What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-15 compared with 2025-11-14 · 319 added, 303 removed, 232 unchanged (73% of the section changed)

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The following discussion and analysis of the Company’s financial

condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and

the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”).

Certain information

contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking

condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the

notes thereto contained elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”).

Certain information contained

in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes

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“could,” “would,” “expect,” “plan,” “anticipate,” “believe,”

“estimate,” and “continue,” or the negative of such terms or other similar expressions.

Such statements include,

but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements

other than statements of historical fact included in this Form 10-Q.

Factors that might cause or contribute to such a discrepancy include,

but are not limited to, those described in our other SEC filings.

Except as expressly required by applicable securities law, we disclaim

any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events

or otherwise.

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.

a vertically integrated company offering energy solutions and services that include sale, design, procurement, installation, and maintenance

of residential solar energy systems.

Many of our solar energy system customers also purchase other energy efficient-related equipment

or services or roofing services from us.

The majority of our customers are located in Florida, Texas, Arkansas, Missouri, Ohio, and Illinois,

and we have an expanding base of customers in California, Colorado, Minnesota, Utah, and Virginia.

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.

“estimate,” “aim,” “goal” and “continue,” or the derivatives of such terms or other similar

expressions about the future.

Such statements include, but are not limited to, our expectations regarding revenue generation, our ability

to obtain financing when needed, or ability to source and financing our growth and expansion, including via acquisitions, and all other

statements other than statements of historical fact included in this Form 10-Q.

Factors that might cause or contribute to such a discrepancy

include, but are not limited to, the risk factors detailed in our SEC filings.

Except as expressly required by applicable securities

law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information,

future events or otherwise.

Our company and personnel are passionate about delivering cost savings

and increased independence and reliability to energy consumers.

Our mission is to expedite the country’s transition to renewable

energy by offering our customers an affordable and sustainable means of achieving energy independence.

We are a vertically integrated

company offering energy solutions and services that include sale, design, procurement, installation, and maintenance of residential solar

energy systems.

Many of our solar energy system customers also purchase other energy efficient-related equipment or services or roofing

services from us.

The majority of our customers are located in Florida, Texas, Ohio, Illinois, and Virginia.

We have an expanding base

of customers in California, Colorado, Minnesota, Utah, and Pennsylvania.

Sunergy was created on October 1, 2021 through the Contribution

of Sun First Energy, LLC, a rapidly growing solar sales management company, and Sunergy Solar, LLC, a large solar installation company

based in Florida, to Sunergy Renewables, LLC.

We believe that we have built (and continue to

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partners and other strategic partners.

The platform includes processes and software, as well as the capacity for the fulfillment and

acquisition of marketing leads.

We believe our platform empowers our in-house sales team and external sales dealers to profitably serve

our regional and underpenetrated markets and helps us compete effectively against larger, more established industry players without making

significant investment in technology and infrastructure.

We have focused to date on a simple, capital

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

to produce our sales pipeline.

We engineer and design projects and process building permit applications on behalf of our customers to

timely install their systems and assist their connections to the local utility power grid.

Most of the equipment we install is drop-shipped

to the installation site by our regional distributors, requiring minimal inventory to be held by the Company during any given period.

We depend on our distributors to timely handle logistics and related requirements in moving equipment to the installation sites.

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.

The platform includes processes and software, as well as the capacity for the fulfillment and acquisition

of marketing leads.

We believe our platform empowers our in-house sales team and external sales dealers to profitably serve our regional

and underpenetrated markets and helps us compete effectively against larger, more established industry players without making significant

investment in technology and infrastructure.

We have focused to date on a simple, capital light

business strategy utilizing, as of March 31, 2026, approximately 260 sales agents and approximately 10 independent sales dealers to produce

our sales pipeline.

We engineer and design projects and process building permit applications on behalf of our customers to timely install

their systems and assist their connections to the local utility power grid.

Most of the equipment we install is drop-shipped to the installation

site by our regional distributors, requiring minimal inventory to be held by the Company during any given period.

We depend on our distributors

to timely handle logistics and related requirements in moving equipment to the installation sites.

In addition to our main offering of

residential solar energy systems, we sell and install products such as roofing, insulation, energy efficient appliances and battery storage

systems for the residential market.

Our core solar service offerings are paid for

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provide customers with simple, predictable pricing for solar energy that is insulated from rising retail electricity prices.

our customers finance their purchases with affordable loans or leases that require minimal or no upfront capital or down payment.

customers finance their purchases with affordable loans or leases that require minimal or no upfront capital or down payment.

