UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 2024

 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

 (Exact name of registrant as specified in its charter)

 Delaware

 98-1601409

 (State or other jurisdiction of

incorporation or organization)

 (I.R.S. Employer

Identification No.)

 7625 Little Rd, Suite 200A,
 New Port Richey, FL

 34654

 (Address of principal executive offices)

 (Zip Code)

 Registrant's telephone number, including
area code: (727) 375-9375

 Securities registered pursuant to Section 12(b) of the Act:

 Title of each class

 Trading Symbol(s)

 Name of each exchange on which registered

 Class A Common Stock, par value $0.0001 per share

 ZEO

 The Nasdaq Stock Market LLC

 Warrants, each exercisable for one share of Class A Common Stock at a price of $11.50, subject to adjustment

 ZEOWW

 The Nasdaq Stock Market LLC

 Securities registered pursuant to Section 12(g)
of the Act: None

 Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes No

has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
 No

is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company,"
and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.

has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.

 If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.

 Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to §240.10D-1(b).

is a shell company (as defined in Rule 12b-2 of the Act). Yes
No

 As of June 28, 2024, the last business day of
the registrant's most recently completed second fiscal quarter, the aggregate market value of the Class A common stock outstanding,
other than shares held by persons who may be deemed affiliates of the registrant, computed by reference to the closing sales price for
the Class A common stock on June 28, 2024, as reported on Nasdaq, was approximately $ 7,350,910 (based on the closing sales price of the
Class A common stock on June 28, 2024 of $2.15).

 As of May 19, 2025, 22,824,845 shares of Class
A Common Stock, par value $0.0001, were issued and outstanding and 26,480,000 shares of Class V Common Stock, par value $0.0001, were
issued and outstanding.

 Documents Incorporated by Reference

 Not applicable.

 CERTAIN TERMS

 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 iii

 SUMMARY RISK FACTORS

 v iii

 ITEM 1. BUSINESS

 ITEM 1A. RISK FACTORS

 ITEM 1B. UNRESOLVED STAFF COMMENTS

 ITEM 1C. CYBERSECURITY

 ITEM 2. PROPERTIES

 ITEM 3. LEGAL PROCEEDINGS

 ITEM 4. MINE SAFETY DISCLOSURES

 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 ITEM 6. [RESERVED]

 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 ITEM 8. FINANCIAL STATEMENT AND SUPPLEMENTARY DATA

 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 ITEM 9A. CONTROLS AND PROCEDURES

 ITEM 9B. OTHER INFORMATION

 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 ITEM 11. EXECUTIVE COMPENSATION

 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

 ITEM 16. FORM 10-K SUMMARY

 i

 EXPLANATORY NOTE

 On March 13, 2024 (the " Closing Date "),
the registrant consummated its previously announced business combination (the " Closing "), pursuant to that certain
Business Combination Agreement, dated as of April 19, 2023 (as amended on January 24, 2024, the " Business Combination Agreement "),
by and among Zeo Energy Corp., a Delaware corporation (f/k/a ESGEN Acquisition Corporation, a Cayman Islands exempted company), ESGEN
OpCo, LLC, a Delaware limited liability company (" OpCo "), Sunergy Renewables, LLC, a Nevada limited liability
company (" Sunergy "), the Sunergy equityholders set forth on the signature pages thereto or joined thereto (collectively,
" Sellers " and each, a " Seller ", and collectively with Sunergy, the " Sunergy
Parties "), for limited purposes, ESGEN LLC, a Delaware limited liability company (the " Sponsor "),
and for limited purposes, Timothy Bridgewater, an individual, in his capacity as the Sellers Representative (collectively, the " Business
Combination "). Prior to the Closing, (i) except as otherwise specified in the Business Combination Agreement, each issued
and outstanding Class B ordinary share of ESGEN was converted into one Class A ordinary share of ESGEN (the " ESGEN Class A
Ordinary Shares " and such conversion, the " ESGEN Share Conversion "); and (ii) ESGEN was domesticated
into the State of Delaware so as to become a Delaware corporation (the " Domestication "). In connection with
the Closing, the registrant changed its name from "ESGEN Acquisition Corporation" to "Zeo Energy Corp."

 Unless otherwise stated in this Annual Report
on Form 10-K (this "Report"), or the context otherwise requires, references to:

 "Board" refers
to the board of directors of the Company;

 "ESGEN" refers
to ESGEN Acquisition Corporation prior to the Closing;

 "Sunergy" refers
to Sunergy Renewables, LLC; and

 "we," "us,"
"our," "Zeo," and the "Company" refer to Zeo Energy Corp., a Delaware corporation, and its consolidated
subsidiaries, including Sunergy (as defined above), following the Closing.

 ii

 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 This Report contains, and our officers and representatives
may from time to time make, "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipate," "intend,"
"plan," "goal," "seek," "believe," "project," "estimate," "expect,"
"strategy," "future," "likely," "may," "should," "will" and similar
references to future periods. Examples of forward-looking statements include, among others, statements we make regarding:

 the failure to realize the anticipated benefits of the Business
Combination, which may be affected by, among other things, competition, the ability of Zeo to grow and manage growth profitably, maintain
relationships with customers and suppliers and retain key employees;

 Zeo's success in retaining or recruiting its principal
officers, key employees or directors;

 intense competition and competitive pressures from electric
utilities and other companies in the industry in which Zeo operates;

 factors relating to the business, operations and financial
performance of Zeo, including market conditions and global and economic factors beyond Zeo's control;

 changes in general economic conditions, including unemployment,
inflation (including the impact of tariffs) or deflation, U.S. and other countries' tariffs or other trade restrictions, financial
institution disruptions and geopolitical conflicts such as the conflict between Russia and Ukraine and the conflict in the Gaza Strip;

 the reduction or elimination of government economic incentives
to the renewable energy market;

 the ability of Zeo to issue equity or equity-linked securities
or obtain debt financing;

 the demand for renewable energy not being sustained or growing
in size;

 impacts of climate change, changing weather patterns and
conditions and natural disasters;

 increases in costs of solar energy system components and
raw materials;

 loss of a supplier or other supply chain disruptions;

 problems with the quality or performance of the solar energy
systems that Zeo sells;

 the effect of legal, tax and regulatory changes; and

 each of the other factors detailed under the section entitled
"Risk Factors."

 Forward-looking statements are neither historical
facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding
the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions.
Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances
that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially
from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important
factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements
include, among others, those factors described under the heading "Risk Factors." Should one or more of these risks or uncertainties
materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these
forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required under applicable securities laws. You should not take any statement
regarding past trends or activities as representation that the trends or activities will continue in the future. Accordingly, you should
not put undue reliance on these statements.

 iii

 FREQUENTLY
USED TERMS AND BASIS OF PRESENTATION

 As used in this Report, unless otherwise noted
or the context otherwise requires, references to:

 " 2024 Plan " refers to the 2024
Omnibus Incentive Equity Plan of Zeo.

 " A&R Registration Rights Agreement "
refers to the Amended and Restated Registration Rights Agreement entered into at Closing, by Zeo, the Sponsor, Piper, the holders of
ESGEN Class B ordinary shares and the Sellers pursuant to which, among other things, the Sponsor, Piper, the holders of ESGEN Class B
ordinary shares and the Sellers were granted certain registration rights with respect to their respective shares of Common Stock, in
each case, on the terms and subject to the conditions set forth therein.

 " affiliate " refers to, with respect
to any Person, any other Person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under
common control with, such Person. The term "control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlled" and "controlling" have meanings correlative thereto.

 " Amendment to the Letter Agreement "
refers to the agreement entered into by the Sponsor, the independent directors of ESGEN and the Westwood Client Accounts, dated April 19,
2023, which was subsequently amended and restated on January 24, 2024 (as amended from time to time).

 " Board " refers to the board of
directors of Zeo.

 " Business Combination " refers to
the transactions contemplated by the Business Combination Agreement.

 " Business Combination Agreement "
refers to the Business Combination Agreement dated as of April 19, 2023, as amended by the First Amendment thereto, dated as of
January 24, 2024, by and among ESGEN, Sunergy, OpCo, the Sellers, the Sponsor, for the limited purposes set forth therein, and Timothy
Bridgewater, an individual, in his capacity as the Sellers Representative.

 " Bylaws " refers to the new bylaws
of Zeo adopted in connection with the Business Combination.

 " Charter " refers to the certificate
of incorporation of Zeo adopted in connection with the Business Combination.

 " Class A Common Stock " refers
to shares of Class A common stock, par value $0.0001 per share, of Zeo.

 " Class V Common Stock " refers
to shares of Class V common stock, par value $0.0001 per share, of Zeo.

 " Closing " refers to the closing
of the Business Combination.

 " Closing Date " refers to the date
on which the Business Combination closed, March 13, 2024.

 " Common Stock " refers to the collective
shares of Class A Common Stock and Class V Common Stock.

 " Convertible OpCo Preferred Unit Conversion "
refers to a Convertible OpCo Preferred Unit Optional Conversion, Convertible OpCo Preferred Unit Maturity Date Conversion, and Convertible
OpCo Preferred Unit Transaction Event Conversion, collectively.

 " Convertible OpCo Preferred Unit Dividend Payment
Date " refers to the last day of March, June, September and December of each calendar year during which the Convertible
OpCo Preferred Units are outstanding.

 " Convertible OpCo Preferred Unit Maturity Date "
means the date that is three (3) years following the Closing Date.

 iv

 " Convertible OpCo Preferred Unit Maturity Date
Conversion " refers to the conversion of all, but not less than all, Convertible OpCo Preferred Units into an amount
of Exchangeable OpCo Units as is determined by dividing the Convertible OpCo Preferred Unit Original Issue Price plus the aggregate
accumulated and unpaid Convertible OpCo Preferred Unit Accruing Dividends with respect to such Convertible OpCo Preferred Units, if any,
through the date the conversion occurs, by a weighted average of the daily market price of the Class A Common Stock during the five
(5) trading days prior to the date thereof, upon the Convertible OpCo Preferred Unit Maturity Date, subject to certain restrictions
set forth in the OpCo A&R LLC Agreement, followed by an immediate exchange of such Exchangeable OpCo Units (together with an
equal number of shares of Class V Common Stock) into an equal number of shares of Class A Common Stock.

 " Convertible OpCo Preferred Unit Optional Conversion "
refers to the conversion of all, but not less than all, Convertible OpCo Preferred Units, into an amount of Exchangeable OpCo Units as
is determined by dividing the Convertible OpCo Preferred Unit Original Issue Price plus the aggregate accumulated and unpaid Convertible
OpCo Preferred Unit Accruing Dividends with respect to such Convertible OpCo Preferred Units, if any, through the date the conversion
occurs, by $11.00, at the option of Sponsor, subject to certain restrictions set forth in the OpCo A&R LLC Agreement, followed by
an immediate exchange of such Exchangeable OpCo Units (together with an equal number of shares of Class V Common Stock) into
an equal number of shares of Class A Common Stock.

 " Convertible OpCo Preferred Unit Redemption "
refers to a Convertible OpCo Preferred Unit Required Redemption and Convertible OpCo Preferred Unit Put Option Redemption, collectively.

 " Convertible OpCo Preferred Unit Transaction
Event Conversion " refers to, in the event of certain change of control transactions or qualified financings, the conversion
of all, but not less than all, Convertible OpCo Preferred Units, into an amount of Exchangeable OpCo Units as is determined by dividing
the Convertible OpCo Preferred Unit Original Issue Price plus the aggregate accumulated and unpaid Convertible OpCo Preferred Unit Accruing
Dividends with respect to such Convertible OpCo Preferred Units, if any, through the date the conversion occurs, by $11.00, at the option
of Sponsor, subject to certain restrictions set forth in the OpCo A&R LLC Agreement, followed by an immediate exchange of such Exchangeable
OpCo Units (together with an equal number of shares of Class V Common Stock) into an equal number of shares of Class A Common Stock.

 " Convertible OpCo Preferred Unit Original Issue
Price " refers to $10.00.

 " Convertible OpCo Preferred Units "
refers to the Class A OpCo convertible preferred units issued to the Sponsor pursuant to the Sponsor Subscription Agreement.

 " CST " refers to Continental Stock
Transfer & Trust Company.

 " DGCL " refers to the Delaware General
Corporation Law.

 " Domestication " refers to the continuation
of ESGEN by way of domestication of ESGEN into a Delaware corporation, with the ESGEN ordinary shares becoming shares of common stock
of the Delaware corporation under the applicable provisions of the Cayman Islands Companies Act (As Revised) and the DGCL; the term includes
all matters and necessary or ancillary changes in order to effect such Domestication, including the adoption of the Charter consistent
with the DGCL and changing the name and registered office of ESGEN.

 " DTC " refers to Depository Trust
Company.

 " Early Lock-Up Termination "
refers to the termination of the lock-up period under the Amendment to the Letter Agreement when, subsequent to Closing, the
last sale price of Class A Common Stock quoted on Nasdaq is greater than or equal to $12 per share (as adjusted for stock splits,
stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-consecutive trading day
period commencing at least 90 days after Closing.

 " Energy Spectrum " refers to Energy
Spectrum Partners VIII LP.

 " ESGEN " refers to ESGEN Acquisition
Corporation, a former blank check company incorporated as a Cayman Islands exempt company.

 v

 " ESGEN Class A ordinary shares "
refers to the Class A ordinary shares, par value $0.0001 per share, of ESGEN.

 " ESGEN Class B ordinary shares "
refers to the Class B ordinary shares, par value $0.0001 per share, of ESGEN.

 " ESGEN ordinary shares " refers
to ESGEN Class A ordinary shares and ESGEN Class B ordinary shares.

 " ESGEN Private Placement Warrants "
refers to the warrants to purchase ESGEN Class A ordinary shares that were issued to the Initial Shareholders in a private placement
concurrently with the IPO.

 " ESGEN Public Warrants " refers
to the redeemable warrants issued in the IPO, entitling the holder thereof to purchase ESGEN Class A ordinary shares.

 " ESGEN Share Conversion " refers
to the conversion of each ESGEN Class B ordinary share into one ESGEN Class A ordinary share prior to the Domestication.

 " ESGEN Warrants " refers collectively
to the ESGEN Private Placement Warrants together with the ESGEN Public Warrants.

 " Exchange Act " refers to the
Securities Exchange Act of 1934, as amended.

 " Exchangeable OpCo Units " refers
to the Class B units of OpCo.

 " FASB " refers to the Financial
Accounting Standards Board.

 " Initial Shareholders " collectively
refers to the Sponsor, ESGEN's former four independent directors who held ESGEN Class B ordinary shares and the Westwood Client
Accounts.

 " Investment Company Act " refers
to the Investment Company Act of 1940, as amended.

 " IPO " refers to ESGEN's initial
public offering of its ESGEN Class A ordinary shares (the " Public Shares ") and ESGEN Public Warrants pursuant to the
ESGEN's Registration Statement on Form S-1, filed with the SEC (File No. 333-252730), on September 28, 2021, and completed
on October 22, 2021.

 " Lock-Up Agreement " refers
to the lock-up agreement entered into in connection with the Closing between the Sellers and Zeo.

 " Mandatory Exchange " refers to
Zeo's right to require, (i) upon a Change of Control Transaction (as defined in the OpCo A&R LLC Agreement) or (ii) in
the discretion of Zeo, with the consent of holders of the OpCo Units holding more than 72% of the OpCo Units (excluding OpCo
Units held by Zeo), each holder of Exchangeable OpCo Units to exchange all of its Exchangeable OpCo Units.

 " Nasdaq " refers to the Nasdaq Stock
Market.

 " OpCo " refers to ESGEN OpCo, LLC,
a Delaware limited liability company.

 " OpCo A&R LLC Agreement " refers
to the Amended and Restated Limited Liability Company Agreement of OpCo.

 " OpCo Exchange Right " refers to
the rights of holders of Exchangeable OpCo Units to cause OpCo to redeem one or more of such Exchangeable OpCo Units, together with
the cancellation of an equal number of shares of such holder's Seller Class V Common Stock, for shares of Class A Common
Stock on a one-for-one basis, or, at the election of Zeo (as manager of OpCo), cash.

 " OpCo Manager Units " refers to
the Class A units of OpCo issued to Zeo in connection with the Business Combination.

 " OpCo Units " refers to the Exchangeable
OpCo Units and the OpCo Manager Units, collectively.

 " Organizational Documents " refers
to the Charter and the Bylaws of Zeo.

 vi

 " Person " means an individual, corporation,
partnership, limited partnership, limited liability company, person (including, without limitation, a "person" as defined
in Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political subdivision, agency or
instrumentality of a government.

 " Sarbanes-Oxley Act " refers
to the Sarbanes-Oxley Act of 2002.

 " SEC " refers to the U.S. Securities
and Exchange Commission.

 " Securities Act " refers to the
Securities Act of 1933, as amended.

 " Seller Class V Common Stock "
refers to a number of newly issued shares of Class V Common Stock, equal to the number of Exchangeable OpCo Units, issued to the
Sellers by OpCo in exchange for the Sellers' contribution of the Sunergy Company Interests to OpCo in connection with the Business
Combination.

 " Sellers " refers to the holders
of the Sunergy Company Interests immediately prior to the Closing of the Business Combination.

 " Sponsor " refers to ESGEN LLC,
a Delaware limited liability company.

 " Sponsor Forfeited Shares " refers
to the 2,361,641 ESGEN ordinary shares forfeited by the Sponsor at Closing pursuant to the Letter Agreement Amendment.

 " Sponsor PIPE Investment " refers
to the Sponsor's commitment to purchase an aggregate of 1,000,000 Convertible OpCo Preferred Units concurrently with the Closing
at a cash purchase price of $10.00 per share, and up to an additional 500,000 Convertible OpCo Preferred Units during the six months
after Closing if called for by Zeo.

 " Sponsor PIPE Securities " refers
to the 1,000,000 Convertible OpCo Preferred Units and up to an additional 500,000 Convertible OpCo Preferred Units during the
six months after Closing if called for by Zeo, to be sold to the Sponsor pursuant to the Sponsor Subscription Agreement.

 " Sponsor Subscription Agreement "
refers to that certain subscription agreement, dated as of April 19, 2023, which was subsequently amended and restated on January 24,
2024, by and between ESGEN, OpCo and the Sponsor, entered into in connection with the Business Combination Agreement.

 " Sunergy " refers to Sunergy Renewables,
LLC, a Nevada limited liability company.

 " Sunergy Company Interests " refers
to the limited liability company interests of Sunergy.

 " Sunergy Convertible Interests "
refers to any options, warrants or rights to subscribe for or purchase any equity interests of Sunergy or any subsidiary of Sunergy or
securities (including debt securities) convertible into or exchangeable for, or that otherwise confer on the holder any right to acquire,
any equity interests of Sunergy or any subsidiary thereof.

 " Tax Receivable Agreement " refers
to the tax receivable agreement that Zeo entered into with the Sellers in connection with the Closing.

 " TRA Holders " refers to the persons
from time to time that become a party to the Tax Receivable Agreement.

 " Trust Account " refers to the trust
account of ESGEN which held the net proceeds from the IPO and certain of the proceeds received in respect of the sale of the ESGEN Private
Placement Warrants, together with interest earned thereon, less amounts released to pay taxes.

 " U.S. Holder " has the meaning
set forth in " Material U.S. Federal Income Tax Considerations — U.S. Holders."

 " Warrants " refers to the redeemable
warrants issued in the IPO, entitling the holder thereof following completion of the Domestication to purchase Class A Common Stock.

 " Westwood Client Accounts " refers
to one or more client accounts of Westwood Holdings Group, Inc., a Delaware corporation, the successor to Salient Capital Partners, LLC,
a Texas limited liability company, that purchased ESGEN Class B ordinary shares and ESGEN Private Placement Warrants concurrently
with the IPO.

 " Zeo " refers to Zeo Energy Corp.,
a Delaware corporation.

 Unless specified otherwise, amounts in this Report
are presented in U.S. dollars.

 Defined terms in the financial statements contained
in this Report have the meanings ascribed to them in the financial statements.

 vii

 SUMMARY RISK FACTORS

 The following is a summary of the principal risks
described below in Part I, Item 1A "Risk Factors" in this Report. We believe that the risks described in the "Risk Factors"
section are material to investors, but other factors not presently known to us or that we currently believe are immaterial may also adversely
affect us. The following summary should not be considered an exhaustive summary of the material risks facing us, and it should be read
in conjunction with the "Risk Factors" section and the other information contained in this Report.

 Risks Related to Zeo's Business

 Increases in the cost or reduction in supply of solar energy system
and energy storage system components due to tariffs or trade restrictions announced or imposed by the U.S. government could have
an adverse effect on our business, financial condition and results of operations;

 The solar energy industry is
an emerging market which is constantly evolving and additional demand for solar energy systems may not develop to the size or at the
rate expected;

 A material reduction in the
retail price of electricity charged by electric utilities or other retail electricity providers would harm Zeo's business, financial
condition and results of operations;

 Sales and installation of solar
energy systems depends heavily on suitable meteorological and environmental conditions such that, if meteorological or environmental
conditions are unexpectedly unfavorable, the electricity production from Zeo's solar service offerings may be below its expectations,
and Zeo's ability to timely deploy new systems may be adversely impacted;

 Zeo's business has benefited
from the declining cost of solar energy system and energy storage system components and may be harmed to the extent the cost of such
components stabilize or increase in the future;

 Zeo's growth depends
in part on the success of its relationships with third parties, including its equipment suppliers, contractors and dealers, including
dealers who market to customers and bring the resulting solar contracts to it for fulfillment;

 Zeo depends on a limited number of suppliers of solar energy system
components and technologies to adequately meet demand for its solar energy systems and, due to the limited number of suppliers in Zeo's
industry, the acquisition of any of these suppliers by a competitor or any shortage, delay, price change, announcement or imposition of
tariffs or duties or other limitation that interferes with Zeo's ability to obtain components or technologies Zeo uses could result
in sales and installation delays, cancelations and loss of customers;

 If Zeo fails to manage its
recent and future growth effectively, it may be unable to execute its business plan, maintain high levels of customer service, or adequately
address competitive challenges;

 Warranties provided by the
manufacturers of equipment Zeo sells or services may be limited by the ability of a supplier and manufacturer to satisfy its warranty
or performance obligations or by the expiration of applicable time or liability limits, which could reduce or void the warranty protections
and increase Zeo's costs to customers for the systems Zeo offers;

 Technical and regulatory limitations
regarding the interconnection of solar energy systems to the electrical grid may significantly delay interconnections and customer in-service
dates, harming Zeo's growth rate and customer satisfaction;

 Zeo's business is concentrated
in certain markets, putting us at risk of region-specific disruptions, including hurricanes or other extreme weather events;

 viii

 Zeo's expansion into
new sales channels could be costly and time-consuming, and as Zeo enters new channels, it could be at a disadvantage relative to other
companies who have more history in these spaces;

 Zeo may not realize the anticipated
benefits of past or future investments, strategic transactions, or acquisitions, and integration of these acquisitions may disrupt its
business and management;

 Zeo has previously been, and
may in the future be, subject to regulatory inquiries and litigation, all of which are costly, distracting to its core business and could
result in an unfavorable outcome, or a material adverse effect on its business, financial condition, results of operations, or the trading
price of our securities;

 Zeo's business currently
depends on the availability of utility rebates, tax credits and other benefits, tax exemptions and exclusions, and other financial incentives
on the federal, state, and/or local levels that may be adversely affected by changes in, and application of these laws or other incentives
to Zeo, and the expiration, elimination or reduction of these benefits could adversely impact Zeo's business;

 Zeo relies on certain utility
rate structures, such as net metering, to offer competitive pricing to customers, and changes to those policies may significantly reduce
demand for Zeo's solar energy systems; and

 Electric utility policies,
statutes, and regulations and changes to such statutes or regulations may present technical, regulatory and economic barriers to the
purchase and use of Zeo's solar energy offerings that may significantly reduce demand for such offerings.

 Risks Related to Zeo and Ownership of Zeo Securities

 Sales, or the perception of
sales, of a substantial number of our securities in the public market by our existing securityholders could cause the price of our shares
of Class A Common Stock and Warrants to fall;

 Certain existing securityholders
purchased, or may purchase, securities in the Company at a price below the current trading price of such securities, and may experience
a positive rate of return based on the current trading price. Future investors in the Company may not experience a similar rate of return.

 Our management team has limited
experience managing a public company, and regulatory compliance obligations may divert its attention from the day-to-day management of
our businesses.

 We incur significant costs
as a result of operating as a public company.

 We have identified material
weaknesses in our internal controls over financial reporting. If we are unable to remediate these material weaknesses, if management
identifies additional material weaknesses in the future or if we otherwise fail to maintain effective internal controls over financial
reporting, we may not be able to accurately or timely report our financial position or results of operations, which may adversely affect
our business and stock price or cause our access to the capital markets to be impaired;

 There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq;

 An active, liquid market for
Zeo's securities may not develop, which would adversely affect the liquidity and price of Zeo's securities;

 Warrants issued in the IPO
are exercisable for Class A Common Stock, which would increase the number of shares eligible for future resale in the public market and
result in dilution to the stockholders of Zeo;

 Zeo may redeem unexpired Warrants
prior to their exercise at a time that is disadvantageous for holders of Warrants;

 Zeo is a holding company. Its
only material asset is its equity interest in OpCo, and Zeo is accordingly dependent upon distributions from OpCo to pay taxes, make
payments under the Tax Receivable Agreement and cover its corporate and other overhead expenses;

 If OpCo were to become a publicly
traded partnership taxable as a corporation for U.S. federal income tax purposes, Zeo and OpCo might be subject to potentially significant
tax inefficiencies, and Zeo would not be able to recover payments previously made by it under the Tax Receivable Agreement even if the
corresponding tax benefits were subsequently determined to have been unavailable due to such status; and

 In certain cases, payments
under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits that Zeo realizes in respect of
the tax attributes subject to the Tax Receivable Agreement.

 ix

 ITEM 1. BUSINESS.

 Mission

 Our company and personnel are passionate about
delivering cost savings and increased independence and reliability to energy consumers. Our mission is to expedite the country's
transition to renewable energy by offering our customers an affordable and sustainable means of achieving energy independence.

 Business Overview

 We are a vertically integrated company offering
energy solutions and services that include sale, design, procurement, installation, and maintenance of residential solar energy systems.
Many of our solar energy system customers also purchase other energy efficiency-related equipment or services or roofing services from
us. The majority of our customers are located in Florida, Texas, Arkansas, Missouri, Ohio, and Illinois, and we have an expanding base
of customers in California, Colorado, Minnesota, Missouri, Ohio, Utah, and Virginia.

 We were originally incorporated under the name
"ESGEN Acquisition Corp." as a blank check company incorporated as a Cayman Islands exempted company and formed for the purpose
of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or
more businesses. As discussed in this Report, we completed the Business Combination with Sunergy on March 13, 2024 and changed our
name to "Zeo Energy Corp."

 Sunergy was created through the Contribution of
Sunergy Solar LLC ("Sunergy Solar") and Sun First Energy, LLC ("Sun First Energy") to Sunergy on October 1,
2021. Sunergy Solar, formed in 2005, and initially focused on providing heating, ventilation and air conditioning products and services
in Florida, later expanded into installing residential solar energy systems sold directly by the company and third-party sales dealerships.
Sun First Energy was established in 2019, and, from its formation to the date of the Contribution, it sold residential solar energy systems
in Florida that were installed by other companies. Prior to the Contribution, Sunergy Solar and Sun First Energy had collaborated on residential
solar energy system installations and shared a commitment to quality, integrity and customer satisfaction. The Contribution established
our vertically integrated company offering residential solar energy solutions.

 The number of our installations, sales support,
and administrative personnel was approximately 190 as of December 31, 2024. In January 2022, we began selling and installing residential
solar energy systems and other energy efficiency-related equipment in Texas, in January 2023, we expanded into Arkansas, in
September 2023, we entered Missouri, and in February 2024, we entered Ohio and Illinois. In 2025, we expanded our services in California,
Colorado, Minnesota, Utah, and Virginia. In November 2024, we also began serving customers for whom Lumio HX, Inc. had begun but not completed
residential energy systems prior to completion of its bankruptcy, primarily in California, Maryland, New Jersey, North Carolina, Oklahoma,
and South Carolina.

 Recent Developments

 On October 25, 2024, the Company closed an
Asset Purchase Agreement (the "Asset Purchase Agreement") with Lumio Holdings, Inc., a Delaware corporation ("Lumio"),
and Lumio HX, Inc., a Delaware corporation (together with Lumio, the "Sellers"), pursuant to which, subject to the terms and
conditions set forth in the Asset Purchase Agreement, the Company agreed to acquire certain assets of the Sellers on an as-is, where-is
basis, including uninstalled residential solar energy contracts, certain inventory, intellectual property and intellectual property rights,
equipment, records, goodwill and other intangible assets (collectively, the "Assets"), free and clear of any liens other than
certain specified liabilities of the Sellers that are being assumed (collectively, the "Liabilities" and such acquisition
of the Assets and assumption of the Liabilities together, the "Transaction") for a total purchase price of (i) $4 million
in cash and (ii) 6,206,897 shares of the Company's Class A Common Stock, par value $0.0001, to be paid to LHX Intermediate,
LLC, a Delaware limited liability company ("LHX").

 The Assets included certain uninstalled or partially
completed residential solar energy contracts through which a customer purchased the solar energy system, and additional uninstalled or
partially completed residential solar energy projects where a third party leasing company (either Palmetto Solar, LLC d/b/a LightReach,
or Sunnova Energy Corporation) owns the solar energy system and leases the output of the system to a customer living in the home where
the system is installed. Various of these Lumio projects are located in states where the Company has not previously operated, principally
in California, Maryland, New Jersey, North Carolina, Oklahoma, and South Carolina, and the Company has newly established operations or
is in the process of establishing operations in these states.

 On December 24, 2024 (the "Issue Date"),
the Company issued a Promissory Note (the "Promissory Note") to LHX pursuant to which the Company could borrow up to an aggregate
principal amount of $4,000,000 (the "Loan"). Subject to the terms and conditions set forth in the Promissory Note, the Loan
shall be provided to the Company in three tranches: (i) $2,500,000 upon execution of the Promissory Note (the "Initial Advance"),
(ii) $750,000 if the Company achieves the Tranche 2 Milestone within 60 days from the Initial Advance (the "Tranche 2
Advance") and (iii) $750,000 if the Company achieves the Tranche 3 Milestone within 60 days from the Tranche 2 Advance.
"Tranche 2 Milestone" means the submission by the Company to the applicable regulatory bodies at least 340 permits to install
solar energy systems sold through the Company's year-round sales program. "Tranche 3 Milestone" means the completion
by the Company of the installation of at least 296 solar energy systems sold through the Company's year-round sales program."
LHX may also waive any milestone described above and advance the applicable amounts to the Company.

 On April 15, 2025, the Promissory Note was amended
to provide that the Tranche 2 Advance will be delivered if a Tranche 2 Milestone is met within 120 days of the Initial Advance, and the
Tranche 3 Advance will be delivered if a Tranche 3 Milestone is met within 120 days of the Tranche 2 Advance.

 The Loan will be repaid in full (the "Repayment")
by issuing to LHX or its designee of a number of the Company's shares of Class A Common Stock equal to the quotient of (i) the
outstanding and unpaid amount of the Loan, divided by (ii) $1.35 (the "Share Issuance"). The Repayment shall take place
immediately following the later of: (x) the day falling on the first anniversary of the Issue Date (or the immediately previous
business day) and (y) the date on which the stockholders of the Company approve the Share Issuance.

 The Promissory Note contains customary representations,
warranties and covenants of the parties, including an obligation of the Company to file a registration statement registering the resale
of the shares issuable in the Share Issuance and to use reasonable efforts to have such registration statement declared effective as soon
as practicable thereafter.

 In connection with the Promissory Note, on December 24,
2024, LHX entered into a Voting Agreement with the Company and certain stockholders of the Company (the "Voting Agreement"),
pursuant to which such stockholders agreed to vote (or cause to be voted), in person or by proxy, all the shares of Class A Common
Stock and Class V Common Stock owned by such stockholders (i) in favor of the nomination and appointment of LHX's designee
to the board of directors of the Company, (ii) in favor of the issuance by the Company to LHX of shares of Class A Common Stock
in connection with an option that may be granted to LHX to purchase up to 4,000,000 shares of Class A Common Stock, subject
to the terms and conditions therein and (iii) in favor of the Share Issuance, when required pursuant to the Promissory Note.

 Products and Services

 Residential Solar Energy Systems

 Zeo's primary business activity is selling
and installing residential solar energy systems that homeowners use to supplement the amount of usable electricity required to power their
homes. We currently operate primarily in Florida, Texas, Arkansas, Missouri, Ohio, and Illinois, and have begun offering solutions and
services in California, Colorado, Minnesota, Utah, and Virginia. We are additionally serving customers for whom Lumio HX, Inc. had begun
 but not completed residential energy systems prior to completion of its bankruptcy, in
Maryland, New Jersey, North Carolina, Oklahoma, and South Carolina.

 Other Energy Efficient Equipment and Services

 In 2023, approximately 23% of our customers purchased
one or more insulation services, such as adding insulation to a home's attic or walls. In 2023, in approximately 53% of our sales
our customers purchased adders that consisted of equipment designed to increase energy efficiency, including items such as hybrid electric
water heaters or swimming pool pumps. During 2023, 1% of our customers purchased battery-based energy storage systems. These battery-based energy
storage systems store energy generated from their residential solar energy systems to be used when the system generates less
usable electricity than the home requires (such as at night or on cloudy days).

 Roofing Services

 We install roofs in Florida, where our subsidiary,
Sunergy Roofing & Construction, Inc., is a licensed roofing contractor. In other states where we operate, for some solar energy
system customers that need roofing services, we may contract with roofing companies for the services. We plan to continue growing our
roofing operations, as we believe our roofing services complement our residential solar energy systems and for some customers helps to
expedite solar system installations.

 Subcontractors

 We use subcontractors to install some of our residential
solar energy systems at times when we do not have a sufficient number of our own installation teams to timely complete the project. We
also use subcontractors to provide all of our insulation services and to install some of the roofing services and energy efficient equipment
such as hybrid electric water heaters and pool pumps which we sell. Our subcontractor fees for residential solar energy system installations
are typically based on total wattage installed, and our arrangements with installation subcontractors allow either party to terminate
the agreement for convenience.

 Marketing and Sales

 We market our products and services to potential
customers directly through in-home visits carried out by our internal sales agents and indirectly through external sales dealers.
In the case of leases, a customer is approached by and communicates with the same sales personnel as if the customer were purchasing a
system directly from Zeo. We also engage in digital marketing efforts on our own or through third-party marketing specialists, including
search engine optimization and social media communications to strengthen our online marketing presence. Our code of conduct applies to
our employees, independent contractors and dealers, and it requires adherence to high ethical standards when carrying out business activities.

 Internal Direct Sales Force

 We have established an internal team of sales
agents that markets and sells directly to customers through door-to-door sales approaches. The team included approximately 290
sales agents as of both December 31, 2024 and December 31, 2023. Our sales agents are engaged through full-time contracts lasting
from April through August, which is our primary selling season. Sales made through our internal sales team have lower customer acquisition
costs than sales sourced through our external dealers. In 2024, approximately 58% of the total systems we installed were sold through
our internal sales team.

 Sales Through External Dealers

 We also install systems sold by external sales
dealers that act as our sales representatives with potential customers. The number of active dealers that have entered into a current
arrangement to sell our solar panel systems was approximately 20 as of December 31, 2024 compared to approximately 30 as of December 31,
2023. The percentage of sales that originate with our external dealers increases during the fall and winter months when our internal
sales efforts are diminished. We provide field support and training to these dealers on our sales offerings, sales processes and other
business processes, including our software sales platform.

 Upon our selection of and engagement with a dealer,
the dealer executes our dealer agreement. The majority of our dealer agreements require the dealers to exclusively represent our business
with respect to the particular products or services we sell. Dealers have the option of choosing to execute a contract that does not require
this exclusivity, and some select this option. Our dealer contracts are terminable for convenience by either party. For each residential
solar energy system that we install for a customer that was sold by a dealer, after we receive payment, we compensate the dealer with
a commission based on the number of watts of solar panels installed.

 We recruit and select dealers based on their experience
in the market, ability to produce sales and general reputation for ethical behavior within the industry. As part of our dealer contract,
we require our dealers to agree in writing to comply with our code of conduct when carrying out their marketing and other activities.

 Customer and Leasing Agreements

 A homeowner becomes our customer typically by
signing a contract with us to purchase and receive installation of a solar energy system. We also install solar energy systems that are
leased by the customer under an agreement between the customer and a third-party leasing company under which the leasing company
will own and lease to a customer a solar energy system. A customer that chooses our products and services typically signs the contract
after meeting with one of our sales agents or dealers in the customer's home and receiving a preliminary system design for their
home and pricing for the system. Whether the customer decides to purchase or lease the solar energy system, the sales agent or dealer
determines the pricing to be offered to the customer based on product and services price information stored in our sales software for
the system components included in a customer's proposed system. After the customer signs the contract, we schedule and conduct
a site survey. If during the site survey we discover property code compliance or other complications with the planned design and installation,
we may issue a change order; if required changes represent additional costs to us or the customer, the party that would be responsible
for those costs may choose to cancel the contract. After the site survey, we prepare formal design and engineering documents and apply
for applicable permits from local government authorities. After required permits are obtained, we schedule and install the solar energy
system and any other equipment purchased on the customer's home.

 Purchase Contract Warranties. As
the owner of the residential solar energy system under the purchase and installation agreement, customers receive a manufacturer's
limited warranty for system components. For the principal components of solar panels, inverter, and racking, the manufacturer's
limited warranty typically lasts 25 years. Manufacturers control whether the warranty periods they offer will change for equipment
purchased in the future. Though we are not responsible for a manufacturer's compliance with warranty obligations, we assist customers
in contacting the manufacturer if a warranty issue arises. We provide customers at least a ten-year limited warranty for our installation
work and at least a five-year limited warranty against roof penetrations. In most of our purchase and installation agreements that
we used prior to 2023, we provided a 25-year limited warranty for installation work and against roof penetrations.

 Purchase Contracts and Financed Sales. For
the twelve months ended December 31, 2024, approximately 32% of our customers who purchased residential solar energy systems from us entered
into a loan arrangement with a third party to finance the purchase over an extended period of time. The loan agreement between the customer
and the third-party lender typically has a repayment term of between 7 and 25 years and requires the customer to pay either
a minimal or no down payment. The lender pays us our portion of the purchase payment after completion of system installation.

 Purchase Contracts and Cash Sales. For
the twelve months ended December 31, 2024, a small minority of our orders (less than
5%) were from customers paying in cash for the purchase of residential solar energy systems. For those sales, our purchase contract typically
requires the customer to pay 25% of the purchase price upon execution of the purchase agreement, 50% when we begin installation, and the
final 25% on the last day of installation. Installation is usually commenced and completed either in a single day or within
several days.

 System Leases. In December 2022,
we launched a program offering customers the option of leasing our solar energy systems from third-party leasing companies. The customer
agrees to pay the leasing company a predetermined monthly fee for the electricity produced by the residential solar energy system. As
of December 31, 2024, approximately 63% of the systems we installed in 2024 are leased by the customer. The lease term between the leasing
company and the customer is 25 years. The customer agrees to pay the leasing company a predetermined monthly fee for the electricity
produced by the solar energy system. The monthly fee generally increases annually over the lease term at a predetermined rate, and the
customer typically has the option to renew the lease for five to ten years. The potential advantage to the customer of a lease agreement
is that a third-party owner of the residential solar energy system may take more advantage of available government tax incentives
for solar energy production, which may allow them to lease the system to the customer at monthly rates that are lower for the customer
than if the customer were financing its own purchase of the system. We installed the first leased solar energy system in April 2023
and during the twelve months ended December 30, 2024, we installed approximately 1,150 leased solar energy systems. In the lease model
offered to our customers, the third-party leasing company contracts with the homeowner customer to install a solar energy system
owned by the leasing company and leased to the customer. The leasing company contracts with Zeo to purchase system equipment and install
the solar energy system. Some leasing companies may contract with ZEO to maintain and service the system on the leasing company's
behalf during the life of the lease.

 Approximately 30% of Zeo's customers who
have entered into leasing agreements have done so with third-party leasing companies established and managed by White Horse Energy, LC
(" White Horse Energy "), a holding company of which Mr. Bridgewater, Zeo's Chairman and Chief Executive
Officer is the owner and manager. Subject to investor and customer demand, White Horse Energy intends to attract more investors to form
third-party leasing companies. No assurance can be given that White Horse Energy will be able to do so or that arrangements can be
made with other funds to act as lessors of Zeo's solar energy systems in the future. Zeo has entered into leasing arrangements with
several other unrelated third parties to offer customers a choice of purchase or lease options, and continues to explore similar arrangements
with other unrelated third-parties.

 Supply

 The main components of our residential solar energy
systems are solar panels, inverters and racking systems. Common related components or systems that we may additionally supply are battery-based energy
storage systems, insulation, hybrid electric water heaters, swimming pool pumps and roofing. All of the products that we install are manufactured
by third parties. We select products and system components, suppliers and distributors based on cost, reliability, warranty coverage,
performance characteristics and ease of installation, among other factors.

 While we procure products and components from
multiple suppliers and distributors to reduce the likelihood that we experience an inability to procure those products and components,
the primary supplier from which we purchase the equipment that we install is Consolidated Electrical Distributors, Inc. (d/b/a Greentech
Renewables) (" Greentech "). Greentech also provides us inventory management services by holding equipment in
its inventory until it delivers directly to the customer site for installation. We purchase from Greentech through a credit agreement
under which Greentech extends us credit for purchases, and we are obligated to make payments by the 15 th day of the month
following each purchase. A purchase discount is available for early cash payment, and a service charge of 1.5% per month can be assessed
for payments made more than 30 days after the invoice date. Our agreement with Greentech does not require either party to continue
to conduct new business with the other party. During 2024, we purchased at least approximately 70% of the equipment that we installed
through Greentech. We believe our relationship with Greentech, and the volume of business we do through them, has established us as a
preferred customer and enables us to procure components at attractive terms. If our relationship with Greentech were to be terminated,
there are other distributors of the same or similar equipment, and we believe we could readily obtain supplies from those other distributors,
though they may take some time to develop the efficient logistics system Greentech employs now on our behalf delivering products to the
customer installation sites.

 Heightened inflation in the costs of labor and
components beginning in 2020 and continuing today has contributed to fluctuating prices for solar energy equipment. At times, we have
had to pay increased prices to obtain equipment. This has not yet prevented us from obtaining the products we need to install systems
purchased by our customers, but there can be no assurance that this will continue. We do not have information that allows us to quantify
the specific amount of cost increases attributable to inflationary pressures.

 We have previously experienced price increases
and temporary supply delays resulting from multiple market phenomena. The majority of the solar panels and other major system equipment
components that we install are manufactured outside of the United States. Government tariffs on solar energy equipment, including tariffs
placed on solar equipment manufactured in China, have also contributed to higher prices on solar equipment. Additionally, Russia's
war against Ukraine caused price and supply pressure on solar energy equipment, as the war has impacted fuel prices and has led to increased
demand in European markets for solar energy equipment as consumers and governments in Europe have sought to establish greater energy independence.
In 2020, 2021, and 2022, we experienced periods of temporary delay in obtaining supplies. We believe these delays reduced the number of
installations in comparison to what we would have been able to install without the delays. In 2023 and 2024, we did not experience appreciable
delays in supply. Following new tariffs introduced by the U.S. government in April 2025, as further detailed below, we expect to experience
an increase in prices for solar system equipment. We have not experienced consequent delays in procuring equipment, but such delays may
occur.

 For more information on risks related to our supply
chain, see " Risk Factors — Risks Related to Zeo's Operations — Due to the limited number
of suppliers in our industry, the acquisition of any of these suppliers by a competitor or any shortage, delay, price change, announcement
and imposition of tariffs or duties or other limitation in our ability to obtain components or technologies we use could result in sales
and installation delays, cancellations and loss of customers " and " Risk Factors — Risks Related to
Zeo's Operations — Increases in the cost or reductions in supply of solar energy system and energy storage system
components due to tariffs or trade restrictions announced or imposed by the U.S. government could have an adverse effect on our business,
financial condition and results of operations. "

 Seasonality

 Historically, our sales volume and installation
activity has been highest during late spring and summer. During this time, consumers in many locations see greater energy needs due to
operating air conditioning systems and warm-weather appliances such as swimming pool pumps. Our door-to-door sales efforts are
also aided during these months by daylight savings time providing increased daylight hours into the evening, and we
have more sales personnel, many of whom are college students, working during these months, as described above. We typically have
largely or entirely scaled down our internal sales efforts during the fall, winter, and early spring. Snow, cold weather or other inclement
weather can also delay our installation of products and services.

 Strategy

 We plan to increase our market impact and grow
our revenue and profits by pursuing the following strategic objectives:

 Expand our operations into additional geographic
markets. We plan to continue to expand in new geographic markets, both organically and through strategic M&A, considering factors
such as the rates consumers pay for electricity, where favorable net metering policies or cost incentives exist, the percentage of the
addressable residential market that already has residential solar energy systems, and where we believe the market is not already oversaturated
with competitors.

 Increase capacity for efficient growth by investing
in people and systems. In 2024, we experienced a decrease in sales and installations that generally affected
the solar industry during the same period. Prior to 2024, we have generally increased the number of solar energy systems we sell and install
by growing and training our internal seasonal sales force, and we plan to continue to do so, as well as increasing our number of external
dealers. We have also grown and plan to continue growing our installation capacity in markets we serve by hiring and training more skilled
technicians and investing in technology. Where we do not yet have installation teams in place, we plan to continue to collaborate with
subcontractors to fulfill our installation needs.

 Continue to grow our external dealer sales
channel. We plan to increase the number of external dealers working to bring us customers. We believe we will
continue to have success in attracting dealers to our business because of our scalable business platform that allows dealers to participate
in the residential solar energy sales and installation life cycle with limited investments in personnel and capital.

 Expand customer options for buying affordable
solar energy. We plan to expand our roofing business in certain markets we enter in the future. Roofing facilitates
a faster processing time for our solar installations in cases where the residential customer is in need of a roof replacement prior to
installing solar systems. We believe offering customers the option to lease a residential solar energy system installed on their home
will increase the number of systems we can sell and install due to the potential savings for some customers that cannot otherwise take
full advantage of certain tax incentives. As described above, in December 2022, we launched a program offering customers the option
of leasing residential solar energy systems from third parties that we install on the customer's home.

 Strengths

 Lean Business Model. We
have a lean business model, in the four years prior to 2024, we had an increase in revenue and profit every year. In 2024, in the face
of a challenging economic environment for our industry, we believe that our lean operations have permitted us to minimize losses.

 Our Sales Model. Our
sales methodology produces a high volume of sales. We believe our internal sales process drives a high volume of sales per sales representative
and results in low customer acquisition costs. The success of our sales processes starts with quality, hands-on training for each
sales representative. Our self-produced digital learning platform presents our sales representatives with sample customer scenarios
and guides them in learning effective communication techniques, as well as how to efficiently carry out administrative steps required
for completing sales. Each sales representative's responses to sample customer scenarios are reviewed and critiqued by managers
of our internal sales team.

 In our sales model, a majority of personnel knock
on doors of potential customers and explain the benefits of solar energy and our offerings with the objective of scheduling a subsequent
sales meeting. In the scheduled meetings, a more experienced sales representative or sales manager provides a homeowner additional information
about system design, energy savings and other benefits, pricing, incentives and financing options.

 We believe that the key elements to our successful
business model include (i) effective training and time spent with senior sales managers, (ii) our use of our customer relationship
management software platform which concurrently tracks key performance indicators across the sales cycle, and (iii) our multi-step setter-closer sales
model, which enables senior sales personnel to focus on greater sales success in presentations, while setters focus on developing and
filtering quality, qualified leads, all of which then contributes to maximizing the percentage of leads converted into sales and sales
into installations because of satisfied customers throughout the process.

 Our vertical integration leads to customer
satisfaction and personnel retention. We believe our vertically integrated business model, in which we market,
design, sell, procure, install and service systems, has a major benefit of enhancing the speed of project completion after an initial
sale is made. It also allows us to price projects strategically with information from both the sales and installation sides of the process.
Our greater control over the total process and our resulting success rates in navigating the local municipal permit process is intended
to increase customer satisfaction and reduce potential sales force frustration from losing many jobs due to delays in the installation
process. Our ratio of sales converted to completed installations is higher for sales that come from our internal agents than that that
come from our dealer sales. We believe this higher rate helps increase the job satisfaction and retention rate for our personnel, as it
enhances commissions that are paid out to sales personnel and managers, and provides work for installation teams.

 Our scalable business platform allows us to
grow efficiently. We believe that we have established a scalable business platform for efficiently completing
the life-cycle of tasks involved in offering and fulfilling customers' residential solar power needs. This platform is principally:
(a) software we use in designing, selling, installing and servicing systems, and in tracking key performance indicators across the
sales cycle; and (b) the business processes of our employees that perform field work, system design, permitting, installation and
back-office support tasks. This platform is intended to allow us to undergo rapid sales and installation growth by efficiently adding
new personnel and collaborating effectively with external dealers who bring us additional customers. We have carefully designed these
processes and our pre- and post-installation operations to be effective systems which can be easily explained to new employees and
replicated in the new cities and regions in which we operate and expand.

 Competition

 The solar energy and renewable energy industries
are both highly competitive and continually evolving as participants strive to distinguish themselves within their markets and compete
with large electric utilities.

 We consider our primary competitors to be electric
utilities that supply electricity to our potential customers. We compete with these electric utilities primarily based on price (cents
per kWh), predictability of future prices and the ease by which customers can switch to electricity generated by our residential solar
energy systems. We may also compete with them based on other value-added benefits. These include reliability and carbon-friendly
power, benefits which consumers have historically paid a premium to secure, but which customers can obtain by purchasing a solar energy
system for monthly costs that are sometimes equal to or less than a traditional monthly power bill from the utility.

 We also compete with retail electric providers
and independent power producers that are not regulated like electric utilities, but which have access to the utilities' electricity
transmission and distribution infrastructure pursuant to state, territorial and local pro-competition and consumer choice policies.
These retail electric providers and independent power producers can offer customers electricity solutions that are competitive with our
residential solar energy system options on both price and usage of renewable energy technology while avoiding the physical installations
that our current business model requires.

 We compete with community solar products offered
by solar companies or sponsored by local governments and municipal power companies, as well as utility companies that provide renewable
power purchase programs. Some customers might choose to subscribe to a community solar project or renewable subscriber program instead
of having a residential solar energy system installed on their home, which could affect our sales. Additionally, some utility companies
(and some utility-like entities, such as community choice aggregators) have power generation portfolios that are increasingly renewable
in nature. As utility companies offer increasingly renewable portfolios to retail customers, those customers might be less inclined to
have a residential solar energy system installed on their home or business, which could adversely affect our growth.

 We also compete with solar energy companies with
vertically integrated business models like our own, many of which are larger than we are. For example, some of our competitors offer their
own consumer financing products to customers and/or produce one or more components of the residential solar energy system or energy storage
system. In addition to financing and manufacturing, some other business models also include sales, engineering, installation, maintenance
and monitoring services. Some of our competitors also have an established complementary construction, electrical contracting or roofing
services.

 Some competitors also offer customers the option
of leasing a residential solar energy system installed on the customer's residence. In such a scenario, the provider or a third
party owns the residential solar energy system, and the customer typically pays a predetermined fee for the electricity produced by the
residential solar energy system. The fee generally increases annually at a predetermined rate over the lease term, which is typically
20 to 25 years, with a renewal option. Such a lease program can take fuller advantage of some of the available tax incentives and,
therefore, can reduce the customer's monthly costs in comparison to owning the residential solar energy system.

 We compete against companies that are not vertically
integrated, such as companies that offer only installation services, or provide only equipment to be installed, or dealers that sell systems
for which another entity or entities will provide and install equipment. Some of these entities finance products directly to consumers,
inclusive of programs like Property-Assessed Clean Energy financing programs established by local governments. For example, we face
competition from solar installation businesses that seek financing from external parties or utilize competitive loan products or state
and local programs.

 We expect the competition to evolve as the market
continues to grow, evolve and attract new market entrants. We believe that with our business model and sales strategy, we can compete
effectively and favorably within the industry.

 For more information on risks relating to increased
competition in our industry, see " Risk Factors — Risks Related to the Solar Industry — We face
competition from electric utilities, retail electric providers, independent power producers, renewable energy companies and other market
participants. "

 Intellectual Property

 We protect our intellectual property rights by
relying on common law protections and through contractual arrangements. We typically require our personnel, consultants and third parties
such as our suppliers with access to our proprietary information to execute confidentiality agreements. Our principal trade secrets and
copyrighted materials consist of our sales methodologies and data regarding our personnel, customers and suppliers.

 We also license third-party software and
services that we use in operating our business. These third-party solutions include, among others, software that we use in selling and
designing our products services, a customer relationship management system to actively track key performance indicators across the sales
cycle and software to augment our sales and marketing efforts.

 Insurance

 We maintain the types and amounts of insurance
coverage and on terms deemed adequate by management based on our actual claims experience and expectations for future claims. However,
future claims could exceed our applicable insurance coverage. Our insurance policies cover employee-and contractor-related accidents
and injuries, property damage, business interruption, storm damage, inventory, vehicles, fixed assets, facilities, and crime and general liability
deriving from our activities. We have also obtained insurance policies covering directors, officers, employment practices, auto liability,
and commercial general liability. We may also be covered in some circumstances for certain liabilities by insurance policies owned by
third parties, including, but not limited to, our dealers and vendors.

 Government Regulation

 U.S. tariffs, duties and other trade regulations
impact the prices of components in the residential solar energy systems and energy storage systems we sell, in addition to the pricing
pressures caused by supply chain factors as discussed above. As further discussed below, these U.S. government-based pricing
influences currently include various tariffs, such as antidumping (" AD ") and countervailing duties (" CVD ")
and other trade restrictions, applied to imported crystalline silicon PV cells and solar panels imported into the U.S. Also, China
is a major producer of solar panels, inverters and other components that we use in the systems that we install, and the U.S. currently
assesses various tariffs and antidumping and countervailing duties on equipment produced in China, including solar panels and inverters.
The U.S. has also placed certain geographic, company-specific and other trade restrictions on Chinese sources of supply based
on foreign policy and national security interests. The scope and timing of these regulatory efforts change over time, and the government
may introduce new regulations as world events occur and public policy evolves. In response to the market uncertainty and price fluctuations
caused by these government actions and other supply chain pressures, we carefully and periodically evaluate our suppliers of system components
and make purchasing decisions based on our judgments of product quality, warranties, pricing and availability.

