marketing expenses decreased by $10.7 million, from $30.3 million for the year ended December 31, 2023 to $19.6 million for the year ended December 31, 2024.
Depreciation and Amortization Depreciation and amortization increased by $3.7 million, from $4.8 million for the year ended December 31, 2024 to $8.6 million for the year ended December 31, 2025. The increase was primarily due to an increase in the amortization of the cost of acquired contracts from the Lumio Asset Purchase Agreement.
The increased cost of consumer lending has reduced the advantage provided by financed solar power relative to standard utility costs, which has negatively affected the demand for our products. 61 Revenue, net less cost of goods sold 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.
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.
If the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company conducts a quantitative goodwill impairment test comparing the fair value of the applicable reporting unit with its carrying value.
If the Company bypasses the qualitative assessment, or concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company performs a quantitative assessment by comparing the estimated fair value of the reporting unit with its carrying amount.
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. 56 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.
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.
It also includes interest income on our cash balances, and accrued interest on tariffs previously paid and approved for a refund.
It also includes interest income on our cash balances, and accrued interest.
We have focused on improving our operational efficiency to meet the decrease in revenues we faced in 2024 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.
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. 63 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.
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. As of December 31, 2024, we have operations in eight states and service customers in 16 states. We primarily generate revenue from our sales, product offerings and services in the residential housing market.
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 in Florida, Texas, Arkansas, Missouri, Illinois, Virginia and Ohio. We primarily generate revenue from our product offerings and services in the residential housing market.
The volume of sales and installations of rooftop solar systems, our primary product, increase 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, upgraded insulation and/or energy storage systems.
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, increase from April to September when a majority of our sales teams are most active in our areas of service.
Cash flows from financing activities Net cash provided by financing activities was approximately $13.7 million for the year ended December 31, 2024, primarily relating to $9.2 million in net proceeds from the issuance of convertible preferred stock at the time of the Business Combination, $2.7 million from a private placement to finance the Lumio asset purchase and $2.4 million from a convertible promissory note with a related party, offset by principal payments on debt and dividends paid on convertible preferred stock.
Net cash provided by financing activities was approximately $13.7 million for the year ended December 31, 2024, primarily relating to net cash acquired from the issuance of convertible preferred stock of $9.2 million and the private placement issuance of Class A common stock offset by repayments of debt and finance leases, and distributions of stockholders.
The following table provides a reconciliation of net (loss) income to Adjusted EBITDA for the periods presented: Year ended December 31, 2024 2023 Net (loss) income $ (9,872,358 ) $ 4,845,069 Adjustment: Other income, net (233,151 ) 183,401 Change in fair value of warrant liabilities (69,000 ) - Interest expense 333,539 110,857 Income tax benefit (988,802 ) - Stock compensation 7,951,248 - Depreciation and amortization 4,836,538 1,841,874 Adjusted EBITDA 1,958,014 6,981,201 Net (loss) income margin (13.5 )% 4.4 % Adjusted EBITDA margin 2.7 % 6.4 % Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires us to establish accounting policies and make estimates and assumptions that affect our reported amounts of assets and liabilities at the date of the condensed consolidated financial statements.
The following table provides a reconciliation of net (loss) income to Adjusted EBITDA for the periods presented: Years Ended December 31, 2025 2024 Net loss $ (19,629,633 ) $ (9,872,358 ) Adjustments: Other income (363,918 ) (141,467 ) Interest expense 155,490 333,539 Gain on disposal of property and equipment – (91,684 ) Gain on change in fair value of warrant liabilities (957,720 ) (69,000 ) Income tax provision (benefit) 263,649 (963,790 ) Stock-based compensation 6,498,623 7,951,248 Acquisition-related expenses 2,116,156 1,971,700 Depreciation and amortization 8,576,502 4,836,538 Adjusted EBITDA $ (3,340,851 ) $ 3,954,726 Net loss margin (28.3 )% (13.5 )% Adjusted EBITDA margin (4.8 )% 5.4 % 72 Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires us to establish accounting policies and make estimates and assumptions that affect our reported amounts of assets and liabilities at the date of the consolidated financial statements.
