What changed in this filing

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Item 1. Business

2025-05-28 compared with 2024-03-25 · 579 added, 502 removed, 39 unchanged (97% of the section changed)

We were originally incorporated under the name “ESGEN Acquisition

Corp.” as a blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a merger,

share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses, which

we refer to throughout this Report as our initial business combination.

As discussed in this Item 1 to this Annual Report on Form 10-K

(this “Report”), we completed our initial business combination with Sunergy Renewables, LLC, a Nevada limited liability company,

on March 13, 2024, and changed our name to “Zeo Energy Corp.”

Our company and personnel are passionate about delivering cost savings

and increased independence and reliability to energy consumers.

Our mission is to expedite the country’s transition to renewable

energy by offering our customers an affordable and sustainable means of achieving energy independence.

Our company and personnel are passionate about

delivering cost savings and increased independence and reliability to energy consumers.

Our mission is to expedite the country’s

transition to renewable energy by offering our customers an affordable and sustainable means of achieving energy independence.

Business Overview

Zeo is a vertically integrated provider of residential solar energy

systems, other energy efficient equipment and related services currently serving customers in Florida, Texas, Arkansas and Missouri.

Sunergy was created through the contribution of Sunergy Solar and Sun

First Energy to Zeo (the “ Contribution ”) on October 1, 2021.

Sunergy Solar, formed in 2005, and initially focused

on providing heating, ventilation and air conditioning products and services in Florida, later expanded into installing residential solar

energy systems sold directly by the company and third-party sales dealerships.

Sun First Energy was established in 2019, and, from its

formation to the date of the Contribution, it sold residential solar energy systems in Florida that were installed by other companies.

Prior to the Contribution, Sunergy Solar and Sun First Energy had collaborated on residential solar energy system installations and shared

a commitment to quality, integrity and customer satisfaction.

The Contribution established a vertically integrated company offering solutions

that included sale, provision, installation, operation and maintenance of residential solar energy systems and other energy efficient

equipment of services.

Many of our solar energy system customers also purchase other energy efficiency-related equipment or services or

roofing services from us.

Since the Contribution, Zeo has expanded operations by increasing the

number of installations, sales, and administration personnel from approximately 180 as of the Contribution to approximately 288

as of December 31, 2023.

In January 2022, we began selling and installing residential solar energy systems and other energy efficiency-related

equipment in Texas, in January 2023, we expanded into Arkansas, and, in September 2023, we entered Missouri.

We are a vertically integrated company offering

energy solutions and services that include sale, design, procurement, installation, and maintenance of residential solar energy systems.

Many of our solar energy system customers also purchase other energy efficiency-related equipment or services or roofing services from

The majority of our customers are located in Florida, Texas, Arkansas, Missouri, Ohio, and Illinois, and we have an expanding base

of customers in California, Colorado, Minnesota, Missouri, Ohio, Utah, and Virginia.

We were originally incorporated under the name

“ESGEN Acquisition Corp.” as a blank check company incorporated as a Cayman Islands exempted company and formed for the purpose

of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or

more businesses.

As discussed in this Report, we completed the Business Combination with Sunergy on March 13, 2024 and changed our

name to “Zeo Energy Corp.”

Sunergy was created through the Contribution of

Sunergy Solar LLC (“Sunergy Solar”) and Sun First Energy, LLC (“Sun First Energy”) to Sunergy on October 1,

Sunergy Solar, formed in 2005, and initially focused on providing heating, ventilation and air conditioning products and services

in Florida, later expanded into installing residential solar energy systems sold directly by the company and third-party sales dealerships.

Sun First Energy was established in 2019, and, from its formation to the date of the Contribution, it sold residential solar energy systems

in Florida that were installed by other companies.

Prior to the Contribution, Sunergy Solar and Sun First Energy had collaborated on residential

solar energy system installations and shared a commitment to quality, integrity and customer satisfaction.

The Contribution established

our vertically integrated company offering residential solar energy solutions.

The number of our installations, sales support,

and administrative personnel was approximately 190 as of December 31, 2024.

In January 2022, we began selling and installing residential

solar energy systems and other energy efficiency-related equipment in Texas, in January 2023, we expanded into Arkansas, in

September 2023, we entered Missouri, and in February 2024, we entered Ohio and Illinois.

In 2025, we expanded our services in California,

Colorado, Minnesota, Utah, and Virginia.

In November 2024, we also began serving customers for whom Lumio HX, Inc.

had begun but not completed

residential energy systems prior to completion of its bankruptcy, primarily in California, Maryland, New Jersey, North Carolina, Oklahoma,

and South Carolina.

Recent Developments

On October 25, 2024, the Company closed an

Asset Purchase Agreement (the “Asset Purchase Agreement”) with Lumio Holdings, Inc., a Delaware corporation (“Lumio”),

and Lumio HX, Inc., a Delaware corporation (together with Lumio, the “Sellers”), pursuant to which, subject to the terms and

conditions set forth in the Asset Purchase Agreement, the Company agreed to acquire certain assets of the Sellers on an as-is, where-is

basis, including uninstalled residential solar energy contracts, certain inventory, intellectual property and intellectual property rights,

equipment, records, goodwill and other intangible assets (collectively, the “Assets”), free and clear of any liens other than

certain specified liabilities of the Sellers that are being assumed (collectively, the “Liabilities” and such acquisition

of the Assets and assumption of the Liabilities together, the “Transaction”) for a total purchase price of (i) $4 million

in cash and (ii) 6,206,897 shares of the Company’s Class A Common Stock, par value $0.0001, to be paid to LHX Intermediate,

LLC, a Delaware limited liability company (“LHX”).

The Assets included certain uninstalled or partially

completed residential solar energy contracts through which a customer purchased the solar energy system, and additional uninstalled or

partially completed residential solar energy projects where a third party leasing company (either Palmetto Solar, LLC d/b/a LightReach,

or Sunnova Energy Corporation) owns the solar energy system and leases the output of the system to a customer living in the home where

the system is installed.

Various of these Lumio projects are located in states where the Company has not previously operated, principally

in California, Maryland, New Jersey, North Carolina, Oklahoma, and South Carolina, and the Company has newly established operations or

is in the process of establishing operations in these states.

On December 24, 2024 (the “Issue Date”),

the Company issued a Promissory Note (the “Promissory Note”) to LHX pursuant to which the Company could borrow up to an aggregate

principal amount of $4,000,000 (the “Loan”).

Subject to the terms and conditions set forth in the Promissory Note, the Loan

shall be provided to the Company in three tranches:

(i) $2,500,000 upon execution of the Promissory Note (the “Initial Advance”),

(ii) $750,000 if the Company achieves the Tranche 2 Milestone within 60 days from the Initial Advance (the “Tranche 2

Advance”) and (iii) $750,000 if the Company achieves the Tranche 3 Milestone within 60 days from the Tranche 2 Advance.

“Tranche 2 Milestone” means the submission by the Company to the applicable regulatory bodies at least 340 permits to install

solar energy systems sold through the Company’s year-round sales program.

“Tranche 3 Milestone” means the completion

by the Company of the installation of at least 296 solar energy systems sold through the Company’s year-round sales program.”

LHX may also waive any milestone described above and advance the applicable amounts to the Company.

On April 15, 2025, the Promissory Note was amended

to provide that the Tranche 2 Advance will be delivered if a Tranche 2 Milestone is met within 120 days of the Initial Advance, and the

Tranche 3 Advance will be delivered if a Tranche 3 Milestone is met within 120 days of the Tranche 2 Advance.

The Loan will be repaid in full (the “Repayment”)

by issuing to LHX or its designee of a number of the Company’s shares of Class A Common Stock equal to the quotient of (i) the

outstanding and unpaid amount of the Loan, divided by (ii) $1.35 (the “Share Issuance”).

The Repayment shall take place

immediately following the later of:

(x) the day falling on the first anniversary of the Issue Date (or the immediately previous

business day) and (y) the date on which the stockholders of the Company approve the Share Issuance.

The Promissory Note contains customary representations,

warranties and covenants of the parties, including an obligation of the Company to file a registration statement registering the resale

of the shares issuable in the Share Issuance and to use reasonable efforts to have such registration statement declared effective as soon

as practicable thereafter.

