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Item 9A. Controls and Procedures

2025-05-28 compared with 2024-03-25 · 2759 added, 1741 removed, 354 unchanged (93% of the section changed)

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generally accepted accounting principles.

We do not expect that our disclosure controls and procedures

will prevent all errors and all instances of fraud.

Disclosure controls and procedures, no matter how well conceived and operated, can

provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.

Further, the design

of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative

to their costs.

Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and

procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any.

of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can

be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Management’s Report on Internal Controls Over Financial

We do not expect that our disclosure controls

and procedures will prevent all errors and all instances of fraud.

Disclosure controls and procedures, no matter how well conceived and

operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.

Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits

must be considered relative to their costs.

Because of the inherent limitations in all disclosure controls and procedures, no evaluation

of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances

of fraud, if any.

The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of

future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Management’s Report on Internal Controls

Over Financial Reporting

Our management is responsible for establishing

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financial reporting was not effective as of December 31, 2024.

We identified material weaknesses in our internal control over financial

reporting, specifically, we did not design and maintain an effective control environment to prevent or detect material misstatements to

the financial statements.

Specifically, we lacked a sufficient complement of personnel with an appropriate level of internal controls

and accounting knowledge, training and experience commensurate with our financial reporting requirements.

Specifically, management did

not design and maintain effective controls over the calculation of earnings per share and classification of the reinvestment of interest

and dividend income in the Trust Account in the statement of cash flows.

A material weakness is a deficiency, or combination of deficiencies,

in internal control over financial reporting, such that there is reasonable possibility that a material misstatement of the annual or

interim financial statements will not be prevented or detected on a timely basis.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial

reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have

materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Further, the design

of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative

to their costs.

Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and

procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any.

As previously disclosed, a material weakness exists in the Company’s

internal control over financial reporting related to ineffective controls over period end financial disclosure and reporting processes,

including not timely performing certain reconciliations and the completeness and accuracy of those reconciliations, and lack of effectiveness

of controls over accurate accounting and financial reporting and reviewing the underlying financial statement elements, and recording

incorrect journal entries that also did not have the sufficient review and approval.

Notwithstanding the identified material weaknesses,

discussed below, management, including the certifying officers, believes that the financial statements contained in this Report filing

fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented in conformity

Material Weaknesses

A material weakness is a deficiency, or a combination

of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement

of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

As previously disclosed, a material weakness exists

in the Company’s internal control over financial reporting related to ineffective controls over period end financial disclosure

and reporting processes, including not timely performing certain reconciliations and the completeness and accuracy of those reconciliations,

and lack of effectiveness of controls over accurate accounting and financial reporting and reviewing the underlying financial statement

elements, and recording incorrect journal entries that also did not have the sufficient review and approval.

The control deficiencies

resulted in and could result in a future misstatement in our accounts or disclosures that would result in a material misstatement

to our financial statements that would not be prevented or detected.

Accordingly, we determined that these control deficiencies constitute

material weaknesses.

We are in the early stages of designing and implementing a plan to

remediate the material weaknesses identified.

Our plan includes the below:

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

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

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

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

Hiring additional experienced accounting, financial reporting and internal control personnel and changing roles and responsibilities of our personnel as we transition to being a public company and are required to comply with Section 404 of the Sarbanes-Oxley Act (“ Section 404 ”).

We are in the process of hiring additional resources and we are engaging with a third-party consulting firm to assist us with our formal internal control plan and to provide accounting services related to complex accounting transactions.

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

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

Management has considered and reviewed the errors

which occurred in revenue and cost of goods sold cutoff, accounts payable, accrued liabilities, stock compensation, expense classification,

prepaid expenses, operating lease cash flow classification and accounting for finance lease arrangements.

Management has determined that

controls are not designed effectively in these areas.

To mitigate future misstatements in these areas management will implement the following

procedures at the end of each reporting period:

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

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

Stock Compensation - Review with the CEO and legal counsel the list

of stock grants which have been made and ask if there have been any other grants made (paper issued to employees or vendors) which should

be included in the analysis.

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

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

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

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

We cannot assure you that these measures will

remediate the material weaknesses described above.

The implementation of these remediation measures is in the early stages and will require

validation and testing of the design and operating effectiveness of our internal controls over a sustained period of financial reporting

cycles and, as a result, the timing of when we will be able to fully remediate the material weaknesses is uncertain.

If the steps we take

do not remediate the material weaknesses in a timely manner, there could be a reasonable possibility that these control deficiencies or

others may result in a material misstatement of our annual or interim financial statements that would not be prevented or detected on

a timely basis.

This, in turn, could jeopardize our ability to comply with our reporting obligations, limit our ability to access the

capital markets and adversely impact our stock price.

Changes in Internal Control over Financial

There were no changes in our internal control

over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal

quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered

relative to their costs.

Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls

and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any.

of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can

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OTHER INFORMATION.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS

THAT PREVENT INSPECTIONS.

DISCLOSURE REGARDING FOREIGN

JURISDICTIONS THAT PREVENT INSPECTIONS.

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Our officers and directors are as follows:

Timothy Bridgewater

Chief Executive Officer, Chief Financial Officer and Director

Chief Executive Officer and Director

Cannon Holbrook

Chief Financial Officer

Chief Operating Officer

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Timothy Bridgewater.

Bridgewater has

served as Zeo’s Chief Executive Officer, Chief Financial Officer and chairman of the board since its creation in October 2021.

served as a founder and manager for Sunergy’s predecessor company Sun First Energy since October 2019 until the Contribution of

Sun First Energy, LLC into Sunergy in October 2021.

has served as Sunergy’s Chief Executive Officer and chairman of the board since its creation in October 2021.

He previously

served as the Company’s Chief Financial Officer from October 2021 until August 2024.

Bridgewater also served as a founder

and manager for Sunergy’s predecessor company Sun First Energy since October 2019 until the Contribution of Sun First Energy,

LLC into Sunergy in October 2021.

From July 2002 to the present, Mr.

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component manufacturing to electronics and software technologies in the U.S.

Bridgewater is the manager of Sunergy Solar

Bridgewater is the manager of Sunergy

From October 2018 to September 2020, Mr.

Bridgewater held the position of manager at Micro Bolt, an energy development company.

April 2020, he has served as a manager at Prometheus Power Partners, LLC, a commercial and utility-scale solar energy development company.

Bridgewater held the position of manager at Micro Bolt, an energy

development company.

Since April 2020, he has served as a manager at Prometheus Power Partners, LLC, a commercial and utility-scale

solar energy development company.

From November 2019 to April 2021, Mr.

Bridgewater served as the Chief Financial Officer of Tintic Consolidated Metals, LLC, a mining company,

and from November 2019 to November 2021, he served as a Vice President for that company.

Bridgewater served as the Chief Financial Officer

of Tintic Consolidated Metals, LLC, a mining company, and from November 2019 to November 2021, he served as a Vice President

for that company.

Bridgewater earned his B.S.

in Finance from

Brigham Young University and completed graduate studies in International Economics from University of Utah.

in Finance from Brigham Young University and completed graduate studies in International

Economics from University of Utah.

We believe that Mr.

is qualified to serve both as a member of our management team and the Board because of his visionary leadership of Zeo from inception

to date, his experience in energy development, and his over 30 years of commercial and international banking, international finance and

business development experience working in the U.S., Asia and Latin America.

Bridgewater is qualified to serve both as a member of our management team

and the Board because of his visionary leadership of Sunergy from inception to date, his experience in energy development, and his over

30 years of commercial and international banking, international finance and business development experience working in the U.S.,

Asia and Latin America.

Cannon Holbrook.

began serving as Zeo’s Chief Financial Officer on August 20, 2024.

He initially joined the Company in March 2024, serving as

advisor to the Chief Executive Officer during the Company’s de-SPAC process and, since that time, has lead its accounting, finance,

and treasury functions as well as building out its external reporting processes.

Holbrook brings over two decades of experience

in finance and accounting to the Company.

Throughout his career, he has demonstrated expertise in strategic planning, mergers and acquisitions,

and capital raising.

He has managed accounting operations for global entities, implemented shared services, and developed and driven process

improvements that have yielded significant cost savings and operational efficiencies.

Prior to joining the Company as CFO, Mr.

served as the advisor to the CEO from March to August 2024.

While in this role, he led the Company’s accounting, finance, and treasury

functions, helped the Company complete its de-SPAC combination in March 2024, and built out external reporting processes.

Before joining

our Company, Mr.

Holbrook served as the CFO of Hawx Pest Control, a company in the business of residential pest services.

he led accounting, finance, and treasury functions, helped the company increase its revenue, and helped to close a major private equity

Prior to this, from September 2020 to December 2021, Mr.

Holbrook served as the Head of Finance in Built Bar, a food manufacturer.

In this role, he implemented key financial reporting functions and helped raise debt and equity financing.

From July to September 2020,

he was the Consulting CFO of Access CFO, a business that provides outsourced CFO services.

While there, he drove company responses to

quality of earnings processes and planned and drove preparation for a company audit.

From December 2017 to July 2020, Mr.

was the VP of Accounting and Finance at HZO, Inc., a nanotechnology manufacturer.

While there, he implemented accounting and finance systems

and processes necessary to enable the company to meet needs through explosive growth, completed an audit, implemented automated accounting

processes, and raised debt and equity financing.

Kalen Larsen.

Larsen serves as Zeo’s

Chief Operating Officer, overseeing regional sales, dealer relations, operations, and process enhancements.

He served as Zeo’s Chief

of Sales and Marketing from October 2021 until Closing.

In September 2019, he co-founded Sun First Energy and co-managed sales and operations

there until its Contribution that formed Sunergy in October 2021.

Larsen began his solar career in October 2016 at Vivint Solar, LLC

and worked there until October 2017.

He worked at and co-managed a sales office at Vivint Inc.

from October 2017 to March 2019, and subsequently,

he managed a sales office for Atlantic Key Energy, LLC from March 2019 to October 2019.

Larsen holds an associate degree from Weber

State University with an emphasis in Spanish.

serves as Zeo’s Chief Operating Officer, overseeing regional sales, dealer relations, operations, and process enhancements.

as Sunergy’s Chief of Sales and Marketing from October 2021 until Closing.

In September 2019, he co-founded Sun First

Energy and co-managed sales and operations there until its Contribution that formed Sunergy in October 2021.

his solar career in October 2016 at Vivint Solar, LLC and worked there until October 2017.

He worked at and co-managed a sales

office at Vivint Inc.

from October 2017 to March 2019, and subsequently, he managed a sales office for Atlantic Key Energy,

LLC from March 2019 to October 2019.

Larsen holds an associate degree from Weber State University with an emphasis

We believe Mr.

Larsen is qualified to serve as a member of our management team because of

his sales and operations experience and proven track record in the solar energy industry.

Larsen is qualified to serve as a member of our management team because of his sales and operations experience

and proven track record in the solar energy industry.

Gianluca “Luke” Guy.

as Zeo’s Chief Installation and Strategy Officer, and has served as a director since the Closing of the Business Combination Mr.

Guy also currently serves as the Financially Responsible Officer at Sunergy Roofing & Construction, Inc., a subsidiary of Zeo, which

he co-founded in November 2020.

Guy is also the co-founder of Sunergy Solar, and oversaw sales, finance, and construction operations

until its Contribution that formed Sunergy in October 2021.

serves as Zeo’s Chief Installation and Strategy Officer, and has served as a director since the Closing of the Business Combination

Guy also currently serves as the Financially Responsible Officer at Sunergy Roofing & Construction, Inc., a subsidiary

of Zeo, which he co-founded in November 2020.

Guy is also the co-founder of Sunergy Solar, and oversaw sales, finance, and

construction operations until its Contribution that formed Sunergy in October 2021.

From January 2013 to August 2015, Mr.

Guy operated JHL Group, LLC, a company

he founded that provided marketing and sales for solar energy installation companies.

Guy holds a construction financial officer license

in the state of Florida.

operated JHL Group, LLC, a company he founded that provided marketing and sales for solar energy installation companies.

holds a construction financial officer license in the state of Florida.

We believe that Mr.

Guy is qualified to serve as a member of our management team and the Board because of his

pivotal role in driving Zeo’s business expansion through his expertise in sales, finance, construction, and strategic leadership.

Guy is qualified to serve as a member

of our management team and the Board because of his pivotal role in driving Sunergy’s business expansion through his expertise in

sales, finance, construction, and strategic leadership.

Brandon Bridgewater.

Bridgewater has served

as Zeo’s Chief Sales Officer since October, 2021 and is the son of Timothy Bridgewater, Zeo’s Chairman, Chief Executive Officer

and Chief Financial Officer.

has served as Sunergy’s Chief Sales Officer since October, 2021 and is the son of Timothy Bridgewater, Zeo’s Chairman and

Chief Executive Officer.

Bridgewater co-founded Sun First Energy, LLC, as its President and Chief Sales Officer, in September 2019

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From September 2017 to December 2018, Mr.

Bridgewater served as a Sales

Manager at Vivint Smart Home, Inc., a smart home company in the United States and Canada.

From August 2015 to September 2017, he served

as an Area Manager for Aptive Environmental, LLC, a pest control solution company.

Bridgewater earned his Bachelor of Science in Business

Finance (with an emphasis in Real Estate) from Brigham Young University’s Marriott School of Business in 2019.

served as a Sales Manager at Vivint Smart Home, Inc., a smart home company in the United States and Canada.

From August 2015

to September 2017, he served as an Area Manager for Aptive Environmental, LLC, a pest control solution company.

earned his Bachelor of Science in Business Finance (with an emphasis in Real Estate) from Brigham Young University’s Marriott School

of Business in 2019.

We believe that Mr.

Bridgewater is qualified to serve as a member of our management team because of his track record in the solar energy industry and range

of sales experience.

Bridgewater is qualified to serve as a member of our management team because of his track

record in the solar energy industry and range of sales experience.

Stirling Adams.

Adams serves as Zeo’s

General Counsel and Secretary.

serves as Zeo’s General Counsel and Secretary.

Adams brings 30 years of legal experience to the executive team.

He has worked as a sole practitioner

attorney since November 2022, focusing on renewable energy and nuclear energy ventures and financing.

From August 2016 to October 2022,

he served as Vice President, Associate General Counsel, and Head of Intellectual Property at Micro Focus International plc (now owned

by OpenText Corporation), where he oversaw the company’s efforts to develop and protect intellectual property.