Cash Flows The following table summarizes our cash flows for the periods presented: Year ended December 31, 2024 2023 Change Net cash (used in) provided by operating activities $ (8,716,717 ) $ 11,977,134 $ (20,693,851 ) Net cash (used in) investing activities (7,369,137 ) (1,034,666 ) (6,334,471 ) Net cash provided by (used in) financing activities 13,697,663 (5,188,468 ) 18,886,131 Cash flows from operating activities Net cash used in operating activities was approximately $8.7 million during the year ended December 31, 2024 compared to a net cash provided by operating activities of approximately $12.0 million during year ended December 31, 2023.
Cash Flows The following table summarizes our cash flows for the periods presented: For the Years Ended December 31, 2025 2024 Change Net cash used in operating activities $ (8,691,421 ) $ (8,716,717 ) $ 25,296 Net cash provided by (used in) investing activities 13,372,867 (7,369,137 ) 20,742,004 Net cash provided by (used in) financing activities (4,172,727 ) 13,697,663 (17,870,390 ) Cash Flows from Operating Activities Net cash used in operating activities was approximately $8.7 million during the year ended December 31, 2025 compared to net cash used in operating activities of approximately $8.7 million during the year ended December 31, 2024.
We also expect to incur substantial additional expenses for, among other things, directors’ and officers’ liability insurance, director fees, internal control compliance, and additional costs for investor relations, accounting, audit, legal and other functions. 59 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.
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.
Sales and marketing expenses consist primarily of personnel-related expenses including sales commissions, as well as advertising, travel, trade shows, marketing, customer support and other indirect costs.
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.
First, the Company assesses qualitative factors to determine whether or not it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
When assessing the recoverability of goodwill, the Company may first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The qualitative assessment considers factors including the current operating environment, industry and market conditions, cost factors, overall financial performance, and other relevant events.
The company used $4.0 million for the Lumio asset purchase, $3.0 million to issue debt to a related party, and $0.4 million to purchase property and equipment. Net cash used in investing activities for the year ended December 31, 2023 was approximately $1.0 million, relating to purchases of vehicles.
Net cash used in investing activities for the year ended December 31, 2024 was approximately $7.4 million, relating to the asset acquisition of Lumio, note receivable – related-party investment, and purchase of property and equipment. 70 Cash Flows from Financing Activities Net cash used in financing activities was approximately $4.2 million for the year ended December 31, 2025, primarily relating to the payment of dividends to OpCo Class A preferred unit holders and repayments of debt and finance leases.
When a customer uses a third-party operator (TPO) lease to finance their system, the TPO is the contracted customer with ZEO. Upon installation inspection, we satisfy our performance obligation and recognize revenue. Many of the Company’s customers finance their obligations with third parties.
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.
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.
We depend on our distributors to timely handle logistics and related requirements in moving equipment to the installation sites.
The decrease was primarily due to a result of a reduction in commissions earned due to the decrease in revenue. General and Administrative expenses General and administrative expenses increased by $8.7 million from $12.9 million for the year ended December 31, 2023 to $21.6 million for the year ended December 31, 2024.
General and Administrative Expenses General and administrative expenses increased by $6.0 million from $21.6 million for the year ended December 31, 2024 to $27.5 million for the year ended December 31, 2025.
We believe the following accounting policies are critical to the preparation of our consolidated financial statements due to the estimation process and business judgment involved in their application: Valuation of Business Combinations The Company recognizes and measures the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date.
We believe the following accounting policies are critical to the preparation of our consolidated financial statements due to the estimation process and business judgment involved in their application: Allowance for Credit Losses Accounts receivable are recorded at the invoiced amount, net of an allowance for current expected credit losses.
