UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number: 001-42628 GORES HOLDINGS X, INC. (Exact name of registrant as specified in its Charter) Cayman Islands 98-1740672 (State or other ju ...

Exhibit 99.1 EUPRAXIA PHARMACEUTICALS INC. CONSOLIDATED FINANCIAL STATEMENTS For the Three and Six Months ended June 30, 2025 (Unaudited and Expressed in U.S. Dollars) EUPRAXIA PHARMACEUTICALS INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2025 (Unaudited and Expressed in U.S. Dollars) CONTENTS | CONSOLIDATED BALANCE SHEETS | 2 | | --- | --- | | CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | 3 | | CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) | 4-5 | | CONSOLIDATED STAT ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements for Q2 and H1 2025, detailing assets, operations, cash flows, and investment schedules [Consolidated Statements of Assets and Liabilities](index=3&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) Total assets increased to **$224.1 million** by June 30, 2025, while net assets slightly decreased to **$76.0 million**, with NAV per share at **$5.27** Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Total Investments, at fair value | $204.1 | $191.6 | | Total Assets | $224.1 | $206.9 | | Debt, net | $134.4 | $122.0 | | Total Liabilities | $148.1 | $129.2 | | Total Net Assets | $76.0 | $77.6 | | **Net Asset Value Per Share** | **$5.27** | **$5.39** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 saw a net decrease in net assets of **$0.4 million**, an improvement from Q2 2024, driven by a **$2.2 million** net realized gain Key Operating Results (Unaudited) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Investment Income | $4,545,199 | $5,119,319 | $8,913,963 | $11,737,408 | | Net Investment Income After Taxes | $604,148 | $1,309,102 | $1,207,674 | $3,387,464 | | Net Realized Gain (Loss) | $2,208,625 | $(1,828,530) | $581,343 | $(8,100,498) | | Net Change in Unrealized (Depreciation) | $(3,247,071) | $(1,432,718) | $(17,023) | $5,172,628 | | **Net Increase (Decrease) in Net Assets** | **$(434,298)** | **$(1,952,146)** | **$1,771,994** | **$459,594** | | **Earnings Per Share (Basic & Diluted)** | **$(0.03)** | **$(0.14)** | **$0.12** | **$0.03** | [Consolidated Statements of Changes in Net Assets](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Net assets decreased by **$1.6 million** to **$76.0 million** for H1 2025, primarily due to stockholder distributions outweighing operational increases Reconciliation of Net Assets (Six Months Ended June 30) | Description | 2025 | 2024 | | :--- | :--- | :--- | | Net Assets at Beginning of Period | $77,602,130 | $78,840,983 | | Net Increase from Operations | $1,771,994 | $459,594 | | Net Decrease from Distributions | $(3,460,353) | $(4,319,679) | | Net Increase from Capital Transactions | $70,453 | $29,311 | | **Net Assets at End of Period** | **$75,984,224** | **$75,010,209** | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash increased by **$5.2 million** in H1 2025, driven by financing activities, reversing the prior year's decrease from debt repayments Cash Flow Summary (Six Months Ended June 30) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash (Used in) Provided by Operating Activities | $(1,641,178) | $24,904,835 | | Net Cash Provided by (Used in) Financing Activities | $6,881,351 | $(34,460,393) | | **Net Change in Cash** | **$5,240,173** | **$(9,555,558)** | | Cash and Restricted Cash at End of Period | $17,344,720 | $5,108,804 | [Consolidated Schedule of Investments](index=7&type=section&id=Consolidated%20Schedule%20of%20Investments) The investment portfolio reached **$204.1 million** by June 30, 2025, primarily in Senior Secured First Lien Debt, with diversified industry concentrations Portfolio Composition by Investment Type (at Fair Value) | Investment Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Senior Secured First Lien Debt | $161,727,463 (79.2%) | $155,530,390 (81.2%) | | Equity, Warrants and Other | $42,403,216 (20.8%) | $36,086,568 (18.8%) | | **Total Investments** | **$204,130,679** | **$191,616,958** | - The portfolio is diversified across various industries, with the top three being Professional Services, Insurance, and Containers & Packaging, collectively making up **32.55%** of the total portfolio at fair value as of June 30, 2025[111](index=111&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=17&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Detailed notes cover accounting policies, investment valuation, debt facilities, related-party transactions, and subsequent events like new dividends and share repurchases - The majority of the investment portfolio, **$176.3 million** out of **$204.1 million**, is classified as Level 3 in the fair value hierarchy, indicating their valuation is based on significant unobservable inputs[117](index=117&type=chunk) Outstanding Borrowings as of June 30, 2025 | Facility | Principal Amount | Maturity Date | | :--- | :--- | :--- | | Capital One Revolving Financing | $70.5 million | Jan 17, 2029 | | 4.875% Notes due 2026 | $65.0 million | Apr 1, 2026 | - Subsequent to quarter-end, on August 7, 2025, the Board declared a quarterly distribution of **$0.12 per share** plus a supplemental distribution of **$0.02 per share**; a new **$5 million** share repurchase program was also authorized for one year[178](index=178&type=chunk)[179](index=179&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operating results, portfolio composition, investment activity, asset quality, liquidity, and capital resources [Portfolio and Investment Activity](index=53&type=section&id=Portfolio%20and%20Investment%20Activity) The **$204.1 million** investment portfolio, primarily first lien, maintained strong asset quality with **85.5%** rated performing at or above expectations - During the six months ended June 30, 2025, the company invested approximately **$24.1 million** in two new and six existing portfolio companies[224](index=224&type=chunk) Portfolio Asset Quality by Fair Value | Investment Rating | % of Portfolio (June 30, 2025) | % of Portfolio (Dec 31, 2024) | | :--- | :--- | :--- | | 1 - Above Expectations | 5.7% | 7.1% | | 2 - At Expectations | 79.8% | 74.6% | | 3 - Below Expectations | 10.4% | 14.6% | | 4 - Substantially Below (Return Loss) | 3.4% | 0.0% | | 5 - Substantially Below (Principal Loss) | 0.7% | 3.7% | [Results of Operations](index=56&type=section&id=Results%20of%20Operations) Total investment income decreased in Q2 and H1 2025 due to lower interest rates, but a significant net realized gain offset some declines - The decrease in investment income for Q2 and H1 2025 compared to 2024 was primarily driven by lower index and interest rates and reduced PIK interest from certain investments following restructurings[230](index=230&type=chunk)[236](index=236&type=chunk) - A net realized gain of **$2.2 million** in Q2 2025, mainly from the sale of an equity interest, contrasted sharply with a **$1.8 million** net realized loss in Q2 2024, which was related to a restructuring[233](index=233&type=chunk) [Liquidity and Capital Resources](index=59&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$2.9 million** cash, **$14.4 million** restricted cash, and **$29.5 million** available on its credit facility - The company's asset coverage ratio was **156.1%** as of June 30, 2025, providing a cushion over the **150%** regulatory requirement for BDCs[246](index=246&type=chunk)[248](index=248&type=chunk) - As of June 30, 2025, the company had unfunded commitments to portfolio companies totaling **$5.6 million**, an increase from **$4.6 million** at year-end 2024[227](index=227&type=chunk)[256](index=256&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to interest rate risk, with a favorable asset-liability structure benefiting from rising rates - The company is positioned to benefit from rising interest rates due to its asset-liability structure, with a higher proportion of floating-rate assets than floating-rate liabilities[261](index=261&type=chunk)[262](index=262&type=chunk) Interest Rate Sensitivity Analysis (as of June 30, 2025) | Change in Interest Rates | Estimated Impact on Net Interest Income | | :--- | :--- | | +1.00% | +8.91% | | +2.00% | +17.82% | [Item 4. Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[267](index=267&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[268](index=268&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings beyond routine litigation incidental to its business - The company is not involved in any material legal proceedings[270](index=270&type=chunk) [Item 1A. Risk Factors](index=65&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the previously disclosed risk factors were reported for the six months ended June 30, 2025 - No material changes to risk factors were reported for the six months ended June 30, 2025[272](index=272&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company issued **17,169 shares** for **$47,738** under its dividend reinvestment plan, exempt from registration - In Q2 2025, **17,169 shares** were issued via the dividend reinvestment plan for proceeds of **$47,738**[273](index=273&type=chunk) [Item 5. Other Information](index=65&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted or terminated Rule 10b5-1 trading plans during the quarter[277](index=277&type=chunk) [Item 6. Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and interactive data files