Prior to that, he

spent 21 years as in-house counsel at Novell, Inc., which was acquired by Micro Focus in 2014 through The Attachmate Group, where he served

in various roles, including at times supervising legal affairs for one or more of Novell’s business units, for its consulting services

arm, and for its Latin American and emerging markets businesses.

prior to becoming General Counsel and Secretary, he worked as a sole practitioner attorney since November 2022, focusing on renewable

energy and nuclear energy ventures and financing.

From August 2016 to October 2022, he served as Vice President, Associate General

Counsel, and Head of Intellectual Property at Micro Focus International plc (now owned by OpenText Corporation), where he oversaw the

company’s efforts to develop and protect intellectual property.

Prior to that, he spent 21 years as in-house counsel at Novell,

Inc., which was acquired by Micro Focus in 2014 through The Attachmate Group, where he served in various roles, including at times supervising

legal affairs for one or more of Novell’s business units, for its consulting services arm, and for its Latin American and emerging

markets businesses.

Throughout most of his career, Mr.

Adams has been engaged in international

business transactions, technology licensing, and M&A transactions.

Adams has been engaged in international business transactions, technology

licensing, and M&A transactions.

He has lived and worked in Europe, South America, and China.

has taught as an adjunct professor of law at Brigham Young University, and holds a J.D.

He has taught as an adjunct professor

of law at Brigham Young University, and holds a J.D.

degree from Boston University, along with a B.S.

in Computer Science and Statistics from Brigham Young University.

in Computer Science and Statistics

from Brigham Young University.

We believe that Mr.

Adams is qualified to serve as a member of our management

team because of his extensive legal expertise.

Allen serves as a

director of Zeo.

Allen is a tenured associate professor of accounting at the Marriott School of Management at Brigham Young University.

Allen holds a doctorate in business administration from Harvard Business School, as well as undergraduate and master’s degrees

in accounting from the University of Southern California.

Adams is qualified to serve as a member of our management team because of his

extensive legal expertise.

serves as a director of Zeo.

Allen is a tenured associate professor of accounting at the Marriott School of Management at Brigham

Young University.

Allen holds a doctorate in business administration from Harvard Business School, as well as undergraduate and

master’s degrees in accounting from the University of Southern California.

She is a licensed CPA.

Prior to BYU, Dr.

Allen was a Lecturer in the Accounting

and Management Unit at Harvard Business School.

was a Lecturer in the Accounting and Management Unit at Harvard Business School.

Prior to academia, Dr.

Allen worked as an external auditor for Deloitte.

research focuses on the political economy and economic consequences of accounting standard setting, as well as corporate governance and

Her work has been published in the Journal of Accounting and Economics, the Journal of Accounting Research, Management Science

and the Journal of Law Finance and Accounting and has been cited and discussed in Forbes Magazine, Harvard Business Review, Columbia Law

School Blue Sky blog, and the Institute for Truth in Accounting.

Allen worked as an external

auditor for Deloitte.

Allen’s research focuses on the political economy and economic consequences of accounting standard

setting, as well as corporate governance and diversity.

Her work has been published in the Journal of Accounting and Economics, the Journal

of Accounting Research, Management Science and the Journal of Law Finance and Accounting and has been cited and discussed in Forbes Magazine,

Harvard Business Review, Columbia Law School Blue Sky blog, and the Institute for Truth in Accounting.

serves as a director of Zeo.

Benson is a founding partner of Energy Spectrum, where he oversees Energy Spectrum’s efforts in

sourcing investments, transaction evaluation, negotiation, executing and financing, monitoring of portfolio companies and the firm’s

Benson is a founding partner of Energy Spectrum, where he oversees Energy Spectrum’s efforts

in sourcing investments, transaction evaluation, negotiation, executing and financing, monitoring of portfolio companies and the firm’s

management and strategy.

With approximately 37 years of venture capital and private equity, investment banking, financial advisory and

commercial banking experience, Mr.

With approximately 37 years of venture capital and private equity, investment banking, financial advisory

and commercial banking experience, Mr.

Benson brings extensive relationships and his network across the energy industry to the company.

Benson currently serves as a director on the boards of multiple Energy Spectrum portfolio companies and has been on two public boards

Benson currently serves as a director on the boards of multiple Energy Spectrum portfolio companies and has been on two public

boards in the past.

Prior to co-founding Energy Spectrum in 1996, Mr.

Benson served for ten years as a Managing Director at R.

Reid Investments

Inc., where his experience included energy-related private placements of debt and equity, acquisitions and divestitures.

his career at InterFirst Bank Dallas, where he served for four years and was responsible for various energy financings and financial recapitalizations.

Benson received his Bachelor of Science degree from the University of Kansas and his Master of Business Administration degree in Finance

from Texas Christian University.

Due to his extensive investment experience in the energy industry, we believe Mr.

Benson is well qualified

to serve on our board of directors.

Bush serves as a director of

Benson served for ten years as a Managing Director at

Reid Investments Inc., where his experience included energy-related private placements of debt and equity, acquisitions and divestitures.

Benson began his career at InterFirst Bank Dallas, where he served for four years and was responsible for various energy

financings and financial recapitalizations.

Benson received his Bachelor of Science degree from the University of Kansas and

his Master of Business Administration degree in Finance from Texas Christian University.

Due to his extensive investment experience in

the energy industry, we believe Mr.

Benson is well qualified to serve on our board of directors.

serves as a director of Zeo.

Bush has served on the board of directors of FutureTech II Acquisition Corp.

since February 2022.

Bush has been the sole

member of Neil Bush Global Advisors, LLC since January 1998.

Bush has been the sole member of Neil Bush Global Advisors, LLC since January 1998.

Additionally, Mr.

Bush has been on the board of directors for Hong Kong Finance

Investment Holding Group since 2012.

Bush has also served as the co-chairman for CIIC since 2006 and as an adviser to CP Group since

Bush has served as a partner for Asia & America Consultants since March 2016 and the chairman of Singhaiyi since

Bush has been

on the board of directors for Hong Kong Finance Investment Holding Group since 2012.

Bush has also served as the co-chairman

for CIIC since 2006 and as an adviser to CP Group since 2015.

Bush has served as a partner for Asia & America

Consultants since March 2016 and the chairman of Singhaiyi since April 2013.

Bush served on the board of Greffex, Inc.

since June 2020 and the Points of Light Foundation.

Bush was appointed director

of Rebound International, LLC in early 2022.

Bush was appointed director of Rebound International, LLC in early 2022.

Due to his extensive investment experience in the energy industry, we believe Mr.

well qualified to serve on our board of directors.

Jacobs serves as a director

Jacobs brings more than 30 years of executive management, operations and investment banking experience across multiple segments

within the broader energy industry.

Bush is well qualified to serve on our board of

serves as a director of Zeo.

Jacobs brings more than 30 years of executive management, operations and investment banking

experience across multiple segments within the broader energy industry.

Since his retirement, Mr.

Jacobs has served as an independent outside consultant serving the energy

industry and privately-held entities undertaking a change in control as well as serving as board chair for a number of nonprofit organizations.

Jacobs previously served as CEO, President and Director of Reliant Energy, a publicly-traded, Fortune 500 energy company.

Jacobs’ tenure, he led the company through a series of crises including the impact of Hurricane Ike and the financial market crisis

He initiated and negotiated a merger-of-equals with Mirant Corporation to form GenOn Energy in 2010 where he served as President,

Chief Operating Officer and a Director of the largest competitive generator in the U.S.

Jacobs was originally recruited to Reliant

Energy in 2002 to serve as Chief Financial Officer.

Jacobs has served as an independent

outside consultant serving the energy industry and privately-held entities undertaking a change in control as well as serving as board

chair for a number of nonprofit organizations.

Jacobs previously served as CEO, President and Director of Reliant Energy, a publicly-traded,

Fortune 500 energy company.

Jacobs’ tenure, he led the company through a series of crises including the impact of

Hurricane Ike and the financial market crisis in 2008.

He initiated and negotiated a merger-of-equals with Mirant Corporation to form

GenOn Energy in 2010 where he served as President, Chief Operating Officer and a Director of the largest competitive generator in the

Jacobs was originally recruited to Reliant Energy in 2002 to serve as Chief Financial Officer.

In that role, Mr.

Jacobs brokered a landmark $6.2B debt restructuring transaction,

leading the company away from a potential bankruptcy filing and repositioned the company to compete in the emerging competitive electricity

brokered a landmark $6.2B debt restructuring transaction, leading the company away from a potential bankruptcy filing and repositioned

the company to compete in the emerging competitive electricity market.

Prior to Reliant Energy, Mr.

Jacobs served as a Managing Director within the Natural Resources Group and Mergers & Acquisitions

Department at Goldman Sachs & Co.

where he provided strategic advice for large public and private corporations related to M&A

and capital markets.

Jacobs served as a Managing Director

within the Natural Resources Group and Mergers & Acquisitions Department at Goldman Sachs & Co.

where he provided strategic

advice for large public and private corporations related to M&A and capital markets.

Jacobs received a B.B.A.

from Southern Methodist University and a Master of Management from the J.L.

Graduate School of Management at Northwestern University.

Due to his extensive operational and leadership experience in the energy industry,

we believe Mr.

Jacobs is well qualified to serve on our board of directors.

from Southern

Methodist University and a Master of Management from the J.L.

Kellogg Graduate School of Management at Northwestern University.

to his extensive operational and leadership experience in the energy industry, we believe Mr.

Jacobs is well qualified to serve on

our board of directors.

Family Relationships

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Composition of the Board of Directors

Zeo’s business affairs are managed under the direction

of its board of directors, which consists of six members.

Under our bylaws, each director will hold office until the expiration of the

term of the class, if any, for which elected and until such director’s successor is elected and qualified or until such director’s

Zeo’s business affairs are managed under

the direction of its board of directors, which consists of six members.

Under our bylaws, each director will hold office until the expiration

of the term of the class, if any, for which elected and until such director’s successor is elected and qualified or until such director’s

earlier death, resignation, disqualification, or removal.

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Director Independence

As a result of Zeo’s common stock being listed on Nasdaq,

Zeo is required to comply with the applicable rules of such exchange in determining whether a director is independent.

The Board has undertaken

a review of the independence of the individuals named above and have determined that each of Dr.

As a result of Zeo’s Class A common stock

being listed on Nasdaq, Zeo is required to comply with the applicable rules of such exchange in determining whether a director is independent.

The Board has undertaken a review of the independence of the individuals named above and have determined that each of Dr.

Allen, Neil Bush, James P.

Benson and Mark M.

Jacobs qualifies as “independent” as defined under the applicable Nasdaq rules.

Jacobs qualifies as “independent” as defined under the applicable

Nasdaq rules.

Committees of the Board of Directors

The Board directs the management of its business and affairs,

as provided by Delaware law, and conducts its business through meetings of the board of directors and standing committees.

Zeo has a standing

audit committee and compensation committee, each of which operates under a written charter.

In addition, from time to time, special committees may be

established under the direction of the Board when it deems it necessary or advisable to address specific issues.

Current copies of Zeo’s

committee charters are posted on its website (investors.zeoenergy.com), as required by applicable SEC and Nasdaq rules.

The information

on or available through any of such website is not deemed incorporated in this Report and does not form part of this Report.

The Board directs the management of its business

and affairs, as provided by Delaware law, and conducts its business through meetings of the board of directors and standing committees.

Zeo has a standing audit committee and compensation committee, each of which operates under a written charter.

In addition, from time to time, special committees

may be established under the direction of the Board when it deems it necessary or advisable to address specific issues.

Current copies

of Zeo’s committee charters are posted on its website (investors.zeoenergy.com), as required by applicable SEC and Nasdaq rules.

The information on or available through any of such website is not deemed incorporated in this Report and does not form part of this Report.

Audit Committee

Zeo has an audit committee consisting of Dr.

Allen, James P.

Benson and Mark M.

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Allen serves as the chair of the audit committee.

The Board has determined that each of these

individuals meets the independence requirements of the Sarbanes-Oxley Act and Rule 10A-3 under the Exchange Act and

the applicable listing standards of Nasdaq.

The Board has determined that

each of these individuals meets the independence requirements of the Sarbanes-Oxley Act and Rule 10A-3 under the Exchange Act and the

applicable listing standards of Nasdaq.

Each member of Zeo’s audit committee is able to read and understand fundamental financial

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The Board has determined that Dr.

Allen qualifies

as an audit committee financial expert within the meaning of SEC regulations and meets the financial sophistication requirements of the

Nasdaq rules.

In making this determination, the Board considered formal education and previous and current experience in financial and

accounting roles.

qualifies as an audit committee financial expert within the meaning of SEC regulations and meets the financial sophistication requirements

of the Nasdaq rules.

In making this determination, the Board considered formal education and previous and current experience in financial

and accounting roles.

Both Zeo’s independent registered public accounting firm and management periodically meet privately with Zeo’s

audit committee.

The audit committee’s responsibilities include, among

other things:

The audit committee’s responsibilities include,

among other things:

● appointing, compensating, retaining,

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independent registered public accounting firm the scope and results of their audit;

● pre-approving all audit

and permissible non-audit services to be performed by Zeo’s independent registered public accounting firm;

● pre-approving all audit and

permissible non-audit services to be performed by Zeo’s independent registered public accounting firm;

● overseeing the financial reporting

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Compensation Committee

Zeo has a compensation committee consisting of Neil Bush,

Zeo has a compensation committee consisting of

Neil Bush, James P.

Benson and Mark M.

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Bush serves as the chair of the compensation committee.

All members are non-employee directors, as

defined in Rule 16b-3 promulgated under the Exchange Act.

The Board has determined that each proposed member is “independent”

as defined under the applicable Nasdaq listing standards, including the standards specific to members of a compensation committee.

compensation committee’s responsibilities include, among other things:

● reviewing and setting or making

recommendations to the Board regarding the compensation of Zeo’s executive officers;

● making recommendations to the

Board regarding the compensation of Zeo’s directors;

● reviewing and approving or

making recommendations to the Board regarding Zeo’s incentive compensation and equity-based plans and arrangements;

● appointing and overseeing any

compensation consultants.

We believe that the composition and functioning of Zeo’s

compensation committee meets the requirements for independence under the current Nasdaq listing standards.

are non-employee directors, as defined in Rule 16b-3 promulgated under the Exchange Act.

The Board has determined that each

proposed member is “independent” as defined under the applicable Nasdaq listing standards, including the standards specific

to members of a compensation committee.

The compensation committee’s responsibilities include, among other things:

● reviewing and setting or making recommendations to the Board

regarding the compensation of Zeo’s executive officers;

● making recommendations to the Board regarding the compensation

of Zeo’s directors;

● reviewing and approving or making recommendations to the

Board regarding Zeo’s incentive compensation and equity-based plans and arrangements;

● appointing and overseeing any compensation consultants.

