Financial Analysis

NOTE 6 BUSINESS COMBINATIONS Heliogen Acquisition On May 28, 2025, the Company 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. The transaction was completed on August 8, 2025, at which time Heliogen became a wholly owned subsidiary of the Company. The acquisition of Heliogen aligns with the Companys strategy to expand its clean-energy platform beyond residential markets into large-scale commercial and industrial energy generation and storage. The acquisition is expected to complement the Companys existing solar operations, create operational synergies, and broaden the Companys market reach. The total consideration transferred consisted entirely of the Companys Class A common stock, measured at fair value on the acquisition date. Shares were issued to Heliogen shareholders at an exchange ratio of 0.9591 shares of the Companys Class A common stock for each share of Heliogen common stock, resulting in the issuance of 6,217,612 shares of Class A common stock. No contingent consideration was included in the transaction. In connection with the merger, all outstanding Heliogen SPAC warrants and restricted stock units (RSUs) were automatically accelerated and fully vested and were settled in the same equity consideration, net of applicable tax withholding. All …

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NOTE 15 COMMITMENTS AND CONTINGENCIES Workmanship and Warranties The Company typically provides workmanship warranties for solar energy systems installed for customers for periods ranging from one to ten years against defects in design and workmanship and that installations will remain watertight. The manufacturers warranties on solar energy system components are generally passed through to customers and typically include product warranty periods ranging from 10 to 20 years and limited performance warranties of up to 25 years. Based on historical experience, the Company has not incurred significant warranty costs associated with these obligations. Accordingly, no warranty reserve was recorded as of December 31, 2025 and 2024. The Company continues to evaluate warranty claims on an ongoing basis and may, at its discretion, provide reimbursements to customers if certain solar equipment does not operate as intended. Litigation From time to time, the Company may be involved in various claims, lawsuits, and legal proceedings arising in the ordinary course of business. The Company records a liability for loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated in accordance with ASC 450. As of December 31, 2025 and 2024, the Company was not aware of any pending or threatened legal proceedings that it believes would have a material adverse effect on the Companys consolidated financial position, results of operations, …

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NOTE 14 DEBT Vehicle Loans The Company has financing arrangements for certain vehicles used in its operations. These financing arrangements consist of direct loans associated with individual vehicles in the Companys fleet. Payments of debt obligations are based on equal monthly payments for 60 months and include interest rates ranging from 4.94% to 11.09%. As of December 31, 2025, the weighted-average interest rate on the Companys vehicle loan obligations was 11.09%. Amounts outstanding under these arrangements are presented in the consolidated balance sheets as the current portion of long-term debt and long-term debt. The Company does not have debt covenants associated with these vehicle loan arrangements. As of December 31, 2025, estimated future minimum principal payments of vehicle loans were as follows: Year Ending December 31, Amount 2026 $ 23,526 2027 26,264 2028 29,322 Total 79,112 Less: current portion (23,526 ) Total long-term debt $ 55,586 Loan Payable On July 1, 2025, the Company converted $2,547,877 of outstanding accounts payable to a vendor into a loan payable with the same vendor. The loan bears interest at an annual rate of 18% (1.5% monthly) and provided for scheduled principal payments beginning in July 2025, with maturity on August 22, 2025. As a result of the transaction, the related accounts payable balance was reclassified to a loan payable in the consolidated balance sheet. The loan, including accrued interest, was repaid during the period. Convertible …

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The Companys net revenues for the years ended December 31, 2025 and 2024 are disaggregated as follows: Years Ended December 31, 2025 2024 Solar system installations, net $ 68,154,316 $ 70,295,305 Roofing installations 1,195,622 2,948,778 Energy storage solutions Total net revenues $ 69,349,938 $ 73,244,083 …