Cost of Goods Sold Cost of goods sold decreased by $21.4 million, from $59.4 million for the year ended December 31, 2023 to $38.0 million for the year ended December 31, 2024. The decrease was due to the decrease in revenue.
Cost of Revenues Cost of revenues decreased by $7.0 million from $38.1 million for the year ended December 31, 2024 to $31.1 million for the year ended December 31, 2025, primarily driven by the decline in installation revenues over the same period.
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, which may continue to put pressure on our operating margins and increase our costs.
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.
As a percentage of revenue, the cost of goods sold was 52.4% for the year ended December 31, 2024, which was consistent with the year ended December 31, 2023. Depreciation and amortization Depreciation and amortization increased by $3.0 million, from $1.8 million for the year ended December 31, 2023, to $4.8 million for the year ended December 31, 2024.
As a percentage of net revenues, cost of revenues improved from 52.0% for the year ended December 31, 2024 to 44.8% for the year ended December 31, 2025.
We believe that our entry into new markets will continue to facilitate revenue growth and customer diversification. 60 Expansion of New Products and Services . We offer roofing replacements to facilitate our solar installations and to repair rooftops on homes in Florida damaged by severe weather.
In 2025, 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.
Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable.
Such events or circumstances may include significant decreases in the market price of an asset, significant changes in the extent or manner in which an asset is used or in its physical condition, significant adverse changes in legal factors or in the business climate, a history or forecast of operating or cash flow losses, significant disposal activity, a significant decline in revenue, or other indicators that the carrying value of an asset may not be recoverable.
The decrease was primarily due to the effect of higher interest rates on consumer financing. The increased cost of consumer lending reduced the advantage provided by financed solar power relative to standard utility costs, which negatively affected the demand for our products. The more difficult selling environment resulted in a decrease in sales from our sales force and dealer network.
The increased cost of consumer lending has reduced the advantage provided by financed solar power relative to standard utility costs, which has negatively affected the demand for our products. 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.
The following table provides a reconciliation of gross profit to contribution profit for the periods presented: Year ended December 31, 2024 2023 Total revenue $ 73,244,083 $ 109,691,001 Less: Cost of goods sold (exclusive of depreciation and amortization shown below) 38,021,519 59,436,674 Less: Depreciation and amortization related to Cost of goods sold 827,848 444,663 Gross Profit $ 34,394,716 $ 49,809,664 Adjustment: Depreciation and amortization 4,008,690 1,397,211 Commissions expense 15,827,850 28,679,176 Contribution Profit 14,588,176 19,733,277 Gross Margin 47.0 % 45.4 % Contribution margin 19.9 % 18.0 % 65 Adjusted EBITDA We define Adjusted EBITDA, a non-GAAP financial measure, as net income (loss) before interest and other income (expenses), net, income tax expense, depreciation and amortization, as adjusted to exclude merger and acquisition expenses (“ M&A expenses ”).
Contribution margin reflects our Contribution profit as a percentage of revenues. 71 The following table provides a reconciliation of gross profit to contribution profit for the periods presented: Years Ended December 31, 2025 2024 Net revenues $ 69,349,938 $ 73,244,083 Cost of revenues (exclusive of depreciation and amortization): 31,066,477 38,067,096 Less: depreciation and amortization related to cost of revenues 8,117,196 3,695,000 Total gross profit $ 30,166,265 $ 31,481,987 Adjustments: Depreciation and amortization 459,306 1,141,538 Commissions expense 16,848,141 15,827,850 Total contribution profit $ 12,858,818 $ 14,512,599 Gross margin 43.5 % 43.0 % Contribution margin 18.5 % 19.8 % Adjusted EBITDA We define Adjusted EBITDA, a non-GAAP financial measure, as net income (loss) before interest and other income (expenses), net, income tax expense, depreciation and amortization, gain on change in fair value of warrant liabilities, stock-based compensation, and merger and acquisition expenses (“ M&A expenses ”).