We believe that the composition and functioning

of Zeo’s compensation committee meets the requirements for independence under the current Nasdaq listing standards.

Director Nominations

Zeo does not have a nominating committee.

However, Zeo will

form a nominating committee as and when required to do so by law or Nasdaq rules.

In accordance with Rule 5605(e)(2) of Nasdaq rules,

a majority of the independent directors may recommend a director nominee for selection by the Board.

The ESGEN Board believes that the

Zeo independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without

Zeo will form a nominating committee as and when required to do so by law or Nasdaq rules.

In accordance with Rule 5605(e)(2) of Nasdaq

rules, a majority of the independent directors may recommend a director nominee for selection by the Board.

The ESGEN Board believes that

the Zeo independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without

the formation of a standing nominating committee.

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As there is no standing nominating committee, we do not have a nominating committee charter in place.

The Board will also consider director candidates recommended

for nomination by its stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting

of stockholders (or, if applicable, a special meeting of stockholders).

Zeo’s stockholders that wish to nominate a director for

election should follow the procedures set forth in our bylaws.

Zeo has not formally established any specific, minimum qualifications

that must be met or skills that are necessary for directors to possess.

In general, in identifying and evaluating nominees for director,

the Board will consider educational background, diversity of professional experience, knowledge of our business, integrity, professional

reputation, independence, wisdom, and the ability to represent the best interests of its stockholders.

The Board will also consider director candidates

recommended for nomination by its stockholders during such times as they are seeking proposed nominees to stand for election at the next

annual meeting of stockholders (or, if applicable, a special meeting of stockholders).

Zeo’s stockholders that wish to nominate

a director for election should follow the procedures set forth in our bylaws.

Zeo has not formally established any specific,

minimum qualifications that must be met or skills that are necessary for directors to possess.

In general, in identifying and evaluating

nominees for director, the Board will consider educational background, diversity of professional experience, knowledge of our business,

integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of its stockholders.

Board Member Attendance at Annual Stockholder

Although we do not have a formal policy regarding

director attendance at annual stockholder meetings, directors are encouraged to attend these annual meetings.

Number of Meetings

the fiscal year ended December 31, 2024, our Board met four times, the audit committee met six times and the compensation committee

met one time.

In the fiscal year ended December 31, 2024, each of our directors attended at least 75% of the meetings of the Board

and committees on which he or she served as a member.

Insider Trading Policy

We have adopted insider trading policies and procedures

governing the purchase, sale, and/or other dispositions of our securities by directors, officers, and employees, which are reasonably

designed to promote compliance with insider trading laws, rules and regulations, and applicable Nasdaq listing standards (the “ Insider

Trading Policy ”).

The foregoing

description of the Insider Trading Policy does not purport to be complete and is qualified in its entirety by the terms and conditions

of the Insider Trading Policy, a copy of which is filed with this Report as Exhibit 19 and is incorporated herein by reference.

Code of Ethics

Zeo has a code of ethics that applies to all of its executive

officers, directors and employees, including its principal executive officer, principal financial officer, principal accounting officer

or controller or persons performing similar functions.

Zeo has a code of ethics that applies to all of

its executive officers, directors and employees, including its principal executive officer, principal financial officer, principal accounting

officer or controller or persons performing similar functions.

The code of ethics is available on Zeo’s website (investors.zeoenergy.com).

Compensation Committee Interlocks and Insider Participation

None of Zeo’s executive officers currently serves,

or has served during the last year, as a member of the board of directors or compensation committee of any entity that has one or more

executive officers serving as a member of the Board.

Compensation Committee Interlocks and Insider

Participation

None of Zeo’s executive officers currently

serves, or has served during the last year, as a member of the board of directors or compensation committee of any entity that has one

or more executive officers serving as a member of the Board.

Communications with the Board

Any stockholder or any other interested party

who desires to communicate with our Board, our non-management directors, or any specified individual director, may do so by directing

such correspondence to the attention of the General Counsel, Zeo Energy Corp., 7625 Little Rd, Suite 200A, New Port Richey, FL 34654.

The General Counsel will forward the communication to the appropriate director or directors as appropriate.

EXECUTIVE COMPENSATION.

On April 27, 2021, the Sponsor paid an aggregate of $25,000 for

certain expenses on behalf of ESGEN in exchange for issuance of 5,750,000 ESGEN Class B ordinary shares.

In September 2021, certain

shareholders surrendered, for no consideration, an aggregate of 1,437,500 ESGEN Class B ordinary shares, leaving 5,750,000 founder

shares outstanding.

On September 10, 2021, the Sponsor transferred 115,000 founder shares to each of Larry L.

Helm, Mark M.

and Sanjay Bishnoi, ESGEN’s independent directors.

In October 2021, a share dividend was issued which resulted in 6,900,000 founder

shares outstanding.

In addition, the Sponsor, executive officers and directors, or their respective affiliates will be reimbursed for

any out-of-pocketexpenses incurred in connection with activities on our behalf such as identifying potential target businesses and

performing due diligence on suitable business combinations.

Our audit committee reviews on a quarterly basis all payments that were made

by us to the Sponsor, executive officers or directors, or their affiliates.

Any such payments prior to an initial business combination

will be made using funds held outside the Trust Account.

Other than quarterly audit committee review of such reimbursements, we do not

have any additional controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses

incurred in connection with our activities on our behalf in connection with identifying and consummating an initial business combination.

Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, were paid by

the ESGEN to the Sponsor, executive officers and directors, or their respective affiliates, prior to completion of our initial business

We are not party to any agreements with our executive officers and

directors that provide for benefits upon termination of employment.

Sunergy Executive

The following table sets forth

information concerning the compensation of the named executive officers for the years ended December 31, 2023:

Executive and Director Compensation

The following table sets forth information concerning

the compensation of the named executive officers for the years ended December 31, 2024 and 2023:

Name and Principal Position

1 unchanged sentence

Timothy Bridgewater

Chairman, CEO and CFO

Chief Installation and Strategy Officer

For 2022, the amounts in this column represent the distributions paid to the NEOs with respect to their partnership interests in Sunergy.

For 2023, the amounts in this column represent the estimated distributions for 2023 to be paid to the NEOs with respect to their partnership interests in Sunergy.

Hruby was COO until November 2023, and Mr.

Larsen then became an executive officer upon Mr.

Hruby’s departure.

Chairman, CEO

Cannon Holbrook

Stirling Adams

(1) Amounts reflect the full grant-date fair value of stock awards

granted during the applicable fiscal year computed in accordance with ASC Topic 718, rather than the amounts paid to or realized

by the named executive officer.

(2) For 2023 and 2024, the amounts in this column represent the

distributions paid in 2023 and 2024 to Mr.

Bridgewater with respect to his partnership interests in Sunergy.

(3) Amounts paid to Mr.

Adams in 2024 for legal services

provided to the Company related to the ESGEN transaction prior to his joining the Company.

Narrative to Executive Compensation Table

Employment Agreement with Timothy Bridgewater

The Company (or one of its

subsidiaries) has entered into an Executive Employment Agreement (the “ Bridgewater Agreement ”) with Mr.

Timothy Bridgewater,

the Company’s Chief Executive Officer.

The period of the Bridgewater Agreement commenced on the Closing and continues through the

third anniversary of the Closing, and is subject to automatic renewals for one (1) year periods, unless either party terminates employment

or provides ninety (90) day notice of intent not to renew.

The Company (or one of its subsidiaries) has entered

into an Executive Employment Agreement (the “ Bridgewater Agreement ”) with Mr.

Timothy Bridgewater, the Company’s

Chief Executive Officer.

The period of the Bridgewater Agreement commenced on the closing of the business combination between Sunergy

Renewables, LLC and ESGEN Acquisition Corp.

(the “ Closing ”) and continues through the third anniversary of the Closing,

and is subject to automatic renewals for one (1) year periods, unless either party terminates employment or provides ninety (90) day

notice of intent not to renew.

In recognition of Mr.

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Bridgewater a base salary of $390,000.

For each year the Bridgewater

Agreement is in effect, the Compensation Committee of the Board may choose to provide a discretionary cash bonus to Mr.

Bridgewater, and

such bonus shall be performance based and the performance goals shall be as set forth by the Compensation Committee.

For each year the Bridgewater Agreement is in

effect, the Compensation Committee of the Board may choose to provide a discretionary cash bonus to Mr.

Bridgewater, and such bonus

shall be performance based and the performance goals shall be as set forth by the Compensation Committee.

In addition, Mr.

is eligible to receive certain grants of vested shares under the Incentive Plan (as defined below) in accordance with the following schedule:

● 50,000 vested shares to be

granted on the date that is 12 months after the effective date of the Bridgewater Agreement;

● 50,000 vested shares to be

granted on the date that is 24 months after the effective date of the Bridgewater Agreement;

● 50,000 vested shares to be

granted on the date that is 35 months after the effective date of the Bridgewater Agreement.

Further, if, within three

(3) years of the effective date of the Bridgewater Agreement, (i) the volume-weighted average price of shares of the publicly traded stock

of the Company exceeds $7.50 for 20 or more days of any consecutive 30-day period, then Mr.

Bridgewater is eligible

to receive certain grants of vested shares under the 2024 Plan in accordance with the following schedule (collectively, the “Retention

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

after the effective date of the Bridgewater Agreement;

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

after the effective date of the Bridgewater Agreement;

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

after the effective date of the Bridgewater Agreement.

Further, if, within three (3) years of the

effective date of the Bridgewater Agreement, (i) the volume-weighted average price of shares of the publicly traded stock of the

Company exceeds $7.50 for 20 or more days of any consecutive 30-day period, then Mr.

Bridgewater will be granted vested equity

from the Incentive Plan (as defined below) equal to 1% of the total issued and outstanding capital stock of the Company, (ii) the volume-weighted

average price of shares of the publicly traded stock of the Company exceeds $12.50 for 20 or more days of any consecutive 30-day period,

Bridgewater will be granted additional vested equity from the Incentive Plan equal to 1% of the total issued and outstanding

from the 2024 Plan equal to 1% of the total issued and outstanding capital stock of the Company, (ii) the volume-weighted average

price of shares of the publicly traded stock of the Company exceeds $12.50 for 20 or more days of any consecutive 30-day period,

Bridgewater will be granted additional vested equity from the 2024 Plan equal to 1% of the total issued and outstanding

capital stock of the Company, (iii) and the volume-weighted average price of shares of the publicly traded stock of the Company exceeds

$15.00 for 20 or more days of any consecutive 30-day period, then Mr.

Bridgewater will be granted additional vested equity from the Incentive

Plan equal to 1% of the total issued and outstanding capital stock of the Company.

Bridgewater will be granted additional vested equity from

the 2024 Plan equal to 1% of the total issued and outstanding capital stock of the Company.

In addition, Mr.

is eligible to participate in the Company’s employee benefits plan for its senior executives or employees, including the Company’s

medical plans.

Bridgewater is eligible

to participate in the Company’s employee benefits plan for its senior executives or employees, including the Company’s medical

Bridgewater is also entitled to receive six (6) weeks of paid time off in accordance with the Company’s policy

4 unchanged sentences

Reimbursable expenses include, but are not limited to, business travel expenses.

The Company may terminate

Bridgewater’s employment with or without Cause (as defined in the Bridgewater Agreement).

The Company has agreed to provide

thirty (30) days in notice to Mr.

Bridgewater if he is terminated without Cause (or base salary in lieu of such notice), but no notice

is required if he is terminated for Cause.

For termination for Cause, Mr.

Bridgewater (with his attorney) shall have the opportunity to

respond to all relevant allegations upon which a contemplated termination for Cause is based.

Bridgewater may terminate

his employment with or without Good Reason (as defined in the Bridgewater Agreement).

Bridgewater intends to terminate his employment

without Good Reason, he has agreed to provide thirty (30) days’ written notice.

For termination for Good Reason, Mr.

has agreed that he will provide the Company with notice within thirty (30) days after receiving notice of a Good Reason event, after which

the Company will have thirty (30) days to cure the Good Reason event, and, if not cured, Mr.

Bridgewater will terminate employment within

fifteen (15) days following the expiration of the cure period.

In the event of termination

for any reason, Mr.

Bridgewater shall continue to receive his full salary through the date of termination, any unreimbursed and approved

business expenses, accrued but unused paid time off days, and any payments, benefits, or fringe benefits Mr.

Bridgewater was entitled

to under plan terms.

If the Company terminates

Bridgewater without Cause or Mr.

Bridgewater terminates for Good Reason, and there is no Change of Control (as defined in the Bridgewater

Agreement), the Company has agreed to also provide Mr.

Bridgewater the following:

(i) a lump sum cash payment, payable

on the date of termination, equal to the sum of the following:

(x) one year’s base salary, and (y) any unpaid annual bonus for

the preceding calendar year, and the greater of (I) any annual target cash bonus opportunity for the year of termination or (II) the

average annual cash bonus for the three preceding completed years (provided, however, that if Mr.

Bridgewater has not been employed for

at least three years in which an annual cash bonus was paid, such calculation will assume that an annual cash bonus equal to any target

annual cash bonus opportunity was paid in the missing years), and (z) any other target long-term incentive award granted to Mr.

for the year in which the termination occurs;

(ii) accelerated vesting of any

outstanding equity grants so that such equity grants vest completely as of the date of termination;

(iii) to the extent eligible, continuation

health insurance coverage under COBRA for twelve (12) months following termination.

If the Company terminates

Bridgewater without Cause or Mr.

Bridgewater terminates for Good Reason, and such termination occurs within two (2) years following

or six (6) months prior to a Change of Control (as defined in the Bridgewater Agreement), the Company has agreed to also provide Mr.

the following:

(i) pro-rated, based on the number

of days worked during the year in which the termination occurs, the greater of any annual target cash bonus opportunity for the year

of termination or the highest actual annual cash bonus paid during the three preceding completed years;

(ii) a lump sum cash payment equal

to the sum of the following:

(x) one year’s base salary, (y) any unpaid annual bonus for the preceding calendar year, and (z) any other

target long-term incentive award granted for the year in which termination occurs;

(iii) accelerated vesting of any

outstanding equity grants so that such equity grants vest completely as of the date of termination;

(iv) to the extent eligible, continuation

health insurance coverage under COBRA for twelve (12) months following termination.

Employment Agreement with Kalen Larsen

The Company (or one of its

subsidiaries) has entered into an Executive Employment Agreement (the “ Larsen Agreement ”) with Mr.