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NOTE 18 STOCK-BASED COMPENSATION 2024 Omnibus Incentive Plan On March 6, 2024, the shareholders of ESGEN approved the Zeo 2024 Omnibus Incentive Equity Plan (the Incentive Plan), which became effective upon the closing of the Sunergy business combination. A total of 3,220,400 shares of Class A common stock were initially reserved for issuance under the Incentive Plan (the Plan Share Reserve). Each award granted under the Incentive Plan reduces the Plan Share Reserve by the number of shares underlying the award. The Plan Share Reserve automatically increases on the first day of each fiscal year beginning in 2025 through 2029 by a number of shares equal to the lesser of (i) 2% of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or (ii) a lesser number of shares determined by the Board of Directors. The purpose of the Incentive Plan is to enable the Company and its subsidiaries to attract and retain key personnel and to align the interests of directors, officers, employees, consultants, and advisors with those of the Companys stockholders through equity-based compensation. March 2024 Grant On March 13, 2024, the Company entered into an executive employment agreement with its CEO. In addition to the CEOs annual salary and cash bonus, the CEO became eligible to receive certain equity awards under the Incentive Plan as follows: 50,000 vested shares to be granted 12 months after the employment agreement date, 50,000 vested shares to be …

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NOTE 20 FAIR VALUE MEASUREMENTS The carrying amounts of the Companys financial instruments, including cash and cash equivalents, accounts receivable, inventories, prepaid expenses and other current assets, accounts payable, accrued expenses, and contract assets and liabilities, approximate fair value due to the short-term nature of these instruments. The carrying amounts of lease liabilities and notes payable also approximate fair value as these instruments bear interest rates that are consistent with current market rates for similar instruments. Recurring Fair Value Measurements The Company measures certain financial instruments at fair value on a recurring basis. As of December 31, 2025, the Companys financial instruments measured at fair value on a recurring basis consist of warrant liabilities. See Note 19Warrants for additional information. The fair value of financial instruments measured at fair value on a recurring basis as of December 31, 2025 consisted of the following: Fair Value Measurements as of December 31, 2025 Description Level 1 Level 2 Level 3 Total Warrant liabilities $ 491,280 $ $ $ 491,280 The following table presents changes in the Companys warrant liabilities measured at fair value on a recurring basis: Amount Warrant Liabilities Balance as of December 31, 2023 $ Fair value of warrant liabilities upon issuance 1,518,000 Gain on change in fair value of warrant liabilities (69,000 ) Extinguishment of warrant liabilities upon settlement Balance as of Decem …

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NOTE 21 INCOME TAXES The Company accounts for income taxes in accordance with ASC 740, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and are measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to reverse. The Companys effective tax rate from continuing operations was a (1.7)% provision and a 9.1% benefit for the years ended December 31, 2025 and 2024, respectively. The effective tax rate differs from the U.S. federal statutory tax rate primarily due to the noncontrolling interest ownership in OpCo, which is treated as a partnership for U.S. federal income tax purposes, as well as changes in the valuation allowance on deferred tax assets. The Company evaluated the realizability of its deferred tax assets based on all available positive and negative evidence. Based on this evaluation, the Company determined that it is not more likely than not that certain deferred tax assets will be realized and therefore recorded a valuation allowance against those deferred tax assets as of December 31, 2025. Due to the Companys Up-C organizational structure, a portion of the Companys earnings is attributable to noncontroll …

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NOTE 13 LEASES Operating Leases In November 2021, the Company entered into a lease agreement for office space located in New Port Richey, Florida. The lease commenced on November 4, 2021 and is for a term of 5 years. Under the terms of the lease, the Company will lease the premises at the monthly rate of $4,793 for the first year, with scheduled annual increases. The lease agreement contains customary events of default, representations, warranties, and covenants. The measurement of the ROU asset and liability associated with this operating lease was $277,948. In June 2023, the Company entered into a lease agreement for office space located in Orlando, Florida. The lease commenced on June 1, 2023 and is for a term of 5 years. Under the terms of the lease, the Company will lease the premises at the monthly rate of $10,011 for the first year, with scheduled annual increases. The lease agreement contains customary events of default, representations, warranties, and covenants. The measurement of the ROU asset and liability associated with this operating lease was $578,285. In July 2024, the Company entered into a lease agreement for office space located in Provo, Utah. The lease commenced on July 1, 2024 and is for a term of 32 months. Under the terms of the lease, the Company will lease the premises at the monthly rate of $14,845 for the first year, with scheduled annual increases. The lease agreement contains customary events of default, representations, warranties, and covenant …

