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Item 1. Financial Statements

2024-05-16 compared with 2023-11-14 · 1196 added, 510 removed, 19 unchanged (99% of the section changed)

Financial Statements

ESGEN ACQUISITION CORPORATION

CONDENSED BALANCE SHEETS

September 30,

December 31, 2022

ZEO ENERGY CORP.

CONSOLIDATED BALANCE SHEET

Current assets

Prepaid expenses

Cash and cash equivalents

Accounts receivable, including $ 3,089,328 and $ 396,488 from related parties, net of allowance for credit losses of $ 2,420,620 and $ 2,270,620 , as of March 31, 2024 and December 31, 2023, respectively

Prepaid installation costs

Prepaid expenses and other current assets

Total current assets

Marketable securities held in Trust Account

Liabilities, Redeemable Ordinary Shares and Shareholders’ Deficit

Property, equipment and other fixed assets, net

Operating lease right of use assets

Intangibles, net

Liabilities, redeemable noncontrolling interests and stockholders’ equity (deficit)

Current liabilities

Accounts payable and accrued expenses

Due to related party

Promissory note—related party

Accounts payable

Accrued expenses and other current liabilities, including $ 267,006 and $ 2,415,966 with related parties at March 31, 2024 and December 31, 2023, respectively

Current portion of long-term debt

Current operating lease liabilities

Contract liabilities, including $ 106,585 and $ 1,160,848 with related parties as of March 31, 2024 and December 31, 2023, respectively

Total current liabilities

Non-current operating lease liabilities

Other liabilities

Warrant liabilities

Deferred underwriters fee

Long-term debt

Total liabilities

Commitments and Contingencies

Class A ordinary shares subject to possible redemption, $ 0.0001 par value;

2,896,555 and 27,600,000 shares at redemption value as of September 30, 2023 and December 31, 2022, respectively

Shareholders’ Deficit:

Preferred shares, $ 0.0001 par value;

1,000,000 shares authorized;

no ne issued or outstanding

Class A shares, $ 0.0001 par value;

250,000,000 shares authorized;

no ne issued or outstanding (excluding 2,896,555 and 27,600,000 shares subject to possible redemption) as of September 30, 2023 and December 31, 2022, respectively

Class B shares, $ 0.0001 par value;

25,000,000 shares authorized;

6,900,000 shares issued and outstanding

Accumulated deficit

Total shareholders’ deficit

Total Liabilities, Redeemable Ordinary Shares and Shareholders’ Deficit

The accompanying notes are an integral part of these unaudited condensed financial statements.

ESGEN ACQUISITION CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

Legal and professional fees

Other operating costs

Operating cost—related party

Loss from operations

Other income (expense):

Dividends earned on marketable securities held in Trust Account

Recovery of offering costs related to the IPO allocated to warrants

Commitments and contingencies (Note 14)

Redeemable noncontrolling interests

Convertible preferred units

Class B units

Stockholders’ equity (deficit)

Class V common stock

Class A common stock

Additional paid in capital

(Accumulated deficit) Retained earnings

( 169,605,155 )

Total stockholders’ equity

( 169,601,129 )

Total liabilities, redeemable noncontrolling interests and stockholders’ equity (deficit)

The accompanying notes

are an integral part of these consolidated financial statements.

ZEO ENERGY CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months ended

Revenue, net of financing fees of $ 4,081,358 and $ 6,269,033 for the three months ended March 31, 2024 and 2023, respectively

Related party revenue, net of financing fees of $ 3,856,219 and $ 0 for the three months ended March 31, 2024 and 2023, respectively

Total revenue

Operating costs and expenses:

Cost of goods sold (exclusive of items shown below)

Depreciation and amortization

Sales and marketing

General and administrative

Total operating expenses

(Loss) income from operations

( 1,614,075 )

Other (expenses) income, net:

Other income, net

Change in fair value of warrant liabilities

Total other income, net

Net income (loss)

Basic and diluted weighted average shares outstanding of Class A ordinary shares

Basic and diluted net income (loss) per share, Class A

Basic and diluted weighted average shares outstanding of Class B ordinary shares

Basic and diluted net income (loss) per share, Class B

The accompanying notes are an integral part of these unaudited condensed financial statements.

ESGEN ACQUISITION CORPORATION

CONDENSED STATEMENTS OF CHANGES IN ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

ordinary shares subject to

possible redemption

ordinary shares

Shareholders’

Balance as of December 31, 2022

Accretion of ordinary shares subject to possible redemption

Redemption of Class A ordinary shares subject to possible redemption

Interest expense

Total other expense, net

Net (loss) income before taxes

( 1,789,129 )

Balance as of March 31, 2023

Accretion of ordinary shares subject to possible redemption

Waiver of deferred underwriters fee

Balance as of June 30, 2023

Accretion of ordinary shares subject to possible redemption

Balance as of September 30, 2023

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022

ordinary shares subject to

possible redemption

ordinary shares

Shareholders’

Balance as of December 31, 2021

Accretion of ordinary shares subject to possible redemption

Balance as of March 31, 2022

Accretion of ordinary shares subject to possible redemption

Balance as of June 30, 2022

Accretion of ordinary shares subject to possible redemption

Balance as of September 30, 2022

The accompanying notes are an integral part of these unaudited condensed financial statements.

ESGEN ACQUISITION CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

September 30,

Income tax (expense) benefit

Net (loss) income

( 1,699,200 )

Net (loss) attributable to Sunergy Renewables LLC prior to the Business Combination

( 1,602,939 )

Net (loss) income for the period March 13, 2024 through March 31, 2024

Net income attributable to noncontrolling interest

Net (loss) income attributable to Class A common stock

$ ( 1,188,531 )

Basic and diluted net (loss) income per share

Weighted average units outstanding, basic and diluted

The accompanying notes

are an integral part of these consolidated financial statements.

ZEO ENERGY CORP.

CONDENSED CONSOLIDATED

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

noncontrolling

Stockholders’

Balance, December 31, 2023

Retroactive application of Business Combination (Note 3)

( 1,000,000 )

( 31,155,864 )

Balance, December 31, 2023

Stockholder distributions

Net loss prior to the Business Combination

Effects of Business Combination

Issuance of Class A Shares to third party advisors

Issuance of Class A Shares to backstop investor

Reverse Recapitalization (Note 3)

( 1,678,167 )

( 1,677,592 )

Transaction Costs

( 2,317,632 )

Establishment of redeemable noncontrolling interest

( 27,399,463 )

Activities subsequent to business combination

Subsequent measurement of redeemable noncontrolling interest

( 4,092,649 )

( 168,743,712 )

( 172,836,361 )

( 7,974,824 )

( 1,188,531 )

Balance, March 31, 2024

$ 192,261,000

$ ( 169,605,155 )

$ ( 169,601,129 )

The accompanying notes

are an integral part of these consolidated financial statements.

ZEO ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

noncontrolling

Stockholders’

Balance, December 31, 2022

Retroactive application of Business Combination (Note 3)

( 1,000,000 )

( 31,155,864 )

Balance, December 31, 2022

Stockholder distributions

Balance, March 31, 2023

The accompanying notes are an integral

part of these consolidated financial statements.

ZEO ENERGY CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Cash Flows from Operating Activities

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

Dividends earned on marketable securities held in Trust Account

Recovery of offering costs related to the IPO allocated to warrants

$ ( 1,699,200 )

Adjustment to reconcile net (loss) income to cash (used in) provided by operating activities

Depreciation and amortization

Change in fair value of warrant liabilities

Changes in current assets and liabilities:

Prepaid expenses

Accounts payable and accrued expenses

Due to related party

Net cash provided by (used in) operating activities

Provision for credit losses

Changes in operating assets and liabilities:

Accounts receivable

( 1,878,529 )

Accounts receivable due from related parties

( 2,692,841 )

Prepaid installation costs

Prepaids and other current assets

( 1,420,528 )

Accounts payable

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities due to related parties

( 2,148,960 )

Contract liabilities

( 3,383,346 )

Contract liabilities due to related parties

( 1,054,263 )

Operating lease payments

Net cash (used in) provided by operating activities

( 10,153,821 )

Cash flows from Investing Activities

Reinvestment of marketable securities held in Trust Account

Extension funding of Trust Account

Cash withdrawn from Trust Account in connection with redemption

Net cash provided by investing activities

Purchases of property, equipment and other assets

Net cash used in investing activities

Cash flows from Financing Activities

Redemption of Class A ordinary shares subject to possible redemption

Proceeds from the issuance of debt

Repayments of debt

Proceeds from Business Combination, net of transaction costs

Distributions to members

Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of the period

Supplemental Cash Flow Information

Cash paid for interest

Non-cash transactions

Transaction costs

Issuance of Class A common stock to vendors

Issuance of Class A common stock to backstop investors

Accretion of Preferred Units

The accompanying notes

are an integral part of these consolidated financial statements.

Zeo Energy Corp.

Notes to the Condensed

Consolidated Financial Statements

March 31, 2024

1 - ORGANIZATION AND BUSINESS OPERATION

(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, warranty coverage 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.

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”).