In connection with the Promissory Note, on December 24,

2024, LHX entered into a Voting Agreement with the Company and certain stockholders of the Company (the “Voting Agreement”),

pursuant to which such stockholders agreed to vote (or cause to be voted), in person or by proxy, all the shares of Class A Common

Stock and Class V Common Stock owned by such stockholders (i) in favor of the nomination and appointment of LHX’s designee

to the board of directors of the Company, (ii) in favor of the issuance by the Company to LHX of shares of Class A Common Stock

in connection with an option that may be granted to LHX to purchase up to 4,000,000 shares of Class A Common Stock, subject

to the terms and conditions therein and (iii) in favor of the Share Issuance, when required pursuant to the Promissory Note.

Products and Services

Residential Solar Energy Systems

Zeo’s primary business activity is selling and installing residential

solar energy systems that homeowners use to supplement the amount of usable electricity required to power their homes.

We currently operate

in Florida, Texas, Arkansas and Missouri, and have experienced rapid growth in our business since 2020.

Zeo’s primary business activity is selling

and installing residential solar energy systems that homeowners use to supplement the amount of usable electricity required to power their

We currently operate primarily in Florida, Texas, Arkansas, Missouri, Ohio, and Illinois, and have begun offering solutions and

services in California, Colorado, Minnesota, Utah, and Virginia.

We are additionally serving customers for whom Lumio HX, Inc.

but not completed residential energy systems prior to completion of its bankruptcy, in

Maryland, New Jersey, North Carolina, Oklahoma, and South Carolina.

Other Energy Efficient Equipment and Services

In 2023, approximately 23% of our customers purchased one or more insulation

services, such as adding insulation to a home’s attic or walls.

In 2023, in approximately 53% of our sales our customers purchased

adders that consisted of equipment designed to increase energy efficiency, including items such as hybrid electric water heaters or swimming

In 2023, approximately 23% of our customers purchased

one or more insulation services, such as adding insulation to a home’s attic or walls.

In 2023, in approximately 53% of our sales

our customers purchased adders that consisted of equipment designed to increase energy efficiency, including items such as hybrid electric

water heaters or swimming pool pumps.

During 2023, 1% of our customers purchased battery-based energy storage systems.

These battery-based energy storage systems

store energy generated from their residential solar energy systems to be used when the system generates less usable electricity

than the home requires (such as at night or on cloudy days).

These battery-based energy

storage systems store energy generated from their residential solar energy systems to be used when the system generates less

usable electricity than the home requires (such as at night or on cloudy days).

Roofing Services

We install roofs in Florida, where our subsidiary, Sunergy Roofing

& Construction, Inc., is a licensed roofing contractor.

In Texas and Arkansas, for some solar energy system customers that need roofing

services, we contract with roofing companies for the services.

We plan to continue growing our roofing operations, as we believe our roofing

services complement our residential solar energy systems and for some customers helps to expedite solar system installations.

We install roofs in Florida, where our subsidiary,

Sunergy Roofing & Construction, Inc., is a licensed roofing contractor.

In other states where we operate, for some solar energy

system customers that need roofing services, we may contract with roofing companies for the services.

We plan to continue growing our

roofing operations, as we believe our roofing services complement our residential solar energy systems and for some customers helps to

expedite solar system installations.

Subcontractors

We use subcontractors to install some of our residential solar energy

systems at times when we do not have a sufficient number of our own installation teams to timely complete the project.

We also use subcontractors

to provide all of our insulation services and to install some of the roofing services and energy efficient equipment such as hybrid electric

water heaters and pool pumps which we sell.

Our subcontractor fees for residential solar energy system installations are typically based

on total wattage installed, and our arrangements with installation subcontractors allow either party to terminate the agreement for convenience.

We use subcontractors to install some of our residential

solar energy systems at times when we do not have a sufficient number of our own installation teams to timely complete the project.

also use subcontractors to provide all of our insulation services and to install some of the roofing services and energy efficient equipment

such as hybrid electric water heaters and pool pumps which we sell.

Our subcontractor fees for residential solar energy system installations

are typically based on total wattage installed, and our arrangements with installation subcontractors allow either party to terminate

the agreement for convenience.

Marketing and Sales

We market our products and services to potential customers directly

through in-home visits carried out by our internal sales agents and indirectly through external sales dealers.

In the case of

leases, a customer is approached by and communicates with the same sales personnel as if the customer were purchasing a system directly

We also engage in digital marketing efforts on our own or through third-party marketing specialists, including search engine

optimization and social media communications to strengthen our online marketing presence.

Our code of conduct applies to our employees,

independent contractors and dealers, and it requires adherence to high ethical standards when carrying out business activities.

We market our products and services to potential

customers directly through in-home visits carried out by our internal sales agents and indirectly through external sales dealers.

In the case of leases, a customer is approached by and communicates with the same sales personnel as if the customer were purchasing a

system directly from Zeo.

We also engage in digital marketing efforts on our own or through third-party marketing specialists, including

search engine optimization and social media communications to strengthen our online marketing presence.

Our code of conduct applies to

our employees, independent contractors and dealers, and it requires adherence to high ethical standards when carrying out business activities.

Internal Direct Sales Force

We have established an internal team of sales agents that markets and

sells directly to customers through door-to-door sales approaches.

As of December 31, 2023 this team included approximately 270 sales

agents, reflecting an approximately 100% agent increase from December 31, 2022.

Our sales agents are engaged through full-time contracts

lasting from April through August, which is our primary selling season.

Sales made through our internal sales team have lower customer

acquisition costs than sales sourced through our external dealers.

In 2023, approximately 50% of the total systems we installed were sold

through our internal sales team.

We have established an internal team of sales

agents that markets and sells directly to customers through door-to-door sales approaches.

The team included approximately 290

sales agents as of both December 31, 2024 and December 31, 2023.

Our sales agents are engaged through full-time contracts lasting

from April through August, which is our primary selling season.

Sales made through our internal sales team have lower customer acquisition

costs than sales sourced through our external dealers.

In 2024, approximately 58% of the total systems we installed were sold through

our internal sales team.

Sales Through External Dealers

We also install systems sold by external sales dealers that act as

our sales representatives with potential customers.

The number of dealers that have entered into a current arrangement to sell our solar

panel systems was approximately 30 as of December 31, 2023 compared to approximately 20 as of December 31, 2022.

The percentage of sales

that originate with our external dealers increases during the fall and winter months when our internal sales efforts are diminished.

provide field support and training to these dealers on our sales offerings, sales processes and other business processes, including our

software sales platform.

Upon our selection of and engagement with a dealer, the dealer executes

our dealer agreement.

The majority of our dealer agreements require the dealers to exclusively represent our business with respect to

the particular products or services we sell.

Dealers have the option of choosing to execute a contract that does not require this exclusivity,

and some select this option.

We also install systems sold by external sales

dealers that act as our sales representatives with potential customers.

The number of active dealers that have entered into a current

arrangement to sell our solar panel systems was approximately 20 as of December 31, 2024 compared to approximately 30 as of December 31,

The percentage of sales that originate with our external dealers increases during the fall and winter months when our internal

sales efforts are diminished.

We provide field support and training to these dealers on our sales offerings, sales processes and other

business processes, including our software sales platform.

Upon our selection of and engagement with a dealer,

the dealer executes our dealer agreement.

The majority of our dealer agreements require the dealers to exclusively represent our business

with respect to the particular products or services we sell.

Dealers have the option of choosing to execute a contract that does not require

this exclusivity, and some select this option.

Our dealer contracts are terminable for convenience by either party.

For each residential solar energy system

that we install for a customer that was sold by a dealer, after we receive payment, we compensate the dealer with a commission based on

the number of watts of solar panels installed.

We recruit and select dealers based on their experience in the market,

ability to produce sales and general reputation for ethical behavior within the industry.

As part of our dealer contract, we require our

dealers to agree in writing to comply with our code of conduct when carrying out their marketing and other activities.

For each residential

solar energy system that we install for a customer that was sold by a dealer, after we receive payment, we compensate the dealer with

a commission based on the number of watts of solar panels installed.

We recruit and select dealers based on their experience

in the market, ability to produce sales and general reputation for ethical behavior within the industry.

