What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-14 compared with 2025-08-13 · 198 added, 214 removed, 337 unchanged (55% of the section changed)

Management’s Discussion

and Analysis of Financial Condition and Results of Operations (as restated)

and Analysis of Financial Condition and Results of Operations

References to the “Company,” “our,”

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We have focused to date on a simple, capital

light business strategy utilizing, as of June 30, 2025, approximately 280 sales agents and approximately 12 independent sales dealers

light business strategy utilizing, as of September 30, 2025, approximately 280 sales agents and approximately 12 independent sales dealers

to produce our sales pipeline.

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Recent Developments

On July 1, 2025, the Company converted approximately $2.55 million

of outstanding accounts payable with a vendor into a note payable with the same vendor.

The note bears interest at an annual rate of 18%

On July 1, 2025, the Company converted $2,547,877

of outstanding accounts payable with a vendor into a loan payable with the same vendor.

The loan bears interest at an annual rate of

18% (1.5% monthly) and provides for scheduled principal payments beginning in July 2025, with maturity on August 22, 2025.

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reduced the Company’s accounts payable and established a formal financing arrangement under the stated terms.

The loan, including

accrued interest, was repaid during the period.

Heliogen Acquisition

On May 28, 2025, the Company entered into an Agreement and Plan of

Merger and Reorganization (the “Merger Agreement”) by and among Heliogen, Inc., a Delaware corporation (“Heliogen”),

Zeo Energy, Hyperion Merger Corp., a Delaware corporation and a direct, wholly-owned subsidiary of Zeo Energy (“Merger Sub I”)

and Hyperion Acquisition LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of Zeo Energy (“Merger

Sub II” and, together with Merger Sub I, the “Merger Subs”).

On August 8, 2025, Merger Sub I merged with and into Heliogen

(the “First Merger”), with Heliogen surviving the First Merger (Heliogen, as the surviving entity of the First Merger, the

“First Surviving Corporation”) with the First Surviving Corporation becoming a direct, wholly owned subsidiary of Zeo Energy,

and immediately following the First Merger, the First Surviving Corporation merged with and into Merger Sub II (the “Second Merger”

and, together with the First Merger, the “Mergers”), with Merger Sub II surviving the Second Merger and becoming a direct,

wholly owned subsidiary of Zeo Energy.

Consideration to Heliogen Stockholders .

Pursuant to the Merger Agreement, at the effective time of the First Merger (the “Effective Time”) on August 8, 2025, each

share of common stock of Heliogen (the “Heliogen Common Stock”) (other than Heliogen Common Stock held by Zeo Energy, Heliogen

or their respective subsidiaries immediately prior to the Effective Time) was canceled and was automatically converted into the right

to receive (i) a number of shares of Class A Common Stock equal to the Exchange Ratio (as defined below), without interest (the “Share

Merger Consideration”), and (ii) if applicable, an amount in cash, rounded to the nearest cent, in lieu of any fractional share

interest in Class A Common Stock to which such holder otherwise would have been entitled (together with the Share Merger Consideration,

the “Merger Consideration”), subject to any required tax withholding.

Pursuant to the Merger Agreement, the Exchange Ratio is 0.9591 shares

of Class A Common Stock for each share of Heliogen Common Stock (the “Exchange Ratio”).

The Mergers, taken together, constitute

a single integrated transaction that qualifies as a reorganization for U.S.

federal income tax purposes.

The shares of Class A Common Stock issued in connection with the Mergers

are listed on the Nasdaq Stock Market LLC.

The issuance of shares of Class A Common Stock in connection with the Mergers was registered

under the Securities Act, pursuant to (i) Zeo Energy’s registration statement on Form S-4 (File No.

333-288489) filed with the U.S.

Securities and Exchange Commission (the “SEC”) on July 2, 2025 and declared effective on July 11, 2025 (the “Registration

The Registration Statement contains additional information about the Mergers, including information concerning the

interests of directors, executive officers and affiliates of Heliogen and Zeo Energy in the Mergers.

Treatment of Heliogen RSUs

Pursuant to the Merger Agreement, at the Effective

Time, each restricted stock unit (“ RSU ”) relating to shares of Heliogen Common Stock (whether vested or unvested) was

automatically accelerated and fully vested and cancelled and each holder thereof became entitled to receive the Merger Consideration in

respect of each share of Heliogen Common Stock covered by such RSU, without interest and subject to any required tax withholding.