Kalen Larsen,

the Company’s Chief Operations Officer.

The period of the Larsen Agreement commenced on the Closing and continues through the third

anniversary of the Closing, and is subject to automatic renewals for one (1) year periods unless either party terminates employment or

provides ninety (90) day notice of intent not to renew.

In recognition of Mr.

responsibilities as the Company’s Chief Operations Officer, and based on comparison to peer organizations with similar activities

and risk profiles, the Company agreed to pay Mr.

Larsen a minimum salary of at least $684 per week or such greater amount as required

to qualify for an exemption from overtime under Section 13(a)(1) of the Fair Labor Standards Act.

From the second year the Larsen Agreement

is in effect, the Compensation Committee of the Board may choose to provide a discretionary cash bonus to Mr.

Larsen, and such bonus shall

be performance based and the performance goals shall be as set forth by the Compensation Committee.

In addition, Mr.

eligible to participate in the Company’s employee benefits plan for its senior executives or employees, including the Company’s

medical plans.

Larsen is also entitled to receive six (6) weeks of paid time off in accordance with the Company’s policy for

its senior executives.

In addition, Mr.

Larsen is entitled to reimbursement by the Company for all reasonable expenses incurred by him

in connection with this employment.

Reimbursable expenses include, but are not limited to, business travel expenses.

The Company may terminate

Larsen’s employment with or without Cause (as defined in the Larsen Agreement).

The Company has agreed to provide thirty (30)

days in notice to Mr.

Larsen if he is terminated without Cause (or base salary in lieu of such notice), but no notice is required if he

is terminated for Cause.

The Company may terminate Mr.

Bridgewater’s

employment with or without Cause (as defined in the Bridgewater Agreement).

The Company has agreed to provide thirty (30) days in

notice to Mr.

Bridgewater if he is terminated without Cause (or base salary in lieu of such notice), but no notice is required if

he is terminated for Cause.

For termination for Cause, Mr.

Larsen (with his attorney) shall have the opportunity to respond to all relevant

allegations upon which a contemplated termination for Cause is based.

Larsen may terminate his

employment with or without Good Reason (as defined in the Larsen Agreement).

Larsen intends to terminate his employment without

Bridgewater (with his attorney) shall have the opportunity to respond

to all relevant allegations upon which a contemplated termination for Cause is based.

Bridgewater may terminate his employment

with or without Good Reason (as defined in the Bridgewater Agreement).

Bridgewater intends to terminate his employment without

Good Reason, he has agreed to provide thirty (30) days’ written notice.

For termination for Good Reason, Mr.

Larsen has agreed that

he will provide the Company with notice within thirty (30) days after receiving notice of a Good Reason event, the Company will have thirty

(30) days to cure the Good Reason, and, if not cured, Mr.

Larsen will terminate employment within fifteen (15) days following the expiration

of the cure period.

In the event of termination

for any reason, Mr.

Larsen shall continue to receive his full salary through the date of termination, any unreimbursed and approved business

expenses, accrued but unused paid time off days, and any payments, benefits, or fringe benefits Mr.

Larsen was entitled to under plan

If the Company terminates

Larsen without Cause or Mr.

Larsen terminates for Good Reason, and there is no Change of Control (as defined in the Larsen Agreement),

has agreed that he will provide the Company with notice within thirty (30) days after receiving notice of a Good Reason event, after

which the Company will have thirty (30) days to cure the Good Reason event, and, if not cured, Mr.

Bridgewater will terminate

employment within fifteen (15) days following the expiration of the cure period.

In the event of termination for any reason, Mr.

shall continue to receive his full salary through the date of termination, any unreimbursed and approved business expenses, accrued but

unused paid time off days, and any payments, benefits, or fringe benefits Mr.

Bridgewater was entitled to under plan terms.

If the Company terminates Mr.

without Cause or Mr.

Bridgewater terminates for Good Reason, and there is no Change of Control (as defined in the Bridgewater Agreement),

the Company has agreed to also provide Mr.

Larsen the following:

(iv) a lump sum cash payment, payable

on the date of termination, equal to the sum of the following:

(x) the greater of $350,000 or Mr.

Larsen’s then-current base salary,

and (y) any unpaid annual bonus for the preceding calendar year, and the greater of (I) any annual target cash bonus opportunity for

the year of termination or (II) the average annual cash bonus, if any, for the three preceding completed years (provided, however, that

Larsen has not been employed for at least three years in which an annual cash bonus was paid, such calculation will assume that

an annual cash bonus equal to any target annual cash bonus opportunity was paid in the missing years;

a cash bonus does not refer to

a distribution of cash made to Mr.

Larsen as a result of Mr.

Larsen’s ownership interests in the Company or any affiliated entity),

and (z) and any target long-term incentive award granted to Mr.

Larsen for the year in which termination occurs;

(v) accelerated vesting of any

outstanding equity grants so that such equity grants vest completely as of the date of termination;

(vi) to the extent eligible, continuation

health insurance coverage under COBRA for twelve (12) months following termination.

If the Company terminates

Larsen without Cause or Mr.

Larsen terminates for Good Reason, and such termination occurs within two (2) years following or six (6)

months prior to Change of Control (as defined in the Larsen Agreement), the Company has agreed to also provide Mr.

Larsen the following:

(v) pro-rated, based on the number

of days worked during the year in which the termination occurs, the greater of any annual target cash bonus opportunity for the year

of termination or the highest actual annual cash bonus paid during the three preceding completed years (a cash bonus does not refer to

a distribution of cash made to Mr.

Larsen as a result of Mr.

Larsen’s ownership interests in the Company or any affiliated entity);

(vi) a lump sum cash payment equal

to the sum of the following:

(x) the greater of $350,000 or Mr.

Larsen’s then-current base salary, and (y) any unpaid annual bonus

for the preceding calendar year;

(vii) accelerated vesting of any

outstanding equity grants so that such equity grants vest completely as of the date of termination;

(viii) to the extent eligible, continuation

health insurance coverage under COBRA for twelve (12) months following termination.

Employment Agreement with Gianluca Guy

The Company (or one or its

subsidiaries) has entered into an Executive Employment Agreement (the “ Guy Agreement ”) with Mr.

Gianluca Guy, the Company’s

Chief Installation and Strategy Officer.

The period of the Guy Agreement commenced on the Closing and continues through the third anniversary

of the Closing, and is subject to automatic renewals for one (1) year periods unless either party terminates employment or provides ninety

(90) day notice of intent not to renew.

Bridgewater the following:

(i) a lump sum cash payment, payable on the date of termination,

equal to the sum of the following:

(x) one year’s base salary, and (y) any unpaid annual bonus for the preceding calendar

year, and the greater of (I) any annual target cash bonus opportunity for the year of termination or (II) the average annual

cash bonus for the three preceding completed years (provided, however, that if Mr.

Bridgewater has not been employed for at

least three years in which an annual cash bonus was paid, such calculation will assume that an annual cash bonus equal to any target

annual cash bonus opportunity was paid in the missing years), and (z) any other target long-term incentive award granted to

Bridgewater for the year in which the termination occurs;

(ii) accelerated vesting of any outstanding equity grants so that

such equity grants vest completely as of the date of termination;

(iii) to the extent eligible, continuation health insurance coverage

under COBRA for twelve (12) months following termination.

If the Company terminates Mr.

without Cause or Mr.

Bridgewater terminates for Good Reason, and such termination occurs within two (2) years following or six

(6) months prior to a Change of Control (as defined in the Bridgewater Agreement), the Company has agreed to also provide Mr.

the following:

(i) pro-rated, based on the number of days worked during

the year in which the termination occurs, the greater of any annual target cash bonus opportunity for the year of termination or the

highest actual annual cash bonus paid during the three preceding completed years;

(ii) a lump sum cash payment equal to the sum of the following:

(x) one year’s base salary, (y) any unpaid annual bonus for the preceding calendar year, and (z) the Retention Award

and any other target long-term incentive award granted for the year in which termination occurs;

(iii) accelerated vesting of any outstanding equity grants so that

such equity grants vest completely as of the date of termination;

(iv) to the extent eligible, continuation health insurance coverage

under COBRA for twelve (12) months following termination.

Additionally, Mr.

Bridgewater is subject

to standard confidentiality and non-disparagement covenants, and covenants not to solicit the company’s customers or employees or

compete with the company for the duration of Mr.

Bridgewater’s employment and for the one year following his termination.

Employment Agreement with Cannon Holbrook

The Company (or one of its subsidiaries) entered

into an employment agreement with Mr.

Holbrook (the “Holbrook Agreement”) pursuant to which Mr.

Holbrook will serve

as the Chief Financial Officer of both Sunergy and the Company, reporting to the Company’s Chief Executive Officer.

The period of the Holbrook Agreement commenced

on August 19, 2024 (the “Effective Date”) and continues through the third anniversary of the Holbrook Agreement Effective

The agreement is subject to automatic renewals for one (1) year periods unless either party terminates employment or provides

ninety (90) day notice of intent not to renew.

In recognition of Mr.

responsibilities as the Company’s Chief Installation and Strategy Officer, and based on comparison to peer organizations with similar

activities and risk profiles, the Company agreed to pay Mr.

Guy a minimum salary of at least $684 per week or such greater amount as required

to qualify for an exemption from overtime under Section 13(a)(1) of the Fair Labor Standards Act.

From the second year the Guy Agreement

is in effect, the Compensation Committee of the Board may choose to provide a discretionary cash bonus to Mr.

Guy, and such bonus shall

be performance based and the performance goals shall be as set forth by the Compensation Committee.

In addition, Mr.

Guy is eligible

to participate in the Company’s employee benefits plan for its senior executives or employees, including the Company’s medical

Guy is also entitled to receive six (6) weeks of paid time off in accordance with the Company’s policy for its senior

Holbrook’s responsibilities,

the Company agreed to pay Mr.

Holbrook a base salary of $225,000, which may be increased from time to time by the Compensation Committee

(the “Committee”) of the Company’s Board in its sole discretion.

A one-time payment of $25,000 was paid to Mr.

in connection with the execution of the Holbrook Agreement.

Though the agreement does not provide for a guaranteed annual target cash

bonus, for each year the Holbrook Agreement is in effect, the Committee may choose to provide a discretionary cash bonus to Mr.

based on meeting positive EBITDA targets, an evaluation of his performance and peer group compensation practices, taking into account

the Company and individual performance objectives, and/or such criteria as determined by the Committee in its sole discretion from time

In addition, Mr.

Guy is entitled to reimbursement by the Company for all reasonable expenses incurred by him in connection

with this employment.

Reimbursable expenses include, but are not limited to, business travel expenses.

The Company may terminate

Guy’s employment with or without Cause (as defined in the Guy Agreement).

The Company has agreed to provide thirty (30) days

in notice to Mr.

Guy if he is terminated without Cause (or base salary in lieu of such notice), but no notice is required if he is terminated

For termination for Cause, Mr.

Guy (with his attorney) shall have the opportunity to respond to all relevant allegations upon

which a contemplated termination for Cause is based.

Guy may terminate his

employment with or without Good Reason (as defined in the Guy Agreement).

Guy intends to terminate his employment without Good

Holbrook is eligible to

receive certain grants of vested shares under the Company’s 2024 Omnibus Incentive Equity Plan, subject to the approval of the Board,

in accordance with the following schedule:

● 15,000 vested shares to be issued as soon as possible following

the Effective Date;

● 75,000 vested shares to be granted on the date that is 12 months

after the Effective Date;

● 75,000 vested shares to be granted on the date that is 24 months

after the Effective Date;

● 75,000 vested shares to be granted on the date that is 35 months

after the Effective Date.

The Company may terminate Mr.

employment with or without Cause (as defined in the Holbrook Agreement).

The Company has agreed to provide thirty (30) days in notice

Holbrook if he is terminated without Cause (or base salary in lieu of such notice).

The termination of Mr.

employment will not be deemed to be for Cause unless Mr.

Holbrook (with his attorney) is given a reasonable opportunity to respond

to all relevant allegations upon which a contemplated termination for Cause is based.

Holbrook may terminate his employment

with or without Good Reason (as defined in the Holbrook Agreement).

Holbrook intends to terminate his employment without Good

Reason, he has agreed to provide thirty (30) days’ written notice.

For termination for Good Reason, Mr.

Guy has agreed that he will

provide the Company with notice within thirty (30) days after receiving notice of a Good Reason event, the Company will have thirty (30)

days to cure the Good Reason, and, if not cured, Mr.

Guy will terminate employment within fifteen (15) days following the expiration of

the cure period.

In the event of termination

for any reason, Mr.

Guy shall continue to receive his full salary through the date of termination, any unreimbursed and approved business

expenses, accrued but unused paid time off days, and any payments, benefits, or fringe benefits Mr.

Guy was entitled to under plan terms.

If the Company terminates

Guy without Cause or Mr.

Guy terminates for Good Reason, and there is no Change of Control (as defined in the Guy Agreement), the

Company has agreed to also provide Mr.

Guy the following:

(i) a lump sum cash payment, payable

on the date of termination, equal to the sum of the following:

(x) the greater of $350,000 or Mr.

Guy’s then-current base salary,

and (y) any unpaid annual bonus for the preceding calendar year, and the greater of (I) any annual target cash bonus opportunity for

the year of termination or (II) the average annual cash bonus, if any, for the three preceding completed years (provided, however, that

Guy has not been employed for at least three years in which an annual cash bonus was paid, such calculation will assume that an

annual cash bonus equal to any target annual cash bonus opportunity was paid in the missing years;

a cash bonus does not refer to a distribution

of cash made to Mr.

Guy as a result of Mr.

Guy’s ownership interests in the Company or any affiliated entity), and (z) and any

target long-term incentive award granted to Mr.

Guy for the year in which termination occurs;

(ii) accelerated vesting of any

outstanding equity grants so that such equity grants vest completely as of the date of termination;

(iii) to the extent eligible, continuation

health insurance coverage under COBRA for twelve (12) months following termination.

If the Company terminates

Guy without Cause or Mr.

Guy terminates for Good Reason, and such termination occurs within two (2) years following or six (6) months

prior to a Change of Control (as defined in the Guy Agreement), the Company has agreed to also provide Mr.

Guy the following:

(i) pro-rated, based on the number

of days worked during the year in which the termination occurs, the greater of any annual target cash bonus opportunity for the year

of termination or the highest actual annual cash bonus paid during the three preceding completed years (a cash bonus does not refer to

a distribution of cash made to Mr.

Guy as a result of Mr.

