Financial Performance - For the three months ended June 30, 2025, net revenue was $18,101,930, an increase from $14,796,272 for the same period in 2024, representing a growth of 15.5%[98] - Revenue for the three months ended June 30, 2025, increased by 22.3% to $18,101,930 compared to $14,796,272 for the same period in 2024[119] - Total revenues increased to $18,101,930 for the three months ended June 30, 2025, up from $14,796,272 in 2024, representing a growth of approximately 22.8%[148] - Revenue for the six months ended June 30, 2025, decreased by 23.0% to $26,885,625 compared to $34,938,428 for the same period in 2024[126] Profitability - Gross profit for the six months ended June 30, 2025, was $14,378,437, compared to $13,589,677 for the same period in 2024, reflecting a gross margin increase from 38.9% to 53.5%[98] - Contribution margin for the three months ended June 30, 2025, was 15.1%, down from 21.4% in 2024, indicating a decline in profitability[148] - Adjusted EBITDA for the three months ended June 30, 2025, was $1,400,148, with an adjusted EBITDA margin of 7.7%, up from 5.2% in the same period of 2024[98] - Adjusted EBITDA for the six months ended June 30, 2025, was $(4,953,383), compared to $(199,531) for the same period in 2024, reflecting a significant deterioration in operational performance[149] Expenses - Cost of goods sold as a percentage of revenue decreased from 47.7% in Q2 2024 to 40.2% in Q2 2025, despite a $0.2 million increase in absolute terms[121] - General and administrative expenses decreased by 11.6% to $4,866,457 in Q2 2025, down from $5,523,571 in Q2 2024[123] - Sales and marketing expenses rose by 27.3% to $5,629,040 in Q2 2025, reflecting efforts to expand year-round sales through digital lead generation[124] - General and administrative expenses increased by 75.4% to $15,334,050 for the six months ended June 30, 2025, primarily due to higher payroll costs and professional fees[130] Cash Flow and Financing - Net cash used in operating activities improved by $7,801,816, decreasing from $(12,351,750) in 2024 to $(4,549,934) in 2025[139] - Net cash used in operating activities decreased by $7.8 million to approximately $4.5 million for the six months ended June 30, 2025, compared to $12.4 million for the same period in 2024[140] - Net cash used in investing activities was approximately $0.8 million for the six months ended June 30, 2025, compared to $0.3 million in 2024, indicating increased investment in property and equipment[141] - Net cash used in financing activities was approximately $0.2 million for the six months ended June 30, 2025, a decrease from $10.0 million provided in 2024, primarily due to debt repayments[142] Debt and Capital - The company converted approximately $2.55 million of outstanding accounts payable into a note payable with an annual interest rate of 18%[88] - The company may need to raise additional capital through debt or equity financing if proceeds from the business combination are insufficient to support business needs[136] - The company has approximately $0.6 million of debt on service trucks and vehicles valued at approximately $1.3 million, net of depreciation[143] Market Expansion - The company plans to expand its residential sales into new markets, targeting underserved areas in Florida, Texas, Arkansas, Missouri, Illinois, Virginia, and Ohio[103] - In 2025, the company continued its roofing replacements to facilitate solar installations and plans to expand its roofing business in all future markets[104] - The company aims to increase its in-house sales force and external sales dealers to target new customers in the Southern U.S. regional residential markets[105] Losses - The company reported a net loss of $2,679,464 for the three months ended June 30, 2025, compared to a net loss of $1,757,319 for the same period in 2024[98] - The net loss for the six months ended June 30, 2025, was $(15,998,827), compared to $(5,864,421) in 2024, indicating a worsening financial position[149] - Depreciation and amortization expenses surged by 599.9% from $453,669 in Q2 2024 to $3,175,452 in Q2 2025, primarily due to increased amortization from the Lumio Asset Purchase Agreement[122] Cost Management - The company is experiencing increased costs due to inflation, particularly in labor and raw materials, which may pressure operating margins[106] - Cost of goods sold for the six months ended June 30, 2025, decreased by 42.2% to $12,074,166, improving as a percentage of revenue from 60.2% in 2024 to 45.2% in 2025[128]
ESGEN Acquisition (ESAC) - 2025 Q2 - Quarterly Report