Treatment of Heliogen Options

Pursuant to the Merger Agreement, each outstanding

option to purchase Heliogen Common Stock (the “ Heliogen Options ”) automatically accelerated such that all Heliogen

Options were fully vested as of immediately prior to the Effective Time.

All Heliogen Options had an exercise price per share equal to

or greater than the Per Share Purchase Price and therefore were cancelled without payment of consideration.

There were no Heliogen Options

“in the money.”

Treatment of Heliogen Warrants

As of immediately prior to the Effective Time,

Heliogen had outstanding certain “ Commercial Warrants ” and “ SPAC Warrants ”.

Commercial Warrants

refer to the warrants to purchase shares of Heliogen Common Stock with an exercise price of $0.35 per share of Heliogen Common Stock.

SPAC Warrants refer to certain redeemable warrants exercisable to purchase one share of Heliogen Common Stock at an exercise price of

$402.50 per share.

Immediately prior to the Effective Time, each

outstanding Commercial Warrant was accelerated to be fully vested in accordance with its terms.

At the Effective Time, to the extent such

Commercial Warrant was unexercised as of the Effective Time, each outstanding Commercial Warrant was automatically cancelled without any

payment of consideration (including Merger Consideration) therefore, and each outstanding and unexercised SPAC Warrant automatically ceased

to represent a SPAC Warrant and became a right to purchase and receive, in lieu of shares of Heliogen Common Stock, the portion of the

Merger Consideration that such holder would have received if such holder had exercised such SPAC Warrant immediately prior to the Effective

Time, subject to the terms and conditions of that certain warrant agreement.

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.

The transaction was completed

on August 8, 2025, under which Heliogen became a wholly owned subsidiary of the Company.

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

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.

We accounted for the Heliogen acquisition using

the acquisition method of accounting in accordance with ASC Topic 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.

Key Operating and Financial Metrics and Outlook

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Three Months Ended

Six Months Ended

Nine Months Ended

Contribution profit

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Loss from operations

(18,345,413 )

(17,868,299 )

Adjusted EBITDA

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to allocate resources going forward.

Contributions margin reflects our Contribution profit as a percentage of revenues.

Contribution margin reflects our Contribution profit as a percentage of revenues.

Non-GAAP Financial Measures ” for a reconciliation of Gross Profit to Contribution Profit and Contribution Margin.

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markets where we operate in Florida, Texas, Arkansas, Missouri, Illinois, Virginia and Ohio.

We primarily generate revenue from our sales,

product offerings and services in the residential housing market.

We primarily generate revenue from our product

offerings and services in the residential housing market.

To continue our growth, we intend to expand our presence in the residential

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our customers to choose a leasing option to finance their systems from a third party.

The acquisition of Heliogen aligns with our strategy

to expand our clean-energy platform beyond residential markets into large-scale commercial and industrial energy generation and storage.

Additionally, Heliogen is expected to complement our existing solar operations, create operational synergies, and broaden market reach.

With the acquisition of Heliogen, we intend to enter into agreements to provide engineering services to support long-duration energy

storage projects.

Adding New Customers and Expansion of Sales

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sales dealers, which incentivizes the acquisition of new customers.

We are seeing an increase in the costs of labor and components as the

result of higher inflation rates.

In particular, we are experiencing an increase in raw material costs and supply chain constraints, and

trade tariffs imposed on certain products from China.

We also see an increase in materials used to achieve the required minimum domestic

content to maximize incentive tax credits.

These increases in material and labor costs may continue to put pressure on our operating margins.

We do not have information that allows us to quantify the specific amount of cost increases attributable to inflationary pressures.

We are seeing an increase in

the costs of labor and components as the result of higher inflation rates.

In particular, we are experiencing an increase in raw material

costs and supply chain constraints, and trade tariffs imposed on certain products from China.

We also see an increase in materials used

to achieve the required minimum domestic content to maximize incentive tax credits.

These increases in material and labor costs may continue

to put pressure on our operating margins.

We do not have information that allows us to quantify the specific amount of cost increases

attributable to inflationary pressures.

Interest rates.

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cash flows and results of operations, including revenue and contribution margin.

Components of Condensed Consolidated Statements

of Operations

Components of Condensed Consolidated Statements of Operations

Our primary source of revenue is the sale of

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appliances, upgraded insulation and/or energy storage systems.