Part I. Financial Information [Item 1. Interim Financial Statements](index=4&type=section&id=Item%201.%20Interim%20Financial%20Statements) Presents Spectral AI, Inc.'s unaudited condensed consolidated financial statements, detailing financial position and performance [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024) **Unaudited Condensed Consolidated Balance Sheets (in thousands)** | Item | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :------------ | :---------------- | | **Assets** | | | | Cash | $10,524 | $5,157 | | Accounts receivable, net | $1,467 | $2,505 | | Total current assets | $14,001 | $10,122 | | Total Assets | $16,009 | $12,095 | | **Liabilities and Stockholders' Deficit** | | | | Accounts payable | $1,986 | $4,035 | | Accrued expenses | $2,547 | $3,210 | | Warrant liabilities | $10,555 | $6,451 | | Total current liabilities | $16,186 | $17,644 | | Notes payable, long-term | $7,632 | $- | | Total Liabilities | $25,160 | $19,346 | | Total Stockholders' Deficit | $(9,151) | $(7,251) | | Total Liabilities and Stockholders' Deficit | $16,009 | $12,095 | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) **Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands)** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Research and development revenue | $5,065 | $7,478 | $11,772 | $13,804 | | Gross profit | $2,290 | $3,314 | $5,458 | $6,259 | | Operating loss | $(2,123) | $(2,442) | $(3,019) | $(4,585) | | Change in fair value of warrant liability | $(5,449) | $348 | $(1,196) | $368 | | Net loss | $(7,968) | $(2,864) | $(5,071) | $(6,069) | | Net loss per share (Basic and Diluted) | $(0.31) | $(0.16) | $(0.21) | $(0.36) | [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Deficit%20for%20the%20three%20months%20ended%20March%2031%2C%202025%20and%202024%2C%20and%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) **Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit (in thousands)** | Item | Balance at Dec 31, 2024 | Stock-based compensation | Issuance of Common Stock from debt offering | Issuance of common stock to pay convertible debt | Sale of common stock | Exercise of stock options | Cumulative translation adjustment | Net income/loss | Balance at June 30, 2025 | | :-------------------------- | :---------------------- | :----------------------- | :------------------------------------------ | :----------------------------------- | :------------------- | :---------------------- | :------------------------------ | :-------------- | :----------------------- | | Common Stock (Shares) | 22,594,877 | - | 2,028,846 | 610,426 | 310,925 | 43,047 | - | - | 25,737,820 | | Common Stock (Amount) | $2 | $- | $- | $- | $- | $- | $- | $- | $2 | | Additional Paid-in Capital | $40,973 | $200 | $377 | $1,433 | $543 | $158 | $- | $- | $44,095 | | Accumulated Other Comprehensive Income | $3 | $- | $- | $- | $- | $- | $49 | $- | $52 | | Accumulated Deficit | $(48,229) | $- | $- | $- | $- | $- | $- | $(5,071) | $(53,300) | | Total Stockholders' Deficit | $(7,251) | $611 | $377 | $1,433 | $543 | $158 | $49 | $(5,071) | $(9,151) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202025%20and%202024) **Unaudited Condensed Consolidated Statements of Cash Flows (in thousands)** | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(4,867) | $(8,042) | | Net cash provided by financing activities | $10,185 | $10,131 | | Effect of exchange rate changes on cash | $49 | $(2) | | Net increase in cash | $5,367 | $2,087 | | Cash, beginning of period | $5,157 | $4,790 | | Cash, end of period | $10,524 | $6,877 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes clarifying accounting policies, fair value, revenue, debt, and equity for the unaudited consolidated financial statements [Note 1. Nature of the Business and Presentation](index=8&type=section&id=1.%20NATURE%20OF%20THE%20BUSINESS%20AND%20PRESENTATION) Spectral AI, Inc. focuses on AI-driven burn wound diagnostics, generating government contract revenue and pursuing FDA approval for DeepView System - Spectral AI, Inc. is an **Artificial Intelligence (AI)** company focused on predictive medical diagnostics, with its **DeepView™ System** designed to assess burn wound healing potential[15](index=15&type=chunk) - The **DeepView System** received **UKCA marking** for burn indications in February 2024 and a De Novo application was filed with the **FDA** in June 2025 for **Class II medical device designation**[16](index=16&type=chunk) - The company currently generates revenue from **contract development and research services** for **governmental agencies** (primarily BARDA and MTEC) and has generated **no product revenue** to date[18](index=18&type=chunk)[19](index=19&type=chunk) - A new contract with BARDA in September 2023 provides up to **$150.0 million** in additional funding, including an initial **$54.9 million** for clinical validation, system distribution, and FDA submission[19](index=19&type=chunk) - **Liquidity Position (in thousands)** | Metric | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | Cash | $10,524 | $5,157 | | Accumulated Deficit | $(53,300) | $(48,229) | | Debt Outstanding | $7,700 | $2,800 | - The company believes it has **sufficient working capital to fund operations for at least one year**, supported by the BARDA contract, MTEC Agreement, and Avenue Financing[45](index=45&type=chunk) - An immaterial correction of errors in prior period financial information resulted in a **$126,000** increase to both accumulated deficit and additional paid-in capital as of December 31, 2024 and 2023[26](index=26&type=chunk) - Accounts receivable and research and development revenue are highly concentrated, with one U.S. government agency representing **94% of net receivables** (June 30, 2025) and **92% of revenue** (three months ended June 30, 2025)[40](index=40&type=chunk)[41](index=41&type=chunk) [Note 2. Recent Accounting Pronouncements](index=12&type=section&id=2.%20RECENT%20ACCOUNTING%20PRONOUCEMENTS) Evaluates the impact of recent accounting standards, ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation), on financial statements - **ASU 2023-09 (Income Taxes)** requires **more detailed income tax disclosures**, effective for annual periods beginning after December 15, 2024[46](index=46&type=chunk) - **ASU 2024-03 (Expense Disaggregation Disclosures)** requires **additional information about specific expense categories**, effective for fiscal years beginning after December 15, 2026[47](index=47&type=chunk) [Note 3. Fair Value Measurements](index=13&type=section&id=3.%20FAIR%20VALUE%20MEASUREMENTS) Measures financial liabilities, primarily warrant liabilities, at fair value, with a significant increase due to Level 3 warrant changes - **Fair Value Measured as of June 30, 2025 (in thousands)** | Item | Fair value | Level 1 | Level 2 | Level 3 | | :------------------ | :--------- | :------ | :------ | :------ | | Warrant liabilities | $10,555 | $5,903 | $- | $4,651 | - **Fair Value Measured as of December 31, 2024 (in thousands)** | Item | Fair value | Level 1 | Level 2 | Level 3 | | :-------------------------- | :--------- | :------ | :------ | :------ | | Warrant liabilities | $6,451 | $6,409 | $- | $41 | | Short-term notes payable – Yorkville | $2,365 | $- | $- | $2,365 | - **Changes in Level 3 Liabilities Measured at Fair Value (in thousands)** | Period | Balance - January 1, 2025 | Fair value at issuance | Change in fair value | Balance - June 30, 2025 | | :-------------------------- | :---------------------- | :--------------------- | :------------------- | :---------------------- | | Six months ended June 30, 2025 | $41 | $2,908 | $1,702 | $4,651 | - Public Warrants were amended in November 2024 to have an exercise price of **$2.75 per share**, down from **$11.50**[52](index=52&type=chunk) - The company issued **2,068,846 Investor Warrants** in March 2025 with an exercise price of **$1.80 per share**, classified as liability instruments due to certain terms[54](index=54&type=chunk)[56](index=56&type=chunk) - As part of the Avenue Financing, **768,072 Avenue Warrants** were issued, classified as liability instruments, with an exercise price equal to the lower of **$1.66 per share** or the lowest price in future equity raises through December 31, 2025[58](index=58&type=chunk)[70](index=70&type=chunk) [Note 4. Research and Development Revenue](index=16&type=section&id=4.%20RESEARCH%20AND%20DEVELOPMENT%20REVENUE) Research and development revenue decreased for both three and six months ended June 30, 2025, primarily due to reduced BARDA contract activity - **Research and Development Revenue by Source (in thousands)** | Source | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | BARDA | $4,649 | $7,066 | $11,030 | $13,167 | | Other U.S. governmental authorities | $416 | $412 | $742 | $637 | | **Total revenue** | **$5,065** | **$7,478** | **$11,772** | **$13,804** | - **Contract Liabilities (Deferred Revenue, in thousands)** | Item | December 31, 2024 Balance | Additions | Reductions | June 30, 2025 Balance | | :----------------- | :------------------------ | :-------- | :--------- | :-------------------- | | Deferred revenue | $960 | $3,615 | $(4,151) | $424 | - Research and development expense for the six months ended June 30, 2025, was **$6.6 million**, down from **$9.7 million** in the comparable 2024 period[64](index=64&type=chunk) [Note 5. Accrued Expenses](index=16&type=section&id=5.%20ACCRUED%20EXPENSES) Accrued expenses decreased from December 31, 2024, to June 30, 2025, primarily due to reduced salary and wages - **Accrued Expenses (in thousands)** | Category | June 30, 2025 | December 31, 2024 | | :------------------ | :-------------- | :---------------- | | Salary and wages | $1,676 | $2,196 | | Operating expenses | $222 | $355 | | Benefits | $446 | $411 | | Non-operating expenses | $60 | $60 | | Taxes | $143 | $188 | | **Total accrued expenses** | **$2,547** | **$3,210** | [Note 6. Notes Payable](index=17&type=section&id=6.