As part of our dealer contract,

we require our dealers to agree in writing to comply with our code of conduct when carrying out their marketing and other activities.

Customer and Leasing Agreements

A homeowner becomes our customer typically by signing a contract with

us to purchase and receive installation of a solar energy system.

We have also began to install solar energy systems that are leased by

the customer under an agreement between the customer and a third-party leasing company under which the leasing company will own and lease

to a customer a solar energy system.

A customer that chooses our products and services typically signs the contract after meeting with

one of our sales agents or dealers in the customer’s home and receiving a preliminary system design for their home and pricing for

Whether the customer determines to purchase or lease the solar energy system, the sales agent or dealer determines the pricing

to be offered to the customer based on product and services price information stored in our sales software for the system components included

in a customer’s proposed system.

After the customer signs the contract, we schedule and conduct a site survey.

If during the site

survey we discover property code compliance or other complications with the planned design and installation, we may issue a change order;

if required changes represent additional costs to us or the customer, the party that would be responsible for those costs may choose to

cancel the contract.

After the site survey, we prepare formal design and engineering documents and apply for applicable permits from local

government authorities.

After required permits are obtained, we schedule and install the solar energy system and any other equipment purchased

on the customer’s home.

A homeowner becomes our customer typically by

signing a contract with us to purchase and receive installation of a solar energy system.

We also install solar energy systems that are

leased by the customer under an agreement between the customer and a third-party leasing company under which the leasing company

will own and lease to a customer a solar energy system.

A customer that chooses our products and services typically signs the contract

after meeting with one of our sales agents or dealers in the customer’s home and receiving a preliminary system design for their

home and pricing for the system.

Whether the customer decides to purchase or lease the solar energy system, the sales agent or dealer

determines the pricing to be offered to the customer based on product and services price information stored in our sales software for

the system components included in a customer’s proposed system.

After the customer signs the contract, we schedule and conduct

a site survey.

If during the site survey we discover property code compliance or other complications with the planned design and installation,

we may issue a change order;

if required changes represent additional costs to us or the customer, the party that would be responsible

for those costs may choose to cancel the contract.

After the site survey, we prepare formal design and engineering documents and apply

for applicable permits from local government authorities.

After required permits are obtained, we schedule and install the solar energy

system and any other equipment purchased on the customer’s home.

Purchase Contract Warranties.

As the owner of the residential

solar energy system under the purchase and installation agreement, customers receive a manufacturer’s limited warranty for system

For the principal components of solar panels, inverter, and racking, the manufacturer’s limited warranty typically lasts

Manufacturers control whether the warranty periods they offer will change for equipment purchased in the future.

Though we are

not responsible for a manufacturer’s compliance with warranty obligations, we assist customers in contacting the manufacturer if

a warranty issue arises.

We provide customers at least a ten-year limited warranty for our installation work and at least a

five-year limited warranty against roof penetrations.

In most of our purchase and installation agreements that we used prior to 2023,

we provided a 25-year limited warranty for installation work and against roof penetrations.

the owner of the residential solar energy system under the purchase and installation agreement, customers receive a manufacturer’s

limited warranty for system components.

For the principal components of solar panels, inverter, and racking, the manufacturer’s

limited warranty typically lasts 25 years.

Manufacturers control whether the warranty periods they offer will change for equipment

purchased in the future.

Though we are not responsible for a manufacturer’s compliance with warranty obligations, we assist customers

in contacting the manufacturer if a warranty issue arises.

We provide customers at least a ten-year limited warranty for our installation

work and at least a five-year limited warranty against roof penetrations.

In most of our purchase and installation agreements that

we used prior to 2023, we provided a 25-year limited warranty for installation work and against roof penetrations.

Purchase Contracts and Financed Sales.

For the period from January

1, 2023 through December 31, 2023, the large majority of our customers (at least 90%) who purchased residential solar energy systems from

us entered into a loan arrangement with a third party to finance the purchase over an extended period of time.

The loan agreement between

the customer and the third-party lender typically has a repayment term of between 7 and 25 years and requires the customer to pay either

the twelve months ended December 31, 2024, approximately 32% of our customers who purchased residential solar energy systems from us entered

into a loan arrangement with a third party to finance the purchase over an extended period of time.

The loan agreement between the customer

and the third-party lender typically has a repayment term of between 7 and 25 years and requires the customer to pay either

a minimal or no down payment.

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Purchase Contracts and Cash Sales.

For the period from January

1, 2023 through December 31, 2023, a small minority of our customers (less than 3%) have paid us in cash for the purchase of residential

solar energy systems.

For those sales, our purchase contract requires the customer to pay 25% of the purchase price upon execution of

the purchase agreement, 50% when we begin installation, and the final 25% on the last day of installation.

Installation is usually commenced

and completed either in a single day or within several days.

the twelve months ended December 31, 2024, a small minority of our orders (less than

5%) were from customers paying in cash for the purchase of residential solar energy systems.

For those sales, our purchase contract typically

requires the customer to pay 25% of the purchase price upon execution of the purchase agreement, 50% when we begin installation, and the

final 25% on the last day of installation.

Installation is usually commenced and completed either in a single day or within

several days.

System Leases.

In December 2022, we launched a program

offering customers the option of leasing our solar energy systems from a third-party leasing company.

The customer agrees to pay the leasing

company a predetermined monthly fee for the electricity produced by the residential solar energy system.

Though we have plans to increase

the number of leased systems we install, as of December 31, 2023, 8% of the systems we have installed in 2023 are leased by the customer,

though we expect that percentage to increase in 2024.

The lease term between the leasing company and the customer is 25 years.

agrees to pay the leasing company a predetermined monthly fee for the electricity produced by the solar energy system.

The monthly fee

generally increases annually over the lease term at a predetermined rate, and the customer has the option to renew the lease for five

to ten years.

The potential advantage to the customer of a lease agreement is that a third-party owner of the residential solar energy

system may take more advantage of available government tax incentives for solar energy production, which may allow them to lease the system

to the customer at monthly rates that are lower for the customer than if the customer were financing its own purchase of the system.

installed the first leased solar energy system in April 2023 and, as of December 31, 2023, we have installed approximately 460 leased

solar energy systems.

In the lease model offered to our customers, the third-party leasing company contracts with the homeowner customer

to install a solar energy system owned by the leasing company and leased to the customer.

The leasing company contracts with Zeo to purchase

system equipment and install the solar energy system and to maintain and service the system on the leasing company’s behalf during

the life of the lease.

As of the date of this filing, Zeo’s customers have solely entered

into leasing agreements with third-party leasing companies established and managed by White Horse Energy, LC (“ White Horse

Energy ”), a holding company of which Mr.

Bridgewater, Zeo’s Chairman, Chief Executive Officer and Chief Financial

In December 2022,

we launched a program offering customers the option of leasing our solar energy systems from third-party leasing companies.

agrees to pay the leasing company a predetermined monthly fee for the electricity produced by the residential solar energy system.

of December 31, 2024, approximately 63% of the systems we installed in 2024 are leased by the customer.

The lease term between the leasing

company and the customer is 25 years.

The customer agrees to pay the leasing company a predetermined monthly fee for the electricity

produced by the solar energy system.

The monthly fee generally increases annually over the lease term at a predetermined rate, and the

customer typically has the option to renew the lease for five to ten years.

The potential advantage to the customer of a lease agreement

is that a third-party owner of the residential solar energy system may take more advantage of available government tax incentives

for solar energy production, which may allow them to lease the system to the customer at monthly rates that are lower for the customer

than if the customer were financing its own purchase of the system.

We installed the first leased solar energy system in April 2023

and during the twelve months ended December 30, 2024, we installed approximately 1,150 leased solar energy systems.

In the lease model

offered to our customers, the third-party leasing company contracts with the homeowner customer to install a solar energy system

owned by the leasing company and leased to the customer.

The leasing company contracts with Zeo to purchase system equipment and install

the solar energy system.

Some leasing companies may contract with ZEO to maintain and service the system on the leasing company’s

behalf during the life of the lease.

Approximately 30% of Zeo’s customers who

have entered into leasing agreements have done so with third-party leasing companies established and managed by White Horse Energy, LC

(“ White Horse Energy ”), a holding company of which Mr.

Bridgewater, Zeo’s Chairman and Chief Executive

Officer is the owner and manager.