The following table sets forth these metrics for the periods presented: Year Ended December 31, (In thousands, except percentages) 2024 2023 Revenue, net $ 73,244 $ 109,691 Gross Profit 34,395 49,810 Gross Margin 47.0 % 45.4 % Contribution profit $ 14,558 $ 19,733 Contribution margin 19.9 % 18.0 % (Loss) income from operations $ (10,830 ) $ 5,139 Net (loss) income $ (9,872 ) $ 4,845 Adjusted EBITDA $ 1,958 $ 6,981 Adjusted EBITDA margin 2.7 % 6.4 % Gross Profit and Gross Margin We define gross profit as revenue, net less cost of goods sold and depreciation and amortization related to cost of goods sold, and define gross margin, expressed as a percentage, as the ratio of gross profit to revenue, net.
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. 65 The following table sets forth these metrics for the periods presented: Years Ended December 31, 2025 2024 Net revenues $ 69,349,938 $ 73,244,083 Gross profit 30,166,265 31,481,987 Gross margin 43.5 % 43.0 % Contribution profit 12,858,818 14,512,599 Contribution margin 18.5 % 19.8 % Loss from operations (20,532,132 ) (10,804,760 ) Net loss (19,629,633 ) (9,872,358 ) Adjusted EBITDA (3,340,851 ) 3,954,726 Adjusted EBITDA margin (4.8 )% 5.4 % Gross Profit and Gross Margin We define gross profit as revenue, net less cost of revenues and depreciation and amortization related to cost of revenues, and define gross margin, expressed as a percentage, as the ratio of gross profit to revenue, net.
We provide competitive compensation packages to our in-house sales teams and external sales dealers, which incentivizes the acquisition of new customers. Interest rates. Interest rate increases for both short-term and long-term debt have stabilized but remain high. Historically, most of our customers have financed the purchase of their solar systems.
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.
Current Indebtedness The Company has approximately $3.6 million in trade-credit with solar equipment distributors, approximately $0.8 million of debt on service trucks and vehicles valued at approximately $1.3 million, net of depreciation and $2.4 million in a convertible promissory note with a related party. 64 Non-GAAP Financial Measures The non-GAAP financial measures below 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.
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.
All adders consisted of less than 10% of the total revenue, net in each of the year ended December 31, 2024, and 2023.
In addition to sales of solar systems, “adders” or accessories to a sale may include roofing, energy efficient appliances, upgraded insulation and/or energy storage systems. All adders consisted of less than 10% of the total revenues, net in the years ended December 31, 2025 and 2024.
If the carrying amount of the reporting unit exceeds the fair value of the reporting unit, the Company recognizes an impairment loss in the condensed consolidated statements of operations for the amount by which the carrying amount exceeds the fair value of the reporting unit. The Company performs its annual goodwill impairment test at December 31 of each year.
If the carrying amount of a reporting unit exceeds its estimated fair value, an impairment loss is recognized for the amount of the excess, limited to the total amount of goodwill allocated to the reporting unit.
Lease financing products have become popular with our customers as the third-party operators can offer a monthly payment lower than a loan product. The company will continue to offer both loan and lease financing products to our customers. Managing our Supply Chain . We rely on contract manufacturers and suppliers to produce our components.
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.
Net cash used in financing activities for the year ended December 31, 2023 was approximately $5.2 million, primarily relating to distributions to members.
Cash Flows from Investing Activities Net cash provided by investing activities was approximately $13.4 million for the year ended December 31, 2025, relating to the cash acquired in the acquisition of Heliogen, offset by purchases of property and equipment.
The Company evaluates the recoverability of intangible assets by comparing their carrying amounts to future net undiscounted cash flows expected to be generated by the intangible assets. If such intangible assets are considered to be impaired, the impairment recognized is measured as the amount by which the carrying amount of the intangible assets exceeds the fair value of the assets.