 For more information on risks relating to government
tariffs, duties or trade restrictions, see " Risk Factors — Risks Related to Zeo's Operations — Increases
in the cost or reduction in supply of residential solar energy system and energy storage system components due to tariffs or trade restrictions
announced or imposed by the U.S. government could have an adverse effect on our business, financial condition and results of operations. "

 Our operations are subject to various national,
state and local laws and regulations. These include regulations regarding license requirements for electricians or other professionals
involved in the installation of residential solar energy systems and energy storage systems. Many states and/or local governments and
utilities have regulated procedures for interconnecting residential solar energy systems and related energy storage systems to the utility's
local distribution system. There are also local building codes or other local regulations for installing the products we sell on a customer's
property. We employ or contract with licensed professionals as needed to comply with regulatory requirements, and as part of our process
of installing residential solar energy systems and related equipment, we assist our customers in obtaining interconnection permission
from the applicable local electric distribution utility, and applicable permits from other local offices.

 Our operations, as well as those of our suppliers
and subcontractors, are subject to stringent and complex U.S. federal, state, territorial and local laws, including regulations governing
the occupational health and safety of employees, wage regulations and environmental protection. For example, we and our suppliers and
subcontractors are subject to the regulations OSHA, the U.S. Department of Transportation (" DOT "), the
U.S. Environmental Protection Agency (" EPA ") and comparable state entities that protect and regulate employee
health and safety and the protection of the environment. Various environmental, health and safety laws can result in the imposition of
costs and liability in connection with system and equipment installation, the repair or replacement of parts, and disposal of hazardous
substances (such as the disposal and recycling of batteries).

 We and the dealers that supply us with sales opportunities
or completed sales are also subject to laws and regulations related to interactions with consumers, including those applicable to sales
and trade practices, privacy and data security, equal protection, consumer financial and credit transactions, consumer collections, mortgages
and re-financings, home or business improvements, trade and professional licensing, warranties, and various means of customer solicitation,
as well as specific regulations pertaining to solar installations.

 Government Incentives

 There are U.S. federal, state and local governmental
bodies that provide incentives to owners, distributors, installers and manufacturers of solar energy systems to promote solar energy.
These incentives include tax credits offered by the federal government under, among others, the Energy Policy Act of 2005, as amended,
and the Inflation Reduction Act of 2022 (" IRA "), as well as other tax credits, rebates and Solar Renewable Energy
Credits (" SRECs ") associated with solar energy generation. Commercial taxpayers, including solar energy system
owners and tax-equity partners, may claim a federal investment tax credit equal to 30% of eligible project costs for solar facilities
that meet certain requirements. The base credit is scheduled to phase down to 26% for projects beginning construction in 2033 and 22%
in 2034, expiring thereafter. In addition, commercial solar energy facilities may be eligible for bonus credits for projects that meet
domestic-content thresholds, are located in energy-community census tracts, or serve low-income communities. If a solar energy system
is owned by a homeowner, the homeowner may claim a 30% federal income tax credit on the cost of purchasing and installing eligible solar
energy systems through 2032, phasing down to 26% in 2033, and 22% in 2034, expiring thereafter. The IRA also provides other incentives
for homeowners to adopt energy-efficient systems and appliances that include (a) a 30% tax credit with an annual limit for certain
upgrades such as installing energy-efficient hybrid water heaters, doors and windows, insulation, and upgrading electrical breaker
boxes and (b) up to $14,000 in point-of-sale rebates for low- and moderate-income households for certain electric appliances
and home upgrades.

 Our business model also relies on multiple tax
exemptions offered at the state and local levels. For example, some states have property tax exemptions that exempt the value of residential
solar energy systems in determining values for calculation of local and state real and personal property taxes, and there are some state
and local tax exemptions that apply to the sale of equipment. State and local tax exemptions can have sunset dates or triggers for loss
of the exemption, and the exemptions can be changed by state legislatures and other regulators.

 A majority of states have adopted net metering
policies, including our sales areas of Florida, Texas, Missouri, Ohio and Illinois. Net metering policies allow homeowners to serve their
own energy load using on-site generation while avoiding the full retail volumetric charge for electricity. Electricity that is generated
by a residential solar energy system and consumed on-site avoids a retail energy purchase from the applicable utility, and excess
electricity that is exported back to the electric grid generates a retail credit within a homeowner's monthly billing period. At
the end of the monthly billing period, if the homeowner has generated excess electricity within that month, the homeowner typically carries
forward a credit for any excess electricity to be offset against future utility energy purchases. At the end of an annual billing period
or calendar year, utilities either continue to carry forward a credit or reconcile the homeowner's final annual or calendar year
bill using different rates (including zero credit) for the exported electricity.

 Utilities, their trade associations, and other
entities are currently challenging net metering policies in various locations by seeking to eliminate them, cap them, reduce the value
of the credit provided to homeowners for excess generation or impose charges on homeowners that have net metering. States where we sell
now or in the future may change, eliminate or reduce net metering benefits. On April 26, 2022, the Florida governor vetoed legislation
that would have established a date for reducing and ending net metering in Florida.

 We rely on a mix of the incentives mentioned above
to reduce the net price our customers that are eligible for incentives would otherwise pay for our solar offerings or per kilowatt hour
used.

 Employees and Human Capital Management

 As of December 31, 2024, we had approximately
190 full-time employees that work year-round processing orders, installing and servicing systems and fulfilling administrative
tasks. We also engage sales agents as independent contractors as described in " Business — Internal Direct
Sales Force " above. None of our employees are covered by collective bargaining agreements, and we have not experienced any work
stoppages due to labor disputes.

 Facilities

 Our corporate headquarters are located in Florida
under a lease that expires at the end of October 2026. In Florida, we maintain offices for operations personnel and warehouses, and
we have warehouses in Texas and Ohio, and warehouse, sales, marketing, and executive offices in Utah. We currently lease the office and
warehouse spaces that we use in our operations, and we do not own any real property. We believe that our facility space adequately meets
our needs and that we will be able to obtain any additional operating space that may be required on commercially reasonable terms.

 Litigation

 We are not currently a party to any material litigation
or governmental or other proceeding. However, from time to time, we have been, are and will likely continue to be involved in legal proceedings,
administrative proceedings and claims that arise in the ordinary course of business with customers, subcontractors, suppliers, regulatory
bodies or others. In general, litigation claims or regulatory proceedings can be expensive and time consuming to bring or defend against,
which may result in the diversion of management's attention and resources from our business and business goals and could result
in settlement or damages that could significantly affect financial results and the conduct of our business.

 Item 1A. Risk Factors

 Risks Related to the Solar Industry

 The solar energy industry is an emerging
market which is constantly evolving and additional demand for solar energy systems may not develop to the size or at the rate we expect.

 The solar energy industry is an emerging and constantly
evolving market opportunity. We believe the solar energy industry is still developing and maturing, and we cannot be certain that additional
demand for solar energy systems will grow to the size or at the rate we expect. Any future growth of the solar energy market and the success
of our solar service offerings depend on many factors beyond our control, including recognition and acceptance of the solar service market
by consumers, the pricing of alternative sources of energy, a favorable regulatory environment, the continuation of expected tax benefits
and other incentives, and our ability to provide our solar service offerings cost effectively. If additional demand for solar energy systems
does not develop to the size or at the rate we expect, our business may be adversely affected.

 Solar energy has yet to achieve broad market acceptance
and depends in part on continued support in the form of rebates, tax credits, and other incentives from federal, state and local governments
or utilities. If support diminishes materially for solar policy related to rebates, tax credits and other incentives, demand for our products
and services may decrease and our ability to obtain external financing on acceptable terms, or at all, could be materially adversely affected.
These types of funding limitations could lead to inadequate financing support for the anticipated growth in our business. Furthermore,
growth in residential solar energy depends in part on macroeconomic conditions, retail prices of electricity and customer preferences,
each of which can change quickly. Declining macroeconomic conditions, including in the job markets and residential real estate markets,
could contribute to instability and uncertainty among customers and impact their financial wherewithal, credit scores or interest in entering
into long-term contracts, even if such contracts would generate immediate and/or long-term savings.

 Furthermore, market prices of retail electricity
generated by utilities or other energy sources could decline for a variety of reasons, as discussed further below. Any such declines in
macroeconomic conditions, changes in retail prices of electricity or changes in customer preferences would adversely impact our business.

 At the international level, the United Nations-sponsored Paris
Agreement requires member states, including the United States, to submit non-binding, individually-determined greenhouse gas reduction
goals known as "Nationally Determined Contributions" every five years after 2020. Former President Biden committed the United
States to a goal of reducing greenhouse gas emissions by 50 – 52% below 2005 levels by 2030, a target consistent with the Paris
Agreement's goal of "net-zero" greenhouse gas emissions by 2050. In contrast to the stated goals of President Biden's
administration, the administration of the newly-elected President Trump, is less likely to create or support incentives to reduce greenhouse
gas emissions. In January the newly-elected President Trump announced the United States will exit the Paris Agreement. As a result,
support from the U.S. government for addressing climate change is likely to decrease, and as a result, consumer demand for clean energy
may decrease. Additional international agreements or any legislation, regulation, or executive action within the U.S. addressing climate
change, including any climate-related disclosure requirements and legislation or regulation.

 We face competition from electric utilities,
retail electric providers, independent power producers, renewable energy companies and other market participants.

 The solar energy and renewable energy industries
are both highly competitive and continually evolving as participants strive to distinguish themselves within their markets and compete
with large electric utilities. We believe our primary competitors are the electric utilities that supply electricity to our potential
customers. We compete with these electric utilities primarily based on price (cents per kWh), predictability of future prices (by providing
pre-determined annual price escalations) and the ease by which customers can switch to electricity generated by our solar energy
systems. We may also compete based on other value-added benefits, such as reliability and carbon-friendly power. If we cannot
offer compelling value to our customers based on these factors, our business may not grow.

 Electric utilities generally have substantially
greater financial, technical, operational and other resources than we do. As a result, these competitors may be able to devote more resources
to the research, development, promotion and sale of their products or services or respond more quickly to evolving industry standards
and changes in market conditions than we can. Electric utilities could also offer other value-added products or services that could
help them to compete with us even if the cost of electricity they offer is higher than ours. In addition, a majority of utilities'
sources of electricity is non-solar, which may allow utilities to sell electricity more cheaply than electricity generated by our solar
energy systems. Electric utilities could also offer customers the option of purchasing electricity obtained from renewable energy resources,
including solar, which would compete with our offerings. Moreover, regulated utilities are increasingly seeking approval to "rate-base"
their own solar energy system and energy storage system businesses. Rate-basing means that utilities would receive guaranteed rates
of return for their solar energy system and energy storage system businesses. This is already commonplace for utility-scale solar
projects and commercial solar projects. While few utilities to date have received regulatory permission to rate-base residential
solar energy systems or energy storage systems, our competitiveness would be significantly harmed should more utilities receive such permission
because we do not receive guaranteed profits for our solar service offerings.

 We also compete with retail electric providers
and independent power producers not regulated like electric utilities but which have access to the utilities' electricity transmission
and distribution infrastructure pursuant to state, territorial and local pro-competition and consumer choice policies. These retail
electric providers and independent power producers are able to offer customers electricity supply-only solutions that are competitive
with our solar energy system options on both price and usage of renewable energy technology while avoiding the physical installations
our current business model requires. This may limit our ability to acquire new customers, particularly those who have an aesthetic or
other objection to putting solar panels on their roofs.

 We also compete with solar companies with vertically
integrated business models like our own. For example, some of our competitors offer their own consumer financing products to customers
and/or produce one or more components of the solar energy system or energy storage system. In addition to financing and manufacturing,
some other business models also include sales, engineering, installation, maintenance and monitoring services. Many of our vertically
integrated competitors are larger than we are and offer certain vertical services that we do not. As a result, these competitors may be
able to devote more resources to the research, development, promotion and sale of their products or services or respond more quickly to
evolving industry standards and changes in market conditions than we can. Solar companies with vertically integrated business models could
also offer other value-added products or services that could help them to compete with us. Larger competitors may also be able to
access financing at a lower cost of capital than we are able to obtain.

 In addition, we compete with other residential
solar companies who sell or finance products directly to consumers, inclusive of programs like Property-Assessed Clean Energy financing
programs established by local governments. For example, we face competition from solar installation businesses that seek financing from
external parties or utilize competitive loan products or state and local programs.

 We also compete with solar companies that are
marketed to potential customers by dealers, and we may also face competition from new entrants into the market as a result of the passage
of the IRA and its impacts and benefits to the solar industry. Some of these competitors specialize in the distributed solar energy market
and some may provide energy at lower costs than we do. Some of our competitors offer or may offer similar services and products as
we do, such as direct outright sales of solar energy systems. Many of our competitors also have significant brand name recognition, lower
barriers to entry into the solar market, greater capital resources than we have and extensive knowledge of our target markets. In addition,
some of our competitors have an established business of providing construction, electrical contracting, or roofing services.

 We also compete with community solar products
offered by solar companies or sponsored by local governments and municipal power companies, as well as utility companies that provide
renewable power purchase programs. Some customers might choose to subscribe to a community solar project or renewable subscriber programs
instead of having a solar energy system installed on their home or business, which could affect our sales. Additionally, some utility
companies (and some utility-like entities, such as community choice aggregators) have generation portfolios that are increasingly
renewable in nature. As utility companies offer increasingly renewable portfolios to retail customers, those customers might be less inclined
to have a solar energy system installed on their home or business, which could adversely affect our growth.

 We have historically provided our services only
to residential customers, but we may expand to other markets, including commercial and industrial customers. There is intense competition
in the solar energy sector in the markets in which we operate and the markets into which we may expand. As new entrants continue to enter
into these markets, and as we enter into new markets, we may be unable to grow or maintain our operations and we may be unable to compete
with companies that have already established themselves in both the residential market and non-residential market.

 As the solar industry grows and evolves, we will
also face new competitors and technologies who are not currently in the market (including those resulting from the consolidation of existing
competitors). Our industry is characterized by low technological barriers to entry, and well-capitalized companies, including utilities
and integrated energy companies, could choose to enter the market and compete with us. Our failure to adapt to changing market conditions
and to compete successfully with existing or new competitors will limit our growth and will have a material adverse effect on our business,
financial condition and results of operations.

 A material reduction in the retail price
of electricity charged by electric utilities or other retail electricity providers would harm our business, financial condition and results
of operations.

 Decreases in the retail price of electricity from
electric utilities or from other retail electric providers, including other renewable energy sources such as larger-scale solar energy
systems, could make our offerings less economically attractive. The price of electricity from utilities could decrease as a result of:

 the construction of a significant number of new power generation
plants, whether generated by natural gas, nuclear power, coal or renewable energy;

 the construction of additional electric transmission and
distribution lines;

 a reduction in the price of natural gas or other natural
resources as a result of increased supply due to new drilling techniques or other technological developments, a relaxation of associated
regulatory standards or broader economic or policy developments;

 less demand for electricity due to energy conservation technologies
and public initiatives to reduce electricity consumption or to recessionary economic conditions; and

 development of competing energy technologies that provide
less expensive energy.

 A reduction in electric utilities' rates
or changes to peak hour pricing policies or rate design (such as the adoption of a fixed or flat rate) could also make our offerings less
competitive with the price of electricity from the electrical grid. If the cost of energy available from electric utilities or other providers
were to decrease relative to solar energy generated from solar energy systems or if similar events impacting the economics of our offerings
were to occur, we may have difficulty attracting new customers. For example, large utilities in some states have started transitioning
customers to time-of-use rates and also have adopted a shift in the peak period for time-of-use rates to later in the day.
Unless grandfathered under a different rate, customers with solar energy systems may be required to take service under time-of-use rates
with the later peak period. Moving utility customers to time-of-use rates or the shift in the timing of peak rates for utility-generated electricity
to include times of day when solar energy generation is less efficient or non-operable could also make our offerings less competitive.
Time-of-use rates could also result in higher costs for our customers whose electricity requirements are not fully met by our offerings
during peak periods.

 Sales and installation of solar energy systems
depend heavily on suitable meteorological and environmental conditions. If meteorological or environmental conditions are unexpectedly
unfavorable, the electricity production from our solar service offerings may be below our expectations, and our ability to timely deploy
new systems may be adversely impacted.

 The energy produced and revenue and cash flows
generated by a solar energy system depend on suitable solar and weather conditions, both of which are beyond our control. Furthermore,
components of our systems, such as panels and inverters, could be damaged by severe weather or natural catastrophes, such as hailstorms,
tornadoes, fires, or earthquakes. Homeowner insurance or homeowners generally bear the expense of repairing weather-related damage
to solar energy systems. However, in these circumstances, we make our install teams available to remove, repair and reinstall the systems.
Sustained unfavorable weather or environmental conditions also could unexpectedly delay the installation of our solar energy systems,
leading to increased expenses and decreased revenue and cash flows in the relevant periods. Extreme weather conditions, including those
associated with climate change, as well as the natural catastrophes that could result from such conditions, can severely impact our operations
by delaying the installation of our systems, lowering sales, and causing a decrease in the output from our systems due to smoke or haze.
Weather patterns could change, making it harder to predict the average annual amount of sunlight striking each location where our solar
energy systems are installed. This could make our solar service offerings less economical overall or make individual systems less economical.
Our economic model and projected returns on our solar energy systems require achievement of certain production results from our systems
and, in some cases, we guarantee these results to our consumers. If the solar energy systems underperform for any reason, our business
could suffer. Any of these events or conditions could harm our business, financial condition, and results of operations.

 Climate change may have long-term impacts
on our business, our industry, and the global economy.

 Climate change poses a systemic threat to the
global economy, and we believe it will continue to do so until our society transitions to renewable energy and decarbonizes. While our
core business model seeks to accelerate this transition to renewable energy, there are inherent climate-related risks to our business
operations. Warming temperatures throughout the United States, including Florida, our biggest market, have contributed to extreme
weather, intense drought, and increased wildfire risks. These events have the potential to disrupt our business, the operations of our
third-party suppliers, and our customers, and may cause us to incur additional operational costs. For instance, natural disasters
and extreme weather events associated with climate change can impact our operations by delaying the installation of our systems, leading
to increased expenses and decreased revenue and cash flows. They can also cause a decrease in the output from our systems due to smoke
or haze. Additionally, if weather patterns significantly shift due to climate change, it may be harder to predict the average annual amount
of sunlight striking each location where our solar energy systems are installed and energy output from our systems could be reduced in
the short-term or long-term in certain areas. This could make our solar service offerings less economical overall, make individual
systems less economical, or reduce demand for our products, as well as damage our reputation to the extent energy generation from our
products does not meet customer expectations. For more information regarding risks posed by meteorological conditions, see " Risk
Factors — Sales and installation of solar energy systems depend heavily on suitable meteorological and environmental conditions.
If meteorological or environmental conditions are unexpectedly unfavorable, the electricity production from our solar service offerings
may be below our expectations, and our ability to timely deploy new systems may be adversely impacted. "

 Our business has benefited from the declining
cost of solar energy systems and energy storage system components and may be harmed to the extent the cost of such components stabilizes
or increases in the future.

 Our business has benefited from the declining
cost of solar energy system and energy storage system components, and to the extent such costs stabilize, decline at a slower rate or
increase, our future growth rate may be negatively impacted. The declining cost of solar energy system and energy storage system components
and the raw materials necessary to manufacture them has been a key driver in the price of solar energy systems and energy storage systems
and customer adoption of solar energy. While historically solar energy system and energy storage system components and raw material prices
have declined, the cost of these components and raw materials have recently increased and may continue to increase in the future, and
such products' availability could decrease, due to a variety of factors, including growth in the solar energy system and energy
storage system industries and the resulting increase in demand for solar energy system and energy storage system components and the raw
materials necessary to manufacture them, supply chain disruptions, tariff penalties, duties, and trade barriers, export regulations, regulatory
or contractual limitations, industry market requirements and industry standards, changes in technology, the loss of or changes in
economic governmental incentives, inflation or other factors. An increase in the prices of solar energy system components and raw materials
could slow our growth and cause our business and results of operations to suffer. See " Risk Factors — Increases in
the cost or reduction in supply of solar energy system and energy storage system components due to tariffs or trade restrictions announced
or imposed by the U.S. government could have an adverse effect on our business, financial condition and results of operations. "

 Risks Related to Operations

 We may be unable to sustain our net losses.

 We may incur net losses as we increase our spending
to finance the expansion of our operations, expand our installation, engineering, administrative, sales and marketing staffs, increase
spending on our brand awareness and other sales and marketing initiatives, make significant investments to drive future growth in our
business and implement internal systems and infrastructure to support our growth and operate as a publicly traded company. We do not know
whether our revenue will grow rapidly enough to absorb these costs and our limited operating history makes it difficult to assess the
extent of these expenses or their impact on our results of operations. Our ability to operate profitably depends on a number of factors,
including but not limited to:

 growing our customer base;

 reducing our operating costs by lowering our customer acquisition
costs and optimizing our design and installation processes and supply chain logistics even as we expand into additional geographic markets;

 maintaining or further lowering our cost of capital;

 reducing the cost of components for our solar service offerings;

 growing and maintaining our sales network;

 maintaining high levels of product quality, performance,
and customer satisfaction; and

 growing our direct-to-consumer business to scale.

 Even if we do operate profitably, we may be unable
to achieve positive cash flows from operations in the future.

 Our growth depends in part on the success
of our relationships with third parties such as our equipment suppliers, subcontractors and dealers, including dealers who market to customers
and bring the resulting solar contracts to us for fulfillment.

 A key component of our growth strategy is to develop
or expand our relationships with third parties, such as our equipment suppliers, subcontractors and dealers. A significant portion of
our business depends on attracting and retaining new and existing sales dealers who market to customers and bring the resulting contracts
to us for fulfillment. Negotiating relationships with subcontractors, dealers and other third parties, training such third parties, and
monitoring them for compliance with our standards require significant time and resources and may present greater risks and challenges
than expanding our direct sales and installation team. If we are unsuccessful in establishing or maintaining our relationships with these
third parties, our ability to grow our business and address our market opportunity could be impaired. Even if we are able to establish
and maintain these relationships, we may not be able to execute our goal of leveraging these relationships to meaningfully expand our
business, brand recognition and customer base. This would limit our growth potential and our opportunities to generate significant additional
revenue or cash flows.

 Due to the limited number of suppliers in
our industry, the acquisition of any of these suppliers by a competitor or any shortage, delay, price change, announcement or imposition
of tariffs or duties or other limitation in our ability to obtain components or technologies we use could result in sales and installation
delays, cancellations and loss of customers.

 We purchase solar panels, inverters, energy storage
systems and other system components and instruments from a limited number of suppliers, qualified and approved by our engineering and
design teams, making us susceptible to quality issues, shortages and price changes that may occur in the supply chain. There are a limited
number of suppliers of solar energy system components, instruments and technologies, and our ability to obtain components or technologies
we use could be affected by circumstances beyond our control, including:

 Increases in
 the cost or reduction in supply of solar energy system and energy storage system components
 due to tariffs or trade restrictions announced or imposed by the U.S. government.
 Recently, the U.S. government has announced or implemented various tariff and trade regulations
 impacting imported goods, including components for solar energy systems and energy storage
 systems. These measures have included the introduction of a baseline tariff on many imports
 and the imposition or adjustment of higher tariffs on goods from specific countries that
 are significant sources of supply of our components. These recent tariffs and other trade
 measures, in combination with other factors such as supply chain constraints, increased demand
 for solar systems in the U.S. and Europe, rising inflation, and higher labor, material, and
 shipping costs, have contributed or are expected to contribute to increases in the cost of
 domestic and imported solar panels, inverters, and related equipment, which includes batteries.
 The tariffs may also result in decreased availability and/or increased procurement time for
 solar system equipment. Measures retaliating to the new tariffs have been announced by some
 countries, and other responses are likely. The new tariffs, and continued volatility in trade
 policy may impact our gross margins and growth, due to factors such as increased procurement
 and installation costs, profit margin compression or the need to pass increased costs to
 consumers, supply chain disruption, and competitive disadvantages relative to market participants
 with more favorable supply arrangements.

 Industry-wide shortages of key components and instruments,
including batteries and inverters, in times of rapid industry growth. The manufacturing infrastructure for
some of these components has a long lead-time, requires significant capital investment and relies on the continued availability of key
commodity materials, potentially resulting in an inability to meet demand for these components. The solar industry is currently experiencing
rapid growth and, as a result, shortages of key components or instruments, including solar panels, may be more likely to occur, which
in turn may result in price increases for such components. Even if industry-wide shortages do not occur, suppliers may decide to
allocate key components or instruments with high demand or insufficient production capacity to more profitable customers, customers with
long-term supply agreements or customers other than us. As a result, our ability to originate solar energy systems and energy storage
systems may be reduced.

 Natural disasters and other events beyond our control (such
as earthquakes, wildfires, flooding, hurricanes, freezes, tsunamis, typhoons, volcanic eruptions, droughts, tornadoes, power outages
or other natural disasters, the effects of climate change and related extreme weather, public health issues and pandemics, war, terrorism,
government restrictions or limitations on trade, impediments to international shipping and geopolitical unrest and uncertainties).

 Human rights and forced labor issues in foreign countries
and the U.S. government's response to them. In particular, the withhold release order issued by U.S. Customs
and Border Protection in June 2021 applicable to certain silica-based products manufactured in the Xinjiang Uyghur Autonomous
Region (" XUAR ") of China, and any other allegations regarding forced labor in China and U.S. trade regulations
to prohibit the importation of any goods derived from forced labor, has affected and may continue to affect our operations. Further, the
Uyghur Forced Labor Prevention Act (" UFLPA ") that former President Biden signed into law on December 23,
2021, which took effect on June 21, 2022, has affected and may continue to affect our supply chain and operations. Intensive examinations,
withhold release orders, and related governmental procedures have resulted in supply chain and operational delays throughout the industry.
These and other similar trade restrictions that may be imposed in the future could cause delivery and installation delays and restrict
the global supply of polysilicon and solar products. While we believe the items described above have contributed to price increases for
components that we purchase, we believe that these increases to the cost of our components were also due to a combination of other factors,
including supply chain constraints, increased demand for solar systems in the U.S. and Europe, rising inflation, and higher labor,
material, and shipping costs. We do not have information that allows us to quantify the specific amount of price increases attributable
to the tariffs and trade regulations described. For more information regarding UFLPA and risks related thereto, see " Risk Factors
— Increases in the cost or reduction in supply of solar energy system and energy storage system components due to tariffs
or trade restrictions announced or imposed by the U.S. government could have an adverse effect on our business, financial condition
and results of operations. "

 Russia's war on Ukraine. We
do not materially rely directly or indirectly on goods or services sourced in Russia, Ukraine or Belarus, or have any material business
relationships, connections to, or assets in, Russia, Belarus, or Ukraine. While we believe Russia's war on Ukraine has contributed
to price increases for components that we purchase, we believe that the increases to the cost of our components were also due to a combination
of other factors, including supply chain constraints, tariffs and trade regulations, increased demand for solar systems in the U.S. and
Europe, U.S. tariffs, rising inflation, and higher labor, material, and shipping costs. We do not have information that allows us
to quantify the specific amount of price increases attributable to Russia's war on Ukraine.

 Disruptions
 to global shipping. Historically,
 we have relied on foreign suppliers and manufacturers for a number of solar energy system
 components, instruments and technologies that we purchase. Our success in the future may
 be dependent on our ability to import or transport such products from overseas vendors in
 a timely and cost-effective manner. We may rely heavily on third parties, including
 ocean carriers and truckers, both of which are experiencing disruptions, shortages and rate
 increases, in that process. The global shipping industry has experienced and may continue
 to experience ocean shipping disruptions, trucking shortages, increased ocean shipping rates
 and increased trucking and fuel costs. There has been and may in the future be a shortage
 of shipping capacity from China and other parts of Asia, among other regions, and as a result,
 our receipt of imported products may be disrupted or delayed. The shipping industry has also
 experienced issues with port congestion and pandemic-related port closures and ship
 diversions. The global shipping industry also experienced unprecedented increases in shipping
 rates from the trans-Pacific and other ocean carriers due to various factors, including
 limited availability of shipping capacity. In 2023 and 2024, we did not experience any appreciable
 delays in supply. We may find it necessary to rely on an increasingly expensive spot market
 and other alternative sources to make up any shortfall in shipping needs.

 If we cannot obtain substitute materials or components
on a timely basis or on acceptable terms, we could be prevented from installing our solar energy systems within the time frames required
in our customer contracts. Any such delays could increase our overall costs, reduce our profit, delay the timing for solar energy systems
to be placed in service and ultimately have a material adverse effect on our business, financial condition and results of operations.

 We depend on a limited number of suppliers
of solar energy system components and technologies to adequately meet demand for our solar energy systems. If we needed to identify alternative
suppliers or to qualify alternative products on commercially reasonable terms, our ability to satisfy demand may be adversely affected.

 Our primary supplier is Consolidated Electrical
Distributors, Inc. (d/b/a Greentech Renewables) (" Greentech "), from which we purchased at least approximately
70% of the equipment that we installed in 2024. If Greentech or one or more of our other suppliers we rely upon to meet anticipated demand
(i) ceases or reduces production due to its financial condition, acquisition by a competitor or otherwise, (ii) is unable to
increase production as industry demand increases, (iii) raises their prices to an extent that cannot be passed on to our customers
without affecting demand or (iv) is otherwise unable to allocate sufficient production to us, it may be difficult to quickly identify
alternative suppliers or to qualify alternative products on commercially reasonable terms. As a result, our ability to satisfy demand
may be adversely affected.

 Although we buy the majority of our equipment
through Greentech, we believe that if our relationship with Greentech were terminated, we could readily obtain supplies from other distributors
of the same or similar equipment, though in some locations, replacement distributors may take some time to develop efficient logistics
with respect to shipping equipment directly to job sites. This could result in additional costs and delays in acquiring and deploying
our solar energy systems or energy storage systems.

 Increased scrutiny of environmental, social,
and governance ("ESG") matters could have an adverse effect on our business, financial condition and results of operations
and damage our reputation.

 In recent years, companies across all industries
are facing increasing scrutiny from a variety of stakeholders, including investor advocacy groups, proxy advisory firms, certain institutional
investors and lenders, investment funds and other influential investors and rating agencies, related to their ESG and sustainability practices.
If we do not adapt to or comply with investor or other stakeholder expectations and standards on ESG matters as they continue to evolve,
or if we are perceived to have not responded appropriately or quickly enough to growing concern for ESG and sustainability issues, regardless
of whether there is a regulatory or legal requirement to do so, we may suffer from reputational damage and our business, financial condition
and/or stock price could be materially and adversely affected. In addition, organizations that provide information to investors on corporate
governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters. Such ratings
are used by some investors to inform their investment and voting decisions. Unfavorable ESG ratings could lead to increased negative investor
sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on our
stock price and our access to and costs of capital.

 We and our suppliers and subcontractors
are subject to risks associated with construction, cost overruns, delays, customer cancellations, regulatory compliance, and other contingencies,
any of which could have a material adverse effect on our business and results of operations.

 We are a licensed contractor in certain communities
that we service, and we are ultimately responsible as the contracting party for every solar energy system installation we provide. We
may be liable, either directly or through our subcontractors, to customers for any damage we or our subcontractors cause to them, their
home, belongings or property during the installation of our systems. For example, we, either directly or through our subcontractors, frequently
penetrate customers' roofs during the installation process and may incur liability for the failure to adequately weatherproof such
penetrations following the completion of construction. In addition, because the solar energy systems we or our subcontractors deploy are
high voltage energy systems, we may incur liability for any failure to comply with electrical standards and manufacturer recommendations.
Legal proceedings that are not resolved in our favor could potentially result in fines, public reprimand, probation, or the suspension
or revocation of certain of our licenses.

 Completing the sale and installation of a solar
energy system requires many different steps including a site audit, completion of designs, permitting, installation, electrical sign-off and
interconnection. Customers may cancel their customer agreement for a limited period, subject to certain conditions, and we have experienced
increased customer cancellations in certain geographic markets during certain periods in our operating history. We or our dealers or subcontractors
may face customer cancellations, delays or cost overruns, which may adversely affect our or our dealers' or subcontractors'
ability to ramp up the volume of sales or installations in accordance with our plans. These cancellations, delays or overruns may be the
result of a variety of factors, such as labor shortages or other labor issues, defects in materials and workmanship, adverse weather conditions,
transportation constraints, construction change orders, site changes or roof conditions, geographic factors and other unforeseen difficulties,
any of which could lead to increased cancellation rates, reputational harm and other adverse effects. For example, some customer orders
are cancelled after a site visit if we determine that a customer needs to make repairs to or install a new roof, or that there is excessive
shading on their property. If we continue to experience increased customer cancellations, our financial results may be materially and
adversely affected.

 In addition, the installation of solar energy
systems and other energy-related products requiring building modifications are subject to oversight and regulation in accordance
with national, state and local laws and ordinances relating to building, fire and electrical codes, safety, environmental protection,
utility interconnection and metering, and related matters. We also rely on certain of our and our subcontractors' employees to maintain
professional licenses in many of the jurisdictions in which we operate, and our failure to employ properly licensed personnel could adversely
affect our licensing status in those jurisdictions. It is difficult and costly to track the requirements of every individual authority
having jurisdiction over our installations and to design solar energy systems to comply with these varying standards. Any new government
regulations or utility policies pertaining to our systems may result in significant additional expenses to us and our customers and, as
a result, could cause a significant reduction in demand for our solar service offerings.

 As the demand for solar plus storage offerings
grows, we anticipate facing additional operational challenges associated with the complexity of deploying storage solutions. For example,
solar plus storage offerings tend to have longer cycle times due to factors such as lengthened permitting and inspection times and potential
need of a main panel upgrade.

 We have a variety of quality standards that we
apply in the selection, supervision, and oversight of our third-party suppliers and subcontractors. However, because our suppliers
and subcontractors are third parties, ultimately, we cannot guarantee that they will follow applicable laws and regulations, any standards
we impose, or ethical business practices, such as fair wage practices and compliance with environmental, safety and other local laws,
despite our efforts to hold them accountable to our standards. A lack of demonstrated compliance with contractual obligations, applicable
laws and regulations or our standards could lead us to seek alternative suppliers or subcontractors, which could increase our costs and
result in delayed delivery or installation of our products, product shortages or other disruptions of our operations. Violation of labor
or other laws by our suppliers and subcontractors or the divergence of a supplier's or subcontractor's labor or other practices
from those generally accepted as ethical in the United States or other markets in which we do business could also attract negative
publicity for us and harm our business, brand and reputation in the market.

 We use subcontractors to perform certain
services, which makes us vulnerable to the extent we rely on them.

 We rely on subcontractors to install some of the
solar energy systems we sell, as well as install energy efficiency equipment such as hybrid electric water heaters and pool pumps and
provide roofing and insulation services. We currently do not have long term agreements with our subcontractors. In addition, either the
subcontractor or Zeo can terminate the relationship for convenience. If a subcontractor terminates their relationship with us or refuses
to continue working with us on reasonable terms, and we cannot find a suitable replacement subcontractor on a timely basis, our business
may be adversely affected.

 Compliance with occupational safety and
health requirements and best practices can be costly, and noncompliance with such requirements may result in potentially significant penalties,
operational delays and adverse publicity.

 The installation and ongoing operations and maintenance
of solar energy systems and energy storage systems requires our employees or those of third-party contractors to work with complicated
and potentially dangerous electrical systems and/or at potentially dangerous heights. The evaluation and modification of buildings as
part of the installation process requires these individuals to work in locations that may contain potentially dangerous levels of asbestos,
lead, mold or other materials known or believed to be hazardous to human health. We also maintain large fleets of vehicles that these
employees use in the course of their work. There is substantial risk of serious illness, injury, or death if proper safety procedures
are not followed. Our operations are subject to regulation under the U.S. Occupational Safety and Health Act (" OSHA "),
Department of Transportation regulations, and equivalent state laws. Changes to such regulatory requirements, or stricter interpretation
or enforcement of existing laws or regulations, could result in increased costs. If we fail to comply with applicable workplace safety
and health regulations, even if no work-related serious illness, injury, or death occurs, we may be subject to civil or criminal
enforcement and be required to pay substantial penalties, incur significant capital expenditures, or suspend or limit operations. Any
accidents, citations, violations, illnesses, injuries or failure to comply with industry best practices may subject us to adverse publicity,
damage our reputation and competitive position and adversely affect our business. Because individuals hired by us or on our behalf to
perform installation and ongoing operations and maintenance of our solar energy systems and energy storage systems, including our third-party contractors,
are compensated on a per project basis, they are incentivized to work more quickly than installers compensated on an hourly basis. While
we have not experienced a high level of injuries to date, this incentive structure may result in higher injury rates than others in the
industry and could accordingly expose us to increased liability.

 If we fail to manage our recent and future
growth effectively, we may be unable to execute our business plan, maintain high levels of customer service, or adequately address competitive
challenges.

 We have experienced significant growth in recent
periods, and we intend to continue to expand our business within existing markets and in a number of new locations in the future. This
growth has placed, and any future growth may continue to place, a significant strain on our management, operational and financial infrastructure.
In particular, we have been in the past, and may in the future, be required to expand, train and manage our growing employee base and
subcontractors. Our management will also be required to maintain and expand our relationships with customers, suppliers, and other third
parties and attract new customers and suppliers, as well as to manage multiple geographic locations.

 In addition, if customer growth results in a backlog
of installation projects, our installation capacity may be outpaced by the growth of such backlog. An increase in backlog creates higher
costs incurred in the period relative to completed installations. If we fail to appropriately manage our backlog in relation to the rate
at which we install, it could adversely affect our financial performance and hinder our ability to compete effectively.

 Our current and planned operations, personnel,
systems and procedures might also be inadequate to support our future growth and may require us to make additional unanticipated investment
in our infrastructure, including additional costs for the expansion of our employee base and our subcontractors as well as marketing and
branding costs. Our success and ability to further scale our business will depend, in part, on our ability to manage these changes in
a cost-effective and efficient manner. If we cannot manage our growth, we may be unable to take advantage of market opportunities,
execute our business strategies or respond to competitive pressures. This could also result in declines in quality or customer satisfaction,
increased costs, difficulties in introducing new solar service offerings or other operational difficulties. Any failure to effectively
manage growth could adversely impact our business, operating results, financial condition and reputation.

 The execution of our growth strategy is
dependent upon the continued availability of third-party financing arrangements for our customers' purchases and is affected by
general economic conditions and other factors.

 Our growth strategy depends on third-party financing
arrangements for our customers' purchases. Most purchasers of our systems have entered into such third-party arrangements to
finance their systems over an extended period of time.

 Credit markets are unpredictable, and if they
become more challenging, customers may be unable or unwilling to finance the cost of our products or the parties that have historically
provided this financing may cease to do so, or only do so on terms that are substantially less favorable for our customers, either of
which could materially and adversely affect our revenue and growth. In addition, a rise in interest rates would likely increase our customers'
cost of financing our products and could reduce their profits and expected returns on investment in our products. The general reduction
in available credit to would-be borrowers or lessees, worldwide economic uncertainty, and the condition of worldwide housing markets
could delay or reduce our sales of products to new homebuilders and authorized resellers.

 The cost of maintenance or repair of solar
energy systems or energy storage systems throughout the period for which we have offered warranties may be higher than projected today
and adversely affect our financial performance and valuation.

 Prior to 2023, we generally provided a 25-year workmanship
warranty and 25-year roof penetration warranty to customers. Beginning in 2023, we generally provide a 10-year workmanship warranty
and a roof penetration warranty of at least five and up to twenty-five years. For the first two years of the workmanship warranty,
we cover all costs to repair failures covered by the warranty. After two years, the customer is responsible for certain "truck
roll" or service fees, but we otherwise cover the costs of repair. For leases, we provide a twenty five-year limited workmanship
warranty and cover all costs for repairs performed under such warranty.

 If a solar system or energy storage system fails
or malfunctions during the period for which we have offered our workmanship warranty and the failure is covered by such warranty, or if
roof damage is covered by the roof penetration warranty, we will incur expenses for maintenance or repair. While our subcontractors provide
warranties as to their workmanship, in the event such warranty providers file for bankruptcy, cease operations or otherwise become unable
or unwilling to fulfill their warranty obligations, we may not be adequately protected by such warranty obligations. Even if such warranty
providers fulfill their obligations, the warranty obligations may not be sufficient to protect us against all of our losses.

 Furthermore, it is difficult to predict how future
environmental regulations may affect the costs associated with the repair, removal, disposal or recycling of our solar energy systems.
This could materially impair our future operating results.

 Problems with product quality or performance
may lower the residual value of our solar energy systems and may damage our market reputation and cause our financial results to decline.

 Because of our limited operating history and the
length of the term of our warranties, we have been required to make assumptions and apply judgments regarding a number of factors, including
our anticipated rate of warranty claims and the durability, performance and reliability of our solar energy systems. Any widespread product
failures or operating deficiencies may damage our market reputation and adversely impact our financial results.

 Warranties provided by the manufacturers
of equipment we sell or service may be limited by the ability of a supplier and manufacturer to satisfy its warranty or performance obligations
or by the expiration of applicable time or liability limits, which could reduce or void the warranty protections of our customers and
increase costs to customers for the systems we offer.

 Manufacturers of the equipment we sell currently
provide a manufacturer's warranty for 25 years. If there is a covered failure of equipment, the manufacturer will pay for replacement
or repair. These warranties are subject to liability and other limits. If a customer seeks warranty protection and a warranty provider
is unable or unwilling to perform its warranty obligations, whether as a result of its financial condition or otherwise, or if the term
of the warranty obligation has expired or a liability limit has been reached, there may be a reduction or loss of protection for the affected
assets and an increase in costs to the customer. Any widespread product failures or operating deficiencies may damage our market reputation
and adversely impact our financial results.

 Product liability claims against us or accidents
could result in adverse publicity and potentially significant monetary damages.

 It is possible the solar energy systems, energy
storage systems or other current or anticipated products or systems we sell could injure our customers or other third parties or those
systems or products could cause property damage as a result of product malfunctions, defects, improper installation, fire or other causes.
We rely on third-party manufacturing warranties and our general liability insurance to cover product liability claims and have not
obtained separate product liability insurance. Our solar energy systems, energy storage systems and other products or their components
could be subject to recalls either due to production defects or malfunctions. Any product liability claim we face could be expensive to
defend and may divert management's attention. The successful assertion of product liability claims against us could result in potentially
significant monetary damages, potential increases in insurance expenses, penalties or fines, subject us to adverse publicity, damage our
reputation and competitive position and adversely affect sales of solar energy systems or energy storage systems. In addition, product
liability claims, injuries, defects or other problems experienced by other companies in the solar industry could lead to unfavorable market
conditions to the industry as a whole and may have an adverse effect on our ability to expand our portfolio of solar energy systems and
energy storage systems, thus affecting our business, financial condition and results of operations.

 Technical and regulatory limitations regarding
the interconnection of solar energy systems to the electrical grid may significantly delay interconnections and customer in-service dates,
harming our growth rate and customer satisfaction.

 Technical and regulatory limitations regarding
the interconnection of solar energy systems to the electrical grid may curb or slow our growth in key markets. Utilitie s throughout
the country follow different rules and regulations regarding interconnection and regulators or utilities have or could cap or limit the
amount of solar energy that can be interconnected to the grid. Our solar energy systems generally do not provide power to a customer's
site until they are interconnected to the grid.

 With regard to interconnection limits, the Federal
Energy Regulatory Commission (" FERC "), in promulgating the first form of small generator interconnection procedures,
recommended limiting customer-sited intermittent generation resources, such as our solar energy systems, to a certain percentage
of peak load on a given electrical feeder circuit. Similar limits have been adopted by many states as a de facto standard and could constrain
our ability to market to customers in certain geographic areas where the concentration of solar installations exceeds this limit.

 Furthermore, in certain areas, we benefit from
policies that allow for expedited or simplified procedures related to connecting solar energy systems and energy storage systems to the
electrical grid. We also are required to obtain interconnection permission for each solar energy system from the local utility. In many
states and territories, by statute, regulations or administrative order, there are standardized procedures for interconnecting distributed
solar energy systems and related energy storage systems to the electric utility's local distribution system. However, approval from
the local utility could be delayed as a result of a backlog of requests for interconnection or the local utility could seek to limit the
number of customer interconnections or the amount of solar energy on the grid. If expedited or simplified interconnection procedures are
changed or cease to be available, if interconnection approvals from the local utility are delayed or if the local utility seeks to limit
interconnections, this could decrease the attractiveness of new solar energy systems and energy storage systems to distributed solar power
companies, including us, and the attractiveness of solar energy systems and energy storage systems to customers. Delays in interconnections
could also harm our growth rate and customer satisfaction scores. Such limitations or delays could also adversely impact our access to
capital and reduce our willingness to pursue solar energy systems and energy storage systems due to higher operating costs. Such limitations
would negatively impact our business, results of operations, future growth and cash flows.

 As adoption of solar distributed generation rises,
along with the increased operation of utility-scale solar generation, the amount of solar energy being contributed to the electrical
grid may surpass the capacity anticipated to be needed to meet aggregate demand. If solar generation resources reach a level capable of
producing an over-generation situation, some existing solar generation resources may have to be curtailed to maintain operation of
the electrical grid. In the event such an over-generation situation were to occur, this could also result in a prohibition on the
installation of new solar generation resources. The adverse effects of such a curtailment or prohibition without compensation could adversely
impact our business, results of operations, future growth and cash flows.

 Our headquarters and other facilities, the
facilities of certain subcontractors and suppliers, and our customers are concentrated in certain regions, putting us at risk of region-specific
disruptions, including hurricanes or other extreme weather events.

 For the twelve months ended December 31, 2024,
approximately 53% of our sales were made in Florida, and for the twelve months ended December 31, 2023, approximately 92% of our
sales were made in Florida. This concentration of our customer base and operational infrastructure could lead to our business and results
of operations being particularly susceptible to adverse economic, regulatory, political, weather and other conditions in this market and
in other markets that may become similarly concentrated.

 In Florida, we maintain offices for operations
personnel and warehouses, and we have warehouses in Texas and Ohio, and warehouse, sales, marketing, and executive offices in Utah. Any
significant epidemic, hurricane, earthquake, flood, fire, or other natural disaster in these areas or in countries where our suppliers
or the manufacturers of the products we sell are located could materially disrupt our operations, result in damage or destruction of all
or a portion of our facilities or result in our experiencing a significant delay in delivery, or substantial shortage, of our products
and services.

 We may not have adequate insurance, including
business interruption insurance, to compensate us for losses that may occur from any such significant events. A significant natural disaster
such as a hurricane, a public health crisis such as a pandemic, or civil unrest could have a material adverse impact on our business,
results of operations and financial condition. In addition, acts of terrorism or malicious computer viruses could cause disruptions in
our or our subcontractors' and suppliers' businesses or the economy as a whole. To the extent that these disruptions result
in delays or cancellations of installations or the deployment of our solar service offerings, our business, results of operations and
financial condition would be adversely affected.

 Expansion into new sales channels could
be costly and time-consuming. As we enter new channels, we could be at a disadvantage relative to other companies who have more history
in these spaces.

 If we expand into new sales channels, such as
direct-to-home, homebuilder, retail, and e-commerce channels, or adapt to a remote selling model, we may incur significant costs.
In addition, we may not initially or ever be successful in utilizing these new channels. Furthermore, we may not be able to compete successfully
with companies with a historical presence in such channels, and we may not realize the anticipated benefits of entering such channels,
including efficiently increasing our customer base and ultimately reducing costs. Entering new channels also poses the risk of conflicts
between sales channels. If we are unable to successfully compete in new channels, our operating results and growth prospects could be
adversely affected.

 Obtaining a sales contract with a potential
customer does not guarantee that the potential customer will not decide to cancel or that we will not need to cancel due to a failed inspection,
which could cause us to generate no revenue despite incurring costs and adversely affect our results of operations.

 Even after we secure a sales contract with a potential
customer, we (either directly or through our subcontractors) must perform an inspection to ensure the home, including the rooftop, meets
our standards and specifications. If the inspection finds repairs to the rooftop are required in order to satisfy our standards and specifications
to install the solar energy system, and a potential customer does not want to make such required repairs, we would lose that anticipated
sale. In addition, per the terms of our customer agreements, a customer maintains the ability to cancel for a limited time after execution
of the agreement, and in some other circumstances subject to specified conditions. An accumulation of delays or cancellations of anticipated
sales could materially and adversely affect our financial results, as we may have incurred sales-related, design-related, and other expenses
and generated no revenue.

 We may not realize the anticipated benefits
of past or future investments, strategic transactions, or acquisitions, and integration of these acquisitions may disrupt our business
and management.

 We have in the past and may in the future acquire
one or more companies, project pipelines, projects, SRECs, products, or technologies or enter into joint ventures or other
strategic transactions. We may not realize the anticipated benefits of past or future investments, strategic transactions, or acquisitions,
and these transactions involve numerous risks that are not within our control. These risks include the following, among others:

 failure to satisfy the required conditions and otherwise
complete a planned acquisition, joint venture or other strategic transaction on a timely basis or at all;

 legal or regulatory proceedings, if any, relating to a planned
acquisition, joint venture or other strategic transaction and the outcome of such legal proceedings;

 difficulty in assimilating the operations, systems, and personnel
of the acquired company;

 difficulty in effectively integrating the acquired technologies
or products with our current products and technologies;

 difficulty in maintaining controls, procedures and policies
during the transition and integration;

 disruption of our ongoing business and distraction of our
management and employees from other opportunities and challenges due to integration issues;

 difficulty integrating the acquired company's accounting,
management information and other administrative systems;

 inability to retain key technical and managerial personnel
of the acquired business;

 inability to retain key customers, vendors and other business
partners of the acquired business;

 inability to achieve the financial and strategic goals for
the acquired and combined businesses;

 incurring acquisition-related costs or amortization
costs for acquired intangible assets that could impact our results of operations;

 significant post-acquisition investments that may lower
the actual benefits realized through the acquisition;

 potential failure of the due diligence processes to identify
significant issues with product quality, legal, and financial liabilities, among other things;

 moderating and anticipating the impacts of inherent or emerging
seasonality in acquired customer agreements;

 potential inability to assert that internal controls over
financial reporting are effective; and

 potential inability to obtain, or obtain in a timely manner,
approvals from governmental authorities, which could delay or prevent such acquisitions.

 Our failure to address these risks, or other problems
encountered in connection with our past or future investments, strategic transactions, or acquisitions, could cause us to fail to realize
the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities, and harm our business generally.
Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities,
amortization expenses, incremental expenses or the write-off of goodwill, any of which could harm our financial condition or results
of operations.

 Mergers and acquisitions are inherently risky,
may not produce the anticipated benefits and could adversely affect our business, financial condition or results of operations.

 Disruptions to solar production metering
and energy storage solutions could negatively impact customer experiences, which could damage our market reputation and adversely impact
our financial results.

 Our customers' ability to monitor solar
energy production for various purposes depends on the operation of the metering solution. For example, some meters and/or inverters operate
on either the 3G or 4G cellular data networks, which are expected to sunset in the near future, and newer technologies we use today may
also become obsolete. Disruptions to solar production metering and energy storage solutions could negatively impact customer experiences,
which could damage our market reputation and adversely impact our financial results.

 Our business may be harmed if we fail to
properly protect our intellectual property, or if we are required to defend against claims or indemnify others against claims that we
infringe on the intellectual property rights of third parties.

 We believe that the success of our business depends
in part on our proprietary information, processes and know-how. We rely on copyright and trade secret protections to secure our intellectual
property. We also typically require employees, consultants, and third parties, such as our vendors and customers, with access to our proprietary
information to execute confidentiality agreements. Although we may incur substantial costs in protecting our intellectual property, we
cannot be certain that we have adequately protected or will be able to adequately protect it because, among other reasons:

 others may not be deterred from misappropriating our intellectual
property despite the existence of laws or contracts prohibiting such misappropriation and information security measures designed to deter
or prevent misappropriation of our intellectual property;

 we have not obtained intellectual property assignment agreements
from our founders or from a contract developer of certain software that we intend to use;

 foreign intellectual property laws and associated foreign
legal enforcement regimes may not adequately protect our intellectual property rights; and

 policing unauthorized use of our intellectual property may
be difficult, expensive, and time-consuming, the remedy obtained may be inadequate to restore protection of our intellectual property,
and moreover, we may be unable to determine the extent of any unauthorized use.

 In addition, we cannot be certain that our intellectual
property provides us with a competitive advantage. Despite our precautions, it may be possible for third parties to develop similar intellectual
property independently or obtain and use our intellectual property without our consent. Reverse engineering, unauthorized copying, or
other misappropriation of our intellectual property could enable third parties to benefit from our intellectual property without compensating
us for doing so. Unauthorized use of our intellectual property by third parties, any other inability to adequately protect our proprietary
rights, and the expenses incurred in protecting our intellectual property rights may adversely affect our business.

 In the future, we may also be required to defend
against claims that we have infringed on the intellectual property of third parties, and we cannot be certain that we will prevail in
any intellectual property dispute. Any future litigation required to enforce our intellectual property, to protect our trade secrets or
know-how or to defend us or indemnify others against claimed infringement of the rights of third parties could harm our business,
financial condition, and results of operations.

 We use "open source" software
components in our solutions as well as other licensed software, which may require that we release the source code of certain software
subject to open source licenses or subject us to possible litigation or other actions that could adversely affect our business.

 We utilize software that is licensed under so-called "open
source," "free" or other similar licenses, or that contain components that are licensed in such manner. Our use of open
source software may entail different or greater risks than use of third-party commercial software. Open source licensors sometimes
do not provide warranties or other contractual protections regarding infringement claims or the quality of the code, and open source software
is sometimes made available to the general public on an "as-is" basis under the terms of a non-negotiable license. In
addition, if we combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses,
be required to release the source code of our proprietary software to the public. We do not believe we have combined any of our proprietary
software with open source software in such a manner, but if that were to occur this would allow our competitors to create similar offerings
with lower development effort and time.

 We may also face claims alleging noncompliance
with open source license terms or other license terms, or infringement or misappropriation of proprietary software. These claims could
result in litigation, require us to purchase a costly license or require us to devote additional research and development resources to
change our software, any of which would have a negative effect on our business and results of operations. Few courts have interpreted
open source licenses and these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our
ability to use our proprietary software. We cannot guarantee that we have incorporated or will incorporate open source or other software
in our software in a manner that will not subject us to liability or require us to release the source code of our proprietary software
to the public.

 Any security breach, unauthorized access
or disclosure, or theft of data, including personal information, we, our third party service providers, and suppliers gather, store, transmit,
and use, or other hacking, cyber-attack, phishing attack, and unauthorized intrusions into or through our systems or those of our third
party service providers, could harm our reputation, subject us to claims, litigation, financial harm, and have an adverse impact on our
business.