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third-party leasing companies.

No assurance can be given that White Horse Energy will be able to do so or that arrangements can be made

with other funds to act as lessors of Zeo’s solar energy systems in the future.

Zeo is exploring leasing arrangements with other

third parties with an objective of offering customers a choice of purchase or lease options.

The main components of our residential solar energy systems are solar

panels, inverters and racking systems.

Common related components or systems that we may additionally supply are battery-based energy storage

systems, insulation, hybrid electric water heaters, swimming pool pumps and roofing.

No assurance can be given that White Horse Energy will be able to do so or that arrangements can be

made with other funds to act as lessors of Zeo’s solar energy systems in the future.

Zeo has entered into leasing arrangements with

several other unrelated third parties to offer customers a choice of purchase or lease options, and continues to explore similar arrangements

with other unrelated third-parties.

The main components of our residential solar energy

systems are solar panels, inverters and racking systems.

Common related components or systems that we may additionally supply are battery-based energy

storage systems, insulation, hybrid electric water heaters, swimming pool pumps and roofing.

All of the products that we install are manufactured

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performance characteristics and ease of installation, among other factors.

While we procure products and components from multiple suppliers and

distributors to reduce the likelihood that we experience an inability to procure those products and components, the primary supplier from

which we purchase the equipment that we install is Greentech.

Greentech also provides us inventory management services by holding equipment

in its inventory until it delivers directly to the customer site for installation.

While we procure products and components from

multiple suppliers and distributors to reduce the likelihood that we experience an inability to procure those products and components,

the primary supplier from which we purchase the equipment that we install is Consolidated Electrical Distributors, Inc.

(d/b/a Greentech

Renewables) (“ Greentech ”).

Greentech also provides us inventory management services by holding equipment in

its inventory until it delivers directly to the customer site for installation.

We purchase from Greentech through a credit agreement

under which Greentech extends us credit for purchases, and we are obligated to make payments by the 15th day of the month following each

A purchase discount is available for early cash payment, and a service charge of 1.5% per month can be assessed for payments

made more than 30 days after the invoice date.

Our agreement with Greentech does not require either party to continue to conduct new business

with the other party.

During 2023, we purchased approximately 98% of the equipment that we installed through Greentech.

We believe our

relationship with Greentech, and the volume of business we do through them, has established us as a preferred customer and enables us

to procure components at attractive terms.

If our relationship with Greentech were to be terminated, there are other distributors of the

same or similar equipment, and we believe we could readily obtain supplies from those other distributors, though they may take some time

to develop the efficient logistics system Greentech employs now on our behalf delivering products to the customer installation sites.

Heightened inflation in the costs of labor and components beginning

in 2020 and continuing today has contributed to fluctuating prices for solar energy equipment.

At times, we have had to pay increased

prices to obtain equipment.

This has not yet prevented us from obtaining the products we need to install systems purchased by our customers,

but there can be no assurance that this will continue.

We do not have information that allows us to quantify the specific amount of cost

increases attributable to inflationary pressures.

We have previously experienced price increases and temporary supply

delays resulting from multiple market phenomena, including the COVID-19 pandemic.

The majority of the solar panels and other

equipment that we install are manufactured outside of the U.S., and most are manufactured in China.

The general supply chain issues resulting

from the COVID-19 pandemic have had specific impacts on our sources of supply for solar energy equipment.

These issues have

included increased price pressures on solar panel components such as polysilicon, pandemic-related port closures, port congestion and

ship diversions, and increases in shipping rates from trans-Pacific ocean carriers due to factors that include limited availability of

shipping capacity, shortages of shipping containers, shortages of dock workers and truck drivers and increases in fuel prices.

These factors

have contributed to price increases and price fluctuations in solar energy equipment, and at times have caused delays in supply.

tariffs on solar energy equipment, including tariffs placed on solar equipment manufactured in China, have also contributed to higher

prices on solar equipment.

Additionally, Russia’s war against Ukraine caused price and supply pressure on solar energy equipment,

as the war has impacted fuel prices and has led to increased demand in European markets for solar energy equipment as consumers and governments

in Europe have sought to establish greater energy independence.

In 2020, 2021, and 2022, we experienced periods of temporary delay in

obtaining supplies.

We believe these delays reduced the number of installations in comparison to what we would have been able to install

without the delays.

In 2023, we did not experience any appreciable delays in supply.

For more information on risks related to our supply chain, see “ Risk

Factors — Risks Related to Zeo’s Operations — Due to the limited number of suppliers in our industry, the acquisition

of any of these suppliers by a competitor or any shortage, delay, price change, imposition of tariffs or duties or other limitation in

our ability to obtain components or technologies we use could result in sales and installation delays, cancellations and loss of customers ”

and “ Risk Factors — Risks Related to Zeo’s Operations — Increases in the cost or reduction in supply of solar

energy system and energy storage system components due to tariffs or trade restrictions imposed by the U.S.

government could have an adverse

effect on our business, financial condition and results of operations.

Historically, our sales volume and installation activity has been highest

during late spring and summer.

During this time, consumers in many locations see greater energy needs due to operating air conditioning

systems and warm-weather appliances such as swimming pool pumps.

Our door-to-door sales efforts are also aided during these

months by daylight savings time providing increased daylight hours into the evening, and we have more sales personnel, many of whom are

college students, working during these months, as described above.

We typically have largely or entirely scaled down our internal sales

efforts during the fall, winter, and early spring.

Snow, cold weather or other inclement weather can also delay our installation of products

and services.

We plan to increase our market impact and grow our revenue and profits

by pursuing the following strategic objectives:

Expand our operations into additional geographic markets.

plan to continue to expand in new geographic markets, both organically and through strategic M&A, where favorable net metering policies

exist, where the percentage of the addressable residential market that already has residential solar energy systems is generally below

7%, and where we do not believe the market is already oversaturated with competitors.

We are actively considering additional markets to

enter beyond Florida, Texas, Arkansas and Missouri, as we identify markets which we believe may have large addressable markets and significant

customer demand for solar energy.

Increase capacity for efficient growth by investing in people and

We have increased the number of solar energy systems we sell and install by growing and training our internal seasonal

sales force, and we plan to continue to do so, as well as increasing our number of external dealers.

We have also grown and plan to continue

growing our installation capacity in markets we serve by hiring and training more skilled technicians and investing in technology.

we do not yet have installation teams in place, we plan to continue to collaborate with subcontractors to fulfill our installation needs.

Continue to grow our external dealer sales channel.

plan to increase the number of external dealers working to bring us customers.

We believe we will continue to have success in attracting

dealers to our business because of our scalable business platform that allows dealers to participate in the residential solar energy sales

and installation life cycle with limited investments in personnel and capital.

Expand customer options for buying affordable solar energy.

plan to expand our roofing business in all markets we enter in the future.

Roofing facilitates a faster processing time for our solar

installations in cases where the residential customer is in need of a roof replacement prior to installing solar systems.

We believe offering

customers the option to lease a residential solar energy system installed on their home will increase the number of systems we can sell

and install due to the potential savings for some customers that cannot otherwise take full advantage of certain tax incentives.

above, in December 2022, we launched a program offering customers the option of leasing residential solar energy systems from third parties

that we install on the customer’s home.

We are profitable .

We have a profitable business model, and

over the last four years, we have increased revenue and earned profit.

In adopting the systems and costs of operating as a publicly traded

company, we expect to face challenges to our ability to maintain or increase our profitability.

However, we believe our strengths position

us for accelerating our growth in an efficient manner that will produce profitable results.

under which Greentech extends us credit for purchases, and we are obligated to make payments by the 15 th day of the month

following each purchase.

A purchase discount is available for early cash payment, and a service charge of 1.5% per month can be assessed

for payments made more than 30 days after the invoice date.

Our agreement with Greentech does not require either party to continue

to conduct new business with the other party.

During 2024, we purchased at least approximately 70% of the equipment that we installed

through Greentech.

We believe our relationship with Greentech, and the volume of business we do through them, has established us as a

preferred customer and enables us to procure components at attractive terms.

If our relationship with Greentech were to be terminated,

there are other distributors of the same or similar equipment, and we believe we could readily obtain supplies from those other distributors,

though they may take some time to develop the efficient logistics system Greentech employs now on our behalf delivering products to the

customer installation sites.