If indicators of impairment are present, the Company evaluates recoverability by comparing the carrying amount of the asset or asset group to the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset or asset group.
Other income (expense), net Other income (expense), net increased from $294,258 of other expense to $31,388 of income primarily due to a decrease in losses on the disposition of assets, a gain on fair value of warrant liabilities and an increase in interest income partly offset by an increase in interest expense. 63 Liquidity and Capital Resources Our primary source of funding to support operations have historically been from cash flows from operations.
The increase was primarily a result of increased gain on change in fair value of warrant liabilities, other income, and less interest expense during the current period. 69 Liquidity and Capital Resources Our operations have historically been funded through a combination of cash on hand, proceeds from financing activities, and in 2025, net cash acquired in connection with the Heliogen acquisition (see Note 6—Business Combinations in the consolidated financial statements).
While we believe that our cash and cash equivalents will be sufficient to meet our currently contemplated business needs for the next twelve months, we cannot assure you that this will be the case. If additional financing is required by us from outside sources, we may not be able to raise it on terms acceptable to us or at all.
We currently believe that our existing cash and working capital balances, anticipated future cash flows from operations and borrowings under our debt agreements will be sufficient to meet our currently contemplated business needs for the next twelve months.
Removed
We believe that continued government policy support of solar energy and increasing conventional utility costs provide the solar energy market with material headwinds for accelerating adoption in the United States, which currently lags other international markets, including Australia and Europe.
Added
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.
Removed
The majority of our customers are located in Florida, Texas, Arkansas, Missouri, Ohio and Illinois and we have an expanding base of customers in California, Colorado, Minesota, Utah and Virginia. We plan to continue to enter new markets selectively where favorable net metering policies or cost incentives exist and we can implement efficient operations.
Added
Recent Developments Heliogen Acquisition On May 28, 2025, we entered into a plan of merger and reorganization agreement with Heliogen, a renewable-energy technology company that provides solutions for delivering low-carbon energy production by combining commercially proven solar technologies with thermal systems and storage expertise.
Removed
Most of our sales were generated in Florida in 2023 and were largely split between Florida and Ohio in 2024.
Added
The transaction was completed on August 8, 2025, under which Heliogen became a wholly owned subsidiary of the Company.
Removed
Recent Developments On October 25, 2024, the Company closed an Asset Purchase Agreement with Lumio Holdings, Inc., a Delaware corporation, and Lumio HX, Inc., a Delaware corporation, pursuant to which, subject to the terms and conditions set forth in the Asset Purchase Agreement, the Company agreed to acquire certain assets of the Sellers on an as-is, where-is basis, including uninstalled residential solar energy contracts, certain inventory, intellectual property and intellectual property rights, equipment, records, goodwill and other intangible assets, free and clear of any liens other than certain specified liabilities of the Sellers that are being assumed for a total purchase price of (i) $4 million in cash and (ii) 6,206,897 shares of the Company’s Class A Common Stock, par value $0.0001, to be paid to LHX Intermediate, LLC, a Delaware limited liability company.
Added
The total consideration transferred consisted entirely of our Class A common stock, issued to Heliogen shareholders at an exchange ratio of 0.9591 shares of our Class A common stock for each share of Heliogen common stock, resulting in the issuance of 6,217,612 Class A common shares. No contingent consideration was included.
Removed
The Asset Purchase Agreement contains customary representations, warranties and covenants of the parties for a transaction involving the acquisition of assets from a debtor in bankruptcy, including the condition that the bankruptcy court enter an order authorizing and approving the Transaction. Business Combination On March 13, 2024, we consummated the Business Combination with ESGEN Acquisition Corp.
Added
In connection with the merger, all outstanding Heliogen SPAC warrants and RSUs were automatically accelerated and fully vested and were settled in the same equity consideration, net of applicable tax withholding. All stock options and commercial warrants were out-of-the-money and canceled with no value.