Recent Developments

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.

The transaction

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, 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.

White Lion Financing Transaction

On January 27, 2026, we entered into the White

Lion Purchase Agreement with White Lion.

We also entered into a Registration Rights Agreement (“RRA”) with White Lion on January

Pursuant to the White Lion Purchase Agreement, the Company has the right, but not the obligation, to require White Lion to purchase,

from time to time, up to $30.0 million in aggregate gross purchase price of newly issued shares of our Class A Common Stock, subject to

certain limitations and conditions set forth in the White Lion Purchase Agreement.

Subject to the satisfaction of certain customary conditions,

the Company’s right to sell shares to White Lion commenced on the date of the execution of White Lion Purchase Agreement and extends

until White Lion Commitment Period.

During the White Lion Commitment Period, subject

to the terms and conditions of the White Lion Purchase Agreement, the Company may notify White Lion when the Company exercises its right

to sell shares of its Class A Common Stock.

The Company may deliver a Rapid Purchase Notice (as such term is defined in the White Lion

Purchase Agreement), where the Company can require White Lion to purchase up to a number of shares of Class A Common Stock equal to the

20% of Average Daily Trading Volume (as such term is defined in the White Lion Purchase Agreement).

The Company may also deliver an Accelerated

Purchase Notice (as such term is defined in the White Lion Purchase Agreement), where the Company may require White Lion to purchase up

to a number of shares of Class A Common Stock equal to 20% of the Average Daily Trading Volume.

White Lion may waive such limits under

any notice at its discretion and purchase additional shares.

The price to be paid by White Lion for any shares

that the Company requires White Lion to purchase will depend on the type of purchase notice that the Company delivers.

For shares being

issued pursuant to Accelerated Purchase Notice, the purchase price per share will be equal to the lowest traded price of Class A Common

Stock during one (1) hour period following the White Lion’s written consent of the acceptance of the notice.

For shares being issued

pursuant to a Rapid Purchase Notice, the purchase price per share will be equal to the average of the three (3) lowest traded prices on

the date that the notice is delivered.

No purchase notice shall result in White Lion

beneficially owning (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 thereunder) more than 4.99% of the number

of shares of the Class A Common Stock outstanding immediately prior to the issuance of shares of Class A Common Stock issuable pursuant

to a purchase notice.

The Company may deliver purchase notices under

the White Lion Purchase Agreement, subject to market conditions, and in light of our capital needs, from time to time and under the limitations

contained in the White Lion Purchase Agreement.

Any proceeds that the Company receives under the White Lion Purchase Agreement are expected

to be used for working capital and general corporate purposes.

The White Lion Purchase Agreement may be terminated

by the Company at any time and for any reason, in its sole discretion, subject to the Company having delivered the applicable Commitment

Shares (as defined below).

The White Lion Purchase Agreement will also terminate automatically upon the earlier of the expiration of the

White Lion Commitment Period or the occurrence of certain bankruptcy or insolvency-related events involving the Company.

In consideration for the commitments of White

Lion, as described above, the Company is contractually committed to issue to White Lion the Commitment Shares.

The Commitment Shares are

deemed fully earned and non-refundable as of the execution date of the White Lion Purchase Agreement;

however, if the White Lion Purchase

Agreement is terminated by the Company as a result of a material breach by White Lion, the Company may pursue all remedies available at

law or in equity, including reimbursement or recovery of such Commitment Shares, to the extent permitted by applicable law.

Concurrently with the White Lion Purchase Agreement,

the Company entered into the RRA with White Lion.

The Purchase Agreement and the RRA contain customary representations, warranties, conditions

and indemnification obligations of the parties.

The representations, warranties and covenants contained in such agreements were made only

for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject

to limitations agreed upon by the contracting parties.

White Horse Energy Transaction

On January 30, 2026, Sunergy, a subsidiary of

the Company, increased the subordinated loan in the form of a note receivable with White Horse Energy, LLC from $3.0 million to $6.15

million under the same terms as the original note.

Nasdaq Listing Rule Notice

On April 23, 2026, the Company received a letter

from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid

price of the Company’s Class A common stock for the last 30 consecutive business days, the Company no longer meets Nasdaq Listing

Rule 5550(a)(2), which requires listed companies to maintain a minimum bid price of at least $1 per share.