%20NOTES%20PAYABLE) Secured new long-term debt via Avenue Financing, including an initial draw-down and potential second tranche, while repaying Yorkville Convertible Notes - **Notes Payable Outstanding Balance (in thousands)** | Note Type | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :------------ | :---------------- | | Avenue Capital Note Principal and Final Payment Fee | $9,250 | $- | | Yorkville Convertible Notes, at fair value | $- | $2,365 | | 2024 Insurance Note | $62 | $422 | | **Total Outstanding Balance** | **$9,312** | **$2,787** | | Less: current portion of notes payable | $(62) | $(2,787) | | Unamortized debt discounts and debt issuance costs | $(1,618) | $- | | **Notes payable, long term** | **$7,632** | **$-** | - The company completed the Avenue Financing on March 24, 2025, with an initial draw-down of **$8.5 million**[67](index=67&type=chunk) - The Avenue Financing has a three-year term, matures on March 1, 2028, and accrues interest at the greater of (i) Prime Rate + 5.25% or (ii) 12.75%; a final payment of **$0.8 million** is due at maturity[68](index=68&type=chunk) - A second financing tranche of **$6.5 million** under the Avenue Financing is contingent upon FDA clearance of the DeepView System and a **$7.0 million** equity raise[68](index=68&type=chunk)[131](index=131&type=chunk) - The remaining **$2.4 million** of Yorkville Convertible Notes were repaid during the six months ended June 30, 2025, with **$1.2 million** in cash and **$1.2 million** in common stock[72](index=72&type=chunk) [Note 7. Commitments and Contingencies](index=18&type=section&id=7.%20COMMITMENTS%20AND%20CONTINGENCIES) The company is not involved in any material legal proceedings or pending claims significantly impacting its business or financial condition - The Company is **not a party to any material legal proceedings or pending claims**[74](index=74&type=chunk) [Note 8. Stockholders' Deficit](index=18&type=section&id=8.%20STOCKHOLDERS%27%20DEFICIT) Following the Business Combination, the company's certificate of incorporation was amended to authorize common and preferred stock - The company's certificate of incorporation was amended to authorize **80 million shares of Common Stock** and **1 million shares of Preferred Stock**[75](index=75&type=chunk) [Note 9. Stock-Based Compensation](index=18&type=section&id=9.%20STOCK-BASED%20COMPENSATION) Recorded stock-based compensation expense, modified RSU awards, and granted new stock options, including those tied to stock price targets - **Stock-Based Compensation Expense (in thousands)** | Period | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------- | :------------------------------- | :----------------------------- | | Stock-based compensation expense | $400 | $600 | - **Restricted Stock Unit (RSU) Activity (Six Months Ended June 30, 2025)** | Item | Number of Shares | Weighted Average Grant Date Fair Value per Share | | :-------------------------- | :--------------- | :--------------------------------------- | | Nonvested as of January 1, 2025 | 169,400 | $1.98 | | Vested | (109,700) | $1.82 | | Nonvested as of June 30, 2025 | 59,700 | $1.73 | - During the six months ended June 30, 2025, the company modified **150,000 RSU awards**, accelerating vesting for **100,000 awards** upon modification and **50,000 awards** to vest by December 31, 2025[78](index=78&type=chunk) - The company granted **550,000 stock options** that vest based on the 30-day VWAP meeting or exceeding **$3.00 per share**, and **360,434 stock options** that vest over a 1-year service period[80](index=80&type=chunk)[81](index=81&type=chunk) - Total unrecognized compensation expense related to stock options was **$1.0 million** (expected over 1.2 years) and for RSUs was **$85 thousand** (expected over 0.55 years) as of June 30, 2025[79](index=79&type=chunk)[82](index=82&type=chunk) [Note 10. Net Loss Per Common Share](index=20&type=section&id=10.%20NET%20LOSS%20PER%20COMMON%20SHARE) Excluded potentially dilutive securities from net loss per common share calculation due to their anti-dilutive effect - **Potentially Dilutive Securities Excluded from EPS Calculation (Six Months Ended June 30, in thousands)** | Security Type | 2025 | 2024 | | :------------------------ | :----- | :----- | | Common stock options | 4,408 | 3,931 | | Common stock warrants | 11,344 | 8,507 | | Unvested restricted stock units | 60 | 469 | | **Total** | **15,812** | **12,908** | [Note 11. Related Party Transactions](index=20&type=section&id=11.%20RELATED%20PARTY%20TRANSACTIONS) Spectral IP, a subsidiary, engaged in a related party note transaction, converting to common stock, and entered an IP license agreement with the Company - Spectral IP, a wholly-owned subsidiary, received a **$1.0 million** note payable investment from an affiliate of its largest stockholder in March 2024[87](index=87&type=chunk) - The Spectral IP Note was amended in October 2024 and fully converted into **540,996 shares of Common Stock** by the end of 2024[88](index=88&type=chunk) - In May 2025, Spectral IP received a **worldwide, non-exclusive license** to one international patent asset from the Company[89](index=89&type=chunk) - Spectral IP is undergoing a **reorganization** to acquire Sauvegarder Investment Management, Inc. by issuing Spectral IP common and preferred stock[90](index=90&type=chunk) [Note 12. Subsequent Events](index=20&type=section&id=12.%20SUBSEQUENT%20EVENTS) There were no subsequent events requiring disclosure [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis of Spectral AI's financial condition and operational results, covering business model, key metrics, liquidity, and future outlook [Overview](index=21&type=section&id=Overview) Spectral AI focuses on AI-driven burn wound diagnostics with DeepView System, completed a pivotal study, and generates government contract revenue - Spectral AI is an **AI company** focused on predictive medical diagnostics, with its **DeepView System** having received **FDA breakthrough device designation (BDD)** status, primarily for burn indications[93](index=93&type=chunk) - The company completed enrollment for its pivotal clinical study by the end of 2024, with **267 patients** across **22 sites** in burn centers and emergency departments[94](index=94&type=chunk) - Revenue is currently generated from contract development and research services for governmental agencies, including BARDA (up to **$150.0 million** new contract), MTEC (**$4.9 million** grant), and DHA[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) - Once commercialized, the DeepView System is anticipated to have two revenue streams: a **SaMD (software as a medical device)** model with a **SaaS licensing fee** and an **imaging device component**[98](index=98&type=chunk) [Key Operating and Financial Metrics](index=22&type=section&id=Key%20Operating%20and%20Financial%20Metrics) Monitors key metrics including R&D revenue, gross profit, net loss, and Adjusted EBITDA, showing improved performance for six months ended June 30, 2025 - **Key Operating and Financial Metrics (in thousands, except percentages)** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Research and development revenue | $5,065 | $7,478 | $11,772 | $13,804 | | Gross profit | $2,290 | $3,314 | $5,458 | $6,259 | | Gross margin | 45.2% | 44.3% | 46.4% | 45.3% | | Operating loss | $(2,123) | $(2,442) | $(3,019) | $(4,585) | | Net loss | $(7,968) | $(2,864) | $(5,071) | $(6,069) | | Adjusted EBITDA | $(1,712) | $(2,038) | $(2,396) | $(3,895) | - **Adjusted EBITDA** is defined as net loss excluding income taxes, depreciation, net interest income, stock compensation, transaction costs, and any non-operating financial income and expense[104](index=104&type=chunk) [Key Factors that May Influence Future Results of Operations](index=23&type=section&id=Key%20Factors%20that%20May%20Influence%20Future%20Results%20of%20Operations) Future results depend on U.S. governmental contract awards, commercialization pricing, and risks from supply chain disruptions and supplier concentration - The company's revenue is **almost exclusively dependent on existing and future U.S. governmental contract awards**, leading to potential inconsistency in operating results[106](index=106&type=chunk) - Commercial sales of the DeepView System may require **lower pricing and incentives** to accelerate adoption, which could **negatively impact future revenue and gross margin percentages**[107](index=107&type=chunk) - The company is **reliant on contract manufacturers and suppliers**, facing **risks of component shortages, delays, increased costs, and supply chain disruptions** due to supplier concentration[108](index=108&type=chunk) [Components of Consolidated Statements of Operations](index=24&type=section&id=Components%20of%20Consolidated%20Statements%20of%20Operations) Outlines primary components of consolidated statements of operations, including R&D revenue, cost of revenue, gross profit, operating costs, and other income/expense - Research and development revenue is the **primary source**, **highly dependent on reimbursements from BARDA and other U.S. governmental contract awards**[109](index=109&type=chunk) - Cost of revenues primarily consists of **direct and indirect costs associated with research and development expenses** related to BARDA and MTEC contracts[110](index=110&type=chunk) - Gross profit is affected by **fixed reimbursement rates** under government contracts and a **variable component** for non-reimbursed expenses[111](index=111&type=chunk) - Operating costs and expenses include **general and administrative expenses** (salaries, consulting, rent, insurance, office) and **non-revenue generating research and development expenses**[112](index=112&type=chunk) - Other income (expense) primarily includes **transaction costs**, net interest income, **changes in the fair value of warrant liabilities**, and **foreign exchange gains/losses**[113](index=113&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Experienced decreased R&D revenue and cost of revenue, improved gross margin, reduced G&A, but net loss widened due to warrant liability fair value changes - **Consolidated Results of Operations (in thousands)** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Research and development revenue | $5,065 | $7,478 | $11,772 | $13,804 | | Cost of revenue | $(2,275) | $(4,164) | $(6,314) | $(7,545) | | Gross profit | $2,290 | $3,314 | $5,458 | $6,259 | | General and administrative | $4,413 | $5,756 | $8,477 | $10,844 | | Operating loss | $(2,123) | $(2,442) | $(3,019) | $(4,585) | | Total other income (expense), net | $(5,864) | $(353) | $(2,000) | $(1,393) | | Net loss | $(7,968) | $(2,864) | $(5,071) | $(6,069) | - **Research and Development Revenue Change (in thousands, except percentages)** | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------- | :----- | :----- | :--------- | :--------- | | Three months ended June 30, | $5,065 | $7,478 | $(2,413) | -32.3% | | Six months ended June 30, | $11,772 | $13,804 | $(2,032) | -14.7% | - **Cost of Revenue Change (in thousands, except percentages)** | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------- | :----- | :----- | :--------- | :--------- | | Three months ended June 30, | $2,775 | $4,164 | $(1,389) | -33.4% | | Six months ended June 30, | $6,314 | $7,545 | $(1,231) | -16.3% | - **Gross Margin Change (percentage points)** | Period | 2025 | 2024 | Change (pp) | | :-------------------------- | :----- | :----- | :---------- | | Three months ended June 30, | 45.2% | 44.3% | +0.9% | | Six months ended June 30, | 46.4% | 45.3% | +1.1% | - **General and Administrative Expense Change (in thousands, except percentages)** | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------- | :----- | :----- | :--------- | :--------- | | Three months ended June 30, | $4,413 | $5,756 | $(1,343) | -23.3% | | Six months ended June 30, | $8,477 | $10,844 | $(2,367) | -21.8% | - The change in fair value of warrant liability decreased by approximately **$5.8 million** for the three months and **$1.6 million** for the six months ended June 30, 2025, compared to 2024, primarily due to the repricing of Public Warrants in November 2024[122](index=122&type=chunk) [Non-GAAP Financial Measures](index=27&type=section&id=Non-GAAP%20Financial%20Measures) Uses Adjusted EBITDA as a non-GAAP metric to evaluate performance, showing improved results for both three and six months ended June 30, 2025 - **Adjusted EBITDA Reconciliation (in thousands)** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(7,968) | $(2,864) | $(5,071) | $(6,069) | | Depreciation expense | $- | $2 | $12 | $5 | | Provision for income taxes | $(19) | $69 | $52 | $91 | | Net interest (income) expense | $277 | $6 | $297 | $(8) | | **EBITDA** | **$(7,710)** | **$(2,787)** | **$(4,710)** | **$(5,981)** | | Stock-based compensation | $411 | $402 | $611 | $685 | | Borrowing related costs | $124 | $699 | $705 | $975 | | Change in fair value of warrant liability | $5,449 | $(348) | $1,196 | $(368) | | Change in fair value of notes payable | $- | $167 | $(220) | $101 | | Foreign exchange transaction loss | $14 | $9 | $22 | $25 | | Other (income) expenses, including transaction costs | $- | $(180) | $- | $668 | | **Adjusted EBITDA** | **$(1,712)** | **$(2,038)** | **$(2,396)** | **$(3,895)** | [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company had **$10.5 million** cash and **$7.7 million** notes payable, with sufficient working capital for one year, supported by BARDA and Avenue Financing - As of June 30, 2025, the company had **$10.5 million** in cash, **$7.7 million** in notes payable, and an accumulated deficit of **$53.3 million**[128](index=128&type=chunk) - The company believes it has **sufficient working capital for at least one year**, supported by the PBS BARDA Contract (up to **$150.0 million**) and the Avenue Financing (up to **$15.0 million**)[129](index=129&type=chunk)[130](index=130&type=chunk) - The Avenue Financing includes an initial draw-down of **$8.5 million** and a second tranche of **$6.5 million** contingent on FDA clearance of the DeepView System and a **$7.0 million** equity raise[130](index=130&type=chunk)[131](index=131&type=chunk) - As a condition to the Avenue Financing, the company raised an additional **$2.7 million** from the sale of **2,076,923 shares** of Common Stock at **$1.30 per share**[133](index=133&type=chunk) - **Cash Flows (Six Months Ended June 30, in thousands)** | Activity | 2025 | 2024 | | :---------------------------------- | :------- | :------- | | Net cash used in operating activities | $(4,867) | $(8,042) | | Net cash provided by financing activities | $10,185 | $10,131 | - Net cash used in operating activities decreased by approximately **$3.2 million**, primarily due to decreased staffing levels and consulting costs[136](index=136&type=chunk) - Net cash provided by financing activities **increased slightly** due to proceeds from the **Avenue Financing** and attendant **equity raise**, partially offset by **Yorkville debt repayments**[137](index=137&type=chunk) - A **material weakness** in financial statement close process controls has **not yet been remediated**, impacting the effectiveness of disclosure controls and procedures[158](index=158&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Spectral AI acknowledges exposure to interest rate, foreign exchange, credit, and inflation risks - The company is a **smaller reporting company** and is **not required to provide quantitative and qualitative disclosures about market risk**[157](index=157&type=chunk) - The company is exposed to **interest rate, foreign exchange, credit, and inflation risks** in the ordinary course of business[151](index=151&type=chunk) - Interest rate sensitivity primarily affects the cost of future borrowings, as current notes are tied to **Prime plus 5%**[152](index=152&type=chunk) - **Credit risk is concentrated** in cash holdings (exceeding federally insured limits) and accounts receivable, with a majority from **one U.S. government agency**[154](index=154&type=chunk)[155](index=155&type=chunk) - **Inflationary pressures** on product, employee, or other costs could **adversely affect gross margin and selling, general, and administrative expenses**[156](index=156&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were not effective due to an un-remediated material weakness in financial statement close process controls, with remediation efforts underway - Disclosure controls and procedures were **not effective** as of June 30, 2025, due to an un-remediated **material weakness** in financial statement close process controls[158](index=158&type=chunk) - The material weakness relates to **financial statement close process controls not consistently operating effectively** or lacking appropriate evidence for account reconciliations, transactions, and journal entries[158](index=158&type=chunk) - Remediation efforts include **engaging professional accounting services**, **strengthening and documenting accounting processes**, and **enhancing ERP system functionality**[163](index=163&type=chunk) - Despite the material weakness, management believes the condensed consolidated financial statements **fairly present the company's financial condition, results of operations, and cash flows**[159](index=159&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any material legal proceedings or pending claims significantly affecting its business or financial condition - The Company is **not a party to any material legal proceedings or pending claims**[165](index=165&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the Annual Report on Form 10-K and Registration Statement on Form S-4 - There have been **no material changes** to the risk factors disclosed in the Annual Report on Form 10-K (March 31, 2025) and the Registration Statement on Form S-4 (January 5, 2024)[166](index=166&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred; planned use of proceeds remains materially unchanged - **No unregistered sales of equity securities** occurred during the period[167](index=167&type=chunk) - There has been **no material change** in the planned use of proceeds from the Business Combination or the Avenue Financing[168](index=168&type=chunk) [Item 3. Defaults Upon Senior Securities](index=34&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the period - **No defaults upon senior securities** occurred during the period[169](index=169&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No disclosures related to mine safety were required - **No mine safety disclosures** were required[170](index=170&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) No other information requiring disclosure was reported - **No other information requiring disclosure** was reported[171](index=171&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Quarterly Report on Form 10-Q, including the Business Combination Agreement, officer certifications, and XBRL - Key exhibits include the **Business Combination Agreement**, certifications from the Principal Executive Officer and Chief Financial Officer, and **Inline XBRL documents**[173](index=173&type=chunk) Part III. Signatures - The report is signed by **J. Michael DiMaio, Principal Executive Officer**, and **Vincent S. Capone, Chief Financial Officer**, on August 12, 2025[178](index=178&type=chunk)[179](index=179&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: SPECTRAL AI, INC. (Exact Name of Registrant as Specified in Its Charter) (State or other jurisdiction of incorporation or organization) ...

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2025 Or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 000-08187 NEW CONCEPT ENERGY, INC. (State or Other Jurisdiction of Incorporation or Organization) Nevada 75-2399477 (I.R.S. Employer Identification No.) ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-42126 Perceptive Capital Solutions Corp (Exact name of registrant as specified in its charter) Cayman Islands 98-1783595 (State or ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number: 001-40927 ZEO ENERGY CORP. (Exact name of registrant as specified in its charter) Delaware 98-1601409 (Sta ...