Heightened inflation in the costs of labor and

components beginning in 2020 and continuing today has contributed to fluctuating prices for solar energy equipment.

At times, we have

had to pay increased prices to obtain equipment.

This has not yet prevented us from obtaining the products we need to install systems

purchased by our customers, but there can be no assurance that this will continue.

We do not have information that allows us to quantify

the specific amount of cost increases attributable to inflationary pressures.

We have previously experienced price increases

and temporary supply delays resulting from multiple market phenomena.

The majority of the solar panels and other major system equipment

components that we install are manufactured outside of the United States.

Government tariffs on solar energy equipment, including tariffs

placed on solar equipment manufactured in China, have also contributed to higher prices on solar equipment.

Additionally, Russia’s

war against Ukraine caused price and supply pressure on solar energy equipment, as the war has impacted fuel prices and has led to increased

demand in European markets for solar energy equipment as consumers and governments in Europe have sought to establish greater energy independence.

In 2020, 2021, and 2022, we experienced periods of temporary delay in obtaining supplies.

We believe these delays reduced the number of

installations in comparison to what we would have been able to install without the delays.

In 2023 and 2024, we did not experience appreciable

delays in supply.

Following new tariffs introduced by the U.S.

government in April 2025, as further detailed below, we expect to experience

an increase in prices for solar system equipment.

We have not experienced consequent delays in procuring equipment, but such delays may

For more information on risks related to our supply

chain, see “ Risk Factors — Risks Related to Zeo’s Operations — Due to the limited number

of suppliers in our industry, the acquisition of any of these suppliers by a competitor or any shortage, delay, price change, announcement

and imposition of tariffs or duties or other limitation in our ability to obtain components or technologies we use could result in sales

and installation delays, cancellations and loss of customers ” and “ Risk Factors — Risks Related to

Zeo’s Operations — Increases in the cost or reductions in supply of solar energy system and energy storage system

components due to tariffs or trade restrictions announced or imposed by the U.S.

government could have an adverse effect on our business,

financial condition and results of operations.

Historically, our sales volume and installation

activity has been highest during late spring and summer.

During this time, consumers in many locations see greater energy needs due to

operating air conditioning systems and warm-weather appliances such as swimming pool pumps.

Our door-to-door sales efforts are

also aided during these months by daylight savings time providing increased daylight hours into the evening, and we

have more sales personnel, many of whom are college students, working during these months, as described above.

We typically have

largely or entirely scaled down our internal sales efforts during the fall, winter, and early spring.

Snow, cold weather or other inclement

weather can also delay our installation of products and services.

We plan to increase our market impact and grow

our revenue and profits by pursuing the following strategic objectives:

Expand our operations into additional geographic

We plan to continue to expand in new geographic markets, both organically and through strategic M&A, considering factors

such as the rates consumers pay for electricity, where favorable net metering policies or cost incentives exist, the percentage of the

addressable residential market that already has residential solar energy systems , and where we believe the market is not already oversaturated

with competitors.

Increase capacity for efficient growth by investing

in people and systems.

In 2024, we experienced a decrease in sales and installations that generally affected

the solar industry during the same period.

Prior to 2024, we have generally increased the number of solar energy systems we sell and install

by growing and training our internal seasonal sales force, and we plan to continue to do so, as well as increasing our number of external

We have also grown and plan to continue growing our installation capacity in markets we serve by hiring and training more skilled

technicians and investing in technology.

Where we do not yet have installation teams in place, we plan to continue to collaborate with

subcontractors to fulfill our installation needs.

Continue to grow our external dealer sales

We plan to increase the number of external dealers working to bring us customers.

We believe we will

continue to have success in attracting dealers to our business because of our scalable business platform that allows dealers to participate

in the residential solar energy sales and installation life cycle with limited investments in personnel and capital.

Expand customer options for buying affordable

solar energy.

We plan to expand our roofing business in certain markets we enter in the future.

Roofing facilitates

a faster processing time for our solar installations in cases where the residential customer is in need of a roof replacement prior to

installing solar systems.

We believe offering customers the option to lease a residential solar energy system installed on their home

will increase the number of systems we can sell and install due to the potential savings for some customers that cannot otherwise take

full advantage of certain tax incentives.

As described above, in December 2022, we launched a program offering customers the option

of leasing residential solar energy systems from third parties that we install on the customer’s home.

Lean Business Model.

have a lean business model, in the four years prior to 2024, we had an increase in revenue and profit every year.

In 2024, in the face

of a challenging economic environment for our industry, we believe that our lean operations have permitted us to minimize losses.

Our Sales Model.

Our sales methodology produces a high volume

We believe our internal sales process drives a high volume of sales per sales representative and results in low customer acquisition

The success of our sales processes starts with quality, hands-on training for each sales representative.

Our self-produced

digital learning platform presents our sales representatives with sample customer scenarios and guides them in learning effective communication

techniques, as well as how to efficiently carry out administrative steps required for completing sales.

Each sales representative’s

responses to sample customer scenarios are reviewed and critiqued by managers of our internal sales team.

In our sales model, a majority of personnel knock on doors of potential

customers and explain the benefits of solar energy and our offerings with the objective of scheduling a subsequent sales meeting.

scheduled meetings, a more experienced sales representative or sales manager provides a homeowner additional information about system

design, energy savings and other benefits, pricing, incentives and financing options.

We believe that the key elements to our successful business model include

(i) effective training and time spent with senior sales managers, (ii) our use of our customer relationship management software platform

which concurrently tracks key performance indicators across the sales cycle, and (iii) our multi-step setter-closer sales model, which

enables senior sales personnel to focus on greater sales success in presentations, while setters focus on developing and filtering quality,

qualified leads, all of which then contributes to maximizing the percentage of leads converted into sales and sales into installations

because of satisfied customers throughout the process.

As of December 31, 2023.

During the Company’s peak sales period in late Spring and Summer of 2023.

See “ - Seasonality ” above.

Our vertical integration leads to customer satisfaction and personnel

We believe our vertically integrated business model, in which we market, design, sell, procure, install and service

systems, has a major benefit of enhancing the speed of project completion after an initial sale is made.

It also allows us to price projects

strategically with information from both the sales and installation sides of the process.

Our greater control over the total process and

our resulting success rates in navigating the local municipal permit process is intended to increase customer satisfaction and reduce

potential sales force frustration from losing many jobs due to delays in the installation process.

Our ratio of sales converted to completed

installations is higher for sales that come from our internal agents than that that come from our dealer sales.

We believe this higher

rate helps increase the job satisfaction and retention rate for our personnel, as it enhances commissions that are paid out to sales personnel

and managers, and provides work for installation teams.

Our scalable business platform allows us to grow efficiently.

believe that we have established a scalable business platform for efficiently completing the life-cycle of tasks involved in offering

and fulfilling customers’ residential solar power needs.

sales methodology produces a high volume of sales.

We believe our internal sales process drives a high volume of sales per sales representative

and results in low customer acquisition costs.

The success of our sales processes starts with quality, hands-on training for each

sales representative.

Our self-produced digital learning platform presents our sales representatives with sample customer scenarios

and guides them in learning effective communication techniques, as well as how to efficiently carry out administrative steps required

for completing sales.

Each sales representative’s responses to sample customer scenarios are reviewed and critiqued by managers

of our internal sales team.

In our sales model, a majority of personnel knock

on doors of potential customers and explain the benefits of solar energy and our offerings with the objective of scheduling a subsequent

sales meeting.

In the scheduled meetings, a more experienced sales representative or sales manager provides a homeowner additional information

about system design, energy savings and other benefits, pricing, incentives and financing options.

We believe that the key elements to our successful

business model include (i) effective training and time spent with senior sales managers, (ii) our use of our customer relationship

management software platform which concurrently tracks key performance indicators across the sales cycle, and (iii) our multi-step setter-closer sales

model, which enables senior sales personnel to focus on greater sales success in presentations, while setters focus on developing and

filtering quality, qualified leads, all of which then contributes to maximizing the percentage of leads converted into sales and sales

into installations because of satisfied customers throughout the process.

Our vertical integration leads to customer

satisfaction and personnel retention.