Nasdaq Listing Rule 5810(c)(3)(A)

provides a compliance period of 180 calendar days, or until October 20, 2026, in which to regain compliance with the minimum bid price

If the Company evidences a closing bid price of at least $1 per share for a minimum of 10 consecutive business days during

the 180-day compliance period, the Company will automatically regain compliance.

In the event the Company does not regain compliance with

the $1 bid price requirement by October 14, 2026, the Company may be eligible for consideration of a second 180-day compliance period

if it meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq’s

Capital Market, other than the minimum bid price requirement.

In addition, the Company would also be required to notify Nasdaq of its

intent to cure the minimum bid price deficiency.

Key Operating and Financial Metrics and Outlook

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analysts, institutional investors and other interested parties in analyzing operating performance and prospects.

Adjusted EBITDA and

Adjusted EBITDA margin are non-GAAP measures, as they are not financial measures calculated in accordance with GAAP and should not be

considered as substitutes for net (loss) income or net (loss) income margin, respectively, calculated in accordance with GAAP.

Adjusted EBITDA and Adjusted

EBITDA margin are non-GAAP measures, as they are not financial measures calculated in accordance with GAAP and should not be considered

as substitutes for net (loss) income or net (loss) income margin, respectively, calculated in accordance with GAAP.

See “Non-GAAP

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to the most comparable GAAP measures.

The following table sets forth these metrics

for the periods presented:

The following table sets forth these metrics for

the periods presented:

Three Months Ended

Nine Months Ended

Contribution profit

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Adjusted EBITDA margin

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 a reconciliation of Gross

Profit and Gross Margin.

Contribution Profit and Contribution Margin

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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.

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.

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

We primarily generate revenue from our product offerings

and services in the residential housing market.

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

additional states based on markets underserved by national sales and installation providers that also have favorable incentives and net

metering policies.

We believe that our entry into new markets will continue to facilitate revenue growth and customer diversification.

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time for our solar installations in cases where the customer is in need of a roof replacement prior to installing a solar system.

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 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.

to provide more financing options for our prospective residential solar energy customers, we have programs in place that allow our customers

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

Following the acquisition of Heliogen in August

2025, the Company has been working to integrate Heliogen’s concentrated solar power and energy storage technology into its clean-energy

platform to complement its existing solar operations, create operational synergies, and broaden market reach.

The Company continues to

pursue engineering services agreements to support long-duration energy storage projects.

Adding New Customers and Expansion of Sales

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operator as means of financing the installation of a solar system.

The lease contract provides a lower monthly cost to the homeowner

than a conventional loan product in a higher interest rate environment.

We do not have information that allows us to quantify the adverse

effects attributable to increased interest rates.

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 .

contract manufacturers and suppliers to produce our components.

We rely on contract

manufacturers and suppliers to produce our components.

Our suppliers are generally meeting our materials needs.

to grow depends, in part, on the ability of our contract manufacturers and suppliers to provide high quality services and deliver components

and finished products on time and at reasonable costs.

In the event we are unable to mitigate the impact of delays and/or price increases

in raw materials, electronic components and freight, it could delay the installation of our systems, which would adversely impact our

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

Our ability to grow depends,

in part, on the ability of our contract manufacturers and suppliers to provide high quality services and deliver components and finished

products on time and at reasonable costs.

In the event we are unable to mitigate the impact of delays and/or price increases in raw materials,

electronic components and freight, it could delay the installation of our systems, which would adversely impact our cash flows and results

of operations, including revenue and contribution margin.

Components of Condensed Consolidated Statements of Operations

Our primary source of revenue is the sale of

our residential solar systems.

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

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We sell our systems primarily direct to end user customers for use in their residences.

Upon installation

Upon passing installation

inspection, we satisfy our performance obligation and recognize revenue.

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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

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

nine months ended September 30, 2025 and 2024.

solar systems, our primary product, increase from April to September when a majority of our sales teams are most active in our areas of

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 for the three months

ended March 31, 2026 and 2025.

Our revenue is affected by changes in the volume,

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

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

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.

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 three months ended March 31, 2026 and 2025.

Our revenue growth is dependent on

our ability to compete effectively in the marketplace by remaining cost competitive, developing and introducing new sales teams within

existing and new territories, scaling our installation teams to keep up with demand and maintaining a strong internal operations team

to process orders while working with building departments and utilities to permit and interconnect our customers to the utility grid.

Revenues improved during the three months ended

March 31, 2026 compared to the three months ended March 31, 2025, driven by increased solar system installation activity.

consumer financing rates continue to present headwinds for the residential solar industry broadly, the Company has managed these pressures

through expanded sales efforts and continued growth in its installation volume.

