Zeo Energy Corp. Leases Disclosure

NOTE 13—LEASES

 

Operating Leases

 

In November 2021, the Company entered into a lease agreement for office space located in New Port Richey, Florida. The lease commenced on November 4, 2021 and is for a term of 5 years. Under the terms of the lease, the Company will lease the premises at the monthly rate of $4,793 for the first year, with scheduled annual increases. The lease agreement contains customary events of default, representations, warranties, and covenants. The measurement of the ROU asset and liability associated with this operating lease was $277,948.

 

In June 2023, the Company entered into a lease agreement for office space located in Orlando, Florida. The lease commenced on June 1, 2023 and is for a term of 5 years. Under the terms of the lease, the Company will lease the premises at the monthly rate of $10,011 for the first year, with scheduled annual increases. The lease agreement contains customary events of default, representations, warranties, and covenants. The measurement of the ROU asset and liability associated with this operating lease was $578,285.

 

In July 2024, the Company entered into a lease agreement for office space located in Provo, Utah. The lease commenced on July 1, 2024 and is for a term of 32 months. Under the terms of the lease, the Company will lease the premises at the monthly rate of $14,845 for the first year, with scheduled annual increases. The lease agreement contains customary events of default, representations, warranties, and covenants. The measurement of the ROU asset and liability associated with this operating lease was $751,619.

 

In October 2024, the Company entered into a lease agreement for office space located in Euclid, Ohio. The lease commenced on October 1, 2024 and is for a term of two years. Under the terms of the lease, the Company will lease the premises at the monthly rate of $2,000 for the first year, with scheduled annual increases. The lease agreement contains customary events of default, representations, warranties, and covenants. The measurement of the ROU asset and liability associated with this operating lease was $47,149.

 

In June 2025, the Company entered into a lease agreement for office space located in Richmond, Virginia. The lease commenced on June 1, 2025 and is for a term of three years. Under the terms of the lease, the Company will lease the premises at the monthly rate of $1,995 for the first year, with scheduled annual increases. The lease agreement contains customary events of default, representations, warranties, and covenants. The measurement of the ROU asset and liability associated with this operating lease was $68,760.

 

In July 2025, the Company entered into a lease agreement for office space located in Sardinia, Ohio. The lease commenced on July 1, 2025 and is for a term of two years. Under the terms of the lease, the Company will lease the premises at the monthly rate of $3,150 for the first year, with scheduled annual increases. The lease agreement contains customary events of default, representations, warranties, and covenants. The measurement of the ROU asset and liability associated with this operating lease was $72,215.

 

In August 2025, in connection with the acquisition of Heliogen, the Company entered into a lease agreement for office space located in Houston, Texas. The lease commenced on August 8, 2025 and is for a term of 13 months. Under the terms of the lease, the Company will lease the premises at the monthly rate of $10,451. The lease agreement contains customary events of default, representations, warranties, and covenants. The measurement of the ROU asset and liability associated with this operating lease was $130,225 and is part of the net assets acquired in the acquisition of Heliogen in the non-cash investing and financing activities of the consolidated statements of cash flows.

 

Operating leases as of December 31, 2025 and 2024 consisted of the following:

 

		December 31, 2025				December 31, 2024
Operating lease right-of-use assets		$	897,476			$	1,268,139
Operating lease liabilities, current portion			684,819				583,429
Operating lease liabilities, long-term			304,295				799,385
Total operating lease liabilities		$	989,114			$	1,382,814
Weighted-average remaining lease term (years)			1.58				2.39
Weighted-average discount rate			4.97	%			5.00	%

The components of operating lease expense consist of the following for the years ended December 31, 2025 and 2024:

 

		December 31, 2025				December 31, 2024
Fixed operating lease expense		$	695,809			$	719,049
Short-term and variable operating lease expense			737,136				166,338
Total operating lease expense			1,432,945				885,387
Sublease income			(87,630	)			–
Total net operating lease expense		$	1,345,315			$	885,387

 

For the years ended December 31, 2025 and 2024, cash paid for amounts included in the measurement of operating lease liabilities totaled $718,824 and $645,724, respectively.

 

As of December 31, 2025, future minimum lease payments under operating lease liabilities were as follows:

 

Year Ending December 31,		Amount
2026		$	717,863
2027			244,051
2028			69,147
Total			1,031,061
Less: imputed interest			(41,947	)
Total operating lease liabilities		$	989,114

 

Finance Leases

 

The Company leases vehicles for its operations under finance leases. These leases generally have five-year terms with interest rates ranging from 9.24% to 10.59%.

 

Finance leases ROU assets and liabilities as of December 31, 2025 and 2024 consisted of the following:

 

		December 31, 2025				December 31, 2024
Finance lease right-of-use assets		$	310,539			$	447,012
Finance lease liabilities, current portion			142,095				130,464
Finance lease liabilities, long-term			208,865				348,807
Total finance lease liabilities		$	350,960			$	479,271
Weighted-average remaining lease term (years)			2.28				3.28
Weighted-average discount rate			9.76	%			9.76	%

 

Finance lease costs included in depreciation and amortization in the consolidated statements of operations were $136,473 for the years ended December 31, 2025 and 2024. Interest expense related to finance leases was $39,364 and $52,100 for the years ended December 31, 2025, and 2024, respectively. For the years ended December 31, 2025 and 2024, cash paid for amounts included in the measurement of finance lease liabilities and interest expense totaled $171,569 and $171,476, respectively.

 

As of December 31, 2025, future minimum lease payments under finance leases were as follows:

 

Year Ending December 31,		Amount
2026		$	171,570
2027			171,570
2028			52,603
Total			395,743
Less: imputed interest			(44,783	)
Total finance lease liabilities		$	350,960