March 13, 2024 (the “Closing Date”), the Company 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 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 “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

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

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 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 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.

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 (the “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 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 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 Closing and (ii) a number of warrants to purchase Manager OpCo Units which

equaled the number of SPAC Warrants (as defined in the Business Combination Agreement) 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, 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 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.

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 (as defined below)) 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 Closing.

As of March 31, 2024, no such grants have occurred.

of the Closing Date, upon consummation of the 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.

Zeo Energy Corp.

Notes to the Condensed

Consolidated Financial Statements

March 31, 2024

connection with entering into the 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 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 (the “Sponsor PIPE Investment”).

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 were

issued to Sponsor in return for aggregate consideration of $ 15,000,000 .

for the Business Combination

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 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.

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.

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 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.

● 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 and the contributions to Sun Managers,

Sunergy was majority owned by five 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 %)

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 Business Combination with ESGEN occurred within the term of the Voting Agreement.

Zeo Energy Corp.

Notes to the Condensed

Consolidated Financial Statements

March 31, 2024

Prior to the Business Combination and the contributions to Sun Managers,

the Primary Sellers had 98 % ownership in Sunergy.

Immediately following the Business Combination, they 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 Business Combination and their shares following the Business Combination and, therefore, there is no change of control before or after

the Business Combination.

This conclusion is 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.

factors that were considered include the following:

the Business Combination, the Board has been comprised of one individual designated by ESGEN

and five individuals designated by Sunergy.

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 continues substantially unchanged upon completion of the

Business Combination.

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

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.

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation and principles of Consolidation

accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles

generally accepted in the United States of America (“U.S.

GAAP”) and the rules and regulations of the Securities and Exchange

Commission (“SEC”).

Accordingly, they do not include all of the information and notes required by U.S.

GAAP for complete

financial statements.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary

for a fair presentation have been included.

These statements should be read in conjunction with Sunergy’s audited financial statements

for the fiscal year ended December 31, 2023 as included in Form 8-K/A filed with the SEC on March 25, 2024.

The results reported in

these unaudited condensed consolidated financial statements are not necessarily indicative of results for the full fiscal year.

condensed consolidated financial statements include the accounts of Zeo Energy Corp, the accounts of Sun First Energy, LLC, Sunergy Solar

LLC and Sunergy Roofing and Construction, LLC, all wholly owned subsidiaries, and ESGEN Opco, a variable interest entity (“VIE”)

for which the Company is the primary beneficiary.

All intercompany balances and transactions have been eliminated in consolidation.

December 31, 2023 balances reported herein are derived from the condensed consolidated financial statements of Sunergy as included with

the Company’s definitive proxy statement filed with the SEC on March 25, 2024.

Growth Company

Company is an emerging growth company (“EGC”), as defined in Section 2(a) of the Securities Act of 1933, as modified by the

Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

Section 102(b)(1) of the JOBS Act exempts EGCs from being required

to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act

registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply

with the new or revised financial accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition

period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.

The Company did not opt out of such extended transition period which means that when a standard is issued or revised and it has different

application dates for public or private companies, the Company, as an EGC, can adopt the new or revised standard at the time private

companies adopt the new or revised standard.

The effective dates shown in this Note 2 below reflect the election to use the extended

transition period.

to the Condensed Consolidated Financial Statements

preparation of the Company’s unaudited condensed 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 warrant liabilities, redemption value of non-controlling interest, subsequent

realizability of intangible assets, useful lives of depreciation and amortization and collectability of accounts receivable.

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.

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 future operations in future periods.

segments are defined as components of an enterprise for which separate discrete financial information is evaluated regularly by our chief

executive officer, who is 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

Accordingly, the Company operates and manages its business as one operating and reportable segment.

and Cash Equivalents

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.

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.

This analysis resulted in an allowance for credit losses as of March 31, 2024 and December 31,

2023 of $ 2,420,620 and $ 2,270,620 , respectively.

Additionally, the Company had no write-offs and no recoveries for each of the three months

ended March 31, 2024 and 2023.

The majority of our customers finance their purchase and installation of solar panels through various financing

companies, who then remit payment to Sunergy typically within 3 days 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.

installation costs

installation costs include costs incurred prior to completion of installations of solar systems.

Such costs include the cost of engineering,

permits, governmental fees, advances for sales commissions, and other related solar installation costs.

These costs are charged to Cost

of goods sold when each installation is completed.

expenses and other current assets

Prepaid expenses and other current assets consist of employee advances,

prepaid insurance, prepaid sales commissions and other current assets.

Concentration

of credit risk

instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and trade accounts

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 March 31, 2024 and December 31, 2023 were $ 7,321,621 and $ 6,979,011 ,

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.

As of March 31, 2024, one customer accounted for 41% of accounts receivable.

No one customer or financing

counterparty exceeded 10 % of accounts receivable as of December 31, 2023.

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

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 condensed consolidated statements of operations.

As of March 31, 2024 and December 31, 2023, inventory was

$ 379,321 and $ 350,353 , respectively.

Zeo Energy Corp.

Notes to the Condensed

Consolidated Financial Statements

March 31, 2024

equipment and other fixed assets

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 combined consolidated Statements of Income.

that is developed for internal use and is accounted for pursuant to ASC 350-40 , 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

All other expenditures, including those incurred in order to maintain an intangible asset’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.

is computed using the straight-line method over the estimated useful lives of the assets, which is five years , across all asset classes.

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 condensed consolidated statements of

of long-lived assets

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 provisions were recorded by the Company during the three months ended

March 31, 2024 and 2023.

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.

the set of assets acquired and liabilities assumed doesn’t constitute a business, it is accounted for as an asset acquisition where

the individual assets and liabilities are recorded at their respective relative fair values corresponding to the consideration transferred.

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.

was no goodwill impairment for the three months ended March 31, 2024 and 2023.

assets subject to amortization

assets include tradenames, 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 trademark, are capitalized as part of the intangible asset and amortized over its revised estimated

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

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 three months ended March 31, 2024 and 2023.

Zeo Energy Corp.

Notes to the Condensed

Consolidated Financial Statements

March 31, 2024

Company determines whether an arrangement contains a lease based on the conveyed rights and obligations at the inception date.

agreement contains an operating or financing lease, at the commencement date, we record a Right of Use (“ROU”) asset and

a corresponding lease liability based on the present value of the minimum lease payments.

As most of our leases do not provide an implicit

borrowing rate, to determine the present value of lease payments, the Company uses its hypothetical secured borrowing rate based on information

available at lease commencement.

Further, management made a number of estimates and judgments regarding the lease term and lease payments.

Term — Leases with an initial term of 12 months or less are not recorded on the balance sheet and we recognize lease expense for

these leases on a straight-line basis over the lease term.

Most leases include one or more options to renew, with renewal terms that

can extend the lease term from one month to one year or more.

Additionally, some of our leases include an option for early termination.

The Company includes renewal periods and exclude termination periods from our lease term if, at commencement, it is reasonably likely

that it will exercise the option.

Payments — Certain of the Company’s lease agreements include rental payments that are adjusted periodically for inflation

or passage of time.

These step payments are included within our present value calculation as they are known adjustments at commencement.

Some of its lease agreements include variable payments that are excluded from the present value calculations.

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 re-assessed at the end of each reporting period.

The Company accounts for

the Public Warrants (as defined in Note 10) (the “Warrants”) 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 Warrants for periods where no observable traded price was available are valued using a binomial lattice model.

quoted market price is utilized as the fair value as of each relevant date.

Company accounts for its revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).

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

1 - Identification of the contract, or contracts, with a client.

2 - Identification of the performance obligations in the contract.

3 - Determination of the transaction price.

4 - Allocation of the transaction price to the performance obligations in the contract

5 - Recognition of revenue when, or as, the Company satisfies a performance obligation.

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 in its accounting records.

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.

Company incurs several costs associated with the installation prior to its completion recorded.

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.

Zeo Energy Corp.

Notes to the Condensed

Consolidated Financial Statements

March 31, 2024

For the three months ended

Solar Systems Installations, gross

Financing Fees

( 7,937,577 )

Proceeds from note payable-related party

Net cash used in financing activities

( 6,250,528 )

Net change in cash

Cash, beginning of the period

Cash, end of the period

Supplemental disclosure of cash flow information:

Change in value of Class A ordinary shares subject to possible redemption

Impact of the waiver of deferred underwriters fee

The accompanying notes are an integral part of these unaudited condensed financial statements.

ESGEN ACQUISITION CORPORATION

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 1 — Organization and Business Operation

ESGEN Acquisition Corporation (the “Company”) was incorporated as a Cayman Islands exempted company on April 19, 2021.

The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities (the “Business Combination”).

The Company will not be limited to a particular industry or geographic region in its identification and acquisition of a target company.

As of September 30, 2023, the Company had not commenced any operations.

All activity for the period from April 19, 2021 (inception) through September 30, 2023, relates to the Company’s formation and the initial public offering (“Public Offering” or “IPO”) described below and since the closing of the IPO, the search for a prospective initial Business Combination.

The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest.

The Company will generate non-operating

income in the form of interest or dividend income on cash and cash equivalents from the proceeds derived from the Public Offering (as defined below).

The Company’s sponsor is ESGEN LLC, a Delaware limited liability company (the “Sponsor”).

The registration statement for the Company’s IPO was declared effective on October 19, 2021.

On October 22, 2021, the Company consummated its IPO of 27,600,000 units (the “Units” and, with respect to the ordinary shares included in the Units being offered, the “Public Shares”) at $ 10.00 per Unit and the sale of 14,040,000 warrants (the “Private Placement Warrants”) each exercisable to purchase one Class A ordinary share at $ 11.50 per share, at a price of $ 1.00 per Private Placement Warrant in a private placement to the Sponsor that closed simultaneously with the Public Offering.

The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80 % of the net assets held in the Trust Account (as defined below) (excluding the deferred

underwriters fee

and taxes payable on the interest or dividends earned on the Trust Account) at the time of signing a definitive agreement in connection with the initial Business Combination.

However, the Company will complete the initial Business Combination only if the post-Business Combination company in which its public shareholders own shares will own or acquire 50 % or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act (the “Investment Company Act”).

There is no assurance that the Company will be able to complete a Business Combination successfully.

Following the closing of the IPO on October 22, 2021, $ 281,520,000 ($ 10.20 per Unit) from the net proceeds sold in the IPO, including proceeds of the sale of the Private Placement Warrants, was deposited in a trust account (“Trust Account”) and, until October 16, 2023, was only invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S.

government treasury obligations.

To mitigate the risk of being deemed to have been operating as an unregistered investment company under the Investment Company Act, on October 16, 2023, the Company instructed the Trustee with respect to the Trust Account, to liquidate the U.S.

government securities or money market funds held in the Trust Account and thereafter to hold all funds in the Trust Account in demand deposits (i.e., in one or more bank accounts) until the earliest of ESGEN’s completion of an initial business combination or J

anuary 22, 2024 (unless extended as described below), as applicable.

Except with respect to interest or other income earned on the funds held in the Trust Account that may be released to the Company to pay its income taxes, if any, the amended and restated memorandum and articles of association, as discussed below and subject to the requirements of law and regulation, will provide that the proceeds from the Public Offering and the sale of the Private Placement Warrants held in the Trust Account will not be released from the Trust Account (1) to the Company, until the completion of the initial Business Combination, or (2) to the public shareholders, until the earliest of (a) the completion of the initial Business Combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations described herein, (b) the redemption of any public shares properly

tendered in connection with a shareholder vote to amend the amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100 % of the public shares if the Company did not complete its initial Business Combination within 15 months (which was extended pursuant to shareholder approval of the Charter Amendment (as defined below)) from the closing of this offering (the “Combination Period”) or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares, and (c) the redemption of the public shares if the Company has not consummated the Business Combination within Combination Period, subject to applicable law.

Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (b) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an initial Business Combination or liquidation if the Company has not consummated an initial Business Combination within Combination Period, with respect to such Class A ordinary shares so redeemed.

The Company will provide its public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer.

The decision as to whether the Company will seek shareholder approval of a proposed Business Combination or conduct a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require the Company to seek shareholder approval under applicable law or stock exchange listing requirement.

The Company will provide its public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of its initial Business Combination at a per-share

price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest or dividends earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes, if any, divided by the number of then-outstanding public shares, subject to the limitations described herein.

The amount in the Trust Account is initially $ 10.20 per public share.

The per share amount the Company will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriters fee

the Company will pay to the underwriters.

The ordinary shares subject to redemption were recorded at redemption value and classified as temporary equity upon the completion of the Public Offering, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $ 5,000,001 upon such consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.

The Company has until January 22, 2024 (unless extended as described below),

described in Note 10, to consummate the initial Business Combination.

If the Company has not consummated the initial Business Combination within the Combination Period, the Company will:

(i) cease all operations except for the purpose of winding up;

(ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share

price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest or dividends earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes, if any (less up to $ 100,000 of interest or dividends to pay winding up and dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any);

and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and its board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

On January 18, 2023, the Company held an extraordinary general meeting of shareholders to consider and vote upon, among other things, a proposal to amend the Company’s amended and restated memorandum and articles of association (the “First Extension Charter Amendment”) to (i) extend the date by which the Company must consummate its initial Business Combination (the “Termination Date”) from January 22, 2023 to April 22, 2023 and (ii) in the event that the Company has not consummated an initial business combination by April 22, 2023, to allow the Company, by resolution of the Company’s board of directors (the “Board”) and, without any approval of the Company’s shareholders, upon five days’ advance notice prior to each Additional Extension, to extend the Termination Date up to six times (with each such extension being upon five days’ advance notice), each by one additional month (for a total of up to six additional months to complete a business combination) (each, an “Additional Extension” and such date, the “Additional Extension Date”), provided that the Sponsor or the Sponsor’s affiliates or permitted designees will deposit into the Trust Account for each Additional Extension Date the lesser of (a) $ 140,000 or (b) $ 0.04 for each Public Share that is then-outstanding, in exchange for one or more non-interest bearing, unsecured promissory notes issued by the Company to the Sponsor or the Sponsor’s affiliates or permitted designees (the “Lenders” and each a “Lender”).

In connection with the vote to approve the First Extension Charter Amendment, the holders of 24,703,445 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $ 10.35 per share, for an aggregate redemption amount of approximately $ 255,875,758 .

The Sponsor and each member of the management team have entered into an agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their Founder Shares;

(ii) waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) that would modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem

100 % of the public shares if the Company did not complete its initial Business Combination within

15 months from the closing of the Public Offering (which was extended pursuant to shareholder approval of the Charter Amendment) or (B) with respect to any other provision relating to the rights of holders of the Company’s Class A ordinary shares and (iii) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to consummate an initial Business Combination within Combination Period.

The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company (other than the Company’s independent registered public accounting firm), or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $ 10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $ 10.00 per public share due to reductions in the value of the Trust Account, in each case net of the interest or dividends that may be withdrawn to pay the Company’s income tax obligations, provided that such liability will not apply to any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”).

In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims.

However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believe that the Sponsor’s only assets are securities of the Company.

Therefore, the Company cannot assure you that the Sponsor would be able to satisfy those obligations.

None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

On October 20, 2023, at the Company’s extraordinary general meeting, the shareholders approved, among other proposals, (i) (a) the extension (such proposal, the “Extension Proposal”) of the time period the Company has to complete an initial Business Combination from October 22, 2023 to January 22, 2024 (the “Charter Amendment”) and (b) in the event that the Company has not consummated an initial Business Combination by January 22, 2024, to allow the Company, by resolution of the Board and, without any approval of the Company’s shareholders, upon five days’ advance notice prior to each Additional Extension, to complete six Additional Extensions, provided that the Sponsor or the Sponsor’s affiliates or permitted designees will deposit into the Trust Account for each Additional Extension Date the lesser of (x) $ 35,000 or (y) $ 0.0175 for each Public Share that is then-outstanding, in exchange for one or more non-interest bearing, unsecured promissory notes issued by a Lender, and (ii) the amendment of the Company’s amended and restated memorandum and articles of association to change certain provisions which restrict the Class B ordinary shares, par value $ 0.0001 , of the Company (the “Class B ordinary shares”) from converting to Class A ordinary shares, par value $ 0.0001 (the “Class A ordinary shares”) prior to the consummation of an initial

Business Combination (such proposal, the “Conversion Proposal”).

Founder Shares

Founder Shares refers to the Class B ordinary shares (the “Founder Shares”) acquired by the initial shareholders prior to the Company’s IPO.

The initial shareholders and each member of the management team have entered into an agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of the Business Combination;

(ii) waive their redemption rights with respect to their Founder Shares and Public Shares in connection with a shareholder vote to approve an amendment to the amended and restated memorandum and articles of association (A) that would modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the Business Combination or to redeem 100 % of the Company’s public shares if it does not complete the Business Combination by the Termination Date or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares and (iii) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to consummate an Business Combination by the Termination Date (although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete the Business Combination within the prescribed time frame).

If the Company seeks shareholder approval, it will complete the Business Combination only if it is approved by an ordinary resolution or such higher approval threshold as may be required by Cayman Islands law and pursuant to the amended and restated memorandum and articles of association.

In such case, the initial shareholders and each member of the management team have agreed to vote their Founder Shares and Public Shares in favor of the Business Combination.

In connection with the approval of the Conversion Proposal at the Meeting and the adoption of the Charter Amendment, the Sponsor converted all of its 5,619,077 Class B ordinary shares into Class A ordinary shares (the “Sponsor Share Conversion”).

As a result of the Sponsor Share Conversion and redemptions made in connection with the Extension Proposal and Conversion Proposal, 7,027,632 Class A ordinary shares remain outstanding.

Notwithstanding the Sponsor Share Conversion, the Sponsor will be not entitled to receive any funds held in the Trust Account with respect to any Class A ordinary shares issued to the Sponsor as a result of the Sponsor Share Conversion and no additional amounts will be deposited into the Trust Account in respect of shares of Class A ordinary shares held by the Sponsor in connection with the extension of the Termination Date to the Extended Date or any Additional Extension Dates.

Risks and Uncertainties

The credit and financial markets have experienced extreme volatility and disruptions due to the current conflict between Ukraine and Russia.

The conflict is expected to have further global economic consequences, including but not limited to the possibility of severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in inflation rates and uncertainty about economic and political stability.

In addition, the United States and other countries have imposed sanctions on Russia which increases the risk that Russia, as a retaliatory action, may launch cyberattacks against the United States, its government, infrastructure and businesses.

Any of the foregoing consequences, including those we cannot yet predict, may cause our business, financial condition, results of operations and the price of our ordinary shares to be adversely affected.

Going Concern

As of September 30, 2023, the Company had $ 267,058 in cash held outside of the Trust Account and owes $ 5,296,038 in accounts payable and accrued expenses and $ 1,718,988 to related parties.

The Company anticipates that the cash held outside of the Trust Account as of September 30, 2023 will not be sufficient to allow the Company to operate for at least the next 12 months from the issuance of the financial statements, assuming that a Business Combination is not consummated during that time.

The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans.

In connection with the Company’s assessment of going concern considerations in accordance with ASC Subtopic 205-40,

“Presentation of Financial Statements – Going Concern”, the Company has until January 22, 2024 to consummate a Business Combination.

If a Business Combination is not consummated by this date and an Additional Extension not obtained, there will be a mandatory liquidation and subsequent dissolution of the Company.

It is uncertain whether the Company will be able to consummate a Business Combination by this time.

Management has determined that the mandatory liquidation, should a Business Combination not occur, and an extension is not obtained, as well as the potential for us to have insufficient funds available to operate our business prior to a Business Combination, raises substantial doubt about the Company’s ability to continue as a going concern.

Note 2 — Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q

and Article 8 of Regulation S-X

Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting.

Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows.

In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K,

which contains the initial audited financial statements and notes thereto for the period ended December 31, 2022, as filed with the SEC on March 31, 2023.

The interim results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the period ending December 31, 2023 or for any future interim periods.

The breakout of loss from operations on the condensed statement of operations for the three and nine months ended September 30, 2022, has been revised to conform to the current presentation.

This presentation did not impact any other financial statement line items.

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging

growth companies but any such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison of the Company’s unaudited condensed financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment.

It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events.

Accordingly, the actual results could differ significantly from those estimates.

Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

The Company had no cash equivalents as of September 30, 2023 and December 31, 2022, respectively.

Marketable Securities Held in Trust Account

Substantially all of the assets held in the Trust Account were held in U.S.

Money Market Funds.

The Company’s investments held in the Trust Account are classified as trading securities.

Trading securities are presented on the balance sheet at fair value at the end of each reporting period.

Gains and losses resulting from the change in fair value of investments held in Trust Account are included in investment income on marketable securities held in Trust Account in the accompanying statements of operations.

The estimated fair values of investments held in Trust Account are determined using available market information.

Fair Value Measurement

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the balance sheet, primarily due to its short-term nature.

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date.

GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The Company’s financial instruments are classified as either Level 1, Level 2 or Level 3.

These tiers include:

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”.

The Company’s derivative instruments are recorded at fair value on the balance sheet with changes in the fair value reported in the statements of operations.

Derivative assets and liabilities are classified on the balance sheets as current or non-current

based on whether or not net-cash

settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Warrant Liabilities

The Company accounts for the Public and Private Placement warrants issued in connection with the Public Offering in accordance with the guidance contained in ASC Topic 815-40

and ASC Topic 480.

Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.

Accordingly, the Company will classify each warrant as a liability at its fair value.

These liabilities are subject to re-measurement

at each balance sheet date.

With each such re-measurement,

the warrant liabilities will be adjusted to fair value, with the change in fair value recognized in the Company’s statements of operations.

Net Income (Loss) Per Ordinary Share

The Company has two classes of shares, which are referred to as redeemable Class A ordinary shares and non-redeemable

Class B ordinary shares.

Income and losses are shared pro rata between the two classes of shares.

Net income (loss) per ordinary share is calculated by dividing the net income (loss) by the weighted average ordinary shares outstanding for the respective period.

With respect to the accretion of Class A ordinary shares subject to possible redemption, the Company treated accretion in the same manner as a dividend, paid to the shareholder in the calculation of the net income (loss) per ordinary share.

The earnings per share presented in the statement of operations is based on the following:

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

Net income (loss)

Accretion of temporary equity to redemption value

Net income including accretion of temporary equity to redemption value

Solar Systems Installations, net

Roofing Installations

Total net revenues

Company receives both customer lender advances and, when the customer does not utilize third-party financing, customer advances.

amounts are listed on the balance sheet as contract liabilities and are considered a liability of the Company until the installation

is completed.

When an installation is delayed, the lender may withdraw their lender advances until the project installation is completed.

The contract liabilities amounts are expected to be recognized as revenue within a few months of the Company’s receipt of the funds.

The following table summarizes the change in contract liabilities:

For the three months ended

September 30,

Non-redeemable

Basic and diluted net income (loss) per share:

Allocation of net income including accretion of temporary equity

Allocation of accretion of temporary equity to redemption value

Allocation of net income (loss)

Weighted-average shares outstanding

Basic and diluted net income (loss) per share

For the Nine Months Ended

September 30,

Non-redeemable

Basic and diluted net (loss) income per share:

Allocation of net income including accretion of temporary equity

Allocation of accretion of temporary equity to redemption value

Allocation of net (loss) income

Weighted-average shares outstanding

Basic and diluted net (loss) income per share

Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period.

The Company has not considered the effect of the 27,840,000 ordinary shares issuable upon exercise of the Public Warrants and Private Placement Warrants in the calculation of diluted income (loss) per share, since th

e exercise of such warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.

Class A Ordinary Shares Subject to Possible Redemption

The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480.

Class A ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value.

Conditionally redeemable ordinary shares (including shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity.

At all other times, ordinary shares are classified as shareholders’ equity.

The Company’s Class A ordinary shares sold in the IPO feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events.

The Company has made a policy election in accordance with ASC 480-10-S99-3A

and recognizes changes in redemption value in additional paid-in

capital (or accumulated deficit in the absence of additional paid-in

capital) immediately as they occur.

The Company recorded accretion of $ 761,527 and $ 2,762,570 in accumulated deficit for three and nine months ended September 30, 2023, respectively, and $ 1,245,745 and $ 1,634,827 in accumulated deficit for the three and nine months ended September 30, 2022, respectively.

For the period ended September 30, 2023, the Company recorded redemption of $ 255,875,758 and $ 1,042,760 was deposited in the Trust Account for extension funding.

The Company accounts for income taxes under ASC Topic 740, “Income Taxes” (“ASC 740”).

ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards.

ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

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.

There were no unrecognized tax benefits as of September 30, 2023 and December 31, 2022.

The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction.

There is currently no taxation imposed on income by the Government of the Cayman Islands.

In accordance with Cayman income tax regulations, income taxes are not levied on the Company.

Consequently, income taxes are not reflected in the Company’s unaudited condensed financial statements.

Contract liabilities, beginning of the period

Revenue recognized from amounts included in contract liabilities at the beginning of the period

( 5,023,418 )

( 1,149,047 )

Cash received prior to completion of performance obligation

Contract liabilities, as of the end of the period

acquisition costs

Company pays sales commissions to sales representatives based on a percentage of the sales contracts entered into by the customer and

Payment is made to the sales representative once installation is completed.

Such costs are included as cost of goods sold

on the condensed consolidated statement 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.

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

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 convertible 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 has been

to the Business Combination, the membership structure of Sunergy Renewable, LLC included membership units.

In conjunction with the closing

of the 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.

The Company has determined that the calculation

of loss per unit for periods prior to the Business Combination would not be meaningful to the users of these consolidated financial statements.

As a result, loss per share information has not been presented for periods prior to the Business Combination.

value of Financial Instruments

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

The three levels of the fair value hierarchy are as follows:

— 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.

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

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.

— 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

some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.

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 Company establishes the fair value of its assets and liabilities using the price

that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the

measurement date and establishes a fair value hierarchy based on the inputs used to measure fair value.

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.

Noncontrolling Interests

Noncontrolling

interests represent the portion of ESGEN Opco, LLC that Zeo Energy Corp.

controls and consolidates but does not own.

The noncontrolling

interests was created as a result of the Business Combination and represents 33,730,000 common units issued by Zeo Energy Corp to the

prior investors.

As of the Close of the Business Combination, Zeo Energy Corp.

held a 13.0 % interest in ESGEN Opco LLC with the remaining

87.0% interest held by ESGEN OpCo’s prior investors.

The prior investors’ interests in ESGEN Opco.

LLC represent a redeemable

noncontrolling interest.

At its discretion, the members have the right to exchange their common units in ESGEN Opco LLC (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 ESGEN Opco, LLC 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.

31, 2024, the prior investors of ESGEN Opco LLC hold the majority of the voting rights on the Board.

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 ESGEN Opco, LLC prior investors’ share in the net assets of the Company upon consummation

of the 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.

Convertible Preferred Units

The Company records redeemable convertible preferred units at fair

value on the dates of issuance, unless an exception applies, net of issuance costs.

The redeemable convertible preferred units have been

classified outside of stockholders’ equity (deficit) as temporary equity on the accompanying condensed consolidated balance sheets

because the shares contain certain redemption features that are not solely within the control of the Company.

See Note 9 – Redeemable

Noncontrolling Interest and Equity.

Because the Class A convertible preferred units are held by the Sponsor at the OpCo level, the preferred

units are presented as a noncontrolling interest on the condensed consolidated balance sheets.

Zeo Energy Corp.

is a corporation and thus is subject to United States (“U.S.”)

federal, state and local income taxes.

ESGEN Opco, LLC is a partnership for U.S.

federal and most state and local income tax purposes

and therefore is generally not subject to U.S.

federal and most state and local income taxes.

Instead, the ESGEN Opco, LLC unitholders,

including Zeo Energy Corp., are liable for U.S.

federal income tax on their respective shares of Zeo Energy Corp.’s taxable income.

ESGEN Opco, LLC is liable for income taxes in those states that treat partnerships as the ultimate taxpayer for U.S.

federal income tax

Otherwise, the income still flows to the LLC owners.

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

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.

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

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.

As of September 30, 2023 and December 31, 2022, there were no unrecognized tax benefits and no amounts were accrued for the payment of interest and penalties.

The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

Recent Accounting Pronouncements

Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.

Note 3 — Related Party Transactions

Promissory Notes — Related Party

On April 27, 2021, the Sponsor agreed to loan the Company up to $ 300,000 to be used for a portion of the expenses of the Public Offering.

The Company borrowed a total of $ 262,268 .

This loan was non-interest

bearing, unsecured and due at the earlier of December 31, 2021 or the closing of the Public Offering.

The loan was to be repaid upon the closing of the Public Offering out of the offering proceeds not held in the Trust Account.

In connection with the closing of the Public Offering, the Company paid down $ 90,922 of the outstanding balance.

As of September 30, 2023 and December 31, 2022, the Company had $ 171,346 outstanding under the promissory note and as is included on the balance sheet as promissory note —

related party.

The Sponsor has agreed to defer repayment of the loan until the close of the Business Combination.

On April 5, 2023, the Company issued an unsecured promissory note (the “Note”) in the principal amount of up to $ 1,500,000 to the Sponsor, which may be drawn down by the Company from time to time prior to the consummation of the Company’s Business Combination.

The Note does no t bear interest, matures on the date of consummation of the Business Combination and is subject to customary events of default.

As of September 30, 2023, the Company had $ 1,238,449 outstanding under the Note and is included on the balance sheet as promissory note —

related party.

In addition, on October 17, 2023, the Company issued an amended and restated promissory note (the “Restated Note”) in the principal amount of up to $ 2,500,000 to the Sponsor.

The Restated Note amends, restates, replaces and supersedes

dated April 5, 2023, in the principal amount of $ 1,500,000 .

The Restated Note may be drawn down by the Company from time to time prior to the consummation of the Company’s initial Business Combination.

The Restated Note does no t bear interest, matures on the date of consummation the Business Combination and is subject to customary events of default.

The Restated Note will be repaid only to the extent that the Company has funds available to it outside of its Trust Account (see Note 10).

Working Capital Loans

In order to finance transaction costs in connection with an intended Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”).

If the Company completes the initial Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company.

Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account.

In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans.

Up to $ 1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $ 1.00 per warrant at the option of the lender.

The warrants would be identical to the Private Placement Warrants.

As of September 30, 2023 and December 31, 2022, the Company had no borrowings under the Working Capital Loans.

Office Space, Secretarial and Administrative Services

Through the earlier of consummation of the initial Business Combination and the liquidation, the Company incurs $ 10,000 per month for office space, utilities, secretarial support and administrative services provided by the Sponsor.

For the three and nine months ended September 30, 2023, the Company has incurred $ 30,000 and $ 90,000 , respectively.

No amounts have been paid for these services.

For the three and nine months ended September 30, 2022, the Company incurred $ 30,000 and $ 90,000 , respectively.

No amounts have been paid for these services.

As of September 30, 2023 and December 31, 2022, the Company reported on the balance sheets $ 165,000 and $ 120,000 , respectively, pursuant to this agreement, in “Due to related party”.

Note 4 — Prepaid Expenses

The Company’s prepaid expenses as of September 30, 2023 and December 31, 2022 primarily consisted of the following:

September 30, 2023

December 31, 2022

Prepaid insurance

Other prepaid expenses

Note 5 — Accounts Payable and Accrued Expense

The Company’s accounts payable and accrued expenses as of September 30, 2023 and December 31, 2022 primarily consisted of legal accruals.

September 30, 2023

December 31, 2022

Legal accrual

Other payables and expenses

Note 6 — Commitments & Contingencies

Registration and Shareholder Rights

The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans) will be entitled to registration rights pursuant to a registration and expected shareholder rights agreement signed at the closing of our Public Offering.

The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities.

In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of its initial Business Combination.

period, which occurs (i) in the case of the Founder Shares, and (ii) in the case of the private placement warrants and the respective Class A ordinary shares issuable upon exercise of the private placement warrants, 30 days after the completion of the initial Business Combination.

The Company will bear the expenses incurred in connection with the filing of any such registration statements.

The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Working Capital Loans and warrants that may be issued upon conversion of Working Capital Loans) will be entitled to registration rights pursuant to a registration and expected shareholder rights agreement signed at the closing of our Public Offering.

The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company’s register such securities.

In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of its initial Business Combination.

However, the registration and expected shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period, which occurs (i) in the case of the Founder Shares, as described in the following paragraph, and (ii) in the case of the Private Placement Warrants and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of the initial Business Combination.

The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Except as described herein, the Sponsor and its directors and executive officers have agreed not to transfer, assign or sell any of their Founder Shares until the earliest of (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $ 12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 -trading

day period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company complete a liquidation, merger, share exchange or other similar transaction that results in all of the public shareholders having the right to exchange their ordinary shares for cash, securities or other property.

Any permitted transferees would be subject to the same restrictions and other agreements of the Sponsor and its directors and executive officers with respect to any founder shares.

Any permitted transferees will be subject to the same restrictions and other agreements of the Sponsor with respect to any Founder Shares.

The Company refers to such transfer restrictions throughout the Public Offering as the lock- up.

In addition, pursuant to the registration and expected shareholder rights agreement, the Sponsor, upon and following consummation of an initial Business Combination, will be entitled to nominate three individuals for election to the board of directors, as long as the Sponsor holds any securities covered by the registration and expected shareholder rights agreement.

Underwriting Agreement

The underwriters were entitled to a deferred

underwriters fee

of 3.5 % of the gross proceeds of the Public Offering upon the completion of the Company’s initial Business Combination.

In April 2023, the underwriters waived any right to receive the deferred

underwriters fee

and will therefore receive no additional

underwriters fee

in connection with the Closing.

As a result, the Company recognized $ 425,040 of other income on the statement of operations and $ 9,234,960 was recorded to accumulated deficit on the statements of changes in ordinary shares subject to possible redemption and shareholders’ deficit in relation to the reduction of the deferred underwriter s

As of September 30, 2023 and December 31, 2022, the deferred underwrit ers

fee is $ 0 and $ 9,660,000 , respectively.

To account for the waiver of the deferred

fee, the Company analogized to the SEC staff’s guidance on accounting for reducing a liability for “trailing fees”.

Upon the waiver of the deferred

fee, the Company reduced the deferred

underwriters fee

to $ 0 and reversed the previously recorded cost of issuing the instruments in the IPO, which included recognizing a contra-expense of $ 425,040 , which is the amount previously allocated to liability classified warrants and expensed upon the IPO, and reduced the accumulated deficit and increased income available to Class B ordinary shares by $ 9,234,960 , which was previously allocated to the Class A ordinary shares subject to redemption and accretion recognized at the IPO date.

Proposed Business Combination

On April 19, 2023, the Company entered into a Business Combination Agreement, by and among the Company, ESGEN OpCo, LLC, a Delaware limited liability company and wholly-owned subsidiary of ESGEN (“OpCo”), Sunergy Renewables, LLC, a Nevada limited liability company (“Sunergy”), the Sunergy equityholders set forth on the signature pages thereto (collectively, “Sellers” and each, a “Seller”, and collectively with Sunergy, the “Sunergy Parties”), for limited purposes, the Sponsor, and for limited purposes, Timothy Bridgewater, an individual, in his capacity as the Sellers Representative (the “Business Combination Agreement”).

In accordance with the terms and subject to the conditions of the Business Combination Agreement, among other things:

(i) prior to the consummation of the Business Combination (the “Closing”), each issued and outstanding Class B ordinary share of ESGEN will convert into one Class A ordinary share of ESGEN (the “ESGEN Share Conversion”);

and (ii) following the ESGEN Share Conversion but prior to the Closing, ESGEN will, subject to the receipt of the requisite shareholder approval, transfer by way of continuation from the Cayman Islands to the State of Delaware and domesticate as a Delaware corporation (the “Domestication”) and will change its name as to be determined by the parties to the Business Combination Agreement (“New PubCo”).

In connection with the Domestication, (A) each outstanding Class A ordinary share will become one share of Class A common stock, par value $ 0.0001 per share, of New PubCo (the “New PubCo Class A Common Stock”), (B) each outstanding warrant to purchase one Class A ordinary share (each, an “ESGEN Warrant”) will become a warrant to purchase one share of New PubCo Class A Common Stock at an exercise price of $ 11.50 per share , and (C) New PubCo will file its certificate of incorporation and will adopt bylaws to serve as its governing documents upon consummation of the Domestication.

In connection with the ESGEN Share Conversion and the Domestication, each issued and outstanding unit of ESGEN, each consisting of one Class A ordinary share and one-half

of one ESGEN Warrant (each, an “ESGEN Unit”), that has not been previously separated into the underlying Class A ordinary shares and underlying ESGEN Warrants prior to the Domestication will be cancelled and will entitle the holder thereof to (x) one share of New PubCo Class A Common Stock and (y)

of one warrant representing the right to purchase one share of New PubCo Class A Common Stock at an exercise price of $ 11.50 per share on the terms and subject to the conditions applicable to ESGEN Warrants set forth in the Warrant Agreement, dated as of October 22, 2021, between ESGEN and Continental Stock Transfer & Trust Company (the “Trustee”).

In accordance with the terms and subject to the conditions of the Business Combination Agreement, Sunergy will cause 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 Closing either to 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 (collectively, the “Sunergy Exchanges”).

At the Closing, ESGEN will contribute to OpCo (1) all of its assets (excluding its interests in OpCo, but including the amount of cash in the Trust Account as of immediately prior to the Closing (after giving effect to the exercise of redemption rights by any ESGEN shareholders)), and (2) a number of newly issued shares of Class V common stock of ESGEN, par value $ 0.0001 per share, which will generally have only voting rights (the “ESGEN Class V Common Stock”), equal to the number of Seller OpCo Units (as defined in the Business Combination Agreement) (the “Seller Class V Shares”) and (y) in exchange, OpCo shall issue to ESGEN (i) a number of common units of OpCo (the “OpCo Units”) which shall equal the number of total shares of ESGEN Class A Common Stock issued and outstanding immediately after the Closing and (ii) a number of warrants to purchase OpCo Units which shall equal the number of SPAC 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 will contribute to OpCo the Sunergy Company Interests and (y) in exchange therefor, OpCo will transfer to the Sellers the Seller OpCo Units and the Seller Class V Shares.

The obligation of ESGEN, the Sunergy Parties and OpCo to consummate the Business Combination is subject to certain customary closing conditions, including, but not limited to, (i) the absence of any order, law or other legal restraint or prohibition enacted, issued or promulgated by any court of competent jurisdiction or other governmental entity of competent jurisdiction having the effect of making the Business Combination illegal or otherwise prohibiting the consummation of the Business Combination, (ii) the termination or expiration of any applicable waiting period applicable to the consummation of the Business Combination under the Hart-Scott-Rodino Act, (iii) the effectiveness of the Registration Statement on Form S-4 (the “Registration Statement”) in accordance with the provisions of the Securities Act, registering the ESGEN Class A Common Stock to be issued in connection with the Business Combination Agreement, (iv) receipt of the required approvals of ESGEN’s shareholders at a meeting of the shareholders of ESGEN in connection with the Business Combination, (v) the ESGEN Class A Common Stock to be issued in connection with the Business Combination immediately after Closing shall be listed on Nasdaq and ESGEN will be able to satisfy any continued listing requirements of Nasdaq immediately after Closing, (vi) if the ESGEN shareholders do not approve the Redemption Limitation Amendment (as defined in the Business Combination Agreement), ESGEN having at least $ 5,000,001 of net tangible assets (as determined in accordance with Rule 3a5-51(g)(1) of the Exchange Act) remaining immediately after any holders of the ESGEN Class A Ordinary Shares exercise their redemption rights, (vii) the members of the post-Business Combination ESGEN board of directors shall have been elected or appointed in accordance with the Business Combination Agreement and (viii) the aggregate transaction proceeds, including from the Trust Account after giving effect to the exercise of redemption rights by any ESGEN shareholders pursuant to the ESGEN amended and restated memorandum and articles of association, as amended, and the proceeds resulting from the Initial PIPE Investment (as defined below) and any financing agreements executed in furtherance of the Business Combination Agreement, shall be greater or equal to $ 20,000,000 .

Concurrently with the execution of the Business Combination Agreement, ESGEN entered into a subscription agreement (the “Initial Subscription Agreement”) with Sponsor.

Pursuant to the Initial Subscription Agreement, Sponsor agreed to subscribe for and purchase, and ESGEN agreed to issue and sell to Sponsor, concurrently with the Closing, an aggregate of 1,000,000 shares of ESGEN Class A Common Stock for a purchase price of $ 10.00 per share, for aggregate gross proceeds of $ 10,000,000 (the “Initial PIPE Investment”).

The closing of the Initial PIPE Investment is contingent upon, among other things, the substantially concurrent consummation of the Business Combination.

The Initial Subscription Agreement provides that ESGEN will grant Sponsor certain customary registration rights.

In addition to the Initial PIPE Investment, under the Business Combination Agreement, ESGEN and Sunergy have agreed to use their reasonable best efforts to identify other investors to enter into equity financing agreements (the “Additional Financing Agreements” and, together with the Initial Subscription Agreement, the “Financing Agreements”), in form and substance reasonably acceptable to ESGEN and Sunergy, to support the transaction (such equity financing under the Financing Agreements, collectively, herein referred to as the “Private Placements”).

The Business Combination is expected to close in the first quarter of 2024, following the receipt of the required approvals by our shareholders and the fulfillment of other customary closing conditions.

Note 7 — Warrant Liabilities

The Company accounts for the 27,840,000 warrants issued in connection with the Public Offering ( 13,800,000 Public Warrants and 14,040,000 Private Placement Warrants) in accordance with the guidance contained in ASC Topic 815-40.

Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.

Accordingly, the Company classifies each warrant as a liability at its fair value.

This liability is subject to remeasurement at each balance sheet date.

With each such remeasurement, the warrant liabilities will be adjusted to fair value, with the change in fair value recognized in the Company’s statements of operations.

Public Warrants

Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $ 11.50 per share, subject to adjustment as discussed herein.

In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $ 9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $ 9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 % of the higher of the Market Value and the Newly Issued Price, the $ 18.00 per share redemption trigger price described adjacent to “Redemption of warrants when the price per Class A ordinary share equals or exceeds $ 18.00 ” will be adjusted (to the nearest cent) to be equal to 180 % of the higher of the Market Value and the Newly Issued Price, and the $ 10.00 per share redemption trigger price described adjacent to the caption “Redemption of warrants when the price per Class A ordinary share equals or exceeds $ 10.00 ” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.

The warrants will become exercisable 30 days after the completion of the Company’s initial Business Combination and will expire five years after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the initial Business Combination, it will use its commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement of which this prospectus forms a part or a new registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the initial Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement;

provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

The “fair market value” as used in this paragraph shall mean the volume weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.

If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60 th

day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but it will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

In such event, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the warrants by (y) the fair market value and (B) 0.361 .

Redemption of warrants when the price per Class

A ordinary share equals or exceeds $ 18.00 .

Once the warrants become exercisable, the Company may redeem not less than all of the outstanding warrants (except as described herein with respect to the Private Placement Warrants):

in whole and not in part;

at a price of $ 0.01 per warrant;

upon a minimum of 30 days’ prior written notice of redemption to each warrant holder;

if, and only if, the closing price of the Class A ordinary shares equals or exceeds $ 18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-dilution Adjustments”) for any 20 trading days within a 30 -trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.

Redemption of warrants when the price per Class

A ordinary share equals or exceeds $ 10.00 .

Once the warrants become exercisable, the Company may redeem not less than all of the outstanding warrants:

in whole and not in part;

at $ 0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption;

if, and only if, the closing price of the Class A ordinary shares equals or exceeds $ 10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-dilution Adjustments”) for any 20 trading days within the 30-trading

day period ending three trading days before the Company sends the notice of redemption to the warrant holders;

Private Warrants

If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units sold in the Public Offering.

Any amendment to the terms of the Private Placement Warrants or any provision of the warrant agreement with respect to the Private Placement Warrants will require a vote of holders of at least 50% of the number of the then outstanding Private Placement Warrants.

The accounting treatment of derivative financial instruments requires that the Company record a derivative liability upon the closing of the IPO.

Accordingly, the Company has classified each warrant as a liability at its fair value and the warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value.

These liabilities are

subject to re-measurement

at each balance sheet date.

With each such re-measurement,

the warrant liabilities will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.

The Company will reassess the classification at each balance sheet date.

If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.

Note 8 — Recurring Fair Value Measurements

As of September 30, 2023 and December 31, 2022, investments held in the Trust Account are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets.

The Company’s Public Warrants are traded on the Nasdaq.

As such, the Public 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 Public Warrant liabilities is classified within Level 1 of the fair value hierarchy.

At September 30, 2023 and December 31, 2022, the Company considers the Private Warrants to be economically equivalent to the Public Warrants.

As such, the valuation of the Public Warrants was used to value the Private Warrants.

The fair value of the Private Warrant liabilities is classified within Level 2 of the fair value hierarchy.

The following tables presents fair value information as of September 30, 2023 and December 31, 2022 of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

September 30, 2023

Marketable securities held in Trust Account

Public Warrants

Private Warrants

Total liabilities

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

condensed consolidated financial statements.

The Company’s reserve related to uncertain tax positions was zero as of March 31,

2024 and December 31, 2023.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March

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 the U.S.

federal and state income tax purposes are 2019

The Company has calculated the provision for income taxes during the interim reporting period by applying an estimate of the Annual Effective

Tax Rate (AETR) for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently

occurring discrete items) for the reporting period.

Our effective tax rate (ETR) from continuing operations was 5.0 % for the three months

ended March 31, 2024, and 0 % percent for the three months ended March 31, 2023.

The ETR for the three months ended differs from statutory

rates primarily due to the non-controlling interest portion of ESGEN Opco, LLC, which is a partnership for federal tax purposes.

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

Receivable Agreement

In conjunction with the consummation of the Transactions, Zeo Energy

Corp entered into a Tax Receivable Agreement (the “TRA”) with ESGEN Opco, LLC and certain ESGEN Opco, LLC members (the “TRA

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 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

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 Tax Receivable Agreement.

All such payments to the TRA Holders are the obligations

of Zeo Energy Corp., and not that of ESGEN Opco, LLC.

As of March 31, 2024, there have been no exchanges of ESGEN Opco, LLC 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.

Depending on the Company’s assessment on realizability of such

Tax Attributes, the arising TRA liability will be recorded through income.

As of March 31, 2024, the Company has concluded, based on applicable

accounting standards, that it was more likely than not that its deferred tax assets subject to the TRA would not be realized;

the Company has not recorded a liability related to the tax savings it may realize from utilization of such deferred tax assets.

March 31,2024, the total unrecorded TRA liability is approximately $48.8 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.

Accounting Pronouncements

Issued Accounting Pronouncements Not Yet Adopted

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.

2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December

Early adoption is permitted, and adoption of ASU 2023-07 should be applied retrospectively to all prior periods presented in

the financial statements.

The Company is currently evaluating the impact of this standard.

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.

NOTE 3 - REVERSE RECAPITALIZATION

discussed in Note 1, “Nature of Operations”, the Business Combination was consummated on March 13, 2023, which, for accounting

purposes, was treated as the equivalent of Zeo issuing stock for the net assets of ESGEN, accompanied by recapitalization.

method of accounting, ESGEN was treated as the acquired company for financial accounting and reporting purposes under GAAP.

closing of the Business Combination, the Company received gross proceeds of $ 17.7 million from the Business Combination, offset by total

transaction costs and other fees totaling $ 7.4 million.

The following table reconciles the elements of the Business Combination to the

consolidated statements of cash flows and the consolidated statement of changes in stockholders’ deficit for the period ended December

Cash-trust and cash, net of redemptions

transaction costs, promissory note and professional fees, paid

( 7,350,088 )

Proceeds from pipe subscription

Net proceeds from the Business Combination

liabilities assumed

( 12,041,595 )

Reverse recapitalization, net

$ ( 1,677,592 )

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

number of shares of Common Stock issued immediately following the consummation of the Business Combination was:

Class V Common Stock

Class A Common Stock

ESGEN Class A common stock, outstanding prior to the Business Combination

Forfeiture of Class A founder shares

( 2,900,000 )

Less redemptions

( 1,159,976 )

Class A common stock of ESGEN

ESGEN Class B common stock, outstanding prior to the Business Combination

Business Combination shares

Sunergy Shares

Issuance of Class A Shares to third party advisors

Issuance of Class A Shares to backstop investor

Shares issued to sponsor

Common Stock immediately after the Business Combination

and private placement warrants

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 Warrant were forfeited.

to the closing of the 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 4 - PROPERTY AND EQUIPMENT

and equipment consisted of the following:

Internally-developed software

Equipment and vehicles

Property and equipment

Accumulated depreciation

( 1,071,085 )

expense related to the Company’s property and equipment was $ 205,693 and $ 108,016 for the three months ended March 31, 2024 and

2023, respectively, which were included in the consolidated statements of operations.

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

5 - INTANGIBLE ASSETS

following is a summary of the Company’s intangible assets, net as of March 31, 2024 and December 31, 2023:

March 31, 2024

Customer lists

December 31, 2023

Marketable securities held in Trust Account

Public Warrants

Private Warrants

Total liabilities

There were no transfers to or from Levels 1, 2 or 3 for the three or nine months ended September 30, 2023 or 2022.

Note 9 — Shareholders’ Deficit

Preference shares

— The Company is authorized to issue 1,000,000 preference shares with a par value of $ 0.0001 and with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors.

As of September 30, 2023 and December 31, 2022, there were no preference shares issued or outstanding.

A ordinary shares

— The Company is authorized to issue 250,000,000 Class A ordinary shares with a par value of $ 0.0001 per share.

As of September 30, 2023 and December 31, 2022, there were no Class A ordinary shares issued or outstanding other than the 2,896,555 and 27,600,000 Class A ordinary shares subject to possible redemption that are accounted for outside of the shareholders’ deficit section of the condensed balance sheets, respectively.

B ordinary shares

— The Company is authorized to issue 25,000,000 Class B ordinary shares with a par value of $ 0.0001 per share.

Holders are entitled to one vote for each share of Class B ordinary shares.

As of September 30, 2023 and December 31, 2022, there were 6,900,000 Class B ordinary shares issued and outstanding.

Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders except as required by law.

Unless specified in the Company’s amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Act or applicable stock exchange rules, the affirmative vote of a majority of the Company’s ordinary shares that are voted is required to approve any such matter voted on by its shareholders.

The Class B ordinary shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the Trust Account if the Company fails to consummate an initial Business Combination) at the time of the initial Business Combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted

basis, 20 % of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Public Offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor, any of its affiliates or any members of the Company’s management team upon conversion of Working Capital Loans.

In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.

This is different than some other similarly structured blank check companies in which the initial shareholders will only be issued an aggregate of 20 % of the total number of shares to be outstanding prior to the initial Business Combination.

Note 10 — Subsequent Events

Promissory Note

On October 17, 2023, the Company issued the Restated Note in the principal amount of up to $ 2,500,000 to the Sponsor.

The Restated Note amends, restates, replaces and supersedes the Note

dated April 5, 2023.

The Restated Note may be drawn down by the Company from time to time prior to the consummation of the Company’s initial Business Combination.

The Restated Note does no t bear interest, matures on the date of consummation the Business Combination and is subject to customary events of default.

The Restated Note will be repaid only to the extent that the Company has funds available to it outside of its Trust Account.

Extraordinary General Meeting

On October 20, 2023, the Company held an extraordinary general meeting of shareholders (the “Meeting”), and approved the Extension Proposal to amend the Company’s amended and restated memorandum and articles of association to:

(i) extend from October 22, 2023 to January 22, 2024 (the “Extended Date”), the date by which, if the Company has not consummated a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination involving one or more businesses or entities, the Company must:

(a) cease all operations except for the purpose of winding up;

(b) as promptly as reasonably possible but not more than ten business days thereafter, redeem the shares sold in the Company’s initial public offering (in a redemption that will completely extinguish the rights of the owners of the Public Shares as shareholders (including the right to receive further liquidation distributions, if any)) at a per-share price, payable in cash, equal to (1) the aggregate amount then on deposit in the Trust Account, including interest or dividends earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes, if any, less up to

$ 100,000 of interest or dividends to pay winding up and dissolution expenses (net of any taxes payable), divided by (2) the number of the then-outstanding Public Shares;

and (c) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s Board, liquidate and dissolve, subject in the case of clauses (b) and (c) to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law, and (ii) in the event that the Company has not consummated an initial Business Combination by the Extended Date, to allow the Company, by resolution of the Board and, without any approval of the Company’s shareholders, upon five days’ advance notice prior to the Extended Date, to extend the Termination Date up to six times (with each such extension being upon five days’ advance notice), each by one additional month (for a total of up to six additional months to complete a business combination), provided that the Company’s Sponsor or the Sponsor’s affiliates or permitted designees will deposit into the Trust Account for each Additional Extension Date the lesser of (a)

$ 35,000 or (b) $ 0.0175 for each Public Share that is then-outstanding, in exchange for one or more non-interest

bearing, unsecured promissory notes issued by the Company to the Lender.

If the Company completes its initial Business Combination, it will, at the option of the Lender, repay the amounts loaned under the promissory note(s) or convert a portion or all of the amounts loaned under such promissory note(s) into warrants at a price of $ 1.00 per warrant, which warrants will be identical to the private placement warrants, each exercisable to purchase one Class A ordinary share at $ 11.50 per share, subject to adjustment, at a price of $ 1.00 per warrant issued to the Sponsor at the time of the Company’s initial public offering.

If the Company does not complete a business combination by the deadline to consummate an initial Business Combination, such promissory notes will be repaid only from funds held outside of the Trust Account.

Additionally, the shareholders approved a proposal to amend, by special resolution, the Company’s amended and restated memorandum and articles of association to change certain provisions which restrict the Class B ordinary shares from converting to Class A ordinary shares prior to the consummation of an initial Business Combination.

In connection with the vote to approve the above proposals, the holders of 1,488,000 Class A ordinary shares of ESGEN properly exercised their right to redeem their shares for cash at a redemption price of approximately $ 11.21 per share, for an aggregate redemption amount of $ 16,679,055 .

In connection with the approval of the Extension Proposal at the Meeting and the adoption of the Charter Amendment, the Sponsor contributed into the Trust Account $ 0.0525 per share for each Class A ordinary share that was not redeemed at the Meeting, for an aggregate contribution of $ 73,949 .

As a result of the Sponsor Share Conversion and redemptions made in connection with the Extension Proposal and Conversion Proposal, 7,027,632 Class A ordinary shares remain outstanding.

Customer lists

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 March 31, 2024 and 2023.

Amortization expense relating to the Company’s

intangible assets was $ 257,008 and $ 324,583 for the three months ended March 31, 2024 and 2023, respectively, which were included in

depreciation and amortization expenses in the consolidated statements of operations.

6 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

following table summarizes accrued expenses and other current liabilities:

Credit card accrual

Accrued payroll

Accrued commissions

Accrued dealer fees

Transaction Costs

Accrued Other

Company leases both office space and warehouse space for its operations.

Lease maturities vary from 2 to 5 years.

Leases are viewed

and 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 $ 163,965 and

$ 130,942 for the three months ended March 31, 2024 and 2023, respectively.

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

following amounts were recorded in the Company’s balance sheet relating to its operating lease and other supplemental information:

Operating lease ROU assets

Current operating lease liabilities

Non-current operating lease liabilities

Total lease liabilities

Other supplemental information:

Weighted average remaining lease term (years)

Weighted average discount rate

following table summarizes the supplemental cash flow information related to leases:

March 31, 2024

March 31, 2023

Cash paid for amounts included in lease liabilities

Right-of-use assets obtained in exchange for operating lease liabilities, net

following table presents the maturity analysis of operating lease liabilities as of December 31, 2023:

Total lease payments

Less interest

Present value of lease liabilities

Company has deposited security payments related to the facility leases of $ 56,515 included in the Consolidated Balance Sheets as other

Company has financing arrangements for many of the vehicles in its fleet.

The financing includes direct loans for each vehicle being

For the three months ended March 31, 2024 and 2023 the Company entered into new vehicle financing arrangements totaling $0

and $ 380,686 , respectively.

Payments of debt obligations are based on level monthly payments for 60 months and include interest

rates ranging from 4.94 % - 11.09 %.

As of March 31, 2024, the weighted average interest rate on the Company’s short debt obligations

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.

following table presents the maturity analysis of the long-term debt as of December 31, 2024:

Less current portion

Long-term debt

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

NOTE 9 - REDEEMABLE NONCONTROLLING INTEREST AND EQUITY

The consolidated statements of stockholders’ deficit, mezzanine

equity and noncontrolling interests reflect the reverse recapitalization and Business Combination as described in Note 1 - Business Description

and Note 3 – Reverse Recapitalization.

As Sunergy was deemed to be the accounting acquirer in the Business Combination, all periods

prior to the consummation of the 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’ deficit, as well as mezzanine and noncontrolling interests, prior to the consummation of the

Business Combination have not been retroactively adjusted.

consummation of the Transactions, 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.

described in Note 1- Business Description, 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 .

with the execution of the 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).

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 and corresponding shares of Zeo Class V Common Stock received

in connection with the 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).

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 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”).

table below reflects share information about the Company’s capital stock as of March 31, 2024.

Treasury Stock

Class A Common Stock

Class V Common Stock

Class A Preferred Stock

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

A Common Stock

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 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).

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

V Common Stock

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).

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 (Redeemable noncontrolling interest)

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 Units, 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.

the first anniversary of 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.

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 ”).

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

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.

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

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 Manager 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 this Section 12.3(e) 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 Manager or the Company is the surviving person) or split.

Such adjustment shall be made successively

whenever any event described above shall occur.

The Manager and the Company, as the case may be, agrees that it will act in good faith

to make any adjustment(s) required by this Section 12.3(e) 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.

Class A Convertible Preferred Units are redeemable in whole but not in part, at the then-applicable Required Return, at the option of

the Company (subject to Section 12.5(a)) , 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.

the occurrence of a Liquidating Event (as defined in the OPCO A&R LLC Agreement), the Preferred Units will be entitled to distributions

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.

Noncontrolling Interests

of March 31, 2024, the prior investors of Sunergy, LLC own 87.03 % 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.

financial results of OpCo, LLC are consolidated with the Company with the redeemable noncontrolling interests’ share of our net

loss separately allocated.

10 - WARRANT LIABILITIES

part of ESGEN’s initial public offering (“IPO”), 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 (the “Public

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 common stock at $11.50 per share.

Upon the closing of the Business Combination

the 14,040,000 Private Warrants were forfeited.

As of March 31, 2024, there are 13,800,000 Public Warrants and no Private Placement warrants

warrants expire on the fifth anniversary of the Business Combination or earlier upon redemption or liquidation and are exercisable commencing

30 days after the 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.

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

the warrants become exercisable, the Company may redeem the outstanding warrants:

whole and not in part;

a price of $ 0.01 per warrant;

not less than 30 days’ prior written notice of redemption given after the warrants become exercisable to each warrant holder;

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.

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 condensed

consolidated statements of operations at each reporting period until they are exercised.

As of March 31, 2024, the Public Warrants are

presented as warrant liabilities on the condensed consolidated balance sheet.

NOTE 11 – 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:

March 31, 2024

The Company’s Warrants are traded on the Nasdaq.

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.

12 - RELATED PARTY TRANSACTIONS

There is one operating lease with a related party.

Operating lease

cost relating to this lease for the three months ended March 31, 2024 and 2023 was $ 7,464 .

As of March 31, 2024 and December 31, 2023,

the related party operating lease right of use asset was $ 49,900 and $ 75,378 , respectively, and the related party operating lease liability

was $ 51,351 and $ 58,134 , respectively.

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 the Company’s third-party lenders.

As such, Solar Leasing deducts

their financing fees and remits the net amount to the Company.

For the three months ended March 31, 2024 and 2023, the Company recognized

$ 8,812,769 and $ 0 of revenue, net of financing fees of $ 3,856,219 and $ 0 , respectively from these arrangements.

As of March 31, 2024

and December 31, 2023, the Company had $ 3,089,328 and $ 396,488 of accounts receivable, $ 267,006 and $ 2,415,966 of accrued expenses and

$ 106,585 and $ 1,160,848 of contract liabilities due to related parties relating to these arrangements, respectively.

13 - NET INCOME PER SHARE

net loss per share of Class A common stock is computed by dividing net income attributable to Class A common stockholders from March

13, 2024, or the Closing Date, to March 31, 2024 by the weighted-average number of shares of Class A common stock outstanding for

the same periods.

net loss per share is the same as basic net loss per share as the inclusion of potentially issuable shares would be anti-dilutive.

to the Business Combination, the membership structure of Sunergy Renewables, LLC included membership units.

In conjunction with the closing

of the Business Combination, the Company effectuated a recapitalization whereby all membership units were converted to common units of

OpCo, LLC 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 Company has determined

that the calculation of loss per unit for periods prior to the Business Combination would not be meaningful to the users of these consolidated

financial statements.

Therefore, net loss per share information has not been presented for periods prior to the Business Combination

on March 13, 2024.

The basic and diluted net income per share for the three months ended March 31, 2024 represents only the period of

March 13, 2024 to March 31, 2024.

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

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 March 31, 2024:

Three months ended

March 31, 2024

Net income attributable to Class A common shareholders

$ ( 1,188,531 )

Basic and diluted weighted-average shares of Class A common stock outstanding

Net income per share of Class A common stock - basic and diluted

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.

Series A Preferred Stock (2)

(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.

14 - COMMITMENTS AND CONTINGENCIES

and Uncertainties - Weather Conditions

significant portion of the Company’s business is conducted in the state of Florida.

During recent years, there have been several

hurricanes that impacted our marketing, sales and installation activities.

Future hurricane storms can have an adverse impact of our

sales installations.

and Warranties

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.

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 March 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.

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.

15 - SUBSEQUENT EVENTS

events have been evaluated through May 15, 2024, which represents the date the consolidated financial statements were available to be

issued, and no events have occurred through that date that would impact the financial statements.

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

What changed 10-Q

Item 1. Financial Statements