All adders consisted of less than 10% of the total revenue, net in the

six months ended June 30, 2025 and 2024.

All adders consisted of less than 10% of the total revenues, net in the

nine months ended September 30, 2025 and 2024.

Our revenue is affected by changes in the volume,

system size and average selling prices of our solutions and related accessories, supply and demand, sales incentives and fluctuating interest

rates that increase or decrease the monthly payments for customers purchasing systems through third party financing.

Less than 5% of our

sales were paid in cash by the customer in each of the six months ended June 30, 2025 and 2024.

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.

Cost of Goods Sold

Cost of goods sold consists primarily of product

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.

5% of our sales were paid in cash by the customer in each of the nine months ended September 30, 2025 and 2024.

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

Revenues declined during the nine months ended

September 30, 2025 because of the effect of higher interest rates on the consumer financing rates.

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.

Cost of goods sold decreased in association with

a reduction in revenues.

Revenues declined because of the effect of higher interest rates on the consumer financing rates.

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.

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

Cost of revenues decreased during the nine months

ended September 30, 2025 in association with a reduction in revenues.

Net revenues less cost of revenues may vary from

period-to-period and is primarily affected by our average selling prices, financing or dealer fees, fluctuations in equipment costs and

our ability to effectively and timely deploy our field installation teams to project sites once permitting departments have approved

the design and engineering of systems on customer sites.

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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.

We expect to continue to make the necessary investments to enable us to execute our strategy to increase our market

penetration geographically and enter into new markets by expanding our base sales teams, installers and strategic sales dealer and partner

of personnel-related expenses including sales commissions, as well as advertising, travel, trade shows, marketing, and other indirect

We expect to continue to make the necessary investments to enable us to execute our strategy to increase our market penetration

geographically and enter into new markets by expanding our base sales teams, installers and strategic sales dealer and partner network.

General and administrative expenses consist primarily

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Depreciation and amortization consist primarily

of depreciation of our vehicles, furniture and fixtures, internally developed software and amortization of our acquired intangibles.

of depreciation of our vehicles, furniture and fixtures, software and amortization of our acquired intangibles.

Other income (expenses), net

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Results of Operations

Three Months Ended June 30, 2025 Compared

to Three Months Ended June 30, 2024

Three Months Ended September 30, 2025 Compared

to Three Months Ended September 30, 2024

The following table sets forth a summary of our

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Costs and expenses:

Cost of goods sold (exclusive of depreciation and amortization)

Cost of revenues

Depreciation and amortization

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Loss from operations

Other income (expense), net:

Other income (expense):

Other income, net

Interest expense

Gain (loss) on change in fair value

of warrant liabilities

Total other income (expense), net

Gain on change in fair value of warrant

Total other income

Net loss before taxes

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$ (1,095,850 )

Revenue, net increased by approximately $3.3

The primary reason for the increase is due to an increase in revenues with our related-party third-party operator.

Cost of Goods Sold

Cost of goods sold increased by $0.2 million.

The increase was a result of the increase in revenues.

As a percentage of revenue, cost of goods sold declined from 47.7% for the three

months ended June 30, 2024 to 40.2% for the three months ended June 30, 2025.

This decline was driven by an increase in the average selling

price of our contracts to our customers compared to the prior year.

Net revenues increased by approximately $4.2

million from $19.7 million for the three months ended September 30, 2024 to $23.9 million for the three months ended September 30, 2025.

The primary reason for the increase is due to increased installations during the current period and a new pricing agreement with Solar

Leasing entered into during the fourth quarter of 2024.

During the three months ended September 30, 2025, there were no revenues generated

from Heliogen.

Cost of Revenues

Cost of revenues increased by $0.3 million from

$9.8 million for the three months ended September 30, 2024 to $10.1 million for the three months ended September 30, 2025.

was a result of the increase in installation revenues.

As a percentage of revenue, cost of revenues declined from 49.8% for the three

months ended September 30, 2024 to 42.1% for the three months ended September 30, 2025.

This decline was driven by an increase in the

average selling price of our contracts to our customers compared to the prior year as a result of a new pricing agreement with Solar

Leasing entered into during the fourth quarter of 2024.