We believe our vertically integrated business model, in which we market,

design, sell, procure, install and service systems, has a major benefit of enhancing the speed of project completion after an initial

sale is made.

It also allows us to price projects strategically with information from both the sales and installation sides of the process.

Our greater control over the total process and our resulting success rates in navigating the local municipal permit process is intended

to increase customer satisfaction and reduce potential sales force frustration from losing many jobs due to delays in the installation

Our ratio of sales converted to completed installations is higher for sales that come from our internal agents than that that

come from our dealer sales.

We believe this higher rate helps increase the job satisfaction and retention rate for our personnel, as it

enhances commissions that are paid out to sales personnel and managers, and provides work for installation teams.

Our scalable business platform allows us to

grow efficiently.

We believe that we have established a scalable business platform for efficiently completing

the life-cycle of tasks involved in offering and fulfilling customers’ residential solar power needs.

This platform is principally:

(a) software we use in designing, selling,

installing and servicing systems, and in tracking key performance indicators across the sales cycle;

and (b) the business processes of

our employees that perform field work, system design, permitting, installation and back-office support tasks.

This platform is intended

to allow us to undergo rapid sales and installation growth by efficiently adding new personnel and collaborating effectively with external

dealers who bring us additional customers.

We have carefully designed these processes and our pre- and post-installation operations

to be effective systems which can be easily explained to new employees and replicated in the new cities and regions in which we operate

The solar energy and renewable energy industries are both highly competitive

and continually evolving as participants strive to distinguish themselves within their markets and compete with large electric utilities.

We consider our primary competitors to be electric utilities that supply

electricity to our potential customers.

We compete with these electric utilities primarily based on price (cents per kWh), predictability

of future prices and the ease by which customers can switch to electricity generated by our residential solar energy systems.

compete with them based on other value-added benefits.

These include reliability and carbon-friendly power, benefits which consumers have

historically paid a premium to secure, but which customers can obtain by purchasing a solar energy system for monthly costs that are sometimes

equal to or less than a traditional monthly power bill from the utility.

We also compete with retail electric providers and independent power

producers that are not regulated like electric utilities but which have access to the utilities’ electricity transmission and distribution

infrastructure pursuant to state, territorial and local pro-competition and consumer choice policies.

These retail electric

providers and independent power producers can offer customers electricity solutions that are competitive with our residential solar energy

system options on both price and usage of renewable energy technology while avoiding the physical installations that our current business

model requires.

We compete with community solar products offered by solar companies

or sponsored by local governments and municipal power companies, as well as utility companies that provide renewable power purchase programs.

Some customers might choose to subscribe to a community solar project or renewable subscriber program instead of having a residential

solar energy system installed on their home, which could affect our sales.

Additionally, some utility companies (and some utility-like

entities, such as community choice aggregators) have power generation portfolios that are increasingly renewable in nature.

companies offer increasingly renewable portfolios to retail customers, those customers might be less inclined to have a residential solar

energy system installed on their home or business, which could adversely affect our growth.

We also compete with solar energy companies with vertically integrated

business models like our own, many of which are larger than we are.

For example, some of our competitors offer their own consumer financing

products to customers and/or produce one or more components of the residential solar energy system or energy storage system.

to financing and manufacturing, some other business models also include sales, engineering, installation, maintenance and monitoring services.

Some of our competitors also have an established complementary construction, electrical contracting or roofing services.

Some competitors also offer customers the option of leasing a

residential solar energy system installed on the customer’s residence.

In such a scenario, the provider or a third party owns

the residential solar energy system, and the customer typically pays a predetermined fee for the electricity produced by the

(a) software we use in designing, selling, installing and servicing systems, and in tracking key performance indicators across the

and (b) the business processes of our employees that perform field work, system design, permitting, installation and

back-office support tasks.

This platform is intended to allow us to undergo rapid sales and installation growth by efficiently adding

new personnel and collaborating effectively with external dealers who bring us additional customers.

We have carefully designed these

processes and our pre- and post-installation operations to be effective systems which can be easily explained to new employees and

replicated in the new cities and regions in which we operate and expand.

The solar energy and renewable energy industries

are both highly competitive and continually evolving as participants strive to distinguish themselves within their markets and compete

with large electric utilities.

We consider our primary competitors to be electric

utilities that supply electricity to our potential customers.

We compete with these electric utilities primarily based on price (cents

per kWh), predictability of future prices and the ease by which customers can switch to electricity generated by our residential solar

energy systems.

We may also compete with them based on other value-added benefits.

These include reliability and carbon-friendly

power, benefits which consumers have historically paid a premium to secure, but which customers can obtain by purchasing a solar energy

system for monthly costs that are sometimes equal to or less than a traditional monthly power bill from the utility.

We also compete with retail electric providers

and independent power producers that are not regulated like electric utilities, but which have access to the utilities’ electricity

transmission and distribution infrastructure pursuant to state, territorial and local pro-competition and consumer choice policies.

These retail electric providers and independent power producers can offer customers electricity solutions that are competitive with our

residential solar energy system options on both price and usage of renewable energy technology while avoiding the physical installations

that our current business model requires.

We compete with community solar products offered

by solar companies or sponsored by local governments and municipal power companies, as well as utility companies that provide renewable

power purchase programs.

Some customers might choose to subscribe to a community solar project or renewable subscriber program instead

of having a residential solar energy system installed on their home, which could affect our sales.

Additionally, some utility companies

(and some utility-like entities, such as community choice aggregators) have power generation portfolios that are increasingly renewable

As utility companies offer increasingly renewable portfolios to retail customers, those customers might be less inclined to

have a residential solar energy system installed on their home or business, which could adversely affect our growth.

We also compete with solar energy companies with

vertically integrated business models like our own, many of which are larger than we are.

For example, some of our competitors offer their

own consumer financing products to customers and/or produce one or more components of the residential solar energy system or energy storage

In addition to financing and manufacturing, some other business models also include sales, engineering, installation, maintenance

and monitoring services.

Some of our competitors also have an established complementary construction, electrical contracting or roofing

Some competitors also offer customers the option

of leasing a residential solar energy system installed on the customer’s residence.

In such a scenario, the provider or a third

party owns the residential solar energy system, and the customer typically pays a predetermined fee for the electricity produced by the

residential solar energy system.

The fee generally increases annually at a predetermined rate over the lease term, which is

typically 20 to 25 years, with a renewal option.

Such a lease program can take fuller advantage of some of the available tax

incentives and, therefore, can reduce the customer’s monthly costs in comparison to owning the residential solar energy

We compete against companies that are not vertically integrated, such

as companies that offer only installation services, or provide only equipment to be installed, or dealers that sell systems for which

another entity or entities will provide and install equipment.

Some of these entities finance products directly to consumers, inclusive

of programs like Property-Assessed Clean Energy financing programs established by local governments.

For example, we face competition

from solar installation businesses that seek financing from external parties or utilize competitive loan products or state and local programs.

We expect the competition to evolve as the market continues to grow,

evolve and attract new market entrants.

We believe that with our business model and sales strategy, we can compete effectively and favorably

within the industry.

For more information on risks relating to increased competition in

our industry, see “ Risk Factors — Risks Related to the Solar Industry — We face competition from electric utilities,

retail electric providers, independent power producers, renewable energy companies and other market participants.

The fee generally increases annually at a predetermined rate over the lease term, which is typically

20 to 25 years, with a renewal option.

Such a lease program can take fuller advantage of some of the available tax incentives and,

therefore, can reduce the customer’s monthly costs in comparison to owning the residential solar energy system.

We compete against companies that are not vertically

integrated, such as companies that offer only installation services, or provide only equipment to be installed, or dealers that sell systems

for which another entity or entities will provide and install equipment.

Some of these entities finance products directly to consumers,

inclusive of programs like Property-Assessed Clean Energy financing programs established by local governments.

For example, we face

competition from solar installation businesses that seek financing from external parties or utilize competitive loan products or state

and local programs.

We expect the competition to evolve as the market

continues to grow, evolve and attract new market entrants.

We believe that with our business model and sales strategy, we can compete

effectively and favorably within the industry.

For more information on risks relating to increased

competition in our industry, see “ Risk Factors — Risks Related to the Solar Industry — We face

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

participants.

Intellectual Property

We protect our intellectual property rights by relying on common law

protections and through contractual arrangements.