[FORM 10-Q Cover Page](index=1&type=section&id=FORM%2010-Q%20Cover%20Page) This section details ZEO ENERGY CORP.'s Form 10-Q filing, stock exchange listings, and company classifications - ZEO ENERGY CORP. filed a Form 10-Q for the quarterly period ended June 30, 2025[1](index=1&type=chunk) - The company's Class A Common Stock (ZEO) and Warrants (ZEOWW) are registered on The Nasdaq Stock Market LLC[2](index=2&type=chunk) - ZEO ENERGY CORP. is classified as a Non-accelerated filer, Smaller reporting company, and Emerging growth company[3](index=3&type=chunk) Shares Outstanding as of August 12, 2025 | Class | Shares Outstanding | | :------------------ | :----------------- | | Class A Common Stock | 28,352,032 | | Class V Common Stock | 26,480,000 | [TABLE OF CONTENTS](index=3&type=section&id=TABLE%20OF%20CONTENTS) This section outlines the structure and organization of the Form 10-Q report [PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Zeo Energy Corp.'s unaudited condensed consolidated financial statements and accompanying notes for the specified periods [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position at June 30, 2025, and December 31, 2024 Key Balance Sheet Figures | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--------------------------------------- | :------------ | :---------------- | :----------- | :--------- | | Total Assets | $46,230,636 | $60,976,116 | $(14,745,480) | (24.2)% | | Total Liabilities | $16,276,304 | $18,063,424 | $(1,787,120) | (9.9)% | | Total Stockholders' Deficit | $(59,446,742) | $(88,912,079) | $29,465,337 | (33.1)% | | Cash and cash equivalents | $68,691 | $5,634,115 | $(5,565,424) | (98.8)% | | Intangibles, net | $- | $7,571,156 | $(7,571,156) | (100.0)% | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's financial performance for the three and six months ended June 30, 2025 and 2024 Three Months Ended June 30, 2025 vs. 2024 | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----------- | :----------- | :----------- | :--------- | | Total Revenues | $18,101,930 | $14,796,272 | $3,305,658 | 22.3% | | Loss from Operations | $(2,853,506) | $(2,662,870) | $(190,636) | 7.2% | | Net Loss | $(2,679,464) | $(1,757,319) | $(922,145) | 52.5% | | Loss per Class A Common Share | $(0.11) | $(0.06) | $(0.05) | 83.3% | Six Months Ended June 30, 2025 vs. 2024 | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----------- | :----------- | :----------- | :--------- | | Total Revenues | $26,885,625 | $34,938,428 | $(8,052,803) | (23.0)% | | Loss from Operations | $(16,364,904) | $(6,711,418) | $(9,653,486) | 143.8% | | Net Loss | $(15,998,827) | $(5,864,421) | $(10,134,406) | 172.8% | | Loss per Class A Common Share | $(0.44) | $(0.60) | $0.16 | (26.7)% | | Depreciation and amortization | $8,076,181 | $913,198 | $7,162,983 | 784.4% | | General and administrative | $15,334,050 | $8,742,993 | $6,591,057 | 75.4% | [Condensed Consolidated Statements of Changes in Redeemable Non-Controlling Interests and Stockholders' Deficit](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Redeemable%20Non-Controlling%20Interests%20and%20Stockholders%27%20Deficit) This section outlines changes in redeemable non-controlling interests and stockholders' deficit for the reported periods Stockholders' Deficit | Period | Amount | | :-------------------- | :------------- | | June 30, 2025 | $(59,446,742) | | December 31, 2024 | $(88,912,079) | - Significant changes for the six months ended June 30, 2025, include **$3,215,449** in stock-based compensation, **$19,167,500** from Class A common stock issued in exchange for OpCo class B units, and **$15,999,471** from subsequent measurement of redeemable non-controlling interests[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the cash flow activities from operations, investing, and financing for the six months ended June 30 Cash Flow Summary (Six Months Ended June 30) | Activity | 2025 | 2024 | Change ($) | | :--------------------------------------- | :----------- | :------------ | :----------- | | Net cash used in operating activities | $(4,549,934) | $(12,351,750) | $7,801,816 | | Net cash used in investing activities | $(807,025) | $(330,829) | $(476,196) | | Net cash (used in) provided by financing activities | $(208,465) | $10,002,393 | $(10,210,858) | | Cash and cash equivalents, end of the period | $68,691 | $5,342,120 | $(5,273,429) | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [NOTE 1—BASIS OF PRESENTATION AND OTHER INFORMATION](index=11&type=section&id=NOTE%201%E2%80%94BASIS%20OF%20PRESENTATION%20AND%20OTHER%20INFORMATION) This note outlines the basis of financial statement preparation and the adoption or evaluation of new accounting standards - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information and should be read in conjunction with the Form 10-K[24](index=24&type=chunk) - ASU 2023-05 (Business Combinations—Joint Venture Formations) was adopted and did not have a material impact[26](index=26&type=chunk) - ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation Disclosures) are currently being evaluated for their impact on future financial statements[27](index=27&type=chunk)[28](index=28&type=chunk) [NOTE 2—DISAGGREGATION OF REVENUES AND SEGMENT REPORTING](index=12&type=section&id=NOTE%202%E2%80%94DISAGGREGATION%20OF%20REVENUES%20AND%20SEGMENT%20REPORTING) This note details the company's revenue breakdown by type and confirms its operation as a single reportable segment Total Net Revenues | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------- | :----------- | :----------- | :----------- | :--------- | | Three Months Ended June 30 | $18,101,930 | $14,796,272 | $3,305,658 | 22.3% | | Six Months Ended June 30 | $26,885,625 | $34,938,428 | $(8,052,803) | (23.0)% | Revenue by Type (Six Months Ended June 30) | Revenue Type | 2025 | 2024 | | :-------------------------- | :----------- | :----------- | | Solar system installations, net | $26,064,556 | $33,101,976 | | Roofing installations | $821,069 | $1,676,357 | - The Company operates as a single operating and reportable segment, focused on the sales and installation of solar panel technology to individual households within the United States[32](index=32&type=chunk) [NOTE 3—PROPERTY AND EQUIPMENT](index=13&type=section&id=NOTE%203%E2%80%94PROPERTY%20AND%20EQUIPMENT) This note provides details on the company's property and equipment, including internally-developed software and depreciation expense Property and Equipment, Net | Metric | June 30, 2025 | December 31, 2024 | Change ($) | | :-------------------------- | :------------ | :---------------- | :----------- | | Total property and equipment, net | $2,849,966 | $2,475,963 | $374,003 | | Internally-developed software | $1,795,250 | $988,225 | $807,025 | Depreciation Expense (Six Months Ended June 30) | Year | Amount | | :--- | :------- | | 2025 | $433,022 | | 2024 | $330,946 | [NOTE 4—INTANGIBLE ASSETS](index=13&type=section&id=NOTE%204%E2%80%94INTANGIBLE%20ASSETS) This note details the company's intangible assets and associated amortization expense for the reported periods Intangible Assets, Net | Metric | June 30, 2025 | December 31, 2024 | Change ($) | | :------------------------ | :------------ | :---------------- | :----------- | | Total intangible assets, net | $- | $7,571,156 | $(7,571,156) | Amortization Expense (Six Months Ended June 30) | Year | Amount | | :--- | :----------- | | 2025 | $7,571,156 | | 2024 | $514,017 | [NOTE 5—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES](index=13&type=section&id=NOTE%205%E2%80%94ACCRUED%20EXPENSES%20AND%20OTHER%20CURRENT%20LIABILITIES) This note provides a breakdown of accrued expenses and other current liabilities, including related party balances Accrued Expenses and Other Current Liabilities | Metric | June 30, 2025 | December 31, 2024 | Change ($) | | :--------------------------------------- | :------------ | :---------------- | :----------- | | Total accrued expenses and other current liabilities | $4,116,182 | $5,181,087 | $(1,064,905) | | Accrued expenses and other current liabilities – related parties | $1,358,427 | $3,359,101 | $(2,000,674) | [NOTE 6—LEASES](index=14&type=section&id=NOTE%206%E2%80%94LEASES) This note details the company's lease obligations, including new operating leases and weighted-average lease terms and discount rates - The Company entered into a new operating lease for office space in Richmond, Virginia, in June 2025, with a 3-year term[37](index=37&type=chunk) Operating Lease Liabilities | Metric | June 30, 2025 | December 31, 2024 | Change ($) | | :-------------------------- | :------------ | :---------------- | :----------- | | Total operating lease liabilities | $1,136,495 | $1,382,814 | $(246,319) | | Weighted-average remaining lease term | 2.11 years | 2.39 years | - | | Weighted-average discount rate | 5.04% | 4.97% | - | - As of June 30, 2025, the weighted-average remaining lease term for all finance leases is **2.78 years** and the weighted average discount rate is **9.76%**[40](index=40&type=chunk) [NOTE 7—DEBT](index=15&type=section&id=NOTE%207%E2%80%94DEBT) This note outlines the company's debt obligations, including vehicle loans and a convertible promissory note with a high effective interest rate - As of June 30, 2025, the weighted-average interest rate on the Company's vehicle loan obligations was **7.63%**, with total long-term debt (net of current portion) of **$337,483**[41](index=41&type=chunk)[42](index=42&type=chunk) - The Company issued a convertible promissory note to LHX Intermediate LLC for up to **$4,000,000**, with **$2.5 million** advanced as of June 30, 2025[43](index=43&type=chunk) - The convertible note is repayable in Class A common stock at **$1.35 per share**, resulting in a computed effective interest rate of **114.8%** as of June 30, 2025[44](index=44&type=chunk) [NOTE 8—FAIR VALUE MEASUREMENTS](index=16&type=section&id=NOTE%208%E2%80%94FAIR%20VALUE%20MEASUREMENTS) This