Guy’s ownership interests in the Company or any affiliated entity);

(ii) a lump sum cash payment equal

to the sum of the following:

(x) the greater of $350,000 or Mr.

Guy’s then-current base salary, and (y) any unpaid annual bonus

for the preceding calendar year;

(iii) accelerated vesting of any

outstanding equity grants so that such equity grants vest completely as of the date of termination;

(iv) to the extent eligible, continuation

health insurance coverage under COBRA for twelve (12) months following termination.

Employment Agreement with Brandon Bridgewater

The Company (or one of its

subsidiaries) has entered into an Executive Employment Agreement (the “ Brandon Bridgewater Agreement ”) with

Brandon Bridgewater, the Company’s Chief Sales Officer.

The period of the Brandon Bridgewater Agreement commenced on the Closing

and continues through the third anniversary of the Closing, and is subject to automatic renewals for one (1) year periods unless either

party terminates employment or provides ninety (90) day notice of intent not to renew.

Holbrook has agreed

that he will provide the Company with notice within thirty (30) days after receiving notice of a Good Reason event, after which the

Company will have thirty (30) days to cure the Good Reason event, and, if not cured, Mr.

Holbrook will terminate employment

within fifteen (15) days following the expiration of the cure period.

In the event of termination for any reason, Mr.

shall continue to receive his full salary through the date of termination, any unreimbursed and approved business expenses, accrued but

unused paid time off days, and any payments, benefits, or fringe benefits Mr.

Holbrook was entitled to under plan terms.

If the Company terminates Mr.

Holbrook without

Holbrook terminates for Good Reason, and there is no Change of Control (as defined in the Holbrook Agreement), the Company

has agreed to also provide Mr.

Holbrook the following:

(i) a lump sum cash payment, payable on the date of termination,

equal to the sum of the following:

(x) one year’s base salary at the annualized rate then in effect (or the rate that should

be in effect but for any base salary diminution), and (y) any unpaid annual bonus for the preceding calendar year and the greater

of (I) any annual target cash bonus opportunity for the year of termination or (II) the average annual cash bonus for the three

preceding calendar years in which an annual cash bonus was paid, and (z) the annual cash bonus and any other target long-term

incentive award granted for the year of the date of termination;

(ii) accelerated vesting of any outstanding equity grants so that

such equity grants vest completely as of the date of termination;

(iii) (iii) to the extent eligible and Mr.

Holbrook properly

elects coverage, continued health insurance coverage under COBRA for twelve (12) months following termination at the same costs

as applied to Mr.

Holbrook prior to his termination, subject to early termination upon Mr.

Holbrook becoming eligible for group

health insurance coverage under another employer’s plan.

If the Company terminates Mr.

Holbrook without

Holbrook terminates for Good Reason, and such termination occurs within two (2) years following or six (6) months

prior to a Change of Control (as defined in the Holbrook Agreement), the Company has agreed to also provide Mr.

Holbrook the following:

(i) severance payments pro-rated, based on the number of days

worked during the year in which the termination occurs, equal to the greater of any annual target cash bonus opportunity for the year

of termination or the highest actual annual cash bonus paid during the three preceding completed years;

(ii) a lump sum cash payment equal to the sum of the following:

(x) one year’s base salary at the annualized rate then in effect (or the rate that should be in effect but for any base salary

diminution), (y) any unpaid annual bonus for the preceding calendar year, and any other target long-term incentive award granted

for the year of the date of termination;

(iii) accelerated vesting of any outstanding equity grants so that

such equity grants vest completely as of the date of termination;

(iv) to the extent eligible, and Mr.

Holbrook properly elects

coverage, continued health insurance coverage under COBRA for twelve (12) months following termination at the same costs as applied

Holbrook prior to his termination, subject to early termination upon Mr.

Holbrook becoming eligible for group health

insurance coverage under another employer’s plan.

Additionally, Mr.

Holbrook is subject to

standard confidentiality and non-disparagement covenants, and covenants not to solicit the company’s customers or employees or compete

with the company for the duration of Mr.

Holbrook’s employment and for the one year following his termination.

Employment Agreement with Stirling Adams

The Company (or one of its subsidiaries) entered

into an employment agreement with Mr.

Adams (the “Adams Agreement”), pursuant to which Mr.

Adams will serve as the

General Counsel and Secretary of both Sunergy and the Company, reporting to the Company’s Chief Executive Officer.

The period of the Adams Agreement commenced on

the Closing and continues through the third anniversary of the Closing.

The agreement is subject to automatic renewals for one (1) year

periods unless either party terminates employment or provides ninety (90) day notice of intent not to renew.

In recognition of Mr.

Bridgewater’s responsibilities as the Company’s Chief Sales Officer, and based on comparison to peer organizations with similar

activities and risk profiles, the Company agreed to pay Mr.

Brandon Bridgewater a minimum salary of at least $684 per week or such greater

amount as required to qualify for an exemption from overtime under Section 13(a)(1) of the Fair Labor Standards Act.

From the second year

the Brandon Bridgewater Agreement is in effect, the Compensation Committee of the Board may choose to provide a discretionary cash bonus

Brandon Bridgewater, and such bonus shall be performance based and the performance goals shall be as set forth by the Compensation

In addition, Mr.

Brandon Bridgewater

is eligible to participate in the Company’s employee benefits plan for its senior executives or employees, including the Company’s

medical plans.

Brandon Bridgewater is also entitled to receive six (6) weeks of paid time off in accordance with the Company’s

policy for its senior executives.

Adams’ responsibilities,

the Company agreed to pay Mr.

Adams a base salary of $289,000, which may be increased from time to time by the Committee in its sole

Though the agreement does not provide for a guaranteed

annual target cash bonus, for each year the Adams Agreement is in effect, the Committee may choose to provide a discretionary cash bonus

Adams, based on an evaluation of his performance and peer group compensation practices, taking into account the Company and

individual performance objectives, and/or such criteria as determined by the Committee in its sole discretion from time to time.

In addition, Mr.

Brandon Bridgewater is entitled to reimbursement by the Company for all reasonable

expenses incurred by him in connection with this employment.

Reimbursable expenses include, but are not limited to, business travel expenses.

The Company may terminate

Brandon Bridgewater’s employment with or without Cause (as defined in the Brandon Bridgewater Agreement).

The Company has agreed

to provide thirty (30) days in notice to Mr.

Brandon Bridgewater if he is terminated without Cause (or base salary in lieu of such notice),

but no notice is required if he is terminated for Cause.

For termination for Cause, Mr.

Brandon Bridgewater (with his attorney) shall

have the opportunity to respond to all relevant allegations upon which a contemplated termination for Cause is based.

Brandon Bridgewater may

terminate his employment with or without Good Reason (as defined in the Brandon Bridgewater Agreement).

Brandon Bridgewater intends

to terminate his employment without Good Reason, he has agreed to provide thirty (30) days’ written notice.

For termination for

Good Reason, Mr.

Brandon Bridgewater has agreed that he will provide the Company with notice within thirty (30) days after receiving notice

of a Good Reason event, the Company will have thirty (30) days to cure the Good Reason, and, if not cured, Mr.

Brandon Bridgewater will

terminate employment within fifteen (15) days following the expiration of the cure period.

In the event of termination

for any reason, Mr.

Brandon Bridgewater shall continue to receive his full salary through the date of termination, any unreimbursed and

approved business expenses, accrued but unused paid time off days, and any payments, benefits, or fringe benefits Mr.

Brandon Bridgewater

was entitled to under plan terms.

If the Company terminates

Brandon Bridgewater without Cause or Mr.

Brandon Bridgewater terminates for Good Reason, and there is no Change of Control (as defined

in the Brandon Bridgewater Agreement), the Company has agreed to also provide Mr.

Brandon Bridgewater the following:

(i) a lump sum cash payment, payable

on the date of termination, equal to the sum of the following:

(x) one year’s base salary, and (y) any unpaid annual bonus for

the preceding calendar year, and the greater of (I) any annual target cash bonus opportunity for the year of termination or (II) the

average annual cash bonus for the three preceding completed years (provided, however, that if Mr.

Brandon Bridgewater has not been employed

for at least three years in which an annual cash bonus was paid, such calculation will assume that an annual cash bonus equal to any

target annual cash bonus opportunity was paid in the missing years), and (z) any other target long-term incentive award granted to Mr.

Brandon Bridgewater for the year in which the termination occurs;

(ii) accelerated vesting of any

outstanding equity grants so that such equity grants vest completely as of the date of termination;

(iii) to the extent eligible, continuation

health insurance coverage under COBRA for twelve (12) months following termination.

If the Company terminates

Brandon Bridgewater without Cause or Mr.

Brandon Bridgewater terminates for Good Reason, and such termination occurs within two (2)

years following or six (6) months prior to a Change of Control (as defined in the Brandon Bridgewater Agreement), the Company has agreed

to also provide Mr.

Brandon Bridgewater the following:

(i) pro-rated, based on the number

of days worked during the year in which the termination occurs, the greater of any annual target cash bonus opportunity for the year

Adams is eligible to receive

certain grants of vested shares under the Company’s 2024 Omnibus Incentive Equity Plan, subject to the approval of the Board, in

accordance with the following schedule:

● 15,000 vested shares which were issued in September 2024;

● 85,000 vested shares to be granted on the date that is within

15 months after the Closing;

● 100,000 vested shares to be granted on the date that is on

or about 24 months after the Closing;

● 100,000 vested shares to be granted on the date that is on

or about 35 months after the Closing.

The Company may terminate Mr.

employment with or without Cause (as defined in the Adams Agreement).

The Company has agreed to provide thirty (30) days in notice

Adams if he is terminated without Cause (or base salary in lieu of such notice).

The termination of Mr.

employment will not be deemed to be for Cause unless Mr.

Adams (with his attorney) is given a reasonable opportunity to respond to

all relevant allegations upon which a contemplated termination for Cause is based.

Adams may terminate his employment with

or without Good Reason (as defined in the Adams Agreement).

Adams intends to terminate his employment without Good Reason,

he has agreed to provide thirty (30) days’ written notice.

For termination for Good Reason, Mr.

Adams has agreed that

he will provide the Company with notice within thirty (30) days after receiving notice of a Good Reason event, after which the Company

will have thirty (30) days to cure the Good Reason event, and, if not cured, Mr.

Adams will terminate employment within fifteen

(15) days following the expiration of the cure period.

In the event of termination for any reason, Mr.

shall continue to receive his full salary through the date of termination, any unreimbursed and approved business expenses, accrued but

unused paid time off days, and any payments, benefits, or fringe benefits Mr.

Adams was entitled to under plan terms.

If the Company terminates Mr.

Adams without

Adams terminates for Good Reason, and there is no Change of Control (as defined in the Adams Agreement), the Company

has agreed to also provide Mr.

Adams the following:

(iv) a lump sum cash payment, payable on the date of termination,

equal to the sum of the following:

(x) one year’s base salary at the annualized rate then in effect (or the rate that should

be in effect but for any base salary diminution), and (y) any unpaid annual bonus for the preceding calendar year and the greater

of (I) any annual target cash bonus opportunity for the year of termination or (II) the average annual cash bonus for the three

preceding calendar years in which an annual cash bonus was paid, and (z) the annual cash bonus and any other target long-term

incentive award granted for the year of the date of termination;

(v) accelerated vesting of any outstanding equity grants so that

such equity grants vest completely as of the date of termination;

(vi) (iii) to the extent eligible and Mr.

Adams properly

elects coverage, continued health insurance coverage under COBRA for twelve (12) months following termination at the same costs

as applied to Mr.

Adams prior to his termination, subject to early termination upon Mr.

Adams becoming eligible for group health

insurance coverage under another employer’s plan.

If the Company terminates Mr.

Adams without

Adams terminates for Good Reason, and such termination occurs within two (2) years following or six (6) months

prior to a Change of Control (as defined in the Adams Agreement), the Company has agreed to also provide Mr.

Adams the following:

(v) severance payments pro-rated, based on the number of days

worked during the year in which the termination occurs, equal to the greater of any annual target cash bonus opportunity for the year

of termination or the highest actual annual cash bonus paid during the three preceding completed years;

(ii) a lump sum cash payment equal

to the sum of the following:

(x) one year’s base salary, (y) any unpaid annual bonus for the preceding calendar year, and (z) any other

target long-term incentive award granted for the year in which termination occurs;

(iii) accelerated vesting of any

outstanding equity grants so that such equity grants vest completely as of the date of termination;

(iv) to the extent eligible, continuation

health insurance coverage under COBRA for twelve (12) months following termination.

Potential Payments on Termination or Change in Control

Sunergy has not previously offered or had in place for our

named executive officers any formal retirement, severance or similar compensation programs providing for additional benefits or payments

in connection with a termination of employment, change in job responsibility or change in control.

The compensation of the Company’s directors after the

consummation of the Business Combination will be determined by the Compensation Committee.

Equity-Based Awards

Sunergy did not have any equity-based plans or awards in

Sunergy Compensation of Directors

Sunergy had four managers that made up its Board of Managers

(Anton Hruby, Gianluca Guy, Kalen Larsen, and Brandon Bridgewater).

None of the directors received any separate payments that solely relate

to their roles as directors of Sunergy for the year that ended December 31, 2023.

Any amounts they received consisted solely of distributions

of company profits with respect to their individual LLC’s ownership shares of Sunergy.

(vi) a lump sum cash payment equal to the sum of the following:

(x) one year’s base salary at the annualized rate then in effect (or the rate that should be in effect but for any base salary

diminution), (y) any unpaid annual bonus for the preceding calendar year, and (z) any other target long-term incentive award

granted for the year of the date of termination;

(vii) accelerated vesting of any outstanding equity grants so that

such equity grants vest completely as of the date of termination;

(viii) to the extent eligible, and Mr.

Adams properly elects

coverage, continued health insurance coverage under COBRA for twelve (12) months following termination at the same costs as applied

Adams prior to his termination, subject to early termination upon Mr.

Adams becoming eligible for group health insurance

coverage under another employer’s plan.

Additionally, Mr.

Adams is subject to standard

confidentiality and non-disparagement covenants, and covenants not to solicit the company’s customers or employees or compete with

the company for the duration of Mr.

Adams’ employment and for the one year following his termination.

Retirement Benefits

Sunergy currently offers certain welfare benefits

through a professional employer organization, Frank Crum, in which the named executive officers may participate.

Sunergy does not currently

offer any qualified retirement benefits, or any non-qualified defined contribution plans or other retirement benefits.