 In the ordinary course of business, we, our third
party providers upon which we rely and our suppliers receive, store, transmit and use data, including the personal information of customers,
such as names, addresses, email addresses, credit information and other housing and energy use information, as well as the personal information
of our employees. Unauthorized disclosure of such personal information, whether through a breach of our or our third party service providers'
and suppliers' systems by an unauthorized party, including, but not limited to hackers, threat actors, sophisticated nation-states,
nation-state-supported actors, personnel theft or misuse of information or otherwise, could harm our business. In addition, we, our
third party service providers upon which we rely and our suppliers may be subject to a variety of evolving threats, such as computer malware
(including as a result of advanced persistent threat intrusions), ransomware, malicious code (such as viruses or worms), social engineering
(including spear phishing and smishing attacks), telecommunications failures, natural disasters and extreme weather events, general hacking
and other similar threats. Cybersecurity incidents have become more prevalent. As of the date of this Report, we have not experienced
a material cybersecurity incident. However, cybersecurity incidents could occur on our systems and those of our third parties in the future.
Our team members who work remotely pose increased risks to our information technology systems and data, because many of them utilize less
secure network connections outside our premises.

 Inadvertent disclosure of confidential data, such
as personal information, or unauthorized access to this type of data in our possession by a third party, could result in future claims
or litigation arising from damages suffered by those affected, government enforcement actions (for example, investigations, fines, penalties,
audits and inspections), additional reporting requirements and/or oversight, indemnification obligations, reputational harm, interruptions
in our operations, financial loss and other similar harms. In addition, we could incur significant costs in complying with the multitude
of federal, state and local laws, and applicable independent security control frameworks, regarding the unauthorized disclosure of personal
information. Although to our knowledge we have not experienced a material information security breach, we cannot assure you that the systems
and processes we have to prevent or detect security breaches and protect the confidential information we receive, store, transmit and
use, will provide absolute security. Finally, any perceived or actual unauthorized disclosure of such information, unauthorized intrusion
or other cyberthreat could harm our reputation, substantially impair our ability to attract and retain customers, interrupt our operations
and have an adverse impact on our business.

 Our contracts may not contain limitations of liability,
and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities,
damages or claims related to our data privacy and security obligations.

 Terrorist attacks or cyberattacks against
centralized utilities could adversely affect our business.

 Assets owned by utilities such as substations
and related infrastructure have been physically attacked in the past and will likely be attacked in the future. These facilities are often
protected by limited security measures, such as perimeter fencing. Any such attacks may result in interruption to electricity flowing
on the grid and consequently interrupt service to our solar energy systems not combined with an energy storage system, which could adversely
affect our operations. Furthermore, cyberattacks, whether by individuals or nation states, against utility companies could severely disrupt
their business operations and result in loss of service to customers, which would adversely affect our operations.

 We may be subject to information technology
system failures or network disruptions that could damage our business operations, financial conditions or reputation.

 We may be subject to information technology system
failures and network disruptions. These may be caused by natural disasters, accidents, power disruptions, telecommunications failures,
acts of terrorism or war, computer viruses, physical or electronic break-ins, or similar events or disruptions. System redundancy may
be ineffective or inadequate, and our disaster recovery planning may not be sufficient for all eventualities. Such failures or disruptions
could result in delayed or cancelled orders. System failures and disruptions could also impede the manufacturing and shipping of products,
delivery of online services, transactions processing and financial reporting. Such system failures or network disruptions could damage
our business operations, financial conditions or reputation.

 Damage to our brand and reputation or failure
to expand our brand would harm our business and results of operations.

 We depend significantly on our brand and reputation
for high-quality solar service offerings, engineering and customer service to attract customers, contractors and dealers, and grow
our business. If we fail to continue to deliver our solar service offerings within the planned timelines, if our solar service offerings
do not perform as anticipated or if we damage any customers' properties or cancel projects, our brand and reputation could be significantly
impaired. We also depend greatly on referrals from customers for our growth. Therefore, our inability to meet or exceed customers'
expectations would harm our reputation and growth through referrals. We have at times focused particular attention on expeditiously growing
our direct sales force and our contractors, leading us in some instances to hire personnel or contractors who we may later determine do
not fit our company culture and standards.

 Given the sheer volume of interactions our sales
force, dealers and contractors have with customers and potential customers, it is also unavoidable that some interactions will be perceived
by customers and potential customers as less than satisfactory and result in complaints. If we cannot manage our hiring and training processes
to limit potential issues and maintain appropriate customer service levels, our brand and reputation may be harmed and our ability to
grow our business would suffer. In addition, if we were unable to achieve a similar level of brand recognition as our competitors, some
of which may have a broader brand footprint, more resources and longer operational history, we could lose recognition in the marketplace
among prospective customers, suppliers and subcontractors, which could affect our growth and financial performance. Our growth strategy
involves marketing and branding initiatives that will involve incurring significant expenses in advance of corresponding revenue. We cannot
assure you that such marketing and branding expenses will result in the successful expansion of our brand recognition or increase our
revenue. We are also subject to marketing and advertising regulations in various jurisdictions, and overly restrictive conditions on our
marketing and advertising activities may inhibit the sales of the affected products.

 The loss of one or more members of our senior
management or key personnel may adversely affect our operations.

 We depend on our experienced management team,
and the loss of one or more key executives could have a negative impact on our business. With any change in leadership, there is a risk
to organizational effectiveness and employee retention as well as the potential for disruption to our business. We may be unable to replace
key members of our management team and key personnel in the event we lose their services. Integrating new personnel into our management
team could prove disruptive to our operations, require substantial resources and management attention and ultimately prove unsuccessful.
An inability to attract and retain sufficient managerial personnel who have critical industry experience and relationships could limit
or delay our strategic efforts, which could have a material adverse effect on our business, financial condition and results of operations.

 A failure to hire and retain a sufficient
number of employees and service providers in key functions would constrain our growth and our ability to timely complete customers'
projects and successfully manage customer accounts.

 To support our growth, we need to hire, train,
deploy, manage and retain a substantial number of skilled employees, engineers, design techs, installers, electricians, operations and
sales managers and sales personnel.

 Competition for qualified personnel in our industry
is increasing, particularly for skilled personnel involved in the installation of solar energy systems. We have in the past been, and
may in the future be, unable to attract or retain qualified and skilled installation personnel or installation companies to be our subcontractors,
which would have an adverse effect on our business. We and our subcontractors also compete with the homebuilding and construction industries
for skilled labor. As these industries grow and seek to hire additional workers, our cost of labor may increase. The unionization of the
industry's labor force could also increase our labor costs. Shortages of skilled labor could significantly delay a project or otherwise
increase our costs. Because our profit on a particular installation is based in part on assumptions as to the cost of such project, cost
overruns, delays or other execution issues may cause us to not achieve our expected margins or cover our costs for that project. Further,
we need to continue to expand upon the training of our customer service team to provide high-end account management and service to customers
before, during and following the point of installation of our solar energy systems. Identifying and recruiting qualified personnel and
training them requires significant time, expense and attention. It can take several months before a new customer service team member
is fully trained and productive at the standards that we have established. If we are unable to hire, develop and retain talented technical
and customer service personnel, we may not be able to realize the expected benefits of this investment or grow our business.

 In addition, to support the growth and success
of our direct-to-consumer channel, we need to recruit, retain and motivate a large number of sales personnel on a continuing basis.
We compete with many other companies for qualified sales personnel, and it could take many months before a new salesperson is fully
trained on our solar service offerings. If we are unable to hire, develop and retain qualified sales personnel or if they are unable to
achieve desired productivity levels, we may not be able to compete effectively.

 If we or our subcontractors cannot meet our hiring,
retention and efficiency goals, we may be unable to complete customers' projects on time or manage customer accounts in an acceptable
manner or at all. Any significant failures in this regard would materially impair our growth, reputation, business and financial results.
If we are required to pay higher compensation than we anticipate, these greater expenses may also adversely impact our financial results
and the growth of our business.

 Regulators may limit the type of electricians
qualified to install and service our solar and battery systems, or introduce other requirements on our installation staff, which may result
in workforce shortages, operational delays, and increased costs.

 Regulators may limit the type of electricians
qualified to install and service our solar and battery systems, such as requiring that electricians installing such systems have a certain
license, or introduce other requirements that would apply to our installation staff. While our workforce includes workers licensed to
install and service our solar and battery systems, if we are unable to hire, develop and retain sufficient certified electricians, we
may face operational delays and increased costs. In addition, our growth may be significantly constrained, which would negatively impact
our operating results.

 We have previously been subject to, and
we may in the future be subject to, regulatory inquiries and litigation, all of which are costly, distracting to our core business and
could result in an unfavorable outcome, or a material adverse effect on our business, financial condition, results of operations, or the
trading price of our securities.

 We have previously been subject to regulatory
inquiries and litigation, and in the future, we may be involved in legal proceedings and receive inquiries from government and regulatory
agencies from time to time. In the event that we are involved in significant disputes or are the subject of a formal action by a regulatory
agency, we could be exposed to costly and time-consuming legal proceedings that could result in any number of outcomes. Although
outcomes of such actions vary, any current or future claims or regulatory actions initiated by or against us, whether successful or not,
could result in significant costs, costly damage awards or settlement amounts, injunctive relief, increased costs of business, fines or
orders to change certain business practices, significant dedication of management time or diversion of significant operational resources,
or otherwise harm our business.

 If we are not successful in any legal proceedings
and litigation, we may be required to pay significant monetary damages, which could hurt our results of operations. Lawsuits are time-consuming and
expensive to resolve and divert management's time and attention. Although we carry general liability insurance, our insurance may
not cover potential claims or may not be adequate to indemnify us for all liability that may be imposed. We cannot predict how the courts
will rule in any potential lawsuit against us. Decisions in favor of parties that bring lawsuits against us could subject us to significant
liability for damages, adversely affect our results of operations and harm our reputation.

 If we are unsuccessful in selling new services
and products, our business, financial condition and results of operations could be adversely affected.

 In the future, we may offer new products or services.
There is a risk that such products or services may not work as intended, or that the marketing of the products or services may not be
as successful as anticipated. The sale of new products and services generally requires substantial investment. We intend to continue to
make substantial investments in new products and services, and it is possible that we may not acquire new products or product enhancements
that compete effectively within our target markets or differentiate our products based on functionality, performance or cost, and thus
our new products may not result in meaningful revenue. In addition, any delays in releasing new or enhanced products or services could
cause us to lose revenue opportunities and potential customers. Any technical flaws in product releases could diminish the innovative
impact of our products and have a negative effect on customer adoption and our reputation. If we fail to introduce new products or services
that meet the demands of our customers or target markets or do not achieve market acceptance, or if we fail to penetrate new markets,
our business, financial conditions and results of operations could be adversely affected.

 Our operating results and our ability to
grow may fluctuate on a seasonal basis and from quarter to quarter and year to year, which could make our future performance difficult
to predict and could cause our operating results for a particular period to fall below expectations.

 Our quarterly and annual operating results and
our ability to grow are difficult to predict and may fluctuate significantly in the future. Historically, our sales volume has been highest
during late spring, summer, and early fall. During this time, consumers in many locations see greater energy needs due to operating air
conditioning systems and warm-weather appliances such as swimming pool pumps. Our door-to-door sales efforts are also aided
during these months by increased daylight hours, and we have more sales personnel working during these months. We
typically have largely or entirely scaled down our sales efforts during the late fall, winter and early spring. Snow, cold weather or
other inclement weather can delay our installation of products and services.

 We have experienced seasonal and quarterly fluctuations
in the past and expect to experience such fluctuations in the future. In addition to the other risks described in this " Risk
Factors " section, the following factors could cause our operating results to fluctuate:

 expiration or initiation of any governmental rebates or incentives;

 significant fluctuations in customer demand for our solar
energy services, solar energy systems and energy storage systems;

 our subcontractors' ability to complete installations
in a timely manner;

 our and our subcontractors' ability to gain interconnection
permission for an installed solar energy system from the relevant utility;

 the availability, terms and costs of suitable financing;

 our ability to continue to expand our operations and the
amount and timing of expenditures related to this expansion;

 announcements by us or our competitors of significant acquisitions,
strategic partnerships, joint ventures or capital-raising activities or commitments;

 changes in our pricing policies or terms or those of our
competitors, including electric utilities;

 actual or anticipated developments in our competitors'
businesses, technology or the competitive landscape; and

 natural disasters or other weather or meteorological conditions.

 For these or other reasons, the results of any
prior quarterly or annual periods should not be relied upon as indications of our future performance.

 We may be unable to generate sufficient
cash flows or obtain access to external financing necessary to fund our operations and make adequate capital investments as planned due
to the general economic environment, cost inflation, and/or the market pressure driving down the average selling prices of our products
and services, among other factors.

 To acquire new products, support future growth,
achieve operating efficiencies and maintain product quality, we may need to make significant capital investments in product and process
technology as well as enhancing our digital capabilities. The delayed disposition of such projects, or the inability to realize the full
anticipated value of such projects on disposition, could have a negative impact on our liquidity.

 Certain municipalities where we install systems
also require performance bonds in cash, issued by an insurance company or bonding agency, or bank guarantees or letters of credit issued
by financial institutions, which are returned to us upon satisfaction of contractual requirements.

 We manage our working capital requirements and
fund our committed capital expenditures with our current cash and cash equivalents and cash generated from operations. If our capital
resources are insufficient to satisfy our liquidity requirements, we may seek to sell additional equity investments or debt securities
or obtain debt financing. Market conditions, however, could limit our ability to raise capital by issuing new equity or debt securities
on acceptable terms, or at all, and lenders may be unwilling to lend funds on acceptable terms, or at all. The sale of additional equity
investments may result in additional dilution to our equity holders. Debt financing would result in increased expenses and could impose
new restrictive covenants. Financing arrangements may not be available to us or may not be available in amounts or on terms acceptable
to us. If financing is not available, we may be forced to seek to sell assets or reduce or delay capital investments, any of which could
adversely affect our business, results of operations, cash flows, and financial condition.

 If we cannot generate sufficient cash flows, find
other sources of capital to fund our operations and projects, make adequate capital investments to remain technologically and price competitive,
or provide bonding or letters of credit required by our projects, we may need to sell additional equity investments or debt securities,
or obtain debt financings. If adequate funds from these or other sources are not available on acceptable terms or at all, our ability
to fund our operations, including making digital investments, develop and expand our distribution network, maintain our research and development
efforts, meet any debt service obligations we take on in the future or otherwise respond to competitive pressures would be significantly
impaired. Our inability to do any of the foregoing could have a material adverse effect on our business, results of operations, cash flows
and financial condition.

 Inflation could result in decreased value
from future contractual payments and higher expenses for labor and equipment, which, in turn, could adversely impact our reputation, business,
financial condition, cash flows and results of operations.

 Any future increase in inflation may adversely
affect our costs, including our subcontractors' cost of labor and equipment, and may result in a decrease in value in our future
contractual payments. These factors could adversely impact our reputation, business, financial condition, cash flows and results of operations.

 While we believe that inflationary pressures have
contributed to increased costs of labor and components that we purchase, we believe that the increased cost of these items were also due
to a combination of other factors, including supply chain constraints, increased demand for solar systems in the U.S. and Europe
and tariffs and trade regulations. We do not have information that allows us to quantify the specific amount of cost increases attributable
to inflationary pressures.

 Fluctuations in interest rates could adversely
affect our business and financial results.

 We are exposed to interest rate risk because many
of our customers depend on debt financing to purchase our solar power systems. An increase in interest rates could make it difficult for
our customers to obtain the financing necessary to purchase our solar power systems on favorable terms, or at all, and thus lower demand
for our solar power products, reduce revenue and adversely affect our results of operations and cash flow. An increase in interest rates
could lower a customer's return on investment in a system or make alternative investments more attractive relative to solar power
systems, which, in each case, could cause our customers to seek alternative investments that promise higher returns or demand higher returns
from our solar power systems, which could reduce our revenue and gross margin and adversely affect our financial results. While we believe
that increases in interest rates have led to higher financing costs for our customers, lower demand for our products and lower revenue
than we would have otherwise experienced, we do not have information that allows us to quantify the adverse effects attributable to increased
interest rates.

 We may incur additional debt in the future,
which could introduce debt servicing costs and risks to our business.

 We and our subsidiaries may incur additional debt
in the future, and such debt arrangements may restrict our ability to incur additional indebtedness, including secured indebtedness. These
restrictions could inhibit our ability to pursue our business strategies. Furthermore, there is no assurance that we will be able to enter
into debt instruments on acceptable terms or at all. If we were unable to satisfy financial covenants and other terms under new instruments,
or obtain waivers or forbearance from our lenders, or if we were unable to obtain refinancing or new financings for our working capital,
equipment, and other needs on acceptable terms if and when needed, our business would be adversely affected.

 So long as the Convertible OpCo Preferred
Units of OpCo remain outstanding, the Sponsor holds certain consent rights over OpCo's ability to incur indebtedness, which
could adversely affect the future business and operations of OpCo and Zeo, including by decreasing its business flexibility.

 The terms of the amended and restated limited
liability company agreement of OpCo (the " OpCo A&R LLC Agreement ") grant Sponsor certain consent rights
with respect to certain actions, including OpCo's incurrence of indebtedness for borrowed money, subject to certain enumerated exceptions,
so long as the Convertible OpCo Preferred Units remain outstanding. As a result, OpCo needs to obtain the prior written consent of
Sponsor before incurring any additional indebtedness (subject to the terms of OpCo A&R LLC Agreement). Because Sponsor has interests
that are different than, or in addition to and which may conflict with, the interests of OpCo and Zeo, there is no assurance that Sponsor
will consent to any proposed future incurrence of debt. Therefore, Sponsor has the ability to influence the outcome of certain matters
affecting OpCo and Zeo, and OpCo may be unable to raise additional debt financing to operate during general economic or business downturns,
take advantage of new business opportunities, and/or pursue its business strategies.

 We have suppliers that are based or manufacture
the products we sell outside the United States, which may subject us to additional business risks, including logistical complexity
and political instability.

 A portion of our supply agreements are with manufacturers
and equipment vendors located outside of the United States. Risks we face in conducting business internationally include:

 multiple, conflicting and changing laws and regulations relating
to employment, safety, environmental protection, international trade, and other government approvals, permits, and licenses and regulatory
requirements;

 financial risks, such as longer sales and payment cycles,
greater difficulty enforcing rights and remedies and capital controls or other restrictions on the transfer of funds;

 currency fluctuations, government-fixed foreign exchange
rates, the effects of currency hedging activity and the potential inability to hedge currency fluctuations;

 the effects of Russia's war against Ukraine and other
political and economic instability, including wars, acts of terrorism, political unrest, boycotts, curtailments of trade, nationalization
of assets, and other business restrictions;

 trade barriers such as import and export requirements or
restrictions, licensing requirements, tariffs, taxes and other restrictions and expenses for which we may have responsibility, which
could increase the prices of our products; and

 liabilities associated with compliance with laws (for example,
the Foreign Corrupt Practices Act in the United States and similar laws outside of the United States).

 the effects of Russia's war on Ukraine, which, while
we believe Russia's war on Ukraine has contributed to price increases for components that we purchase, we believe that the increases
to the cost of our components were also due to a combination of other factors, including supply chain constraints, increased demand for
solar systems in the U.S. and Europe, tariffs and trade regulations, rising inflation, and higher labor, material, and shipping
costs. We do not have information that allows us to quantify the specific amount of price increases attributable to Russia's war
on Ukraine and do not materially rely directly or indirectly on goods or services sources in Russia, Ukraine or Belarus or have any material
business relationships, connections to, or assets in, Russia, Belarus or Ukraine.

 We must work with our suppliers to effectively
manage the flow of products in light of these risks. If we fail to do so, our available inventory may not correspond with product demand.
If we are unable to successfully manage any such risks, any one or more could materially and adversely affect our business, results of
operations, cash flows and financial condition.

 We are currently dependent on third-party
leasing companies to offer customers the option of leasing our solar energy systems.

 During 2024, the majority of our customers who
entered into leasing agreements have done so with third-party leasing companies Palmetto Solar, LLC d/b/a LightReach, Sunnova Energy
Corporation ("Sunnova"), or third party leasing companies established and managed by White Horse Energy. Thus far, such companies
have had sufficient assets to finance the purchase of systems for each of our customers who have signed agreements for leased solar energy
systems to be installed on their home and for whom the installation processes have been completed. However, no assurance can be given
that this will continue, and if such companies decide not to continue to provide financing for leases due to general market conditions,
changes in tax benefits associated with our solar systems, concerns about their or our business or prospects, or any other reason, or
if they materially change the terms under which they are willing to pay us to install and service leased solar energy systems, and we
cannot timely replace them, this could have an adverse effect on our business, financial condition and results of operations. Additionally,
such companies may fail to pay or delay the payment of amounts owed to us for several reasons, including financial difficulties resulting
from macroeconomic conditions, and extended delays or defaults in payment could adversely affect our business, results of operations,
cash flows and financial condition. To mitigate the foregoing risks, we have identified additional leasing partners and are negotiating
business arrangements with them to increase the number of leasing parties we have the ability to work with.

 We intend to seek out additional third-party
investors to provide financing for customers wishing to lease their solar energy systems. However, no assurance can be given that we will
be able to successfully do so.

 System leases represented 8% of our installations
in 2023 and approximately 64% in the twelve months ended December 31, 2024. Approximately 44% of those leases are owned by Solar, and
if (i) Solar terminates their relationship with us, (ii) Solar does not have sufficient assets in the future to provide financing
for customers wishing to lease their solar energy systems, (iii) we cannot enter into new arrangements with other third-party investors
to provide financing for customers wishing to lease their solar energy systems, or (iv) we cannot maintain current or enter into new arrangements
with other third party leasing companies, we may be unable to continue to increase the size of our residential lease program, which could
have a material, adverse effect on our business, results of operations, cash flows, and financial condition in the future.

 We typically bear the cost of maintenance
and repair on solar energy systems we install that are owned and leased by third-party leasing companies.

 We are obligated through a maintenance services
agreement to provide maintenance and repair services for solar energy systems we install that are leased by third-party leasing companies
to homeowners. In the maintenance services agreement, we have agreed to maintain the leased systems for a fixed fee that is calculated
to cover our future expected maintenance costs. If our solar energy systems require an above-average amount of repairs or if the
cost of repairing systems were higher than our estimate, we may need to perform such services without additional compensation.

 Members of our management team have interests
in or are employed by other business ventures that may divert their attention from our business.

 Members of our management team presently have,
and may in the future have additional, ownership interests in, employment by and/or fiduciary or contractual obligations to other entities
with which they are affiliated with (such as Solar). Such other ventures and entities could divert the attention of our management from
our business or create conflicts of interests.

 Risks Related to Regulation and Policy

 Increases in the cost or reduction in supply
of solar energy system and energy storage system components due to tariffs or trade restrictions announced or imposed by the U.S. government
could have an adverse effect on our business, financial condition and results of operations.

 On April 2, 2025, the U.S. government introduced
a baseline tariff on nearly all goods imported into the U.S and higher tariffs on specific countries. For example, certain proposed tariffs
on goods imported from China and specific Southeast Asian countries that are sources of solar components have been announced at significant
percentage rates, although the application and final rates of these measures are being actively negotiated, remain subject to government
action, and may differ from initial proposals. Shortly after the initial announcement, the U.S. government announced a delay in applying
certain of these tariffs, while other measures, such as the baseline tariff and increased tariff on Chinese imports, remained in effect
or were implemented as initially announced or modified. As of the date of this Report, the tariff rates on imports from China have been
set at substantial levels, and rates for other countries remain subject to ongoing review and potential implementation. Less than 10%
of the solar components and equipment we purchase for the solar systems we install are manufactured in the United States. The new tariffs
are likely to result in price increases for domestic and imported solar panels, inverters, and related equipment. The tariffs may also
result in decreased availability and/or increased procurement time for solar system equipment. Measures retaliating to the new tariffs
have been announced by some countries, and other responses are likely.

 Going forward, the tariff environment and effects
on the supply chain are likely to remain in flux. As changes occur, we will continue to assess our procurement and pricing strategies.
The new tariffs, and continued volatility in trade policy may impact our gross margins and growth, due to factors such as increased procurement
and installation costs, profit margin compression or the need to pass increased costs to consumers, supply chain disruption, and competitive
disadvantages relative to market participants with more favorable supply arrangements.

 Trade policy may evolve further in ways that are
adverse to our business. As examples, if current tariffs are extended or increased, or if retaliatory actions or supply shortages arise,
our financial condition, results of operations, and future growth prospects could be materially and adversely affected. We continue to
monitor these developments closely and revise our pricing models and sourcing strategies in response. However, there can be no assurance
that such measures will be sufficient to mitigate the impact of the trade restrictions and their impacts on the supply chain and market
demand for our products.

 Additionally, China is a major producer of solar
cells (the main components of solar panels) and other solar products. Certain solar cells, panels, laminates and panels from China are
subject to various U.S. antidumping and countervailing duty rates, depending on the exporter supplying the product, imposed by the
U.S. government as a result of determinations that the U.S. was materially injured as a result of such imports being sold at
less than fair value and subsidized by the Chinese government. Historically, we and our subcontractors regularly surveyed the market to
identify multiple alternative locations for product manufacturers. Nonetheless, many of the solar products we purchase are from manufacturers
in China or from manufacturers in other jurisdictions who rely, in part, on products sourced in China. If alternative sources are not
available on competitive terms in the future, we and our subcontractors may be required to purchase these products from manufacturers
in China. In addition, tariffs on solar cells, panels and inverters in China may put upward pressure on prices of these products in other
jurisdictions from which we or our subcontractors currently purchase equipment, which could reduce our ability to offer competitive pricing
to potential customers.

 The antidumping and countervailing duties discussed
above are subject to annual review and may be increased or decreased. Furthermore, under Section 301 of the Trade Act of 1974,
the Office of the United States Trade Representative (" USTR ") imposed tariffs on $200 billion worth
of imports from China, including inverters and certain AC panels and non-lithium-ion batteries, effective September 24, 2018.
In May 2019, the tariffs were increased from 10% to 25% and may be raised by the USTR in the future. Since these tariffs impact the
purchase price of the solar products, these tariffs raise the cost associated with purchasing these solar products from China and reduce
the competitive pressure on providers of solar cells not subject to these tariffs.

 In August 2021, an anonymous trade group
filed a petition with the U.S. Department of Commerce (the " Department of Commerce ") requesting an investigation
into whether solar panels and cells imported from Malaysia, Thailand and Vietnam are circumventing anti-dumping and countervailing
duties imposed on solar products manufactured in China. The group also requested the imposition of tariffs on such imports ranging from
50% – 250%. In November 2021, the Department of Commerce rejected the petition, citing the petitioners' ongoing
anonymity as one of the reasons for its decision. In March 2022, the Department of Commerce announced it is initiating country-wide circumvention
inquiries to determine whether imports of solar cell and panels produced in Cambodia, Malaysia, Thailand and Vietnam that use components
from China are circumventing anti-dumping and countervailing duty orders on solar cells and panels from China. The Department of
Commerce's inquiries were initiated pursuant to a petition filed by Auxin Solar, Inc. on February 8, 2022.

 While the investigation remains ongoing, in December 2022,
the Department of Commerce announced its preliminary determination in the investigation. In its determination, the Department of Commerce
found that certain Chinese solar manufacturers circumvented U.S. import duties by routing some of their operations through Cambodia,
Malaysia, Thailand and Vietnam. Given the Department of Commerce preliminarily found that circumvention was occurring through each of
the four Southeast Asian countries, the Department of Commerce made a "country-wide" circumvention finding, which designates
each country as one through which solar cells and panels are being circumvented from China. However, companies in these countries will
be permitted to certify they are not circumventing the U.S. import duties, in which case the circumvention findings may not apply.
The Department of Commerce will take a number of additional steps before issuing a final determination. In particular, the Department
of Commerce will conduct in-person audits to verify the information that was the basis of its preliminary determination. Furthermore,
the Department of Commerce will gather public comments on the preliminary determination to consider before issuing its final determination.
Notably, however, on June 6, 2022, the President of the United States issued an emergency declaration establishing a tariff
exemption of two years for solar panels and cells imported from Cambodia, Malaysia, Thailand and Vietnam, delaying the possibility
of the imposition of dumping duties until the end of such two-year period. In September 2022, the Department of Commerce issued
its final rule effectuating the two-year exemption period, and new dumping duties will not be imposed on solar panels and cells imported
from Cambodia, Malaysia, Thailand and Vietnam until the earlier of two years after the date of the emergency declaration or when
the emergency is terminated. Tariffs may be reinstated following the exemption period, but imports of solar cells and panels will not
be subject to retroactive tariffs during the exemption period. The addition of new dumping duties would significantly disrupt the supply
of solar cells and panels to customers in the U.S., as a large percentage of solar cells and panels used in the U.S. are imported
from Cambodia, Malaysia, Thailand and Vietnam. If imposed, these or similar tariffs could put upward pressure on prices of these solar
products, which could reduce our ability to offer competitive pricing to potential customers.

 In addition, in December 2021, the U.S. International
Trade Commission recommended the President extend tariffs initially imposed in 2018 on imported crystalline silicon PV cells and panels
for another four years, until 2026. Under Presidential Proclamation 10339, published in February 2022, former President Biden
extended the tariff beyond the scheduled expiration date of February 6, 2022, with an initial tariff of 14.75%, which will gradually
be reduced to 14% by the eighth year of the measure. Since such actions increase the cost of imported solar products, to the extent we
or our subcontractors use imported solar products or domestic producers are able to raise their prices for their solar products, the overall
cost of the solar energy systems will increase, which could inhibit our ability to offer competitive pricing in certain markets.

 Additionally, the U.S. government has imposed
various trade restrictions on Chinese entities determined to be acting contrary to U.S. foreign policy and national security interests.
For example, the Department of Commerce's Bureau of Industry and Security has added a number of Chinese entities to its entity list
for enabling human rights abuses in the XUAR or for procuring U.S. technology to advance China's military modernization efforts,
thereby imposing severe trade restrictions against these designated entities. Moreover, in June 2021, U.S. Customs and Border
Protection issued a Withhold Release Order pursuant to Section 307 of the Tariff Act of 1930 excluding the entry into U.S. commerce
of silica-based products (such as polysilicon) manufactured by Hoshine Silicon Industry Co. Ltd. (" Hoshine ")
and related companies, as well as goods made using those products, based on allegations related to Hoshine labor practices in the XUAR
to manufacture such products. Additionally, in December 2021, Congress passed the UFLPA, which, with limited exception, prohibits
the importation of all goods or articles mined or produced in whole or in part in the XUAR, or goods or articles mined or produced by
entities working with the XUAR government to recruit, transport or receive forced labor from the XUAR. To date, intensive examinations,
withhold release orders, and related governmental procedures have resulted in supply chain and operational delays throughout the industry.
Although we maintain policies and procedures designed to maintain compliance with applicable governmental laws and regulations, these
and other similar trade restrictions that may be imposed in the future may cause us to incur substantially higher compliance and due diligence
costs in connection with procurement and have the effect of restricting the global supply of, and raising prices for, polysilicon and
solar products, which could increase the overall cost of solar energy systems, reduce our ability to offer competitive pricing in certain
markets and adversely impact our business and results of operations. Further, any operational delays or other supply chain disruption
resulting from the human rights concerns or any of the supply chain risks articulated above, associated governmental responses, or a desire
to source products, components, or materials from other manufacturers or regions could result in shipping, sales and installation delays,
cancellations, penalty payments, or loss of revenue and market share, or may cause our key suppliers to seek to re-negotiate terms
and pricing with us, any of which could have a material adverse effect on our business, results of operations, cash flows, and financial
condition.

 Furthermore, AD and CVD petitions filed on April
24, 2024, against solar cell and module exporters from Cambodia, Malaysia, Thailand, and Vietnam led to the Department of Commerce's
final affirmative determination in April 2025. AD and CVD measures (typically, in the form of tariffs) are used to remedy the economic
advantage created by unfair foreign pricing and government subsidies. Importers must now post cash deposits at rates that differ markedly
by country and by exporter or producer, with non-cooperating parties facing particularly high rates. These duties may be stacked on top
of other existing tariffs. The Department of Commerce also upheld prior determinations that "critical circumstances" for certain
importers, potentially exposing shipments made prior to the preliminary determinations to retroactive duty collection. This demonstrates
that application of AD, CVD, and other trade measures can be complex, potentially involving the stacking of multiple tariff rates on single
imported products and applying liabilities retroactively. This uncertainty may trigger unplanned costs, tighten margins, and slow growth
for the company.

 While we believe the tariffs and trade regulations
described above have contributed to price increases for components that we purchase, we believe that these price increases are also due
to a combination of other factors, including supply chain constraints, increased demand for solar systems in the U.S. and Europe,
rising inflation, and higher labor, material, and shipping costs. We cannot predict what additional actions the U.S. may adopt with
respect to tariffs or other trade regulations or what actions may be taken by other countries in retaliation for such measures. The tariffs
described above, the adoption and expansion of trade restrictions, the occurrence of a trade war or other governmental action related
to tariffs, trade agreements or related policies have the potential to adversely impact our supply chain and access to equipment, our
costs and ability to economically serve certain markets. If additional measures are imposed or other negotiated outcomes occur, our ability
or the ability of our subcontractors to purchase these products on competitive terms or to access specialized technologies from other
countries could be further limited, which could adversely affect our business, financial condition and results of operations.

 Our business currently depends on the availability
of utility rebates, tax credits and other benefits, tax exemptions and exclusions, and other financial incentives on the federal, state,
and/or local levels. We may be adversely affected by changes in, and application of these laws or other incentives to us, and the expiration,
elimination or reduction of these benefits could adversely impact our business.

 Our business depends on government policies that
promote and support solar energy and enhance the economic viability of owning solar energy systems. U.S. federal, state and local
governmental bodies provide incentives to owners, distributors, installers and manufacturers of solar energy systems to promote solar
energy. These incentives include an investment tax credit and income tax credit offered by the federal government, as well as other tax
credits, rebates and SRECs associated with solar energy generation. We rely on these incentives to lower our cost of capital and to attract
investors, all of which enable us to lower the price we charge customers for our solar service offerings. These incentives have had a
significant impact on the development of solar energy, but they could change at any time, as further described below. These incentives
may also expire on a particular date, end when the allocated funding is exhausted, or be reduced, terminated or repealed without notice.
The financial value of certain incentives may also decrease over time.

 In December 2017, the Tax Cuts and Job Acts
of 2017 (the " Tax Act ") was enacted. As part of the Tax Act, the corporate income tax rate was reduced, and
there were other changes, including limiting or eliminating various other deductions, credits and tax preferences. The IRA implemented
a corporate alternative minimum tax of 15% of financial statement income (subject to certain adjustments) for companies that report over
$1 billion in profits to shareholders; similar to existing law, business credits (including solar energy credits) are limited to
75% of income in excess of $25,000 (with no limit against the first $25,000). We cannot predict whether and to what extent the U.S. corporate
income tax rate will change under the Trump administration. The U.S. Congress is constantly considering changes to the tax code.
Further limitations on, or elimination of, the tax benefits that support the financing of solar energy under current U.S. law could
significantly and adversely impact our business.

 The Trump administration is evaluating whether
to seek reductions in the amount of federal tax credits available under the IRA. If this occurs, or if the federal government introduces
other delays, reductions, or changes in policies that support the residential solar industry, including the tax credits available under
the IRA, this could have an adverse effect on our business. Additionally, the above-described changes in the government's trade
policy, and possible changes in tax policy have contributed to investor and consumer uncertainty, and could contribute to a higher interest
rate environment, which may further negatively impact our operations and financing costs. While it is difficult to predict specific outcomes
at this time, we expect a period of regulatory and policy uncertainty in the near term.

 Our business model also relies on multiple tax
exemptions offered at the state and local levels. For example, some states have property tax exemptions that exempt the value of solar
energy systems in determining values for calculation of local and state real and personal property taxes. State and local tax exemptions
can have sunset dates, triggers for loss of the exemption, and can be changed by state legislatures and other regulators, and if solar
energy systems were not exempt from such taxes, the property taxes payable by customers would be higher, which could offset any potential
savings our solar service offerings could offer. Similarly, if state or local legislatures or tax administrators impose property taxes
on third-party owners of solar energy systems, solar companies like us would be subject to higher costs.

 In general, we rely on certain state and local
tax exemptions that apply to the sale of equipment, sale of power, or both. These state and local tax exemptions can expire, can be changed
by state legislatures, or their application to us can be challenged by regulators, tax administrators, or court rulings. Any changes to,
or efforts to overturn, federal and state laws, regulations or policies that are supportive of solar energy generation or that remove
costs or other limitations on other types of energy generation that compete with solar energy projects could materially and adversely
affect our business.

 We rely on certain utility rate structures,
such as net metering, to offer competitive pricing to customers, and changes to those policies may significantly reduce demand for electricity
from our solar energy systems.

 As of December 31, 2024, a substantial majority
of states had adopted net metering policies, including Florida, Texas, Missouri, Ohio and Illinois. Net metering policies allow homeowners
to serve their own energy load using on-site generation while avoiding the full retail volumetric charge for electricity. Electricity
that is generated by a solar energy system and consumed on-site avoids a retail energy purchase from the applicable utility, and
excess electricity that is exported back to the electric grid generates a retail credit within a homeowner's monthly billing period.
At the end of the monthly billing period, if the homeowner has generated excess electricity within that month, the homeowner typically
carries forward a credit for any excess electricity to be offset against future utility energy purchases. At the end of an annual billing
period or calendar year, utilities either continue to carry forward a credit, or reconcile the homeowner's final annual or calendar
year bill using different rates (including zero credit) for the exported electricity.

 Utilities, their trade associations, and fossil
fuel interests in the country are currently challenging net metering policies, and seeking to eliminate them, cap them, reduce the value
of the credit provided to homeowners for excess generation, or impose charges on homeowners that have net metering.

 A few states have moved away from traditional
full retail net metering and instead values excess generation by customers' solar systems in various ways. For example, in 2017,
Nevada enacted legislation to restore net metering at a reduced credit and guarantee new customers the net metering rate in effect at
the time they applied for interconnection for 20 years. In 2016, the Arizona Corporation Commission replaced retail net metering
with a net-feed in tariff (a fixed export rate). Some states set limits on the total percentage of a utility's customers that
can adopt net metering or set a timeline to evaluate net metering successor tariffs. For example, South Carolina passed legislation in
2019 that required review of net metering after two years. In 2021, the South Carolina Public Service Commission approved a portion
of Duke Energy's proposal that maintains the net metering framework with time-of-use rates and rejected a proposal from Dominion
Energy to eliminate net metering altogether. In 2021 legislation, Illinois changed its net metering threshold from a percentage of customers
to full retail net metering offered to a date certain (December 31, 2024) with a directed successor tariff that includes values that
distributed resources provide to the distribution grid. New Jersey currently has no net metering cap; however, it has a threshold that
triggers commission review of its net metering policy. States we serve now or in the future may adopt similar policies or net metering
caps. If the net metering caps in these jurisdictions are reached without an extension of net metering policies, homeowners in those jurisdictions
will not have access to the economic value proposition net metering provides. Our ability to sell our solar service offerings may
be adversely impacted by the failure to extend existing limits to net metering or the elimination of currently existing net metering policies.
The failure to adopt a net metering policy where it currently is not in place would pose a barrier to entry in those states. On April 26,
2022, Florida Governor DeSantis vetoed legislation that would have established a threshold date and percentage trigger when retail net
metering would have faced declines in the immediate export rate.

 Additionally, the imposition of charges that only
or disproportionately impact homeowners that have solar energy systems, or the introduction of rate designs mentioned above, would adversely
impact our business. Because fixed charges cannot easily be avoided with the installation of an on-site battery, which can mitigate
or eliminate the negative impacts of net metering changes, these fixed charges have the potential to cause a more significant adverse
impact. In June of 2021, two of four commissioners of FERC, including its chairperson, issued a letter stating there was a "strong
case" such fixed charges in Alabama "may be violating the Commission's PURPA regulations, undermining the statute's
purpose of encouraging Qualifying Facilities," which is the Commission's term for on-site generation. Litigation regarding
the legality of these charges is ongoing in federal court. Most recently, on April 26, 2022, Florida Governor DeSantis vetoed legislation
that would have allowed investor-owned utilities to petition the Public Service Commission for the ability to add fixed charges on
solar customers. As part of the California Public Utilities Commission (" CPUC ") final decision on December 15,
2022, the CPUC rejected a solar specific fixed charge on solar customers.

 Electric utility policies, statutes, and
regulations and changes to such statutes or regulations may present technical, regulatory and economic barriers to the purchase and use
of our solar energy offerings that may significantly reduce demand for such offerings.

 Federal, state and local government policies,
statutes and regulations concerning electricity heavily influence the market for our solar energy offerings and are constantly evolving.
These statutes, regulations, and administrative rulings relate to electricity pricing, net metering, consumer protection, incentives,
taxation, competition with utilities and the interconnection of homeowner-owned and third party-owned solar energy systems to
the electrical grid. These policies, statutes and regulations are constantly evolving. Governments, often acting through state utility
or public service commissions, change and adopt different rates for residential customers on a regular basis and these changes can have
a negative impact on our ability to deliver savings, or energy bill management, to customers.

 In addition, many utilities, their trade associations,
and fossil fuel interests in the country, which have significantly greater economic, technical, operational, and political resources than
the residential solar industry, are currently challenging solar-related policies to reduce the competitiveness of residential solar
energy. Any adverse changes in solar-related policies could have a negative impact on our business and prospects.

 We are not currently regulated as a utility
under applicable laws, but we may be subject to regulation as a utility in the future or become subject to new federal and state regulations
for any additional solar service offerings we may introduce in the future.

 Most federal, state, and municipal laws do not
currently regulate us as a utility. As a result, we are not subject to the various regulatory requirements applicable to U.S. utilities.
However, any federal, state, local or other applicable regulations could place significant restrictions on our ability to operate our
business and execute our business plan by prohibiting or otherwise restricting our sale of electricity. These regulatory requirements
could include restricting our sale of electricity, as well as regulating the price of our solar service offerings. If we become subject
to the same regulatory authorities as utilities or if new regulatory bodies are established to oversee our business, our operating costs
could materially increase.

 Changes to the applicable laws and regulations
governing direct-to-home sales and marketing may limit or restrict our ability to effectively compete.

 We utilize a direct-to-home sales model as
a primary sales channel and are vulnerable to changes in laws and regulations related to direct sales and marketing that could impose
additional limitations on unsolicited residential sales calls and may impose additional restrictions such as adjustments to our marketing
materials and direct-selling processes, and new training for personnel. If additional laws and regulations affecting direct sales
and marketing are passed in the markets in which we operate, it would take time to train our sales professionals to comply with such laws,
and we may be exposed to fines or other penalties for violations of such laws. If we fail to compete effectively through our direct-selling efforts,
our financial condition, results of operations and growth prospects could be adversely affected.

 Any failure to comply with laws and regulations
relating to interactions by us or third parties (such as our dealers and subcontractors) with customers or with licensing requirements
applicable to our business could result in negative publicity, claims, investigations and litigation, and may adversely affect our financial
performance.

 Our business involves transactions with customers.
We and our subcontractors and dealers must comply with numerous federal, state and local laws and regulations that govern matters relating
to our interactions with customers, including those pertaining to privacy and data security, home improvement contracts, warranties and
direct-to-home solicitation, along with certain rules and regulations specific to the marketing and sale of residential solar products
and services. These laws and regulations are dynamic and subject to potentially differing interpretations, and various federal, state and
local legislative and regulatory bodies may expand current laws or regulations, or enact new laws and regulations, regarding these matters.
Changes in these laws or regulations or their interpretation could dramatically affect how we do business, acquire customers, and manage
and use information we collect from and about current and prospective customers and the costs associated therewith. We strive to comply
with all applicable laws and regulations relating to our interactions with customers. It is possible, however, that these requirements
may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or
our practices. Noncompliance with any such laws or regulations, or the perception that we or our subcontractors or dealers have violated
such laws or regulations or engaged in deceptive practices that could result in a violation, could also expose us to claims, proceedings,
litigation and investigations by private parties and regulatory authorities, as well as substantial fines and negative publicity, each
of which may materially and adversely affect our business. We have incurred, and will continue to incur, significant expenses to comply
with such laws and regulations, and increased regulation of matters relating to our interactions with customers could require us to modify
our operations and incur significant additional expenses, which could have an adverse effect on our business, financial condition, and
results of operations.

 Any investigations, actions, adoption or amendment
of regulations relating to the marketing of our products could divert management's attention from our business, require us to modify
our operations and incur significant additional expenses, which could have an adverse effect on our business, financial condition, and
results of operations or could reduce the number of our potential customers.

 We cannot ensure that our sales professionals
and other personnel will always comply with our standard practices and policies, as well as applicable laws and regulations. In any of
the numerous interactions between our sales professionals or other personnel and our customers or potential customers, our sales professionals
or other personnel may, without our knowledge and despite our efforts to effectively train them and enforce compliance, engage in conduct
that is or may be prohibited under our standard practices and policies and applicable laws and regulations. Any such non-compliance, or
the perception of non-compliance, may expose us to claims, proceedings, litigation, investigations or enforcement actions by private parties
or regulatory authorities, as well as substantial fines and negative publicity, each of which may materially and adversely affect our
business and reputation. We have incurred, and will continue to incur, significant expenses to comply with the laws, regulations and industry
standards that apply to us.

 In addition, our affiliations with third-party dealers
and subcontractors may subject us to alleged liability in connection with actual or alleged violations of law by such third parties, whether
or not actually attributable to us, which may expose us to significant damages and penalties, and we may incur substantial expenses in
defending against legal actions related to third parties, whether or not we are ultimately found liable.

 Compliance with environmental laws and regulations
can be expensive, and noncompliance with these laws and regulations may result in adverse publicity and potentially significant monetary
damages and fines.

 We are required to comply with all applicable
foreign, U.S. federal, state, and local laws and regulations regarding pollution control and protection of safety and the environment.
These laws and regulations may include obligations relating to the release, emissions or discharge of materials into the air, water and
ground, the generation, storage, handling, use, transportation and disposal of hazardous materials and wastes and the health and safety
of our employees and other persons. Under some statutes and regulations, a government agency, or other parties, may seek recovery and
response costs from owners or operators of property where releases of hazardous substances have occurred or are ongoing, even if the owner
or operator was not responsible for such release or otherwise at fault. We use solar energy system and energy storage components that
may contain toxic, volatile and otherwise hazardous substances in our operations. Any failure by us to control the use of, transport of,
or to restrict adequately the discharge of, hazardous substances could subject us to, among other matters, potentially significant monetary
damages and fines or liabilities or suspensions of our business operations. In addition, if more stringent laws and regulations are adopted
in the future, the costs of compliance with these new laws and regulations could be substantial. If we fail to comply with present or
future environmental laws and regulations, we may be required to pay substantial fines, suspend production or cease operations, or be
subjected to other sanctions. Private parties may also have the right to pursue legal actions to enforce compliance as well as to seek
damages for non-compliance with environmental laws and regulations or for personal injury or property damage.

 In addition, U.S. legislation includes disclosure
requirements regarding the use of "conflict" minerals mined from the Democratic Republic of Congo and adjoining countries
and procedures regarding a manufacturer's efforts to prevent the sourcing of such "conflict" minerals. We have incurred
and will incur additional costs to comply with the disclosure requirements, including costs related to determining the source of
any of the relevant minerals and metals used in our products. The implementation of these requirements could affect the sourcing and availability
of minerals used in the manufacture of solar products. As a result, there may only be a limited pool of suppliers who provide conflict-free minerals,
and we cannot be certain that we will be able to obtain products in sufficient quantities or at competitive prices. Since our supply chain
is complex, we have not been able to sufficiently verify, and in the future, we may not be able to sufficiently verify, the origins for
these conflict minerals used in our products. As a result, we may face reputational challenges with our customers and other stakeholders
if we are unable to sufficiently verify the origins for all conflict minerals used in our products.

 Compliance with health and safety laws and
regulations can be complex, and noncompliance with these laws and regulations may result in potentially significant monetary damages and
fines.

 We are subject to a number of federal and state
laws and regulations, including the federal Occupational Safety and Health Act and comparable state statues, establishing requirements
to protect the health and safety of workers. The OSHA hazard communication standard, the US EPA community right-to-know regulations
under Title III of the federal Superfund Amendment and Reauthorization Act, and comparable state statutes, require maintenance of
information about hazardous materials used or produced in operations and provision of this information to employees, state and local government
authorities, and citizens. Other OSHA standards regulate specific worker safety aspects of our operations. Substantial fines and penalties
can be imposed, and orders or injunctions limiting or prohibiting certain operations may be issued, in connection with any failure to
comply with these laws and regulations.

 Our business is subject to complex and evolving
U.S. and international privacy and data protection laws, rules, policies and other obligations. Many of these laws and regulations
are subject to change and uncertain interpretation and could result in claims, increased cost of operations or otherwise harm our business.

 Consumer personal privacy and data security have
become significant issues and the subject of rapidly evolving regulation. Furthermore, federal, state and local government bodies or agencies
have in the past adopted, and may in the future adopt, more laws and regulations affecting data privacy. For example, new California legislation
and regulations afford California consumers an array of new rights, including the right to be informed about what kinds of personal information
companies have collected and the purpose for the collection. Complying with such laws or regulations, including in connection with any
future expansion into new states (e.g., California), may significantly impact our business activities and require substantial compliance
costs that adversely affect our business, operating results, prospects and financial condition. To date, we have not experienced substantial
compliance costs in connection with fulfilling the requirements with any such laws or regulations. However, we cannot be certain that
compliance costs will not increase in the future with respect to such laws or regulations. Furthermore, if we expand to foreign markets
we will be subject to additional privacy and data protection laws, such as the General Data Protection Regulation in the European Union.

 We operate a call center that uses personal information
to conduct follow-up marketing calls to prospective customers of our solar energy systems. The out-going marketing calls we
make are subject to the Telephone Consumer Protection Act (" TCPA ") and any failure to comply with the TCPA could
result in significant fines and potential litigation from consumers.

 Any inability to adequately address privacy and
security concerns, even if unfounded, or comply with applicable privacy and data protection laws, regulations and policies, could result
in additional cost and liability to us, damage our reputation, inhibit sales and adversely affect our business. Furthermore, the costs
of compliance with, and other burdens imposed by, the laws, regulations and policies that are applicable to our business may limit the
use and adoption of, and reduce the overall demand for, our solutions. If we are not able to adjust to changing laws, regulations and
standards related to privacy or security, our business may be harmed.

 A change in our effective tax rate could
have a significant adverse impact on our business, and an adverse outcome resulting from examination of our income or other tax returns
could adversely affect our results.

 A number of factors may adversely affect our future
effective tax rates, such as the jurisdictions in which our profits are determined to be earned and taxed; changes in the valuation of
our deferred tax assets and liabilities; adjustments to estimated taxes upon finalization of various tax returns; adjustments to our interpretation
of transfer pricing standards; changes in available tax credits, grants and other incentives; changes in stock-based compensation expense; the
availability of loss or credit carryforwards to offset taxable income; changes in tax laws or the interpretation of such tax laws (for
example federal and state taxes); and changes in U.S. generally accepted accounting principles (" GAAP ").
A change in our effective tax rate due to any of these factors may adversely affect our future results from operations.

 Significant judgment is required to determine
the recognition and measurement attributes prescribed in the accounting guidance for uncertainty in income taxes. The accounting guidance
for uncertainty in income taxes applies to all income tax positions, including the potential recovery of previously paid taxes, which
if settled unfavorably could adversely affect our provision for income taxes. In addition, we are subject to examination of our income
tax returns by various tax authorities. We regularly assess the likelihood of adverse outcomes resulting from any examination to determine
the adequacy of our provision for income taxes. An adverse determination of an examination could have an adverse effect on our results
of operations and financial condition.

 Additionally, U.S. tax reform may lead to
further changes in (or departure from) these norms. As these and other tax laws and related regulations change, our results of operations,
cash flows, and financial condition could be materially impacted. Given the unpredictability of these possible changes and their potential
interdependency, it is very difficult to assess whether the overall effect of such potential tax changes would be cumulatively positive
or negative for our earnings and cash flow.

 Risks Related to Ownership of Zeo Securities

 There can be no assurance that we will be
able to comply with the continued listing standards of Nasdaq.

 Our continued eligibility for listing on Nasdaq
depends on our ability to comply with Nasdaq's continued listing requirements.

 On January 24, 2025, we received a letter from
the Listing Qualifications Staff of Nasdaq notifying us that we are not in compliance with periodic requirements for continued listing
set forth in Nasdaq Listing Rule 5250(c)(1) (the "Reporting Rule") because our Annual Report on Form 10-K for the
fiscal year ended December 31, 2024 was not filed with the Securities and Exchange Commission by the required due date of March 31, 2025.
The letter received from Nasdaq has no immediate effect on the listing or trading of our shares.

 Under Nasdaq rules, we have until Monday, June
16, 2025 to submit a plan to regain compliance with Nasdaq Listing Rules. If Nasdaq accepts our plan, Nasdaq may grant an exception until
Monday, October 13, 2025 to regain compliance with the Nasdaq Listing Rules.

 While the filing of this Report means that we
have regained compliance with the Nasdaq Listing Rules, we expect that we will not be able to remain in compliance as we anticipate that
our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 will not be filed by the required due date.

 If Nasdaq delists our common stock from trading
on its exchange for failure to meet the Reporting Rule or any other listing standards, we and our stockholders could face significant
material adverse consequences including:

 a limited availability of market quotations for our securities;

 a determination that our common stock is a "penny stock," which will require brokers trading in our common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock;

 a limited amount of analyst coverage; and

 a decreased ability to issue additional securities or obtain additional financing in the future.

 Sales of a substantial number of our securities
in the public market by our existing securityholders could cause the price of our shares of Class A Common Stock and Warrants to
fall.

 Pursuant to a resale registration statement, selling
securityholders can sell up to:

 4,000,004 outstanding shares of Class A Common Stock
issued to the Sponsor and certain former holders of ESGEN Class B ordinary shares, issued to such holders at an equity consideration
value of $10.00 per share;

 50,000 outstanding shares of Class A Common Stock issued
to Piper Sandler & Co. at an equity consideration value of $5.00 per share;

 1,838,430 shares of Class A Common Stock issuable
upon exchange of an equivalent number of Convertible OpCo Preferred Units and Class V Common Stock issued to the Sponsor pursuant
to the Sponsor Subscription Agreement at an equity consideration value of $10.00 per share;

 33,730,000 shares of Class A Common Stock issuable
upon exchange of an equivalent number of Exchangeable OpCo Units and Class V Common Stock issued to the Sellers pursuant to
the Business Combination Agreement at an equity consideration value of $10.00 per share; and

 500,000 shares of Class A Common Stock issuable to Sun
Managers, LLC upon potential forfeiture of an equivalent number of shares of Class A Common Stock previously issued to Sponsor and certain
former holders of ESGEN Class B ordinary shares at an equity consideration value of $10.00 per share.