note details the fair value measurement of warrant liabilities and the associated gain on change in fair value Warrant Liabilities (Level 1 Measurement) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | | :--------------------------------------- | :------------ | :---------------- | :----------- | | Warrant liabilities | $881,820 | $1,449,000 | $(567,180) | | Gain on change in fair value of warrant liabilities (six months) | $(567,180) | - | - | [NOTE 9—REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY](index=16&type=section&id=NOTE%209%E2%80%94REDEEMABLE%20NON-CONTROLLING%20INTERESTS%20AND%20EQUITY) This note outlines the company's capital stock structure, changes in equity, and the unrecorded Tax Receivable Agreement liability Capital Stock as of June 30, 2025 | Class | Authorized Shares | Issued Shares | Outstanding Shares | | :-------------------------- | :---------------- | :------------ | :----------------- | | Class A common stock | 300,000,000 | 22,096,464 | 22,096,464 | | Class V common stock | 100,000,000 | 26,480,000 | 26,480,000 | | Class A convertible preferred units | 1,500,000 | 1,500,000 | 1,500,000 | - During the six months ended June 30, 2025, **8,750,000** Class A common shares were issued in exchange for OpCo class B units and corresponding class V common shares[48](index=48&type=chunk) - The total unrecorded Tax Receivable Agreement (TRA) liability is approximately **$18.9 million** as of June 30, 2025[51](index=51&type=chunk) OpCo Class A Preferred Dividends | Period | Amount | | :-------------------- | :------- | | Three Months Ended June 30, 2025 | $422,966 | | Six Months Ended June 30, 2025 | $828,203 | [NOTE 10—STOCK-BASED COMPENSATION](index=18&type=section&id=NOTE%2010%E2%80%94STOCK-BASED%20COMPENSATION) This note details the company's stock-based compensation plans, including the 2024 Omnibus Incentive Equity Plan and various awards - The 2024 Omnibus Incentive Equity Plan was approved on March 6, 2024, reserving **3,220,400 shares**, with an automatic annual increase[54](index=54&type=chunk) - Performance-based executive shares for the CEO are tied to stock price thresholds (**$7.50, $12.50, $15.00**) within three years of the closing date[57](index=57&type=chunk) Equity Compensation Expense (Six Months Ended June 30, 2025) | Award Type | Expense | | :--------------------------------------- | :----------- | | CEO Performance-Based Awards | $1,284,672 | | February 2025 Grants (740k + 250k shares) | $592,920 | | Sun Managers, LLC Management Incentive Plan | $792,750 | | Seasonal Manager Stock Compensation Plan | $545,107 | - As of June 30, 2025, remaining unrecognized compensation expense for various plans totals approximately **$3.05 million**, to be recognized over periods ranging from **0.75 to 2.6 years**[58](index=58&type=chunk)[62](index=62&type=chunk)[69](index=69&type=chunk) [NOTE 11—RELATED PARTY TRANSACTIONS](index=20&type=section&id=NOTE%2011%E2%80%94RELATED%20PARTY%20TRANSACTIONS) This note outlines the company's transactions with related parties, including solar leasing revenue and convertible debt arrangements Related Party Revenue (Solar Leasing) | Period | 2025 | 2024 | | :-------------------- | :----------- | :----------- | | Three Months Ended June 30 | $8,125,483 | $6,997,626 | | Six Months Ended June 30 | $10,692,787 | $15,810,395 | - The Company transferred a **$3,000,000** rebate from Solar Leasing to White Horse Energy (wholly owned by the CEO) in the form of convertible debt, with a principal balance of **$3,000,000** as of June 30, 2025[72](index=72&type=chunk) - Interest income from the related party note receivable was **$75,786** for the six months ended June 30, 2025[72](index=72&type=chunk) - An unrecorded Tax Receivable Agreement (TRA) liability of approximately **$18.9 million** exists as of June 30, 2025[73](index=73&type=chunk) [NOTE 12—NET LOSS PER SHARE](index=21&type=section&id=NOTE%2012%E2%80%94NET%20LOSS%20PER%20SHARE) This note presents the basic and diluted net loss per Class A common share and weighted-average shares outstanding Loss per Class A Common Share – Basic and Diluted | Period | 2025 | 2024 | | :-------------------- | :------- | :------- | | Three Months Ended June 30 | $(0.11) | $(0.06) | | Six Months Ended June 30 | $(0.44) | $(0.60) | Weighted-Average Class A Common Shares Outstanding – Basic and Diluted | Period | 2025 | 2024 | | :-------------------- | :----------- | :----------- | | Three Months Ended June 30 | 22,096,464 | 5,026,964 | | Six Months Ended June 30 | 19,983,013 | 3,010,654 | - **43,221,852** potential common share equivalents were excluded from diluted loss per share calculations as of June 30, 2025, due to their anti-dilutive effect[74](index=74&type=chunk) [NOTE 13—INCOME TAXES](index=22&type=section&id=NOTE%2013%E2%80%94INCOME%20TAXES) This note details the effective tax rate, deferred tax assets and liabilities, and the valuation allowance recorded Effective Tax Rate (ETR) from Continuing Operations | Period | ETR | | :--------------------------------------- | :-------- | | Three Months Ended June 30, 2025 | 8.5% benefit on loss | | Six Months Ended June 30, 2025 | 2.2% expense on loss | Net Deferred Tax Assets and Liabilities | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Net deferred tax asset | $- | $661,904 | | Net deferred tax assets and liabilities | $- | $238,491 | - A valuation allowance was recorded on deferred tax assets as their realization is not more likely than not[76](index=76&type=chunk) [NOTE 14—SUBSEQUENT EVENTS](index=22&type=section&id=NOTE%2014%E2%80%94SUBSEQUENT%20EVENTS) This note discloses significant events occurring after the reporting period, including debt conversion, new legislation, and a merger - On July 1, 2025, approximately **$2.55 million** of outstanding accounts payable was converted into an **18%** annual interest note payable[78](index=78&type=chunk) - The One Big Beautiful Bill Act of 2025 (OBBBA) was signed into law on July 4, 2025, and is not expected to materially impact the 2025 effective tax rate[79](index=79&type=chunk) - The merger with Heliogen, Inc. was completed on August 8, 2025, making Heliogen a direct, wholly-owned subsidiary of Zeo Energy[80](index=80&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Zeo Energy Corp.'s financial condition, results of operations, and key influencing factors [Cautionary Note Regarding Forward-Looking Statements](index=23&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This note advises that the report contains forward-looking statements subject to risks and uncertainties, with no obligation to update - The report contains forward-looking statements that involve known and unknown risks, uncertainties, and assumptions, and the company disclaims any obligation to update them[82](index=82&type=chunk) [Overview](index=23&type=section&id=Overview) This section describes Zeo Energy Corp.'s business model, product offerings, operational regions, and customer financing methods - Zeo Energy Corp. is a vertically integrated company offering sales, design, procurement, installation, and maintenance of residential solar energy systems, with a mission to expedite the transition to renewable energy[83](index=83&type=chunk) - The company also sells and installs roofing, insulation, energy-efficient appliances, and battery storage systems[86](index=86&type=chunk) - Operations are primarily in Florida, Texas, Arkansas, Missouri, Ohio, and Illinois, with an expanding customer base in California, Colorado, Minnesota, Utah, and Virginia[83](index=83&type=chunk) - The business model is capital-light, utilizing approximately **280 sales agents** and **12 independent sales dealers**, with most equipment drop-shipped to installation sites[86](index=86&type=chunk) - Most customers finance purchases through third-party long-term lenders or leasing products[87](index=87&type=chunk) [Recent Developments](index=24&type=section&id=Recent%20Developments) This section highlights significant recent events, including the acquisition of Heliogen, Inc [Heliogen Acquisition](index=24&type=section&id=Heliogen%20Acquisition) This section details the merger agreement and completion of the Heliogen, Inc. acquisition, including share exchange terms - On May 28, 2025, the Company entered into a Merger Agreement to acquire Heliogen, Inc., with the mergers completed on August 8, 2025[89](index=89&type=chunk) - Heliogen common stockholders received **0.9591 shares** of Zeo Class A Common Stock for each share of Heliogen Common Stock[91](index=91&type=chunk) - All Heliogen RSUs were automatically accelerated and fully vested, while Heliogen Options and Commercial Warrants were cancelled without payment due to exercise prices being at or above the purchase price[93](index=93&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk) [Key Operating and Financial Metrics and Outlook](index=25&type=section&id=Key%20Operating%20and%20Financial%20Metrics%20and%20Outlook) This section presents key operating and financial metrics for the reported periods and discusses their use in performance evaluation Key Operating and Financial Metrics (Three Months Ended June 30) | Metric | 2025 | 2024 | | :------------------ | :----------- | :----------- | | Revenue, net | $18,101,930 | $14,796,272 | | Gross profit | $10,603,679 | $7,573,890 | | Gross margin | 58.6% | 51.2% | | Contribution profit | $2,741,929 | $3,165,365 | | Contribution margin | 15.1% | 21.4% | | Loss from operations | $(2,853,506) | $(2,662,870) | | Net loss | $(2,679,464) | $(1,757,319) | | Adjusted EBITDA | $1,400,148 | $775,737 | | Adjusted EBITDA margin | 7.7% | 5.2% | Key Operating and Financial Metrics (Six Months Ended June 30) | Metric | 2025 | 2024 | | :------------------ | :----------- | :----------- | | Revenue, net | $26,885,625 | $34,938,428 | | Gross profit | $14,378,437 | $13,589,677 | | Gross margin | 53.5% | 38.9% | | Contribution profit | $(34,390) | $5,237,435 | | Contribution margin | (0.1)% | 15.0% | | Loss from operations | $(16,364,904) | $(6,711,418) | | Net loss | $(15,998,827) | $(5,864,421) | | Adjusted EBITDA | $(4,953,383) | $(199,531) | | Adjusted EBITDA margin | (18.4)% | (0.6)% | - The company uses non-GAAP measures like Contribution Profit and Adjusted EBITDA to evaluate financial performance, efficiency, pricing strategy, and resource allocation[100](index=100&type=chunk)[101](index=101&type=chunk) [Key Factors that May Influence Future Results of Operations](index=26&type=section&id=Key%20Factors%20that%20May%20Influence%20Future%20Results%20of%20Operations) This section discusses factors impacting future financial performance, including market expansion, product offerings, and economic pressures - Future revenue growth is dependent on expanding product offerings and services into new residential markets, particularly underserved areas with favorable incentives and net metering policies[103](index=103&type=chunk) - Plans include expanding the roofing business to facilitate solar installations and offering more financing options, such as leasing[104](index=104&type=chunk) - The company intends to increase its in-house sales force and external sales dealers to target new customers in Southern U.S. regional residential markets[105](index=105&type=chunk) - Inflationary pressures are increasing costs for labor, raw materials, and components, along with supply chain constraints and trade tariffs, which may pressure operating margins[106](index=106&type=chunk) - Higher interest rates have led more homeowners to opt for lease contracts over conventional loans, impacting the competitive advantage of financed solar power[107](index=107&type=chunk) - Reliance on contract manufacturers and suppliers means delays or price increases in raw materials could adversely impact cash flows and results of operations[108](index=108&type=chunk) [Components of Condensed Consolidated Statements of Operations](index=27&type=section&id=Components%20of%20Condensed%20Consolidated%20Statements%20of%20Operations) This section defines the primary components of the statements of operations, including revenue, cost of goods sold, and operating expenses - Primary revenue source is residential solar system sales, recognized upon installation inspection, net of financing fees[109](index=109&type=chunk) - Cost of goods sold includes product costs, installation labor, and permitting, and decreased due to lower revenues and the impact of higher interest rates on consumer financing[112](index=112&type=chunk)[113](index=113&type=chunk) - Operating expenses consist of sales and marketing (including commissions, advertising) and general and administrative (including personnel, professional services, software, facilities costs)[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - Depreciation and amortization primarily relate to vehicles, furniture, internally developed software, and acquired intangibles[118](index=118&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) This section provides a detailed comparative analysis of the company's financial performance for the reported periods [Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024](index=28&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202024) This section analyzes the financial performance for the three-month period, highlighting changes in revenue, costs, and expenses - Revenue, net increased by **$3.3 million (22.3%)** to **$18.1 million**, primarily due to an increase in revenues with a related-party third-party operator[119](index=119&type=chunk)[120](index=120&type=chunk) - Cost of goods sold increased by **$0.2 million (3.2%)** but declined as a percentage of revenue from **47.7% to 40.2%** due to an increase in the average selling price of contracts[119](index=119&type=chunk)[121](index=121&type=chunk) - Depreciation and amortization increased significantly by **$2.7 million (599.9%)** to **$3.2 million**, mainly due to amortization of acquired contracts from the Lumio Asset Purchase Agreement[119](index=119&type=chunk)[122](index=122&type=chunk) - Sales and marketing expenses increased by **$1.2 million (27.3%)** due to efforts to expand year-round sales through digital lead generation[119](index=119&type=chunk)[124](index=124&type=chunk) - General and administrative expenses decreased by **$0.7 million (11.6%)** due to a **$1.5 million** decrease in stock compensation and a **$0.6 million** decrease in bad debt expense, partially offset by increased payroll and public company expenses[119](index=119&type=chunk)[123](index=123&type=chunk) - Other income (expense), net decreased by **$0.84 million**, shifting from income to expense, primarily due to a gain on fair value of warrant liabilities in the prior period[119](index=119&type=chunk)[125](index=125&type=chunk) [Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024](index=29&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202024) This section analyzes the financial performance for the six-month period, detailing changes in revenue, costs, and operating expenses - Revenue, net decreased by **$8.0 million (23.0%)** to **$26.9 million**, primarily due to a decrease in deferred revenue recognized in Q1 2025 compared to Q1 2024[126](index=126&type=chunk)[127](index=127&type=chunk) - Cost of goods sold decreased by **$8.9 million (42.2%)**, improving as a percentage of revenue from **60.2% to 45.2%**, mainly due to the impact of deferred revenue costs in 2023 being deferred to 2024, with no similar costs in 2025[126](index=126&type=chunk)[128](index=128&type=chunk) - Depreciation and amortization increased by **$7.2 million (784.4%)** to **$8.1 million**, primarily due to increased amortization of acquired contracts from the Lumio Asset Purchase Agreement[126](index=126&type=chunk)[129](index=129&type=chunk) - General and administrative expenses increased by **$6.6 million (75.4%)** to **$15.3 million**, driven by higher payroll costs, stock compensation, professional fees related to being a public company, and a **$3.2 million** bad debt reserve[126](index=126&type=chunk)[130](index=130&type=chunk) - Sales and marketing expenses decreased by **$3.2 million (29.2%)** due to a **$2.5 million** reduction in stock compensation expense and lower commissions from decreased revenue[126](index=126&type=chunk)[131](index=131&type=chunk) - Other income, net increased by **$46,792 (7.1%)**, influenced by a decrease in the gain on fair value of warrant liabilities and a decrease in interest expense[126](index=126&type=chunk)[132](index=132&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's cash position, cash flow activities, and future capital requirements Cash and Cash Equivalents | Period | Amount | | :-------------------- | :----------- | | June 30, 2025 | $68,691 | | December 31, 2024 | $5,634,115 | - Net cash used in operating activities decreased by **$7.8 million** to **$(4.5) million** for the six months ended June 30, 2025, primarily due to positive cash flows from accounts receivable, prepaids, accounts payable, and contract liabilities, offset by increased net loss and lower stock compensation[139](index=139&type=chunk)[140](index=140&type=chunk) - Net cash used in investing activities increased to **$(0.8) million** for the six months ended June 30, 2025, mainly due to purchases of property and equipment[139](index=139&type=chunk)[141](index=141&type=chunk) - Net cash (used in) provided by financing activities shifted from **$10.0 million** provided in 2024 to **$(0.2) million** used in 2025, primarily due to cash acquired from the business combination in 2024 not recurring[139](index=139&type=chunk)[142](index=142&type=chunk) - The proceeds from the Heliogen business combination are expected to meet business needs for the next twelve months, but additional debt or equity financing may be required for future growth[137](index=137&type=chunk) - Current indebtedness includes approximately **$2.5 million** in trade-credit with solar equipment distributors and **$0.6 million** in debt on service trucks and vehicles[143](index=143&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures used by management to evaluate performance [Contribution Profit and Contribution Margin](index=32&type=section&id=Contribution%20Profit%20and%20Contribution%20Margin) This section defines contribution profit and margin, explaining their use in evaluating financial performance and resource allocation - Contribution profit is defined as revenue, net less direct costs of revenue, commissions expense, and depreciation and amortization; contribution margin is the ratio of contribution profit to revenue, net[147](index=147&type=chunk) - These metrics are used by management to understand financial performance, efficiency, evaluate pricing strategy, and allocate resources[147](index=147&type=chunk) Contribution Profit and Margin (Six Months Ended June 30) | Metric | 2025 | 2024 | | :------------------ | :----------- | :----------- | | Total Contribution profit | $(34,390) | $5,237,435 | | Contribution margin | (0.1)% | 15.0% | [Adjusted EBITDA](index=33&type=section&id=Adjusted%20EBITDA) This section defines Adjusted EBITDA and its use as an internal performance measure for comparative analysis - Adjusted EBITDA is defined as net income (loss) before interest, taxes, depreciation, amortization, other income/expenses, and stock compensation, adjusted to exclude merger and acquisition expenses[149](index=149&type=chunk) - It is used as an internal performance measure to allow for a more relevant comparison of results to other companies by excluding non-cash and non-recurring charges[149](index=149&type=chunk) Adjusted EBITDA and Margin (Six Months Ended June 30) | Metric | 2025 | 2024 | | :------------------ | :----------- | :----------- | | Adjusted EBITDA | $(4,953,383) | $(199,531) | | Adjusted EBITDA margin | (18.4)% | (0.6)% | [Critical Accounting Estimates](index=33&type=section&id=Critical%20Accounting%20Estimates) This section confirms no material changes to critical accounting policies and estimates since the prior annual report - There have been no material changes to critical accounting policies and estimates since the Annual Report on Form 10-K for the year ended December 31, 2024[150](index=150&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Zeo Energy Corp. is not required to provide quantitative and qualitative disclosures about market risk [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to material weaknesses, though financial statements are fairly presented - Disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses that are still being remediated[152](index=152&type=chunk) - Management believes the condensed consolidated financial statements fairly represent the company's financial condition, results of operations, and cash flows[152](index=152&type=chunk) - No changes in internal control over financial reporting materially affected or are reasonably likely to materially affect internal control over financial reporting during the period[154](index=154&type=chunk) [PART II – OTHER INFORMATION](index=34&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This part includes disclosures on legal proceedings, risk factors, equity sales, defaults, and other relevant information [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings - No legal proceedings were reported[156](index=156&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) This section references the Annual Report for risk factors and highlights new risks related to the Heliogen acquisition and integration - Substantial costs incurred in connection with the Heliogen Mergers could adversely affect financial condition and results of operations[160](index=160&type=chunk) - Inability to effectively manage and integrate Heliogen's business could harm the company's reputation and operating results[162](index=162&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds - No unregistered sales of equity securities or use of proceeds were reported[163](index=163&type=chunk) [Item 3. Defaults Upon Senior Securities](index=35&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[164](index=164&type=chunk) [Item 4. Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[165](index=165&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarterly period ended June 30, 2025 - No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter[166](index=166&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of, or incorporated by reference into, the Form 10-Q, including key agreements, corporate documents, and certifications - Key exhibits include the Agreement and Plan of Merger and Reorganization (Heliogen), Certificate of Incorporation, Bylaws, and certifications from the Principal Executive Officer and Principal Financial Officer[168](index=168&type=chunk) [SIGNATURES](index=37&type=section&id=SIGNATURES) This section contains the official signatures of the company's executive and financial officers, certifying the report - The report was signed by Timothy Bridgewater, Chief Executive Officer, and Cannon Holbrook, Chief Financial Officer, on August 12, 2025[173](index=173&type=chunk)

Part I. Financial Information [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements.) The company, a non-operational blank check entity, reported a $2.46 million net income for H1 2025 from trust account interest, with assets of $131.2 million primarily held in trust [Condensed Financial Statements](index=4&type=section&id=Condensed%20Financial%20Statements) Condensed Balance Sheet Highlights (Unaudited) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $1,121,801 | $1,368,608 | | Investments in Trust Account | $129,902,367 | $127,163,421 | | **Total Assets** | **$131,216,755** | **$128,753,770** | | **Liabilities & Equity** | | | | Total Liabilities | $4,511,581 | $4,504,272 | | Class A Ordinary Shares subject to possible redemption | $129,902,367 | $127,163,421 | | Total Shareholders' Deficit | ($3,197,193) | ($2,913,923) | Condensed Statement of Operations (Unaudited) | Account | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | General and administrative expenses | $162,835 | $305,907 | | Loss from operations | ($162,835) | ($305,907) | | Interest earned on Investments in Trust Account | $1,374,969 | $2,738,946 | | **Net income** | **$1,222,925** | **$2,455,676** | | Basic and diluted net income per share, Class A | $0.07 | $0.14 | Condensed Statement of Cash Flows (Unaudited) | Cash Flow Item | Six Months Ended June 30, 2025 | | :--- | :--- | | Net income | $2,455,676 | | Interest earned on Investments in Trust Account | ($2,738,946) | | **Net cash used in operating activities** | **($246,807)** | | Cash - Beginning of period | $1,368,608 | | **Cash - End of period** | **$1,121,801** | [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes detail the company's formation, IPO proceeds, accounting policies for redeemable shares, related party transactions, and key commitments - The Company is a blank check company formed to effect a Business Combination and **has not commenced any operations** as of June 30, 2025[20](index=20&type=chunk)[21](index=21&type=chunk) - On November 12, 2024, the Company consummated its IPO of 12,650,000 units at $10,00 per unit, generating gross proceeds of **$126.5 million**[23](index=23&type=chunk)[28](index=28&type=chunk) - Class A Ordinary Shares subject to redemption are classified as temporary equity, with the redemption value increasing to **$129.9 million** as of June 30, 2025[54](index=54&type=chunk) - The Company pays an affiliate of the Sponsor **$10,000 per month** for office space and administrative support, totaling $60,000 for H1 2025[69](index=69&type=chunk) - The underwriters are entitled to a deferred underwriting discount of **$4,427,500** payable upon the completion of the Company's initial Business Combination[77](index=77&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses the company's non-operational status, with net income of $2.46 million for H1 2025 driven by trust interest, and sufficient working capital - The company's activities since inception have been limited to organizational activities, the IPO, and searching for a **Business Combination target**[104](index=104&type=chunk)[108](index=108&type=chunk) Results of Operations Summary | Period | Net Income | Key Drivers | | :--- | :--- | :--- | | **Three Months Ended June 30, 2025** | $1,222,925 | $1.37M interest income from Trust Account, offset by $162,835 in operating expenses | | **Six Months Ended June 30, 2025** | $2,455,676 | $2.74M interest income from Trust Account, offset by $305,907 in operating expenses | - As of June 30, 2025, the company had **$1.12 million in cash** for working capital and **$129.9 million** in cash and investments held within the Trust Account[114](index=114&type=chunk)[115](index=115&type=chunk) - The Sponsor may provide up to **$1.5 million in Working Capital Loans**, which can be converted into warrants at $1.00 per warrant upon a Business Combination[117](index=117&type=chunk) [Quantitative and Qualitative Disclosures Regarding Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20Regarding%20Market%20Risk.) As a smaller reporting company, the company is not required to provide disclosures about market risk - As a smaller reporting company defined by Rule 12b-2 of the Exchange Act, the company is **not required to provide** quantitative and qualitative disclosures about market risk[130](index=130&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025 - Based on an evaluation conducted by management, the company's principal executive officer and principal financial officer concluded that the disclosure controls and procedures were **effective** as of June 30, 2025[132](index=132&type=chunk) Part II. Other Information [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings.) The company is not aware of any material pending or contemplated litigation - There is **no material litigation** currently pending or contemplated against the company or its officers and directors[136](index=136&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors.) Key risks include impacts from international trade policies and the potential for Nasdaq delisting if a business combination is not completed by November 2027 - Changes in **international trade policies and tariffs** could negatively impact the search for a suitable business combination target or the future performance of a post-combination company[138](index=138&type=chunk)[140](index=140&type=chunk) - The company's securities face **suspension and delisting** from Nasdaq if a business combination is not completed by November 7, 2027, in accordance with Nasdaq's 36-month requirement for SPACs[142](index=142&type=chunk)[143](index=143&type=chunk)[145](index=145&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) No unregistered sales of equity securities occurred, and the use of IPO proceeds remains unchanged - There were **no unregistered sales** of equity securities in the reported period[147](index=147&type=chunk) - There has been **no material change** in the planned use of proceeds from the IPO and Private Placement as described in the IPO Registration Statement[148](index=148&type=chunk) [Other Information](index=34&type=section&id=Item%205.%20Other%20Information.) No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - **No directors or officers** adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[152](index=152&type=chunk) [Exhibits](index=34&type=section&id=Item%206.%20Exhibits.) This section lists filed exhibits, including officer certifications and Inline XBRL data files - The report includes exhibits such as **CEO and CFO certifications** (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101 series)[154](index=154&type=chunk)