Depreciation and Amortization

Depreciation and amortization increased by $2.7

million, from $0.5 million for the three months ended June 30, 2024 to $3.2 million for the three months ended June 30, 2025.

was primarily due to an increase in the amortization of the cost of acquired contracts from the Lumio Asset Purchase Agreement.

Depreciation and amortization decreased by $0.3

million, from $0.5 million for the three months ended September 30, 2024 to $0.2 million for the three months ended September 30, 2025.

The decrease was primarily due to less amortization of intangible assets during the current period.

General and Administrative Expenses

General and administrative expenses decreased

by $0.7 million from $5.5 million for the three months ended June 30, 2024 to $4.8 million for the three months ended June 30, 2025.

The decrease was primarily due to a $1.5 million decrease in stock compensation expenses and $0.6 million decrease in bade debt expense

offset by a $0.9 million increase in payroll related expenses and $0.5m increase in expenses related to being a public company, software,

and other miscellaneous expenses.

by $1.2 million from $7.2 million for the three months ended September 30, 2024 to $6.0 million for the three months ended September

The decrease was primarily due to decreased stock-based compensation expenses and bad debt expense offset by increased payroll

costs associated with additional staffing, higher professional fees associated with being a public company, and new costs as a result

of the acquisition of Heliogen.

Sales and Marketing

Sales and marketing expenses increased by $4.4

The increase was a result of a efforts to expand our selling process to include year-round sales through digital lead generation.

million from $5.2 million for the three months ended September 30, 2024 to $9.6 million for the three months ended September 30, 2025.

The increase was primarily a result of increased stock-based compensation expense and efforts to expand our selling process to include

year-round sales through digital lead generation.

Other Income (Expense), net

Other income (expense), net decreased from other

income of $829,013 for the three months ended June 30, 2024 to other expense of $12,952 for the three months ended June 30, 2025.

decrease was primarily due to a gain on fair value of warrant liabilities in the prior period.

Six Months Ended June 30, 2025 Compared

to Three Months Ended June 30, 2024

Other income (expense), net increased by $0.1

million from $0.1 million for the three months ended September 30, 2024 to $0.2 million for the three months ended September 30, 2025.

The increase was primarily due to increased other income, offset by less interest expense during the current period.

Nine Months Ended September 30, 2025 Compared

to Nine Months Ended September 30, 2024

The following table sets forth a summary of our

condensed consolidated statements of operations for the periods presented:

Six Months ended

Nine Months ended

September 30,

$ (3,814,260 )

Costs and expenses:

Cost of goods sold (exclusive of depreciation and amortization)

Cost of revenues

Depreciation and amortization

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(18,345,413 )

Other income (expense), net:

Other income (expense):

Other income, net

Interest expense

Gain (loss) on change in fair value

of warrant liabilities

Total other income, net

Gain on change in fair value of warrant

Total other income

Net loss before taxes

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$ (8,972,197 )

$ (9,606,694 )

Revenue, net decreased by approximately $8.0

The primary reason for the decrease in revenue was a decrease in deferred revenue recognized in first quarter of 2025 compared

to the first quarter of 2024.

The first quarter of 2024 benefited from systems which were installed at the end of 2023 but for which

revenue was not able to be recognized in 2024.

Cost of Goods Sold

Cost of goods sold decreased by $8.9 million.

The decrease was a result of the decrease in revenue as noted above.

As a percentage of revenue, cost of goods sold improved from 60.2%

for the six months ended June 30, 2024 to 45.2% for the six months ended June 30, 2025.

This improvement was driven primarily by the

impact of the costs associated with the deferred revenue in 2023 being deferred to 2024.

There were no similar costs in 2025.

Net revenues decreased by approximately $3.8

million from $54.6 million for the nine months ended September 30, 2024 to $50.8 million for the nine months ended September 30, 2025.

The primary reason for the decrease in revenue was a decrease in installations during the current period, offset by a new pricing agreement

with Solar Leasing entered into during the fourth quarter of 2024.

The comparative period also benefited from deferred revenue at the

end of 2023, that was recognized in the first quarter of 2024.

During the nine months ended September 30, 2025, there were no revenues

generated from Heliogen.

Cost of Revenues

Cost of revenues decreased by $8.7 million from

$30.8 million for the nine months ended September 30, 2024 to $22.1 million for the nine months ended September 30, 2025.

was primarily a result of the decrease in installation revenues.