Potential Payments on Termination or Change

Neither Zeo nor Sunergy has not previously offered

or had in place for our named executive officers any formal retirement, severance or similar compensation programs providing for additional

benefits or payments in connection with a termination of employment, change in job responsibility or change in control.

Outstanding Equity Awards at 2024 Fiscal Year-End

Zeo did not have any outstanding equity-based

awards as of December 31, 2024.

2024 Omnibus Incentive Equity Plan

The purpose of the 2024 Omnibus Incentive Plan

(the “2024 Plan”) is to provide a means whereby we can secure and retain the service of employees, directors and consultants,

to provide incentives to such persons and to align the interests of such service providers with our stockholders.

This section summarizes

the material features of the 2024 Plan.

Securities to be Offered

The aggregate number of shares of common stock

that may be issued or used for reference purposes or with respect to which awards may be granted under the 2024 Plan at adoption was 3,220,400

(the “ Initial Share Reserve ”).

The number of shares of Zeo Class A Common Stock available for issuance

under the 2024 Plan is subject to an annual increase on the first day of each calendar year beginning January 1, 2025 and ending

and including January 1, 2029, equal to the lesser of (i) 2% of the aggregate number of fully diluted shares of Zeo outstanding

on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the administrator

of the 2024 Plan.

The aggregate number of shares of Zeo Class A Common Stock that may be issued or used under the 2024 Plan pursuant

to incentive stock options shall not exceed an amount equal to the Initial Share Reserve.

Shares of Zeo Class A Common Stock subject

to an award that expires or is cancelled, forfeited or otherwise terminated without delivery of shares, tendered in payment of an option,

covered by a stock-settled stock appreciation right or that were otherwise not issued upon settlement, and shares delivered or withheld

to satisfy any tax withholding obligations will again be available for delivery pursuant to other awards under the 2024 Plan.

shall be deemed to have been issued in settlement of a SAR, restricted stock unit or other award that only provides for settlement in,

and settles only in, cash.

The number of shares of Zeo Class A Common Stock available for issuance under the 2024 Plan is not reduced

by shares issued pursuant to awards issued or assumed in connection with a merger or acquisition as contemplated by applicable stock exchange

rules, provided that any substitute awards issued in connection with the assumption of, or in substitution for, outstanding options intended

to qualify as “incentive stock options” within the meaning of Section 422 of the Code shall be counted against the aggregate

number of shares available for incentive stock option awards under the 2024 Plan).

Administration

The 2024 Plan is administered by a committee of

the Zeo Board that has been authorized to administer the 2024 Plan, except if no such committee is authorized by the Zeo Board, the Zeo

Board will administer the 2024 Plan (as applicable, the “ Committee ”).

The Committee has broad discretion to

administer the 2024 Plan, including the power to determine the eligible individuals to whom awards will be granted, the number and type

of awards to be granted and the terms and conditions of awards.

Directors, officers, employees, consultants and

advisors of Zeo and its affiliates and prospective officers, employees, consultants and advisors who have accepted offers of employment

or consultancy with Zeo and its affiliates are eligible to receive awards under the 2024 Plan.

As stated above, the basis for participation

in the 2024 Plan is the Committee’s decision to select, in its sole discretion, participants from among those eligible.

Non-Employee Director Compensation

The fair value of any awards granted under the

2024 Plan to a non-employee director as compensation for services on the Zeo Board, during any one fiscal year, taken together

with any cash fees paid to such non-employee director during such period in respect of the non-employee director’s services

as a member of the Zeo Board during such year, may not exceed any limits as outlined in any Zeo compensation policy, provided that the

Zeo Board can make exceptions to this limit so long as the applicable non-employee director does not participate in the decision.

Types of Awards

The 2024 Plan provides for the grant of both incentive

stock options (” ISOs ”), which are intended to qualify for favorable tax treatment under Section 422 of

the Code, and nonqualified stock options (“ NSOs ”), as well as the grant of restricted stock, restricted stock

units (“ RSUs ”), stock appreciation rights (“ SARs ”), and other equity-based awards

and substitute awards.

Zeo may grant ISOs and NSOs to eligible persons,

except that ISOs may only be granted to persons who are Zeo’s employees or employees of one of its subsidiaries or controlled affiliates,

in accordance with Section 422 of the Code.

The exercise price of an option cannot be less than 100% of the fair market value of

a share of Zeo Class A Common Stock on the date on which the option is granted and the option must not be exercisable for longer

than ten years following the date of grant.

However, in the case of an ISO granted to an individual who owns (or is deemed to own)

at least 10% of the total combined voting power of all classes of our capital stock, the exercise price of the option must be at least

110% of the fair market value of a share of Zeo Class A Common Stock on the date of grant and the option must not be exercisable

more than five years from the date of grant.

The aggregate fair market value, determined at the time of grant, of our Zeo Class A

Common Stock with respect to ISOs that are exercisable for the first time by an award holder during any calendar year under all of our

stock plans may not exceed $100,000.

Options or portions thereof that exceed such limit will generally be treated as NSOs.

Payment of the exercise price may be made in a

manner approved by the Committee, which may include (i) immediately available funds in U.S.

dollars, (ii) delivery of Zeo

Class A Common Stock having a value equal to the exercise price, (iii) a broker assisted cashless exercise or (iv) any

other means approved by the Committee.

Unless the Committee provides otherwise, options

generally are not transferable except by will or the laws of descent and distribution.

Restricted Stock Awards

A restricted stock award is a grant of shares

of Zeo Class A Common Stock subject to the restrictions on transferability and risk of forfeiture imposed by the Committee.

otherwise determined by the Committee and specified in the applicable award agreement, the holder of a restricted stock award has rights

as a stockholder, including the right to vote the shares of Zeo Class A Common Stock subject to the restricted stock award or to

receive dividends (or dividend equivalents) on such shares of Zeo Class A Common Stock subject to the restricted stock award during

the restriction period.

In the discretion of the Committee, dividends distributed prior to vesting may be subject to the same restrictions

and risk of forfeiture as the restricted shares with respect to which the distribution was made.

Restricted Stock Units

An RSU is a right to receive cash, shares of Zeo

Class A Common Stock or a combination of cash and shares of Zeo Class A Common Stock at the end of a specified period equal

to the fair market value of one share of Zeo Class A Common Stock on the date of vesting.

RSUs may be subject to the restrictions,

including a risk of forfeiture, imposed by the Committee.

The Committee may determine that a grant of RSUs will provide a participant

a right to receive dividend equivalents, which entitles the participant to receive the equivalent value (in cash or shares of Zeo Class A

Common Stock) of dividends paid on the underlying shares of Zeo Class A Common Stock.

Dividend equivalent rights may be paid currently

or credited to an account, settled in cash or shares, and may be subject to the same restrictions as the RSUs with respect to which the

dividend equivalent rights are granted.

Stock Appreciation Rights

A SAR is the right to receive an amount equal

to the excess of the fair market value of one share of common stock on the date of exercise over the grant price of the SAR.

grant price of a SAR cannot be less than 100% of the fair market value of a share of common stock on the date on which the SAR is granted.

The term of a SAR may not exceed ten years.

The Committee has the discretion to determine other terms and conditions of a SAR award.

Other Equity-Based Awards

Other equity-based awards are awards denominated

or payable in, valued in whole or in part by reference to, or otherwise based on or related to, the value of Zeo Class A Common Stock.

Substitute Awards

Awards may be granted under the 2024 Plan in substitution

for similar awards held for individuals who become participants as a result of a merger, consolidation or acquisition of another entity

by or with Zeo or one of its affiliates.

Certain Transactions

If any change is made to our capitalization, such

as a stock split, stock combination, stock dividend, exchange of stock or other recapitalization, merger or otherwise, which results in

an increase or decrease in the number of outstanding shares of common stock, appropriate adjustments will be made by the Committee in

the shares subject to an award under the 2024 Plan.

The Committee also has the discretion to make certain adjustments to awards in the

event of a change in control of Zeo, such as the assumption or substitution of outstanding awards, the purchase of any outstanding awards

in cash based on the applicable change in control price, the ability for participants to exercise any outstanding stock options upon the

change in control (and if not exercised such awards will be terminated), and the acceleration of vesting or exercisability of any outstanding

All awards granted under the 2024 Plan may be

subject to reduction, cancelation or recoupment under any written clawback policy that Zeo may adopt and that Zeo determines should apply

to awards under the 2024 Plan or that is required by law.

Plan Amendment and Termination

The 2024 Plan allows the Committee to amend or

terminate any award, award agreement or the 2024 Plan at any time, provided that the rights of a participant granted an award prior to

such amendment or termination may not be impaired without such participant’s consent.

In addition, stockholder approval will be

required for any amendment to the extent necessary to comply with applicable law or exchange listing standards.

The Committee does not

have the authority, without the approval of stockholders, to amend any outstanding option or share appreciation right to reduce its exercise

price per share.

The 2024 Plan will remain in effect for a period of ten years (unless earlier terminated by the Zeo Board).

Material U.S.

Federal Income Tax Consequences

The following is a general summary under current

law of the principal U.S.

federal income tax consequences related to awards under the 2024 Plan.

This summary describes the general

federal income tax principles that apply, as based on current law and interpretational authorities which are subject to change at any

time, and is provided only for general information.

This summary does not purport to be complete discussion of all potential tax effects

relevant to recipients of awards under the 2024 Plan.

No attempt has been made to discuss certain kinds of taxes, including any potential non-U.S., state,

or local tax consequences.

This summary is not intended as tax advice to participants, who should consult their own tax advisors.

Non-Qualified Stock Options and Stock

Appreciation Rights

If a participant is granted a NSO or SAR under

the 2024 Plan, the participant should not have taxable income as of the grant of the NSO or SAR.

Upon the exercise of a NSO or SAR,

a participant will recognize ordinary income equal to the excess, if any, of the fair market value of the shares acquired on the date

of exercise over the exercise price.

If the participant is employed by us or one of our affiliates at the time of exercise, such income

will be subject to withholding taxes.

The participant’s tax basis in the Zeo Class A Common Stock for purposes of determining

gain or loss on a subsequent sale or disposition of such shares generally will be the fair market value of such Zeo Class A Common

Stock on the date the participant exercises such option or SAR.

When a participant sells the Zeo Class A Common Stock acquired

as a result of the exercise of a NSO or SAR, any appreciation or depreciation in the value of the Zeo Class A Common Stock after

the exercise date will be taxable as a long-term or short-term capital gain or loss for U.S.

federal income tax purposes, depending

on the holding period.

The Zeo Class A Common Stock must be held for more than twelve (12) months to qualify for long-term capital

gain treatment.

Subject to the discussion under “ — Tax Consequences to Zeo ” below, Zeo and its subsidiaries

or controlled affiliates generally should be entitled to a federal income tax deduction at the time and for the same amount as the participant

recognizes ordinary income.

Incentive Stock Options

A participant receiving ISOs should not recognize

taxable income upon grant.

Additionally, if applicable holding period requirements are met, the participant should not recognize taxable

income at the time of exercise.

However, the excess of the fair market value of the shares of the Zeo Class A Common Stock received

over the option exercise price is an item of tax preference income potentially subject to the alternative minimum tax.

If stock acquired

upon exercise of an ISO is held for a minimum of two years from the date of grant and one year from the date of exercise and otherwise

satisfies the ISO requirements, the gain or loss (in an amount equal to the difference between the fair market value on the date of disposition

and the exercise price) upon disposition of the stock will be treated as a long-term capital gain or loss, and we will not be entitled

to any deduction.

If the holding period requirements are not met, the ISO will be treated as one that does not meet the requirements of

the Code for ISOs and the participant will recognize ordinary income at the time of the disposition equal to the excess of the amount

realized over the exercise price, but not more than the excess of the fair market value of the shares on the date the ISO is exercised

over the exercise price, with any remaining gain or loss being treated as capital gain or capital loss.

Zeo and its subsidiaries or controlled

affiliates generally are not entitled to a federal income tax deduction upon either the exercise of an ISO or upon disposition of the

shares acquired pursuant to such exercise, except to the extent that the participant recognizes ordinary income on disposition of the

Restricted Stock

Generally, the recipient of a restricted stock

award will recognize ordinary income at the time the stock is received equal to the excess, if any, of the fair market value of the stock

received over any amount paid by the recipient in exchange for the stock.

If, however, the stock is subject to restrictions constituting

a substantial risk of forfeiture when it is received (for example, if the employee is required to work for a period of time in order to

have the right to transfer or sell the stock), the recipient generally will not recognize income until the restrictions constituting a

substantial risk of forfeiture lapse, at which time the recipient will recognize ordinary income equal to the excess, if any, of the fair

market value of the stock on the date it becomes vested over any amount paid by the recipient in exchange for the stock.

A recipient may,

however, file an election with the Internal Revenue Service, within 30 days following the date of grant, to recognize ordinary income,

as of the date of grant, equal to the excess, if any, of the fair market value of the stock on the date the award is granted over any

amount paid by the recipient for the stock.

The recipient’s basis for the determination of gain or loss upon the subsequent disposition

of shares acquired from a restricted stock award will be the amount paid for such shares plus any ordinary income recognized either when

the stock is received or when the restrictions constituting a substantial risk of forfeiture lapse.

Subject to the discussion under “ — Tax

Consequences to Zeo ” below, Zeo and its subsidiaries or affiliates generally should be entitled to a federal income tax deduction

at the time and for the same amount as the participant recognizes ordinary income.

Generally, the recipient of a restricted stock

unit award will recognize ordinary income at the time the stock is delivered equal to the excess, if any, of (i) the fair market

value of the stock received over any amount paid by the recipient in exchange for the stock or (ii) the amount of cash paid to the

The recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from

a restricted stock unit award will be the amount paid for such shares plus any ordinary income recognized when the stock is delivered,

and the participant’s capital gain holding period for those shares will begin on the day after they are transferred to the

Subject to the discussion under “ — Tax Consequences to Zeo ” below, Zeo and its subsidiaries

or affiliates generally should be entitled to a federal income tax deduction at the time and for the same amount as the participant recognizes

ordinary income.

Tax Consequences to Zeo

Reasonable Compensation

In order for the amounts described above to be

deductible by Zeo, such amounts must constitute reasonable compensation for services rendered or to be rendered by an individual service

provider and must be ordinary and necessary business expenses.

Golden Parachute Payments

Zeo’s ability (or the ability of one of

its subsidiaries) to obtain a deduction for future payments under the 2024 Plan could also be limited by the golden parachute rules of

Section 280G of the Code, which prevent the deductibility of certain excess parachute payments made in connection with a change in

control of an employer-corporation.