Cost of Revenues

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labor and permitting costs.

Cost of revenues decreased during the nine months

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

Cost of revenues increased during three months

ended March 31, 2026 in association with the increase in revenues.

Net revenues less cost of revenues may vary from

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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.

It also includes

interest income on our cash balances, and accrued interest

Other Income (Expense)

Other income (expense) primarily consists of change

in fair value of warrant liabilities and interest expense and fees under our equipment and vehicle term loans.

It also includes interest

income on our cash and note receivable balances.

Results of Operations

Three Months Ended September 30, 2025 Compared

to Three Months Ended September 30, 2024

Three Months Ended March 31, 2026 Compared

to Three Months Ended March 31, 2025

The following table sets forth a summary of our

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Three Months Ended

Costs and expenses:

Operating expenses

Cost of revenues

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Loss from operations

(13,511,398 )

Other income (expense):

Other income, net

Interest expense

Gain on change in fair value of warrant

Total other income

Gain (loss) on change in fair value of warrant liabilities

Total other income (expense)

Net loss before taxes

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$ (12,795,863 )

$ (1,095,850 )

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.

Net revenues increased by approximately $4.4 million

from $8.8 million for the three months ended March 31, 2025 to $13.2 million for the three months ended March 31, 2026.

The increase in

revenue was primarily driven by growth in solar system installations during the current period, partially offset by a decrease in related

party revenue from Solar Leasing I, LLC (“SLI”).

There were no revenues generated from the Heliogen segment during the three

months ended March 31, 2026 and 2025.

Cost of Revenues

Cost of revenues increased by $2.8 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.

$4.8 million for the three months ended March 31, 2025 to $7.6 million for the three months ended March 31, 2026, primarily driven by

the increase in solar system installation activity during the current period.

As a percentage of net revenues, cost of revenues increased

slightly from 54.5% for the three months ended March 31, 2025 to 57.5% for the three months ended March 31, 2026, reflecting a compression

in gross margin year-over-year.

Depreciation and Amortization

Depreciation and amortization decreased by $3.8

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.

million, from $4.9 million for the three months ended March 31, 2025 to $1.1 million for the three months ended March 31, 2026.

was primarily related to $4.6 million in amortization of the customer-related intangible asset acquired in connection with the Lumio asset

acquisition, which was fully amortized during 2025.

This was offset by the $0.8 million of accelerated depreciation associated with the

abandonment of software during the three months ended March 31, 2026.

Sales and Marketing

Sales and marketing expenses decreased by $0.1

million from $3.1 million for the three months ended March 31, 2025 to $3.0 million for the three months ended March 31, 2026.

was primarily driven by lower stock-based compensation expense, offset by higher sales commissions, consistent with the increase in installation

revenues during the period.

General and Administrative Expenses

General and administrative expenses decreased

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

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 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:

Nine Months ended

September 30,

$ (3,814,260 )

Costs and expenses:

Cost of revenues

Depreciation and amortization

Sales and marketing

General and administrative

Total operating expenses

Loss from operations

(18,345,413 )

by $3.2 million from $9.5 million for the three months ended March 31, 2025 to $6.3 million for the three months ended March 31, 2026.

The decrease was primarily driven by significant reductions in bad debt expense and stock-based compensation expense compared to the prior

Other Income (Expense)

Other income, net

Interest expense

Gain on change in fair value of warrant

Total other income

Net loss before taxes

$ (17,483,041 )

$ (8,972,197 )

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 $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 $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 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 $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.

Other income (expense), net decreased by $0.7

million from other income, net of $0.7 million for the three months ended March 31, 2025 to other expense, net of $18,316 for the three

months ended March 31, 2026.

The decrease was primarily a result of a significant gain on change in fair value of warrant liabilities

for the three months ended March 31, 2025 and a loss on change in fair value of warrant liabilities for the three months ended March 31,

Liquidity and Capital Resources

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.

Our operations have historically been funded through a combination

of revenue generation, proceeds from financing activities, and in 2025, net cash acquired in connection with the Heliogen acquisition.

Our primary short-term requirements for liquidity and capital are to fund general working capital and capital expenses, including through

our common stock purchase agreement with White Lion Capital LLC (the “White Lion ELOC”).

Our principal long-term working capital

uses include ensuring revenue growth, expanding our sales and marketing efforts and potential acquisitions.