 The Initial Shareholders have agreed not to transfer
an aggregate of 500,000 shares of Class A Common Stock until two years after the Closing (with such shares being forfeited
upon the occurrence of a Convertible OpCo Preferred Unit Optional Conversion or a Convertible OpCo Preferred Unit Redemption within two years
after Closing).

 The sale of all or a portion of these securities
could result in a significant decline in the public trading price of our securities. Despite such a decline in the public trading price,
some of the selling securityholders may still experience a positive rate of return on the securities they purchased due to the price at
which such selling securityholder initially purchased the securities. See " Risk Factors — Certain existing securityholders
purchased, or may purchase, securities in the Company at a price below the current trading price of such securities, and may experience
a positive rate of return based on the current trading price. Future investors in the Company may not experience a similar rate of return. "
below.

 In addition, sales of a substantial number of
our shares of Class A Common Stock and/or Warrants in the public market by the selling securityholders and/or by our other existing
securityholders, or the perception that those sales might occur, could depress the market price of our Class A Common Stock and Warrants
and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that
such sales may have on the prevailing market price of our Class A Common Stock and Warrants.

 Sales, or the perception of sales, of our
Class A Common Stock by us or our existing stockholders in the public market could cause the market price for our Class A Common
Stock to decline.

 The sale of substantial amounts of shares Class A
Common Stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of the Class A
Common Stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities
in the future at a time and at a price that we deem appropriate.

 Upon the expiration or waiver of the lock-up described
in the risk factor above, shares held by certain of our stockholders will be eligible for resale. As restrictions on resale end, the market
price of shares of Class A Common Stock could drop significantly if the holders of these shares sell them or are perceived by the
market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings
of our shares of common stock or other securities.

 In addition, the shares of our Class A Common
Stock reserved for future issuance under the 2024 Plan will become eligible for sale in the public market once those shares are issued,
subject to provisions relating to various vesting agreements, lock-up agreements and, in some cases, limitations on volume and manner
of sale by affiliates under Rule 144, as applicable. The number of shares reserved and available for future issuance under the 2024
Plan currently equals 3,074,400 shares of Class A Common Stock.

 We have filed a registration statement on Form S-8 under
the Securities Act to register shares of our Class A Common Stock or securities convertible into or exchangeable for shares
of our Class A Common Stock issued pursuant to our equity incentive plan. Such Form S-8 registration statement became automatically
become effective upon filing. Accordingly, shares issued under such registration statement will be available for sale in the open market.
The initial registration statement on Form S-8 covers 3,220,400 shares of Class A Common Stock.

 Certain existing securityholders purchased,
or may purchase, securities in the Company at a price below the current trading price of such securities, and may experience a positive
rate of return based on the current trading price. Future investors in the Company may not experience a similar rate of return.

 Certain stockholders in the Company, including
certain of the selling securityholders, acquired, or may acquire, shares of our Class A Common Stock or Warrants at prices below
the current trading price of our Class A Common Stock or Warrants, as applicable, and may experience a positive rate of return based
on the current trading price.

 For example, the Sponsor and the other Initial
Shareholders can earn a positive rate of return on their investment if the trading price of Class A Common Stock is approximately $2.04
or more per share. Public stockholders may not be able to experience the same positive rates of return on securities they purchase due
to the low price at which the Sponsor and the other Initial Shareholders purchased shares of our Class A Common Stock and Warrants.

 Our management team has limited experience
managing a public company, and regulatory compliance obligations may divert its attention from the day-to-day management of our businesses.

 Most of the individuals who now constitute our
management team have limited to no experience managing a publicly-traded company, interacting with public company investors and complying
with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage our
transition to being a public company subject to significant regulatory oversight and reporting obligations under federal securities
laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant
attention from our senior management and could divert their attention away from the day-to-day management of our businesses,
which could adversely affect our businesses. It is probable that we will be required to expand our employee base and hire additional employees
to support our operations as a public company, which would increase our operating costs in future periods.

 We incur significant costs as a result of
operating as a public company.

 We are subject to the reporting requirements of
the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Nasdaq
listing requirements and other applicable securities laws and regulations. The expenses incurred by public companies generally for reporting
and corporate governance purposes are greater than those for private companies. For example, the Exchange Act requires, among other
things, that we file annual, quarterly, and current reports with respect to our business, financial condition, and results of operations.
Compliance with these rules and regulations will increase our legal and financial compliance costs, and increase demand on our systems,
particularly after we are no longer an emerging growth company. In addition, as a public company, we may be subject to stockholder activism,
which can lead to additional substantial costs, distract management, and impact the manner in which we operate our business in ways we
cannot currently anticipate. As a result of disclosure of information in this Report and in filings required of a public company, our
business and financial condition will become more visible, which may result in threatened or actual litigation, including by competitors.
We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more difficult,
time-consuming, and costly, although we are currently unable to estimate these costs with any degree of certainty.

 We also expect that being a public company and
being subject to new rules and regulations will make it more expensive for us to obtain directors and officers liability insurance, and
we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These laws and regulations could
also make it more difficult for us to attract and retain qualified persons to serve on the Board, committees of the Board or as our executive
officers. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of Class A
Common Stock, fines, sanctions, and other regulatory action and potentially civil litigation. These factors may therefore strain our resources,
divert management's attention, and affect our ability to attract and retain qualified board members and executive officers.

 As a public reporting company, we are subject
to rules and regulations established from time to time by the SEC and Public Company Accounting Oversight Board regarding our internal
control over financial reporting. If we fail to establish and maintain effective internal control over financial reporting and disclosure
controls and procedures, we may not be able to accurately report our financial results or report them in a timely manner, which could
adversely affect our business.

 We are a public reporting company subject to the
rules and regulations established from time to time by the SEC and the Public Company Accounting Oversight Board. These rules and regulations
require, among other things, that we establish and periodically evaluate procedures with respect to our internal control over financial
reporting. Reporting obligations as a public company are likely to place a considerable strain on our financial and management systems,
processes, and controls, as well as on our personnel.

 As a public company, we are required to document
and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management
can certify as to the effectiveness of our internal control over financial reporting by the time our second annual report is filed with
the SEC and thereafter, which requires us to document and make significant changes to our internal control over financial reporting. As
a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010, as well as rules adopted, and to be adopted, by the SEC and Nasdaq, and other
applicable securities rules and regulations, which impose various requirements on public companies, including the establishment and maintenance
of effective disclosure and financial controls and changes in corporate governance practices. Our management and other personnel need
to devote a substantial amount of time to these public company requirements. Moreover, we expect these rules and regulations to substantially
increase our legal and financial compliance costs and to make some activities more time-consuming and costly. We may need to hire
additional legal, accounting and financial staff with appropriate public company experience and technical accounting knowledge and maintain
an internal audit function.

 Likewise, as a public company, we may lose our
status as an "emerging growth company," as defined in the JOBS Act, and become subject to the SEC's internal control
over financial reporting management and auditor attestation requirements in the year in which we are deemed to be a large accelerated
filer, which would occur once we are subject to Exchange Act reporting requirements for 12 months, have filed at least one SEC
annual report and the market value of our common equity held by non-affiliates equals or exceeds $700 million as of the end
of the prior fiscal year's second fiscal quarter. If we become subject to the SEC's internal control reporting and attestation
requirements, we might not be able to complete our evaluation, testing and any required remediation in a timely fashion. In addition,
our current controls and any new controls that we develop may become inadequate because of poor design and changes in our business, including
increased complexity resulting from any international expansion. Any failure to implement and maintain effective internal controls over
financial reporting could adversely affect the results of assessments by our independent registered public accounting firm and their attestation
reports.

 We are continuing to develop and refine our disclosure
controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will
file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information
required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial
officers. We are also continuing to improve our internal control over financial reporting, which includes hiring additional accounting
and financial personnel to implement such processes and controls. We expect to incur costs related to implementing an internal audit and
compliance function in the upcoming years to further improve our internal control environment.

 We have identified material weaknesses in
our internal controls over financial reporting. If we are unable to remediate these material weaknesses, if management identifies additional
material weaknesses in the future or if we otherwise fail to maintain effective internal controls over financial reporting, we may not
be able to accurately or timely report our financial position or results of operations, which may adversely affect our business and stock
price or cause our access to the capital markets to be impaired.

 We have identified material weaknesses in our
internal controls over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal controls
over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements
will not be prevented or detected on a timely basis. Specifically, a material weakness exists in the Company's internal control
over financial reporting related to ineffective controls over period end financial disclosure and reporting processes, including not timely
performing certain reconciliations and the completeness and accuracy of those reconciliations, and lack of effectiveness of controls over
accurate accounting and financial reporting and reviewing the underlying financial statement elements, and recording incorrect journal
entries that also did not have the sufficient review and approval.

 These control deficiencies could result in a misstatement
in our accounts or disclosures that would result in a material misstatement to our financial statements that would not be prevented or
detected. Accordingly, we determined that these control deficiencies constitute material weaknesses.

 We are in the early stages of designing and implementing
a plan to remediate the material weaknesses identified.

 Our plan includes the below:

 Designing and implementing a risk assessment process supporting
the identification of risks.

 Implementing systems and controls to enhance our review of
significant accounting transactions and other new technical accounting and financial reporting issues and preparing and reviewing accounting
memoranda addressing these issues.

 Improving our internal control policies and procedures to
specifically address controls around segregation of duties, cybersecurity, user access reviews, and changes in management.

 Implementing specific user access, segregation of duties
and change management controls within our financial reporting IT systems.

 Hiring additional experienced accounting, financial reporting
and internal control personnel and changing roles and responsibilities of our personnel as we transition to being a public company and
are required to comply with Section 404 of the Sarbanes-Oxley Act (" Section 404 "). We are in
the process of hiring additional resources and we are engaging with a third-party consulting firm to assist us with our formal internal
control plan and to provide accounting services related to complex accounting transactions.

 Implementing controls to enable an effective and timely review
of period-end close procedures.

 Implementing controls to enable an accurate and timely review
of accounting records that support our accounting processes and maintain documents for internal accounting reviews.

 Additionally, management has considered and reviewed
the errors which occurred in revenue and cost of goods sold cutoff, accounts payable, accrued liabilities, stock compensation, expense
classification, prepaid expenses, operating lease cash flow classification and finance lease arrangements. Management has determined that
controls are not designed effectively in these areas. To mitigate future misstatements in these areas management will implement the following
procedures at the end of each reporting period:

 1.
 Accounts Payable – Review the accounts payable with
the executive team to inquire about any invoices not sent to accounts payable.

 2.
 Accrued Liabilities – Review the accrued liabilities
detail with the executive team to determine if there are any expenses/liabilities for which the company should accrue an expense which
has not yet been recognized.

 3.
 Stock Compensation – Review with the CEO and legal counsel the
list of stock grants which have been made and ask if there have been any other grants made which should be included in the analysis.

 4.
 Classification of expenses – Review the expense classification
with the executive team to determine all expenses are properly classified.

 5.
 Classification of financing agreements – Review the
financing agreements with the executive team to determine proper classification of the agreements as debt or finance lease.

 6.
 Prepaid expenses – Review prepaid expenses with the
executive team to determine if all prepaid expenses have been properly recorded for future services to be rendered and subsequently amortized.

 7.
 Revenue and cost of goods sold cut off – Review revenue
and related cost of goods sold with executive team to determine if revenue and related cost of goods sold is properly recognized. We
cannot assure you that these measures will significantly improve or remediate the material weaknesses described above. The implementation
of these remediation measures is in the early stages and will require validation and testing of the design and operating effectiveness
of our internal controls over a sustained period of financial reporting cycles and, as a result, the timing of when we will be able to
fully remediate the material weaknesses is uncertain. If the steps we take do not remediate the material weaknesses in a timely manner,
there could be a reasonable possibility that these control deficiencies or others may result in a material misstatement of our annual
or interim financial statements that would not be prevented or detected on a timely basis. This, in turn, could jeopardize our ability
to comply with our reporting obligations, limit our ability to access the capital markets and adversely impact our stock price.

 We and our independent registered public accounting
firm were not required to perform an evaluation of our internal control over financial reporting as of December 31, 2024 in accordance
with the provisions of the Sarbanes-Oxley Act. Accordingly, we cannot assure you that we have identified all, or that we will not
in the future have additional, material weaknesses. Material weaknesses may still exist when we report on the effectiveness of our internal
control over financial reporting as required by reporting requirements under Section 404.

 Implementing any appropriate changes to our internal
controls may distract our officers and employees, entail substantial costs to modify our existing processes and take significant time
to complete. These changes may not, however, be effective in maintaining the adequacy of our internal controls, and any failure to maintain
that adequacy, or consequent inability to produce accurate financial statements on a timely basis, could increase our operating costs
and harm our business. In addition, investors' perceptions that our internal controls are inadequate or that we are unable to produce
accurate financial statements on a timely basis may harm our stock price and make it more difficult for us to effectively market and sell
our products and services to new and existing customers.

 However, if we identify future deficiencies in
our internal control over financial reporting or if we are unable to comply with the demands that are placed upon us as a public company,
including the requirements of Section 404 of the Sarbanes-Oxley Act, in a timely or effective manner, we may be unable to accurately
report our financial results, or report them within the timeframes required by the SEC. We also could become subject to sanctions
or investigations by the SEC or other regulatory authorities. In addition, if we are unable to assert that our internal control over financial
reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness
of our internal control over financial reporting when required, investors may lose confidence in the accuracy and completeness of our
financial reports, we may face restricted access to the capital markets and our stock price may be adversely affected.

 Our current controls and any new controls that
we develop may also become inadequate because of poor design or changes in our business, including increased complexity resulting from
any international expansion, and weaknesses in our disclosure controls and internal control over financial reporting may be discovered
in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement
could cause us to fail to meet our reporting obligations, result in a restatement of our financial statements for prior periods, undermine
investor confidence in us and adversely affect the trading price of our common stock. In addition, if we are unable to continue to meet
these requirements, we may not be able to remain listed on Nasdaq.

 Changing laws and regulations could create
uncertainty for Zeo regarding compliance matters and result in higher costs.

 Changing laws, regulations and standards relating
to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance
costs, and making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations and
may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding
compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest
resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative
expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities. We
cannot predict or estimate the amount or timing of additional costs it may incur to respond to these requirements. If our efforts to comply
with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related
to their application and practice, regulatory authorities may initiate legal proceedings against us, and our business may be adversely
affected.

 The rules and regulations applicable to
public companies make it more expensive for Zeo to obtain and maintain director and officer liability insurance, which could adversely
affect its ability to attract and retain qualified officers and directors.

 The rules and regulations applicable to public
companies make it more expensive for Zeo to obtain and maintain director and officer liability insurance, and Zeo may be required to accept
reduced coverage or incur substantially higher costs to obtain coverage. We cannot predict or estimate the amount or timing of additional
costs we may incur to respond to these requirements. The potential for increased personal liability could also make it more difficult
for Zeo to attract and retain qualified members of the Board, particularly to serve on its audit committee and compensation committee,
and qualified executive officers.

 An active, liquid market for Zeo's
securities may not develop, which would adversely affect the liquidity and price of Zeo's securities.

 The price of Zeo's securities
may vary significantly due to factors specific to Zeo as well as to general market or economic conditions. Furthermore, an
active, liquid trading market for Zeo's securities may never develop, or, if developed, it may not be sustained. You
may be unable to sell your securities without depressing the market price for the securities or at all unless an active, liquid market
can be established and sustained. An inactive trading market may also impair Zeo's ability to attract and motivate employees
through equity incentive awards and to acquire other companies, products or technologies by using shares of capital stock as consideration.

 The market price of the shares of Class A
Common Stock may decline.

 The market price of the shares of Class A
Common Stock may decline for a number of reasons, including if:

 investors react negatively to the prospects of Zeo's business;

 Zeo's business and prospects is not consistent
with the expectations of financial or industry analysts; or

 Zeo does not achieve the perceived benefits of the Business
Combination as rapidly or to the extent anticipated by financial or industry analysts.

 The price of Class A Common Stock may
change significantly, even if Zeo's business is doing well, and you could lose all or part of your investment as a result.

 The trading price of shares of Class A Common
Stock is likely to be volatile. The stock market recently has experienced extreme volatility. This volatility often has been unrelated
or disproportionate to the operating performance of particular companies. You may not be able to resell your shares of Class A Common
Stock at an attractive price due to a number of factors such as the following:

 results of operations that vary from the expectations of
securities analysts and investors;

 results of operations that vary from those of Zeo's
competitors;

 changes in expectations as to Zeo's future financial
performance, including financial estimates and investment recommendations by securities analysts and investors;

 declines in the market prices of stocks generally;

 strategic actions by Zeo or its competitors;

 announcements by Zeo or its competitors of significant contracts,
acquisitions, joint ventures, other strategic relationships or capital commitments;

 any significant change in Zeo's management;

 changes in general economic or market conditions (including
changes in interest rates or inflation) or trends in Zeo's industry or markets;

 changes in business or regulatory conditions, including new
laws or regulations or new interpretations of existing laws or regulations applicable to Zeo's business;

 future sales of Class A Common Stock or other securities;

 dilution as a result of future exercises of Warrants, conversion
of the Convertible OpCo Preferred Units or exchanges of the Exchangeable OpCo Units;

 investor perceptions of the investment opportunity associated
with Class A Common Stock relative to other investment alternatives;

 the public's response to press releases or other public
announcements by Zeo or third parties, including Zeo's filings with the SEC;

 litigation involving Zeo, Zeo's industry, or both,
or investigations by regulators into the Board, Zeo's operations or those of Zeo's competitors;

 guidance, if any, that Zeo provides to the public, any changes
in this guidance or Zeo's failure to meet this guidance;

 the development and sustainability of an active trading market
for Class A Common Stock;

 actions by institutional or activist stockholders;

 changes in accounting standards, policies, guidelines, interpretations
or principles; and

 other events or factors, including those resulting from pandemics,
natural disasters, war, acts of terrorism or responses to these events.

 These broad market and industry fluctuations may
adversely affect the market price of Class A Common Stock, regardless of Zeo's actual operating performance. In addition, price
volatility may be greater if the public float and trading volume of Class A Common Stock is low.

 In the past, following periods of market volatility,
stockholders have instituted securities class action litigation. If Zeo were involved in securities litigation, it could have a substantial
cost and divert resources and the attention of executive management from Zeo's business regardless of the outcome of such litigation.

 Warrants issued in the IPO are exercisable
for Class A Common Stock, which would increase the number of shares eligible for future resale in the public market and result in
dilution to the stockholders of Zeo.

 Outstanding Warrants to purchase an aggregate
of 13,800,000 shares of Class A Common Stock are exercisable in accordance with the terms of the warrant agreement governing
those securities. The exercise price of these Warrants is $11.50 per share. To the extent such Warrants are exercised, additional shares
of Class A Common Stock will be issued, which will result in dilution to the then existing holders of Class A Common Stock and
increase the number of shares eligible for resale in the public market.

 Zeo stockholders may experience significant
dilution as a result of a Convertible OpCo Preferred Unit Conversion.

 Subject to the conditions described in the OpCo
A&R LLC Agreement, the holder of the Convertible OpCo Preferred Units may, or OpCo may require the holder of such Convertible
OpCo Preferred Units to, convert all of such holder's Convertible OpCo Preferred Units into such number of Exchangeable
OpCo Units as determined by the conversion ratio applicable to the respective Convertible OpCo Preferred Unit Conversion. Upon the
occurrence of a conversion of Convertible OpCo Preferred Units into Exchangeable OpCo Units, all Exchangeable OpCo Units received
as a result of such conversion shall be immediately exchanged (together with an equal number of shares of Class V Common Stock) into
an equal number of shares of Class A Common Stock. Accordingly, if the Convertible OpCo Preferred Units are converted into Exchangeable
OpCo Units and immediately thereafter exchanged for shares of Class A Common Stock, holders of Class A Common Stock
could experience significant dilution. Further, if the holders of the shares of Class A Common Stock issued as a result of a Convertible
OpCo Preferred Unit Conversion dispose of a substantial portion of such shares of Class A Common Stock in the public market, whether
in a single transaction or series of transactions, it could adversely affect the market price for the Class A Common Stock. These
sales, or the possibility that these sales may occur, could make it more difficult for Zeo or its stockholders to sell shares of Class A
Common Stock in the future.

 Zeo may be subject to securities class action
litigation, which may harm its business and operating results.

 Certain companies that have experienced volatility
in the market price of their stock have been subject to securities class action litigation. Zeo may be the target of this type of litigation
in the future. Securities litigation against Zeo could result in substantial costs and damages and divert Zeo's management's
attention from other business concerns, which could seriously harm Zeo's business, results of operations, financial condition or
cash flows.

 Zeo may also be called on to defend itself against
lawsuits relating to its business operations. Some of these claims may seek significant damages amounts. Due to the inherent uncertainties
of litigation, the ultimate outcome of any such proceedings cannot be accurately predicted. A future unfavorable outcome in a legal proceeding
could have an adverse impact on Zeo's business, financial condition and results of operations. In addition, current and future litigation,
regardless of its merits, could result in substantial legal fees, settlements or judgment costs and a diversion of Zeo's management's
attention and resources that are needed to successfully run Zeo's business.

 Because there are no current plans to pay
cash dividends on shares of Class A Common Stock for the foreseeable future, you may not receive any return on investment unless
you sell your shares of Class A Common Stock at a price greater than what you paid for them.

 Zeo intends to retain future earnings, if any,
for future operations, expansion (which may include potential acquisitions) and debt repayment, and there are no current plans to pay
any cash dividends for the foreseeable future. The declaration, amount and payment of any future dividends on shares of Class A Common
Stock will be at the sole discretion of the Board. The Board may take into account general and economic conditions, Zeo's financial
condition and results of operations, Zeo's available cash and current and anticipated cash needs, capital requirements, contractual,
legal, tax and regulatory restrictions, implications of the payment of dividends by Zeo to its stockholders or by its subsidiaries to
it and such other factors as the Board may deem relevant. As a result, you may not receive any return on an investment in the shares of
Class A Common Stock unless you sell such shares for a price greater than that which you paid for it.

 Zeo may issue additional shares of Class A
Common Stock or other equity securities without seeking approval of its stockholders, which would dilute your ownership interests and
may depress the market price of Class A Common Stock.

 Zeo has Warrants outstanding to purchase up to
an aggregate of 13,800,800 shares of Class A Common Stock. Additionally, Zeo will issue shares of Class A Common Stock
to (i) the holders of Convertible OpCo Preferred Units upon the occurrence of a Convertible OpCo Preferred Unit Conversion and (ii)
the Sellers upon the conversion of Seller OpCo Units (together with an equal number of shares of Seller Class V Common Stock) into Class
A Common Stock. Further, Zeo may choose to seek third-party financing to provide additional working capital for Zeo's business,
in which event Zeo may issue additional shares of Class A Common Stock or other equity securities. Zeo may also issue additional
shares of Class A Common Stock or other equity securities of equal or senior rank in the future for any reason or in connection with,
among other things, future acquisitions, the redemption of outstanding Warrants or repayment of outstanding indebtedness, without stockholder
approval, in a number of circumstances.

 The issuance of additional shares of Class A
Common Stock or other equity securities of equal or senior rank would have the following effects:

 Zeo's existing stockholders' proportionate ownership
interest in Zeo will decrease;

 the amount of cash available per share, including for payment
of dividends in the future, may decrease;

 the relative voting strength of each previously outstanding
share of Class A Common Stock may be diminished; and

 the market price of the shares of Class A Common Stock
may decline.

 If securities or industry analysts do not
publish research or reports about Zeo's business, if they change their recommendations regarding the shares of Class A Common
Stock or if Zeo's operating results do not meet their expectations, the price and trading volume of shares of Class A Common
Stock could decline.

 The trading market for shares of Class A
Common Stock will depend in part on the research and reports that securities or industry analysts publish about Zeo or its businesses.
If no securities or industry analysts commence coverage of Zeo, the trading price for shares of Class A Common Stock could be negatively
impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover Zeo downgrade its securities
or publish unfavorable research about its businesses, or if Zeo's operating results do not meet analyst expectations, the trading
price of shares of Class A Common Stock would likely decline. If one or more of these analysts cease coverage of Zeo or fail to publish
reports on Zeo regularly, demand for shares of Class A Common Stock could decrease, which might cause the share price and trading
volume to decline. Accordingly, holders of Class A Common Stock may experience a loss as a result of a decline in the market price
of Class A Common Stock. In addition, a decline in the market price of Class A Common Stock could adversely affect Zeo's
ability to issue additional securities and to obtain additional financing in the future.

 The ability of Zeo's management to
require holders of Warrants to exercise such Warrants on a cashless basis will cause holders to receive fewer shares of Class A Common
Stock upon their exercise of such Warrants than they would have received had they been able to exercise such Warrants for cash.

 If Zeo calls the Warrants for redemption after
the redemption criteria have been satisfied, Zeo's management will have the option to require any holder that wishes to exercise
Warrants to do so on a "cashless basis." If Zeo's management chooses to require holders to exercise their Warrants on
a cashless basis, the number of shares of Class A Common Stock received by a holder upon exercise will be fewer than it would have
been had such holder exercised his, her or its Warrants for cash. This will have the effect of reducing the potential "upside"
of the holder's investment in Zeo.

 Zeo may redeem unexpired Warrants prior
to their exercise at a time that is disadvantageous for holders of Warrants.

 Zeo may redeem outstanding Warrants at any time
after they become exercisable and prior to their expiration, at a price of $0.01 per Warrant; provided, that the last reported sales price
of shares of Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day period
ending on the third business day prior to the date Zeo sends the notice of redemption to the holders of Warrants. If and when the
Warrants become redeemable by Zeo, Zeo may exercise its redemption right if there is a current registration statement in effect with respect
to the shares of Class A Common Stock underlying such Warrants. Redemption of the outstanding Warrants could force you to: (i) exercise
your Warrants and pay the related exercise price at a time when it may be disadvantageous for you to do so; (ii) sell your Warrants
at the then-current market price when you might otherwise wish to hold your Warrants; or (iii) accept the nominal redemption
price which, at the time the outstanding Warrants are called for redemption, is likely to be substantially less than the market value
of your Warrants.

 In the event Zeo determines to redeem any Warrants,
holders of such Warrants would be notified of such redemption as described in the warrant agreement governing the Warrants. Specifically,
in the event that Zeo elects to redeem all of the redeemable Warrants as described above, Zeo will fix a Warrant redemption date. Notice
of redemption will be mailed by first class mail, postage prepaid, by Zeo not less than 30 days prior to such date to the registered
holders of the redeemable Warrants to be redeemed at their last addresses as they appear on the registration books. Any notice mailed
in the manner provided in the warrant agreement governing the Warrants will be conclusively presumed to have been duly given whether or
not the registered holder received such notice. In addition, beneficial owners of the redeemable Warrants will be notified of such redemption
via Zeo's posting of the redemption notice to DTC.

 If Zeo's performance does not meet
market expectations, the price of its securities may decline.

 If Zeo's performance does not meet market
expectations, the price of the Class A Common Stock may decline. Fluctuations in the price of the Class A common Stock could
contribute to the loss of all or part of your investment. If an active market for Class A Common Stock develops and continues, the
trading price of the Class A Common Stock could be volatile and subject to wide fluctuations in response to various factors, some
of which are beyond its control.

 Any of the factors listed below could have a material
adverse effect on your investment in the Class A Common Stock and it may trade at prices significantly below the price you paid for
them. Factors affecting the trading price of Class A Common Stock may include:

 actual or anticipated fluctuations in Zeo's quarterly
financial results or the quarterly financial results of companies perceived to be similar to it;

 changes in the market's expectations about its operating
results;

 success of competitors;

 its operating results failing to meet market expectations
in a particular period;

 changes in financial estimates and recommendations by securities
analysts concerning Zeo or the solar energy industry and market in general;

 operating and stock price performance of other companies
that investors deem comparable to Zeo;

 its ability to market new and enhanced products on a timely
basis;

 changes in laws and regulations affecting its business;

 commencement of, or involvement in, litigation involving
Zeo;

 changes in its capital structure, such as future issuances
of securities or the incurrence of additional debt;

 the volume of shares of its common stock available for public
sale;

 any significant change in its board or management;

 sales of substantial amounts of common stock by its directors,
executive officers or significant stockholders or the perception that such sales could occur; and

 general economic and political conditions such as recessions,
interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

 Broad market and industry factors may depress
the market price of the Class A Common Stock irrespective of Zeo's operating performance. The stock market in general and the
Nasdaq have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance
of the particular companies affected.

 The trading prices and valuations of these stocks,
and of Zeo's securities, may not be predictable. A loss of investor confidence in the market for solar energy or the stocks of other
companies which investors perceive to be similar to Zeo could depress its stock price regardless of its business, prospects, financial
conditions or results of operations. A decline in the market price of the Class A Common Stock also could adversely affect its ability
to issue additional securities and its ability to obtain additional financing in the future.

 Delaware law and our governing documents
contain certain provisions, including anti-takeover provisions, that limit the ability of stockholders to take certain actions and could
delay or discourage takeover attempts that stockholders may consider favorable.

 Our governing documents and the DGCL contain provisions
that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by the Board and therefore
depress the trading price of Class A Common Stock. These provisions could also make it difficult for stockholders to take certain
actions, including electing directors who are not nominated by the current members of the Board or taking other corporate actions, including
effecting changes in the management of Zeo. Among other things, our governing documents include provisions regarding:

 the ability of the Board to issue shares of preferred stock,
including "blank check" preferred stock and to determine the price and other terms of those shares, including preferences
and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

 the limitation of the liability of, and the indemnification
of, Zeo's directors and officers;

 the exclusive right of the Board to elect a director to fill
a vacancy created by the expansion of the Board or the resignation, death or removal of a director, which prevents stockholders from
being able to fill vacancies on the Board;

 the requirement that, subject to the special rights of the
holders of one or more series of preferred stock, special meetings of the stockholders may be called only (i) by or at the direction
of the Board, the Chairperson of the Board or the Chief Executive Officer, in each case, in accordance with our bylaws or (ii) for
so long as the holders of shares of the Class V Common Stock beneficially own, directly or indirectly, a majority of the total voting
power of stock entitled to vote generally in election of directors, by or at the request of stockholders collectively holding shares
of capital stock of Zeo representing a majority of the total voting power of stock entitled to vote generally in election of directors,
which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors;

 controlling the procedures for the conduct and scheduling
of the Board and stockholder meetings;

 the requirement for the affirmative vote of holders of at
least 2/3 of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend,
alter, change or repeal certain provisions of the Charter, which could preclude stockholders from bringing matters before annual or special
meetings of stockholders, delay changes in Zeo and inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited
takeover attempt;

 the ability of the Board to amend our bylaws, which may allow
the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend our bylaws to
facilitate an unsolicited takeover attempt; and

 advance notice procedures with which stockholders must comply
to nominate candidates to the Board or to propose matters to be acted upon at a stockholders' meeting, which could preclude stockholders
from bringing matters before annual or special meetings of stockholders, delay changes in the Board and discourage or deter a potential
acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain
control of Zeo.

 These provisions, alone or together, could delay
or prevent hostile takeovers and changes in control or changes in the Board or management.

 Any provision of our governing documents or Delaware
law that has the effect of delaying or preventing a change in control could limit the opportunity for stockholders to receive a premium
for their shares of Class A Common Stock and could also affect the price that some investors are willing to pay for shares of Class A
Common Stock.

 We are a holding company. Our only material
asset is our equity interest in OpCo, and we are accordingly dependent upon distributions from OpCo to pay taxes, make payments under
the Tax Receivable Agreement and cover our corporate and other overhead expenses.

 We are a holding company and have no material
assets other than our equity interest in OpCo. We have no independent means of generating revenue. To the extent OpCo has available cash,
we intend to cause OpCo to make generally pro rata distributions to the holders of OpCo Units, including us, in an amount sufficient to
cause each OpCo unitholder to receive a distribution at least equal to (i) such OpCo unitholder's allocable share of net taxable
income as calculated with certain assumptions, multiplied by an assumed tax rate, and (ii) with respect to us, any payments required
to be made by us under the Tax Receivable Agreement. The assumed tax rate for this purpose will be the combined maximum U.S. federal,
state, and local rate of tax applicable to an individual resident in New York City, New York for the applicable taxable year.
We intend to cause OpCo to make non-pro rata payments to us to reimburse us for our corporate and other overhead expenses. To the
extent that we need funds and OpCo or its subsidiaries are restricted from making such distributions or payments under applicable law
or regulation or under the terms of any current or future financing arrangements, or are otherwise unable to provide such funds, our liquidity
and financial condition could be materially adversely affected.

 Moreover, because we have no independent means
of generating revenue, our ability to make tax payments and payments under the Tax Receivable Agreement will be dependent on the ability
of OpCo to make distributions to us in an amount sufficient to cover our tax obligations and obligations under the Tax Receivable Agreement.
This ability, in turn, may depend on the ability of OpCo's subsidiaries to make distributions to OpCo. We intend that such
distributions from OpCo and its subsidiaries be funded with cash from operations or from future borrowings. The ability of OpCo, its subsidiaries
and other entities in which it directly or indirectly hold an equity interest to make such distributions will be subject to, among other
things, (i) the applicable provisions of Delaware law (or other applicable jurisdiction) that may limit the amount of funds available
for distribution and (ii) restrictions in relevant debt instruments issued by OpCo or its subsidiaries and other entities in which
it directly or indirectly holds an equity interest. To the extent that we are unable to make payments under the Tax Receivable Agreement
for any reason, such payments will be deferred and will accrue interest until paid, and such failure to make payments may result in a
breach under the Tax Receivable Agreement in certain cases. Because distributions of OpCo will be used to fund Tax Receivable Agreement
payments by us, OpCo's liquidity will be affected negatively by the Tax Receivable Agreement in a material respect.

 We are required to make payments under the
Tax Receivable Agreement for certain tax benefits that we may claim, and the amounts of such payments could be significant.

 In connection with the Business Combination, we
entered into the Tax Receivable Agreement with the TRA Holders. This agreement generally provides for the payment by us to the TRA Holders
of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax (computed using simplifying
assumptions to address the impact of state and local taxes) that we actually realize (or are deemed to realize in certain circumstances)
in periods after the Business Combination as a result of certain increases in tax basis available to us pursuant to the exercise of the
OpCo Exchange Rights or a Mandatory Exchange and certain benefits attributable to imputed interest. We will retain the benefit of the
remaining 15% of any actual net cash tax savings that we realize.

 The term of the Tax Receivable Agreement will
continue until all tax benefits that are subject to the Tax Receivable Agreement have been utilized or expired, unless we experience a
change of control (as defined in the Tax Receivable Agreement, which includes certain mergers, asset sales, or other forms of business
combinations) or the Tax Receivable Agreement otherwise terminates early (at our election or as a result of our breach or the commencement
of bankruptcy or similar proceedings by or against us), and we make the termination payments specified in the Tax Receivable Agreement
in connection with such change of control or other early termination.

 The payment obligations under the Tax Receivable
Agreement are our obligations and not obligations of OpCo, and we expect that the payments required to be made under the Tax Receivable
Agreement will be substantial. Payments under the Tax Receivable Agreement will reduce the amount of cash provided by the tax savings
that would otherwise have been available to us for other uses. Estimating the amount and timing of payments that may become due under
the Tax Receivable Agreement is by its nature imprecise. For purposes of the Tax Receivable Agreement, net cash tax savings generally
are calculated by comparing our actual tax liability (determined by using the actual applicable U.S. federal income tax rate and
an assumed combined state and local income and franchise tax rate) to the amount we would have been required to pay had we not been able
to utilize any of the tax benefits subject to the Tax Receivable Agreement. The actual increases in tax basis covered by the Tax Receivable
Agreement, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending on a number of factors,
including the timing of any redemption of Exchangeable OpCo Units, the price of Class A Common Stock at the time of each redemption,
the extent to which such redemptions are taxable transactions, the amount of the redeeming OpCo unitholder's tax basis in its Exchangeable
OpCo Units at the time of the relevant redemption, the depreciation and amortization periods that apply to the increase in tax basis,
the amount and timing of taxable income we generate in the future, the U.S. federal income tax rates then applicable, and the portion
of our payments under the Tax Receivable Agreement that constitute imputed interest or give rise to depreciable or amortizable tax basis.
Any distributions made by OpCo to us in order to enable us to make payments under the Tax Receivable Agreement, as well as any corresponding
pro rata distributions made to the OpCo unitholders, could have a substantial negative impact on our liquidity.

 The payments under the Tax Receivable Agreement
following the exercise of the OpCo Exchange Rights or a Mandatory Exchange will not be conditioned upon a TRA Holder having a continued
ownership interest in us or OpCo.

 In certain cases, payments under the Tax
Receivable Agreement may be accelerated and/or significantly exceed the actual benefits, if any, Zeo realizes in respect of the tax attributes
subject to the Tax Receivable Agreement.

 If we experience a change of control (as defined
under the Tax Receivable Agreement, which includes certain mergers, asset sales and other forms of business combinations) or the Tax Receivable
Agreement otherwise terminates early (at our election or as a result of our breach or the commencement of bankruptcy or similar proceedings
by or against us), our obligations under the Tax Receivable Agreement would accelerate and we would be required to make an immediate
payment equal to the present value of the anticipated future payments to be made by us under the Tax Receivable Agreement, and it is expected
that such payment would be substantial. The calculation of anticipated future payments would be based upon certain assumptions and deemed
events set forth in the Tax Receivable Agreement, including (i) that we have sufficient taxable income to fully utilize the tax benefits
covered by the Tax Receivable Agreement, and (ii) that any OpCo Units (other than those held by us) outstanding on the termination
date are deemed to be redeemed on the termination date. If we were to experience a change of control or the Tax Receivable Agreement was
otherwise terminated as of the Closing Date, we estimate that the early termination payment would be approximately $18.6 million.
The foregoing amount is merely an estimate, and the actual payment could differ materially. The aggregate amount of payments that are
actually made under the Tax Receivable Agreement could substantially exceed the estimated termination payment described above.

 Any early termination payment may be made significantly
in advance of, and may materially exceed, the actual realization, if any, of the future tax benefits to which the termination payment
relates. Moreover, the obligation to make an early termination payment upon a change of control could have a substantial negative impact
on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, or other forms of business
combinations or changes of control.

 There can be no assurance that we will be able
to satisfy our obligations under the Tax Receivable Agreement.

 In the event that payment obligations under
the Tax Receivable Agreement are accelerated in connection with a change of control, the consideration payable to holders of Class A
Common Stock in connection with such change of control could be substantially reduced.

 If we experience a change of control (as defined
under the Tax Receivable Agreement, which includes certain mergers, asset sales and other forms of business combinations), we would be
obligated to make a substantial immediate payment, and such payment may be significantly in advance of, and may materially exceed, the
actual realization, if any, of the future tax benefits to which the payment relates. As a result of this payment obligation, holders of
Class A Common Stock could receive substantially less consideration in connection with a change of control transaction than they
would receive in the absence of such obligation. Further, any payment obligations under the Tax Receivable Agreement will not be conditioned
upon the TRA Holders having a continued interest in us or OpCo. Accordingly, the TRA Holders' interests may conflict with those
of the holders of Class A Common Stock.

 We will not be reimbursed for any payments
made under the Tax Receivable Agreement in the event that any tax benefits are subsequently disallowed.

 Payments under the Tax Receivable Agreement will
be based on the tax reporting positions that we will determine. The IRS or another taxing authority may challenge all or part of the tax
basis increases covered by the Tax Receivable Agreement, as well as other related tax positions we take, and a court could sustain such
challenge. The TRA Holders will not be required to reimburse us for any payments previously made under the Tax Receivable Agreement if
any tax benefits that have given rise to payments under the Tax Receivable Agreement are subsequently disallowed, except that excess payments
made to any TRA Holder will be netted against future payments that would otherwise be made to such TRA Holder, if any, after our determination
of such excess (which determination may be made a number of years following the initial payment and after future payments have been
made). As a result, in such circumstances, we could make payments that are greater than our actual net cash tax savings, if any, and we
may not be able to recoup those payments, which could have a substantial negative impact on our liquidity.

 If OpCo were to become a publicly traded
partnership taxable as a corporation for U.S. federal income tax purposes, we and OpCo might be subject to potentially significant
tax inefficiencies, and we would not be able to recover payments previously made by us under the Tax Receivable Agreement even if the
corresponding tax benefits were subsequently determined to have been unavailable due to such status.

 We intend to operate such that OpCo does not become
a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. A "publicly traded partnership"
is a partnership the interests of which are traded on an established securities market or are readily tradable on a secondary market or
the substantial equivalent thereof.

 Under certain circumstances, transfers of OpCo
Units could cause OpCo to be treated as a publicly traded partnership. Applicable U.S. Treasury regulations provide for certain
safe harbors from treatment as a publicly traded partnership, and we intend to operate such that redemptions or other transfers of OpCo
Units qualify for one or more of such safe harbors. For example, we intend to limit the number of holders of OpCo Units, and the
OpCo A&R LLC Agreement provides for certain limitations on the ability of holders of OpCo Units to transfer their OpCo Units and
provides us, as the manager of OpCo, with the right to prohibit the exercise of an OpCo Exchange Right if we determine (based on the advice
of counsel) there is a material risk that OpCo would be a publicly traded partnership as a result of such exercise.

 If OpCo were to become a publicly traded partnership
taxable as a corporation for U.S. federal income tax purposes, significant tax inefficiencies might result for us and for OpCo, including
as a result of our inability to file a consolidated U.S. federal income tax return with OpCo. In addition, we might not be able to
realize tax benefits covered under the Tax Receivable Agreement, and we would not be able to recover any payments previously made by us
under the Tax Receivable Agreement, even if the corresponding tax benefits (including any claimed increase in the tax basis of OpCo's
assets) were subsequently determined to have been unavailable.

 In certain circumstances, OpCo is required
to make tax distributions to the OpCo unitholders, including us, and the tax distributions that OpCo is required to make may be substantial.
The OpCo tax distribution requirement may complicate our ability to maintain our intended capital structure.

 To the extent OpCo has available cash, we intend
to cause OpCo to make generally pro rata distributions to the holders of OpCo Units, including us, in an amount sufficient to cause each
OpCo unitholder to receive a distribution at least equal to (i) such OpCo unitholder's allocable share of net taxable income
as calculated with certain assumptions, multiplied by an assumed tax rate, and (ii) with respect to us, any payments required to
be made by us under the Tax Receivable Agreement. The assumed tax rate for this purpose will be the combined maximum U.S. federal,
state, and local rate of tax applicable to an individual resident in New York City, New York for the applicable taxable year.
The amount of tax distributions to such unitholder for any year may be reduced by prior operating distributions made to that unitholder
for such year. As a result of certain assumptions in calculating the tax distribution payments, including the assumed tax rate, we may
receive tax distributions from OpCo that exceed our actual tax liability and our obligations under the Tax Receivable Agreement by a material
amount.

 The receipt of such excess distributions would
complicate our ability to maintain certain aspects of our capital structure. Such cash, if retained, could cause the value of an OpCo
Manager Unit to deviate from the value of a share of Class A Common Stock. If we retain such cash balances, the holders of Exchangeable
OpCo Units would benefit from any value attributable to such accumulated cash balances as a result of their exercise of the OpCo
Exchange Rights. We intend to take steps to eliminate any material cash balances. Such steps could include distributing such cash balances
as dividends on the Class A Common Stock or reinvesting such cash balances in OpCo for additional OpCo Manager Units (with an
accompanying stock dividend with respect to Class A Common Stock).

 The tax distributions to the OpCo unitholders
may be substantial and may, in the aggregate, exceed the amount of taxes that OpCo would have paid if it were a similarly situated corporate
taxpayer. Funds used by OpCo to satisfy its tax distribution obligations will generally not be available for reinvestment in its business.

 ITEM 1B. UNRESOLVED STAFF COMMENTS.

 None.

 ITEM 1C. CYBERSECURITY.

 Cybersecurity Risk Management and Strategy

 We have developed and implemented, and continue
to implement, cybersecurity risk management processes intended to protect the confidentiality, integrity, and availability of our critical
systems and information. Primary cybersecurity oversight responsibility is shared by our board of directors, our audit and compliance
committee ("Audit Committee"), and senior management.

 Our cybersecurity risk management program includes
physical, technological, and administrative controls intended to support our cybersecurity and data governance framework, including protections
designed to protect the confidentiality, integrity, and availability of our key information systems and customer, employee, partner, and
other third-party information stored on those systems. These measures include access controls, encryption, data handling requirements,
and internal policies that govern our cybersecurity risk management and data protection practices. Our program also includes cybersecurity
risk assessment processes designed to help identify material cybersecurity risks to our critical systems and information.

 Over the past fiscal year, we have not identified
risks from known cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our operations,
business strategy, operating results, or financial condition.

 We will continue to monitor and assess our cybersecurity
risk management program as well as seek to improve such systems and processes as appropriate. If we were to experience a material cybersecurity
incident in the future, such incident may have a material effect, including on our operations, business strategy, operating results, or
financial condition. For more information regarding cybersecurity risks that we face and potential impacts on our business related thereto,
see the section titled " Risk Factors " in Part I, Item 1A of this Report.

 Cybersecurity Governance

 With oversight from our board of directors, the
Audit Committee is primarily responsible for assisting the board in fulfilling its oversight responsibilities relating to risk assessment
and management, including cybersecurity and other information technology risks. The Audit Committee oversees management's implementation
of our cybersecurity risk management program, including processes and policies for determining risk tolerance, and reviews management's
strategies for adequately mitigating and managing identified risks relating to cybersecurity threats.

 The Audit Committee receives updates from members
of management on our cybersecurity risks at its quarterly meetings, and reviews metrics about cyber threat response preparedness, program
maturity, risk mitigation status, and the current and emerging threat landscape. In addition, management provides updates to the Audit
Committee, as necessary, regarding any material cybersecurity threats or incidents, as well as any incidents with lesser impact potential.

 The Audit Committee reports to our board of directors
regarding its activities, including those related to key cybersecurity risks, mitigation strategies, and ongoing developments, on a quarterly
basis, or more frequently as needed. The board of directors also receives updates from management on our cyber risk management program
and other matters relating to our data privacy and cybersecurity approach, including risk mitigations to bolster and enhance our data
protection and data governance framework.

 Our management team is responsible for assessing
and managing our material risks from cybersecurity threats and for our overall cybersecurity risk management program on a day-to-day basis.
Our management team supervises our efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various
means, including through briefings from internal IT personnel, which may include threat intelligence and other information obtained from
governmental, public or private sources, and alerts and reports produced by security tools deployed in our IT environment.

 ITEM 2. PROPERTIES.

 Our corporate headquarters are located in Florida
under a lease that expires at the end of October 2026. We maintain offices for operations in Texas and Arkansas, and we have sales, marketing
and executive offices in Utah and throughout Florida. We currently lease the office and warehouse spaces that we use in our operations,
and we do not own any real property. We believe that our facility space adequately meets our needs and that we will be able to obtain
any additional operating space that may be required on commercially reasonable terms.

 ITEM 3. LEGAL PROCEEDINGS.

 To the knowledge of our management, there is no
material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their
capacity as such.

 ITEM 4. MINE SAFETY DISCLOSURES.

 Not applicable.

 ITEM 5. MARKET FOR REGISTRANT'S
COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 (a) Market Information

 The Class A Common Stock and publicly traded warrants
are traded on Nasdaq under the symbols "ZEO" and "ZEOWW," respectively.

 (b) Holders

 On May 19, 2025, there were 86 holders of record
of our Class A Common Stock, and one holder of record of our warrants.

 (c) Dividends

 The Company has not paid any cash dividends on
its shares of its common stock to date. The payment of cash dividends in the future will be dependent upon our revenues and earnings,
if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion of the Board.

 (d) Recent Sales of Unregistered Securities; Use
of Proceeds from Registered Offerings

 None.

 ITEM 6. [RESERVED]

 ITEM 7. MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 The following discussion and analysis summarizes
the significant factors affecting our operating results, financial condition, liquidity and cash flows as of and for the periods presented
below. The following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto
included elsewhere in this Report. The discussion contains forward-looking statements that are based on the beliefs of management, as
well as assumptions made by, and information currently available to, management. Actual results could differ materially from those discussed
in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Report,
particularly in the sections titled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements."

 Unless the context otherwise requires, references
in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" to "Zeo,"
"we", "us", "our", and the "Company" are intended to refer to (i) following the Business
Combination (as defined below), the business and operations of Zeo and its consolidated subsidiaries, and (ii) prior to the Business Combination,
Sunergy (the predecessor entity in existence prior to the consummation of the Business Combination) and its consolidated subsidiary.

 Overview

 Our company and personnel are passionate about
delivering cost savings and increased independence and reliability to energy consumers. Our mission is to expedite the country's
transition to renewable energy by offering our customers an affordable and sustainable means of achieving energy independence. We are
a vertically integrated company offering energy solutions and services that include sale, design, procurement, installation, and maintenance
of residential solar energy systems. Many of our solar energy system customers also purchase other energy efficient-related equipment
or services or roofing services from us. The majority of our customers are located in Florida, Texas, Arkansas, Missouri, Ohio, and Illinois,
and we have an expanding base of customers in California, Colorado, Minnesota, Missouri, Ohio, Utah, and Virginia. Sunergy was created
on October 1, 2021 through the Contribution of Sun First Energy, LLC, a rapidly growing solar sales management company, and Sunergy Solar,
LLC, a large solar installation company based in Florida, to Sunergy Renewables, LLC.

 We believe that we have built (and continue to
build) the infrastructure and capabilities necessary to rapidly acquire and serve customers in a low-cost and scalable manner. Today,
our scalable regional operating platform provides us with a number of advantages, including the marketing of our solar service offerings
through multiple channels, including our diverse sales partner network and direct-to-consumer vertically integrated sales and installation
operations. We believe that this multi-channel model supports rapid sales and installation growth, allowing us to achieve capital-efficient
growth in the regional markets we serve.

 Since our founding, we have continued to invest
in a platform of services and tools to enable large scale operations for us and our partner network, which includes sales partners, installation
partners and other strategic partners. The platform includes processes and software, as well as the capacity for the fulfillment and acquisition
of marketing leads. We believe our platform empowers our in-house sales team and external sales dealers to profitably serve our regional
and underpenetrated markets and helps us compete effectively against larger, more established industry players without making significant
investment in technology and infrastructure.

 We have focused to date on a simple, capital light
business strategy utilizing, as of December 31, 2024, approximately 290 sales agents and approximately 22 independent sales dealers to
produce our sales pipeline. We engineer and design projects and process building permit applications on behalf of our customers to timely
install their systems and assist their connections to the local utility power grid. Most of the equipment we install is drop-shipped to
the installation site by our regional distributors, requiring minimal inventory to be held by the Company during any given period. We
depend on our distributors to timely handle logistics and related requirements in moving equipment to the installation sites. In addition
to our main offering of residential solar energy systems, we sell and install products such as roofing, insulation, energy efficient appliances
and battery storage systems for the residential market.

 We believe that continued government policy support
of solar energy and increasing conventional utility costs provide the solar energy market with material headwinds for accelerating adoption
in the United States, which currently lags other international markets, including Australia and Europe. The majority of our customers
are located in Florida, Texas, Arkansas, Missouri, Ohio and Illinois and we have an expanding base of customers in California, Colorado,
Minesota, Utah and Virginia. We plan to continue to enter new markets selectively where favorable net metering policies or cost incentives
exist and we can implement efficient operations. Most of our sales were generated in Florida in 2023 and were largely split between Florida
and Ohio in 2024. We have focused on improving our operational efficiency to meet the decrease in revenues we faced in 2024

 Our core solar service offerings are paid for
by customer purchases and financed through either third-party long-term lenders or third-party operators who offer leasing products that
provide customers with simple, predictable pricing for solar energy that is insulated from rising retail electricity prices. Most of our
customers finance their purchases with affordable loans or leases that require minimal or no upfront capital or down payment.

 Recent Developments

 On October 25, 2024, the Company closed an Asset
Purchase Agreement with Lumio Holdings, Inc., a Delaware corporation, and Lumio HX, Inc., a Delaware corporation, pursuant to which, subject
to the terms and conditions set forth in the Asset Purchase Agreement, the Company agreed to acquire certain assets of the Sellers on
an as-is, where-is basis, including uninstalled residential solar energy contracts, certain inventory, intellectual property and intellectual
property rights, equipment, records, goodwill and other intangible assets, free and clear of any liens other than certain specified liabilities
of the Sellers that are being assumed for a total purchase price of (i) $4 million in cash and (ii) 6,206,897 shares of the Company's
Class A Common Stock, par value $0.0001, to be paid to LHX Intermediate, LLC, a Delaware limited liability company. The Asset Purchase
Agreement contains customary representations, warranties and covenants of the parties for a transaction involving the acquisition of assets
from a debtor in bankruptcy, including the condition that the bankruptcy court enter an order authorizing and approving the Transaction.

 Business Combination

 On March 13, 2024, we consummated the Business
Combination with ESGEN Acquisition Corp. Prior to the Closing, (i) except as otherwise specified in the Business Combination Agreement,
each issued and outstanding ESGEN Class B ordinary share was converted into one ESGEN Class A ordinary; and (ii) ESGEN was domesticated
into the State of Delaware so as to become a Delaware corporation. In connection with the Closing, we changed our name from "ESGEN
Acquisition Corporation" to "Zeo Energy Corp."

 Following the Domestication, each then-outstanding
ESGEN Class A ordinary share was converted into one share of Class A common stock, and each then-outstanding ESGEN Public Warrant converted
automatically into a Warrant, exercisable for one share of Zeo Class A Common Stock. Additionally, each outstanding unit of ESGEN was
cancelled and separated into one share of Class A Common Stock and one-half of one Warrant.

 In accordance with the terms of the Business Combination
Agreement, Sunergy caused all holders of any options, warrants or rights to subscribe for or purchase any equity interests of Sunergy
or its subsidiaries or securities (including debt securities) convertible into or exchangeable for, or that otherwise conferred on the
holder any right to acquire, any equity interests of Sunergy or any subsidiary thereof (collectively, the "Sunergy Convertible Interests")
existing immediately prior to the Closing to either exchange or convert all such holder's Sunergy Convertible Interests into limited
liability interests of Sunergy (the "Sunergy Company Interests") in accordance with the governing documents of Sunergy or
the Sunergy Convertible Interests.

 At the Closing, ESGEN contributed to OpCo (1)
all of its assets (excluding its interests in OpCo, but including the amount of cash in ESGEN's Trust Account as of immediately
prior to the Closing (after giving effect to the exercise of redemption rights by ESGEN stockholders)), and (2) a number of newly issued
shares of Class V common stock, which are non-economic, voting shares of Zeo, equal to the number of Seller OpCo Units (as defined in
the Business Combination Agreement) and (y) in exchange, OpCo issued to ESGEN (i) a number of Class A common units of OpCo (the "OpCo
Manager Units") which equaled the total number of shares of Class A Common Stock issued and outstanding immediately after the Closing
and (ii) a number of warrants to purchase OpCo Manager Units which equaled the number of Warrants issued and outstanding immediately after
the Closing (the transactions described above in this paragraph, the "ESGEN Contribution"). Immediately following the ESGEN
Contribution, (x) the Sellers contributed to OpCo the Sunergy Company Interests and (y) in exchange therefor, OpCo transferred to the
Sellers the Seller OpCo Units and the Seller Class V Shares.

 Prior to the Closing, Sellers transferred 24.167%
of their Sunergy Company Interests (which were thereafter exchanged for Seller OpCo Units and Seller Class V Shares at the Closing, as
described above) pro rata to Sun Managers, LLC, a Delaware limited liability company ("Sun Managers"), in exchange for Class
A Units (as defined in the Sun Managers limited liability company agreement (the "SM LLCA")) in Sun Managers. In connection
with such transfer, Sun Managers executed a joinder to, and became a "Seller" for purposes of, the Business Combination Agreement.
Sun Managers intends to grant Class B Units (as defined in the SM LLCA) in Sun Managers through the Sun Managers, LLC Management Incentive
Plan (the "Management Incentive Plan") adopted by Sun Managers to certain eligible employees or service providers of OpCo,
Sunergy or their subsidiaries, in the discretion of Timothy Bridgewater, as manager of Sun Managers. Such Class B Units may be subject
to a vesting schedule, and once such Class B Units become vested, there may be an exchange opportunity through which the grantees may
request (subject to the terms of the Management Incentive Plan and the OpCo A&R LLC Agreement) the exchange of their Class B Units
into Seller OpCo Units (together with an equal number of Seller Class V Shares), which may then be converted into Class A Common Stock
(subject to the terms of the Management Incentive Plan and the OpCo A&R LLC Agreement). Grants under the Management Incentive Plan
will be made after Closing.

 Common Stock and Class V Common Stock.

 In connection with entering into the Business
Combination Agreement, ESGEN and the Sponsor entered the Sponsor Subscription Agreement, pursuant to which, among other things, the Sponsor
agreed to purchase an aggregate of 1,000,000 Convertible OpCo Preferred Units convertible into Exchangeable OpCo units (and be issued
an equal number of shares of Class V Common Stock) concurrently with the Closing at a cash purchase price of $10.00 per unit and up to
an additional 500,000 Convertible OpCo Preferred Units (together with the concurrent issuance of an equal number of shares of Zeo Class
V Common Stock) during the six months after Closing if called for by Zeo. Prior to the Closing, ESGEN informed the Sponsor that it wished
to call for the additional 500,000 Convertible OpCo Preferred Units at the Closing and, as a result, a total of 1,500,000 Convertible
OpCo Preferred Units and an equal number of shares of Class V Common Stock were issued to Sponsor in return for aggregate consideration
of $15,000,000.

 Accounting for the Business Combination

 Following the Business Combination, we are organized
in an "Up-C" structure, such that Sunergy and the subsidiaries of Sunergy hold and operate substantially all of the assets
and businesses of the registrant, and the registrant is a publicly listed holding company that holds a certain amount of equity interests
in OpCo, which holds all of the equity interests in Sunergy. The Class A Common Stock and public warrants are traded on Nasdaq under the
ticker symbols "ZEO" and "ZEOWW," respectively.

 The Business Combination was accounted for as
a reverse recapitalization with ESGEN being treated as the acquired company since there was no change in control in accordance with the
guidance for common control transactions in ASC 805-50. Accordingly, the financial statements of the combined entity will represent a
continuation of the financial statements of Sunergy with the business combination treated as the equivalent of Sunergy issuing stock for
the net assets of ESGEN, accompanied by a recapitalization. The net assets of ESGEN were stated at historical cost, with no goodwill or
other intangible assets recorded. Operations prior to the Business Combination were those of Sunergy.

 Sunergy was determined to be the accounting acquirer
based on evaluation of the following facts and circumstances.

 Based upon the evaluation of the OpCo A&R
LLC Agreement, the Sellers contributed their interests of Sunergy into OpCo. OpCo's members did not have substantive kickout or
participating rights and therefore OpCo is a VIE. Consideration of OpCo as a VIE was necessary to determine the accounting treatment between
ESGEN and Sunergy. Upon evaluation, ESGEN Acquisition Corp. is considered to be the primary beneficiary through its membership interest
and manager powers conferred to it through the Class A Units. For VIEs, the accounting acquirer is always considered to be the primary
beneficiary. As such, ESGEN will consolidate OpCo and is considered to the accounting acquirer; however, further consideration of whether
the entities are under common control was required in order to determine whether there is an ultimate change in control and the acquisition
method of accounting is required under ASC 805.

 While Sunergy did not control or have common ownership
of ESGEN prior to the consummation of the Business Combination, the Company evaluated the ownership of the new entity subsequent to the
consummation of the transaction to determine if a change in control occurred by evaluating whether Sunergy was under common control prior
to and subsequent to the consummation of the transaction. If the business combination is between entities under common control, then the
acquisition method of accounting is not applicable and the guidance in ASC 805-50 regarding common control should be applied instead.
EITF Issue 02-5 "Definition of 'Common Control' in Relation to FASB Statement No. 141" indicates that common control
would exist if a group of stockholders holds more than 50 percent of the voting ownership of each entity, and contemporaneous written
evidence of an agreement to vote a majority of the entities' shares in concert exists. Prior to the Business Combination, Sunergy
was majority owned by five entities (the " Primary Sellers "), who entered into a Voting Agreement, dated September
7, 2023. The term of the Voting Agreement is for five years from the date of the Voting Agreement. The consummation of the Business Combination
with ESGEN occurred within the term of the Voting Agreement.

 Prior to the Business Combination and the contributions
to Sun Managers as described above, the Primary Sellers had 98% ownership in Sunergy. Immediately following the Business Combination,
the Sellers now own 83.8% of the equity of the Company.

 The Voting Agreement constitutes contemporaneous
written evidence of an agreement to vote a majority of the Primary Sellers' shares of the Company in concert. Accordingly, the Primary
Sellers retain majority control through the voting of their units in conjunction with the Voting Agreement immediately prior to the Business
Combination and their shares following the Business Combination and, therefore, there was no change of control before or after the Business
Combination. This conclusion was appropriate even though there was no relationship or common ownership or control between Sunergy and
ESGEN prior to the Business Combination. Accordingly, the Business Combination should be accounted for in accordance with the guidance
for common control transactions in ASC 805-50.

 Additional factors that were considered include
the following:

 Since the Business Combination, the Board has been comprised of one individual designated by ESGEN and five individuals designated by Sunergy.

 Since the Business Combination, management of the Company has been the existing management at Sunergy immediately prior to the Business Combination. The individual that was serving as the chief executive officer and chief financial officer of Sunergy's management team immediately prior to the Business Combination continued substantially unchanged upon completion of the Business Combination.

 For common control transactions that include the
transfer of a business, the reporting entity is required to account for the transaction in accordance with the procedural guidance in
ASC 805-50. In essence, the Business Combination will be treated as a reverse recapitalization with ESGEN being treated as the acquired
company since there was no change in control. Accordingly, the financial statements of the combined entity will represent a continuation
of the financial statements of Sunergy with the business combination treated as the equivalent of Sunergy issuing equity for the net assets
of ESGEN, accompanied by a recapitalization.

 Public Company Costs

 Following the Business Combination, we have ongoing
reporting and other compliance requirements relating to our Exchange Act registration and Nasdaq listing. We expect to see an increase
in general and administrative, compared to historical results, to support the legal and accounting requirements of the combined publicly
traded company. We also expect to incur substantial additional expenses for, among other things, directors' and officers'
liability insurance, director fees, internal control compliance, and additional costs for investor relations, accounting, audit, legal
and other functions.

 Key Operating and Financial Metrics and Outlook

 We regularly review a number of metrics, including
the following key operating and financial metrics, to evaluate our business, measure our performance, identify trends in our business,
prepare financial projections and make strategic decisions. We believe the operating and financial metrics presented below are useful
in evaluating our operating performance, as they are similar to measures by our public competitors and are regularly used by security
analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA and Adjusted
EBITDA margin are non-GAAP measures, as they are not financial measures calculated in accordance with GAAP and should not be considered
as substitutes for net (loss) income or net (loss) income margin, respectively, calculated in accordance with GAAP. See "Non-GAAP
Financial Measures " for additional information on non-GAAP financial measures and a reconciliation of these non-GAAP measures
to the most comparable GAAP measures.

 The following table sets forth these metrics for
the periods presented:

 Year Ended December 31,

 (In thousands, except percentages)

 2024

 2023

 $
 73,244

 $
 109,691

 Gross Profit

 34,395

 49,810

 Gross Margin

 47.0
 %

 45.4
 %

 Contribution profit

 $
 14,558

 $
 19,733

 Contribution margin

 19.9
 %

 18.0
 %

 (Loss) income from operations

 $
 (10,830
)

 $
 5,139

 $
 (9,872
)

 $
 4,845

 Adjusted EBITDA

 $
 1,958

 $
 6,981

 Adjusted EBITDA margin

 2.7
 %

 6.4
 %

 Gross Profit and Gross Margin

 We define gross profit as revenue, net less cost
of goods sold and depreciation and amortization related to cost of goods sold, and define gross margin, expressed as a percentage, as
the ratio of gross profit to revenue, net. See "— Non-GAAP Financial Measures " for a reconciliation of Gross
Profit and Gross Margin.

 Contribution Profit and Contribution Margin

 We define contribution profit as revenue, net
less direct costs of revenue, commissions expense and depreciation and amortization, and define contribution margin, expressed as a percentage,
as the ratio of contribution profit to revenue, net. Contribution profit and margin can be used to understand our financial performance
and efficiency and allows investors to evaluate our pricing strategy and compare against competitors. Our management uses these metrics
to make strategic decisions, identify areas for improvement, set targets for future performance and make informed decisions about how
to allocate resources going forward. Contributions margin reflects our Contribution profit as a percentage of revenues. See "—
 Non-GAAP Financial Measures " for a reconciliation of Gross Profit to Contribution Profit and Contribution Margin.

 Adjusted EBITDA and Adjusted EBITDA Margin

 We define Adjusted EBITDA, a non-GAAP financial
measure, as earnings (loss) before interest expense, income tax expense (benefit), depreciation and amortization, other income (expenses),
net, and stock compensation, as adjusted to exclude merger transaction related expenses. Adjusted EBITDA margin reflects our Adjusted
EBITDA as a percentage of revenues. See "— Non-GAAP Financial Measures " for a reconciliation of GAAP net loss
to Adjusted EBITDA and Adjusted EBITDA Margin.

 Key Factors that May Influence Future Results
of Operations

 Our financial results of operations may not be
comparable from period to period due to several factors. Key factors affecting the results of our operations are summarized below.

 Tariffs and Inflation. We are seeing an
increase in the costs of labor and components as the result of higher inflation rates. In particular, we are experiencing an increase
in raw material costs and supply chain constraints, which may continue to put pressure on our operating margins and increase our costs.
Increased tariffs will likely result in an increase in the cost of our raw materials which are sourced both domestically and abroad. We
do not have information that allows us to quantify the specific amount of cost increases attributable to inflation or tariffs.

 Expansion of Residential Sales into New Markets.
Our future revenue growth is, in part, dependent on our ability to expand our product offerings and services in the select residential
markets where we operate. As of December 31, 2024, we have operations in eight states and service customers in 16 states. We primarily
generate revenue from our sales, product offerings and services in the residential housing market. To continue our growth, we intend to
expand our presence in the residential market into additional states based on markets underserved by national sales and installation providers
that also have favorable incentives and net metering policies. We believe that our entry into new markets will continue to facilitate
revenue growth and customer diversification.

 Expansion of New Products and Services.
We offer roofing replacements to facilitate our solar installations and to repair rooftops on homes in Florida damaged by severe weather.
We plan to expand our roofing business in all markets we enter in the future. Roofing facilitates a faster processing time for our solar
installations in cases where the customer is in need of a roof replacement prior to installing a solar system. In addition, to provide
more financing options for our prospective residential solar energy customers, we have partnered with several third-party operators which
allows our customers to choose a leasing option to finance their systems. We will continue to work with financing partners to find products
which best meet the needs of our customers and help them to reduce the cost of their energy consumption.

 Adding New Customers and Expansion of Sales
with Existing Customers. We intend to continue to grow our in-house sales force and external sales dealers. Through 2024, our in-house
sales have been generated through a summer-sales effort. In 2025, we will introduce a year-round sales team with sales representatives
who live in the markets where they sell. Our efforts to increase sales will be focused on increasing the concentration of sales in the
markets where we operate, improving operational efficiency. We provide competitive compensation packages to our in-house sales teams and
external sales dealers, which incentivizes the acquisition of new customers.

 Interest rates. Interest rate increases
for both short-term and long-term debt have stabilized but remain high. Historically, most of our customers have financed the purchase
of their solar systems. Higher interest rates have resulted in higher monthly costs to customers, which has the effect of slowing the
financing-related sales of solar systems in the areas in which we sell and operate. We do not have information that allows us to quantify
the adverse effects attributable to increased interest rates. Lease financing products have become popular with our customers as the third-party
operators can offer a monthly payment lower than a loan product. The company will continue to offer both loan and lease financing products
to our customers.

 Managing our Supply Chain. We rely on contract
manufacturers and suppliers to produce our components. Our suppliers are generally meeting our materials needs and we are realizing a
decrease in pricing for our solar components compared to the prior year. We do not anticipate continued decrease in pricing in the coming
year. Our ability to grow depends, in part, on the ability of our contract manufacturers and suppliers to provide high quality services
and deliver components and finished products on time and at reasonable costs. In the event we are unable to mitigate the impact of delays
and/or price increases in raw materials, electronic components and freight, it could delay the manufacturing and installation of our systems,
which would adversely impact our cash flows and results of operations, including revenue and contribution margin.

 Components of Condensed Consolidated Statements
of Operations

 Our primary source of revenue is the sale of our
residential solar systems. Our systems are fully functional at the time of installation and require an inspection prior to interconnection
to the utility power grid. We sell our systems primarily direct to end user customers for use in their residences. When a customer uses
a third-party operator (TPO) lease to finance their system, the TPO is the contracted customer with ZEO. Upon installation inspection,
we satisfy our performance obligation and recognize revenue. Many of the Company's customers finance their obligations with third
parties. In these situations, the finance company deducts their financing fees and remits the net amount to the Company. Revenue is recorded
net of these financing fees (and/or dealer fees). The volume of sales and installations of rooftop solar systems, our primary product,
increase from April to September when a majority of our sales teams are most active in our areas of service. In addition to sales of solar
systems, "adders" or accessories to a sale may include roofing, energy efficient appliances, upgraded insulation and/or energy
storage systems. All adders consisted of less than 10% of the total revenue, net in each of the year ended December 31, 2024, and 2023.

 Our revenue is affected by changes in the volume
and average selling prices of our solutions and related accessories, supply and demand, sales incentives and fluctuating interest rates
that increase or decrease the monthly payments for customers purchasing systems through third party financing. Approximately 5% of our
sales were paid in cash by the customer in each of the year ended December 31, 2024, and 2023. Our revenue growth is dependent on our
ability to compete effectively in the marketplace by remaining cost competitive, developing and introducing new sales teams within existing
and new territories, scaling our installation teams to keep up with demand and maintaining a strong internal operations team to process
orders while working with building departments and utilities to permit and interconnect our customers to the utility grid.

 Cost of Goods Sold

 Cost of goods sold consists primarily of product
costs (including solar panels, inverters, metal racking, connectors, shingles, wiring, warranty costs and logistics costs), installation
labor, vehicle costs, and permitting costs.

 During 2024, costs of goods sold decreased in
association with a reduction in revenues. Revenues declined because of the effect of higher interest rates on the consumer financing rates.
The increased cost of consumer lending has reduced the advantage provided by financed solar power relative to standard utility costs,
which has negatively affected the demand for our products.

 Revenue, net less cost of goods sold may vary
from period-to-period and is primarily affected by our average selling prices, financing or dealer fees, fluctuations in equipment costs
and our ability to effectively and timely deploy our field installation teams to project sites once permitting departments have approved
the design and engineering of systems on customer sites.

 Operating Expenses

 Operating expenses consist of sales and marketing
and general and administrative expenses. Personnel-related costs are the most significant component of each of these expense categories
and include salaries, benefits and payroll taxes. In the future, the Company intends to provide more benefits to its employees, including
an employee stock purchase plan, which will increase operating expenses.

 Sales and marketing expenses consist primarily
of personnel-related expenses including sales commissions, as well as advertising, travel, trade shows, marketing, customer support and
other indirect costs. We expect to continue to make the necessary investments to enable us to execute our strategy to increase our market
penetration geographically and enter into new markets by expanding our base sales teams, installers and strategic sales dealer and partner
network.

 General and administrative expenses consist primarily
of personnel-related expenses for our executive, finance, human resources, information technology, operations support and software, facilities
costs and fees for professional services. Fees for professional services consist primarily of outside legal, accounting and information
technology consulting costs.

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

 Other income (expenses), net

 Other income (expenses), net primarily consists
of change in fair value of warrant liabilities and interest income. It also includes interest income on our cash balances, and accrued
interest on tariffs previously paid and approved for a refund.

 Year Ended December 31, 2024, Compared to
Year Ended December 31, 2023

 The following table sets forth a summary of our
consolidated statements of operations for the periods presented:

 Change

 2024

 2023

 $

 %

 $

 $

 $
 (36,446,918
)

 (33.2
)%

 Costs and expenses:

 Cost of goods sold (exclusive of depreciation and amortization)

 38,021,519

 59,436,674

 (21,415,155
)

 (36.0
)%

 4,836,538

 1,841,874

 2,994,664

 162.6
 %

 Sales and marketing

 19,587,073

 30,324,059

 (10,736,986
)

 (35.4
)%

 General and administrative

 21,628,725

 12,949,067

 8,679,658

 67.0
 %

 Total operating expenses

 84,073,855

 104,551,674

 (20,447,819
)

 (19.6
)%

 (Loss) income from operations

 (10,829,772
)

 5,139,327

 (15,969,099
)

 (310.7
)%

 Other income (expense), net:

 Other income (expense), net

 233,151

 (183,401
)

 416,552

 (227.1
)%

 69,000

 -

 69,000

 -
 %

 Interest expense

 (333,539
)

 (110,857
)

 (222,682
)

 200.9
 %

 Total other income (expense), net

 (31,388
)

 (294,258
)

 262,870

 (89.3
)%

 Net (loss) income before taxes

 $
 (10,861,160
)

 $

 $
 (15,706,229
)

 (324,2
)%

 Revenue, net decreased by approximately $36.4
million, from $109.7 million for the year ended December 31, 2023 to $73.2 million for the year ended December 31, 2024. The decrease
was primarily due to the effect of higher interest rates on consumer financing. The increased cost of consumer lending reduced the advantage
provided by financed solar power relative to standard utility costs, which negatively affected the demand for our products. The more difficult
selling environment resulted in a decrease in sales from our sales force and dealer network.

 Cost of Goods Sold

 Cost of goods sold decreased by $21.4 million,
from $59.4 million for the year ended December 31, 2023 to $38.0 million for the year ended December 31, 2024. The decrease was due to
the decrease in revenue. As a percentage of revenue, the cost of goods sold was 52.4% for the year ended December 31, 2024, which was
consistent with the year ended December 31, 2023.

 Depreciation and amortization increased by $3.0
million, from $1.8 million for the year ended December 31, 2023, to $4.8 million for the year ended December 31, 2024. The increase was
due to an increase in the amortization of the cost of acquired contracts from the Lumio Asset Purchase Agreement.

 Sales and Marketing

 Sales and marketing expenses decreased by $10.7
million, from $30.3 million for the year ended December 31, 2023 to $19.6 million for the year ended December 31, 2024. The decrease was
primarily due to a result of a reduction in commissions earned due to the decrease in revenue.

 General and Administrative expenses

 General and administrative expenses increased
by $8.7 million from $12.9 million for the year ended December 31, 2023 to $21.6 million for the year ended December 31, 2024. The increase
was primarily due to $7.8 million of stock compensation expense in 2024 of which there was none in 2023.

 Other income (expense), net

 Other income (expense), net increased from $294,258
of other expense to $31,388 of income primarily due to a decrease in losses on the disposition of assets, a gain on fair value of warrant
liabilities and an increase in interest income partly offset by an increase in interest expense.

 Liquidity and Capital Resources

 Our primary source of funding to support operations
have historically been from cash flows from operations. Our primary short-term requirements for liquidity and capital are to fund general
working capital and capital expenses. Our principal long-term working capital uses include ensuring revenue growth, expanding our sales
and marketing efforts and potential acquisitions.

 As of December 31, 2024 and 2023, our cash and
cash equivalents balance was approximately $5.6 million and $8.0 million, respectively. The Company maintains its cash in checking and
savings accounts.

 Our future capital requirements depend on many
factors, including our revenue growth rate, the timing and extent of our spending to support further sales and marketing, the degree to
which we are successful in launching new business initiatives and the cost associated with these initiatives, and the growth of our business
generally.

 In order to finance these opportunities and associated
costs, it is possible that we will need to raise additional capital through either debt or equity financing. In December of 2024, we entered
into a the Promissory Note for $2.4 million to help fund the creation of a year-round sales team.

 While we believe that our cash and cash equivalents
will be sufficient to meet our currently contemplated business needs for the next twelve months, we cannot assure you that this will be
the case. If additional financing is required by us from outside sources, we may not be able to raise it on terms acceptable to us or
at all. If we are unable to raise additional capital on acceptable terms when needed, our business, results of operations and financial
condition would be materially and adversely affected.

 Cash Flows

 The following table summarizes our cash flows
for the periods presented:

 Year ended December 31,

 2024

 2023

 Change

 Net cash (used in) provided by operating activities

 $
 (8,716,717
)

 $
 11,977,134

 $
 (20,693,851
)

 Net cash (used in) investing activities

 (7,369,137
)

 (1,034,666
)

 (6,334,471
)

 Net cash provided by (used in) financing activities

 13,697,663

 (5,188,468
)

 18,886,131

 Cash flows from operating activities

 Net cash used in operating activities was approximately
$8.7 million during the year ended December 31, 2024 compared to a net cash provided by operating activities of approximately $12.0 million
during year ended December 31, 2023. The decrease was primarily due to an increase in accounts receivable. Accounts receivable increased
as our customers transitioned to financing their systems through lease arrangements. Revenues associated with lease arrangements were
64% of sales in 2024 compared to 21% in 2023. In loan arrangements, 100% of the cash is received shortly after installation. Loan arrangements
provide for a holdback of 20% of the cash due until the customer has received permission to operate from the utility, which delays full
payment of products by 90-120 days past installation.

 Cash flows from investing activities

 Net cash used in investing activities was approximately
$7.4 million for the year ended December 31, 2024. The company used $4.0 million for the Lumio asset purchase, $3.0 million to issue debt
to a related party, and $0.4 million to purchase property and equipment. Net cash used in investing activities for the year ended December
31, 2023 was approximately $1.0 million, relating to purchases of vehicles.

 Cash flows from financing activities

 Net cash provided by financing activities was
approximately $13.7 million for the year ended December 31, 2024, primarily relating to $9.2 million in net proceeds from the issuance
of convertible preferred stock at the time of the Business Combination, $2.7 million from a private placement to finance the Lumio asset
purchase and $2.4 million from a convertible promissory note with a related party, offset by principal payments on debt and dividends
paid on convertible preferred stock. Net cash used in financing activities for the year ended December 31, 2023 was approximately $5.2
million, primarily relating to distributions to members.

 Current Indebtedness

 The Company has approximately $3.6 million in
trade-credit with solar equipment distributors, approximately $0.8 million of debt on service trucks and vehicles valued at approximately
$1.3 million, net of depreciation and $2.4 million in a convertible promissory note with a related party.

 Non-GAAP Financial Measures

 The non-GAAP financial measures below have not
been calculated in accordance with GAAP and should be considered in addition to results prepared in accordance with GAAP and should not
be considered as a substitute for, or superior to, GAAP results. In addition, Adjusted EBITDA and Adjusted EBITDA Margin should not be
construed as indicators of our operating performance, liquidity or cash flows generated by operating, investing and financing activities,
as there may be significant factors or trends that they fail to address. We caution investors that non-GAAP financial information, by
its nature, departs from traditional accounting conventions. Therefore, its use can make it difficult to compare our current results with
our results from other reporting periods and with the results of other companies.

 Our management uses these non-GAAP financial measures,
in conjunction with GAAP financial measures, as an integral part of managing our business and to, among other things: (i) monitor and
evaluate the performance of our business operations and financial performance; (ii) facilitate internal comparisons of the historical
operating performance of our business operations; (iii) facilitate external comparisons of the results of our overall business to the
historical operating performance of other companies that may have different capital structures and debt levels; (iv) review and assess
the operating performance of our management team; (v) analyze and evaluate financial and strategic planning decisions regarding future
operating investments; and (vi) plan for and prepare future annual operating budgets and determine appropriate levels of operating investments.
We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating
results and trends, and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP
financial measures to investors.

 Contribution Profit and Contribution Margin

 We define contribution profit as revenue, net
less direct costs of revenue, commissions expense and depreciation and amortization, and define contribution margin, expressed as a percentage,
as the ratio of contribution profit to revenue, net. Contribution profit and margin can be used to understand our financial performance
and efficiency and allows investors to evaluate our pricing strategy and compare against competitors. Our management uses these metrics
to make strategic decisions, identify areas for improvement, set targets for future performance and make informed decisions about how
to allocate resources going forward. Contributions margin reflects our Contribution profit as a percentage of revenues.

 The following table provides a reconciliation
of gross profit to contribution profit for the periods presented:

 Year ended December 31,

 2024

 2023

 Total revenue

 $

 $

 Less: Cost of goods sold (exclusive of depreciation and amortization shown below)

 38,021,519

 59,436,674

 Less: Depreciation and amortization related to Cost of goods sold

 827,848

 444,663

 Gross Profit

 $
 34,394,716

 $
 49,809,664

 Adjustment:

 4,008,690

 1,397,211

 Commissions expense

 15,827,850

 28,679,176

 Contribution Profit

 14,588,176

 19,733,277

 Gross Margin

 47.0
 %

 45.4
 %

 Contribution margin

 19.9
 %

 18.0
 %

 Adjusted EBITDA

 We define Adjusted EBITDA, a non-GAAP financial
measure, as net income (loss) before interest and other income (expenses), net, income tax expense, depreciation and amortization, as
adjusted to exclude merger and acquisition expenses (" M&A expenses "). We utilize Adjusted EBITDA as an internal
performance measure in the management of our operations because we believe the exclusion of these non-cash and non-recurring charges allow
for a more relevant comparison of our results of operations to other companies in our industry. Adjusted EBITDA should not be viewed as
a substitute for net (loss) income calculated in accordance with GAAP, and other companies may define Adjusted EBITDA differently. Adjusted
EBITDA margin reflects our Adjusted EBITDA as a percentage of revenues. The following table provides a reconciliation of net (loss) income
to Adjusted EBITDA for the periods presented:

 Year ended December 31,

 2024

 2023

 $
 (9,872,358
)

 $

 Adjustment:

 Other income, net

 (233,151
)

 183,401

 (69,000
)

 -

 Interest expense

 333,539

 110,857

 Income tax benefit

 (988,802
)

 -

 Stock compensation

 7,951,248

 -

 4,836,538

 1,841,874

 Adjusted EBITDA

 1,958,014

 6,981,201

 Net (loss) income margin

 (13.5
)%

 4.4
 %

 Adjusted EBITDA margin

 2.7
 %

 6.4
 %

 Critical Accounting Estimates

 The preparation of financial statements in conformity
with GAAP requires us to establish accounting policies and make estimates and assumptions that affect our reported amounts of assets and
liabilities at the date of the condensed consolidated financial statements. These financial statements include some estimates and assumptions
that are based on informed judgments and estimates of management. We evaluate our policies and estimates on an on-going basis and discuss
the development, selection and disclosure of critical accounting policies with those charged with governance. Predicting future events
is inherently an imprecise activity and as such requires the use of judgment. Our condensed consolidated financial statements may differ
based upon different estimates and assumptions.

 We discuss our significant accounting policies
in Note 3, Summary of Significant Accounting Policies, to our condensed consolidated financial statements. Our significant accounting
policies are subject to judgments and uncertainties that affect the application of such policies. We believe these financial statements
include the most likely outcomes with regard to amounts that are based on our judgment and estimates. Our financial position and results
of operations may be materially different when reported under different conditions or when using different assumptions in the application
of such policies. In the event estimates or assumptions prove to be different from the actual amounts, adjustments are made in subsequent
periods to reflect more current information. We believe the following accounting policies are critical to the preparation of our consolidated
financial statements due to the estimation process and business judgment involved in their application:

 Valuation of Business Combinations

 The Company recognizes and measures the assets
acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date. Any excess or
surplus of the purchase consideration when compared to the fair value of the net tangible assets acquired, if any, is recorded as goodwill
or gain from a bargain purchase. The fair value of assets and liabilities as of the acquisition date are often estimated using a combination
of approaches, including the income approach, which requires us to project future cash flows and apply an appropriate discount rate; and
the market approach which uses market data and adjusts for entity-specific differences. We use all available information to make these
fair value determinations and engage third-party consultants for valuation assistance. The estimates used in determining fair values are
based on assumptions believed to be reasonable, but which are inherently uncertain. Accordingly, actual results may differ materially
from the projected results used to determine fair value.

 Goodwill

 Goodwill is recognized and initially measured
as any excess of the acquisition-date consideration transferred in a business combination over the acquisition-date amounts recognized
for the net identifiable assets acquired.

 Goodwill is not amortized but is tested for impairment
annually, or more frequently if an event occurs or circumstances change that would more likely than not result in an impairment of goodwill.
First, the Company assesses qualitative factors to determine whether or not it is more likely than not that the fair value of a reporting
unit is less than its carrying amount. If the Company concludes that it is more likely than not that the fair value of a reporting
unit is less than its carrying amount, the Company conducts a quantitative goodwill impairment test comparing the fair value of the applicable
reporting unit with its carrying value. If the carrying amount of the reporting unit exceeds the fair value of the reporting unit, the
Company recognizes an impairment loss in the condensed consolidated statements of operations for the amount by which the carrying amount
exceeds the fair value of the reporting unit. The Company performs its annual goodwill impairment test at December 31 of each year. There
was no goodwill impairment recorded for the year ended December 31, 2024, and 2023.

 Intangible assets subject to amortization

 Intangible assets include tradename, customer
lists and non-compete agreements. Amounts are subject to amortization on a straight-line basis over the estimated period of benefit and
are subject to annual impairment consideration. Costs incurred to renew or extend the term of a recognized intangible asset, such as the
acquired tradename, are capitalized as part of the intangible asset and amortized over its revised estimated useful life.

 Intangible assets are reviewed for impairment
whenever events or changes in circumstances indicate the carrying amount of the intangible assets may not be recoverable. Conditions that
would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change
in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount
of an asset or group of assets may not be recoverable. The Company evaluates the recoverability of intangible assets by comparing their
carrying amounts to future net undiscounted cash flows expected to be generated by the intangible assets. If such intangible assets are
considered to be impaired, the impairment recognized is measured as the amount by which the carrying amount of the intangible assets exceeds
the fair value of the assets. The Company determines fair value based on discounted cash flows using a discount rate commensurate with
the risk inherent in the Company's current business model for the specific intangible asset being valued. No impairment charges
were recorded for the year ended December 31, 2024, and 2023.

 ITEM 7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK.

 We are a smaller reporting company as defined
by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and are not required to provide the
information otherwise required under this item.

 ITEM 8. FINANCIAL STATEMENT AND SUPPLEMENTARY
DATA.

 This information appears following Item 15 of
this Report and is incorporated herein by reference.

 ITEM 9. CHANGES IN AND DISAGREEMENTS
WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 None.

 ITEM 9A. CONTROLS AND PROCEDURES.

 Evaluation of Disclosure Controls and Procedures

 Disclosure controls are procedures that are designed
with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report,
is recorded, processed, summarized and reported within the time period specified in the SEC's rules and forms. Disclosure controls
are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the
Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our management
evaluated, with the participation of our principal executive officer and principal financial and accounting officer, the effectiveness
of our disclosure controls and procedures as of December 31, 2024, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that
evaluation, our principal executive officer and principal financial and accounting officer concluded that, as of December 31, 2024, our
disclosure controls and procedures were not effective because of the identification of a material weakness in our internal control over
financial reporting described below. In light of this material weakness, we performed additional analysis as deemed necessary to ensure
that our financial statements were prepared in accordance with U.S. generally accepted accounting principles.

 We do not expect that our disclosure controls
and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.
Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits
must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation
of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances
of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 Management's Report on Internal Controls
Over Financial Reporting

 Our management is responsible for establishing
and maintaining adequate internal control over financial reporting (as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for us. Under the supervision and with the participation of our chief executive officer and chief financial officer, our management assessed
the effectiveness of our internal control over financial reporting as of December 31, 2024 based on criteria specified in Internal Control-Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment, our management,
including our chief executive officer and chief financial officer, concluded that, as of December 31, 2024, our internal control over
financial reporting was not effective as of December 31, 2024. As previously disclosed, a material weakness exists in the Company's
internal control over financial reporting related to ineffective controls over period end financial disclosure and reporting processes,
including not timely performing certain reconciliations and the completeness and accuracy of those reconciliations, and lack of effectiveness
of controls over accurate accounting and financial reporting and reviewing the underlying financial statement elements, and recording
incorrect journal entries that also did not have the sufficient review and approval.

 Notwithstanding the identified material weaknesses,
discussed below, management, including the certifying officers, believes that the financial statements contained in this Report filing
fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented in conformity
with GAAP.

 Material Weaknesses

 A material weakness is a deficiency, or a combination
of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement
of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

 As previously disclosed, a material weakness exists
in the Company's internal control over financial reporting related to ineffective controls over period end financial disclosure
and reporting processes, including not timely performing certain reconciliations and the completeness and accuracy of those reconciliations,
and lack of effectiveness of controls over accurate accounting and financial reporting and reviewing the underlying financial statement
elements, and recording incorrect journal entries that also did not have the sufficient review and approval. The control deficiencies
resulted in and could result in a future misstatement in our accounts or disclosures that would result in a material misstatement
to our financial statements that would not be prevented or detected. Accordingly, we determined that these control deficiencies constitute
material weaknesses.

 We are in the early stages of designing and implementing a plan to
remediate the material weaknesses identified.. Our plan includes the below:

 Designing and implementing a risk assessment process supporting the identification of risks.

 Implementing systems and controls to enhance our review of significant accounting transactions and other new technical accounting and financial reporting issues and preparing and reviewing accounting memoranda addressing these issues.

 Improving our internal control policies and procedures to specifically address controls around segregation of duties, cybersecurity, user access reviews, and changes in management.

 Implementing specific user access, segregation of duties and change management controls within our financial reporting IT systems.

 Hiring additional experienced accounting, financial reporting and internal control personnel and changing roles and responsibilities of our personnel as we transition to being a public company and are required to comply with Section 404 of the Sarbanes-Oxley Act (" Section 404 "). We are in the process of hiring additional resources and we are engaging with a third-party consulting firm to assist us with our formal internal control plan and to provide accounting services related to complex accounting transactions.

 Implementing controls to enable an effective and timely review of period-end close procedures.

 Implementing controls to enable an accurate and timely review of accounting records that support our accounting processes and maintain documents for internal accounting reviews.

 Management has considered and reviewed the errors
which occurred in revenue and cost of goods sold cutoff, accounts payable, accrued liabilities, stock compensation, expense classification,
prepaid expenses, operating lease cash flow classification and accounting for finance lease arrangements. Management has determined that
controls are not designed effectively in these areas. To mitigate future misstatements in these areas management will implement the following
procedures at the end of each reporting period:

 1.

 Accounts Payable - Review the accounts payable with the executive team to inquire about any invoices not sent to accounts payable.

 2.

 Accrued Liabilities - Review the accrued liabilities detail with the executive team to determine if there are any expenses/liabilities for which the company should accrue an expense which has not yet been recognized.

 3.

 Stock Compensation - Review with the CEO and legal counsel the list
of stock grants which have been made and ask if there have been any other grants made (paper issued to employees or vendors) which should
be included in the analysis.

 4.

 Classification of expenses - Review the expense classification with the executive team to determine all expenses are properly classified.

 5.

 Classification of financing agreements - Review the financing agreements with the executive team to determine proper classification of the agreements as debt or finance lease.

 6.

 Prepaid expenses – Review prepaid expenses with the executive team to determine if all prepaid expenses have been properly recorded for future services to be rendered and subsequently amortized.

 7.

 Revenue and cost of goods sold cut off – Review revenue and related cost of goods sold with executive team to determine if revenue and related cost of goods sold is properly recognized.

 We cannot assure you that these measures will
remediate the material weaknesses described above. The implementation of these remediation measures is in the early stages and will require
validation and testing of the design and operating effectiveness of our internal controls over a sustained period of financial reporting
cycles and, as a result, the timing of when we will be able to fully remediate the material weaknesses is uncertain. If the steps we take
do not remediate the material weaknesses in a timely manner, there could be a reasonable possibility that these control deficiencies or
others may result in a material misstatement of our annual or interim financial statements that would not be prevented or detected on
a timely basis. This, in turn, could jeopardize our ability to comply with our reporting obligations, limit our ability to access the
capital markets and adversely impact our stock price.

 Changes in Internal Control over Financial
Reporting

 There were no changes in our internal control
over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal
quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Further,
the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered
relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls
and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design
of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can
be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 ITEM 9B. OTHER INFORMATION.

 None.

 ITEM 9C. DISCLOSURE REGARDING FOREIGN
JURISDICTIONS THAT PREVENT INSPECTIONS.

 Not applicable.

 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 Our officers and directors are as follows:

 Name

 Age

 Position

 Timothy Bridgewater

 Chief Executive Officer and Director

 Cannon Holbrook

 Chief Financial Officer

 Kalen Larsen

 Chief Operating Officer

 Gianluca "Luke" Guy

 Chief Installation and Strategy Officer and Director

 Brandon Bridgewater

 Chief Sales Officer

 Stirling Adams

 General Counsel and Secretary of the Board

 Dr. Abigail M. Allen

 James P. Benson

 Neil Bush

 Mark Jacobs

 Timothy Bridgewater. Mr. Bridgewater
has served as Sunergy's Chief Executive Officer and chairman of the board since its creation in October 2021. He previously
served as the Company's Chief Financial Officer from October 2021 until August 2024. Mr. Bridgewater also served as a founder
and manager for Sunergy's predecessor company Sun First Energy since October 2019 until the Contribution of Sun First Energy,
LLC into Sunergy in October 2021. From July 2002 to the present, Mr. Bridgewater has been a founder and managing director
of Capitol Financial Strategies, LLC (also known as Interlink Capital Strategies), an investment advisory services company, where he has
advised on debt and private equity investments in industries ranging from mining, building materials, renewable energy, and automotive
component manufacturing to electronics and software technologies in the U.S. and Asia. Mr. Bridgewater is the manager of Sunergy
Solar LLC. From October 2018 to September 2020, Mr. Bridgewater held the position of manager at Micro Bolt, an energy
development company. Since April 2020, he has served as a manager at Prometheus Power Partners, LLC, a commercial and utility-scale
solar energy development company. From November 2019 to April 2021, Mr. Bridgewater served as the Chief Financial Officer
of Tintic Consolidated Metals, LLC, a mining company, and from November 2019 to November 2021, he served as a Vice President
for that company. Mr. Bridgewater earned his B.S. in Finance from Brigham Young University and completed graduate studies in International
Economics from University of Utah. We believe that Mr. Bridgewater is qualified to serve both as a member of our management team
and the Board because of his visionary leadership of Sunergy from inception to date, his experience in energy development, and his over
30 years of commercial and international banking, international finance and business development experience working in the U.S.,
Asia and Latin America.

 Cannon Holbrook. Mr. Holbrook
began serving as Zeo's Chief Financial Officer on August 20, 2024. He initially joined the Company in March 2024, serving as
advisor to the Chief Executive Officer during the Company's de-SPAC process and, since that time, has lead its accounting, finance,
and treasury functions as well as building out its external reporting processes. Mr. Holbrook brings over two decades of experience
in finance and accounting to the Company. Throughout his career, he has demonstrated expertise in strategic planning, mergers and acquisitions,
and capital raising. He has managed accounting operations for global entities, implemented shared services, and developed and driven process
improvements that have yielded significant cost savings and operational efficiencies. Prior to joining the Company as CFO, Mr. Holbrook
served as the advisor to the CEO from March to August 2024. While in this role, he led the Company's accounting, finance, and treasury
functions, helped the Company complete its de-SPAC combination in March 2024, and built out external reporting processes. Before joining
our Company, Mr. Holbrook served as the CFO of Hawx Pest Control, a company in the business of residential pest services. While there,
he led accounting, finance, and treasury functions, helped the company increase its revenue, and helped to close a major private equity
financing. Prior to this, from September 2020 to December 2021, Mr. Holbrook served as the Head of Finance in Built Bar, a food manufacturer.
In this role, he implemented key financial reporting functions and helped raise debt and equity financing. From July to September 2020,
he was the Consulting CFO of Access CFO, a business that provides outsourced CFO services. While there, he drove company responses to
quality of earnings processes and planned and drove preparation for a company audit. From December 2017 to July 2020, Mr. Holbrook
was the VP of Accounting and Finance at HZO, Inc., a nanotechnology manufacturer. While there, he implemented accounting and finance systems
and processes necessary to enable the company to meet needs through explosive growth, completed an audit, implemented automated accounting
processes, and raised debt and equity financing.

 Kalen Larsen. Mr. Larsen
serves as Zeo's Chief Operating Officer, overseeing regional sales, dealer relations, operations, and process enhancements. He served
as Sunergy's Chief of Sales and Marketing from October 2021 until Closing. In September 2019, he co-founded Sun First
Energy and co-managed sales and operations there until its Contribution that formed Sunergy in October 2021. Mr. Larsen began
his solar career in October 2016 at Vivint Solar, LLC and worked there until October 2017. He worked at and co-managed a sales
office at Vivint Inc. from October 2017 to March 2019, and subsequently, he managed a sales office for Atlantic Key Energy,
LLC from March 2019 to October 2019. Mr. Larsen holds an associate degree from Weber State University with an emphasis
in Spanish. We believe Mr. Larsen is qualified to serve as a member of our management team because of his sales and operations experience
and proven track record in the solar energy industry.

 Gianluca "Luke" Guy. Mr. Guy
serves as Zeo's Chief Installation and Strategy Officer, and has served as a director since the Closing of the Business Combination
Mr. Guy also currently serves as the Financially Responsible Officer at Sunergy Roofing & Construction, Inc., a subsidiary
of Zeo, which he co-founded in November 2020. Mr. Guy is also the co-founder of Sunergy Solar, and oversaw sales, finance, and
construction operations until its Contribution that formed Sunergy in October 2021. From January 2013 to August 2015, Mr. Guy
operated JHL Group, LLC, a company he founded that provided marketing and sales for solar energy installation companies. Mr. Guy
holds a construction financial officer license in the state of Florida. We believe that Mr. Guy is qualified to serve as a member
of our management team and the Board because of his pivotal role in driving Sunergy's business expansion through his expertise in
sales, finance, construction, and strategic leadership.

 Brandon Bridgewater. Mr. Bridgewater
has served as Sunergy's Chief Sales Officer since October, 2021 and is the son of Timothy Bridgewater, Zeo's Chairman and
Chief Executive Officer. Mr. Bridgewater co-founded Sun First Energy, LLC, as its President and Chief Sales Officer, in September 2019
until its Contribution that formed Sunergy in October 2021. From September 2017 to December 2018, Mr. Bridgewater
served as a Sales Manager at Vivint Smart Home, Inc., a smart home company in the United States and Canada. From August 2015
to September 2017, he served as an Area Manager for Aptive Environmental, LLC, a pest control solution company. Mr. Bridgewater
earned his Bachelor of Science in Business Finance (with an emphasis in Real Estate) from Brigham Young University's Marriott School
of Business in 2019. We believe that Mr. Bridgewater is qualified to serve as a member of our management team because of his track
record in the solar energy industry and range of sales experience.

 Stirling Adams. Mr. Adams
serves as Zeo's General Counsel and Secretary. Mr. Adams brings 30 years of legal experience to the executive team. Just
prior to becoming General Counsel and Secretary, he worked as a sole practitioner attorney since November 2022, focusing on renewable
energy and nuclear energy ventures and financing. From August 2016 to October 2022, he served as Vice President, Associate General
Counsel, and Head of Intellectual Property at Micro Focus International plc (now owned by OpenText Corporation), where he oversaw the
company's efforts to develop and protect intellectual property. Prior to that, he spent 21 years as in-house counsel at Novell,
Inc., which was acquired by Micro Focus in 2014 through The Attachmate Group, where he served in various roles, including at times supervising
legal affairs for one or more of Novell's business units, for its consulting services arm, and for its Latin American and emerging
markets businesses. Throughout most of his career, Mr. Adams has been engaged in international business transactions, technology
licensing, and M&A transactions. He has lived and worked in Europe, South America, and China. He has taught as an adjunct professor
of law at Brigham Young University, and holds a J.D. degree from Boston University, along with a B.S. in Computer Science and Statistics
from Brigham Young University. We believe that Mr. Adams is qualified to serve as a member of our management team because of his
extensive legal expertise.

 Dr. Abigail M. Allen. Dr. Allen
serves as a director of Zeo. Dr. Allen is a tenured associate professor of accounting at the Marriott School of Management at Brigham
Young University. Dr. Allen holds a doctorate in business administration from Harvard Business School, as well as undergraduate and
master's degrees in accounting from the University of Southern California. She is a licensed CPA. Prior to BYU, Dr. Allen
was a Lecturer in the Accounting and Management Unit at Harvard Business School. Prior to academia, Dr. Allen worked as an external
auditor for Deloitte. Dr. Allen's research focuses on the political economy and economic consequences of accounting standard
setting, as well as corporate governance and diversity. Her work has been published in the Journal of Accounting and Economics, the Journal
of Accounting Research, Management Science and the Journal of Law Finance and Accounting and has been cited and discussed in Forbes Magazine,
Harvard Business Review, Columbia Law School Blue Sky blog, and the Institute for Truth in Accounting.

 James P. Benson. Mr. Benson
serves as a director of Zeo. Mr. Benson is a founding partner of Energy Spectrum, where he oversees Energy Spectrum's efforts
in sourcing investments, transaction evaluation, negotiation, executing and financing, monitoring of portfolio companies and the firm's
management and strategy. With approximately 37 years of venture capital and private equity, investment banking, financial advisory
and commercial banking experience, Mr. Benson brings extensive relationships and his network across the energy industry to the company.
Mr. Benson currently serves as a director on the boards of multiple Energy Spectrum portfolio companies and has been on two public
boards in the past. Prior to co-founding Energy Spectrum in 1996, Mr. Benson served for ten years as a Managing Director at
R. Reid Investments Inc., where his experience included energy-related private placements of debt and equity, acquisitions and divestitures.
Mr. Benson began his career at InterFirst Bank Dallas, where he served for four years and was responsible for various energy
financings and financial recapitalizations. Mr. Benson received his Bachelor of Science degree from the University of Kansas and
his Master of Business Administration degree in Finance from Texas Christian University. Due to his extensive investment experience in
the energy industry, we believe Mr. Benson is well qualified to serve on our board of directors.

 Neil Bush. Mr. Bush
serves as a director of Zeo. Mr. Bush has served on the board of directors of FutureTech II Acquisition Corp. since February 2022.
Mr. Bush has been the sole member of Neil Bush Global Advisors, LLC since January 1998. Additionally, Mr. Bush has been
on the board of directors for Hong Kong Finance Investment Holding Group since 2012. Mr. Bush has also served as the co-chairman
for CIIC since 2006 and as an adviser to CP Group since 2015. Further, Mr. Bush has served as a partner for Asia & America
Consultants since March 2016 and the chairman of Singhaiyi since April 2013. Mr. Bush served on the board of Greffex, Inc.
since June 2020 and the Points of Light Foundation. Mr. Bush was appointed director of Rebound International, LLC in early 2022.
Due to his extensive investment experience in the energy industry, we believe Mr. Bush is well qualified to serve on our board of
directors.

 Mark M. Jacobs. Mr. Jacobs
serves as a director of Zeo. Mr. Jacobs brings more than 30 years of executive management, operations and investment banking
experience across multiple segments within the broader energy industry. Since his retirement, Mr. Jacobs has served as an independent
outside consultant serving the energy industry and privately-held entities undertaking a change in control as well as serving as board
chair for a number of nonprofit organizations. Mr. Jacobs previously served as CEO, President and Director of Reliant Energy, a publicly-traded,
Fortune 500 energy company. During Mr. Jacobs' tenure, he led the company through a series of crises including the impact of
Hurricane Ike and the financial market crisis in 2008. He initiated and negotiated a merger-of-equals with Mirant Corporation to form
Gen On Energy in 2010 where he served as President, Chief Operating Officer and a Director of the largest competitive generator in the
U.S. Mr. Jacobs was originally recruited to Reliant Energy in 2002 to serve as Chief Financial Officer. In that role, Mr. Jacobs
brokered a landmark $6.2B debt restructuring transaction, leading the company away from a potential bankruptcy filing and repositioned
the company to compete in the emerging competitive electricity market. Prior to Reliant Energy, Mr. Jacobs served as a Managing Director
within the Natural Resources Group and Mergers & Acquisitions Department at Goldman Sachs & Co. where he provided strategic
advice for large public and private corporations related to M&A and capital markets. Mr. Jacobs received a B.B.A. from Southern
Methodist University and a Master of Management from the J.L. Kellogg Graduate School of Management at Northwestern University. Due
to his extensive operational and leadership experience in the energy industry, we believe Mr. Jacobs is well qualified to serve on
our board of directors.

 Family Relationships

 Timothy Bridgewater is the father of Brandon Bridgewater.
There are no other family relationships among our directors and executive officers.

 Corporate Governance

 Composition of the Board of Directors

 Zeo's business affairs are managed under
the direction of its board of directors, which consists of six members. Under our bylaws, each director will hold office until the expiration
of the term of the class, if any, for which elected and until such director's successor is elected and qualified or until such director's
earlier death, resignation, disqualification, or removal. Pursuant to our charter, the number of directors on the Board will be fixed
exclusively by one or more resolutions adopted from time to time by the board. Any vacancies on the Board and any newly created directorships
resulting from any increase in the number of directors will also be filled only by the affirmative vote of a majority of the directors
then in office, even though less than a quorum, or by a sole remaining director.

 Director Independence

 As a result of Zeo's Class A common stock
being listed on Nasdaq, Zeo is required to comply with the applicable rules of such exchange in determining whether a director is independent.
The Board has undertaken a review of the independence of the individuals named above and have determined that each of Dr. Abigail
M. Allen, Neil Bush, James P. Benson and Mark M. Jacobs qualifies as "independent" as defined under the applicable
Nasdaq rules.

 Committees of the Board of Directors

 The Board directs the management of its business
and affairs, as provided by Delaware law, and conducts its business through meetings of the board of directors and standing committees.
Zeo has a standing audit committee and compensation committee, each of which operates under a written charter.

 In addition, from time to time, special committees
may be established under the direction of the Board when it deems it necessary or advisable to address specific issues. Current copies
of Zeo's committee charters are posted on its website (investors.zeoenergy.com), as required by applicable SEC and Nasdaq rules.
The information on or available through any of such website is not deemed incorporated in this Report and does not form part of this Report.

 Audit Committee

 Zeo has an audit committee consisting of Dr. Abigail
M. Allen, James P. Benson and Mark M. Jacobs, and Dr. Allen serves as the chair of the audit committee. The Board has determined that
each of these individuals meets the independence requirements of the Sarbanes-Oxley Act and Rule 10A-3 under the Exchange Act and the
applicable listing standards of Nasdaq. Each member of Zeo's audit committee is able to read and understand fundamental financial
statements in accordance with Nasdaq audit committee requirements. In arriving at this determination, the board examined each proposed
audit committee member's scope of experience and the nature of their prior and/or current employment.

 The Board has determined that Dr. Abigail M. Allen
qualifies as an audit committee financial expert within the meaning of SEC regulations and meets the financial sophistication requirements
of the Nasdaq rules. In making this determination, the Board considered formal education and previous and current experience in financial
and accounting roles. Both Zeo's independent registered public accounting firm and management periodically meet privately with Zeo's
audit committee.

 The audit committee's responsibilities include,
among other things:

 appointing, compensating, retaining,
evaluating, terminating and overseeing Zeo's independent registered public accounting firm;

 discussing with Zeo's
independent registered public accounting firm their independence from management;

 reviewing with Zeo's
independent registered public accounting firm the scope and results of their audit;

 pre-approving all audit and
permissible non-audit services to be performed by Zeo's independent registered public accounting firm;

 overseeing the financial reporting
process and discussing with management and Zeo's independent registered public accounting firm the interim and annual financial
statements that Zeo files with the SEC;

 reviewing and monitoring Zeo's
accounting principles, accounting policies, financial and accounting controls and compliance with legal and regulatory requirements;
and

 establishing procedures for
the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters.

 Compensation Committee

 Zeo has a compensation committee consisting of
Neil Bush, James P. Benson and Mark M. Jacobs, and Mr. Bush serves as the chair of the compensation committee. All members
are non-employee directors, as defined in Rule 16b-3 promulgated under the Exchange Act. The Board has determined that each
proposed member is "independent" as defined under the applicable Nasdaq listing standards, including the standards specific
to members of a compensation committee. The compensation committee's responsibilities include, among other things:

 reviewing and setting or making recommendations to the Board
regarding the compensation of Zeo's executive officers;

 making recommendations to the Board regarding the compensation
of Zeo's directors;

 reviewing and approving or making recommendations to the
Board regarding Zeo's incentive compensation and equity-based plans and arrangements; and

 appointing and overseeing any compensation consultants.

 We believe that the composition and functioning
of Zeo's compensation committee meets the requirements for independence under the current Nasdaq listing standards.

 Director Nominations

 Zeo does not have a nominating committee. However,
Zeo will form a nominating committee as and when required to do so by law or Nasdaq rules. In accordance with Rule 5605(e)(2) of Nasdaq
rules, a majority of the independent directors may recommend a director nominee for selection by the Board. The ESGEN Board believes that
the Zeo independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without
the formation of a standing nominating committee. The directors who participate in the consideration and recommendation of director nominees
are Dr. Abigail M. Allen, James P. Benson, Neil Bush and Mark M. Jacobs. In accordance with Rule 5605(e)(1)(A) of Nasdaq rules, all such
directors are independent. As there is no standing nominating committee, we do not have a nominating committee charter in place.

 The Board will also consider director candidates
recommended for nomination by its stockholders during such times as they are seeking proposed nominees to stand for election at the next
annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Zeo's stockholders that wish to nominate
a director for election should follow the procedures set forth in our bylaws.

 Zeo has not formally established any specific,
minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating
nominees for director, the Board will consider educational background, diversity of professional experience, knowledge of our business,
integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of its stockholders.

 Board Member Attendance at Annual Stockholder
Meetings

 Although we do not have a formal policy regarding
director attendance at annual stockholder meetings, directors are encouraged to attend these annual meetings.

 Number of Meetings

 During
the fiscal year ended December 31, 2024, our Board met four times, the audit committee met six times and the compensation committee
met one time. In the fiscal year ended December 31, 2024, each of our directors attended at least 75% of the meetings of the Board
and committees on which he or she served as a member.

 Insider Trading Policy

 We have adopted insider trading policies and procedures
governing the purchase, sale, and/or other dispositions of our securities by directors, officers, and employees, which are reasonably
designed to promote compliance with insider trading laws, rules and regulations, and applicable Nasdaq listing standards (the " Insider
Trading Policy ").

 The foregoing
description of the Insider Trading Policy does not purport to be complete and is qualified in its entirety by the terms and conditions
of the Insider Trading Policy, a copy of which is filed with this Report as Exhibit 19 and is incorporated herein by reference.

 Code of Ethics

 Zeo has a code of ethics that applies to all of
its executive officers, directors and employees, including its principal executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions. The code of ethics is available on Zeo's website (investors.zeoenergy.com).

 Compensation Committee Interlocks and Insider
Participation

 None of Zeo's executive officers currently
serves, or has served during the last year, as a member of the board of directors or compensation committee of any entity that has one
or more executive officers serving as a member of the Board.

 Communications with the Board

 Any stockholder or any other interested party
who desires to communicate with our Board, our non-management directors, or any specified individual director, may do so by directing
such correspondence to the attention of the General Counsel, Zeo Energy Corp., 7625 Little Rd, Suite 200A, New Port Richey, FL 34654.
The General Counsel will forward the communication to the appropriate director or directors as appropriate.

 ITEM 11. EXECUTIVE COMPENSATION.

 Executive and Director Compensation

 The following table sets forth information concerning
the compensation of the named executive officers for the years ended December 31, 2024 and 2023:

 Name and Principal Position

 Year

 Salary
 ($)

 Stock
 Awards
 ($) (1)

 Non-Equity
 Incentive Plan
 Compensation
 ($)

 All Other
 Compensation
 ($)

 Total
 ($)

 Timothy Bridgewater

 2024

 260,000

 4,242,150

 —

 215,000
 (2)

 475,000

 Chairman, CEO

 2023

 —

 —

 —

 547,993
 (2)

 547,993

 Cannon Holbrook
 CFO

 2024

 135,577

 26,250

 —

 —

 161,827

 Stirling Adams
 GC

 2024

 225,308

 26,250

 —

 119,785
 (3)

 371,373

 (1)
 Amounts reflect the full grant-date fair value of stock awards
granted during the applicable fiscal year computed in accordance with ASC Topic 718, rather than the amounts paid to or realized
by the named executive officer.

 (2)
 For 2023 and 2024, the amounts in this column represent the
distributions paid in 2023 and 2024 to Mr. Bridgewater with respect to his partnership interests in Sunergy.

 (3)
 Amounts paid to Mr. Adams in 2024 for legal services
provided to the Company related to the ESGEN transaction prior to his joining the Company.

 Narrative to Executive Compensation Table

 Employment Agreement with Timothy Bridgewater

 The Company (or one of its subsidiaries) has entered
into an Executive Employment Agreement (the " Bridgewater Agreement ") with Mr. Timothy Bridgewater, the Company's
Chief Executive Officer. The period of the Bridgewater Agreement commenced on the closing of the business combination between Sunergy
Renewables, LLC and ESGEN Acquisition Corp. (the " Closing ") and continues through the third anniversary of the Closing,
and is subject to automatic renewals for one (1) year periods, unless either party terminates employment or provides ninety (90) day
notice of intent not to renew.

 In recognition of Mr. Bridgewater's
responsibilities as the Company's Chief Executive Officer, and based on comparison to peer organizations with similar activities
and risk profiles, the Company agreed to pay Mr. Bridgewater a base salary of $390,000.

 For each year the Bridgewater Agreement is in
effect, the Compensation Committee of the Board may choose to provide a discretionary cash bonus to Mr. Bridgewater, and such bonus
shall be performance based and the performance goals shall be as set forth by the Compensation Committee.

 In addition, Mr. Bridgewater is eligible
to receive certain grants of vested shares under the 2024 Plan in accordance with the following schedule (collectively, the "Retention
Award"):

 50,000 vested shares to be granted on the date that is 12 months
after the effective date of the Bridgewater Agreement;

 50,000 vested shares to be granted on the date that is 24 months
after the effective date of the Bridgewater Agreement; and

 50,000 vested shares to be granted on the date that is 35 months
after the effective date of the Bridgewater Agreement.

 Further, if, within three (3) years of the
effective date of the Bridgewater Agreement, (i) the volume-weighted average price of shares of the publicly traded stock of the
Company exceeds $7.50 for 20 or more days of any consecutive 30-day period, then Mr. Bridgewater will be granted vested equity
from the 2024 Plan equal to 1% of the total issued and outstanding capital stock of the Company, (ii) the volume-weighted average
price of shares of the publicly traded stock of the Company exceeds $12.50 for 20 or more days of any consecutive 30-day period,
then Mr. Bridgewater will be granted additional vested equity from the 2024 Plan equal to 1% of the total issued and outstanding
capital stock of the Company, (iii) and the volume-weighted average price of shares of the publicly traded stock of the Company exceeds
$15.00 for 20 or more days of any consecutive 30-day period, then Mr. Bridgewater will be granted additional vested equity from
the 2024 Plan equal to 1% of the total issued and outstanding capital stock of the Company.

 In addition, Mr. Bridgewater is eligible
to participate in the Company's employee benefits plan for its senior executives or employees, including the Company's medical
plans. Mr. Bridgewater is also entitled to receive six (6) weeks of paid time off in accordance with the Company's policy
for its senior executives. In addition, Mr. Bridgewater is entitled to reimbursement by the Company for all reasonable expenses incurred
by him in connection with this employment. Reimbursable expenses include, but are not limited to, business travel expenses.

 The Company may terminate Mr. Bridgewater's
employment with or without Cause (as defined in the Bridgewater Agreement). The Company has agreed to provide thirty (30) days in
notice to Mr. Bridgewater if he is terminated without Cause (or base salary in lieu of such notice), but no notice is required if
he is terminated for Cause. For termination for Cause, Mr. Bridgewater (with his attorney) shall have the opportunity to respond
to all relevant allegations upon which a contemplated termination for Cause is based.

 Mr. Bridgewater may terminate his employment
with or without Good Reason (as defined in the Bridgewater Agreement). If Mr. Bridgewater intends to terminate his employment without
Good Reason, he has agreed to provide thirty (30) days' written notice. For termination for Good Reason, Mr. Bridgewater
has agreed that he will provide the Company with notice within thirty (30) days after receiving notice of a Good Reason event, after
which the Company will have thirty (30) days to cure the Good Reason event, and, if not cured, Mr. Bridgewater will terminate
employment within fifteen (15) days following the expiration of the cure period.

 In the event of termination for any reason, Mr. Bridgewater
shall continue to receive his full salary through the date of termination, any unreimbursed and approved business expenses, accrued but
unused paid time off days, and any payments, benefits, or fringe benefits Mr. Bridgewater was entitled to under plan terms.

 If the Company terminates Mr. Bridgewater
without Cause or Mr. Bridgewater terminates for Good Reason, and there is no Change of Control (as defined in the Bridgewater Agreement),
the Company has agreed to also provide Mr. Bridgewater the following:

 (i)
 a lump sum cash payment, payable on the date of termination,
equal to the sum of the following: (x) one year's base salary, and (y) any unpaid annual bonus for the preceding calendar
year, and the greater of (I) any annual target cash bonus opportunity for the year of termination or (II) the average annual
cash bonus for the three preceding completed years (provided, however, that if Mr. Bridgewater has not been employed for at
least three years in which an annual cash bonus was paid, such calculation will assume that an annual cash bonus equal to any target
annual cash bonus opportunity was paid in the missing years), and (z) any other target long-term incentive award granted to
Mr. Bridgewater for the year in which the termination occurs;

 (ii)

 (iii)
 to the extent eligible, continuation health insurance coverage
under COBRA for twelve (12) months following termination.

 If the Company terminates Mr. Bridgewater
without Cause or Mr. Bridgewater terminates for Good Reason, and such termination occurs within two (2) years following or six
(6) months prior to a Change of Control (as defined in the Bridgewater Agreement), the Company has agreed to also provide Mr. Bridgewater
the following:

 (i)
 pro-rated, based on the number of days worked during
the year in which the termination occurs, the greater of any annual target cash bonus opportunity for the year of termination or the
highest actual annual cash bonus paid during the three preceding completed years;

 (ii)
 a lump sum cash payment equal to the sum of the following:
(x) one year's base salary, (y) any unpaid annual bonus for the preceding calendar year, and (z) the Retention Award
and any other target long-term incentive award granted for the year in which termination occurs;

 (iii)

 (iv)
 to the extent eligible, continuation health insurance coverage
under COBRA for twelve (12) months following termination.

 Additionally, Mr. Bridgewater is subject
to standard confidentiality and non-disparagement covenants, and covenants not to solicit the company's customers or employees or
compete with the company for the duration of Mr. Bridgewater's employment and for the one year following his termination.

 Employment Agreement with Cannon Holbrook

 The Company (or one of its subsidiaries) entered
into an employment agreement with Mr. Holbrook (the "Holbrook Agreement") pursuant to which Mr. Holbrook will serve
as the Chief Financial Officer of both Sunergy and the Company, reporting to the Company's Chief Executive Officer.

 The period of the Holbrook Agreement commenced
on August 19, 2024 (the "Effective Date") and continues through the third anniversary of the Holbrook Agreement Effective
Date. The agreement is subject to automatic renewals for one (1) year periods unless either party terminates employment or provides
ninety (90) day notice of intent not to renew.

 In recognition of Mr. Holbrook's responsibilities,
the Company agreed to pay Mr. Holbrook a base salary of $225,000, which may be increased from time to time by the Compensation Committee
(the "Committee") of the Company's Board in its sole discretion.

 A one-time payment of $25,000 was paid to Mr. Holbrook
in connection with the execution of the Holbrook Agreement. Though the agreement does not provide for a guaranteed annual target cash
bonus, for each year the Holbrook Agreement is in effect, the Committee may choose to provide a discretionary cash bonus to Mr. Holbrook,
based on meeting positive EBITDA targets, an evaluation of his performance and peer group compensation practices, taking into account
the Company and individual performance objectives, and/or such criteria as determined by the Committee in its sole discretion from time
to time.

 In addition, Mr. Holbrook is eligible to
receive certain grants of vested shares under the Company's 2024 Omnibus Incentive Equity Plan, subject to the approval of the Board,
in accordance with the following schedule:

 15,000 vested shares to be issued as soon as possible following
the Effective Date;

 75,000 vested shares to be granted on the date that is 12 months
after the Effective Date;

 75,000 vested shares to be granted on the date that is 24 months
after the Effective Date; and

 75,000 vested shares to be granted on the date that is 35 months
after the Effective Date.

 The Company may terminate Mr. Holbrook's
employment with or without Cause (as defined in the Holbrook Agreement). The Company has agreed to provide thirty (30) days in notice
to Mr. Holbrook if he is terminated without Cause (or base salary in lieu of such notice). The termination of Mr. Holbrook's
employment will not be deemed to be for Cause unless Mr. Holbrook (with his attorney) is given a reasonable opportunity to respond
to all relevant allegations upon which a contemplated termination for Cause is based.

 Mr. Holbrook may terminate his employment
with or without Good Reason (as defined in the Holbrook Agreement). If Mr. Holbrook intends to terminate his employment without Good
Reason, he has agreed to provide thirty (30) days' written notice. For termination for Good Reason, Mr. Holbrook has agreed
that he will provide the Company with notice within thirty (30) days after receiving notice of a Good Reason event, after which the
Company will have thirty (30) days to cure the Good Reason event, and, if not cured, Mr. Holbrook will terminate employment
within fifteen (15) days following the expiration of the cure period.

 In the event of termination for any reason, Mr. Holbrook
shall continue to receive his full salary through the date of termination, any unreimbursed and approved business expenses, accrued but
unused paid time off days, and any payments, benefits, or fringe benefits Mr. Holbrook was entitled to under plan terms.

 If the Company terminates Mr. Holbrook without
Cause or Mr. Holbrook terminates for Good Reason, and there is no Change of Control (as defined in the Holbrook Agreement), the Company
has agreed to also provide Mr. Holbrook the following:

 (i)
 a lump sum cash payment, payable on the date of termination,
equal to the sum of the following: (x) one year's base salary at the annualized rate then in effect (or the rate that should
be in effect but for any base salary diminution), and (y) any unpaid annual bonus for the preceding calendar year and the greater
of (I) any annual target cash bonus opportunity for the year of termination or (II) the average annual cash bonus for the three
preceding calendar years in which an annual cash bonus was paid, and (z) the annual cash bonus and any other target long-term
incentive award granted for the year of the date of termination;

 (ii)

 (iii)
 (iii) to the extent eligible and Mr. Holbrook properly
elects coverage, continued health insurance coverage under COBRA for twelve (12) months following termination at the same costs
as applied to Mr. Holbrook prior to his termination, subject to early termination upon Mr. Holbrook becoming eligible for group
health insurance coverage under another employer's plan.

 If the Company terminates Mr. Holbrook without
Cause or Mr. Holbrook terminates for Good Reason, and such termination occurs within two (2) years following or six (6) months
prior to a Change of Control (as defined in the Holbrook Agreement), the Company has agreed to also provide Mr. Holbrook the following:

 (i)
 severance payments pro-rated, based on the number of days
worked during the year in which the termination occurs, equal to the greater of any annual target cash bonus opportunity for the year
of termination or the highest actual annual cash bonus paid during the three preceding completed years;

 (ii)
 a lump sum cash payment equal to the sum of the following:
(x) one year's base salary at the annualized rate then in effect (or the rate that should be in effect but for any base salary
diminution), (y) any unpaid annual bonus for the preceding calendar year, and any other target long-term incentive award granted
for the year of the date of termination;

 (iii)

 (iv)
 to the extent eligible, and Mr. Holbrook properly elects
coverage, continued health insurance coverage under COBRA for twelve (12) months following termination at the same costs as applied
to Mr. Holbrook prior to his termination, subject to early termination upon Mr. Holbrook becoming eligible for group health
insurance coverage under another employer's plan.

 Additionally, Mr. Holbrook is subject to
standard confidentiality and non-disparagement covenants, and covenants not to solicit the company's customers or employees or compete
with the company for the duration of Mr. Holbrook's employment and for the one year following his termination.

 Employment Agreement with Stirling Adams

 The Company (or one of its subsidiaries) entered
into an employment agreement with Mr. Adams (the "Adams Agreement"), pursuant to which Mr. Adams will serve as the
General Counsel and Secretary of both Sunergy and the Company, reporting to the Company's Chief Executive Officer.

 The period of the Adams Agreement commenced on
the Closing and continues through the third anniversary of the Closing. The agreement is subject to automatic renewals for one (1) year
periods unless either party terminates employment or provides ninety (90) day notice of intent not to renew.

 In recognition of Mr. Adams' responsibilities,
the Company agreed to pay Mr. Adams a base salary of $289,000, which may be increased from time to time by the Committee in its sole
discretion.

 Though the agreement does not provide for a guaranteed
annual target cash bonus, for each year the Adams Agreement is in effect, the Committee may choose to provide a discretionary cash bonus
to Mr. Adams, based on an evaluation of his performance and peer group compensation practices, taking into account the Company and
individual performance objectives, and/or such criteria as determined by the Committee in its sole discretion from time to time.

 In addition, Mr. Adams is eligible to receive
certain grants of vested shares under the Company's 2024 Omnibus Incentive Equity Plan, subject to the approval of the Board, in
accordance with the following schedule:

 15,000 vested shares which were issued in September 2024;

 85,000 vested shares to be granted on the date that is within
15 months after the Closing;

 100,000 vested shares to be granted on the date that is on
or about 24 months after the Closing; and

 100,000 vested shares to be granted on the date that is on
or about 35 months after the Closing.

 The Company may terminate Mr. Adams'
employment with or without Cause (as defined in the Adams Agreement). The Company has agreed to provide thirty (30) days in notice
to Mr. Adams if he is terminated without Cause (or base salary in lieu of such notice). The termination of Mr. Adams'
employment will not be deemed to be for Cause unless Mr. Adams (with his attorney) is given a reasonable opportunity to respond to
all relevant allegations upon which a contemplated termination for Cause is based.

 Mr. Adams may terminate his employment with
or without Good Reason (as defined in the Adams Agreement). If Mr. Adams intends to terminate his employment without Good Reason,
he has agreed to provide thirty (30) days' written notice. For termination for Good Reason, Mr. Adams has agreed that
he will provide the Company with notice within thirty (30) days after receiving notice of a Good Reason event, after which the Company
will have thirty (30) days to cure the Good Reason event, and, if not cured, Mr. Adams will terminate employment within fifteen
(15) days following the expiration of the cure period.

 In the event of termination for any reason, Mr. Adams
shall continue to receive his full salary through the date of termination, any unreimbursed and approved business expenses, accrued but
unused paid time off days, and any payments, benefits, or fringe benefits Mr. Adams was entitled to under plan terms.

 If the Company terminates Mr. Adams without
Cause or Mr. Adams terminates for Good Reason, and there is no Change of Control (as defined in the Adams Agreement), the Company
has agreed to also provide Mr. Adams the following:

 (iv)
 a lump sum cash payment, payable on the date of termination,
equal to the sum of the following: (x) one year's base salary at the annualized rate then in effect (or the rate that should
be in effect but for any base salary diminution), and (y) any unpaid annual bonus for the preceding calendar year and the greater
of (I) any annual target cash bonus opportunity for the year of termination or (II) the average annual cash bonus for the three
preceding calendar years in which an annual cash bonus was paid, and (z) the annual cash bonus and any other target long-term
incentive award granted for the year of the date of termination;

 (v)

 (vi)
 (iii) to the extent eligible and Mr. Adams properly
elects coverage, continued health insurance coverage under COBRA for twelve (12) months following termination at the same costs
as applied to Mr. Adams prior to his termination, subject to early termination upon Mr. Adams becoming eligible for group health
insurance coverage under another employer's plan.

 If the Company terminates Mr. Adams without
Cause or Mr. Adams terminates for Good Reason, and such termination occurs within two (2) years following or six (6) months
prior to a Change of Control (as defined in the Adams Agreement), the Company has agreed to also provide Mr. Adams the following:

 (v)
 severance payments pro-rated, based on the number of days
worked during the year in which the termination occurs, equal to the greater of any annual target cash bonus opportunity for the year
of termination or the highest actual annual cash bonus paid during the three preceding completed years;

 (vi)
 a lump sum cash payment equal to the sum of the following:
(x) one year's base salary at the annualized rate then in effect (or the rate that should be in effect but for any base salary
diminution), (y) any unpaid annual bonus for the preceding calendar year, and (z) any other target long-term incentive award
granted for the year of the date of termination;

 (vii)

 (viii)
 to the extent eligible, and Mr. Adams properly elects
coverage, continued health insurance coverage under COBRA for twelve (12) months following termination at the same costs as applied
to Mr. Adams prior to his termination, subject to early termination upon Mr. Adams becoming eligible for group health insurance
coverage under another employer's plan.

 Additionally, Mr. Adams is subject to standard
confidentiality and non-disparagement covenants, and covenants not to solicit the company's customers or employees or compete with
the company for the duration of Mr. Adams' employment and for the one year following his termination.

 Retirement Benefits

 Sunergy currently offers certain welfare benefits
through a professional employer organization, Frank Crum, in which the named executive officers may participate. Sunergy does not currently
offer any qualified retirement benefits, or any non-qualified defined contribution plans or other retirement benefits.

 Potential Payments on Termination or Change
in Control

 Neither Zeo nor Sunergy has not previously offered
or had in place for our named executive officers any formal retirement, severance or similar compensation programs providing for additional
benefits or payments in connection with a termination of employment, change in job responsibility or change in control.

 Outstanding Equity Awards at 2024 Fiscal Year-End

 Zeo did not have any outstanding equity-based
awards as of December 31, 2024.

 2024 Omnibus Incentive Equity Plan

 The purpose of the 2024 Omnibus Incentive Plan
(the "2024 Plan") is to provide a means whereby we can secure and retain the service of employees, directors and consultants,
to provide incentives to such persons and to align the interests of such service providers with our stockholders. This section summarizes
the material features of the 2024 Plan.

 Securities to be Offered

 The aggregate number of shares of common stock
that may be issued or used for reference purposes or with respect to which awards may be granted under the 2024 Plan at adoption was 3,220,400
(the " Initial Share Reserve "). The number of shares of Zeo Class A Common Stock available for issuance
under the 2024 Plan is subject to an annual increase on the first day of each calendar year beginning January 1, 2025 and ending
and including January 1, 2029, equal to the lesser of (i) 2% of the aggregate number of fully diluted shares of Zeo outstanding
on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the administrator
of the 2024 Plan. The aggregate number of shares of Zeo Class A Common Stock that may be issued or used under the 2024 Plan pursuant
to incentive stock options shall not exceed an amount equal to the Initial Share Reserve. Shares of Zeo Class A Common Stock subject
to an award that expires or is cancelled, forfeited or otherwise terminated without delivery of shares, tendered in payment of an option,
covered by a stock-settled stock appreciation right or that were otherwise not issued upon settlement, and shares delivered or withheld
to satisfy any tax withholding obligations will again be available for delivery pursuant to other awards under the 2024 Plan. No shares
shall be deemed to have been issued in settlement of a SAR, restricted stock unit or other award that only provides for settlement in,
and settles only in, cash. The number of shares of Zeo Class A Common Stock available for issuance under the 2024 Plan is not reduced
by shares issued pursuant to awards issued or assumed in connection with a merger or acquisition as contemplated by applicable stock exchange
rules, provided that any substitute awards issued in connection with the assumption of, or in substitution for, outstanding options intended
to qualify as "incentive stock options" within the meaning of Section 422 of the Code shall be counted against the aggregate
number of shares available for incentive stock option awards under the 2024 Plan).

 Administration

 The 2024 Plan is administered by a committee of
the Zeo Board that has been authorized to administer the 2024 Plan, except if no such committee is authorized by the Zeo Board, the Zeo
Board will administer the 2024 Plan (as applicable, the " Committee "). The Committee has broad discretion to
administer the 2024 Plan, including the power to determine the eligible individuals to whom awards will be granted, the number and type
of awards to be granted and the terms and conditions of awards.

 Eligibility

 Directors, officers, employees, consultants and
advisors of Zeo and its affiliates and prospective officers, employees, consultants and advisors who have accepted offers of employment
or consultancy with Zeo and its affiliates are eligible to receive awards under the 2024 Plan. As stated above, the basis for participation
in the 2024 Plan is the Committee's decision to select, in its sole discretion, participants from among those eligible.

 Non-Employee Director Compensation
Limits

 The fair value of any awards granted under the
2024 Plan to a non-employee director as compensation for services on the Zeo Board, during any one fiscal year, taken together
with any cash fees paid to such non-employee director during such period in respect of the non-employee director's services
as a member of the Zeo Board during such year, may not exceed any limits as outlined in any Zeo compensation policy, provided that the
Zeo Board can make exceptions to this limit so long as the applicable non-employee director does not participate in the decision.

 Types of Awards

 The 2024 Plan provides for the grant of both incentive
stock options (" ISOs "), which are intended to qualify for favorable tax treatment under Section 422 of
the Code, and nonqualified stock options (" NSOs "), as well as the grant of restricted stock, restricted stock
units (" RSUs "), stock appreciation rights (" SARs "), and other equity-based awards
and substitute awards.

 Options

 Zeo may grant ISOs and NSOs to eligible persons,
except that ISOs may only be granted to persons who are Zeo's employees or employees of one of its subsidiaries or controlled affiliates,
in accordance with Section 422 of the Code. The exercise price of an option cannot be less than 100% of the fair market value of
a share of Zeo Class A Common Stock on the date on which the option is granted and the option must not be exercisable for longer
than ten years following the date of grant. However, in the case of an ISO granted to an individual who owns (or is deemed to own)
at least 10% of the total combined voting power of all classes of our capital stock, the exercise price of the option must be at least
110% of the fair market value of a share of Zeo Class A Common Stock on the date of grant and the option must not be exercisable
more than five years from the date of grant. The aggregate fair market value, determined at the time of grant, of our Zeo Class A
Common Stock with respect to ISOs that are exercisable for the first time by an award holder during any calendar year under all of our
stock plans may not exceed $100,000. Options or portions thereof that exceed such limit will generally be treated as NSOs.

 Payment of the exercise price may be made in a
manner approved by the Committee, which may include (i) immediately available funds in U.S. dollars, (ii) delivery of Zeo
Class A Common Stock having a value equal to the exercise price, (iii) a broker assisted cashless exercise or (iv) any
other means approved by the Committee.

 Unless the Committee provides otherwise, options
generally are not transferable except by will or the laws of descent and distribution.

 Restricted Stock Awards

 A restricted stock award is a grant of shares
of Zeo Class A Common Stock subject to the restrictions on transferability and risk of forfeiture imposed by the Committee. Unless
otherwise determined by the Committee and specified in the applicable award agreement, the holder of a restricted stock award has rights
as a stockholder, including the right to vote the shares of Zeo Class A Common Stock subject to the restricted stock award or to
receive dividends (or dividend equivalents) on such shares of Zeo Class A Common Stock subject to the restricted stock award during
the restriction period. In the discretion of the Committee, dividends distributed prior to vesting may be subject to the same restrictions
and risk of forfeiture as the restricted shares with respect to which the distribution was made.

 Restricted Stock Units

 An RSU is a right to receive cash, shares of Zeo
Class A Common Stock or a combination of cash and shares of Zeo Class A Common Stock at the end of a specified period equal
to the fair market value of one share of Zeo Class A Common Stock on the date of vesting. RSUs may be subject to the restrictions,
including a risk of forfeiture, imposed by the Committee. The Committee may determine that a grant of RSUs will provide a participant
a right to receive dividend equivalents, which entitles the participant to receive the equivalent value (in cash or shares of Zeo Class A
Common Stock) of dividends paid on the underlying shares of Zeo Class A Common Stock. Dividend equivalent rights may be paid currently
or credited to an account, settled in cash or shares, and may be subject to the same restrictions as the RSUs with respect to which the
dividend equivalent rights are granted.

 Stock Appreciation Rights

 A SAR is the right to receive an amount equal
to the excess of the fair market value of one share of common stock on the date of exercise over the grant price of the SAR. The
grant price of a SAR cannot be less than 100% of the fair market value of a share of common stock on the date on which the SAR is granted.
The term of a SAR may not exceed ten years. The Committee has the discretion to determine other terms and conditions of a SAR award.

 Other Equity-Based Awards

 Other equity-based awards are awards denominated
or payable in, valued in whole or in part by reference to, or otherwise based on or related to, the value of Zeo Class A Common Stock.

 Substitute Awards

 Awards may be granted under the 2024 Plan in substitution
for similar awards held for individuals who become participants as a result of a merger, consolidation or acquisition of another entity
by or with Zeo or one of its affiliates.

 Certain Transactions

 If any change is made to our capitalization, such
as a stock split, stock combination, stock dividend, exchange of stock or other recapitalization, merger or otherwise, which results in
an increase or decrease in the number of outstanding shares of common stock, appropriate adjustments will be made by the Committee in
the shares subject to an award under the 2024 Plan. The Committee also has the discretion to make certain adjustments to awards in the
event of a change in control of Zeo, such as the assumption or substitution of outstanding awards, the purchase of any outstanding awards
in cash based on the applicable change in control price, the ability for participants to exercise any outstanding stock options upon the
change in control (and if not exercised such awards will be terminated), and the acceleration of vesting or exercisability of any outstanding
awards.

 Clawback

 All awards granted under the 2024 Plan may be
subject to reduction, cancelation or recoupment under any written clawback policy that Zeo may adopt and that Zeo determines should apply
to awards under the 2024 Plan or that is required by law.

 Plan Amendment and Termination

 The 2024 Plan allows the Committee to amend or
terminate any award, award agreement or the 2024 Plan at any time, provided that the rights of a participant granted an award prior to
such amendment or termination may not be impaired without such participant's consent. In addition, stockholder approval will be
required for any amendment to the extent necessary to comply with applicable law or exchange listing standards. The Committee does not
have the authority, without the approval of stockholders, to amend any outstanding option or share appreciation right to reduce its exercise
price per share. The 2024 Plan will remain in effect for a period of ten years (unless earlier terminated by the Zeo Board).

 Material U.S. Federal Income Tax Consequences

 The following is a general summary under current
law of the principal U.S. federal income tax consequences related to awards under the 2024 Plan. This summary describes the general
federal income tax principles that apply, as based on current law and interpretational authorities which are subject to change at any
time, and is provided only for general information. This summary does not purport to be complete discussion of all potential tax effects
relevant to recipients of awards under the 2024 Plan. No attempt has been made to discuss certain kinds of taxes, including any potential non-U.S., state,
or local tax consequences. This summary is not intended as tax advice to participants, who should consult their own tax advisors.

 Non-Qualified Stock Options and Stock
Appreciation Rights

 If a participant is granted a NSO or SAR under
the 2024 Plan, the participant should not have taxable income as of the grant of the NSO or SAR. Upon the exercise of a NSO or SAR,
a participant will recognize ordinary income equal to the excess, if any, of the fair market value of the shares acquired on the date
of exercise over the exercise price. If the participant is employed by us or one of our affiliates at the time of exercise, such income
will be subject to withholding taxes. The participant's tax basis in the Zeo Class A Common Stock for purposes of determining
gain or loss on a subsequent sale or disposition of such shares generally will be the fair market value of such Zeo Class A Common
Stock on the date the participant exercises such option or SAR. When a participant sells the Zeo Class A Common Stock acquired
as a result of the exercise of a NSO or SAR, any appreciation or depreciation in the value of the Zeo Class A Common Stock after
the exercise date will be taxable as a long-term or short-term capital gain or loss for U.S. federal income tax purposes, depending
on the holding period. The Zeo Class A Common Stock must be held for more than twelve (12) months to qualify for long-term capital
gain treatment. Subject to the discussion under " — Tax Consequences to Zeo " below, Zeo and its subsidiaries
or controlled affiliates generally should be entitled to a federal income tax deduction at the time and for the same amount as the participant
recognizes ordinary income.

 Incentive Stock Options

 A participant receiving ISOs should not recognize
taxable income upon grant. Additionally, if applicable holding period requirements are met, the participant should not recognize taxable
income at the time of exercise. However, the excess of the fair market value of the shares of the Zeo Class A Common Stock received
over the option exercise price is an item of tax preference income potentially subject to the alternative minimum tax. If stock acquired
upon exercise of an ISO is held for a minimum of two years from the date of grant and one year from the date of exercise and otherwise
satisfies the ISO requirements, the gain or loss (in an amount equal to the difference between the fair market value on the date of disposition
and the exercise price) upon disposition of the stock will be treated as a long-term capital gain or loss, and we will not be entitled
to any deduction. If the holding period requirements are not met, the ISO will be treated as one that does not meet the requirements of
the Code for ISOs and the participant will recognize ordinary income at the time of the disposition equal to the excess of the amount
realized over the exercise price, but not more than the excess of the fair market value of the shares on the date the ISO is exercised
over the exercise price, with any remaining gain or loss being treated as capital gain or capital loss. Zeo and its subsidiaries or controlled
affiliates generally are not entitled to a federal income tax deduction upon either the exercise of an ISO or upon disposition of the
shares acquired pursuant to such exercise, except to the extent that the participant recognizes ordinary income on disposition of the
shares.

 Restricted Stock

 Generally, the recipient of a restricted stock
award will recognize ordinary income at the time the stock is received equal to the excess, if any, of the fair market value of the stock
received over any amount paid by the recipient in exchange for the stock. If, however, the stock is subject to restrictions constituting
a substantial risk of forfeiture when it is received (for example, if the employee is required to work for a period of time in order to
have the right to transfer or sell the stock), the recipient generally will not recognize income until the restrictions constituting a
substantial risk of forfeiture lapse, at which time the recipient will recognize ordinary income equal to the excess, if any, of the fair
market value of the stock on the date it becomes vested over any amount paid by the recipient in exchange for the stock. A recipient may,
however, file an election with the Internal Revenue Service, within 30 days following the date of grant, to recognize ordinary income,
as of the date of grant, equal to the excess, if any, of the fair market value of the stock on the date the award is granted over any
amount paid by the recipient for the stock. The recipient's basis for the determination of gain or loss upon the subsequent disposition
of shares acquired from a restricted stock award will be the amount paid for such shares plus any ordinary income recognized either when
the stock is received or when the restrictions constituting a substantial risk of forfeiture lapse. Subject to the discussion under " — Tax
Consequences to Zeo " below, Zeo and its subsidiaries or affiliates generally should be entitled to a federal income tax deduction
at the time and for the same amount as the participant recognizes ordinary income.

 RSUs

 Generally, the recipient of a restricted stock
unit award will recognize ordinary income at the time the stock is delivered equal to the excess, if any, of (i) the fair market
value of the stock received over any amount paid by the recipient in exchange for the stock or (ii) the amount of cash paid to the
participant. The recipient's basis for the determination of gain or loss upon the subsequent disposition of shares acquired from
a restricted stock unit award will be the amount paid for such shares plus any ordinary income recognized when the stock is delivered,
and the participant's capital gain holding period for those shares will begin on the day after they are transferred to the
participant. Subject to the discussion under " — Tax Consequences to Zeo " below, Zeo and its subsidiaries
or affiliates generally should be entitled to a federal income tax deduction at the time and for the same amount as the participant recognizes
ordinary income.

 Tax Consequences to Zeo

 Reasonable Compensation

 In order for the amounts described above to be
deductible by Zeo, such amounts must constitute reasonable compensation for services rendered or to be rendered by an individual service
provider and must be ordinary and necessary business expenses.

 Golden Parachute Payments

 Zeo's ability (or the ability of one of
its subsidiaries) to obtain a deduction for future payments under the 2024 Plan could also be limited by the golden parachute rules of
Section 280G of the Code, which prevent the deductibility of certain excess parachute payments made in connection with a change in
control of an employer-corporation.

 Compensation of Covered Employees

 Zeo's ability to obtain a deduction for
amounts paid under the 2024 Plan could be limited by Section 162(m) of the Code. Section 162(m) of the Code limits
our ability to deduct compensation, for federal income tax purposes, paid during any year to a "covered employee" (within
the meaning of Section 162(m) of the Code) in excess of $1,000,000.

 Zeo Compensation of Directors

 Abigail Allen, Neil Bush and Mark Jacobs were
each granted 10,000 Class A shares on September 13, 2024. The shares had a value of $1.75 each for total compensation value
of $17,500 to each director. Our directors did not receive any other fees for their service in 2024.

 Director Compensation Table

 Name

 Fees Earned or
 Paid in 2024
 ($)

 Stock
 Awards
 ($) (1)

 Total
 ($)

 Abigail Allen

 —

 Neil Bush

 —

 Mark Jacobs

 —

 (1)
 Amounts reflect the full grant-date fair value of stock awards
granted during the applicable fiscal year computed in accordance with ASC Topic 718, rather than the amounts paid to or realized
by the director.

 (2)
 As of December 31, 2024, there were no option awards
(exercisable and unexercisable) and unvested stock awards held by our directors.

 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS.

 The following table sets forth information known to the Company regarding
beneficial ownership of shares of the Company's common stock as of May 19, 2025 by:

 each person known by the Company
to be the beneficial owner of more than 5% of the Company's outstanding common stock;

 each of the Company's
named executive officers and directors; and

 all executive officers and
directors as a group.

 Beneficial ownership is determined according to
the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or
shared voting or investment power over that security, including options, warrants and certain other derivative securities that are currently
exercisable or will become exercisable within 60 days.

 The percentage of beneficial ownership is based
on 22,824,845 shares of Class A Common Stock issued and outstanding and 26,480,000 shares of Class V Common Stock issued
and outstanding as of May 19, 2025.

 In accordance with SEC rules, shares of our common
stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within
60 days of the date of the Closing are deemed beneficially owned by the holders of such options and warrants and are deemed outstanding
for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing
the percentage of ownership of any other person.

 Unless otherwise indicated, the business address
of each of the entities, directors and executives in this table is 7625 Little Rd, Suite 200A, New Port Richey, FL 34654. Unless otherwise
indicated and subject to community property laws and similar laws, except as otherwise indicated below, the Company believes that all
parties named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by
them.

 Name and Address of Beneficial Owners

 Number of
 Shares of
 Class A
 Stock

 % of
 Shares of
 Class A
 Stock

 Number of
 Shares of
 Class V
 Stock

 % of
 Shares of
 Class V
 Stock

 % of
 total
 voting
 power

 Directors and Executive Officers

 Directors and executive officers (1)

 Timothy Bridgewater (2)

 2,250,000

 9.9

 %

 8,210,410

 31.0

 %

 21.2

 %

 Gianluca Guy (3)

 6.6

 %

 4,400,478

 16.6

 %

 12.0

 %

 Brandon Bridgewater (4)

 3,000,000

 13.1

 %

 2,515,664

 9.5

 %

 11.2

 %

 Kalen Larsen (5)

 500,000

 2.2

 %

 5,015,664

 18.9

 %

 11.2

 %

 Stirling Adams

 190,000

 *

 —

 —

 *

 Cannon Holbrook

 15,000

 *

 —

 —

 *

 Dr. Abigail M. Allen

 —

 —

 —

 —

 —

 James P. Benson

 —

 —

 —

 —

 —

 Neil Bush

 10,000

 *

 —

 —

 *

 Mark Jacobs

 90,000

 *

 —

 —

 *

 All directors and executive officers as a group (9 individuals)

 7,365,000

 33.1

 %

 20,142,216

 76.1

 %

 56.2

 %

 Five Percent Holders

 Southern Crown Holdings, LLC

 6.6

 %

 4,400,478

 16.6

 %

 12.0

 %

 ESGEN LLC (6)

 4,035,817

 17.7

 %

 5.7

 %

 11.2

 %

 LHX Intermediate, LLC (7)

 8,080,000

 35.4

 %

 —

 —

 16.4

 %

 *
 Less than 1%.

 (1)
 Unless otherwise noted, the business address of each of the
directors and officers is 7625 Little Rd, Suite 200A, New Port Richey, FL 34654.

 (2)
 The total number of shares of Class V Common Stock owned
by Timothy Bridgewater comprise (i) 750,000 shares of Class A Common Stock and 1,558,883 shares of Class V Common Stock owned of
record by LCB Trust, his family trust entity and (ii) 1,500,000 shares of Class A Common Stock and 6,651,527 shares of Class V Common
Stock held of record by Sun Managers, LLC for which as the manager he has voting and investment power. Sun Managers, LLC is expected
to use such shares in connection with a management equity program. Mr. Bridgewater disclaims beneficial ownership over any such
shares held by Sun Managers, LLC.

 (3)
 Shares are held of record by Lamadd LLC. Mr. Guy exercises
voting and dispositive power over the shares held by such entity.

 (4)
 Shares are held of record by Clarke Capital, LLC. Mr. Bridgewater
exercises voting and dispositive power over the shares held by such entity.

 (5)
 Shares are held of record by JKAE Holdings, LLC. Mr. Larsen
exercises voting and dispositive power over the shares held by such entity.

 (6)
 James P. Benson, Michael C. Mayon and Andrea Bernatova
are the managers of ESGEN LLC, and each of them disclaims beneficial ownership over any securities owned by ESGEN LLC in which he or
she does not have any pecuniary interest. The business address of ESGEN LLC is 5956 Sherry Lane, Suite 1400, Dallas, Texas 75225.

 (7)
 As reported on the Schedule 13D/A of LHX filed on December
27, 2024. Consists of 8,080,000 shares of Class A Common Stock held by LHX. This number does not take into account shares of stock of
the Company held by other stockholders party to the Voting Agreement (described herein) or issuable under the Promissory Note (described
herein), pursuant to which such stockholders have agreed, in certain circumstances, to vote (i) in favor of the nomination and appointment
of LHX's designee to the Board, (ii) in favor of the issuance to LHX of shares of Class A Common Stock in connection with an option
that may be granted to LHX and (iii) the Share Issuance (described herein) pursuant to the Promissory Note. The business address of LHX
is 5956 Sherry Lane, Suite 1400, Dallas, Texas 75225.

 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE.

 Sunergy Related Party Transactions

 Approximately 30% of Zeo's customers who
have entered into leasing agreements have done so with third-party leasing companies established and managed by White Horse Energy, a
holding company of which Timothy Bridgewater, Zeo's Chairman and Chief Executive Officer, is the owner and manager. Mr. Bridgewater,
through White Horse, holds 1% or less of the membership interests of the third-party leasing companies established and managed by White
Horse Energy that own installed solar energy systems leased by Zeo Customers, with the remainder of the membership interests being held
by third parties. For the twelve months ended December 31, 2024, the third-party leasing companies managed by White Horse Energy had purchased
approximately $20.6 million in solar energy systems from Zeo for their leasing customers. As of that date, those third-party leasing
companies had entered into leasing agreements with customers for an additional approximately $4.2 million in leased systems to be
installed by Zeo, if the development and installation of all of those systems continued to completion. For the twelve months ended December 31,
2023, the third-party leasing companies managed by White Horse Energy had purchased approximately $19.0 million in solar energy systems
from Zeo for their leasing customers. Subject to investor and customer demand, White Horse Energy intends to attract additional investors
to form third-party leasing companies that will be able to fund additional installations of solar systems by Zeo.

 ESGEN

 ESGEN Class B Ordinary Shares

 On April 27, 2021, the Sponsor paid $25,000, or
approximately $0.004 per share, to cover certain of our offering and formation costs in consideration of 7,187,500 ESGEN Class B ordinary
shares, par value $0.0001. The Sponsor transferred 138,000 ESGEN Class B ordinary shares to each of our independent directors and 866,923
ESGEN Class B ordinary shares to the Westwood Client Accounts.

 ESGEN Private Placement Warrants

 The Sponsor purchased an aggregate of 11,240,000
ESGEN Private Placement Warrants for a purchase price of $1.00 per whole warrant, or $11,240,000 in the aggregate, in a private placement
that occurred simultaneously with the closing of our IPO. Each ESGEN Private Placement Warrant entitles the holder to purchase one Class
A ordinary share at $11.50 per share, subject to adjustment. The ESGEN Private Placement Warrants (including the ESGEN Class A ordinary
shares issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder
until 30 days after the completion of our initial business combination.

 Pursuant to the Amended Letter Agreement entered
into on January 24, 2024, the Sponsor and the other Initial Shareholders agreed to forfeit, for no consideration, all ESGEN Private Placement
Warrants held by them in connection with Closing.

 Promissory Notes

 No compensation of any kind, including finder's
and consulting fees, were paid to the Sponsor, its officers and directors, or their respective affiliates, for services rendered prior
to or in connection with the completion of our initial business combination. However, these individuals were reimbursed for any out-of-pocket
expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence
on suitable business combinations. Our audit committee reviewed on a quarterly basis all payments that were made by us to the Sponsor,
and our officers, directors or their affiliates and determined which expenses and the amount of expenses were reimbursed. There was no
cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

 The Sponsor advanced $262,268 to cover expenses related to our IPO
under the April 2021 Promissory Note. As of December 31, 2024, no covered expenses remained outstanding and due to the Sponsor.

 On April 5, 2023, ESGEN issued the April 2023
Promissory Note in the principal amount of up to $1,500,000 to the Sponsor, which was amended and restated by the October 2023 Promissory
Note, which could be drawn down by ESGEN from time to time prior to the consummation of our initial business combination. The October
2023 Promissory Note, as well as the April 2021 Promissory Note was not be repaid and was cancelled at Closing. As of January 31, 2024,
ESGEN had drawn $1,787,047.65 and $171,346 under the October 2023 Promissory Note and April 2021 Promissory Note, respectively.

 On January 24, 2024, ESGEN issued the January
2024 Promissory Note in the principal amount of up to $750,000 to the Sponsor. The January 2024 Promissory Note could be drawn down by
ESGEN from time to time prior to the consummation of our initial Business Combination for specific uses as designated therein. The January
2024 Promissory Note does not bear interest, matured on the date of consummation of the Business Combination and is subject to customary
events of default. The principal amount under the January 2024 Promissory Note was paid at Closing from funds that ESGEN had available
to it outside of its Trust Account.

 Office Space, Secretarial and Administrative Services Until Closing

 ESGEN incurred $10,000 per month for office space,
utilities, secretarial support and administrative services provided by the Sponsor. No amounts were paid for these services. As of December
31, 2023, ESGEN reported on the balance sheets $120,000 pursuant to this agreement, in "Due to related party".

 Amendment to the Letter Agreement

 Concurrently with the execution of the Business
Combination Agreement, the Initial Shareholders entered into the Amendment to the Letter Agreement, pursuant to which, among other things,
each of the Initial Shareholders agreed (i) not to transfer his, her or its ESGEN Class B ordinary shares (or the New PubCo Class A Common
Stock issuable in exchange for such ESGEN Class B ordinary shares pursuant to the Business Combination Agreement) prior to the earlier
of (a) six months after the Closing or (b) subsequent to the Closing (A) if the last sale price of the New PubCo Class A Common Stock
quoted on Nasdaq is greater than or equal to $12 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within a 30-consecutive trading day period commencing at least 90 days after Closing, or (B) the
date on which New PubCo completes a liquidation, merger, share exchange or other similar transaction that results in all of New PubCo's
stockholders having the right to exchange their New PubCo Class A Common Stock for cash, securities or other property, (ii) to waive any
adjustment to the conversion ratio set forth in the governing documents of ESGEN with respect to the ESGEN Class B ordinary shares prior
to the earlier of the ESGEN Share Conversion or the Closing, (iii) the Sponsor agreed to irrevocably surrender and forfeit 2,361,641 ESGEN
ordinary shares, (iv) the Initial Shareholders other than Sponsor agreed to irrevocably surrender and forfeit 538,359 ESGEN ordinary shares,
(v) the Initial Shareholders and Sponsor agreed to forfeit an additional 500,000 shares of New PubCo Class A Common Stock if, within two
years of Closing, the Convertible OpCo Preferred Units are redeemed or converted (with such shares subject to a lock-up for two years
after Closing) and (vi) the Initial Shareholders agreed to forfeit all of their ESGEN Private Placement Warrants in connection with Closing.

 Lock-Up Agreement

 At the Closing, ESGEN and each of the Lock-Up
Sellers entered into the Lock-Up Agreement, pursuant to which each of the Lock-Up Sellers agreed not to transfer any of its respective
Exchangeable OpCo Units and corresponding shares of New PubCo Class V Common Stock received in connection with the Business Combination
until the earlier of (i) six months after the Closing Date and (ii) subsequent to the Closing Date, (a) if the last sale price of New
PubCo Class A Common Stock quoted on Nasdaq is greater than or equal to $12.00 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations, and the like) for any 20 trading days within any period of 30 consecutive trading days commencing
at least 90 days after the Closing Date or (b) the date on which New PubCo completes a PubCo Sale (as defined in the Lock-Up Agreement).

 PIPE Financing

 At Closing, the Sponsor purchased $15,000,000
of Convertible OpCo Preferred Units in the Sponsor PIPE Investment.

 Policies and Procedures for Related Person
Transactions

 The Board has adopted a policy with respect to
the review, approval and ratification of related party transactions. Under the policy, Zeo's audit committee is responsible for
reviewing and approving related person transactions. In the course of its review and approval of related party transactions, Zeo's
audit committee will consider the relevant facts and circumstances to decide whether to approve such transactions. In particular, Zeo's
policy requires Zeo's audit committee to consider, among other factors it deems appropriate:

 the related person's
relationship to Zeo and interest in the transaction;

 the material facts of the proposed
transaction, including the proposed aggregate value of the transaction;

 the impact on a director's
or a director nominee's independence in the event the related person is a director or director nominee or an immediate family member
of the director or director nominee;

 the benefits to Zeo of the
proposed transaction;

 if applicable, the availability
of other sources of comparable products or services; and

 an assessment of whether the
proposed transaction is on terms that are comparable to the terms available to an unrelated third party or to employees generally.

 Zeo's audit committee will only approve
those transactions that are in, or are not inconsistent with, Zeo's best interests and those of Zeo's stockholders, as Zeo's
audit committee determines in good faith. In addition, under Zeo's code of business conduct and ethics, its employees, directors
and director nominees have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected
to give rise to a conflict of interest.

 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

 On April 16, 2024 (the
"Dismissal Date"), the Company dismissed BDO USA P.C. ("BDO")
as the independent registered public accounting firm for the Company. The dismissal was approved by the Audit Committee. The change in
independent registered public accounting firm is not the result of any disagreement with BDO.

 BDO's audit reports
on the financial statements as of December 31, 2023 and 2022 of the Company did not provide an adverse opinion or disclaimer of opinion
to the Company's financial statements, nor did it modify its opinion as to uncertainty, audit scope or accounting principles, except
that such reports contained an explanatory paragraph regarding the Company's ability to continue as a going concern.

 For the Company's
two most recent fiscal years, and in the subsequent interim period through the Dismissal Date, there were (i) no "disagreements"
within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions between the Company and BDO on
any matters of accounting principles or practices, financial statement disclosures or auditing scope or procedures which, if not resolved
to BDO's satisfaction, would have caused BDO to make reference thereto in its reports on the financial statements of the Company
for such periods, and (ii) no "reportable events" (as defined in Item 304(a)(1)(v) of Regulation S-K), except that
material weaknesses in internal control over financial reporting were identified. Specifically, we did not design and maintain an effective
control environment to prevent or detect material misstatements to the financial statements. We lacked a sufficient complement of personnel
with an appropriate level of internal controls and accounting knowledge, training and experience commensurate with our financial reporting
requirements. Management did not design and maintain effective controls over the calculation of earnings per share (as disclosed in our
2023 and 2022 Annual Report on Form 10-K, and our September 30, 2023 and 2022, June 30, 2023 and 2022, and March 31, 2023 and 2022 Form
10-Qs), and classification of the reinvestment of interest and dividend income in the Trust Account in the statement of cash flows (as
disclosed in our 2023 and 2022 Annual Report on Form 10-K, and our September 30, 2023, June 30, 2023, and March 31, 2023 Form 10-Qs).

 On April 16, 2024, as recommended and approved
by the Audit Committee, the Company engaged GT as the Company's independent public accounting firm to audit the Company's
consolidated financial statements for the fiscal year ending December 31, 2024 and to review the Company's quarterly consolidated
financial statements for each of the quarters ending April 30, 2024, June 30, 2024, and September 30, 2024. GT previously served as the
independent registered public accounting firm of Sunergy prior to the Closing of the Business Combination.

 For the Company's two most recent fiscal
years, and in the subsequent interim period through the Dismissal Date, neither the Company nor anyone on its behalf consulted with GT
regarding: (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Company's financial statements, and neither a written report nor oral advice was provided
to the Company that GT concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing
or financial reporting issue; or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv)
of Regulation S-K and the related instructions) or a reportable event (as described in Item 304(a)(1)(v) of Regulation
S-K).

 Fees

 GT served as the independent registered public
accounting firm to audit our books and accounts for the fiscal year ended December 31, 2024. BDO served as the independent registered
public accounting firm to audit our books and accounts for the fiscal year ended December 31, 2023.

 The table below presents the aggregate fees billed
for professional services rendered by GT for the year ended December 31, 2024.

 Audit fees

 $
 1,104,438

 Audit-related fees

 -

 Tax fees

 -

 All other fees

 -

 Total fees

 $
 1,104,438

 In the above table, Audit fees consist of fees
billed for professional services rendered for the audit of our year-end financial statements, reviews of our quarterly financial statements
and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory
filings.

 Our Audit Committee determined that the services
provided by GT were compatible with maintaining the independence of GT as our independent registered public accounting firm.

 The table below presents the aggregate fees billed
for professional services rendered by BDO for the years ended December 31, 2024, and 2023.

 2024

 2023

 Audit fees

 $
 124,810

 $
 210,945

 Audit-related fees

 -

 -

 Tax fees

 $
 -

 -

 All other fees

 -

 -

 Total fees

 $
 124,810

 $
 210,945

 In the above table, Audit fees consist of fees
billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by
our independent registered public accounting firm in connection with statutory and regulatory filings.

 Our Audit Committee determined that the services
provided by BDO were compatible with maintaining the independence of BDO as our independent registered public accounting firm.

 ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES.

 The following documents are filed as part of this Report:

 (1) Financial Statements: Our financial statements are
listed in the "Index to Financial Statements" on page F-1.

 ( 2) Financial Statement Schedules: None.

 (3) Exhibits

 We hereby file as part of this Report the exhibits listed in the attached
Exhibit Index. Copies of such material can also be obtained on the SEC website at www.sec.gov.

 Exhibit

 Incorporated by Reference

 Number

 Description

 Form

 Exhibit

 Filing Date

 2.1

 Business Combination Agreement, dated as of April 19, 2023, by and among ESGEN, Sunergy, the Sellers, OpCo, the Sponsor and Timothy Bridgewater.

 2.1

 April 20, 2023

 2.2

 Amendment No. 1 to Business Combination Agreement, dated as of January 24, 2024, by and between ESGEN and Sunergy.

 2.1

 January 25, 2024

 3.1

 Certificate of Incorporation of Zeo Energy Corp.

 3.1

 3.2

 Bylaws of Zeo Energy Corp.

 3.2

 10.1

 Amended and Restated Subscription Agreement, dated as of January 24, 2024, by and among ESGEN, OpCo and the Sponsor.

 10.2

 January 25, 2024

 10.2

 Letter Agreement, dated as of October 22, 2021, by and among ESGEN, the Sponsor and the Insiders party thereto.

 10.5

 October 25, 2021

 10.3

 Amendment to Letter Agreement, dated as of April 19, 2023, by and among ESGEN, the Sponsor and the Insiders party thereto.

 10.1

 April 20, 2023

 10.4

 Amendment No. 2 to Letter Agreement, dated as of January 24, 2024, by and among ESGEN, the Sponsor and the Insiders party thereto.

 10.1

 January 25, 2024

 10.5

 Side Letter, dated as of March 13, 2024 by and among ESGEN, Sponsor, Sunergy and the other parties thereto.

 10.5

 10.6

 Non-Redemption Agreement, dated as of March 11, 2024, by and between ESGEN and The K2 Principal Fund L.P.

 10.1

 March 12, 2024

 10.7

 Amended and Restated Registration Rights Agreement, dated as of March 13, 2024.

 10.7

 10.8

 OpCo A&R LLC Agreement, dated as of March 13, 2024.

 10.8

 10.9

 Form of Lock-Up Agreement.

 2.1

 April 20, 2023

 10.10

 Tax Receivable Agreement, dated as of March 13, 2024.

 10.10

 10.11

 Form of Indemnification Agreement.

 10.11

 10.12

 Employment Agreement, dated March 13, 2024, by and between Opco and Timothy Bridgewater.

 10.12

 10.13

 Employment Agreement, dated March 13, 2024, by and between Opco and Kalen Larsen.

 10.13

 10.14

 Employment Agreement, dated March 13, 2024, by and between Opco and Gianluca "Luke" Guy.

 10.14

 10.15

 Employment Agreement, dated March 13, 2024, by and between Opco and Brandon Bridgewater.

 10.15

 10.16

 Zeo Energy Corp. 2024 Omnibus Incentive Equity Plan.

 10.17

 10.17*

 Promissory Note, dated December 24, 2024, between Zeo Energy Corp. and LHX Intermediate LLC.

 10.18

 Form of Voting Agreement, dated December 24, 2024, between Zeo Energy Corp., LHX Intermediate LLC and certain stockholders of the Company.

 10.2

 December 26, 2024

 Letter from BDO USA P.C. dated April 18, 2024 to the Securities and Exchange Commission regarding change in certifying accountant.

 16.1

 April 18, 2024

 19*

 Insider Trading Policy

 21*

 Subsidiaries of Zeo Energy Corp.

 21.1

 April 1, 2024

 23*

 Consent of Grant Thornton LLP

 31.1**

 Certification of Chief Executive
 Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2**

 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1**

 Certification of Chief Executive
 Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 32.2**

 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 97*

 Clawback Policy.

 101*

 104*

 *
 Filed herewith

 **
 Furnished herewith

 ITEM 16. FORM 10-K SUMMARY.

 None.

 SIGNATURES

 Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized this date of May 27, 2025.

 Zeo Energy Corp.

 By:

 /s/ Timothy Bridgewater

 Name:

 Timothy Bridgewater

 Title:

 Chief Executive Officer and Director

 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on May 27, 2025.

 Name

 Position

 /s/ Timothy Bridgewater

 Chief Executive Officer and Director

 Timothy Bridgewater

 /s/ Cannon Holbrook

 Chief Financial Officer

 Cannon Holbrook

 /s/ Gianluca "Luke" Guy

 Chief Installation and Strategy Officer and Director

 Gianluca "Luke" Guy

 /s/ Dr. Abigail M. Allen

 Dr. Abigail M. Allen

 /s/ James P. Benson

 James P. Benson

 /s/ Neil Bush

 Neil Bush

 /s/ Mark Jacobs

 Mark Jacobs

 ZEO ENERGY CORP. AND SUBSIDIARIES

 INDEX TO FINANCIAL STATEMENTS

 Page

 Report of Independent Registered Public Accounting Firm (PCAOB ID 248)

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Changes in Shareholders' Deficit

 Consolidated Statements of Cash Flows

 Notes to Financial Statements

 F-7 to F-33

 F- 1

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 Board of Directors and Shareholders

 Zeo Energy Corp.

 Opinion on the financial statements

 We have audited the accompanying consolidated
balance sheets of Zeo Energy Corp. (a Delaware corporation) and subsidiaries (the "Company") as of December 31, 2024 and 2023,
the related consolidated statements of operations, changes in shareholders' deficit, and cash flows for each of the two years in
the period ended December 31, 2024, and the related notes (collectively referred to as the "consolidated financial statements").
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December
31, 2024, in conformity with accounting principles generally accepted in the United States of America.

 Basis for opinion

 These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 /s/ GRANT THORNTON LLP

 We have served as the Company's auditor
since 2023.

 Kansas City, Missouri

 May 27, 2025

 F- 2

 CONSOLIDATED BALANCE SHEETS

 As of

 2024

 2023

 Assets

 Current assets

 Cash and cash equivalents

 $
 5,634,115

 $
 8,022,306

 Accounts receivable, including $ 191,662 and $ 396,488 from related parties, net of allowance for credit losses of $ 1,165,336 and $ 862,580, as of December 31, 2024 and 2023, respectively

 10,186,543

 2,905,205

 Inventories

 872,470

 350,353

 Contract assets

 64,202

 4,915,064

 Prepaid expenses and other current assets

 2,131,345

 40,403

 Total current assets

 18,888,675

 16,233,331

 Other assets

 314,426

 62,140

 Property, equipment and other fixed assets, net

 2,475,963

 2,289,723

 Right -of-use operating lease asset

 1,268,139

 1,135,668

 Right-of-use finance lease asset

 447,012

 583,484

 Intangibles, net

 7,571,156

 771,028

 Related party note receivable

 3,000,000

 -

 Goodwill

 27,010,745

 27,010,745

 Total assets

 $
 60,976,116

 $
 48,086,119

 Liabilities, redeemable noncontrolling interest and stockholders' (deficit) equity

 Current liabilities

 Accounts payable

 $
 2,780,885

 $
 4,699,855

 Accrued expenses and other current liabilities, including $ 3,359,101 and $ 2,415,966 with related parties at December 31, 2024 and 2023, respectively

 8,540,188

 4,646,365

 Current portion of long-term debt

 291,036

 294,398

 Current portion of obligations under operating leases

 583,429

 539,599

 Current portion of obligations under finance leases

 130,464

 118,416

 Convertible promissory note, net of debt issuance costs

 2,440,000

 -

 Contract liabilities, including $ 2,000 and $ 1,160,848 with related parties as of December 31, 2024 and 2023, respectively

 203,607

 5,223,518

 Total current liabilities

 14,969,609

 15,522,151

 Obligations under operating leases, non-current

 799,385

 636,414

 Obligations under finance leases, non-current

 348,807

 479,271

 Warrant liabilities

 1,449,000

 -

 Long-term debt

 496,623

 825,764

 Total liabilities

 18,063,424

 17,463,600

 Commitments and contingencies (Note 17)

 Redeemable noncontrolling interests

 Convertible preferred units, 1,500,000 units issued and outstanding as of December 31, 2024 and no units issued and outstanding as of December 31, 2023

 16,130,871

 -

 Class B Units

 115,693,900

 -

 Stockholders' (deficit) equity

 Class V common stock, $ 0.0001 par value, 100,000,000 authorized shares; 35,230,000 and 33,730,000 shares issued and outstanding as of December 31, 2024, and December 31, 2023, respectively

 3,523

 3,373

 Class A common stock, $ 0.0001 par value, 300,000,000 authorized shares; 13,252,964 and no shares issued and outstanding as of December 31, 2024, and December 31, 2023, respectively

 1,326

 -

 Additional paid-in capital

 14,523,963

 31,152,491

 Accumulated deficit

 ( 103,440,891
)

 ( 533,345
)

 Total stockholders' (deficit) equity

 ( 88,912,079
)

 30,622,519

 Total liabilities, redeemable noncontrolling interests and stockholders' (deficit) equity

 $
 60,976,116

 $
 48,086,119

 The accompanying notes are an integral part
of the financial statements.

 F- 3

 CONSOLIDATED STATEMENTS OF OPERATIONS

 Year Ended

 2024

 2023

 $
 51,088,065

 $
 94,226,149

 Related party revenue, net

 22,156,018

 15,464,852

 Total revenue

 Operating costs and expenses:

 Cost of goods sold (exclusive of depreciation and amortization shown below)

 38,021,519

 59,436,674

 4,836,538

 1,841,874

 Sales and marketing

 19,587,073

 30,324,059

 General and administrative

 21,628,725

 12,949,067

 Total operating expenses

 84,073,855

 104,551,674

 (Loss) income from operations

 ( 10,829,772
)

 5,139,327

 Other income (expenses), net:

 Other income, net

 233,151

 ( 183,401
)

 69,000

 -

 Interest expense

 ( 333,539
)

 ( 110,857
)

 Total other income (expense), net

 ( 31,388
)

 ( 294,258
)

 Net (loss) income before taxes

 ( 10,861,160
)

 Income tax benefit

 988,802

 -

 ( 9,872,358
)

 Less: Net loss attributable to Sunergy Renewables, LLC prior to the ESGEN Business Combination

 ( 523,681
)

 -

 Net loss subsequent to the ESGEN Business Combination

 ( 9,348,677
)

 Less: Net loss attributable to redeemable non-controlling interests

 ( 6,679,788
)

 -

 Net loss attributable to Class A common stock

 $
 ( 2,668,889
)

 $

 Basic and diluted net loss per common share

 $
 ( 0.48
)

 $
 4.85

 Weighted average units outstanding, basic and diluted

 5,546,925

 1,000,000

 The accompanying notes are an integral part
of the financial statements.

 F- 4

 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
DEFICIT

 FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

 Retained

 Mezzanine
 Equity

 Non-controlling

 Units

 Class
 V
 Common Stock

 Class
 A
 Common Stock

 Additional

 Paid in

 Earnings

 (Accumulated

 Total

 Members'

 Shares

 interest

 Units

 Units

 Units

 Capital

 Deficit)

 Equity

 Balance,
 December 31, 2022

 -

 $

 -

 $

 -

 1,000,000

 $

 31,155,864

 -

 $

 -

 -

 $

 -

 $

 -

 $

 119,982

 $

 31,275,846

 Retroactive
 application of ESGEN Business Combination (Note 1)

 -

 -

 -

 ( 1,000,000

)

 ( 31,155,864

)

 33,730,000

 3,373

 -

 -

 31,152,491

 -

 -

 Balance,
 December 31, 2022

 -

 -

 -

 -

 -

 33,730,000

 3,373

 -

 -

 31,152,491

 119,982

 31,275,846

 Stockholder
 distributions

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 5,498,396

)

 ( 5,498,396

)

 Net
 income

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 Balance,
 December 31, 2023

 -

 -

 -

 -

 -

 33,730,000

 3,373

 -

 -

 31,152,491

 ( 533,345

)

 30,622,519

 Stockholder
 distributions

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 90,000

)

 ( 90,000

)

 Net
 loss prior to the ESGEN Business Combination

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 523,681

)

 ( 523,681

)

 Effects
 of ESGEN Business Combination

 Issuance
 of Class A Shares to third party advisors

 -

 -

 -

 -

 -

 -

 -

 178,207

 891,017

 -

 891,035

 Issuance
 of Class A Shares to backstop investor

 -

 -

 -

 -

 -

 -

 -

 225,174

 1,569,440

 -

 1,569,463

 Reverse
 Recapitalization (Note 3)

 6,855,076

 -

 -

 -

 4,248,583

 ( 2,498,380

)

 -

 ( 2,497,805

)

 Transaction
 costs

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 2,890,061

)

 -

 ( 2,890,061

)

 Establishment
 of redeemable noncontrolling interest

 -

 -

 26,116,548

 -

 -

 -

 -

 -

 -

 ( 26,116,548

)

 -

 ( 26,116,548

)

 Activities
 subsequent to ESGEN Business Combination

 Stock-based
 compensation

 -

 -

 -

 -

 -

 -

 -

 375,000

 7,360,697

 -

 7,360,734

 Class
 A common stock issued to vendor

 -

 -

 -

 -

 -

 -

 -

 146,000

 255,485

 -

 255,500

 Lumio
 Asset purchase

 -

 -

 -

 -

 -

 -

 -

 6,206,897

 8,131,035

 -

 8,131,656

 Issuance
 of Class A Shares to private placement investor

 -

 -

 -

 -

 -

 -

 -

 1,873,103

 2,715,813

 -

 2,716,000

 Subsequent
 measurement of redeemable noncontrolling interest

 -

 -

 105,672,002

 -

 -

 -

 -

 -

 -

 ( 6,047,026

)

 ( 99,624,976

)

 ( 105,672,002

)

 Net
 income

 -

 9,414,862

 ( 16,094,650

)

 -

 -

 -

 -

 -

 -

 -

 ( 2,668,889

)

 ( 2,668,889

)

 Dividends
 paid to Preferred unit holders

 -

 ( 139,067

)

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 Balance,
 December 31, 2024

 $

 16,130,871

 115,693,900

 -

 $

 -

 35,230,000

 $

 3,523

 13,252,964

 $

 1,326

 $

 14,523,963

 $

 ( 103,440,891

)

 $

 ( 88,912,079

)

 The accompanying notes are an integral part
of the financial statements.

 F- 5

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 Year Ended December 31,

 2024

 2023

 Cash Flows from Operating Activities

 $
 ( 9,872,358
)

 $

 Adjustment to reconcile net (loss) income to cash (used in) provided by operating activities

 4,836,538

 1,841,874

 Gain on disposal of fixed assets

 ( 91,684
)

 -

 ( 69,000
)

 -

 Provision for credit losses

 2,815,633

 1,531,223

 Noncash operating lease expense

 705,293

 550,425

 Stock based compensation expense

 7,951,248

 -

 Income tax benefit

 ( 997,702
)

 -

 Changes in operating assets and liabilities:

 Accounts receivable

 ( 8,785,973
)

 ( 3,475,661
)

 Accounts receivable due from related parties

 204,826

 ( 396,488
)

 Inventories

 ( 131,898
)

 ( 63,207
)

 Contract assets

 4,850,862

 ( 4,795,309
)

 Prepaids and other current assets

 ( 1,757,354
)

 61,852

 Other assets

 ( 13,795
)

 -

 Due from related party

 -

 ( 104,056
)

 Accounts payable

 ( 2,512,834
)

 4,501,798

 Accrued expenses and other current liabilities

 ( 1,140,780
)

 1,536,287

 Accrued expenses and other current liabilities due to related parties

 943,135

 2,415,996

 Contract liabilities

 ( 3,861,063
)

 2,913,623

 Contract liabilities due to related parties

 ( 1,158,848
)

 1,160,848

 Operating lease payments

 ( 630,963
)

 ( 547,140
)

 Net cash (used in) provided by operating activities

 ( 8,716,717
)

 11,977,134

 Cash flows from Investing Activities

 Purchases of property, equipment and other assets

 ( 369,137
)

 ( 1,034,666
)

 Investment in related party note receivable

 ( 3,000,000
)

 -

 Asset acquisitions

 ( 4,000,000
)

 -

 Net cash used in investing activities

 ( 7,369,137
)

 ( 1,034,666
)

 Cash flows from Financing Activities

 Proceeds from the issuance of debt

 -

 311,029

 Repayments of finance lease liabilities

 ( 118,416
)

 ( 84,678
)

 Proceeds from private placement

 2,716,000

 -

 Proceeds from the issuance of convertible preferred stock, net of transaction costs

 9,221,649

 -

 Repayments of debt

 ( 332,503
)

 ( 241,423
)

 Proceeds from convertible promissory note, net of debt issuance costs

 2,440,000

 -

 Dividends paid to Convertible preferred units

 ( 139,067
)

 -

 Distributions to members

 ( 90,000
)

 ( 5,173,396
)

 Net cash provided by (used in) financing activities

 13,697,663

 ( 5,188,468
)

 Net (decrease) increase in cash and cash equivalents

 ( 2,388,191
)

 5,754,000

 Cash and cash equivalents, beginning of period

 8,022,306

 2,268,306

 Cash and cash equivalents, end of the period

 $
 5,634,115

 $
 8,022,306

 Supplemental Cash Flow Information

 Cash paid for interest

 $
 124,488

 $
 103,421

 Accrual of distribution to owners

 $
 -

 $
 325,000

 Cash paid for income taxes

 $
 -

 $
 -

 Noncash finance lease expense

 $
 136,472

 $
 98,881

 Non-cash transactions

 Deferred equity issuance costs

 $
 2,769,039

 $
 -

 Right-of-use assets obtained in exchange for operating lease liabilities

 $
 837,764

 $
 -

 Issuance of Class A common stock to vendors

 $
 891,035

 $
 -

 Issuance of Class A common stock to backstop investors

 $
 1,569,463

 $
 -

 Preferred dividends

 $
 9,275,795

 $
 -

 The accompanying notes
are an integral part of the financial statements.

 F- 6

 NOTES TO FINANCIAL STATEMENTS

 DECEMBER 31, 2024

 NOTE 1 - ORGANIZATION AND BUSINESS OPERATION

 Zeo Energy Corp. (formerly known as ESGEN Acquisition Corporation or
"ESGEN"), collectively with its subsidiaries (the "Company" or "Zeo") is in the business of marketing,
sales and installation, and maintenance of solar panel technology to individual households within the United States. As part of this,
the Company may also provide roofing repairs and construction.

 Zeo Energy Corp. was a blank check company originally incorporated
on April 19, 2021 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share
purchase, reorganization or similar business combination with one or more businesses. On October 22, 2021, ESGEN consummated an initial
public offering, after which its securities began trading on the Nasdaq Stock Market LLC ("Nasdaq").

 ESGEN Business Combination

 On March 13, 2024 (the "Closing Date"), the Company consummated
its previously announced business combination (the "ESGEN Closing"), pursuant to that certain Business Combination Agreement,
dated as of April 19, 2023 (as amended on January 24, 2024, the "ESGEN Business Combination Agreement"), by and among Zeo
Energy Corp., a Delaware corporation (f/k/a ESGEN Acquisition Corporation, a Cayman Islands exempted company), ESGEN OpCo, LLC, a Delaware
limited liability company("OpCo"), Sunergy Renewables, LLC, a Nevada limited liability company ("Sunergy"), the
Sunergy equity holders set forth on the signature pages thereto or joined thereto (collectively, "Sellers" and each, a "Seller",
and collectively with Sunergy, the "Sunergy Parties"), for limited purposes, ESGEN LLC, a Delaware limited liability company
(the "Sponsor"), and for limited purposes, Timothy Bridgewater, an individual, in his capacity as the Sellers Representative
(collectively, the "ESGEN Business Combination"). Prior to the ESGEN Closing, (i) except as otherwise specified in the ESGEN
Business Combination Agreement, each issued and outstanding Class B ordinary share of ESGEN was converted into one Class A ordinary share
of ESGEN (the "ESGEN Class A Ordinary Shares" and such conversion, the "ESGEN Share Conversion"); and (ii) ESGEN
was domesticated into the State of Delaware so as to become a Delaware corporation (the "Domestication"). In connection with
the ESGEN Closing, the registrant changed its name from "ESGEN Acquisition Corporation" to "Zeo Energy Corp."

 Upon the Domestication, each then-outstanding ESGEN Class A Ordinary
Share was cancelled and converted into one share of Class A common stock of the Company, par value $ 0.0001 per share ("Zeo Class
A Common Stock"), and each then-outstanding ESGEN Public Warrant was assumed and converted automatically into a warrant of the registrant,
exercisable for one share of Zeo Class A Common Stock. Additionally, each outstanding unit of ESGEN was cancelled and converted into one
share of Zeo Class A Common Stock and one-half of one warrant of the Company.

 In accordance with the terms of the ESGEN Business Combination Agreement,
Sunergy caused all holders of any options, warrants or rights to subscribe for or purchase any equity interests of Sunergy or its subsidiaries
or securities (including debt securities) convertible into or exchangeable for, or that otherwise confer on the holder any right to acquire,
any equity interests of Sunergy or any subsidiary thereof (collectively, the "Sunergy Convertible Interests") existing immediately
prior to the ESGEN Closing to either exchange or convert all such holder's Sunergy Convertible Interests into limited liability
interests of Sunergy (the "Sunergy Company Interests") in accordance with the governing documents of Sunergy or the Sunergy
Convertible Interests.

 At the ESGEN Closing, ESGEN contributed to OpCo (1) all of its assets
(excluding its interests in OpCo, but including the amount of cash in ESGEN's Trust Account (the "Trust Account") as
of immediately prior to the ESGEN Closing (after giving effect to the exercise of redemption rights by ESGEN stockholders), and (2) a
number of newly issued shares of Class V common stock of the registrant, par value $ 0.0001 per share, which generally have only voting
rights (the "Zeo Class V Common Stock"), equal to the number of Seller OpCo Units (as defined in the ESGEN Business Combination
Agreement) (the "Seller Class V Shares"). In exchange, OpCo issued to ESGEN (i) a number of Class A common units of OpCo (the
"Manager OpCo Units") which equaled the number of total shares of the Zeo Class A Common Stock issued and outstanding immediately
after the ESGEN Closing and (ii) a number of warrants to purchase Manager OpCo Units which equaled the number of SPAC Warrants (as defined
in the ESGEN Business Combination Agreement) issued and outstanding immediately after the ESGEN Closing (the transactions described above
in this paragraph, the "ESGEN Contribution"). Immediately following the ESGEN Contribution, (x) the Sellers contributed to
OpCo the Sunergy Company Interests and (y) in exchange therefor, OpCo transferred to the Sellers the Seller OpCo Units and the Seller
Class V Shares.

 F- 7

 Prior to the ESGEN Closing, the Sellers transferred 24.167 % of their
Sunergy Company Interests (which were thereafter exchanged for Seller OpCo Units and Seller Class V Shares at the ESGEN Closing, as described
above) pro rata to Sun Managers, LLC, a Delaware limited liability company ("Sun Managers"), in exchange for Class A Units
(as defined in the Sun Managers limited liability company agreement (the "SM LLCA") in Sun Managers. In connection with such
transfer, Sun Managers executed a joinder to, and became a "Seller" for purposes of, the ESGEN Business Combination Agreement.
Sun Managers intends to grant Class B Units (as defined in the SM LLCA) in Sun Managers through the Sun Managers, LLC Management Incentive
Plan (the "Management Incentive Plan") adopted by Sun Managers to certain eligible employees or service providers of OpCo,
Sunergy or their subsidiaries, in the discretion of Timothy Bridgewater, as manager of Sun Managers. Such Class B Units may be subject
to a vesting schedule, and once such Class B Units become vested, there may be an exchange opportunity through which the grantees may
request (subject to the terms of the Management Incentive Plan and the OpCo amended and restated limited liability company agreement in
its entirely (the "OpCo A&R LLC Agreement")) the exchange of their Class B Units into Seller OpCo Units (together with
an equal number of Seller Class V Shares), which may then be converted into Zeo Class A Common Stock (subject to the terms of the Management
Incentive Plan and the OpCo A&R LLC Agreement). Grants under the Management Incentive Plan will be made after ESGEN Closing.

 As of the ESGEN Closing Date, upon consummation of the ESGEN Business
Combination, the only outstanding shares of capital stock of the registrant were shares of Zeo Class A Common Stock and Zeo Class V Common
Stock.

 In connection with entering into the ESGEN Business Combination Agreement,
ESGEN and the Sponsor entered into a subscription agreement, dated April 19, 2023, which ESGEN, the Sponsor and OpCo subsequently amended
and restated on January 24, 2024 (the "Sponsor Subscription Agreement"), pursuant to which, among other things, the Sponsor
agreed to purchase an aggregate of 1,000,000 OpCo preferred units (and be issued an equal number of shares of Zeo Class V Common Stock)
("Convertible OpCo Preferred Units") concurrently with the ESGEN Closing at a cash purchase price of $ 10.00 per unit and up
to an additional 500,000 Convertible OpCo Preferred Units (together with the concurrent issuance of an equal number of shares of Zeo Class
V Common Stock) during the nine months after ESGEN Closing if called for by Zeo (the "Sponsor PIPE Investment"). Prior to
the ESGEN Closing, ESGEN informed the Sponsor that it wished to call for the additional 500,000 Convertible OpCo Preferred Units at the
Closing and, as a result, a total of 1,500,000 Convertible OpCo Preferred Units were issued to Sponsor in return for aggregate consideration
of $ 15,000,000.

 Accounting for the ESGEN Business Combination

 The ESGEN Business Combination was accounted for as a reverse recapitalization
with ESGEN being treated as the acquired company since there was no change in control in accordance with the guidance for common control
transactions in Accounting Standards Codification ("ASC") 805-50, Business Combinations – Related Issues ("ASC
805-50"). Accordingly, the financial statements of the combined entity will represent a continuation of the financial statements
of Sunergy with the ESGEN Business Combination treated as the equivalent of Sunergy issuing stock for the net assets of ESGEN, accompanied
by a recapitalization. The net assets of ESGEN were stated at historical cost, with no goodwill or other intangible assets recorded. Operations
prior to the ESGEN Business Combination were those of Sunergy.

 Sunergy was determined to be the accounting acquirer based on evaluation
of the following facts and circumstances:

 Based upon the evaluation of the OpCo A&R LLC Agreement, OpCo is
considered to be a Variable Interest Entity ("VIE") and ESGEN is considered to be the primary beneficiary through its membership
interest and manager powers conferred to it through the Class A Units. For VIEs, the accounting acquirer is always considered to be the
primary beneficiary. As such, Zeo will consolidate OpCo and will be considered the accounting acquirer; however, further consideration
of whether the entities are under common control was required in order to determine whether there is an ultimate change in control and
the acquisition method of accounting is required under ASC 805.

 While Sunergy did not control or have common ownership of ESGEN prior
to the consummation of the ESGEN Business Combination, the Company evaluated the ownership of the new entity subsequent to the consummation
of the transaction to determine if common control existed. If the business combination is between entities under common control, then
the acquisition method of accounting is not applicable and the guidance in ASC 805-50 regarding common control should be applied instead.
The Financial Accounting Standards Board ("FASB") ASC does not include a definition of common control. In practice, entities
with a common parent entity, as determined under ASC 810, Consolidation, are generally considered to be under common control. Emerging
Issues Task force ("EITF") Issue 02-5, "Definition of 'Common Control' in Relation to FASB Statement No.
141 ("EITF Issue 02-5")", which was never finalized or codified, has also been applied in practice to determine when
entities are under common control. EITF Issue 02-5 indicates that common control would exist in any of the following situations:

 An individual (including trusts in which the individual is the beneficial owner) or entity holds more than 50 percent of the voting ownership of each entity.

 Immediate family members hold more than 50 percent of the voting ownership interest of each entity, and there is no evidence that those family members would vote their shares in any way other than in concert. Immediate family members include a married couple and their children, but not the married couple's grandchildren. Entities might be owned in varying combinations among living siblings and their children. Those situations require careful consideration of the substance of the ownership and voting relationships.

 F- 8

 Group of stockholders holds more than 50 percent of the voting ownership of each entity, and contemporaneous written evidence of an agreement to vote a majority of the entities' shares in concert exists.

 Prior to the ESGEN Business Combination and the contributions to Sun
Managers, Sunergy was majority owned by 5 entities (the "Primary Sellers"):

 Southern Crown Holdings, LLC (wholly owned by Anton Hruby) — 230,000 Common Units ( 23 %)

 LAMADD LLC (wholly owned by Gianluca Guy) — 230,000 Common Units ( 23 %)

 JKae Holdings, LLC (wholly owned by Kalen Larsen) — 215,000 Common Units ( 21.5 %)

 Clarke Capital, LLC (wholly owned by Brandon Bridgewater) — 215,000 Common Units ( 21.5 %)

 White Horse Energy, LC (wholly owned by Timothy Bridgewater) — 90,000 Common Units ( 9 %)

 Each of the above parties entered into a Voting Agreement, dated September
7, 2023. The term of the Voting Agreement is for five years from the date of the Voting Agreement. The consummation of the ESGEN Business
Combination occurred within the term of the Voting Agreement.

 Prior to the ESGEN Business Combination and the contributions to Sun
Managers, the Primary Sellers had 98 % ownership in Sunergy. Immediately following the ESGEN Business Combination, the Primary Sellers
owned 83.8 % of the Common Stock of the registrant through their Zeo Class V Common Stock that have voting interests. The Voting Agreement
constitutes contemporaneous written evidence of an agreement to vote a majority of the Primary Sellers' shares of the registrant
in concert. Accordingly, the Primary Sellers retain majority control through the voting of their units in conjunction with the Voting
Agreement immediately prior to the ESGEN Business Combination and their shares following the ESGEN Business Combination and, therefore,
there is no change of control before or after the ESGEN Business Combination. This conclusion is appropriate even though there was no
relationship or common ownership or control between Sunergy and ESGEN prior to the ESGEN Business Combination. Accordingly, the ESGEN
Business Combination should be accounted for in accordance with the guidance for common control transactions in ASC 805-50.

 Additional factors that were considered include the following:

 Since the ESGEN Business Combination, the Board has been comprised of one individual designated by ESGEN and five individuals designated by Sunergy.

 Since the ESGEN Business Combination, management of the Company has been the existing management at Sunergy immediately prior to the ESGEN Business Combination. The individual that was serving as the chief executive officer and chief financial officer of Sunergy's management team immediately prior to the ESGEN Business Combination continues substantially unchanged upon completion of the ESGEN Business Combination.

 For common control transactions that include the transfer of a business,
the reporting entity is required to account for the transaction in accordance with the procedural guidance in ASC 805-50. The C Corporation
(ESGEN) is considered to be a substantive entity, the LLC (OpCo) is a business and VIE, and the C Corporation is considered to be the
accounting acquirer since it is the primary beneficiary of the LLC. In a transaction that is a combination of entities under common control,
the acquirer (ESGEN) should recognize the acquired entity (OpCo and Sunergy) on the same basis as the entities' common parent.

 NOTE 2 - LIQUIDITY AND GOING CONCERN

 As of December 31, 2024, the Company had approximately $ 3.9 million
of working capital including $ 5.6 million of cash and cash equivalents. Management has assessed the going concern assumptions of the Company
during the preparation of these consolidated financial statements.

 The Company's consolidated financial statements have been prepared
on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
Historically, the Company's primary source of funding to support operations has been cash flows from operations.

 F- 9

 NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Basis of Presentation and principles of Consolidation

 The consolidated financial statements for the Company as of December
31, 2024 and 2023 include the accounts of the Company's wholly-owned subsidiaries for years ended 2024 and 2023. The accompanying
consolidated financial statements have been prepared pursuant to the accounting principles generally accepted in the United States of
America ("US GAAP"). References to the "ASC" hereafter refer to the Accounting Standards Codification established
by the Financial Accounting Standards Board ("FASB") as the source of authoritative US GAAP. All intercompany balances and
transactions have been eliminated in consolidation.

 Reclassification

 Certain amounts from prior period financial statements
have been reclassified to align with the presentation used in the current consolidated financial statements for comparative purposes.
These reclassifications had no effect on the Company's previously reported results of operations.
An adjustment has been made to the Consolidated Statements of Cash Flows for the year ended December 31, 2023, to match this current year's
presentation of noncash financing lease expense. This change in classification does not affect previously reported cash flows from
operating activities in the Consolidated Statements of Cash Flows.

 Use of Estimates

 The preparation of the Company's consolidated financial statements
in conformity with US GAAP requires it to make estimates and assumptions that affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues
and expenses for the reporting period. Some of the more significant estimates include fair value of preferred shares, fair value of assets
acquired and liabilities assumed in asset acquisitions, share-based compensation, fair value of warrant liabilities, redemption value
of non-controlling interest, subsequent realizability of intangible assets, depreciation and amortization periods and collectability of
accounts receivable. Due to the uncertainty involved in making estimates, actual results could differ from those estimates which could
have a material effect on the financial condition and results of operations in future periods.

 The Company bases its estimates and assumptions on historical experience
and other factors, including the current economic environment and on various other judgements that it believes to be reasonable under
the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Changes in those estimates
resulting from continuing changes in the economic environment could have a material effect on the financial condition and results of operations
in future periods.

 Segment Information

 Operating segments are defined as components of an enterprise for which
separate discrete financial information is evaluated regularly by the chief operating decision maker ("CODM"), in deciding
how to allocate resources and assess performance. The CODM reviews financial information presented on a consolidated basis for the purposes
of allocating resources and evaluating financial performance. Accordingly, the Company operates and manages its business as one operating
and reportable segment. (See Note 19)

 Cash and Cash Equivalents

 The Company considers all highly liquid investments purchased with
original maturities of three months or less from the purchase date to be cash equivalents. The Company maintains its cash in checking
and savings accounts. Income generated from cash held in savings accounts is recorded as interest income. The carrying value of the Company's
savings accounts is included in cash and cash equivalents and approximates the fair value.

 Accounts receivable, net of allowance for credit losses

 Accounts receivable is presented at the invoiced receivable amounts,
less any allowance for any potential expected credit loss amounts, and do not bear interest. The Company estimates allowance for credit
losses based on the creditworthiness of each customer, historical collections experience, forward looking information and other information
including the aging of the receivables. The majority of our customers lease or finance their purchase and installation of solar panels
through various financing companies. The financing companies remit payment to the Company typically within 3 weeks after installation.
The Company is not deemed a borrower with these financing agreements and as a result is not subject to any of the terms of the financing
transaction between the financing company and the customer.

 In September 2024, based on a reassessment of creditworthiness of customers,
historical collections experience, forward looking information and other information including the aging of the receivables, the Company
revised its estimate of allowance for credit losses.

 This change in estimate has been accounted for prospectively in accordance
with ASC 250, Accounting Changes and Error Corrections. In accordance with
its policy, the Company reviews the estimated allowance for credit losses on an ongoing basis. This review indicated that the estimated
allowance for credit losses in the Company's consolidated financial statements should be increased. As a result, effective September
30, 2024, the Company recorded a change in estimate to increase the three and nine months provision for credit losses by $ 1,820,365, increase
net loss by $ 1,820,365 for the three and nine months ended September 30, 2024, and increase basic and diluted net loss per common share
by $ 0.30 and $ 0.49 for the three and nine months ended September 30, 2024.

 F- 10

 The following represents a roll forward of the allowance for credit
losses for the years ended December 31, 2024 and 2023:

 2024

 2023

 Allowance for credit losses, beginning of the period

 $
 862,580

 $
 742,772

 Provision for credit losses

 2,815,633

 1,531,223

 Write offs

 ( 2,525,100
)

 ( 1,411,415
)

 Recoveries

 12,223

 -

 Allowance for credit losses, as of the end of the period

 $
 1,165,336

 $
 862,580

 Significant judgement is involved in determination of the collectability
of accounts receivable. Management assesses the reasonability of collectability of accounts receivable on a quarterly basis to record
the allowance for credit losses.

 Contract assets

 Contract assets costs include prepaid installation costs incurred prior
to completion of installations of solar systems and accrued revenues for which the invoicing criteria have not been met. Prepaid installation
costs include the cost of engineering, permits, governmental fees, and other related solar installation costs were $ 64,202 and $ 4,915,064
as of December 31, 2024 and 2023, respectively. These costs are charged to Cost of goods sold when each installation is completed. The
following table summarizes the change in contract assets:

 2024

 2023

 Contract asset, beginning of the period

 $
 4,915,064

 $
 119,755

 Cost of goods sold recognized during the period

 ( 4,915,064
)

 ( 119,755
)

 Cash paid prior to completion of performance obligation

 64,202

 4,915,064

 Contract assets, as of the end of the period

 $
 64,202

 $
 4,915,064

 Prepaid expenses and other current assets

 Prepaid expenses and other current assets consist of employee advances,
advanced sales commissions, prepaid insurance, and other current assets.

 Note receivable

 The Company records notes receivable when it extends credit or financing
to related parties or third parties. The Company evaluates notes receivable for collectability at each reporting period under the current
expected credit loss (CECL) model, in accordance with ASC 326, Financial Instruments - Credit Losses ("ASC 326"). If
necessary, an allowance for doubtful accounts is recorded to reflect potential losses. As of December 31, 2024, we evaluated the need
for an allowance for credit loss using the guidelines set forth in ASC 326, and have determined this note is fully collectible and, therefore,
we have not recorded an allowance against the note receivable balance.

 Concentration of credit risk

 Financial instruments that potentially subject the Company to concentrations
of credit risk consist of cash and cash equivalents and trade accounts receivable. The Company maintains its cash and cash equivalent
balances in highly rated financial institutions, which at times may exceed federally insured limits. The amounts over these insured limits
as of December 31, 2024, and December 31, 2023 were $ 5,389,013 and $ 7,772,306, respectively. The Company mitigates this concentration
of credit risk by monitoring the credit worthiness of the financial institutions. No losses have been incurred to date on any deposits.

 The Company performs periodic credit evaluations of its customers'
financial condition and also monitors the financial condition of the financial counterparties that finance customer transactions and generally
does not require collateral. For customers who finance their systems through a lease product, the Third Party Operator (TPO) of the lease
product is the contracted customer with the Company. Where the Company has a concentration of credit risk, it is with these TPO customers.
At December 31, 2024, the Company had two customers who exceeded 10% of accounts receivable. Their balances were $ 3,192,077 and $ 2,306,096.
No one customer or financing counterparty exceeded 10% of accounts receivable as of December 31, 2023. For the years ended December 31,
2024 and 2023, the Company had three and one customers, respectively, who exceeded 10% of revenue recognized. Their revenue recognized
was $ 17,834,595, $ 23,386,284 and $ 8,781,244 for 2024 and $ 13,083,458 for 2023, respectively. See Note 20 – subsequent events for
further information.

 Advertising and Marketing

 The Company charges the costs of advertising to
expense as incurred. For the years ended December 31, 2024 and 2023, the Company incurred $173,903 and $188,526, respectively, of advertising
and marketing costs.

 F- 11

 Inventories

 Inventories are primarily comprised of solar panels and other related
items necessary for installations and service needs. Inventories are accounted for on a first-in-first-out basis and are measured at the
lower of cost or net realizable value, where cost is determined using a weighted-average cost method. When evidence exists that the net
realizable value of inventory is lower than its cost, the difference is recognized as cost of goods sold in the consolidated statements
of operations in the period identified. As of December 31, 2024 and 2023, inventory was $ 872,470 and $ 350,353, respectively.

 Property, equipment and other fixed assets, net

 Property, equipment and other fixed assets are carried at cost less
accumulated depreciation and includes expenditures that substantially increase the useful lives of existing property and equipment. Maintenance,
repairs, and minor renovations are charged to expense as incurred. When property and equipment is retired or otherwise disposed of, the
related costs and accumulated depreciation are removed from their respective accounts, and any difference between the sale proceeds and
the carrying amount of the asset is recognized as a gain or loss on disposal in the consolidated Statements of Operations.

 Software that is developed for internal use and is accounted for accordance
with ASC 350, Intangibles, Goodwill and Other-Internal-Use Software. Qualifying costs incurred to develop internal-use software
are capitalized when (i) the preliminary project stage is completed, (ii) management has authorized further funding for the completion
of the project and (iii) it is probable that the project will be completed and perform as intended. These capitalized costs include compensation
for employees who develop internal-use software and external costs related to development of internal-use software. Capitalization of
these costs ceases once the project is substantially complete and the software is ready for its intended purpose. Internally developed
software is amortized using the straight-line method over an estimated useful life. All other expenditures, including those incurred to
maintain an internal-use software's current level of performance, are expensed as incurred. When these assets are retired or disposed
of, the cost and accumulated amortization thereon are removed, and any resulting gain or losses are included in the consolidated statements
of operations.

 Depreciation is computed using the straight-line method over the estimated
useful lives of the assets, which is five years, across all asset classes.

 The estimated useful lives and depreciation methods are reviewed at
each year-end, with the effect of any changes in estimates accounted for prospectively. All depreciation expense is included with depreciation
and amortization in the consolidated statements of operations.

 Impairment of long-lived assets

 Management reviews each asset or asset group for impairment whenever
events or circumstances indicate that the carrying value of an asset or asset group may not be recoverable, and at least annually. No
impairment charges were recorded by the Company during the years ended December 31, 2024, and 2023.

 Business Combinations

 The Company accounts for an acquisition as a business combination if
the assets acquired and liabilities assumed in the transaction constitute a business in accordance with ASC Topic 805. Such acquisitions
are accounted using the acquisition method by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed,
and any non-controlling interest in the acquired business, measured at their acquisition date fair values.

 Where the set of assets acquired and liabilities assumed doesn't
constitute a business, it is accounted for as an asset acquisition and the individual assets and liabilities are recorded at their respective
relative fair values corresponding to the consideration transferred.

 Goodwill

 Goodwill is recognized and initially measured as any excess of the
acquisition-date consideration transferred in a business combination over the acquisition-date amounts recognized for the net identifiable
assets acquired. Goodwill is not amortized but is tested for impairment annually, or more frequently if an event occurs or circumstances
change that would more likely than not result in an impairment of goodwill. First, the Company assesses qualitative factors to determine
whether or not it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company concludes
that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company conducts a quantitative
goodwill impairment test comparing the fair value of the applicable reporting unit with its carrying value. If the carrying amount of
the reporting unit exceeds the fair value of the reporting unit, the Company recognizes an impairment loss in the consolidated statements
of operations for the amount by which the carrying amount exceeds the fair value of the reporting unit. The Company performs its annual
goodwill impairment test at December 31 of each year. There was no goodwill impairment for the years ended December 31, 2024, and
2023.

 F- 12

 Intangible assets subject to amortization

 Intangible assets include tradenames, customer lists, order backlog
and non-compete agreements. Amounts are subject to amortization on a straight-line basis over the estimated period of benefit and are
subject to annual impairment consideration. Costs incurred to renew or extend the term of a recognized intangible asset, such as the acquired
tradename, are capitalized as part of the intangible asset and amortized over its revised estimated useful life.

 Intangible assets are reviewed for impairment whenever events or changes
in circumstances indicate the carrying amount of the intangible assets may not be recoverable. Conditions that would necessitate an impairment
assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which
an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets
may not be recoverable. The Company evaluates the recoverability of intangible assets by comparing their carrying amounts to future net
undiscounted cash flows expected to be generated by the intangible assets. If such intangible assets are considered to be impaired, the
impairment recognized is measured as the amount by which the carrying amount of the intangible assets exceeds the fair value of the assets.
The Company determines fair value based on discounted cash flows using a discount rate commensurate with the risk inherent in the Company's
current business model for the specific intangible asset being valued. No impairment charges were recorded for the years ended December
31, 2024, and 2023.

 Leases

 The Company evaluates the contracts it enters into to determine whether
such contracts contain leases at inception. A contract contains a lease if the contract conveys the right to control the use of identified
property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further
evaluated for classification as an operating or finance lease where the Company is a lessee. When the arrangements include lease and non-lease
components, the Company accounts for them as a single lease component.

 Operating Leases

 A lease for which substantially all the benefits and risks incidental
to ownership remain with the lessor is classified by the lessee as an operating lease. Operating leases are included in the line items
right-of-use ("ROU") operating lease asset, current portion of obligations under operating leases, and obligations under operating
leases, non-current in the consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for
the lease term and obligations under lease represents its obligation to make lease payments arising from the lease. For operating leases,
the Company measures its lease obligations based on the present value of the total lease payments not yet paid. These payments are then
discounted based on the more readily determinable of the rate implicit in the lease or the Company's incremental borrowing rate,
which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over
the term of the lease. The Company uses its incremental borrowing rate based on the information available at lease commencement date in
determining the present value of lease payments. The Company measures ROU assets based on the corresponding lease obligation adjusted
for payments made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Company begins
recognizing lease expense when the lessor makes the underlying asset available to the Company. Lease expenses for lease payments is recognized
on a straight-line basis over the lease term.

 For leases with a lease term of less than one year (short-term leases),
the Company has elected not to recognize an obligation or ROU asset on its consolidated balance sheet. Instead, it recognizes the lease
payments as expenses on a straight-line basis over the lease term. Short-term lease costs are immaterial to its consolidated statements
of operations and cash flows.

 Finance leases

 Leases that transfer substantially all of the benefits and risks incidental
to the ownership of assets are accounted for as finance leases as if there was an acquisition of an asset and incurrence of an obligation
at the inception of the lease. Lease cost for finance leases where the Company is the lessee includes the amortization of the ROU asset,
which is amortized on a straight-line basis and recorded to depreciation and amortization and interest expense on the finance lease obligation,
which is calculated using the effective interest method and recorded to interest expense on the accompanying consolidated statements of
operations. Finance lease ROU assets are amortized over the shorter of their estimated useful lives or the terms of the respective leases.
If the Company is reasonably certain to exercise the option to purchase the underlying asset at the end of lease term, the finance lease
ROU assets are amortized to the end of useful life of the assets on a straight-line basis.

 F- 13

 Warrant Liabilities

 The Company evaluates all of its financial instruments, including issued
share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant
to ASC 815-40, Derivatives and Hedging ("ASC 815-40"). The classification of derivative instruments, including whether
such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. The Company accounts
for the Public Warrants (as defined in Note 13) in accordance with the guidance contained in ASC 815-40 under which the Warrants do not
meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Warrants as liabilities
at their fair value and adjusts the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each
balance sheet date until exercised, and any change in fair value is recognized in the consolidated statements of operations. The quoted
market price is utilized as the fair value as of each relevant date.

 Revenue Recognition

 The Company accounts for revenue in accordance with ASC 606, Revenue
from Contracts with Customers ("ASC 606"). The Company applies judgment in the determination of performance obligations
in accordance with ASC 606. Performance obligations in a contract are identified based on the services that will be transferred to the
customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with
other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby
the transfer of the services is separately identifiable from other promises in the contract. In addition, a single performance obligation
may comprise a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the
customer. This principle is achieved through applying the following five-step approach:

 Step 1 - Identification of the contract, or contracts, with a customer.

 Step 2 - Identification of the performance obligations in the contract.

 Step 3 - Determination of the transaction price.

 Step 4 - Allocation of the transaction price to the performance obligations in the contract

 Step 5 - Recognition of revenue when, or as, the Company satisfies a performance obligation.

 The Company recognizes and records revenue from its operations upon
completion of installation for both solar system installations and roofing installations. In connection with the sales and installation,
a signed contract between the Company and the purchaser defines the duties and obligations of each party. The contract is specific as
to the duties and responsibilities which govern the accounting for these transactions. Once the Company's performance obligations
are met with installation completed, according to the signed contract, the Company's obligations are completed, and title is transferred
to the buyer. The Company believes its performance obligation is completed once the installation of the solar panels is completed, which
is prior to the customer receiving permission to operate the solar panels from the local utility company. The Company records sales revenue
at this point in time. Many of the Company's customers finance their obligations with third parties. In these situations, the finance
company deducts their financing fees and remits the net amount to the Company. Revenue recorded is equal to the contract amount signed
by the purchaser, net of the financing fees. The Company incurs several costs associated with the installation prior to its completion.
In accordance with ASC 340, Other Assets and Deferred Costs, installation-related costs are recorded as prepaid expenses and other
current assets and in turn are expensed when installation is completed. Thus, revenue recognition is in turn matched with the installation
equipment costs and expense associated with the completion of each project.

 Years ended

 2024

 2023

 Solar systems installations, net

 70,614,343

 102,928,549

 Roofing installations

 2,629,740

 6,762,452

 Total net revenues

 $

 $

 F- 14

 Contract liabilities

 The Company receives both customer advances and
may receive lender advances from third-party financing companies on behalf of customers. These amounts are recorded on the consolidated
balance sheets as contract liabilities and are considered a liability of the Company until the installation is completed. When the permission
to turn on ("PTO") the solar panels from the local municipality is significantly delayed, the lender may withdraw their previous
payments for a customer account until the PTO is completed. The contract liabilities amounts are expected to be recognized as revenue
within twelve months of the Company's receipt of the funds. The following table summarizes the change in contract liabilities:

 2024

 2023

 Contract liabilities, beginning of the period

 $
 5,223,518

 $
 1,149,047

 Revenue recognized from amounts included in contract liabilities at the beginning of the period

 ( 5,223,518
)

 ( 1,149,047
)

 Cash received prior to completion of performance obligation

 120,143

 5,223,518

 Contract liabilities, end of the period

 $
 120,143

 $
 5,223,518

 Contract acquisition costs

 The Company pays sales commissions to sales representatives based on
a percentage of the value of sales contracts entered into by the customer and the Company. Payment is made to the sales representative
once installation is completed. Such costs are included as sales and marketing on the consolidated statements of operations. Since sales
commission payments are subject to completion of the installation, payment is made commensurate with the recognition of revenue from the
sale, and therefore the full expense is incurred as the Company does not have any remaining performance obligations.

 Costs to obtain a contract are not considered
to be incremental or material, and project duration generally does not span more than one year. Accordingly, the Company applies a practical
expedient for these types of costs and as such, they are expensed in the period incurred.

 Earnings per share

 The Company reports both basic and diluted earnings per share. Basic
earnings per share is calculated based on the weighted average number of shares of Class A Common Stock outstanding and excludes the dilutive
effect of warrants, stock options, and other types of convertible securities. Diluted earnings per share is calculated based on the weighted
average number of shares of Class A Common Stock outstanding and the dilutive effect of warrants and other types of participating securities
are included in the calculation. Dilutive securities are excluded from the diluted earnings per share calculation if their effect is anti-dilutive,
such as in periods where a net loss is reported.

 Prior to the ESGEN Business Combination, the membership structure of
Sunergy Renewable, LLC included membership units. In conjunction with the closing of the ESGEN Business Combination, the Company effectuated
a recapitalization whereby all membership units were converted to common units of ESGEN OpCo, LLC, and Zeo Energy Corp. implemented a
revised class structure including Class A Common Stock having one vote per share and economic rights and Class V Common Stock having one
vote per share and no economic rights.

 Stock-based Compensation

 The Company recognizes an expense for stock-based compensation awards
based on the estimated fair value of the award on the date of grant. The Company has elected to account for restricted stock awards with
market conditions using a graded vesting method. This method recognizes the compensation cost in the consolidated statements of operations
over the requisite service period for each separately vesting tranche of awards. The Company has elected to recognize forfeitures as they
occur rather than estimate expected forfeitures.

 Fair value of Financial Instruments

 Fair value is the price that would be received to sell an asset, or
the amount paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is a fair
value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to quoted prices in active
markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).
We classify fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows:

 Level 1 — Inputs based on unadjusted quoted market prices
in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

 Level 2 — Observable inputs other than quoted prices included
in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar instruments
in markets that are not active or for which all significant inputs are observable or can be corroborated by observable market data.

 Level 3 — Inputs reflect management's best estimate
of what market participants would use in pricing the asset or liability at the measurement date. The inputs are both unobservable for
the asset and liability in the market and significant to the overall fair value measurement.

 F- 15

 In some circumstances, the inputs used to measure fair value might
be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its
entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. The recorded amounts
of certain financial instruments, including cash and cash equivalents, accounts receivable, accrued expenses, advanced funding, accounts
payable, and debt approximate fair value due to their relatively short maturities.

 Redeemable Noncontrolling Interests

 Noncontrolling interests represent the portion of OpCo that Zeo Energy
Corp. controls and consolidates but does not own. The noncontrolling interests were created as a result of the ESGEN Business Combination
and represent 33,730,000 common units issued by Zeo Energy Corp. to the prior investors. As of the close of the ESGEN Business Combination,
Zeo Energy Corp. held a 13.0 % interest in OpCo with the remaining 87.0 % interest held by OpCo's prior investors. At December 31,
2024, Zeo Energy Corp. held a 28.2 % interest in ESGEN OpCo, LLC with the remaining 71.8 % interest held by OpCo's prior investors.
The prior investors' interests in OpCo represent a redeemable noncontrolling interest. At its discretion, the members have the right
to exchange their common units in OpCo (along with the cancellation of the paired shares of Zeo Energy Corp. or the Class V Common Stock)
for either shares of Class A Common Stock on a one-to-one basis or cash proceeds of equal value at the time of redemption. Any redemption
of OpCo common units in cash must be funded through a private or public offering of Class A Common Stock and is subject to the Company's
Board's approval. As of December 31, 2024, the prior investors of OpCo hold the majority of the voting rights on the Board.

 As the redeemable noncontrolling interests are redeemable upon the
occurrence of an event that is not solely within the Company's control, the Company classifies redeemable noncontrolling interests
as temporary equity. The redeemable noncontrolling interests in common units were initially measured at the OpCo prior investors'
share in the net assets of the Company upon consummation of the ESGEN Business Combination. Subsequent remeasurements of the Company's
redeemable noncontrolling interests are recorded as a deemed dividend each reporting period, which reduces retained earnings, if any,
or additional paid-in capital of Zeo Energy Corp. Remeasurements of the Company's redeemable noncontrolling interests are based
on the fair value of our Class A Common Stock.

 Redeemable Convertible Preferred Units

 The Company records redeemable convertible preferred units at fair
value on the dates of issuance, net of issuance costs. The redeemable convertible preferred units have been classified outside of stockholders'
(deficit) equity as temporary equity on the accompanying consolidated balance sheets because the shares contain certain redemption features
that are not solely within the control of the Company. See Note 11 – Redeemable Noncontrolling Interests and Equity. Because the
redeemable convertible preferred units are held by the Sponsor at the OpCo level, the preferred units are presented as a noncontrolling
interests on the consolidated balance sheets.

 Income Taxes

 Zeo Energy Corp. is a corporation and thus is subject to United States
("U.S.") federal, state and local income taxes. OpCo is a partnership for U.S. federal income tax purposes and therefore does
not pay U.S. federal income tax. Instead, the OpCo unitholders, including Zeo Energy Corp., are liable for U.S. federal income tax on
their respective shares of OpCo's taxable income. OpCo is liable for income taxes in those states which tax entities classified
as partnerships for U.S. federal income tax purposes.

 We use the asset and liability method of accounting for income taxes
for the Company. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax
bases and net operating loss ("NOL") and tax credit carry forwards. Deferred tax assets and liabilities are measured using
enacted income tax rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in the results of operations in the period
that includes the enactment date. The realizability of deferred tax assets is evaluated quarterly based on a "more likely than not"
standard and, to the extent this threshold is not met, a valuation allowance is recorded.

 F- 16

 ASC 740 prescribes a recognition threshold and a measurement attribute
for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits
to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes
accrued interest and penalties related to unrecognized tax benefits as income tax expense. Management has evaluated the Company's
tax positions, including its previous status as a pass-through entity for federal and state tax purposes, and has determined that the
Company has taken no uncertain tax positions that require adjustment to the consolidated financial statements. The Company's reserve
related to uncertain tax positions was zero as of December 31, 2024 and December 31, 2023. There were no unrecognized tax benefits and
no amounts accrued for interest and penalties as of December 31, 2024 and December 31, 2023. The Company is currently not aware of any
issues under review that could result in significant payments, accruals or material deviation from its position.

 Interest and penalties associated with tax positions are recorded in
the period assessed as general and administrative expenses. The open tax years for U.S. federal and state income tax purposes are 2021
and forward.

 Tax Receivable Agreement

 In conjunction with the consummation of the ESGEN
Business Combination, Zeo Energy Corp entered into a Tax Receivable Agreement (the "TRA") with Opco and certain Opco members
(the "TRA Holders"). Pursuant to the TRA, Zeo Energy Corp. is required to pay the TRA Holders 85 % of the net cash savings,
if any, in U.S. federal, state and local income and franchise tax (computed using simplifying assumptions to address the impact of state
and local taxes) that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the ESGEN Business
Combination as a result of, as applicable to each such TRA Holder, (i) certain increases in tax basis that occur as a result of the acquisition
(or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder's Exchangeable OpCo Units pursuant
to the exercise of the OpCo Exchange Rights or a Mandatory Exchange and (ii) imputed interest deemed to be paid by the Company as a result
of, and additional tax basis arising from, any payments it makes under the TRA. All such payments to the TRA Holders are the obligations
of Zeo Energy Corp., and not that of Opco. As of December 31, 2024, there have been no exchanges of Opco units for Class A Common Stock
of Zeo Energy Corp. and, accordingly, no TRA liabilities currently exist. Future exchanges will result in incremental tax attributes and
potential cash tax savings for Zeo Energy Corp. The associated liability for the TRA will be recorded as a decrease to additional paid-in
capital in the consolidated statement of changes in stockholders' deficit. As of December 31,2024, assuming a hypothetical
exchange of all outstanding units, the total TRA would be $ 27.6 million. In accordance with ASC Topic 450, Contingencies, any changes
to an existing TRA liability, including changes to the fair value measurement or to re-establish a TRA liability related to prior year
exchanges, will be recorded as tax receivable agreement in other income (expense), net in the consolidated statement of operations. Similarly,
if utilization of the deferred tax assets subject to the TRA becomes more likely than not in the future, the Company will record a liability
related to the TRA which will be recorded in the consolidated statement of operations. See Note 14 – Related Party Transactions.

 New Accounting Pronouncements

 Recently Adopted Accounting Pronouncements

 In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting-Improvements
to Reportable Segment Disclosures (Topic 280) ("ASU 2023-07"), which requires an enhanced disclosure of segments on an annual
and interim basis, including the title of the chief operating decision maker, significant segment expenses, and the composition of other
segment items for each segment's reported profit or loss. ASU 2023-07 is effective for fiscal years beginning after December 15,
2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of ASU 2023-07 did not have a
material impact on the consolidated financial statements. Refer to Note 19, Segment Reporting.

 Recently Issued Accounting Pronouncements Not Yet Adopted

 In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic
740) - Improvements to income tax disclosures ("ASU 2023-09"), expanding the disclosures requirement for income taxes primarily
by requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. ASU 2023-09 is effective for annual
periods beginning after December 15, 2024. Early adoption is permitted, and adoption of ASU 2023-09 can be applied prospectively or retrospectively.
The Company is currently evaluating the impact of this standard.

 In November 2024, the FASB issued ASU 2024-03, " Income Statement
- Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):Disaggregation of Income Statement Expenses "
("ASU 2024-03"). The standard requires additional disclosure of certain costs and expenses within the notes to the financial
statements. The provisions of the standard are effective for annual reporting periods beginning after December 15, 2026, and interim reporting
periods beginning after December 15, 2027, with early adoption permitted. This accounting standards update may be applied either prospectively
or retrospectively. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

 F- 17

 NOTE 4 - REVERSE RECAPITALIZATION

 As discussed in Note 1, "Organization and Business Operation",
the ESGEN Business Combination was consummated on March 13, 2024, which, for accounting purposes, was treated as the equivalent of Zeo
issuing stock for the net assets of ESGEN, accompanied by recapitalization. Under this method of accounting, ESGEN was treated as the
acquired company for financial accounting and reporting purposes under US GAAP.

 Transaction Proceeds

 Upon closing of the ESGEN Business Combination, the Company received
gross proceeds of $ 17.7 million from the ESGEN Business Combination, offset by total transaction costs and other fees totaling $ 7.4 million.
 The following table reconciles the elements of the ESGEN Business Combination to the consolidated statements of cash flows and the consolidated
statements of changes in stockholders' deficit for the period ended December 31, 2024:

 Cash-trust and cash, net of redemptions

 $
 2,714,091

 Less: transaction costs, promissory note and professional fees, paid

 ( 7,350,088
)

 Proceeds from Sponsor PIPE Investment

 15,000,000

 Net proceeds from the ESGEN Business Combination

 10,364,003

 Less: liabilities assumed

 ( 12,861,808
)

 Reverse recapitalization, net

 $
 ( 2,497,805
)

 The number of shares of Common Stock issued immediately following the
consummation of the ESGEN Business Combination was:

 Class V

Stock

 Class A

 Stock

 ESGEN Class A common stock, outstanding prior to the ESGEN Business Combination

 -

 7,027,636

 Forfeiture of Class A founder shares

 -

 ( 2,900,000
)

 Less redemptions

 -

 ( 1,159,976
)

 Class A common stock of ESGEN

 -

 2,967,660

 ESGEN Class B common stock, outstanding prior to the ESGEN Business Combination

 -

 1,280,923

 ESGEN Business Combination shares

 -

 4,248,583

 Sunergy Shares

 33,730,000

 -

 Issuance of Class A Shares to third party advisors

 -

 553,207

 Issuance of Class A Shares to backstop investor

 -

 225,174

 Shares issued to sponsor

 -

 Common Stock immediately after the ESGEN Business Combination

 35,230,000

 5,026,964

 Public and private placement warrants

 The 13,800,000 Public Warrants issued at the time of ESGEN's
initial public offering remained outstanding and became warrants for the Company and the 14,040,000 private placement warrants were forfeited.

 Redemption

 Prior to the closing of the ESGEN Business Combination, certain ESGEN
public stockholders exercised their right to redeem certain of their outstanding shares for cash, resulting in the redemption of 1,159,976
shares of ESGEN Class A common stock for an aggregate payment from the Trust of $ 13,336,056.

 NOTE 5 – ASSET PURCHASE

 Lumio Purchase Agreement

 On October 25, 2024, the Company, entered into an Asset Purchase Agreement
(the "Asset Purchase Agreement") with Lumio Holdings, Inc., a Delaware corporation ("Lumio"), and Lumio HX, Inc.,
a Delaware corporation (together with Lumio, the "Lumio Sellers"), pursuant to which, subject to the terms and conditions
set forth in the Asset Purchase Agreement, the Company agreed to acquire certain assets of the Lumio Sellers on an as-is, where-is basis,
including uninstalled residential solar energy contracts, certain inventory, intellectual property and intellectual property rights, equipment,
records, and other intangible assets (collectively, the "Assets"), free and clear of any liens other than certain specified
liabilities of the Lumio Sellers that are being assumed (collectively, the "Liabilities" and such acquisition of the Assets
and assumption of the Liabilities together, the "Transaction") for a total purchase price of (i) $ 4 million in cash and (ii)
 6,206,897 shares of the Company's Class A Common Stock, par value $ 0.0001 (the "Common Stock"), to be paid to LHX Intermediate,
LLC, a Delaware limited liability company ("LHX"). The Asset Purchase Agreement contains customary representations, warranties
and covenants of the parties for a transaction involving the acquisition of assets from a debtor in bankruptcy, including the condition
that the Bankruptcy Court (as defined below) enter an order authorizing and approving the Transaction.

 F- 18

 The Lumio Sellers are debtors in a voluntary Chapter 11 case before
the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"), which commenced on September 3,
2024.

 The Company evaluated this acquisition under ASC
805, Business Combinations ("ASC 805"). ASC 805 requires that an acquirer determine whether it has acquired a business.
If the criteria of ASC 805 are met, a transaction would be accounted for as a business combination and the purchase price is allocated
to the respective net assets and liabilities assumed based on their fair values and a determination is made whether any goodwill results
from the transaction. In evaluating the criteria outlined by this standard, the Company concluded that the acquired set of assets did
not meet the US GAAP definition of a business. The Company did not acquire an assembled workforce nor a substantive process. Therefore,
the Company accounted for the purchase as an asset acquisition rather than a business combination, and allocated the total consideration
transferred on the date of the acquisition to the assets and liabilities acquired on a relative fair value basis.

 The acquisition cost was allocated to the assets
acquired as follows:

 October 24, 2024

 Purchase consideration:

 Initial Cash Purchase Price

 $
 4,000,000

 Issuance of Stock

 8,131,656

 Assumed liabilities

 1,000,000

 Total purchase consideration

 $
 13,131,656

 Purchase price allocation:

 Accounts receivable

 $
 1,515,824

 Inventory

 390,219

 Fixed assets

 416,792

 Order backlog

 10,808,821

 Fair value of net assets acquired

 $
 13,131,656

 The Company determined the fair value of the Order Backlog intangible
asset by applying the multi-period excess earnings method. The excess earnings valuation method estimates the value of the order backlog
equal to the present value of the incremental after-tax cash flows attributable to that order backlog over its remaining economic life.
Some of the more significant assumptions utilized in our asset valuations included projected revenues, probability of cancellation, and
the discount rate. The fair value using the excess earnings valuation method was determined using an estimated weighted average cost of
capital of 15.5 %, which reflects the risks inherent in future cash flow projections and represents a rate of return that a market participant
would expect for this asset. This fair value measurement was based on significant inputs not observable in the market and thus represent
Level 3 fair value measurement. The fair value was then adjusted based on relative fair value as compared to the other assets acquired.

 F- 19

 NOTE 6 - PROPERTY, EQUIPMENT, AND OTHER FIXED ASSETS

 Property, equipment and other fixed assets, net consisted of the following:

 2024

 2023

 Internally-developed software

 $
 988,225

 $
 691,745

 Furniture

 384,368

 126,007

 Equipment and vehicles

 2,477,034

 2,220,168

 Leasehold improvements

 10,000

 -

 Property and equipment

 3,859,627

 3,037,920

 Accumulated depreciation

 ( 1,383,664
)

 ( 748,197
)

 $
 2,475,963

 $
 2,289,723

 Depreciation expense related to the Company's property and equipment
was $ 691,373 and $ 444,660 for the years ended December 31, 2024, and 2023, respectively, which are included in depreciation and amortization
expense on the accompanying consolidated statements of operations.

 NOTE 7 - INTANGIBLE ASSETS

 The following is a summary of the Company's intangible assets,
net as of December 31, 2024 and 2023:

 Weighted

Average Useful

 December 31, 2024

 Life
 Remaining

 Gross
 Carrying

 Accumulated

 (in years)

 Amortization

 Total

 Trade names

 -

 $
 3,084,100

 $
 3,084,100

 $
 -

 Customer lists

 -

 496,800

 496,800

 -

 Non-compete

 -

 224,000

 224,000

 -

 Order backlog

 0.6

 10,808,821

 3,237,665

 7,571,156

 $
 14,613,721

 7,042,565

 $
 7,571,156

 Weighted

Average Useful

 December 31, 2023

 Life

Remaining

 Gross
 Carrying

 Accumulated

 (in years)

 Amortization

 Total

 Trade names

 0.8

 $
 3,084,100

 $
 2,313,072

 $
 771,028

 Customer lists

 -

 496,800

 496,800

 -

 Non-compete

 -

 224,000

 224,000

 -

 $
 3,804,900

 $
 3,033,872

 $
 771,028

 The Company periodically reviews the estimated useful lives of its
identifiable intangible assets, taking into consideration any events or circumstances that might result in either a diminished fair value
or revised useful life. Management has determined there have been no indicators of impairment or change in useful life for the years ended
December 31, 2024, and 2023. Amortization expense relating to the Company's intangible assets was $ 4,008,693 and $ 1,298,333 for
the years ended December 31, 2024, and 2023, respectively, which is included in depreciation and amortization expenses on the accompanying
consolidated statements of operations.

 As of December 31, 2024, all of the intangible asset for order backlog
will be amortized in 2025.

 F- 20

 NOTE 8 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

 The following table summarizes accrued expenses and other current liabilities:

 2024

 2023

 Accrued payroll

 421,825

 136,668

 Accrued commissions

 290,969

 856,360

 Accrued dealer fees

 3,359,101

 2,415,966

 Accrued interest

 84,425

 -

 Transaction costs

 3,208,288

 -

 Professional fees

 383,114

 -

 Accrued Other

 792,466

 1,237,371

 $
 8,540,188

 $
 4,646,365

 NOTE 9 - LEASES

 The Company leases both office space and warehouse space for its operations.
Lease maturities vary from 2 to 5 years. These leases are recorded as operating leases and as such periodic payments (monthly) are
expensed according to the period for which payment is made.

 Operating lease costs recorded in general and administrative expenses
in the consolidated statements of operations were $ 719,049 and $ 599,873 for the years ended December 31, 2024, and 2023, respectively.

 The Company also leases multiple vehicles for its operations. The leases
on vehicles generally have a 5 -year term and are recorded as finance leases.

 Finance lease costs recorded in depreciation and amortization in the
consolidated statements of operations were $ 136,472 and $ 98,881 for the years ended December 31, 2024, and 2023, respectively. Finance
lease costs recorded in interest expense in the consolidated statements of operations were $ 52,100 and $ 44,506 for the years ended December
31, 2024, and 2023, respectively.

 The following amounts were recorded in the Company's consolidated
balance sheets relating to its operating and finance lease and other supplemental information:

 Other supplemental information:

 Weighted average remaining lease term (years)

 Operating leases

 2.39

 2.86

 Finance leases

 3.28

 4.28

 Weighted average discount rate

 Operating leases

 4.97
 %

 4.26
 %

 Finance leases

 9.76
 %

 9.75
 %

 F- 21

 The following tables present the maturity of operating and finance
lease liabilities as of December 31, 2024:

 Operating leases

 Years

 Operating

 Leases

 2025

 636,225

 2026

 572,098

 2027

 200,061

 2028

 58,565

 Total lease payments

 1,466,949

 Less interest

 84,135

 Present value of lease liabilities

 1,382,814

 Finance leases

 Years

 Finance

 Leases

 2025

 171,476

 2026

 171,476

 2027

 171,476

 2028

 47,607

 Total lease payments

 562,035

 Less interest

 82,764

 Present value of lease liabilities

 479,271

 The Company has deposited security payments related to the facility
leases of $ 80,794 included in the accompanying consolidated balance sheets as other assets.

 NOTE 10 - DEBT

 Vehicle Loans

 The Company has financing arrangements for many of the vehicles in
its fleet. The financing includes direct loans for each vehicle being financed. The Company entered into new vehicle financing arrangements
totaling $0 and $ 311,029 for the years ended December 31, 2024, and 2023, respectively. Payments of debt obligations are based on equal
monthly payments for 60 months and include interest rates ranging from 4.94 % - 11.09 %. As of December 31, 2024, the weighted average
interest rate on the Company's short debt obligations was 6.75 %. The combined amounts of these financial obligations are included
in the consolidated balance sheets as current portion of long-term debt and Long-term debt. The company does not have debt covenants associated
with these arrangements.

 The following table presents the maturity analysis of the long-term
debt as of December 31, 2024:

 Years

 2025

 $
 291,036

 2026

 299,254

 2027

 135,976

 2028

 61,392

 Total debt

 787,659

 Less current portion

 291,036

 Long-term debt

 $
 496,623

 F- 22

 Notes payable

 On December 24, 2024 (the "Issue Date"),
the Company, issued a Promissory Note (the "Promissory Note") to LHX Intermediate LLC ("LHX"), pursuant to which
the Company could borrow up to an aggregate principal amount of $ 4,000,000 (the "Loan"). Subject to the terms and conditions
set forth in the Promissory Note, the Loan shall be provided to the Company in three tranches: (i) $ 2,500,000 upon execution of the Promissory
Note (the "Initial Advance"), (ii) $ 750,000 if the Company achieves the Tranche 2 Milestone within 60 days from the Initial
Advance (the "Tranche 2 Advance") and (iii) $ 750,000 if the Company achieves the Tranche 3 Milestone within 60 days from the
Tranche 2 Advance. "Tranche 2 Milestone" means the submission by the Company to the applicable regulatory bodies at least
340 permits to install solar energy systems sold through the Company's year-round sales program. "Tranche 3 Milestone"
means the completion by the Company of the installation of at least 296 solar energy systems sold through the Company's year-round
sales program." LHX may also waive any milestone described above and advance the applicable amounts to the Company. As of December
31, 2024, $ 2.5 million has been advanced and the balance of $ 2.4 million, net of debt discount is included in Convertible promissory note
on the accompanying Consolidated Balance Sheet.

 No interest shall be charged or accrue on the balance outstanding on
the loan. The Loan will be repaid in full (the "Repayment") by issuing to LHX or its designee of a number of the Company's
shares of Class A common stock ("Class A Common Stock") equal to the quotient of (i) the outstanding and unpaid amount of
the Loan, divided by (ii) $ 1.35 (the "Share Issuance"). The Repayment shall take place immediately following the later of:
(x) the day falling on the first anniversary of the Issue Date (or the immediately previous business day) and (y) the date on which the
stockholders of the Company approve the Share Issuance. Due to this provision, the Company considered whether the embedded conversion
option qualifies for derivative accounting under ASC 815-15 "Derivatives and Hedging." As the note is
not convertible until maturity, no derivative liability was recognized as of December 31, 2024. Based on the Company's
stock price on the date the note was entered into, the computed effective interest rate on the loan is 58 %.

 In connection with the Promissory Note, on December 24, 2024, LHX entered
into a Voting Agreement with the Company and certain stockholders of the Company (the "Voting Agreement"), pursuant to which
such stockholders agreed to vote (or cause to be voted), in person or by proxy, all the shares of Class A Common Stock and Class V common
stock owned by such stockholders (i) in favor of the nomination and appointment of LHX's designee to the board of directors of the
Company (ii) in favor of the issuance by the Company to LHX of shares of Class A Common Stock in connection with an option that may be
granted to LHX to purchase up to 4,000,000 shares of Class A Common Stock, subject to the terms and conditions therein and (iii) in favor
of the Share Issuance, when required pursuant to the Promissory Note.

 NOTE 11- REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

 ESGEN Business Combination

 The consolidated statements of changes in stockholders' deficit
reflect the reverse recapitalization and ESGEN Business Combination as described in Note 1 – Organization and Business Operation
and Note 4 – Reverse Recapitalization. As Sunergy was deemed to be the accounting acquirer in the ESGEN Business Combination, all
periods prior to the consummation of the ESGEN Business Combination reflect the balances and activity of Sunergy Renewables, LLC. The
consolidated balances as of December 31, 2023 from the financial statements of Sunergy Renewables, LLC as of that date and membership
unit activity in the consolidated statements of change in stockholders' equity, prior to the consummation of the ESGEN Business
Combination have not been retroactively adjusted.

 Upon consummation of the ESGEN Business Combination, the Company's
capital stock consisted of (i) 3,257,436 shares of Class A Common Stock held by the Sponsor, (ii) 1,026,960 shares of Class A Common Stock
issued to public stockholders, net of redemptions as well as certain service providers, (iii) 742,568 shares of Class A Common Stock issued
to Sunergy Renewables, LLC initial Stockholders other than Sponsor, (iv) 32,230,000 shares of Class V Common Stock issued to Sun Managers
and other prior investors of Sunergy; and (v) 1,500,000 shares of Series A Preferred Stock and 1,500,000 shares of Class V Common Stock
issued to Sponsor investors pursuant to the Sponsor PIPE Investment.

 F- 23

 Private Placement

 As described in Note 1- Organization and Business Operation, pursuant
to the Sponsor Subscription Agreement, at the Closing, a total of 1,500,000 Convertible OpCo Preferred Units (including an equal number
of shares of the Company's Class V Common Stock) were issued to the Sponsor in return for aggregate consideration of $ 15,000,000.

 Lock-Up Agreements

 Concurrently with the execution of the ESGEN Business Combination Agreement,
on April 19, 2023, the Sponsor, ESGEN's independent directors at the time of its initial public offering ("IPO") and
one or more client accounts of Westwood Group Holdings, Inc. (successor to Salient Capital Advisors, LLC) (the "Westwood Client
Accounts" and, together with the Sponsor and certain independent directors of ESGEN, the "Initial Shareholders"), entered
into an amendment to that certain Letter Agreement, dated as of October 22, 2021 (the "Letter Agreement") (and
as further amended on January 24, 2024, the "Letter Agreement Amendment"), pursuant to which, among other things, (i) the
Initial Shareholders agreed not to transfer his, her or its ESGEN Class B ordinary shares (or the Class A Common Stock) prior to the earlier
of (a) six months after the Closing or (b) subsequent to the Closing (A) if the last sale price of the Zeo Class A Common Stock quoted
on Nasdaq is greater than or equal to $ 12 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within a 30 -consecutive trading day period commencing at least 90 days after Closing,
or (B) the date on which Zeo completes a liquidation, merger, share exchange or other similar transaction that results in all of Zeo's
stockholders having the right to exchange their Zeo Class A Common Stock for cash, securities or other property; and (ii) the Initial
Shareholders and Sponsor agreed to forfeit an additional 500,000 shares of Zeo Class A Common Stock if, within two years of Closing, the
Convertible OpCo Preferred Units are redeemed or converted (with such shares subject to a lock-up for two years after Closing).

 On March 13, 2024, concurrently with the Closing, the Sellers entered
into the Lock-Up Agreement, pursuant to which each of the Sellers agreed not to transfer its Exchangeable OpCo Units,
as defined below, and corresponding shares of Zeo Class V Common Stock received in connection with the ESGEN Business Combination
until the earlier of (i) six months after the Closing and (ii) subsequent to the Closing, (a) satisfaction of the Early Lock-Up Termination or
(b) the date on which Zeo completes a PubCo Sale (as defined in the Lock-Up Agreement).

 Registration Rights

 Also concurrent with the Closing, on March 13, 2024, the Sellers, the
Initial Shareholders, Piper (the "New PubCo Holders") and Zeo entered into the Amended and Restated Registration Rights Agreement
(the "A&R Registration Rights Agreement"), pursuant to which, among other things, Zeo will provide the stockholders
certain registration rights with respect to certain shares of Class A Common Stock held by them or otherwise issuable to them pursuant
to the ESGEN Business Combination Agreement, the OpCo A&R LLC Agreement (as defined below) or the Company's certificate of incorporation
filed on March 13, 2024 (the "Zeo Charter").

 The table below reflects share information about the Company's
capital stock as of December 31, 2024.

 Par Value

 Authorized

 Issued

 Treasury

Stock

 Outstanding

 Class A Common Stock

 $
 0.0001

 300,000,000

 13,252,964

 -

 13,252,964

 Class V Common Stock

 $
 0.0001

 100,000,000

 35,230,000

 -

 35,230,000

 Class A convertible preferred units

 $
 0.0001

 -

 Total shares

 401,500,000

 49,982,964

 -

 49,982,964

 Class A Common Stock

 Each holder of Class A Common Stock is entitled to one vote for each
share of Class A Common Stock held of record in person or by proxy on all matters which stockholders generally are entitled to vote,
except that, in each case, to the fullest extent permitted by law, each holder has no voting power with respect to, and will not be entitled
to vote on, any amendment to its Certificate of Incorporation (including any certificate of designations relating to any series of Preferred
Stock) that relates solely to the terms of any outstanding Preferred Stock if the holders of such Preferred Stock are entitled to vote
as a separate class thereon (including any certificate of designations relating to any series of Preferred Stock) or under the General
Corporation Law of the State of Delaware (the " DGCL "). The holders of the outstanding shares of Class A Common Stock
shall be entitled to vote separately upon any amendment to its Certificate of Incorporation (including by merger, consolidation, reorganization
or similar event) that would alter or change the powers, preferences or special rights of such class of Common Stock in a manner that
is disproportionately adverse as compared to the Class V Common Stock. Except as otherwise required in its Certificate of Incorporation
or by applicable law, the holders of Common Stock will vote together as a single class on all matters (or, if any holders of Preferred
Stock are entitled to vote together with the holders of Common Stock, as a single class with the holders of Preferred Stock).

 F- 24

 Class A Common Stockholders have rights to the economics of the Company
and to receive dividend distributions, subject to applicable laws and the rights and preferences of holders of Series A Preferred Stock
or any other series of stock having preference over or participation rights with Class A Common Stock. In the event of liquidation, dissolution
or winding up of the affairs of Company, Class A Common Stock has rights to assets and funds of the Company available for distribution
after making provisions for preferential and other amounts to the holders of Series A Preferred Stock or any other series of stock having
preference over or participation rights with Class A Common Stock.

 LHX Subscription Agreement

 On October 25, 2024, the Company and LHX entered
into a Subscription Agreement (the "LHX Subscription Agreement") pursuant to which LHX purchased 1,873,103 shares of Common
Stock (the "Shares") at a purchase price per share of $ 1.45 for an aggregate purchase price of $ 2,716,000 (the "Share
Purchase") which is reflected on the statement of changes in stockholders'
deficit and statement of cash flows. Pursuant to the LHX Subscription Agreement, the Company has also (i) appointed one individual designated
by LHX to its board of directors (the "Board") and (ii) filed a registration statement registering the resale of the Shares
within 15 days of the Share Purchase and to use reasonable efforts to have such registration statement declared effective as soon as practicable
thereafter.

 Class V Common Stock

 Each holder of Class V Common Stock is entitled to one vote for each
share of Class V Common Stock held of record in person or by proxy on all matters which stockholders generally are entitled to vote, except
that, in each case, to the fullest extent permitted by law, each holder has no voting power with respect to, and will not be entitled
to vote on, any amendment to its Certificate of Incorporation (including any certificate of designations relating to any series of Preferred
Stock) that relates solely to the terms of any outstanding Preferred Stock if the holders of such Preferred Stock are entitled to vote
as a separate class thereon (including any certificate of designations relating to any series of Preferred Stock) or under the DGCL. The
holders of the outstanding shares of Class V Common Stock are entitled to vote separately upon any amendment to its Certificate of Incorporation
(including by merger, consolidation, reorganization or similar event) that would alter or change the powers, preferences or special rights
of such class of Common Stock in a manner that is disproportionately adverse as compared to the Class A Common Stock. Except as otherwise
required in its Certificate of Incorporation or by applicable law, the holders of Common Stock will vote together as a single class on
all matters (or, if any holders of Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class with
the holders of Preferred Stock).

 Class V Common Stockholders do not have rights to the economics of
the Company nor to receive dividend distributions, and would not be entitled to receive, with respect to such shares, any assets of the
Corporation, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

 Class A Convertible Preferred Units (Mezzanine Equity)

 The Class A Convertible Preferred Unitholders have no voting rights
and only have certain consent rights. However, as outlined above, the Preferred Units were issued in conjunction with Class V Common Stock,
which entitle the holders to voting rights. The Class A Convertible Preferred Unitholders are to be paid dividends, quarterly in arrears
at the rate of 10 % per annum of the original price per share, plus the amount of previously accrued, but unpaid dividends, compounded
monthly On each Dividend Payment Date, the Company must: (i) pay the Sponsor an amount equal to 30 % of the Preferred Unit Dividends that
have accrued for such Dividend Period (or portion of a Dividend Period, as applicable) and (ii) may elect to either (A) pay the remainder
of the Preferred Unit Dividends that have accrued for the applicable Dividend Period in cash or (B) to the extent the remaining portion
of any such Preferred Unit Dividends are not paid on the Dividend Payment Date in cash, the remaining portion of the Preferred Unit Dividends
will continue to accrue and compound, as described above.

 Following the first anniversary of the date on which the first Class
A Convertible Preferred Unit was issued (the "Class A Convertible Preferred Unit Original Issue Date") and continuing until
the earlier of (A) March 13, 2027, the "Maturity Date," (B) a Required Redemption (as described in the OpCo A&R LLC Agreement),
(C) the date the Sponsor elects for a Put Option Redemption, or (D) a Transaction Event Conversion (as described in the OpCo A&R LLC
Agreement), the Sponsor has the option to convert all, but not less than all, of the outstanding Class A Convertible Preferred Units
into such number of Class B Units (an " Optional Conversion") as is determined by dividing the Class A Convertible Preferred
Unit Original Issue Price plus the aggregate accumulated and unpaid Class A Convertible Preferred Unit Accruing Dividends with respect
to such Class A Convertible Preferred Units, if any, through the date the conversion occurs, by $ 11.00 (the " Optional Conversion
Price "). The Sponsor must elect to convert all, but not less than all, of the outstanding Class A Convertible Preferred Units.

 Each Class A Convertible Preferred Unit that is outstanding on the
Maturity Date will be converted into such number of Class B Units (a " Maturity Date Conversion ") as is determined by
dividing the Class A Convertible Preferred Unit Original Issue Price plus the aggregate accumulated and unpaid Class A Convertible Preferred
Unit Accruing Dividends with respect to such Class A Convertible Preferred Units, if any, through and until the Maturity Date, by the
Market Price (the " Maturity Date Conversion Price "). The " Market Price " shall mean the average of
the daily VWAP of the Class A Common Stock during the five (5) Trading Days prior to the Maturity Date. The " VWAP "
means, for any Trading Day, the per share daily volume weighted average price of the Class A Common Stock for such Trading Day on the
principal trading exchange or market for the Common Stock (the " Principal Market ") from 9:30 a.m. Eastern Time through
4:00 p.m. Eastern Time (the " Measurement Period ") or, if such price is not available, " VWAP " shall
mean the market value per share of Class A Common Stock on such Trading Day as determined, using a volume-weighted average method, by
an independent investment banking firm or other similar party chosen by the Company. A " Trading Day " means any days
during the course of which the Principal Market on which the Class A Common Stock is listed or admitted to trading is open for the exchange
of securities.

 F- 25

 If, after the Class A Convertible Preferred Unit Original Issue Date,
the Company (i) makes a distribution on its Class B Units in securities (including Class B Units), (ii) subdivides or splits its outstanding
Class B Units into a greater number of Class B Units, (iii) combines or reclassifies its Class B Units into a smaller number of Class
B Units or (iv) issues by reclassification of its Class B Units any securities (including any reclassification in connection with a merger,
consolidation or business combination in which the Company is the surviving person), then the Conversion Price in effect at the time of
the record date for such distribution or of the effective date of such subdivision, split, combination, or reclassification shall
be proportionately adjusted so that the Conversion of the Class A Convertible Preferred Units after such time shall entitle the Sponsor
to receive the aggregate number of Class B Units that such holder would have been entitled to receive if the Class A Convertible Preferred
Units had been converted into Class B Units immediately prior to such record date or effective date, as the case may be. An adjustment
made pursuant to the applicable section of the OpCo A&R LLC Agreement shall become effective immediately after the record date
in the case of a distribution and shall become effective immediately after the effective date in the case of a subdivision, combination,
reclassification (including any reclassification in connection with a merger, consolidation or business combination in which the Company
is the surviving person) or split. Such adjustment shall be made successively whenever any event described above shall occur. The Company
and the ESGEN OpCo, LLC, as the case may be, agree that it will act in good faith to make any adjustment(s) required by the applicable
sections of the OpCo A&R LLC Agreement equitably and in such a manner as to afford the Sponsor the benefits of the provisions
hereof, and will not intentionally take any action to deprive such holders of the express benefit hereof.

 Redemption

 The Class A Convertible Preferred Units are redeemable in whole but
not in part, at the then-applicable rate of return (" Required Return"), at the option of the Company (subject to the
OpCo A&R LLC Agreement), at any time prior to the Maturity Date (a "Required Redemption "), or (ii)
if required by the Company upon the Sponsor's delivery to the Company of a notice in accordance with the Sponsor electing a Put
Option Redemption.

 Upon the occurrence of a Liquidating Event (as defined in the OpCo
A&R LLC Agreement), the Preferred Units will be entitled to distributions as follows:

 Following the satisfaction of all of the Company's debts and liabilities to creditors, and the satisfaction of all of the Company's Liabilities to Members in satisfaction of liabilities for previously declared distributions, the Sponsor is entitled to an amount equal to the then-remaining Required Return with respect to each Preferred Unit then outstanding (the "Liquidation Redemption").

 The Sponsor does not participate in further distributions following the receipt of the Required Return (i.e., the Preferred Units are non-participating instruments).Upon any liquidation or deemed liquidation event, the holders of Class A Convertible Preferred Units will be entitled to receive out of the available proceeds, before any distribution is made to holders of Common Stock or any other junior securities, an amount per share equal to the greater of (i) 100 % of the Accrued Value (as defined in the Certificate of Designation) or (ii) such amount per share as would have been payable had all shares of Series A Preferred Stock been converted into Class A Common Stock immediately prior to the liquidation event.

 The Class A Convertible Preferred Units are carried at their current
redemption value of $ 16,130,871 on the accompany balance sheet as of December 31, 2024.

 Redeemable Noncontrolling Interests

 As of December 31, 2024, the prior investors of Sunergy own 71.8 % of
the common units of the Company. The OpCo A&R LLC Agreement provides among other things, a holder of corresponding economic, non-voting
Class B units of OpCo (the "Exchangeable OpCo Units") has the right to cause OpCo to redeem one or more of such Exchangeable
OpCo Units, together with the cancellation of an equal number of shares of such holder's Zeo Class V Common Stock, for shares of
Zeo Class A Common Stock on a one-for-one basis, or, at the election of Zeo (as manager of OpCo), cash, in each case, subject to certain
restrictions set forth in the OpCo A&R LLC Agreement and the Charter. The OpCo A&R LLC Agreement also provides for mandatory OpCo
Unit Redemptions in certain limited circumstances, including in connection with certain changes of control. Subject to certain conditions,
the Class A Convertible OpCo Preferred Units are redeemable by Zeo and following the first anniversary of the Closing may be converted
by the Sponsor into Exchangeable OpCo Units (and then would be immediately exchanged on a one-for-one basis, together with an equal number
of accompanying shares of Zeo Class V Common Stock, for shares Zeo Class A Common Stock). The Convertible OpCo Preferred Units have accruing
distributions of 10 % per annum and the Sponsor as holder thereof has certain consent rights over the taking of certain actions of OpCo
and its subsidiaries.

 F- 26

 The financial results of OpCo, LLC are consolidated with the Company
with the redeemable noncontrolling interests' share of our net loss separately allocated.

 NOTE 12- STOCK-BASED COMPENSATION

 2024 Omnibus Incentive Plan

 On March 6, 2024, the shareholders of ESGEN approved the Zeo Energy
Corp. 2024 Omnibus Incentive Equity Plan (the "Incentive Plan"), which became effective upon the Closing. 3,220,400 of the
outstanding shares of Class A Common Stock of the Company (the "Plan Share Reserve") shall be available for awards under the
Incentive Plan. Each Award granted under the Plan will reduce the Plan Share Reserve by the number of shares of Common Stock underlying
the Award. Notwithstanding the foregoing, the Plan Share Reserve shall be automatically increased on the first day of the 2025 fiscal
year through the 2029 fiscal year by a number of shares of Common Stock equal to the lesser of (i) the positive difference, if any, between
 2 % of the then-outstanding shares of Common Stock on the last day of the immediately preceding fiscal year, and (ii) a lower number of
shares of Common Stock as may be determined by the Board.

 The purpose of the Incentive Plan is to provide a means through which
the Company and the other members of the Company and its subsidiaries (the "Company Group") may attract and retain key
personnel and to provide a means whereby directors, officers, employees, consultants and advisors of the Company and the other members
of the Company Group can acquire and maintain an equity interest in the Company, or be paid incentive compensation measured by reference
to the value of Common Stock, thereby strengthening their commitment to the welfare of the Company Group and aligning their interests
with those of the Company's stockholders.

 On the Closing Date the Company entered into an Executive Employment
Agreement with the Company's CEO. In addition to the CEO's annual salary and cash bonus, the CEO became eligible to receive
certain grants of vested shares under the Incentive Plan as follows:

 50,000 vested shares to be granted on the date that is 12 months after the Closing Date.

 50,000 vested shares to be granted on the date that is 24 months after the Closing Date.; and

 50,000 vested shares to be granted on the date that is 35 months after the after the Closing Date.

 The Company determined the grant date fair value per share was $ 6.97,
a Level 1 measurement, by reference to the publicly traded stock price on March 13, 2024.

 Further, if, within three (3) years of the effective date of the Closing,
(i) the volume-weighted average price of shares of the publicly traded stock of the Company exceeds $ 7.50 for 20 or more days of any consecutive
30-day period, then the CEO will be granted vested equity from the Incentive Plan equal to 1 % of the total issued and outstanding capital
stock of the Company, (ii) the volume-weighted average price of shares of the publicly traded stock of the Company exceeds $ 12.50 for
20 or more days of any consecutive 30-day period, then the CEO will be granted additional vested equity from the Incentive Plan equal
to 1 % of the total issued and outstanding capital stock of the Company, (iii) and the volume-weighted average price of shares of the publicly
traded stock of the Company exceeds $ 15.00 for 20 or more days of any consecutive 30-day period, then the CEO will be granted additional
vested equity from the Incentive Plan equal to 1 % of the total issued and outstanding capital stock of the Company.

 The per unit fair value and derived service period for each Tranche
of Performance Based Executive Shares is included in the Valuation of Performance-based Equity Bonus Awards as of March 13, 2024, as follows:

 3/13/2024

 Stock price

 $
 6.97

 Tranche 1 hurdle price

 $
 7.50

 Tranche 2 hurdle price

 $
 12.50

 Tranche 3 hurdle price

 $
 15.00

 Risk-free rate

 4.28
 %

 Volatility

 55.00
 %

 F- 27

 The per unit fair value and derived service period for each Tranche
of Performance Based Executive Shares is included in the Valuation of Performance-based Equity Bonus Awards as of March 13, 2024, as follows:

 Fair Value Summary

 Tranche 1

 Tranche 2

 Tranche 3

 Tranche per unit fair value

 $
 5.96

 $
 4.53

 $
 3.82

 Stock price on valuation date

 $
 6.97

 $
 6.97

 $
 6.97

 Derived service period

 0.35 years

 1.19 years

 1.47 years

 During the year ended December 31, 2024, $7,951,248, respectively,
of equity compensation expense was recognized for these awards, as well as 375,000 and 120,707 awards issued to salespeople and vendors,
respectively, at the close of the ESGEN Business Combination based on the fair value of the stock on that date. As of December 31, 2024,
an unrecognized compensation expense of $ 2,059,288 was determined and is expected to be recognized over the remaining 2.5 years.

 NOTE 13 - WARRANT LIABILITIES

 As part of ESGEN's IPO, as defined in Note 11, ESGEN issued warrants
to third-party investors where each whole warrant entitles the holder to purchase one share of the Company's common stock at an
exercise price of $ 11.50 per share. Simultaneously with the closing of the IPO, ESGEN completed the private sale of warrants where each
warrant allows the holder to purchase one share of the Company's Class A Common Stock at $ 11.50 per share. Upon the closing of the
ESGEN Business Combination the 14,040,000 Private Warrants were forfeited. As of December 31, 2024, there are 13,800,000 Public Warrants
and no private placement warrants outstanding.

 These warrants expire on the fifth anniversary of the ESGEN Business
Combination or earlier upon redemption or liquidation and are exercisable commencing 30 days after the ESGEN Business Combination, provided
that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise
of the warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their warrants on a
cashless basis under the circumstances specified in the warrant agreement) and registered, qualified or exempt from registration under
the securities, or blue sky, laws of the state of residence of the holder.

 Once the warrants become exercisable, the Company may redeem the outstanding
warrants:

 in whole and not in part;

 at a price of $ 0.01 per warrant;

 upon not less than 30 days' prior written notice of redemption given after the warrants become exercisable to each warrant holder; and

 if, and only if, the reported last sale price of the Class A Common Stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 -trading day period commencing once the warrants become exercisable and ending three business days before the Company sends the notice of redemption to the warrant holders.

 The Public Warrants are recognized as derivative liabilities in accordance
with ASC 815, Derivatives and Hedging ("ASC 815"). Accordingly, the Company recognized the warrant instruments as liabilities
at fair value as of the Closing Date, with an offsetting entry to additional paid-in capital and adjusts the carrying value of the instruments
to fair value through other income (expense) on the consolidated statements of operations at each reporting period until they are exercised.
As of December 31, 2024, the Public Warrants are presented as warrant liabilities on the accompanying consolidated balance sheets.

 NOTE 14 - RELATED PARTY TRANSACTIONS

 There was one operating lease with a related party, which expired by
December 31, 2024 and was not renewed. Operating lease cost relating to this lease was $ 15,009 and $ 28,880 for the years ended December
31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, the related party operating lease ROU asset was $ 0 and $ 75,378, respectively,
and the related party operating lease liability was $ 0 and $ 58,134, respectively.

 In 2023, some of the Company's customers
financed their obligations with a related party, Solar Leasing, whose CEO is also the CEO of the Company. These arrangements are similar
to those with other third-party lenders. As such, Solar Leasing deducts their financing fees and remits the net amount to the Company.
For the years ended December 31, 2024, and 2023, the Company recognized $ 22,156,018 and $ 15,464,852 of revenue, net of financing fees
of $ 8,246,532 and $ 6,851,232, respectively, from these arrangements. As of December 31, 2024, and 2023, the Company had $ 191,662 and $ 396,488
of accounts receivable, $ 3,359,101 and $ 2,415,966 of accrued expenses and $ 2,000 and $ 1,160,848 of contract liabilities due to related
parties relating to these arrangements, respectively.

 F- 28

 On December 24, 2024, the Company entered into a Promissory Note with
LHX (See Note 10). LHX owns 14.1 % of the Company's Class A Common Stock.

 During the year ended December 31, 2024, Solar Leasing performed a
fair-market-value assessment of its lease assets. As a result, Solar Leasing paid a discretionary rebate to the Company of $ 3,000,000
based on the excess of fair-market-value over the carrying value of its assets, primarily to optimize certain tax positions for its owners.
The Company agreed to transfer the received rebate to White Horse Energy, LC ("White Horse Energy"), a entity wholly owned
by the Company's CEO, in the form of convertible debt. Additionally, the Company guarantees the outstanding indebtedness of Solar
Leasing (approximately $ 10 million) which results in the Company having a variable interest in Solar Leasing. The Company determined it
was not the primary beneficiary as defined in ASC 810-10-25-38A. Although the Company's CEO, wholly owns White Horse Energy, the
Company does not have any control over White Horse Energy or Solar Leasing, nor any obligation to absorb losses from Solar leasing. Based
on the Company's reassessment, the flow of funds resulting from the discretionary rebate does not transfer control or economic exposure
to the Company in a manner that would require consolidation under ASC 810-10. White Horse Energy remains the primary beneficiary, and
no changes to the Company's financial statement presentation are required. The $ 3,000,000 convertible note is recorded as a Related
Party Note Receivable on the consolidated balance sheet as of December 31, 2024. The balances relating to Solar Leasing are reflected
as related party balances in the accompany consolidated financial statements.

 As described in Note 3, Zeo Energy Corp. entered
into the TRA with the TRA Holders. As of December 31, 2024, the Company has not recorded a liability related to the tax savings it may
realize from utilization of such deferred tax assets. As of December 31, 2024, assuming a hypothetical exchange of all outstanding units,
the total TRA would be $ 27.6 million. If utilization of the deferred tax assets subject to the TRA becomes more likely than not in the
future, the Company will record a liability related to the TRA which will be recognized as expense within its consolidated statements
of operations.

 On August 27, 2024, the Company entered into a
guarantee for a Business Loan Agreement (Loan) between Solar Leasing I, LLC and a bank. The Loan is for up to $ 10,000,000. At 12/31/2024,
Solar Leasing I, LLC had an outstanding loan balance of $ 3,460,840. This Loan is also personally guaranteed by the Company's CEO and manager
of Solar Leasing I, LLC, Tim Bridgewater.

 NOTE 15- FAIR VALUE MEASUREMENTS

 Items Measured at Fair Value on a Recurring Basis:

 The Company accounts for certain liabilities at fair value on a recurring
basis and classifies these liabilities within the fair value hierarchy (Level 1, Level 2, or Level 3).

 Liabilities subject to fair value measurements are as follows:

 December 31, 2024

 Level 1

 Level 2

 Level 3

 Total

 Liabilities:

 Warrant liabilities

 $
 1,449,000

 $
 -

 $
 -

 $
 1,449,000

 The Company's Public Warrants are traded on the Nasdaq. As such,
the Warrant valuation is based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has
the ability to access. The fair value of the Warrant liabilities is classified within Level 1 of the fair value hierarchy. There were
no warrant liabilities as of December 31, 2023.

 NOTE 16- NET LOSS PER SHARE

 Basic net loss per share of Class A common stock is computed by dividing
net loss attributable to Class A common stockholders from March 13, 2024, or the Closing Date, to December 31, 2024, by the weighted-average
number of shares of Class A common stock outstanding for the same periods.

 Diluted net loss per share is the same as basic net loss per share
as the inclusion of potentially issuable shares that would be anti-dilutive.

 Prior to the ESGEN Business Combination, the membership structure of
Sunergy Renewables, LLC included membership units. In conjunction with the closing of the ESGEN Business Combination, the Company effectuated
a recapitalization whereby all membership units were converted to common units of OpCo and the Company implemented a revised class structure
including Class A Common Stock having one vote per share and economic rights, and Class V Common Stock having one vote per share and no
economic rights. Shares of the Company's Class V Common Stock do not participate in the earnings or losses of the Company and are
therefore not participating securities. The basic and diluted net income per share for the year ended December 31, 2024 represents only
the period of March 13, 2024 to December 31, 2024.

 F- 29

 The following table presents the computation of the basic and diluted
income per share of Class A Common Stock for the period of March 13, 2024 (the Closing Date) to December 31, 2024:

 2024

 Numerator

 Net income attributable to Class A common shareholders

 $
 ( 2,668,889
)

 Denominator

 Basic and diluted weighted-average shares of Class A common stock outstanding

 5,546,925

 Net income per share of Class A common stock - basic and diluted

 $
 ( 0.48
)

 The following table presents potentially dilutive securities, as of
the end of the period, excluded from the computation of diluted net earnings per share of Class A Common Stock.

 2024

 Warrants(1)

 13,800,000

 Series A Preferred Stock (2)

 Convertible promissory notes (3)

 1,851,852

 (1)
 Represents number of instruments outstanding at the end of the period that were evaluated under the treasury stock method for potentially dilutive effects and were determined to be anti-dilutive.

 (2)
 Represents number of Preferred Units outstanding at the end of the period that were excluded using the if-converted method.

 (3)
 Represents number of shares that would be issued to settle the convertible promissory note as of the end of the period

 NOTE 17 - COMMITMENTS AND CONTINGENCIES

 Workmanship and Warranties

 The Company typically warrants solar energy systems sold to customers
for periods of one to ten years against defects in design and workmanship, and that installations will remain watertight.

 The manufacturers' warranties on the solar energy system components,
which are typically passed through to the customers, typically have product warranty periods of 10 to 20 years and a limited performance
warranty period of 25 years. As of December 31, 2024, and 2023, the Company did not record a warranty reserve as the historical costs
incurred that the Company is required to pay have not been significant or indicative of the Company performing warranty work in the future.
The Company, at its discretion, may provide certain reimbursements to customers if certain solar equipment is not operating as intended
during future periods.

 Litigation

 In the normal course of business, the Company may become involved in
various lawsuits and legal proceedings. While the ultimate results of these matters cannot be predicted with certainty, management does
not expect them to have a material adverse effect on the financial position or results of operations of the Company.

 Accrual for Probable Loss Contingencies

 In the normal course of business, the Company is involved in various
claims and legal proceedings. A liability is recorded for such matters when it is probable that a loss has been incurred and the amounts
can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued.
If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued.
Legal costs associated with loss contingencies are expensed as incurred.

 F- 30

 NOTE 18 – INCOME TAXES

 Prior to the close of the ESGEN Business Combination,
the Company's financial reporting predecessor, Sunergy Renewables, LLC, was treated as a pass-through entity for tax purposes and no provision
was recorded. As of the date of the ESGEN Business Combination (March 2024), the operations of the Company ceased to be taxed as an partnership
resulting in a change in tax status for federal and state income tax purposes. This change in tax status requires immediate recognition
of any deferred tax assets or liabilities as of the transaction date as the Company will now be directly liable for income taxes. The
recognition of these initial deferred balances, if any, would be recorded as an additional tax expense in the period of the transaction.
In addition, the Company will accrue current and deferred tax expense based on ongoing activity from that date.

 The components of the provision (benefit) for
income taxes were as follows:

 2024

 2023

 Current:

 Federal

 $
 -

 -

 State and local

 8,900

 -

 Total current provision

 8,900

 -

 Deferred:

 Federal

 $
 ( 814,350
)

 $
 -

 State and local

 ( 183,352
)

 -

 Total deferred benefit

 ( 997,702
)

 Total benefit

 ( 988,802
)

 -

 The effective tax rate differs from the statutory tax rates as follows:

 2024

 2023

 Tax at statutory federal rate

 21.00
 %

 -

 %

 State income taxes, less federal income tax benefits

 1.6
 %

 -

 %

 Investment in Sunergy Renewables, LLC

 ( 0.5
)%

 -

 %

 Noncontrolling interest in Sunergy Renewables, LLC

 ( 12.1
)%

 -

 %

 Income attributable to Sunergy Renewables prior to ESGEN Business Combination

 ( 1.0
)%

 -

 %

 Other

 0.1
 %

 -

 %

 Provision for income taxes

 9.1
 %

 -

 %

 Deferred income tax assets and liabilities result
primarily from temporary differences in the recognition of various expenses for tax and financial statement purposes, and from the recognition
of the tax benefits of net operating loss carryforwards.

 F- 31

 The components of the deferred income tax assets
and liabilities were as follows:

 2024

 2023

 Deferred tax assets:

 Net operating losses and tax credit carry-forward

 $
 190,907

 $
 -

 Accrued stock compensation

 198,575

 -

 Accrued liabilities

 268,766

 -

 Other

 3,656

 -

 Gross deferred tax asset

 $
 661,904

 $
 -

 Less valuation allowance

 -

 -

 Net deferred tax asset

 $
 661,904

 $
 -

 Deferred tax liabilities:

 Goodwill

 ( 423,413
)

 -

 Total deferred tax liability

 $
 ( 423,413
)

 $
 -

 Net deferred tax asset

 $
 238,491

 $
 -

 The net deferred tax asset as of December 31,
2024 is included in other assets in the accompanying consolidated balance sheet.

 As of December 31, 2024, the Company had
federal NOL of approximately $ 0.7 million, and state NOL carryforwards of approximately $ 0.9 million. As of December 31, 2024, the
Company had NOL carryforwards of approximately $ 0 million. The federal NOL carryforwards generated in the tax years 2024 will never expire
and the state NOL carryforwards have varying expiration dates based on the jurisdiction. Utilization of the NOL carryforwards may be subject
to an annual limitation according to Section 382 of the Internal Revenue Code of 1986 as amended, and similar provisions.

 ASC 740, Income Taxes, requires a valuation
allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion
or all of the deferred tax assets will not be realized. After consideration of all of the evidence, has determined it is more likely than
not that the Company will be able to recognize the benefits of its net deferred tax assets. At December 31, 2023, the Company did not
record a valuation allowance as there were not any deferred tax assets recorded as the Company is taxed as a partnership.

 There was an increase in deferred tax assets of $ 238,491 which resulted
in $ 997,702 thousand of deferred tax benefit and an offsetting $ 759,211 recorded in additional paid-in-capital. The total net deferred
tax asset of $ 238,491 includes $ 423,413 deferred tax liability as a result of the Business Combination. The excess of the Company's
book carrying value in its investment in OpCo over its tax basis in this investment resulted in a deferred tax liability, with an offsetting
effect recorded to deferred income tax expense of $ 335,798 and additional paid-in-capital of $ 759,211.

 The Company recognizes interest accrued to unrecognized
tax benefits and penalties as income tax expense. There were no penalties or interest accrued as of, nor recognized during the years ended
December 31, 2024 and 2023.

 As of December 31, 2024 and 2023, the Company
has not recorded an amount of gross unrecognized tax benefits for uncertain tax positions for the current or prior year planned tax filing
positions. No unrecognized tax benefits are applicable for prior periods.

 The Company files tax returns as prescribed by
the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal
and state jurisdictions where applicable based on the statute of limitations that apply in each jurisdiction.

 The Company has no open tax audits with any taxing
authority as of December 31, 2024.

 The Company actively monitors domestic and global
tax law changes to account for the effects in the period the legislation is enacted, as applicable.

 NOTE 19- SEGMENT REPORTING

 The Company has one operating segment and one
reportable segment, the business of sales and installation of solar panel technology to individual households within the United States.
The Company's chief operating decision-maker ("CODM") is our chief executive officer. Our CODM reviews and evaluates
consolidated net income (loss) for purposes of evaluating financial performance, making operating decisions, allocating resources, and
planning and forecasting for future periods.

 All the Company's long-lived assets and
revenues are maintained in the U.S. Refer to Note 3 for further information on revenues.

 F- 32

 The following presents the significant financial
information with respect to the Company's reportable segment for the years ended December 31, 2024 and 2023 (in thousands):

 Year ended December 31,

 2024

 2023

 Total revenue

 $

 $

 Less: Cost of goods sold (exclusive of depreciation and amortization shown below):

 Direct labor

 9,857,796

 13,488,173

 Materials

 23,730,300

 40,830,481

 Other

 4,433,423

 5,118,020

 Less: Cost of goods sold (exclusive of depreciation and amortization shown below):

 38,021,519

 59,436,674

 Less: Depreciation and amortization related to Cost of goods sold

 827,848

 444,663

 Gross Profit

 $
 34,394,716

 $
 49,809,664

 4,008,690

 1,397,211

 Commissions expense

 15,827,850

 28,679,176

 Sales and marketing (exclusive of Commissions expense above)

 3,759,223

 1,644,883

 General and administrative

 21,628,724

 12,949,067

 Other expense, net

 ( 233,151
)

 183,401

 ( 69,000
)

 -

 Interest expense

 333,539

 110,857

 Net (loss) income before taxes

 ( 10,861,159
)

 Income tax benefit

 988,802

 -

 ( 9,872,357
)

 NOTE 20 - SUBSEQUENT EVENTS

 On April 17, 2025, the Company received a notice (the "Notice")
from Nasdaq notifying the Company that it is not in compliance with the periodic filing requirements for continued listing set forth in
Nasdaq Listing Rule 5250(c)(1) because the Company's Annual Report on Form 10-K for the year ended December 31, 2024 ("Fiscal
Year 2024 10-K") was not filed with the Securities and Exchange Commission (the "SEC") by the required due date of March
31, 2025. This Notice received from Nasdaq has no immediate effect on the listing or trading of the Company's shares. Nasdaq has
provided the Company with 60 calendar days, until Sunday, June 16, 2025, to submit a plan to regain compliance. If Nasdaq accepts the
Company's plan, then Nasdaq may grant the Company an exception until October 13, 2025 to regain compliance with the Nasdaq Listing
Rules.

 In the disclosure on "Concentration of
credit risk" found in Note 3 - Summary of Significant Accounting Policies, the company identified that two customers
exceeded 10% of accounts receivable. As of the date of this report, one of those customers has not made payment towards those
accounts receivable and may pose a credit risk of $ 2,306,096.

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