Compensation of Covered Employees

Zeo’s ability to obtain a deduction for

amounts paid under the 2024 Plan could be limited by Section 162(m) of the Code.

Section 162(m) of the Code limits

our ability to deduct compensation, for federal income tax purposes, paid during any year to a “covered employee” (within

the meaning of Section 162(m) of the Code) in excess of $1,000,000.

Zeo Compensation of Directors

Abigail Allen, Neil Bush and Mark Jacobs were

each granted 10,000 Class A shares on September 13, 2024.

The shares had a value of $1.75 each for total compensation value

of $17,500 to each director.

Our directors did not receive any other fees for their service in 2024.

Director Compensation Table

Fees Earned or

Abigail Allen

(1) Amounts reflect the full grant-date fair value of stock awards

granted during the applicable fiscal year computed in accordance with ASC Topic 718, rather than the amounts paid to or realized

by the director.

(2) As of December 31, 2024, there were no option awards

(exercisable and unexercisable) and unvested stock awards held by our directors.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS.

The following table sets forth

information known to the Company regarding beneficial ownership of shares of the Company’s common stock as of March 22, 2024 by:

The following table sets forth information known to the Company regarding

beneficial ownership of shares of the Company’s common stock as of May 19, 2025 by:

● each person known by the Company

4 unchanged sentences

directors as a group.

Beneficial ownership is determined

according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses

sole or shared voting or investment power over that security, including options, warrants and certain other derivative securities that

are currently exercisable or will become exercisable within 60 days.

The percentage of beneficial

ownership is based on 5,026,964 shares of Class A Common Stock issued and outstanding and 35,230,000 shares of Zeo Class V Common Stock

issued and outstanding as of the Closing Date.

In accordance with SEC rules,

shares of our common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become

exercisable within 60 days of the date of the Closing are deemed beneficially owned by the holders of such options and warrants and are

deemed outstanding for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the

purpose of computing the percentage of ownership of any other person.

Unless otherwise indicated,

the business address of each of the entities, directors and executives in this table is 7625 Little Rd, Suite 200A, New Port Richey, FL

Unless otherwise indicated and subject to community property laws and similar laws, except as otherwise indicated below, the Company

believes that all parties named in the table below have sole voting and investment power with respect to all shares of common stock beneficially

owned by them.

Beneficial ownership is determined according to

the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or

shared voting or investment power over that security, including options, warrants and certain other derivative securities that are currently

exercisable or will become exercisable within 60 days.

The percentage of beneficial ownership is based

on 22,824,845 shares of Class A Common Stock issued and outstanding and 26,480,000 shares of Class V Common Stock issued

and outstanding as of May 19, 2025.

In accordance with SEC rules, shares of our common

stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within

60 days of the date of the Closing are deemed beneficially owned by the holders of such options and warrants and are deemed outstanding

for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing

the percentage of ownership of any other person.

Unless otherwise indicated, the business address

of each of the entities, directors and executives in this table is 7625 Little Rd, Suite 200A, New Port Richey, FL 34654.

Unless otherwise

indicated and subject to community property laws and similar laws, except as otherwise indicated below, the Company believes that all

parties named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by

Name and Address of Beneficial Owners

2 unchanged sentences

Timothy Bridgewater (2)

Gianluca Guy (3)

Brandon Bridgewater (4)

Kalen Larsen (5)

Stirling Adams

Cannon Holbrook

All directors and executive officers as a group (9 individuals)

Five Percent Holders

Southern Crown Holdings, LLC

ESGEN LLC (6)

LHX Intermediate, LLC (7)

* Less than 1%.

(1) Unless otherwise noted, the

business address of each of the directors and officers is 7625 Little Rd, Suite 200A, New Port Richey, FL 34654.

(2) The total number of shares

of Zeo Class V Common Stock owned by Timothy Bridgewater comprise (i) 2,308,883 shares of Zeo Class V Common Stock owned

of record by LCB Trust, his family trust entity and (ii) 8,151,527 shares of Zeo Class V Common Stock held of record by Sun

Managers, LLC for which as the manager he has voting and investment power.

Sun Managers, LLC is expected to use such shares in connection

with a management equity program.

Bridgewater disclaims beneficial ownership over any such shares held by Sun Managers, LLC.

(1) Unless otherwise noted, the business address of each of the

directors and officers is 7625 Little Rd, Suite 200A, New Port Richey, FL 34654.

(2) The total number of shares of Class V Common Stock owned

by Timothy Bridgewater comprise (i) 750,000 shares of Class A Common Stock and 1,558,883 shares of Class V Common Stock owned of

record by LCB Trust, his family trust entity and (ii) 1,500,000 shares of Class A Common Stock and 6,651,527 shares of Class V Common

Stock held of record by Sun Managers, LLC for which as the manager he has voting and investment power.

Sun Managers, LLC is expected

to use such shares in connection with a management equity program.

Bridgewater disclaims beneficial ownership over any such

shares held by Sun Managers, LLC.

(3) Shares are held of record by Lamadd LLC.

Guy exercises

voting and dispositive power over the shares held by such entity.

(4) Shares are held of record by Clarke Capital, LLC.

exercises voting and dispositive power over the shares held by such entity.

(5) Shares are held of record by JKAE Holdings, LLC.

exercises voting and dispositive power over the shares held by such entity.

Benson, Michael C.

Mayon and Andrea Bernatova are the managers of ESGEN LLC, and each of them disclaims beneficial ownership over any securities owned by

ESGEN LLC in which he or she does not have any pecuniary interest.

The business address of ESGEN LLC is 5956 Sherry Lane, Suite 1400,

Dallas, Texas 75225.

Mayon and Andrea Bernatova

are the managers of ESGEN LLC, and each of them disclaims beneficial ownership over any securities owned by ESGEN LLC in which he or

she does not have any pecuniary interest.

The business address of ESGEN LLC is 5956 Sherry Lane, Suite 1400, Dallas, Texas 75225.

(7) As reported on the Schedule 13D/A of LHX filed on December

Consists of 8,080,000 shares of Class A Common Stock held by LHX.

This number does not take into account shares of stock of

the Company held by other stockholders party to the Voting Agreement (described herein) or issuable under the Promissory Note (described

herein), pursuant to which such stockholders have agreed, in certain circumstances, to vote (i) in favor of the nomination and appointment

of LHX’s designee to the Board, (ii) in favor of the issuance to LHX of shares of Class A Common Stock in connection with an option

that may be granted to LHX and (iii) the Share Issuance (described herein) pursuant to the Promissory Note.

The business address of LHX

is 5956 Sherry Lane, Suite 1400, Dallas, Texas 75225.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,

AND DIRECTOR INDEPENDENCE.

Sunergy Related Party Transactions

Approximately 30% of Zeo’s customers who

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

holding company of which Timothy Bridgewater, Zeo’s Chairman and Chief Executive Officer, is the owner and manager.

through White Horse, holds 1% or less of the membership interests of the third-party leasing companies established and managed by White

Horse Energy that own installed solar energy systems leased by Zeo Customers, with the remainder of the membership interests being held

by third parties.

For the twelve months ended December 31, 2024, the third-party leasing companies managed by White Horse Energy had purchased

approximately $20.6 million in solar energy systems from Zeo for their leasing customers.

As of that date, those third-party leasing

companies had entered into leasing agreements with customers for an additional approximately $4.2 million in leased systems to be

installed by Zeo, if the development and installation of all of those systems continued to completion.

For the twelve months ended December 31,

2023, the third-party leasing companies managed by White Horse Energy had purchased approximately $19.0 million in solar energy systems

from Zeo for their leasing customers.

Subject to investor and customer demand, White Horse Energy intends to attract additional investors

to form third-party leasing companies that will be able to fund additional installations of solar systems by Zeo.

ESGEN Class B Ordinary Shares

On April 27, 2021, the Sponsor paid $25,000, or approximately

$0.004 per share, to cover certain of our offering and formation costs in consideration of 7,187,500 ESGEN Class B ordinary shares,

par value $0.0001.

On April 27, 2021, the Sponsor paid $25,000, or

approximately $0.004 per share, to cover certain of our offering and formation costs in consideration of 7,187,500 ESGEN Class B ordinary

shares, par value $0.0001.

The Sponsor transferred 138,000 ESGEN Class B ordinary shares to each of our independent directors and 866,923

1 unchanged sentence

ESGEN Private Placement Warrants

The Sponsor purchased an aggregate of 11,240,000 ESGEN Private Placement

Warrants for a purchase price of $1.00 per whole warrant, or $11,240,000 in the aggregate, in a private placement that occurred simultaneously

with the closing of our IPO.

Each ESGEN Private Placement Warrant entitles the holder to purchase one Class A ordinary share at $11.50

per share, subject to adjustment.

The ESGEN Private Placement Warrants (including the ESGEN Class A ordinary shares issuable upon

exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder until 30 days after the

completion of our initial business combination.

Pursuant to the Amended Letter Agreement entered into on January 24,

2024, the Sponsor and the other Initial Shareholders agreed to forfeit, for no consideration, all ESGEN Private Placement Warrants held

by them in connection with Closing.

The Sponsor purchased an aggregate of 11,240,000

ESGEN Private Placement Warrants for a purchase price of $1.00 per whole warrant, or $11,240,000 in the aggregate, in a private placement

that occurred simultaneously with the closing of our IPO.

Each ESGEN Private Placement Warrant entitles the holder to purchase one Class

A ordinary share at $11.50 per share, subject to adjustment.

The ESGEN Private Placement Warrants (including the ESGEN Class A ordinary

shares issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder

until 30 days after the completion of our initial business combination.

Pursuant to the Amended Letter Agreement entered

into on January 24, 2024, the Sponsor and the other Initial Shareholders agreed to forfeit, for no consideration, all ESGEN Private Placement

Warrants held by them in connection with Closing.

Promissory Notes

No compensation of any kind, including finder’s and consulting

fees, were paid to the Sponsor, its officers and directors, or their respective affiliates, for services rendered prior to or in connection

with the completion of our initial business combination.

However, these individuals were reimbursed for any out-of-pocket expenses

incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable

business combinations.

Our audit committee reviewed on a quarterly basis all payments that were made by us to the Sponsor, and our officers,

directors or their affiliates and determined which expenses and the amount of expenses were reimbursed.

There was no cap or ceiling on

the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

No compensation of any kind, including finder’s

and consulting fees, were paid to the Sponsor, its officers and directors, or their respective affiliates, for services rendered prior

to or in connection with the completion of our initial business combination.

However, these individuals were reimbursed for any out-of-pocket

expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence

on suitable business combinations.

Our audit committee reviewed on a quarterly basis all payments that were made by us to the Sponsor,

and our officers, directors or their affiliates and determined which expenses and the amount of expenses were reimbursed.

cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

The Sponsor advanced $262,268 to cover expenses related to our IPO

under the April 2021 Promissory Note.

As of December 31, 2023, $171,346 of such covered expenses remains outstanding and is due to

On April 5, 2023, ESGEN issued the April 2023 Promissory Note

in the principal amount of up to $1,500,000 to the Sponsor, which was amended and restated by the October 2023 Promissory Note, which

could be drawn down by ESGEN from time to time prior to the consummation of our initial business combination.

The October 2023 Promissory

Note, as well as the April 2021 Promissory Note was not be repaid and was cancelled at Closing.

As of January 31, 2024, ESGEN had

drawn $1,787,047.65 and $171,346 under the October 2023 Promissory Note and April 2021 Promissory Note, respectively.

On January 24, 2024, ESGEN issued the January 2024 Promissory

Note in the principal amount of up to $750,000 to the Sponsor.

The January 2024 Promissory Note could be drawn down by ESGEN from time

to time prior to the consummation of our initial Business Combination for specific uses as designated therein.

The January 2024 Promissory

Note does not bear interest, matured on the date of consummation of the Business Combination and is subject to customary events of default.

The principal amount under the January 2024 Promissory Note was paid at Closing from funds that ESGEN had available to it outside of its

Trust Account.

Office Space, Secretarial and Administrative Services

Until Closing, ESGEN incurred $10,000 per month for office space, utilities,

secretarial support and administrative services provided by the Sponsor.

As of December 31, 2024, no covered expenses remained outstanding and due to the Sponsor.

On April 5, 2023, ESGEN issued the April 2023

Promissory Note in the principal amount of up to $1,500,000 to the Sponsor, which was amended and restated by the October 2023 Promissory

Note, which could be drawn down by ESGEN from time to time prior to the consummation of our initial business combination.

2023 Promissory Note, as well as the April 2021 Promissory Note was not be repaid and was cancelled at Closing.

As of January 31, 2024,

ESGEN had drawn $1,787,047.65 and $171,346 under the October 2023 Promissory Note and April 2021 Promissory Note, respectively.

On January 24, 2024, ESGEN issued the January

2024 Promissory Note in the principal amount of up to $750,000 to the Sponsor.

The January 2024 Promissory Note could be drawn down by

ESGEN from time to time prior to the consummation of our initial Business Combination for specific uses as designated therein.

2024 Promissory Note does not bear interest, matured on the date of consummation of the Business Combination and is subject to customary

events of default.

The principal amount under the January 2024 Promissory Note was paid at Closing from funds that ESGEN had available

to it outside of its Trust Account.

Office Space, Secretarial and Administrative Services Until Closing

ESGEN incurred $10,000 per month for office space,

utilities, secretarial support and administrative services provided by the Sponsor.

No amounts were paid for these services.

As of each of December

31, 2023 and December 31, 2022, the Company reported on the balance sheets $120,000 pursuant to this agreement, in “Due to related

As of December

31, 2023, ESGEN reported on the balance sheets $120,000 pursuant to this agreement, in “Due to related party”.