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Recently Adopted Accounting Pronouncements In August 2023, the FASB issued Accounting Standards Update (ASU) 2023-05, Business CombinationsJoint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement , which requires a newly-formed joint venture to apply a new basis of accounting to its contributed net assets, resulting in the joint venture initially measuring its contributed net assets at fair value on the formation date. ASU 2023-05 is effective for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted for joint ventures formed before the effective date. The adoption of ASU 2023-05 did not have a material impact on the Companys consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which enhances the transparency and decision usefulness of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. T …

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NOTE 16 RELATED PARTY TRANSACTIONS Solar Leasing Arrangements Certain customers of the Company finance their solar energy system purchases through SLI. These arrangements are substantially similar to those with unrelated third-party financing providers. Under these arrangements, SLI deducts financing fees and remits the net proceeds to the Company upon completion of the related solar installation. For the years ended December 31, 2025 and 2024, the Company recognized revenue of $18,141,871 and $22,156,018, respectively, from installations financed through SLI, net of financing fees of $0 and $8,246,532, respectively. Included within revenue recognized for the years ended December 31, 2025 and 2024 is discretionary rebate paid by SLI of $3,150,000 and $2,943,979, respectively. As of December 31, 2025 and 2024, the Company had accounts receivable of $611,807 and $191,662, respectively, due from SLI related to these arrangements. See Note 5Variable Interest Entities for additional information regarding the Companys involvement with SLI. In August 2024, the Company entered into a guarantee of SLIs obligations under a Business Loan Agreement between SLI and a bank for borrowings up to $10 million. The loan is also personally guaranteed by the Companys CEO, who serves as the manager of SLI through White Horse. As of December 31, 2025 and 2024, the outstanding balance under the loan was $9,976,752 and $3,460,840, respectively. Note Receivable During 2024, SLI performed a fair-market …

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NOTE 8 DISAGGREGATION OF REVENUES AND SEGMENT REPORTING Disaggregation of Revenues The Companys revenues are disaggregated based on revenue type, including (i) solar system installations, (ii) roofing installations, and (iii) energy storage solutions. The Companys net revenues for the years ended December 31, 2025 and 2024 are disaggregated as follows: Years Ended December 31, 2025 2024 Solar system installations, net $ 68,154,316 $ 70,295,305 Roofing installations 1,195,622 2,948,778 Energy storage solutions Total net revenues $ 69,349,938 $ 73,244,083 For the years ended December 31, 2025 and 2024, the Company had three customers that accounted for more than 10% of revenue. Aggregate revenue from these customers was $56,929,240 and $50,002,123 for the years ended December 31, 2025 and 2024, respectively. Segment Reporting The Company reports segment information in accordance with ASC 280. Operating segments are defined as components of an enterprise for which separate financial information is available and whose operating results are regularly reviewed by the Companys CODM to allocate resources and assess performance. Following the acquisition of Heliogen on August 8, 2025, the Company reassessed its segment structure and determined that it operates in two operating and reportable segments: (1) Sunergy, which includes the design, procurement, installation, and servicing of residential solar photovoltaic systems and related roofing services; and (2) Heliogen, which includes …

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NOTE 23 SUBSEQUENT EVENTS On January 27, 2026, the Company entered into the White Lion ELOC with White Lion Capital LLC (White Lion), pursuant to which the Company has the right, but not the obligation, to sell to White Lion up to $30.0 million in aggregate gross purchase price of newly issued shares of Class A common stock, subject to certain limitations and conditions, over a period ending on the earlier of January 27, 2029 or the purchase of the full commitment amount. In consideration for the commitment, the Company agreed to issue to White Lion $100,000 worth of Class A common stock. Concurrently, the Company entered into a Registration Rights Agreement with White Lion. As of the date of this filing, the Company sold 241,000 shares for proceeds of $272,020. The Company settled the $100,000 commitment amount for 66,225 shares. On January 30, 2026, the Company increased the subordinated loan in the form of a note receivable with White Horse Energy, LLC from $3.0 million to $6.15 million under the same terms as the original note. …

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