We typically require our personnel, consultants and third parties such as our suppliers

with access to our proprietary information to execute confidentiality agreements.

Our principal trade secrets and copyrighted materials

consist of our sales methodologies and data regarding our personnel, customers and suppliers.

We also license third-party software and services that we use in operating

our business.

These third-party solutions include, among others, software that we use in selling and designing our products services,

a customer relationship management system to actively track key performance indicators across the sales cycle and software to augment

our sales and marketing efforts.

We maintain the types and amounts of insurance coverage and on terms

deemed adequate by management based on our actual claims experience and expectations for future claims.

However, future claims could exceed

our applicable insurance coverage.

Our insurance policies cover employee-and contractor-related accidents and injuries, property damage,

business interruption, storm damage, inventory, vehicles, fixed assets, facilities, and crime and general liability deriving from our

We have also obtained insurance policies covering directors, officers, employment practices, auto liability, and commercial

general liability.

We may also be covered in some circumstances for certain liabilities by insurance policies owned by third parties,

including, but not limited to, our dealers and vendors.

We protect our intellectual property rights by

relying on common law protections and through contractual arrangements.

We typically require our personnel, consultants and third parties

such as our suppliers with access to our proprietary information to execute confidentiality agreements.

Our principal trade secrets and

copyrighted materials consist of our sales methodologies and data regarding our personnel, customers and suppliers.

We also license third-party software and

services that we use in operating our business.

These third-party solutions include, among others, software that we use in selling and

designing our products services, a customer relationship management system to actively track key performance indicators across the sales

cycle and software to augment our sales and marketing efforts.

We maintain the types and amounts of insurance

coverage and on terms deemed adequate by management based on our actual claims experience and expectations for future claims.

future claims could exceed our applicable insurance coverage.

Our insurance policies cover employee-and contractor-related accidents

and injuries, property damage, business interruption, storm damage, inventory, vehicles, fixed assets, facilities, and crime and general liability

deriving from our activities.

We have also obtained insurance policies covering directors, officers, employment practices, auto liability,

and commercial general liability.

We may also be covered in some circumstances for certain liabilities by insurance policies owned by

third parties, including, but not limited to, our dealers and vendors.

Government Regulation

tariffs, duties and other trade regulations impact the prices

of components in the residential solar energy systems and energy storage systems we sell, in addition to the pricing pressures caused

by supply chain factors as discussed above.

government-based pricing influences currently include tariffs placed on crystalline

silicon PV cells and solar panels imported into the U.S.

Also, China is a major producer of solar modules, inverters and other components

that we use in the systems that we install, and the U.S.

currently assesses various tariffs and antidumping and countervailing duties

on equipment produced in China, including solar modules and inverters.

has also placed certain geographic, company-specific and

other trade restrictions on Chinese sources of supply based on foreign policy and national security interests.

The scope and timing of

these regulatory efforts change over time, and the government may introduce new regulations as world events occur and public policy evolves.

In response to the market uncertainty and price fluctuations caused by these government actions and other supply chain pressures, we carefully

and periodically evaluate our suppliers of system components and make purchasing decisions based on our judgments of product quality,

warranties, pricing and availability.

For more information on risks relating to government tariffs, duties

or trade restrictions, see “ Risk Factors — Risks Related to Zeo’s Operations — Increases in the cost or reduction

in supply of residential solar energy system and energy storage system components due to tariffs or trade restrictions imposed by the

tariffs, duties and other trade regulations

impact the prices of components in the residential solar energy systems and energy storage systems we sell, in addition to the pricing

pressures caused by supply chain factors as discussed above.

As further discussed below, these U.S.

government-based pricing

influences currently include various tariffs, such as antidumping (“ AD ”) and countervailing duties (“ CVD ”)

and other trade restrictions, applied to imported crystalline silicon PV cells and solar panels imported into the U.S.

is a major producer of solar panels, inverters and other components that we use in the systems that we install, and the U.S.

assesses various tariffs and antidumping and countervailing duties on equipment produced in China, including solar panels and inverters.

has also placed certain geographic, company-specific and other trade restrictions on Chinese sources of supply based

on foreign policy and national security interests.

The scope and timing of these regulatory efforts change over time, and the government

may introduce new regulations as world events occur and public policy evolves.

In response to the market uncertainty and price fluctuations

caused by these government actions and other supply chain pressures, we carefully and periodically evaluate our suppliers of system components

and make purchasing decisions based on our judgments of product quality, warranties, pricing and availability.

For more information on risks relating to government

tariffs, duties or trade restrictions, see “ Risk Factors — Risks Related to Zeo’s Operations — Increases

in the cost or reduction in supply of residential solar energy system and energy storage system components due to tariffs or trade restrictions

announced or imposed by the U.S.

government could have an adverse effect on our business, financial condition and results of operations.

Our operations are subject to various national, state and local laws

and regulations.

These include regulations regarding license requirements for electricians or other professionals involved in the installation

of residential solar energy systems and energy storage systems.

Many states and/or local governments and utilities have regulated procedures

for interconnecting residential solar energy systems and related energy storage systems to the utility’s local distribution system.

There are also local building codes or other local regulations for installing the products we sell on a customer’s property.

employ or contract with licensed professionals as needed to comply with regulatory requirements, and as part of our process of installing

residential solar energy systems and related equipment, we assist our customers in obtaining interconnection permission from the applicable

local electric distribution utility, and applicable permits from other local offices.

Our operations, as well as those of our suppliers and subcontractors,

are subject to stringent and complex U.S.

Our operations are subject to various national,

state and local laws and regulations.

These include regulations regarding license requirements for electricians or other professionals

involved in the installation of residential solar energy systems and energy storage systems.

Many states and/or local governments and

utilities have regulated procedures for interconnecting residential solar energy systems and related energy storage systems to the utility’s

local distribution system.

There are also local building codes or other local regulations for installing the products we sell on a customer’s

We employ or contract with licensed professionals as needed to comply with regulatory requirements, and as part of our process

of installing residential solar energy systems and related equipment, we assist our customers in obtaining interconnection permission

from the applicable local electric distribution utility, and applicable permits from other local offices.

Our operations, as well as those of our suppliers

and subcontractors, are subject to stringent and complex U.S.

federal, state, territorial and local laws, including regulations governing

2 unchanged sentences

subcontractors are subject to the regulations OSHA, the U.S.

Department of Transportation (“ DOT ”), the U.S.

Environmental Protection Agency (“ EPA ”) and comparable state entities that protect and regulate employee health

and safety and the protection of the environment.

Various environmental, health and safety laws can result in the imposition of costs

and liability in connection with system and equipment installation, the repair or replacement of parts, and disposal of hazardous substances

(such as the disposal and recycling of batteries).

We and the dealers that supply us with sales opportunities or completed

sales are also subject to laws and regulations related to interactions with consumers, including those applicable to sales and trade practices,

privacy and data security, equal protection, consumer financial and credit transactions, consumer collections, mortgages and re-financings, home

or business improvements, trade and professional licensing, warranties, and various means of customer solicitation, as well as specific

regulations pertaining to solar installations.

Department of Transportation (“ DOT ”), the

Environmental Protection Agency (“ EPA ”) and comparable state entities that protect and regulate employee

health and safety and the protection of the environment.

Various environmental, health and safety laws can result in the imposition of

costs and liability in connection with system and equipment installation, the repair or replacement of parts, and disposal of hazardous

substances (such as the disposal and recycling of batteries).

We and the dealers that supply us with sales opportunities

or completed sales are also subject to laws and regulations related to interactions with consumers, including those applicable to sales

and trade practices, privacy and data security, equal protection, consumer financial and credit transactions, consumer collections, mortgages

and re-financings, home or business improvements, trade and professional licensing, warranties, and various means of customer solicitation,

as well as specific regulations pertaining to solar installations.

Government Incentives

There are U.S.

federal, state and local governmental bodies that provide

incentives to owners, distributors, installers and manufacturers of residential solar energy systems to promote solar energy.

These incentives

include an investment tax credit and income tax credit offered by the federal government, as well as other tax credits, rebates and Solar

Renewable Energy Credits associated with solar energy generation.

federal Energy Policy Act of 2005, as amended, established

what came to be known as the Residential Energy Efficient Property Credit, an incentive that provides homeowners a 30% tax credit for

the cost of purchasing and installing qualified residential alternative energy equipment, including solar electricity equipment.

renamed this credit as the Residential Clean Energy Credit and extended the 30% credit through 2032.

The credit rate falls to 26% in 2033,

22% for 2034 and expires at the end of 2034.

The IRA also provides other incentives for homeowners to adopt energy-efficient systems and

appliances that include:

(a) a 30% tax credit with an annual limit for certain upgrades such as installing energy-efficient hybrid water

heaters, doors and windows, insulation, and upgrading electrical breaker boxes;

and (b) up to $14,000 in point-of-sale rebates

for low- and moderate-income households for certain electric appliances and home upgrades.

Our business model also relies on multiple tax exemptions offered at

the state and local levels.

For example, some states have property tax exemptions that exempt the value of residential solar energy systems

in determining values for calculation of local and state real and personal property taxes, and there are some state and local tax exemptions

that apply to the sale of equipment.

State and local tax exemptions can have sunset dates or triggers for loss of the exemption, and the

exemptions can be changed by state legislatures and other regulators.

A majority of states have adopted net metering policies, including

our sales areas of Florida, Texas, Arkansas and Missouri.

Net metering policies allow homeowners to serve their own energy load using on-site generation

while avoiding the full retail volumetric charge for electricity.

Electricity that is generated by a residential solar energy system and

consumed on-site avoids a retail energy purchase from the applicable utility, and excess electricity that is exported back to

the electric grid generates a retail credit within a homeowner’s monthly billing period.

At the end of the monthly billing period,

if the homeowner has generated excess electricity within that month, the homeowner typically carries forward a credit for any excess electricity

to be offset against future utility energy purchases.

At the end of an annual billing period or calendar year, utilities either continue

to carry forward a credit or reconcile the homeowner’s final annual or calendar year bill using different rates (including zero

credit) for the exported electricity.

Utilities, their trade associations, and other entities are currently

challenging net metering policies in various locations by seeking to eliminate them, cap them, reduce the value of the credit provided

to homeowners for excess generation or impose charges on homeowners that have net metering.

States where we sell now or in the future

may change, eliminate or reduce net metering benefits.

On April 26, 2022, the Florida governor vetoed legislation that would have established

a date for reducing and ending net metering in Florida.

We rely on a mix of the incentives mentioned above to reduce the net

price our customers that are eligible for incentives would otherwise pay for our solar offerings or per kilowatt hour used.

federal, state and local governmental

bodies that provide incentives to owners, distributors, installers and manufacturers of solar energy systems to promote solar energy.

These incentives include tax credits offered by the federal government under, among others, the Energy Policy Act of 2005, as amended,

and the Inflation Reduction Act of 2022 (“ IRA ”), as well as other tax credits, rebates and Solar Renewable Energy

Credits (“ SRECs ”) associated with solar energy generation.

Commercial taxpayers, including solar energy system

owners and tax-equity partners, may claim a federal investment tax credit equal to 30% of eligible project costs for solar facilities

that meet certain requirements.

The base credit is scheduled to phase down to 26% for projects beginning construction in 2033 and 22%

in 2034, expiring thereafter.

In addition, commercial solar energy facilities may be eligible for bonus credits for projects that meet

domestic-content thresholds, are located in energy-community census tracts, or serve low-income communities.

If a solar energy system

is owned by a homeowner, the homeowner may claim a 30% federal income tax credit on the cost of purchasing and installing eligible solar

energy systems through 2032, phasing down to 26% in 2033, and 22% in 2034, expiring thereafter.

The IRA also provides other incentives

for homeowners to adopt energy-efficient systems and appliances that include (a) a 30% tax credit with an annual limit for certain

upgrades such as installing energy-efficient hybrid water heaters, doors and windows, insulation, and upgrading electrical breaker

boxes and (b) up to $14,000 in point-of-sale rebates for low- and moderate-income households for certain electric appliances

and home upgrades.

Our business model also relies on multiple tax

exemptions offered at the state and local levels.

For example, some states have property tax exemptions that exempt the value of residential

solar energy systems in determining values for calculation of local and state real and personal property taxes, and there are some state

and local tax exemptions that apply to the sale of equipment.

State and local tax exemptions can have sunset dates or triggers for loss

of the exemption, and the exemptions can be changed by state legislatures and other regulators.

A majority of states have adopted net metering

policies, including our sales areas of Florida, Texas, Missouri, Ohio and Illinois.

Net metering policies allow homeowners to serve their

own energy load using on-site generation while avoiding the full retail volumetric charge for electricity.

Electricity that is generated

by a residential solar energy system and consumed on-site avoids a retail energy purchase from the applicable utility, and excess

electricity that is exported back to the electric grid generates a retail credit within a homeowner’s monthly billing period.

the end of the monthly billing period, if the homeowner has generated excess electricity within that month, the homeowner typically carries

forward a credit for any excess electricity to be offset against future utility energy purchases.

At the end of an annual billing period

or calendar year, utilities either continue to carry forward a credit or reconcile the homeowner’s final annual or calendar year

bill using different rates (including zero credit) for the exported electricity.

Utilities, their trade associations, and other

entities are currently challenging net metering policies in various locations by seeking to eliminate them, cap them, reduce the value

of the credit provided to homeowners for excess generation or impose charges on homeowners that have net metering.

States where we sell

now or in the future may change, eliminate or reduce net metering benefits.

On April 26, 2022, the Florida governor vetoed legislation

that would have established a date for reducing and ending net metering in Florida.

We rely on a mix of the incentives mentioned above

to reduce the net price our customers that are eligible for incentives would otherwise pay for our solar offerings or per kilowatt hour

Employees and Human Capital Management

As of December 31, 2023, we have approximately 190 full-time employees

that work year-round processing orders, installing and servicing systems and fulfilling administrative tasks.

We also engage sales agents

as independent contractors as described in “— Internal Direct Sales Force ” above.

None of our employees

are covered by collective bargaining agreements, and we have not experienced any work stoppages due to labor disputes.

Our corporate headquarters are located in Florida under a lease that

expires at the end of October 2026.

We maintain offices for operations in Texas and Arkansas, and we have sales, marketing and executive

offices in Utah and throughout Florida.

We currently lease the office and warehouse spaces that we use in our operations, and we do not

own any real property.

We believe that our facility space adequately meets our needs and that we will be able to obtain any additional

operating space that may be required on commercially reasonable terms.

We are not currently a party to any material litigation or governmental

or other proceeding.

However, from time to time, we have been, are and will likely continue to be involved in legal proceedings, administrative

proceedings and claims that arise in the ordinary course of business with customers, subcontractors, suppliers, regulatory bodies or others.

In general, litigation claims or regulatory proceedings can be expensive and time consuming to bring or defend against, which may result

in the diversion of management’s attention and resources from our business and business goals and could result in settlement or

damages that could significantly affect financial results and the conduct of our business.

As of December 31, 2024, we had approximately

190 full-time employees that work year-round processing orders, installing and servicing systems and fulfilling administrative

We also engage sales agents as independent contractors as described in “ Business — Internal Direct

Sales Force ” above.

None of our employees are covered by collective bargaining agreements, and we have not experienced any work

stoppages due to labor disputes.

Our corporate headquarters are located in Florida

under a lease that expires at the end of October 2026.

In Florida, we maintain offices for operations personnel and warehouses, and

we have warehouses in Texas and Ohio, and warehouse, sales, marketing, and executive offices in Utah.

We currently lease the office and

warehouse spaces that we use in our operations, and we do not own any real property.

We believe that our facility space adequately meets

our needs and that we will be able to obtain any additional operating space that may be required on commercially reasonable terms.

We are not currently a party to any material litigation

or governmental or other proceeding.

However, from time to time, we have been, are and will likely continue to be involved in legal proceedings,

administrative proceedings and claims that arise in the ordinary course of business with customers, subcontractors, suppliers, regulatory

bodies or others.

In general, litigation claims or regulatory proceedings can be expensive and time consuming to bring or defend against,

which may result in the diversion of management’s attention and resources from our business and business goals and could result

in settlement or damages that could significantly affect financial results and the conduct of our business.

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-K

Item 1. Business