As a percentage of revenue, cost of revenues improved from 56.4% for

the nine months ended September 30, 2024 to 43.6% for the nine months ended September 30, 2025.

This decline was driven by an increase

in the average selling price of our contracts to our customers compared to the prior year as a result of a new pricing agreement with

Solar Leasing entered into during the fourth quarter of 2024 and another third-party pricing agreement entered into during the second

quarter of 2024.

Depreciation and Amortization

Depreciation and amortization increased by $6.9

million, from $0.9 million for the six months ended June 30, 2024 to $8.1 million for the six months ended June 30, 2025.

was primarily due to an increase in the amortization of the cost of acquired contracts from the Lumio Asset Purchase Agreement.

million, from $1.4 million for the nine months ended September 30, 2024 to $8.3 million for the nine months ended September 30, 2025.

The increase was primarily due to an increase in the amortization of the cost of acquired contracts from the Lumio Asset Purchase Agreement.

General and Administrative Expenses

General and administrative expenses increased

by $6.6 million from $8.7 million for the six months ended June 30, 2024 to $15.3 million for the six months ended June 30, 2025.

increase was primarily due to an increase in payroll costs associated with additional staffing, including stock compensation and higher

professional fees associated with being a public company.

The Company also recorded an additional reserve for bad debt of $3.2 million

related to finance partners who have filed for bankruptcy and have discontinued making payments.

by $5.4 million from $15.9 million for the nine months ended September 30, 2024 to $21.3 million for the nine months ended September

The increase was primarily due to an increase in payroll costs associated with additional staffing, increased bad debt expense,

higher professional fees associated with being a public company, and new costs as a result of the acquisition of Heliogen offset by decreased

stock-based compensation expense.

Sales and Marketing

Sales and marketing expenses decreased by $3.2

million from $11.0 million for the six months ended June 30, 2024 to $7.8 million for the six months ended June 30, 2025.

was primarily a result of a $2.5 million reduction in stock compensation expense and less commissions earned due to the decrease in revenue.

Sales and marketing expenses increased by $1.2

million from $16.2 million for the nine months ended September 30, 2024 to $17.4 million for the nine months ended September 30, 2025.

The increase was primarily a result of increased stock-based compensation expense and efforts to expand our selling process to include

year-round sales through digital lead generation.

Other Income, net

Other income, net increased by $46,792 from $655,791

for the six months ended June 30, 2024 to $702,583 for the six months ended June 30, 2025.

The increase was primarily due to a decrease

in the gain on fair value of warrant liabilities, a decrease in interest expense, and a decrease in the gain on the disposition of assets.

Other income, net increased by $0.2 million from

$0.7 million for the nine months ended September 30, 2024 to $0.9 million for the nine months ended September 30, 2025.

was primarily due to increased other income and less interest expense during the current period.

Liquidity and Capital Resources

Our primary source of funding to support operations

have historically been from cash flows from operations.

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 June 30, 2025 and December 31, 2024, our

cash and cash equivalents balance were $68,691 and $5,634,115, respectively.

The Company maintains its cash in checking and savings accounts.

Our primary source of funding to support operations have historically

been from cash flows from operations and financing activities.

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 September 30, 2025 and December 31, 2024,

our cash and cash equivalents balance were $3,915,900 and $5,634,115, respectively.

The Company maintains its cash in checking, savings,

and money market accounts.

Our future capital requirements depend on many

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business generally.

In order to finance these opportunities and associated

costs, it is possible that we will need to raise additional capital through either debt or equity financing if the proceeds realized

from the Business Combination are insufficient to support our business needs.

We believe that the proceeds realized through

the Heliogen business combination will be sufficient to meet our currently contemplated business needs for the next twelve months.

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 financing activities will be sufficient to meet our currently contemplated business

needs for the next twelve months.

In the event we pursue and complete significant transactions or acquisitions in the future, additional

funds may be required to meet our strategic needs, which may require us to raise additional funds in the debt or equity markets.

are unable to raise additional capital on acceptable terms when needed, our business, results of operations and financial condition would

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for the periods presented:

For the Six Months Ended

For the Nine Months Ended

Net cash used in operating activities

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$ (12,189,535 )

Net cash used in investing activities

Net cash (used in) provided by financing activities

$ (1,056,614 )

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

(12,911,363 )

Cash Flows from Operating Activities

Net cash used in operating activities was approximately

$4.5 million during the six months ended June 30, 2025 compared to a net cash used in operating activities of approximately $12.4 million

during six months ended June 30, 2024.