As of March 31, 2026 and December 31, 2025, our

cash and cash equivalents balance were $1.7 million and $6.1 million, respectively.

The Company maintains its cash in checking, savings,

and money market accounts.

Our future capital requirements depend on many

factors, including our revenue growth rate, the timing and extent of our spending to support further sales and marketing, the degree

to which we are successful in launching new business initiatives and the cost associated with these initiatives, and the growth of our

business generally.

Our future capital requirements depend on many factors, including our

revenue growth rate, the timing and extent of our spending to support further sales and marketing, the degree to which we are successful

in launching new business initiatives, the costs associated with these initiatives, the growth of our business generally and our access

to third party financing.

We have operational plans to increase revenue and move towards the

goal of profitable operations in 2026, which plans are expected to improve cash flows.

Our operational plan includes an increase in the

number of sales agents to increase revenue and improved efficiency in our operations through centralization of field offices and labor

and productivity improvement in the corporate operations through the implementation of a new CRM software.

We are also working internally and with third parties to address short-term

cash needs, including through the use of the White Lion ELOC, which provides us with the right to sell up to $30.0 million in shares of

our Class A common stock, subject to market liquidity and contractual limitations.

The White Lion ELOC is limited to selling shares equal

to 4.99% of the outstanding shares at the time of sale and resets once White Lion Capital LLC (i.e., once White Lion Capital liquidates

their holdings in the open market).

We believe we also have other opportunities to raise capital, such as through revenue generating initiatives,

private placements, public offerings or repricing of outstanding warrants.

In addition, in June 2026, we will become eligible to utilize

a universal shelf registration statement to raise funding for our company.

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

be materially and adversely affected.

anticipated future cash flows from operations, borrowings under our debt agreements, and access to equity capital markets (including the

White Lion ELOC) will be sufficient to meet our currently contemplated business needs for the next twelve months.

In the event we pursue

and complete significant transactions or acquisitions in the future, additional funds will be required to meet our strategic needs, which

will require us to raise additional funds in the debt or equity markets.

While our plan and expectation is to raise additional capital in 2026,

and while we are routinely active in discussions and planning for financing, there can be no assurance that we will be successful in such

pursuits, and our fundraising efforts are subject to a variety of uncertainties.

Moreover, even if we are able to raise additional capital,

other than the While Lion ELOC, we do not know with precision what the terms of any such financing would be.

Any future sale of our equity

securities would dilute the ownership and control of your shares and could be at prices below prices at which investors acquired our shares

or at which our shares currently trade.

The sale of convertible debt securities or additional equity securities could result in additional

dilution to our shareholders.

Also, the incurrence of indebtedness would result in increased debt service obligations and could result

in operating and financing covenants that would restrict our operations and liquidity and ability to pay dividends.

Our inability to raise

capital, coupled with our inability to generate adequate cash from operations, could require us to significantly modify our operational

plans, and any failure to raise additional funds on favorable terms when needed could have a material adverse effect on our business,

liquidity and financial condition.

The following table summarizes our cash flows

for the periods presented:

For the Nine Months Ended

For the Three Months Ended

Net cash used in operating activities

$ (2,263,438 )

$ (12,189,535 )

$ (1,056,614 )

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

(12,911,363 )

Net cash used in investing activities

Net cash used in financing activities

Cash Flows from Operating Activities

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).

Net cash used in operating activities was approximately

$0.9 million during the three months ended March 31, 2026 compared to approximately $2.3 million during the three months ended March 31,

The $1.4 million improvement in operating cash flows was driven primarily by favorable working capital changes, including a $1.3

million increase in accounts payable and a $3.8 million increase in accrued expenses and other current liabilities – related parties,

and a $0.2 million decrease in prepaid expenses and other current assets.

These improvements were partially offset by a $2.4 million increase

in accounts receivable, a $0.7 million decrease in contract liabilities, and a $0.5 million decrease in accrued expenses and other current

Non-cash charges also decreased significantly year-over-year, with depreciation and amortization of $1.1 million, stock-based

compensation of $0.7 million, and provision for credit losses of $0.2 million in the current period, compared to $4.9 million, $2.2 million,

and $3.5 million, respectively, in the prior year period, reflecting the significant reduction in operating activity from the prior year

In addition to the previously mentioned changes in operating cash flows, the Heliogen segment that was acquired in the quarter

ended September 30, 2025, incurred a net loss of $0.9 million for the three months ended March 31, 2026 that is included in net loss compared

to no impact on net loss for the three months ended March 31, 2025.