Removed
Prior to the Closing, (i) except as otherwise specified in the Business Combination Agreement, each issued and outstanding ESGEN Class B ordinary share was converted into one ESGEN Class A ordinary; and (ii) ESGEN was domesticated into the State of Delaware so as to become a Delaware corporation.
Added
We accounted for the Heliogen acquisition using the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” and allocated the purchase price to the assets acquired and liabilities assumed based on their estimated fair values at the acquisition date, with the excess of purchase price over the estimated fair value of the net assets acquired recorded as goodwill.
Removed
In connection with the Closing, we changed our name from “ESGEN Acquisition Corporation” to “Zeo Energy Corp.” Following the Domestication, each then-outstanding ESGEN Class A ordinary share was converted into one share of Class A common stock, and each then-outstanding ESGEN Public Warrant converted automatically into a Warrant, exercisable for one share of Zeo Class A Common Stock.
Added
Note Conversion On October 30, 2025, the outstanding balance of the Promissory Note totaling $2.5 million was converted into 1,851,851 shares of the Company’s Class A common stock. Upon conversion, the remaining unamortized debt discount was recognized and the carrying value of the Promissory Note was reclassified to equity.
Removed
Additionally, each outstanding unit of ESGEN was cancelled and separated into one share of Class A Common Stock and one-half of one Warrant. 57 In accordance with the terms of the Business Combination Agreement, Sunergy caused all holders of any options, warrants or rights to subscribe for or purchase any equity interests of Sunergy or its subsidiaries or securities (including debt securities) convertible into or exchangeable for, or that otherwise conferred on the holder any right to acquire, any equity interests of Sunergy or any subsidiary thereof (collectively, the “Sunergy Convertible Interests”) existing immediately prior to the Closing to either exchange or convert all such holder’s Sunergy Convertible Interests into limited liability interests of Sunergy (the “Sunergy Company Interests”) in accordance with the governing documents of Sunergy or the Sunergy Convertible Interests.
Added
No balance remained outstanding under the Promissory Note as of December 31, 2025. White Lion Transaction On January 27, 2026, we entered into the White Lion Purchase Agreement with White Lion. We also entered into the RRA with White Lion on January 27, 2026.
Removed
At the Closing, ESGEN contributed to OpCo (1) all of its assets (excluding its interests in OpCo, but including the amount of cash in ESGEN’s Trust Account as of immediately prior to the Closing (after giving effect to the exercise of redemption rights by ESGEN stockholders)), and (2) a number of newly issued shares of Class V common stock, which are non-economic, voting shares of Zeo, equal to the number of Seller OpCo Units (as defined in the Business Combination Agreement) and (y) in exchange, OpCo issued to ESGEN (i) a number of Class A common units of OpCo (the “OpCo Manager Units”) which equaled the total number of shares of Class A Common Stock issued and outstanding immediately after the Closing and (ii) a number of warrants to purchase OpCo Manager Units which equaled the number of Warrants issued and outstanding immediately after the Closing (the transactions described above in this paragraph, the “ESGEN Contribution”).
Added
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.
Removed
Immediately following the ESGEN Contribution, (x) the Sellers contributed to OpCo the Sunergy Company Interests and (y) in exchange therefor, OpCo transferred to the Sellers the Seller OpCo Units and the Seller Class V Shares.
Added
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.
Removed
Prior to the Closing, Sellers transferred 24.167% of their Sunergy Company Interests (which were thereafter exchanged for Seller OpCo Units and Seller Class V Shares at the Closing, as described above) pro rata to Sun Managers, LLC, a Delaware limited liability company (“Sun Managers”), in exchange for Class A Units (as defined in the Sun Managers limited liability company agreement (the “SM LLCA”)) in Sun Managers.
Added
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.
Removed
In connection with such transfer, Sun Managers executed a joinder to, and became a “Seller” for purposes of, the Business Combination Agreement.
Added
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).

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