The $7.8 million decrease in cash used was primarily driven 1) a $10.2 million increase in cash

flows associated with a) positive cash flows from accounts receivable ($5.8 million), prepaids and other current assets ($1.4 million),

accounts payable ($4.7 million), and contract liabilities ($4.8 million) offset by b) negative cash flows from a change in contract assets

($6.5 million) and 2) a $2.3 million use of cash from net income resulting form a) increase in net loss ($10.3 million) and less stock

compensation expense ($2.3 million) offset by b) increases in non-cash expenses for depreciation and amortization ($7.2 million) and

Net cash used in operating activities was

approximately $11.1 million during the nine months ended September 30, 2025 compared to a net cash used in operating activities of

approximately $12.2 million during nine months ended September 30, 2024.

The $1.1 million decrease in cash used was primarily driven

by positive cash flows from accounts receivable ($4.7 million), prepaids and other current assets ($1.7 million), accounts payable

($2.9 million), contract liabilities ($4.5 million), and contract liabilities – related parties ($1.2 million) offset by

negative cash flows from a change in contract assets ($5.7 million), contract assets – related parties ($3.6 million), accrued

expenses and other current liabilities – related parties ($1.4 million), increase in net loss ($9.1 million) and less stock

compensation expense ($0.8 million), offset by increases in non-cash expenses for depreciation and amortization ($6.9 million) and

the provision for credit losses ($0.3 million).

Cash Flows from Investing Activities

Net cash used in investing activities was approximately

$0.8 million for the six months ended June 30, 2025, relating to purchases of property and equipment.

Net cash used in investing activities

for the six months ended June 30, 2024 was approximately $0.3 million, relating to purchases of property and equipment.

Cash flows used in financing activities

Net cash provided by investing activities was

approximately $13.5 million for the nine months ended September 30, 2025, relating to the cash acquired in the acquisition of Heliogen,

offset by purchases of property and equipment.

Net cash used in investing activities for the nine months ended September 30, 2024 was

approximately $0.3 million, relating to purchases of property and equipment.

Cash Flows from Financing Activities

Net cash used in financing activities was approximately

$0.2 million for the six months ended June 30, 2025, primarily relating to the repayment of debt and finance leases.

Net cash provided

by financing activities for the six months ended June 30, 2024 was approximately $10.0 million for the six months ended June 30, 2024,

primarily relating to cash acquired from the business combination of $10.4 million offset by repayments of debt and finance leases, and

distributions of stockholders.

$4.1 million for the nine months ended September 30, 2025, primarily relating to the payment of dividends to OpCo class A preferred unit

holders and repayments of debt and finance leases.

Net cash provided by financing activities was approximately $8.8 million for the nine

months ended September 30, 2024, primarily relating to net cash acquired from the issuance of convertible preferred stock of $9.2 million

offset by repayments of debt and finance leases, and distributions of stockholders.

Current Indebtedness

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positive cashflow to grow the business.

Other than approximately $2.5 million in trade-credit with solar equipment distributors, Sunergy

has only approximately $0.6 million of debt on service trucks and vehicles valued at approximately $1.3 million, net of depreciation.

Other than approximately $2.5 million convertible note, the Company has only approximately $0.1

million of debt on service trucks and vehicles.

Non-GAAP Financial Measures

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Three Months Ended

Six Months Ended

Total revenues

Cost of goods sold (exclusive of depreciation and amortization):

depreciation and amortization related to cost of goods sold

Nine Months Ended

Cost of revenues (exclusive of depreciation and amortization):

depreciation and amortization related

to cost of revenues

Total gross profit

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Three Months Ended

Six Months Ended

Total net loss

Nine Months Ended

$ (1,869,472 )

$ (2,872,424 )

$ (17,868,299 )

$ (8,736,845 )

Other income, net

Interest expense

Change in fair value of warrant liabilities

Income tax provision

Gain on change in fair value of warrant liabilities

Income tax provision (benefit)

Stock-based compensation

Acquisition-related expenses

Depreciation and amortization

Adjusted EBITDA

$ (1,924,958 )

Net loss margin

11 unchanged sentences

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What changed 10-Q

Item 2. Management’s Discussion and Analysis