Cash Flows from Investing 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.

Net cash used in investing activities was approximately

$3.4 million for the three months ended March 31, 2026 relating to the note receivable – related-party investment and purchases

of property and equipment.

Net cash used in investing activities was approximately $0.4 million for the three months ended March 31, 2025,

relating to purchases of property and equipment.

Cash Flows from Financing Activities

Net cash used in financing activities was approximately

$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.

$0.2 million for the three months ended March 31, 2026 relating to the payment of dividends to OpCo Class A preferred unit holders, repayments

of debt and finance leases, and tax withholding paid related to stock-based compensation, offset by net proceeds received in connection

with the White Lion RRA.

Net cash used in financing activities was approximately $0.1 million for the three months ended March 31, 2025,

relating to repayments of debt and finance leases.

Current Indebtedness

The Company has utilized internally generated

positive cashflow to grow the business.

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

million of debt on service trucks and vehicles.

As of March 31, 2026, the Company’s outstanding

indebtedness consisted of approximately $73,471 of vehicle loans.

The Company has historically funded its operations and growth through

a combination of cash on hand, proceeds from financing activities, and in 2025, net cash acquired in connection with the Heliogen acquisition.

Non-GAAP Financial Measures

9 unchanged sentences

with our results from other reporting periods and with the results of other companies.

Our management uses these non-GAAP financial

measures, in conjunction with GAAP financial measures, as an integral part of managing our business and to, among other things:

and evaluate the performance of our business operations and financial performance;

Our management uses these non-GAAP financial measures,

in conjunction with GAAP financial measures, as an integral part of managing our business and to, among other things:

(i) monitor and

evaluate the performance of our business operations and financial performance;

(ii) facilitate internal comparisons of the historical

19 unchanged sentences

to allocate resources going forward.

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

The following table provides a reconciliation

of gross profit to contribution profit for the periods presented:

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

The following table provides a reconciliation of contribution profit

for the periods presented:

Three Months Ended

Nine Months Ended

Cost of revenues (exclusive of depreciation and amortization):

depreciation and amortization related

to cost of revenues

Cost of revenues

Total gross profit

2 unchanged sentences

Total contribution profit

$ (2,770,825 )

Contribution margin

1 unchanged sentence

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 ”).

We utilize Adjusted EBITDA as an internal

performance measure in the management of our operations because we believe the exclusion of these non-cash and non-recurring charges

allow for a more relevant comparison of our results of operations to other companies in our industry.

Adjusted EBITDA should not be viewed

as a substitute for net (loss) income calculated in accordance with GAAP, and other companies may define Adjusted EBITDA differently.

measure, as net income (loss) before interest and other income (expense), net, income tax provision (benefit), depreciation and amortization,

gain (loss) on change in fair value of warrant liabilities, stock-based compensation, and non-recurring transaction-related expenses.

We utilize Adjusted EBITDA as an internal performance measure in the management of our operations because we believe the exclusion of

these non-cash and non-recurring charges allow for a more relevant comparison of our results of operations to other companies in our industry.

Adjusted EBITDA should not be viewed as a substitute for net income (loss) calculated in accordance with GAAP, and other companies may

define Adjusted EBITDA differently.

Adjusted EBITDA margin reflects our Adjusted EBITDA as a percentage of revenues.

The following table provides a reconciliation of net

(loss) income to Adjusted EBITDA for the periods presented:

The following table

provides a reconciliation of net income (loss) to Adjusted EBITDA for the periods presented:

Three Months Ended

Nine Months Ended

$ (4,691,311 )

$ (13,319,363 )

$ (17,868,299 )

$ (8,736,845 )

Other income, net

Interest expense

Gain on change in fair value of warrant liabilities

(Gain) loss on change in fair value of warrant liabilities

Income tax provision (benefit)

Stock-based compensation

Acquisition-related expenses

Non-recurring transaction-related expenses

Depreciation and amortization

1 unchanged sentence

$ (2,850,505 )

$ (5,507,671 )

Net loss margin

1 unchanged sentence

Critical Accounting Estimates

For a description of our critical accounting

policies and estimates, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations –

Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on May

There have been no material changes to our critical accounting policies and estimates since our Annual Report on Form 10-K

for the year ended December 31, 2024.

For a description of our critical accounting policies

and estimates, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical

Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on April 1, 2026.

There have been no material changes to our critical accounting policies and estimates since our Annual Report on Form 10-K for the year

ended December 31, 2025.

Quantitative and Qualitative Disclosures

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis