What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-01-23 compared with 2025-01-23 · 766 added, 735 removed, 1241 unchanged (55% of the section changed)

1 unchanged sentence

ZEO ENERGY CORP.

CONDENSED CONSOLIDATED BALANCE SHEET

(as restated See Note 3)

CONDENSED CONSOLIDATED BALANCE SHEETS

(as restated -

Current assets

Cash and cash equivalents

Accounts receivable, including $ 819,212 and $ 396,488 from related parties, net of allowance for credit losses of $ 1,112,580 and $ 862,580 , as of June 30, 2024 and December 31, 2023, respectively

Accounts receivable, including $ 3,089,329 and $ 396,488 from related

parties, net of allowance for credit losses of $ 1,012,580 and $ 862,580 , as of March 31, 2024 and December 31, 2023, respectively

Prepaid installation costs

5 unchanged sentences

Intangibles, net

Liabilities, mezzanine equity and stockholders’

Liabilities, redeemable noncontrolling

interests and stockholders’ equity (deficit)

Current liabilities

Accounts payable

Accrued expenses and other current liabilities, including $ 784,527 and $ 2,415,966 with related parties at June 30, 2024 and December 31, 2023, respectively

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

1 unchanged sentence

Current portion of obligations under finance leases

Contract liabilities, including $ 9,900 and $ 1,160,848 with related parties as of June 30, 2024 and December 31, 2023, respectively

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

9 unchanged sentences

Class B units

Stockholders’ (deficit) equity

Stockholders’ equity (deficit)

Class V common stock

6 unchanged sentences

Total liabilities,

redeemable noncontrolling interests and stockholders’ (deficit) equity

redeemable noncontrolling interests and stockholders’ equity (deficit)

The accompanying notes are an integral part

3 unchanged sentences

Three Months ended

Six Months Ended

(as restated – See Note 3)

Revenue, net of financing fees of $ 1,662,391 and $ 12,533,767 for the three months ended June 30, 2024 and 2023, respectively and $ 5,743,749 and $ 18,784,295 for the six months ended June 30, 2024 and 2023, respectively

Related party revenue, net of financing fees of $ 3,127,622 and $ 0 for the three months ended June 30, 2024 and 2023, respectively and $ 6,983,841 and $ 0 for the six months ended June 30, 2024 and 2023, respectively

(as restated -

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 depreciation and amortization

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

Depreciation and amortization

4 unchanged sentences

( 4,048,548 )

( 6,711,418 )

Other income (expense), net:

Other income (expense), net

Other expenses, net:

Other income, net

Change in fair value of warrant liabilities

Interest expense

Total other income (expense), net

Total other expenses, net

Net (loss) income before taxes

( 4,221,770 )

( 6,055,627 )

Income tax benefit

1 unchanged sentence

( 4,107,102 )

( 5,864,421 )

Net loss attributable to Sunergy

Renewables LLC prior to the Business Combination

Net (loss) income subsequent to the Business

( 1,757,319 )

( 5,340,740 )

Net loss attributable to redeemable

noncontrolling interests

( 1,479,529 )

Net (loss) income attributable

to Sunergy Renewables LLC prior to the Business Combination

Net loss for the period March 13, 2024 through March 31, 2024

( 3,583,421 )

Net (loss) income

attributable to Class A common stock

Net loss attributable to noncontrolling interests

( 2,051,930 )

Net loss attributable to Class A common stock

$ ( 1,531,491 )

Basic and diluted net loss per common

Weighted average units outstanding,

basic and diluted

Basic and diluted net loss per share

Weighted average units outstanding, basic and diluted

The accompanying notes are an integral part

1 unchanged sentence

ZEO ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN REDEEMABLE

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE

NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2024

noncontrolling interests

Preferred Units

FOR THE THREE MONTHS ENDED MARCH 31, 2024

noncontrolling

Stockholders’

6 unchanged sentences

distributions

loss prior to the Business Combination

loss prior to the Business Combination (as restated)

of Business Combination

17 unchanged sentences

income (loss) (as restated)

( 10,276,021 )

( 1,531,491 )

March 31, 2024 (as restated)

1 unchanged sentence

$ ( 173,051,964

measurement of redeemable noncontrolling interests, as restated

$ ( 173,047,938

income (loss), as restated

( 1,863,917 )

June 30, 2024, as restated

$ ( 55,452,171 )

$ ( 53,030,257 )

The accompanying notes are an integral

part of these condensed consolidated financial statements.

The accompanying notes are an integral part

of these condensed consolidated financial statements.

ZEO ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN REDEEMABLE

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE

NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2023

Redeemable noncontrolling interests

Preferred Units

FOR THE THREE MONTHS ENDED MARCH 31, 2023

noncontrolling

Stockholders’

Balance, December

Retroactive application of Business

Combination (Note 1)

application of Business Combination (Note 3)

( 1,000,000 )

2 unchanged sentences

Stockholder distributions

Net income prior to the Business

Combination, as restated

Balance, March 31, 2023, as restated

Stockholder distributions

Net income prior to the Business

Combination, as restated

Balance, June 30, 2023, as restated

income prior to the business combination (as restated)

March 31, 2023 (as restated)

The accompanying notes are an integral part

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

(as restated – see Note 3)

Three Months Ended

Cash Flows from Operating Activities

(As restated,

Net (loss) income

$ ( 4,107,102

Adjustment to reconcile net (loss) income to cash (used

in) provided by operating activities

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

by operating activities

Depreciation and amortization

3 unchanged sentences

Non-cash finance lease expense

Stock based compensation expense

Stock-based compensation

Changes in operating assets and liabilities:

Accounts receivable

( 4,452,021 )

( 1,834,200 )

Accounts receivable due from related parties

( 2,692,841 )

Prepaid installation costs

Prepaids and other current assets

Accounts payable

( 1,420,528 )

Accounts payable

Accrued expenses and other current liabilities

( 1,347,027 )

Accrued expenses and other current liabilities due to related

Accrued expenses and other current liabilities due

to related parties

( 2,148,960 )

Due to officers

Contract liabilities

( 3,508,323 )

( 1,046,093 )

Contract liabilities due to related parties

( 1,054,263 )

Due to officers

Operating lease payments

Net cash (used in)

provided by operating activities

Operating lease liabilities

Net cash (used in) provided by

operating activities

( 10,151,989 )

Cash flows from Investing Activities

Purchases of property, equipment

and other assets

Net cash used in

investing activities

Purchases of property, equipment and other assets

Net cash used in investing activities

Cash flows from Financing Activities

Proceeds from the issuance of convertible preferred stock,

net of transaction costs

Repayments of debt

Repayments of finance lease

Proceeds from the issuance of convertible preferred stock, net of

transaction costs

Distributions to members

Net cash provided

by (used in) financing activities

Net cash provided by (used in)

financing activities

Net (decrease) increase in cash and cash equivalents

( 2,680,186 )

Cash and cash equivalents, beginning

Cash and cash equivalents,

end of the period

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of the period

Supplemental Cash Flow Information

1 unchanged sentence

Non-cash transactions

Right-of-use assets obtained in exchange for operating lease

Right-of-use assets obtained in exchange for finance lease

Recording of operating right-of-use assets and lease liability

Recording of finance right-of-use assets and lease liability

Transaction costs

1 unchanged sentence

Issuance of Class A common stock to backstop investors

Preferred dividends

Accretion of Preferred Units

The accompanying notes are an integral part

2 unchanged sentences

Notes to the Condensed Consolidated Financial

June 30, 2024

March 31, 2024

(as restated)

55 unchanged sentences

Notes to the Condensed Consolidated Financial

June 30, 2024

March 31, 2024

(as restated)

15 unchanged sentences

will be made after Closing.

As of June 30, 2024, no such grants have occurred.

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

As of the Closing Date, upon consummation of the Business Combination,

15 unchanged sentences

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.

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.

prior to the Business Combination were those of Sunergy.

Operations prior to the Business Combination were those of Sunergy.

Sunergy was determined to be the accounting acquirer based on evaluation

5 unchanged sentences

primary beneficiary.

As such, Zeo will consolidate OpCo and will be considered to the accounting acquirer;

As such, Zeo will consolidate OpCo and will be considered the accounting acquirer;

however, further consideration

13 unchanged sentences

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.

● 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.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

March 31, 2024

(as restated)

● 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 5 entities (the “Primary Sellers”):

● Southern Crown Holdings, LLC

(wholly owned by Anton Hruby) - 230,000 Common Units ( 23 %)

● LAMADD LLC (wholly owned by

Gianluca Guy) - 230,000 Common Units ( 23 %)

● JKae Holdings, LLC (wholly

owned by Kalen Larsen) - 215,000 Common Units ( 21.5 %)

● Clarke Capital, LLC (wholly

owned by Brandon Bridgewater) - 215,000 Common Units ( 21.5 %)

● White Horse Energy, LC (wholly

owned by Timothy Bridgewater) - 90,000 Common Units ( 9 %)

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 %)

Each of the above parties entered into a Voting Agreement, dated September

17 unchanged sentences

Additional factors that were considered include the following:

● Since the Business Combination,

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

● Since the Business Combination,

management of the Company has been the existing management at Sunergy immediately prior to the Business Combination.

The individual that

was serving as the chief executive officer and chief financial officer of Sunergy’s management team immediately prior to the Business

Combination continues substantially unchanged upon completion of the Business Combination.

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

Since the Business Combination, management of the Company has been the existing management at Sunergy immediately prior to the Business Combination.

The individual that was serving as the chief executive officer and chief financial officer of Sunergy’s management team immediately prior to the Business Combination continues substantially unchanged upon completion of the Business Combination.

For common control transactions that include the transfer of a business,

7 unchanged sentences

Notes to the Condensed Consolidated Financial

June 30, 2024

March 31, 2024

(as restated)

NOTE 2 - LIQUIDITY AND GOING CONCERN

As of June 30, 2024, the Company had $ 7.6 million of working capital

including $ 5.3 million of cash and cash equivalents.

Management has assessed the going concern assumptions of the Company during the

preparation of these consolidated financial statements.

The Company’s condensed consolidated financial statements have

been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal

course of business.

Historically, the Company’s primary source of funding to support operations has been cash flows from operations.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and principles of Consolidation

The accompanying unaudited condensed consolidated interim financial

The 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.

6 unchanged sentences

These statements should

be read in conjunction with Sunergy’s audited financial statements for the fiscal year ended December 31, 2023 as included with

the Company’s Form 8-K/A filed with the SEC on March 25, 2024.

The results reported in these unaudited condensed consolidated interim

financial statements are not necessarily indicative of results for the full fiscal year.

Our unaudited condensed consolidated interim financial statements

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 interim financial statements

are not necessarily indicative of results for the full fiscal year.

The unaudited condensed consolidated interim 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, VIE for which the Company is the primary beneficiary.

All intercompany balances and

transactions have been eliminated in consolidation.

The December 31, 2023 balances reported herein are derived from the audited consolidated

financial statements of Sunergy as included in the Company’s Current Report on Form 8-K/A Amendment No.

3, filed with the SEC on

January 23, 2025.

LLC, all wholly owned subsidiaries, and ESGEN Opco, VIE, as defined in Note 1, for which the Company is the primary beneficiary.

intercompany balances and transactions have been eliminated in consolidation.

The December 31, 2023 balances reported herein are derived

from the restated consolidated financial statements of Sunergy as included with the Company’s Current Report on Form 8-K/A Amendment

3 as filed with the SEC on January 23, 2025.

Restatement to Previously Reported Financial

On November 13, 2024, the audit committee of the board of directors

of Zeo Energy Corp.

(the “Company”), after discussion with the management of the Company, concluded that (i) the Company’s

previously issued financial statements for the fiscal years ended December 31, 2023 and 2022 included in the Company’s Form 8-K

as filed with SEC on March 20, 2024 and as amended on March 25, 2024 and August 19, 2024 (the “8-K”), (ii) the Company’s

unaudited condensed consolidated interim financial statements for the three months ended March 31, 2024 included in the Quarterly Report

on Form 10-Q/A as filed with the SEC on August 19, 2024 (the “Q1 10-Q”), (iii) the Company’s unaudited condensed consolidated

interim financial statements for three and six months ended June 30, 2024 included in the Quarterly Report on Form 10-Q as filed with

the SEC on August 19, 2024 (the “Q2 10-Q”, and together with the Q1 10-Q, the “10-Qs”) and (iv) the financial

statements noted in items (i) through (iii) above included in the Company’s Registration Statement on Form S-1, as amended (the

“S-1”), which was declared effective by the SEC on October 1, 2024, should no longer be relied upon due to the misstatements

described below.

During the preparation of the Company’s unaudited condensed

consolidated interim financial statements for the three and nine months ended September 30, 2024, the Company’s management identified

the following misstatements, to the Company’s financial statements:

For the three and six months ended June 30, 2024, there

were misstatements to revenue, net of financing fees and total revenue, cost of goods sold (exclusive of depreciation and amortization),

prepaid installation costs, contract liabilities and accounts receivable, net for improper cut-off.

Adjustments have been made

to revenue, net of financing fees, total revenue and cost of goods sold (exclusive of depreciation and amortization) on the statements

of operations as well as adjustments to reflect these adjustments in the balance sheet, statement of changes in redeemable noncontrolling

interests and stockholders’ equity and statement of cash flows.

For the three and six months ended June 30, 2024 and 2023,

cost of goods sold (exclusive of depreciation and amortization) included selling expenses related to commissions earned by the

sales team and third party dealers related to obtaining sales orders and contracts.

The Company has further determined that selling

expenses should not be included in the cost of goods sold (exclusive of depreciation and amortization) but instead in sales and

marketing expense as they do not relate to the direct delivery of the product or service but rather to the acquiring of the customer

and sale of the product or service.

This misstatement has no impact on total operating expenses, (loss) income from operations

or net (loss) income.

Additionally, this misstatement has no impact on the balance sheets, statements of changes in redeemable

noncontrolling interests and stockholders’ equity or statements of cash flows.

● As of June 30,

2024 and December 31, 2023, finance lease assets and liabilities were included in property,

equipment and other fixed assets, net and in the current portion of long-term debt and long-term

The Company has further determined that the vehicles should be recorded as right-of-use

finance lease assets and finance lease liabilities.

Adjustments have been made to depreciation

and amortization expense and interest expense on the statement of operations as well as adjustments

to reflect the presentation of finance leases in the statement of cash flows.

Restatement Background

On November 13, 2024, the audit committee of

the board of directors of Zeo Energy Corp.

(the “Company”), after discussion with the management of the Company, concluded

that (i) the Company’s previously issued financial statements for the fiscal years ended December 31, 2023 and 2022 included in

the Company’s Form 8-K as filed with SEC on March 20, 2024 and as amended on March 25, 2024 and August 19, 2024 (the “8-K”),

(ii) the Company’s unaudited condensed consolidated interim financial statements for the three months ended March 31, 2024 included

in the Quarterly Report on Form 10-Q/A as filed with the SEC on August 19, 2024 (the “Q1 10-Q”), (iii) the Company’s

unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2024 included in the Quarterly

Report on Form 10-Q as filed with the SEC on August 19, 2024 (the “Q2 10-Q”, and together with the Q1 10-Q, the “10-Qs”)

and (iv) the financial statements noted in items (i) through (iii) above included in the Company’s Registration Statement on Form

S-1, as amended (the “S-1”), which was declared effective by the SEC on October 1, 2024, should no longer be relied upon

due to the misstatements described below.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

March 31, 2024

(as restated)

For the six months ended June 30, 2023, adjustments have been made to reflect the correct presentation of operating leases

within the statement of cash flows.

This has no impact on total operating cash flows.

As of June 30, 2024, prepaid expenses and other current assets

included prepaid expenses associated with shares issued in connection with arrangements with the Company’s service providers.

After further investigation, it was determined that certain of these prepaid expenses should have been expensed at the time of

issuance as there was no future service obligation in place and other prepaid expenses did not have the appropriate amortization

expense recorded in association with the arrangements.

Certain of these amounts initially recorded did not reflect the fair value

of the Class A Common Stock at the date of the Business Combination which resulted in additional expense and an impact to additional

paid-in capital for the incremental value of the shares issued.

After further investigation, it was determined that this should

be recorded as a period expense at the time of the issuance as there was no future service obligation in place.

The amount recorded

reflects the fair value at the date of the Business Combination and resulted in additional expense and an impact to additional

paid-in capital for the incremental value.

three and six months ended June 30, 2024 and 2023, due to the nature of the underlying costs,

reclassifications of expenses have been made between cost of goods sold (exclusive of depreciation

and amortization), sales and marketing and general and administrative.

This misstatement

has no impact on total operating expenses, (loss) income from operations or net (loss) income.

Additionally, this misstatement has no impact on the balance sheets, statements of changes

in redeemable noncontrolling interests and stockholders’ equity or statements of cash

During the preparation of the Company’s unaudited condensed

consolidated interim financial statements for the quarter ended September 30, 2024, the Company’s management identified the following

misstatements, to the Company’s financial statements:

For the three months ended March 31, 2024, there were misstatements to revenue, net of financing fees and total revenue, cost

of goods sold (exclusive of depreciation and amortization), prepaid installation costs, contract liabilities and accounts receivable,

net for improper cut-off.

Adjustments have been made to revenue, net, total revenue and cost of goods sold (exclusive of depreciation

and amortization) on the statement of operations as well as adjustments to reflect these adjustments in the balance sheet, statement

of changes in redeemable noncontrolling interests and stockholders’ equity and statement of cash flows.

For the three months ended March 31, 2024 and 2023, cost of goods sold (exclusive of depreciation and amortization) included

selling expenses related to commissions earned by the sales team and third party dealers related to obtaining sales orders and contracts.

The Company has further determined that selling expenses should not be included in the cost of goods sold (exclusive of depreciation

and amortization) but instead in sales and marketing expense as they do not relate to the direct delivery of the product or service

but rather to the acquiring of the customer and sale of the product or service.

This misstatement has no impact on total operating

expenses, (loss) income from operations or net (loss) income.

Additionally, this misstatement has no impact on the balance sheets,

statements of changes in redeemable noncontrolling interests and stockholders’ equity or statements of cash flows.

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

lease assets and liabilities were included in property, equipment and other fixed assets, net and in the current portion of long-term

debt and long-term debt.

The Company has further determined that the vehicles should be recorded as right-of-use finance lease assets

and finance lease liabilities.

Adjustments have been made to depreciation and amortization expense and interest expense on the statement

of operations as well as adjustments to reflect the presentation of finance leases in the statement of cash flows.

As of March 31, 2024, prepaid expenses and other current assets included prepaid expenses associated with shares issued in

connection with arrangements with the Company’s service providers.

After further investigation, it was determined that certain

of these prepaid expenses should have been expensed at the time of issuance as there was no future service obligation in place and

other prepaid expenses did not have the appropriate amortization expense recorded in association with the arrangements.

these amounts initially recorded did not reflect the fair value of the Class A Common Stock at the date of the Business Combination

which resulted in additional expense and an impact to additional paid-in capital for the incremental value of the shares issued.

After further investigation, it was determined that this should be recorded as a period expense at the time of the issuance as there

was no future service obligation in place.

The amount recorded reflects the fair value at the date of the Business Combination and

resulted in additional expense and an impact to additional paid-in capital for the incremental value.

For the three months ended

March 31, 2024 and 2023, due to the nature of the underlying costs, reclassifications of expenses have been made between cost of

goods sold (exclusive of depreciation and amortization), sales and marketing and general and administrative.

This misstatement has

no impact on total operating expenses, (loss) income from operations or net (loss) income.

Additionally, this misstatement has no

impact on the balance sheets, statements of changes in redeemable noncontrolling interests and stockholders’ equity or statements

of cash flows.

This Note discloses the nature of the restatement

adjustments and discloses the cumulative effects of these adjustments included in Amendment No.

1 to the Original Form 10-Q.

adjustments and discloses the cumulative effects of these adjustments included in Amendment No.2 to the Original Form 10-Q.

of the misstatements have been corrected in all impacted tables and footnotes throughout these unaudited condensed consolidated interim

financial statements.

Impact to the condensed consolidated balance sheet as of June

Accounts receivable, net

Impact to the condensed consolidated balance sheet as of

March 31, 2024

Accounts Receivable

Prepaid installation costs

5 unchanged sentences

$ ( 591,308 )

Right of use financing lease assets

Right-of-use finance lease assets

$ ( 1,448,100 )

1 unchanged sentence

$ ( 113,319 )

Current portion of obligations under financing leases

Current portion of obligations under finance leases

Contract liabilities

Total current liabilities

Obligations under financing leases, non-current

Obligations under finance leases, non-current

Long-term debt

1 unchanged sentence

Total liabilities

Additional paid in capital

Accumulated deficit

2 unchanged sentences

$ ( 173,051,964 )

Total stockholders’ deficit

Total stockholders’ (deficit) equity

$ ( 171,603,115 )

1 unchanged sentence

$ ( 173,047,938 )

Total liabilities, redeemable noncontrolling interests and stockholders’ equity

Total liabilities, redeemable noncontrolling interests and

stockholders’ equity (deficit)

$ ( 1,448,100 )

Impact to the condensed consolidated statement of operations

for the three months ended June 30, 2024

net of financing fees

of goods sold (exclusive of depreciation and amortization shown below)

and amortization

and marketing

and administrative

operating expenses

from operations

other income (expense), net

loss before taxes

loss subsequent to the Business Combination

Net (loss) attributable to redeemable noncontrolling interests

loss attributable to Class A common stock

and diluted net loss per common unit

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

March 31, 2024

(as restated)

Impact to the condensed consolidated statement of operations

for the three months ended June 30, 2023

Cost of goods sold (exclusive of depreciation and

amortization shown below)

Impact to the condensed consolidated statement of

operations for the three months ended March 31, 2024

Revenue, net of financing fees

Total revenue

Cost of goods sold (exclusive of depreciation and amortization

$ ( 3,405,735 )

2 unchanged sentences

General and administrative

$ ( 456,637 )

Total operating expenses

Income from operations

Loss from operations

$ ( 1,757,654 )

$ ( 2,290,894 )

$ ( 4,048,548 )

Interest expense

Total other income (expense), net

Net income before taxes

Net income attributable to Sunergy Renewables LLC prior

to the Business Combination

Impact to the condensed consolidated statement of operations

for the six months ended June 30, 2024

net of financing fees

of goods sold (exclusive of depreciation and amortization shown below)

and amortization

and marketing

and administrative

operating expenses

from operations

other income (expense), net

loss before taxes

loss subsequent to the Business Combination

Net loss attributable to redeemable noncontrolling interests

loss attributable to Class A common stock

and diluted net loss per common unit

Impact to the condensed consolidated statement of operations

for the six months ended June 30, 2023

Total other expenses, net

$ ( 175,054 )

$ ( 173,222 )

Net loss before taxes

$ ( 1,932,708 )

$ ( 2,289,062 )

$ ( 4,221,770 )

Income tax benefit

$ ( 1,892,075 )

$ ( 2,215,027 )

$ ( 4,107,102 )

Net loss for the period March 13, 2024 through March 31, 2024

$ ( 1,368,394 )

$ ( 2,215,027 )

$ ( 3,583,421 )

Net (loss) income attributable to redeemable non-controlling

$ ( 124,203 )

$ ( 1,927,727 )

$ ( 2,051,930 )

Net loss attributable to Class A common stock

$ ( 1,244,191 )

$ ( 287,300 )

$ ( 1,531,491 )

Basic and diluted net income per common unit

Impact to the condensed consolidated statement of

operations for the three months ended March 31, 2023

Cost of goods sold (exclusive of depreciation and

7 unchanged sentences

Interest expense

Total other income (expense), net

Total other expenses, net

Net income before taxes

1 unchanged sentence

to the Business Combination

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

(as restated)

Impact to the condensed consolidated statement of changes in

redeemable noncontrolling interests and stockholders’ equity for the three and six months ended June 30, 2024

redeemable noncontrolling interests and stockholders’ equity for the three months ended March 31, 2024

Class B units

For the three months ended March 31, 2024:

Establishment of redeemable noncontrolling interests

5 unchanged sentences

$ ( 10,276,021 )

For the three months ended June 30, 2024:

Subsequent measurement of redeemable noncontrolling interests

$ ( 118,284,464 )

$ ( 117,877,583 )

Net income (loss)

$ ( 1,457,036 )

$ ( 406,881 )

$ ( 1,863,917 )

Class A Common Stock - Shares

5 unchanged sentences

Additional paid in capital

For the three months ended March 31, 2024:

Issuance of Class A Shares to third party advisors

8 unchanged sentences

$ ( 6,047,026 )

For the three months ended June 30, 2024:

Net income (loss)

$ ( 384,388 )

Balance, June 30, 2024

Accumulated deficit

Retained earnings (accumulated deficit)

Balance, December 31, 2023

12 unchanged sentences

$ ( 173,051,964 )

Subsequent measurement of redeemable noncontrolling interests

$ 118,284,464

$ ( 406,881 )

$ 117,877,583

Net income (loss)

$ ( 445,028 )

$ ( 277,790 )

Balance, June 30, 2024

$ ( 53,155,439 )

$ ( 2,296,732 )

$ ( 55,452,171 )

Total Stockholders’ Deficit

Total Stockholders’ Equity (Deficit)

Balance, December 31, 2023

16 unchanged sentences

$ ( 173,047,938 )

Subsequent measurement of redeemable noncontrolling interests

$ 118,284,464

$ ( 406,881 )

$ 117,877,583

$ ( 217,150 )

$ ( 277,790 )

Balance, June 30, 2024

$ ( 51,117,913 )

$ ( 1,912,344 )

$ ( 53,030,257 )

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

March 31, 2024

(as restated)

Impact to the condensed consolidated statement of changes in

redeemable noncontrolling interests and stockholders’ equity for the three and six months ended June 30, 2023

redeemable noncontrolling interests and stockholders’ equity for the three months ended March 31, 2023

Class B units

3 unchanged sentences

$ ( 1,602,939 )

Net income prior to the business combination

$ ( 797,249 )

Balance, June 30, 2023

$ ( 2,400,188 )

Retained earnings

1 unchanged sentence

Balance, March 31, 2023

Net income prior to the business combination

Balance, June 30, 2023

$ ( 407,660 )

Total Stockholders’ equity

1 unchanged sentence

Balance, March 31, 2023

Net income prior to the business combination

Balance, June 30, 2023

Impact to the condensed consolidated statement of cash flows

for the six months ended June 30, 2024

Impact to the condensed consolidated statement of cash

flows for the three months ended March 31, 2024

Cash Flows from Operating Activities

4 unchanged sentences

Depreciation and amortization

Non-cash finance lease expense

Stock based compensation expense

Changes in operating assets and liabilities:

Non-cash finance lease expense

Changes operating assets and liabilities:

Accounts Receivable

2 unchanged sentences

$ ( 2,297,517 )

Accounts receivable due from related parties

Prepaid installation costs

$ ( 109,443 )

Contract liabilities

$ ( 3,583,446 )

Accrued expenses and other current liabilities

$ ( 3,508,323 )

Net cash used in operating activities

$ ( 10,153,821 )

$ ( 10,151,989 )

Accrued expenses and other current liabilities due to related

Cash flows from Financing Activities

Repayments of debt

Repayments of finance lease liability

Net cash provided by financing activities

Supplemental Cash Flow Information

Cash paid for interest

Non-cash transactions

Issuance of Class A common stock to vendors

$ ( 1,587,445 )

Impact to the condensed consolidated statement of cash

flows for the three months ended March 31, 2023

Cash Flows from Operating

Adjustment to reconcile

net loss to cash used in operating activities:

Depreciation and amortization

Non-cash finance lease

Changes operating assets

and liabilities:

Due to officers

cash provided by operating activities

flows from Investing Activities

Purchases of property,

equipment and other assets

$ ( 605,874 )

Prepaid installation costs

cash used in investing activities

$ ( 605,874 )

Prepaids and other current assets

flows from Financing Activities

Proceeds from the

issuance of debt

$ ( 408,003 )

Repayments of debt

$ ( 124,693 )

Repayments of finance

lease liability

cash used in financing activities

$ ( 461,737 )

Contract liabilities

$ ( 295,057 )

Cash Flow Information

Cash paid for interest

Recording of finance right-of-use

assets and lease liability

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

March 31, 2024

(as restated)

Restatement Background - previously filed on August 19, 2024

On July 29, 2024, the Audit Committee of the Board of Directors of

the Company, based upon the recommendation of management, determined that our (i) audited consolidated financial statements included in

the Company’s Form 8-K for the period ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”)

on March 20, 2024 and as amended on March 25, 2024 (the “Original Form 8-K”) and (ii) unaudited condensed consolidated financial

statements included in our Quarterly Report on Form 10-Q for the quarterly period March 31, 2024, filed with the SEC on May 16, 2024 (the

“Original Report”) (collectively, the “Affected Periods”), as well as the relevant portions of any communications

which describe or are based on such financial statements, should no longer be relied upon, and that the previously issued financial statements

for the Affected Periods should be restated.

This Note discloses the nature of the restatement adjustments and discloses

the cumulative effects of these adjustments on the condensed consolidated balance sheet, statement of operations, statement of changes

in redeemable noncontrolling interests and stockholders’ equity and statement of cash flows for the three months ended March 31,

2024 included in the Original Form 10-Q.

In addition, the related notes to the condensed consolidated financial statements have also been

adjusted as appropriate to reflect the impact of the restatements.

Description of Restatement Adjustments - previously filed

on August 19, 2024

In July 2024, in connection with the Company’s the preparation

of the Company’s unaudited condensed consolidated interim financial statements for the quarter ended June 30, 2024, the Company’s

management identified the following misstatements in the Company’s previously reported interim financial statements included in

the Company’s Original Report:

● Corrections to the December 31, 2023 annual period which reversed in the March 31, 2024 quarterly period increased net income by approximately $ 361,000 as follows:

a) revenue increased by $ 376,000 , b) cost of sales increased by $ 180,000 and c) general and administrative expenses decreased by $ 166,000 .

● Stock-based compensation of approximately $ 505,000 relating to an executive had not been recorded as general and administrative expenses and additional paid-in capital.

● Transaction costs relating to the business combination of approximately $ 572,000 had not been recorded in additional paid-in capital and accrued expenses.

● The net impact of correcting the errors in the March 31, 2024 quarterly period is a reduction to Net Income of approximately $ 144,000 .

In accordance with SEC Staff Accounting Bulletin No.

99, “Materiality,”

and SEC Staff Accounting Bulletin No.

108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in

Current Year Financial Statements,” the Company evaluated the corrections and has determined that the related impacts were material

to the previously filed financial statements that contained the errors, reported in the Original Filing (the “Affected Quarterly

Therefore, on July 29, 2024, the audit committee of the Company’s board of directors (the “Audit Committee”)

of the Company, after discussion with the Company’s management, who consulted with the Company’s independent registered public

accounting firm, concluded that the previously issued financial statements that contained the error should no longer be relied upon and

should be restated to correct the errors.

As such, the Company is reporting the restatement to the Affected Quarterly Period in this quarterly

Impact of the Restatement - previously filed on August 19,

The impact of the restatement on the financial statements for the Affected

Quarterly Period is presented below.

In addition to the below, the related notes to the condensed consolidated financial statements have

also been adjusted as appropriate to reflect the impact of the restatements.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

March 31, 2024

(as restated)

The tables below present the effect of the financial statement

adjustments related to the restatement discussed above of the Company’s previously reported unaudited condensed consolidated interim

financial statements:

Impact to the condensed consolidated balance sheet as of March 31,

Accounts payable

Accrued expenses and other current liabilities, including $ 267,006 and with related parties at March 31, 2024

Total current liabilities

Total liabilities

(Accumulated deficit) Retained earnings

$ ( 169,605,155 )

Contract liabilities due to related parties

$ ( 2,001,986 )

$ ( 171,607,141 )

Net cash used in operating activities

Total stockholders’ equity

$ ( 169,601,129 )

$ ( 2,001,986 )

Cash flows from Financing Activities

Repayments of debt

$ ( 171,603,115 )

Impact to the condensed consolidated statement of operations for

the three months ended March 31, 2024

Revenue, net of financing fees of $ 4,081,358 for the three months ended March 31, 2024

Total revenue

Cost of goods sold (exclusive of items shown below)

General and administrative

Total operating expenses

Loss from operations

$ ( 1,614,075 )

Repayments of finance lease

Net cash provided by financing activities

Supplemental Cash Flow Information

Cash paid for interest

Non-cash transactions

Issuance of Class A common stock to vendors

$ ( 143,579 )

Preferred dividends

$ ( 1,757,654 )

Loss before taxes

$ ( 1,789,129 )

$ ( 143,579 )

$ ( 1,932,708 )

Income tax (expense) benefit

$ ( 1,699,200 )

$ ( 192,875 )

$ ( 1,892,075 )

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

$ ( 759,936 )

$ ( 523,681 )

Net loss for the period March 13, 2024 through March 31, 2024

$ ( 939,264 )

$ ( 429,130 )

$ ( 1,368,394 )

Net loss attributable to redeemable non-controlling interests

$ ( 373,470 )

$ ( 124,203 )

Net loss attributable to Class A common stock

$ ( 1,188,531 )

$ ( 1,244,191 )

Basic and diluted net loss per common unit

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

March 31, 2024

(as restated)

Impact to the condensed consolidated statement of cash flows

for the six months ended June 30, 2023

Cash Flows from Operating Activities

Adjustment to reconcile net income to cash used in operating

Depreciation and amortization

Non-cash operating lease expense

Non-cash finance lease expense

Impact to the condensed consolidated statement of changes in redeemable

noncontrolling interests and stockholders’ equity for the three months ended March 31, 2024

Class B units:

Establishment of noncontrolling interests

$ ( 1,310,289 )

Subsequent measurement of redeemable noncontrolling interests

$ 172,836,361

$ 174,520,120

$ ( 7,974,824 )

$ ( 373,470 )

$ ( 8,348,294 )

Additional paid in capital:

Reverse Recapitalization (Note 3)

$ ( 1,678,167 )

$ ( 1,677,860 )

Transaction costs

$ ( 2,317,632 )

$ ( 572,429 )

$ ( 2,890,061 )

Establishment of noncontrolling interests

$ ( 27,399,463 )

$ ( 26,089,174 )

Stock-based compensation

Subsequent measurement of redeemable noncontrolling interests

$ ( 4,092,649 )

$ ( 1,243,001 )

$ ( 5,335,650 )

Retained Earnings (Accumulated Deficit):

Balance, December 31, 2023, as restated

$ ( 1,741,823 )

$ ( 564,799 )

Net loss prior to the business combination

$ ( 759,936 )

$ ( 523,681 )

Subsequent measurement of redeemable noncontrolling interests

$ ( 168,743,712 )

$ ( 440,758 )

$ ( 169,184,470 )

$ ( 1,188,531 )

$ ( 1,244,191 )

Retained Earnings (Accumulated Deficit)

$ ( 169,605,155 )

$ ( 2,001,986 )

$ ( 171,607,141 )

Total stockholder’s equity (deficit):

Total Stockholders’ Equity balance December 31, 2023

$ ( 1,741,323 )

Net loss prior to the Business combination

$ ( 759,936 )

$ ( 523,681 )

Reverse Recapitalization (Note 3)

$ ( 1,677,592 )

$ ( 1,677,285 )

Transaction costs

$ ( 2,317,632 )

$ ( 572,429 )

$ ( 2,890,061 )

Establishment of noncontrolling interests

$ ( 27,399,463 )

$ ( 26,089,174 )

Stock compensation

Subsequent measurement of redeemable noncontrolling interests

$ ( 172,836,361 )

$ ( 1,683,759 )

$ ( 174,520,120 )

$ ( 1,188,531 )

$ ( 1,244,191 )

Total stockholder’s equity (deficit)

$ ( 169,601,129 )

$ ( 2,001,986 )

$ ( 171,603,115 )

Impact to the condensed consolidated statement of cash flows for

the three months ended March 31, 2024

$ ( 1,699,200 )

$ ( 192,875 )

$ ( 1,892,075 )

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

Stock based compensation expense

Changes in operating assets and liabilities:

Accrued expenses and other current liabilities

Contract liabilities

Accounts receivable

$ ( 1,878,529 )

$ ( 1,944,029 )

Operating lease payments

Prepaid installation costs

Accounts payable

$ ( 330,661 )

$ ( 400,861 )

Net cash provided by operating activities

Cash flows from Investing Activities

Purchases of property, equipment and other fixed assets

Accrued expenses and other current liabilities

$ ( 456,316 )

Net cash used in investing activities

$ ( 235,000 )

Cash flows from Financing Activities

Proceeds from the issuance of debt

$ ( 691,316 )

Repayments of debt

Contract liabilities

$ ( 3,383,346 )

Repayments of finance lease

Net cash provided by (used in) financing

$ ( 200,100 )

$ ( 3,583,446 )

Supplemental Cash Flow Information

Cash paid for interest

Non-cash transactions

Recording of operating right-of-use assets and lease liability

Recording of finance right-of-use assets and lease liability

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

March 31, 2024

(as restated)

Use of Estimates

1 unchanged sentence

interim 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.

Due to the uncertainty involved in making estimates, actual results could differ from those

estimates which could have a material effect on the financial condition and results of operations in future periods.

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.

Due to the uncertainty involved in making estimates, actual results could

differ from those estimates which could have a material effect on the financial condition and results of operations in future periods.

The Company bases its estimates and assumptions on historical experience

5 unchanged sentences

operations in future periods.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

(as restated)

Segments Information

20 unchanged sentences

including the aging of the receivables.

This analysis resulted in an allowance for credit losses as of June 30, 2024 and December 31,

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

2023 of $ 1,012,580 and $ 862,580 , respectively.

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

six months ended June 30, 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.

Additionally, the Company had $ 150,000 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.

Prepaid installation costs

1 unchanged sentence

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.

Such costs include the cost of engineering, permits, governmental fees, and other related solar installation

These costs are charged to Cost of goods sold when each installation is completed.

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of accrued employee

expenses, prepaid insurance, and other current assets.

Prepaid expenses and other current assets consist of employee advances,

prepaid insurance, advances for sales commissions, prepaid sales commissions and other current assets.

Concentration of credit risk

4 unchanged sentences

The amounts over these insured limits

as of June 30, 2024 and December 31, 2023 were $ 5,092,120 and $ 6,979,011 , respectively.

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

2 unchanged sentences

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.

No one customer or financing counterparty exceeded 10% of accounts receivable as of June 30, 2024 and December

Inventories are primarily comprised of solar panels and other related

items necessary for installations and service needs.

Inventories are accounted for on a first-in-first-out basis and are measured at

the lower of cost or net realizable value, where cost is determined using a weighted-average cost method.

When evidence exists that the

net realizable value of inventory is lower than its cost, the difference is recognized as cost of goods sold in the condensed consolidated

statements of operations.

As of June 30, 2024 and December 31, 2023, inventory was $ 436,859 and $ 350,353 , respectively.

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.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

March 31, 2024

(as restated)

Inventories are primarily comprised of solar panels and other related

items necessary for installations and service needs.

Inventories are accounted for on a first-in-first-out basis and are measured at the

lower of cost or net realizable value, where cost is determined using a weighted-average cost method.

When evidence exists that the net

realizable value of inventory is lower than its cost, the difference is recognized as cost of goods sold in the condensed consolidated

statements of operations.

As of March 31, 2024 and December 31, 2023, inventory was $ 379,321 and $ 350,353 , respectively.

Property, equipment and other fixed assets

30 unchanged sentences

events or circumstances indicate that the carrying value of an asset or asset group may not be recoverable, and at least annually.

impairment provisions were recorded by the Company during the three and six months ended June 30, 2024 and 2023.

impairment provisions were recorded by the Company during the three months ended March 31, 2024 and 2023.

Business Combinations

7 unchanged sentences

relative fair values corresponding to the consideration transferred.

Goodwill is recognized and initially measured as any excess of the

acquisition-date consideration transferred in a business combination over the acquisition-date amounts recognized for the net identifiable

assets acquired.

Goodwill is not amortized but is tested for impairment annually, or more frequently if an event occurs or circumstances

change that would more likely than not result in an impairment of goodwill.

First, the Company assesses qualitative factors to determine

whether or not it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If the Company concludes

that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company conducts a quantitative

goodwill impairment test comparing the fair value of the applicable reporting unit with its carrying value.

If the carrying amount of

the reporting unit exceeds the fair value of the reporting unit, the Company recognizes an impairment loss in the consolidated statements

of operations for the amount by which the carrying amount exceeds the fair value of the reporting unit.

The Company performs its annual

goodwill impairment test at December 31 of each year.

There was no goodwill impairment for the three months ended June 30, 2024 and 2023.

Goodwill is recognized and initially measured as any excess of

the acquisition-date consideration transferred in a business combination over the acquisition-date amounts recognized for the net

identifiable assets acquired.

Goodwill is not amortized but is tested for impairment annually, or more frequently if an event occurs

or circumstances change that would more likely than not result in an impairment of goodwill.

First, the Company assesses qualitative

factors to determine whether or not it is more likely than not that the fair value of a reporting unit is less than its carrying

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.

goodwill impairment for the three months ended March 31, 2024 and 2023.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

March 31, 2024

(as restated)

Intangible assets subject to amortization

Intangible assets include trade names, customer lists and non-compete

Intangible assets include tradenames, customer lists and non-compete

Amounts are subject to amortization on a straight-line basis over the estimated period of benefit and are subject to annual

2 unchanged sentences

are capitalized as part of the intangible asset and amortized over its revised estimated useful life.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

(as restated)

Intangible assets are reviewed for impairment whenever events or changes

10 unchanged sentences

current business model for the specific intangible asset being valued.

No impairment charges were recorded for the three and six months

ended June 30, 2024 and 2023.

No impairment charges were recorded for the three months ended

March 31, 2024 and 2023.

The Company evaluates the contracts it enters into to determine

26 unchanged sentences

Lease expenses for lease payments are recognized on a straight-line basis over the lease term.

For leases with a lease term of less than one year (short-term

leases), the Company has elected not to recognize a lease liability or ROU asset on its consolidated balance sheet.

Instead, it recognizes

the lease payments as expenses on a straight-line basis over the lease term.

Short-term lease costs are immaterial to its condensed consolidated

statements of operations and cash flows.

For leases with a lease term of less than

one year (short-term leases), the Company has elected not to recognize a lease liability or ROU asset on its consolidated balance

Instead, it recognizes the lease payments as expenses on a straight-line basis over the lease term.

Short-term lease costs

are immaterial to its condensed consolidated statements of operations and cash flows.

Finance leases

Leases that transfer substantially all of the benefits and risks

incidental to the ownership of assets are accounted for as finance leases as if there was an acquisition of an asset and incurrence of

an obligation at the inception of the lease.

Lease costs for finance leases where the Company is the lessee includes the amortization

of the ROU asset, which is amortized on a straight-line basis and recorded to depreciation and amortization and interest expense on the

finance lease liability, which is calculated using the effective interest method and recorded to interest expense on the accompanying

condensed consolidated statements of operations.

Finance lease ROU assets are amortized over the shorter of their estimated useful lives

or the terms of the respective leases.

If the Company is reasonably certain to exercise the option to purchase the underlying asset at

the end of lease term, the finance lease ROU assets are amortized to the end of useful life of the assets on a straight-line basis.

Leases that transfer substantially all of the

benefits and risks incidental to the ownership of assets are accounted for as finance leases as if there was an acquisition of an asset

and incurrence of an obligation at the inception of the lease.

Lease costs for finance leases where the Company is the lessee includes

the amortization of the ROU asset, which is amortized on a straight-line basis and recorded to depreciation and amortization and interest

expense on the finance lease liability, which is calculated using the effective interest method and recorded to interest expense on the

accompanying condensed consolidated statements of operations.

Finance lease ROU assets are amortized over the shorter of their estimated

useful lives or the terms of the respective leases.

If the Company is reasonably certain to exercise the option to purchase the underlying

asset at the end of lease term, the finance lease ROU assets are amortized to the end of useful life of the assets on a straight-line

Warrant Liabilities

3 unchanged sentences

The classification of derivative instruments, including whether such

instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.

instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

The Company accounts for

8 unchanged sentences

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

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

March 31, 2024

(as restated)

Accrual for Probable Loss Contingencies

6 unchanged sentences

Legal costs associated with loss contingencies are expensed as incurred.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

(as restated)

Revenue Recognition

44 unchanged sentences

For the three months ended

For the six months ended

Solar Systems Installations, gross

2 unchanged sentences

( 6,269,033 )

( 12,727,590 )

( 18,784,295 )

Solar Systems Installations, net

1 unchanged sentence

Total net revenues

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

March 31, 2024

(as restated)

Contract liabilities

8 unchanged sentences

The following table summarizes the change in contract liabilities:

Contract liabilities, beginning of the

Revenue recognized from amounts included in contract

liabilities at the beginning of the period

For the three months ended

Contract liabilities, beginning of the period

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

( 5,223,518 )

( 1,149,047 )

Cash received prior to completion

of performance obligation

Cash received prior to completion of performance obligation

Contract liabilities, as of the end of the period

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

(as restated)

Contract acquisition costs

The Company pays sales commissions to sales representatives based on

a percentage of the sales contracts entered into by the customer and the Company.

Payment is made to the sales representative once installation

is completed.

Such costs are included as 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.

The Company pays sales commissions to sales representatives based

on a percentage of the sales contracts entered into by the customer and the Company.

Payment is made to the sales representative once

installation is completed.

Such costs are included as sales and marketing on the condensed consolidated statement of operations.

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.

Earnings per share

7 unchanged sentences

such as in periods where a net loss has been reported.

Prior 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 unaudited condensed consolidated interim financial statements.

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

Prior 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.

Stock-based Compensation

18 unchanged sentences

markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 - Observable inputs other than quoted prices included in Level

1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar instruments in

markets that are not active or for which all significant inputs are observable or can be corroborated by observable market data.

Level 3 - Inputs reflect management’s best estimate of what market

participants would use in pricing the asset or liability at the measurement date.

The inputs are both unobservable for the asset and liability

in the market and significant to the overall fair value measurement.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

(as restated)

Level 2 - Observable inputs other than quoted prices included in

Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar instruments

in markets that are not active or for which all significant inputs are observable or can be corroborated by observable market data.

Level 3 - Inputs reflect management’s best estimate of what

market participants would use in pricing the asset or liability at the measurement date.

The inputs are both unobservable for the asset

and liability in the market and significant to the overall fair value measurement.

In some circumstances, the inputs used to measure fair value might

25 unchanged sentences

of Class A Common Stock and is subject to the Company’s Board’s approval.

As of June 30, 2024, the prior investors of ESGEN

As of March 31, 2024, the prior investors of ESGEN

Opco LLC hold the majority of the voting rights on the Board.

23 unchanged sentences

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

federal income tax purposes

and therefore does not pay United States federal income tax.

Instead, the ESGEN Opco, LLC unitholders, including Zeo Energy Corp., are

liable for U.S.

federal income tax on their respective shares of ESGEN OpCo, LLC’s taxable income.

ESGEN OpCo, LLC is liable for

income taxes in those states which tax entities classified as partnerships 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.

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 purposes.

Otherwise, the income still flows to the LLC owners.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

(as restated)

We use the asset and liability method of accounting for income taxes

17 unchanged sentences

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 interim financial statements.

Company’s reserve related to uncertain tax positions was zero as of June 30, 2024 and December 31, 2023.

There were no unrecognized

tax benefits and no amounts accrued for interest and penalties as of June 30, 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.

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 and forward.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

(as restated)

federal and state income tax purposes are

2019 and forward.

The Company has calculated the provision for income taxes during

2 unchanged sentences

Our effective

tax rate (ETR) from continuing operations was 3.8 % and 0 % for the three months ended June 30, 2024 and June 30, 2023, respectively, and

3.1 % and 0 % for the six months ended June 30, 2024 and June 30, 2023, respectively.

The ETR for the three and six months ended June 30,

2024 differs from statutory rates primarily due to the non-controlling interest portion of ESGEN OpCo, LLC, which is a partnership for

federal tax purposes.

tax rate (ETR) from continuing operations was 2.7 % 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.

Tax Receivable Agreement

12 unchanged sentences

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

As of June 30, 2024, there have been no exchanges of ESGEN

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

Opco, LLC units for Class A Common Stock of Zeo Energy Corp.

4 unchanged sentences

Agreement will be recorded as a decrease to additional paid-in capital in the consolidated statement of stockholders’ equity.

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;

therefore, the Company has not recorded a liability related to the tax savings it

may realize from utilization of such deferred tax assets.

As of June 30,2024, the total unrecorded TRA liability is approximately $ 48.8

In accordance with ASC Topic 450, Contingencies, any changes to an existing TRA liability, including changes to the fair value

measurement or to re-establish a TRA liability related to prior year exchanges, will be recorded as tax receivable agreement in other

income (expense), net in the condensed consolidated statement of operations.

Similarly, if utilization of the deferred tax assets subject

to the TRA becomes more likely than not in the future, the Company will record a liability related to the TRA which will be recorded

through the condensed consolidated statement of operations.

changes to an existing TRA liability, including changes to re-establish a TRA liability related to prior year exchanges, will be recorded

as tax receivable agreement expense in the consolidated income statement.

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;

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

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

In accordance with ASC Topic 450, Contingencies,

any changes to an existing TRA liability, including changes to the fair value measurement or to re-establish a TRA liability related

to prior year exchanges, will be recorded as tax receivable agreement in other income (expense), net in the condensed consolidated statement

of operations.

Similarly, if utilization of the deferred tax assets subject to the TRA becomes more likely than not in the future, the

Company will record a liability related to the TRA which will be recorded through the condensed consolidated statement of operations.

See Note 13 – Related Party Transactions.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

(as restated)

New Accounting Pronouncements

34 unchanged sentences

( 7,350,088 )

Proceeds from Sponsor PIPE investment

Proceeds from pipe subscription

Net proceeds from the Business Combination

4 unchanged sentences

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

(as restated)

1 unchanged sentence

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

23 unchanged sentences

Accumulated depreciation

( 1,079,144 )

Depreciation expense related to the Company’s property and

equipment was $ 162,542 and $ 131,244 for the three months ended June 30, 2024 and 2023, respectively, and $ 330,946 and $ 230,383 for the

six months ended June 30, 2024 and 2023, respectively, which are included in depreciation and amortization expense on the accompanying

condensed consolidated statements of operations.

equipment was $ 168,403 and $ 99,138 for the three months ended March 31, 2024 and 2023, respectively, which were included in the condensed

consolidated statements of operations.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

(as restated)

1 unchanged sentence

The following is a summary of the Company’s intangible assets,

net as of June 30, 2024 and December 31, 2023:

Weighted June 30, 2024

Average Useful Gross Carrying Accumulated

Life (in years) Amount Amortization Total

Trade names 0.25 $ 3,084,100 $ 2,827,089 $ 257,011

net as of March 31, 2024 and December 31, 2023:

Weighted March 31, 2024

(in years) Gross

Amount Accumulated

Amortization Total

Tradename 0.75 $ 3,084,100 $ 2,570,080 $ 514,020

Customer lists 0 496,800 496,800 -

2 unchanged sentences

Weighted December 31, 2023

Average Useful Gross Carrying Accumulated

Life (in years) Amount Amortization Total

Trade names 1.5 $ 3,084,100 $ 2,313,072 $ 771,028

(in years) Gross

Amount Accumulated

Amortization Total

Tradename 1.5 $ 3,084,100 $ 2,313,072 $ 771,028

Customer lists 0 496,800 496,800 0

1 unchanged sentence

$ 3,804,900 $ 3,033,872 $ 771,028

The Company periodically reviews the estimated useful lives of

its identifiable intangible assets, taking into consideration any events or circumstances that might result in either a diminished fair

value or revised useful life.

Management has determined there have been no indicators of impairment or change in useful life for the

years ended June 30, 2024 and 2023.

Amortization expense relating to the Company’s intangible assets was $ 257,009 and $ 324,584

for the three months ended June 30, 2024 and 2023, respectively, and $ 514,017 and $ 649,166 for the six months ended June 30, 2024 and

2023, respectively, which were included in depreciation and amortization expenses on the accompanying condensed consolidated statements

of operations.

The Company periodically reviews the estimated useful lives of its

identifiable intangible assets, taking into consideration any events or circumstances that might result in either a diminished fair value

or revised useful life.

Management has determined there have been no indicators of impairment or change in useful life for the years ended

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 condensed consolidated

statements of operations.

NOTE 6 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

11 unchanged sentences

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 $ 141,787 for the three months ended June 30, 2024 and 2023, respectively and $ 327,930

and $ 272,729 for the six months ended June 30, 2024 and 2023, respectively.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

(as restated)

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

Operating lease costs recorded in general and administrative expenses

in the condensed consolidated statements of operations were $ 163,965 and $ 130,942 for the three months ended March 31, 2024 and 2023,

respectively.

The Company also leases multiple vehicles for its operations.

leases on vehicles generally have a 5-year term and are recorded as finance leases.

Finance lease costs recorded in depreciation and amortization in

the consolidated statements of operations were $ 34,118 and $ 27,523 for the three months ended June 30, 2024, and 2023, respectively.

Finance lease costs recorded in depreciation and amortization in the consolidated statements of operations were $ 68,236 and $ 30,644 for

the six months ended June 30, 2024, and 2023, respectively.

Finance lease costs recorded in interest expense in the consolidated statements

of operations were $ 13,395 and $ 12,740 for the three months ended June 30, 2024, and 2023, respectively.

Finance lease costs recorded

in interest expense in the consolidated statements of operations were $ 27,495 and $ 14,258 for the six months ended June 30, 2024, and

Finance lease costs recorded in depreciation

and amortization in the consolidated statements of operations were $ 34,118 and $ 3,121 for the three months ended March 31, 2024, and

2023, respectively.

Finance lease costs recorded in interest expense in the consolidated statements of operations were $ 14,332 and $ 0

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

The following amounts were recorded in the Company’s balance

16 unchanged sentences

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

(as restated)

The following table presents the maturity analysis of operating

and finance lease liabilities as of June 30, 2024:

and finance lease liabilities as of March 31, 2024:

Operating leases

8 unchanged sentences

The Company has deposited security payments related to the facility

leases of $ 71,515 included in the accompanying condensed consolidated balance sheets as other assets.

leases of $ 56,515 included in the Consolidated Balance Sheets as other assets.

NOTE 8 - DEBT

The Company has financing arrangements for many of the vehicles in

The Company has financing arrangements for many of the vehicles

in its fleet.

The financing includes direct loans for each vehicle being financed.

The Company entered into new vehicle financing arrangements

totaling $0 and $ 281,575 for the three months ended June 30, 2024 and 2023, respectively, and $ 0 and $ 744,933 for the six months ended

June 30, 2024 and 2023.

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 June 30, 2024, the weighted average interest rate on the Company’s short debt obligations was 7.8 %.

combined amounts of these financial obligations are included in the Consolidated Balance Sheets as Current portion of long-term debt and

Long-term debt.

During the three months ended March 31, 2024 and 2023

the Company entered into no new vehicle financing arrangements.

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 was 7.55 %.

The combined amounts of these financial obligations are included in the condensed consolidated balance

sheets as current portion of long-term debt and Long-term debt.

The company does not have debt covenants associated with these arrangements.

The following table presents the maturity analysis of the long-term

debt as of June 30, 2024:

debt as of March 31, 2024:

Less current portion

1 unchanged sentence

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

(as restated)

2 unchanged sentences

The consolidated statements of stockholders’ deficit, mezzanine

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

Business Description and Note 4 - 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.

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.

Upon consummation of the Transactions, the Company’s capital

32 unchanged sentences

Registration Rights

Also concurrent with the Closing, on March 13, 2024, the Sellers, the

Initial Shareholders, Piper (the “New PubCo Holders”) and Zeo entered into the Amended and Restated Registration Rights Agreement

(the “A&R Registration Rights Agreement”), pursuant to which, among other things, Zeo will provide the stockholders certain

registration rights with respect to certain shares of Class A Common Stock held by them or otherwise issuable to them pursuant to the

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”).

Also concurrent with the Closing, on March 13, 2024, the Sellers,

the Initial Shareholders, Piper (the “New PubCo Holders”) and Zeo entered into the Amended and Restated Registration

Rights Agreement (the “A&R Registration Rights Agreement”), pursuant to which, among other things, Zeo will provide

the stockholders certain registration rights with respect to certain shares of Class A Common Stock held by them or otherwise

issuable to them pursuant to the 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”).

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

(as restated)

The table below reflects share information about

the Company’s capital stock as of June 30, 2024.

The table below reflects share information about the Company’s

capital stock as of March 31, 2024.

Treasury Stock

39 unchanged sentences

Corporation, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

(as restated)

Class A Convertible Preferred Units (Mezzanine Equity)

Class A Convertible Preferred Units (Redeemable noncontrolling

The Class A Convertible Preferred Unitholders have no voting rights

15 unchanged sentences

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.

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.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

(as restated)

Each Class A Convertible Preferred Unit that is outstanding on the

23 unchanged sentences

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

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

(as restated)

Such adjustment 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 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.

to the Maturity Date (a “ Required Redemption ”), or (ii) if required by the Company upon the Sponsor’s delivery

to the Company of a notice in accordance with the Sponsor electing a Put Option Redemption.

Upon the occurrence of a Liquidating Event (as defined in the OPCO

11 unchanged sentences

Redeemable Noncontrolling Interests

As of June 30, 2024, the prior investors of Sunergy, LLC own 87.03 %

As 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.

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.

The financial results of OpCo, LLC are consolidated with the Company

2 unchanged sentences

Notes to the Condensed Consolidated Financial

June 30, 2024

March 31, 2024

(as restated)

11 unchanged sentences

may be determined by the Board.

The purpose of the Incentive Plan is to provide a means through which

the Company and the other members of the Company Group may attract and retain key personnel and to provide a means whereby directors,

The purpose of the Incentive Equity Plan is to provide a means through

which the Company and the other members of the Company Group may attract and retain key personnel and to provide a means whereby directors,

officers, employees, consultants and advisors of the Company and the other members of the Company Group can acquire and maintain an equity

5 unchanged sentences

certain grants of vested shares under the 2024 Omnibus Incentive Plan as follows:

● 50,000 vested shares to be

granted on the date that is 12 months after the Closing Date;

● 50,000 vested shares to be

granted on the date that is 24 months after the Closing Date;

● 50,000 vested shares to be

granted on the date that is 35 months after the after the Closing Date.

● 50,000 vested shares to be granted on the date that is 12 months after the Closing Date;

● 50,000 vested shares to be granted on the date that is 24 months after the Closing Date;

● 50,000 vested shares to be granted on the date that is 35 months after the after the Closing Date.

The Company determined the grant date fair value per share was $ 6.97 ,

9 unchanged sentences

The fair value of stock option grants with market-based conditions

for vesting is estimated on the grant date using a Monte-Carlo simulation under a risk-neutral framework and using the average value

over 100,000 model iterations.

for vesting is estimated on the grant date using a Monte-Carlo simulation under a risk-neutral framework and using the average value over

100,000 model iterations.

The following table illustrates the assumptions used in estimating the fair value of options granted during

the period ended June 30, 2024.

the period ended March 31, 2024.

Tranche 1 hurdle price

2 unchanged sentences

Risk-free rate

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

(as restated)

The per unit fair value and derived service period for each Tranche

of Performance Based Executive Shares is included in the Valuation of Performance-based Equity Bonus Awards as of March 13, 2024, as

of Performance Based Executive Shares is included in the Valuation of Performance-based Equity Bonus Awards as of March 13, 2024, as follows:

Fair Value Summary Tranche 1 Tranche 2 Tranche 3

2 unchanged sentences

Derived service period 0.35 years 1.19 years 1.47 years

During the three and six months ended June 30, 2024, $ 2,417,888

and $ 5,598,689 , respectively, of equity compensation expense was recognized for these awards, as well as 375,000 and 120,707 awards issued

to salespeople and vendors, respectively, at the close of the Business Combination based on the fair value of the stock on that date.

As of June 30, 2024, an unrecognized compensation expense of $ 3,883,549 was determined and is expected to be recognized over the remaining

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

(as restated)

During the period ended March 31, 2024, $ 3,118,584 of equity compensation

expense was recognized for these awards as well as 375,000 awards and 120,707 awards issued to salespeople and vendors, respectively,

at the close of the Business Combination based on the fair value of the stock on that date.

As of March 31, 2024, an unrecognized compensation

expense of $ 6,301,438 was determined and is expected to be recognized over the remaining 2.9 years.

NOTE 11 - WARRANT LIABILITIES

6 unchanged sentences

Upon the closing of the Business Combination the 14,040,000 Private Warrants were forfeited.

As of June 30,

As of March 31,

2024, there are 13,800,000 Public Warrants and no Private Placement warrants outstanding.

20 unchanged sentences

are exercised.

As of June 30, 2024, the Public Warrants are presented as warrant liabilities on the accompanying condensed consolidated

balance sheet.

As of March 31, 2024, the Public Warrants are presented as warrant liabilities on the condensed consolidated balance sheet.

NOTE 12 - 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.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

(as restated)

NOTE 13 - RELATED PARTY TRANSACTIONS

1 unchanged sentence

Operating lease

cost relating to this lease was $ 7,464 for each of the three months ended June 30, 2024 and 2023 and $ 14,929 for each of the six months

ended June 30, 2024 and 2023.

As of June 30, 2024 and December 31, 2023, the related party operating lease right of use asset was $ 43,061

and $ 75,378 , respectively, and the related party operating lease liability was $ 44,476 and $ 58,134 , respectively.

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.

In 2023, some of the Company’s customers financed their obligations

4 unchanged sentences

For the three months

ended June 30, 2024 and 2023, the Company recognized $ 6,997,626 and $ 0 of revenue, net of financing fees of $ 3,127,622 and $ 0 , respectively

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.

For the three months ended June 30, 2024 and 2023, the Company recognized $ 15,810,395 and $ 0 of revenue, net

of financing fees of $ 6,983,841 and $ 0 , respectively from these arrangements.

As of June 30, 2024 and December 31, 2023, the Company had

$ 819,212 and $ 396,488 of accounts receivable, $ 784,527 and $ 2,415,966 of accrued expenses and $ 9,900 and $ 1,160,848 of contract liabilities

due to related parties relating to these arrangements, respectively.

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.

As described in Note 2, Zeo Energy Corp.

1 unchanged sentence

the TRA Holders.

As of June 30, 2024, the Company has not recorded a liability related to the tax savings it may realize from utilization

As of March 31, 2024, the Company has not recorded a liability related to the tax savings it may realize from utilization

of such deferred tax assets.

As of June 30,2024, the total unrecorded TRA liability is approximately $ 48.8 million.

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

If utilization of

1 unchanged sentence

the TRA which will be recognized as expense within its consolidated statements of operations.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

(as restated)

NOTE 14 - 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:

June 30, 2024

Warrant liabilities

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.

NOTE 15 - NET LOSS PER SHARE

NOTE 14 - NET INCOME PER SHARE

Basic 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 June 30, 2024 by the weighted-average

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.

Diluted net loss per share is the same as basic net loss per share

as the inclusion of potentially issuable shares that would be anti-dilutive.

Prior to the 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 unaudited condensed consolidated interim financial statements.

Therefore, net loss per share information has not been presented for periods prior to the Business Combination on March 13, 2024.

basic and diluted net income per share for the six months ended June 30, 2024 represents only the period of March 14, 2024 to June 30

as the inclusion of potentially issuable shares would be anti-dilutive.

Prior 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

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.

The following table presents the computation of the basic and diluted

income per share of Class A Common Stock for the period of March 14, 2024 (the Closing Date) to June 30, 2024:

Three months ended

Six months ended

Net loss attributable to Class

A common shareholders

$ ( 277,790 )

$ ( 1,809,281 )

Basic and diluted weighted-average shares of Class A common

stock outstanding

Net loss per share of Class A common stock

- basic and diluted

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial

June 30, 2024

income per share of Class A Common Stock for the period of March 13, 2024 (the Closing Date) to March 31, 2024:

March 31, 2024

(as restated)

Net loss attributable to

Class A common shareholders

$ ( 1,722,607 )

Basic and diluted weighted-average shares

of Class A common stock outstanding

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

The following table presents potentially dilutive securities, as of

the end of the period, excluded from the computation of diluted net earnings per share of Class A Common Stock.

Three months ended

Six months ended

Series A Preferred Stock(2)

4 unchanged sentences

Units outstanding at the end of the period that were excluded using the if-converted method.

Zeo Energy Corp.

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

(as restated)

NOTE 15 - COMMITMENTS AND CONTINGENCIES

10 unchanged sentences

warranty period of 25 years.

As of June 30, 2024 and 2023, the Company did not record a warranty reserve as the historical costs incurred

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.

22 unchanged sentences

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/A

Item 1. Financial Statements