Amendment to the Letter Agreement

Concurrently with the execution of the Business Combination Agreement,

the Initial Shareholders entered into the Amendment to the Letter Agreement, pursuant to which, among other things, each of the Initial

Shareholders agreed (i) not to transfer his, her or its ESGEN Class B ordinary shares (or the New PubCo Class A Common

Concurrently with the execution of the Business

Combination Agreement, the Initial Shareholders entered into the Amendment to the Letter Agreement, pursuant to which, among other things,

each of the Initial Shareholders agreed (i) not to transfer his, her or its ESGEN Class B ordinary shares (or the New PubCo Class A Common

Stock issuable in exchange for such ESGEN Class B ordinary shares pursuant to the Business Combination Agreement) prior to the earlier

of (a) six months after the Closing or (b) subsequent to the Closing (A) if the last sale price of the New PubCo Class A

Common Stock quoted on Nasdaq is greater than or equal to $12 per share (as adjusted for stock splits, stock dividends, reorganizations,

recapitalizations and the like) for any 20 trading days within a 30-consecutive trading day period commencing at least

90 days after Closing, or (B) the date on which New PubCo completes a liquidation, merger, share exchange or other similar transaction

that results in all of New PubCo’s stockholders having the right to exchange their New PubCo Class A Common Stock for cash,

securities or other property, (ii) to waive any adjustment to the conversion ratio set forth in the governing documents of ESGEN

with respect to the ESGEN Class B ordinary shares prior to the earlier of the ESGEN Share Conversion or the Closing, (iii) the Sponsor

agreed to irrevocably surrender and forfeit 2,361,641 ESGEN ordinary shares, (iv) the Initial Shareholders other than Sponsor agreed to

irrevocably surrender and forfeit 538,359 ESGEN ordinary shares, (v) the Initial Shareholders and Sponsor agreed to forfeit an additional

500,000 shares of New PubCo Class A Common Stock if, within two years of Closing, the Convertible OpCo Preferred Units are redeemed or

converted (with such shares subject to a lock-up for two years after Closing) and (vi) the Initial Shareholders agreed to forfeit all

of their ESGEN Private Placement Warrants in connection with Closing.

of (a) six months after the Closing or (b) subsequent to the Closing (A) if the last sale price of the New PubCo Class A Common Stock

quoted on Nasdaq is greater than or equal to $12 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations

and the like) for any 20 trading days within a 30-consecutive trading day period commencing at least 90 days after Closing, or (B) the

date on which New PubCo completes a liquidation, merger, share exchange or other similar transaction that results in all of New PubCo’s

stockholders having the right to exchange their New PubCo Class A Common Stock for cash, securities or other property, (ii) to waive any

adjustment to the conversion ratio set forth in the governing documents of ESGEN with respect to the ESGEN Class B ordinary shares prior

to the earlier of the ESGEN Share Conversion or the Closing, (iii) the Sponsor agreed to irrevocably surrender and forfeit 2,361,641 ESGEN

ordinary shares, (iv) the Initial Shareholders other than Sponsor agreed to irrevocably surrender and forfeit 538,359 ESGEN ordinary shares,

(v) the Initial Shareholders and Sponsor agreed to forfeit an additional 500,000 shares of New PubCo Class A Common Stock if, within two

years of Closing, the Convertible OpCo Preferred Units are redeemed or converted (with such shares subject to a lock-up for two years

after Closing) and (vi) the Initial Shareholders agreed to forfeit all of their ESGEN Private Placement Warrants in connection with Closing.

Lock-Up Agreement

At the Closing, ESGEN and each of the Lock-Up Sellers entered

into the Lock-Up Agreement, pursuant to which each of the Lock-Up Sellers agreed not to transfer any of its respective

At the Closing, ESGEN and each of the Lock-Up

Sellers entered into the Lock-Up Agreement, pursuant to which each of the Lock-Up Sellers agreed not to transfer any of its respective

Exchangeable OpCo Units and corresponding shares of New PubCo Class V Common Stock received in connection with the Business Combination

until the earlier of (i) six months after the Closing Date and (ii) subsequent to the Closing Date, (a) if the last sale

price of New PubCo Class A Common Stock quoted on Nasdaq is greater than or equal to $12.00 per share (as adjusted for stock splits,

stock dividends, reorganizations, recapitalizations, and the like) for any 20 trading days within any period of 30 consecutive trading

days commencing at least 90 days after the Closing Date or (b) the date on which New PubCo completes a PubCo Sale (as defined in

the Lock-Up Agreement).

until the earlier of (i) six months after the Closing Date and (ii) subsequent to the Closing Date, (a) if the last sale price of New

PubCo Class A Common Stock quoted on Nasdaq is greater than or equal to $12.00 per share (as adjusted for stock splits, stock dividends,

reorganizations, recapitalizations, and the like) for any 20 trading days within any period of 30 consecutive trading days commencing

at least 90 days after the Closing Date or (b) the date on which New PubCo completes a PubCo Sale (as defined in the Lock-Up Agreement).

PIPE Financing

At Closing, the Sponsor purchased $10,000,000 of Convertible OpCo Preferred

Units in a private placement and has committed, pursuant to the Sponsor Subscription Agreement, to purchase an additional $5,000,0000

of Convertible OpCo Preferred Units if called for by New PubCo within six months of Closing.

Zeo’s customers who have entered into leasing agreements have

done so solely with third-party leasing companies established and managed by White Horse Energy, a holding company of which Timothy Bridgewater,

Zeo’s Chairman, Chief Executive Officer and Chief Financial Officer, is the owner and manager.

Bridgewater, through White Horse,

holds 1% or less of the membership interests of the third-party leasing companies that own the installed solar energy systems leased by

Zeo Customers, with the remainder of the membership interests being held by third parties.

As of December 31, 2023, the third-party leasing

companies had purchased approximately $19.0 million in solar energy systems from Zeo for their leasing customers.

As of that date, the

third-party leasing companies had entered into leasing agreements with customers for approximately $6.0 million in leased systems to be

installed by Zeo, if the development and installation of all of those systems continued to completion.

Subject to investor and customer

demand, White Horse Energy intends to attract additional investors to form third-party leasing companies that will be able to fund additional

installations of solar systems by Zeo.

Policies and Procedures for Related Person Transactions

The Board has adopted a policy with respect to the review, approval

and ratification of related party transactions.

Under the policy, Zeo’s audit committee is responsible for reviewing and approving

related person transactions.

In the course of its review and approval of related party transactions, Zeo’s audit committee will

consider the relevant facts and circumstances to decide whether to approve such transactions.

In particular, Zeo’s policy requires

Zeo’s audit committee to consider, among other factors it deems appropriate:

At Closing, the Sponsor purchased $15,000,000

of Convertible OpCo Preferred Units in the Sponsor PIPE Investment.

Policies and Procedures for Related Person

The Board has adopted a policy with respect to

the review, approval and ratification of related party transactions.

Under the policy, Zeo’s audit committee is responsible for

reviewing and approving related person transactions.

In the course of its review and approval of related party transactions, Zeo’s

audit committee will consider the relevant facts and circumstances to decide whether to approve such transactions.

In particular, Zeo’s

policy requires Zeo’s audit committee to consider, among other factors it deems appropriate:

● the related person’s

11 unchanged sentences

proposed transaction is on terms that are comparable to the terms available to an unrelated third party or to employees generally.

Zeo’s audit committee will only approve those transactions that

are in, or are not inconsistent with, Zeo’s best interests and those of Zeo’s stockholders, as Zeo’s audit committee

determines in good faith.

In addition, under Zeo’s code of business conduct and ethics, its employees, directors and director nominees

have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict

Zeo’s audit committee will only approve

those transactions that are in, or are not inconsistent with, Zeo’s best interests and those of Zeo’s stockholders, as Zeo’s

audit committee determines in good faith.

In addition, under Zeo’s code of business conduct and ethics, its employees, directors

and director nominees have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected

to give rise to a conflict of interest.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The following is a summary of fees paid to BDO USA P.C.

(BDO) for services

Audit fees consist of fees billed for professional

services rendered for the audit of our year-end financial statements, reviews of our quarterly financial statements and services that

are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings.

The aggregate

fees billed by BDO for audit fees, inclusive of required filings with the SEC for the year ended December 31, 2023 and 2022, and of services

rendered in connection with our initial public offering, totaled $210,945 and $85,300, respectively.

On April 16, 2024 (the

“Dismissal Date”), the Company dismissed BDO USA P.C.

as the independent registered public accounting firm for the Company.

The dismissal was approved by the Audit Committee.

The change in

independent registered public accounting firm is not the result of any disagreement with BDO.

BDO’s audit reports

on the financial statements as of December 31, 2023 and 2022 of the Company did not provide an adverse opinion or disclaimer of opinion

to the Company’s financial statements, nor did it modify its opinion as to uncertainty, audit scope or accounting principles, except

that such reports contained an explanatory paragraph regarding the Company’s ability to continue as a going concern.

For the Company’s

two most recent fiscal years, and in the subsequent interim period through the Dismissal Date, there were (i) no “disagreements”

within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions between the Company and BDO on

any matters of accounting principles or practices, financial statement disclosures or auditing scope or procedures which, if not resolved

to BDO’s satisfaction, would have caused BDO to make reference thereto in its reports on the financial statements of the Company

for such periods, and (ii) no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K), except that

material weaknesses in internal control over financial reporting were identified.

Specifically, we did not design and maintain an effective

control environment to prevent or detect material misstatements to the financial statements.

We lacked a sufficient complement of personnel

with an appropriate level of internal controls and accounting knowledge, training and experience commensurate with our financial reporting

requirements.

Management did not design and maintain effective controls over the calculation of earnings per share (as disclosed in our

2023 and 2022 Annual Report on Form 10-K, and our September 30, 2023 and 2022, June 30, 2023 and 2022, and March 31, 2023 and 2022 Form

10-Qs), and classification of the reinvestment of interest and dividend income in the Trust Account in the statement of cash flows (as

disclosed in our 2023 and 2022 Annual Report on Form 10-K, and our September 30, 2023, June 30, 2023, and March 31, 2023 Form 10-Qs).

On April 16, 2024, as recommended and approved

by the Audit Committee, the Company engaged GT as the Company’s independent public accounting firm to audit the Company’s

consolidated financial statements for the fiscal year ending December 31, 2024 and to review the Company’s quarterly consolidated

financial statements for each of the quarters ending April 30, 2024, June 30, 2024, and September 30, 2024.

GT previously served as the

independent registered public accounting firm of Sunergy prior to the Closing of the Business Combination.

For the Company’s two most recent fiscal

years, and in the subsequent interim period through the Dismissal Date, neither the Company nor anyone on its behalf consulted with GT

(i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit

opinion that might be rendered on the Company’s financial statements, and neither a written report nor oral advice was provided

to the Company that GT concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing

or financial reporting issue;

or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv)

of Regulation S-K and the related instructions) or a reportable event (as described in Item 304(a)(1)(v) of Regulation

GT served as the independent registered public

accounting firm to audit our books and accounts for the fiscal year ended December 31, 2024.

BDO served as the independent registered

public accounting firm to audit our books and accounts for the fiscal year ended December 31, 2023.

The table below presents the aggregate fees billed

for professional services rendered by GT for the year ended December 31, 2024.

Audit-related fees

Audit-related fees consist of fees billed

for assurance and related services that are reasonably related to performance of the audit or review of our year-end financial statements

and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation

and consultation concerning financial accounting and reporting standards.

We did not pay BDO any audit-related fees during the year ended

December 31, 2023 and 2022.

Tax fees consist of fees billed for professional services

relating to tax compliance, tax planning and tax advice.

We did not pay BDO any tax fees during the year ended December 31, 2023 and 2022.

All other fees

All other fees consist of fees billed for all

other services.

The aggregate fees billed for other fees during the year ended December 31, December 31, 2023 and 2022 totaled $0

and $0, respectively.

In the above table, Audit fees consist of fees

billed for professional services rendered for the audit of our year-end financial statements, reviews of our quarterly financial statements

and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory

Our Audit Committee determined that the services

provided by GT were compatible with maintaining the independence of GT as our independent registered public accounting firm.

The table below presents the aggregate fees billed

for professional services rendered by BDO for the years ended December 31, 2024, and 2023.

Audit-related fees

All other fees

In the above table, Audit fees consist of fees

billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by

our independent registered public accounting firm in connection with statutory and regulatory filings.

Our Audit Committee determined that the services

provided by BDO were compatible with maintaining the independence of BDO as our independent registered public accounting firm.

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES.

The following documents are filed as part of this

The following documents are filed as part of this Report:

(1) Financial Statements :

Our financial statements are listed in the “Index to Financial Statements” on page F-1.

Our financial statements are

listed in the “Index to Financial Statements” on page F-1.

( 2) Financial Statement Schedules :

We hereby file as part of this Report the exhibits listed in

the attached Exhibit Index.

We hereby file as part of this Report the exhibits listed in the attached

Exhibit Index.

Copies of such material can also be obtained on the SEC website at www.sec.gov.

43 unchanged sentences

March 20, 2024

Promissory Note, dated December 24, 2024, between Zeo Energy Corp.

and LHX Intermediate LLC.

Form of Voting Agreement, dated December 24, 2024, between Zeo Energy Corp., LHX Intermediate LLC and certain stockholders of the Company.

December 26, 2024

Letter from BDO USA P.C.

dated April 18, 2024 to the Securities and Exchange Commission regarding change in certifying accountant.

April 18, 2024

Insider Trading Policy

Subsidiaries of Zeo Energy Corp.

Certification of Chief Executive Officer and Chief Financial Officer

pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

April 1, 2024

Consent of Grant Thornton LLP

Certification of Chief Executive

Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Executive

Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Clawback Policy.

4 unchanged sentences

FORM 10-K SUMMARY.

Pursuant to the requirements of Section

13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized this date of March 25, 2024.

Pursuant to the requirements of Section 13 or

15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized this date of May 27, 2025.

Zeo Energy Corp.

1 unchanged sentence

Timothy Bridgewater

Chief Executive Officer and Chief Financial Officer

Chief Executive Officer and Director

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the

registrant and in the capacities indicated on May 27, 2025.

/s/ Timothy Bridgewater

Chief Executive Officer and Chief Financial

Officer (Principal Executive Officer, Principal Financial Officer and Principal

Accounting Officer)

Chief Executive Officer and Director

Timothy Bridgewater

/s/ Cannon Holbrook

Chief Financial Officer

Cannon Holbrook

/s/ Gianluca “Luke” Guy

Chief Installation and Strategy Officer and Director

Gianluca “Luke” Guy

1 unchanged sentence

/s/ Mark Jacobs

ESGEN ACQUISITION CORPORATION

ZEO ENERGY CORP.

AND SUBSIDIARIES

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm ( BDO USA, P.C.

, New York, NY , PCAOB ID# 243 ) F - 2

Balance Sheets as of December 31, 2023 and 2022 F - 3

Statements of Operations for the years ended December 31, 2023 and 2022 F - 4

Statements of Changes in Redeemable Ordinary Shares and Shareholders’ Deficit for the years ended December 31, 2023 and 2022 F - 5

Statements of Cash Flows for the years ended December 31, 2023 and 2022 F - 6

Report of Independent Registered Public Accounting Firm (PCAOB ID 248 ) F-2

Consolidated Balance Sheets F-3

Consolidated Statements of Operations F-4

Consolidated Statements of Changes in Shareholders’ Deficit F-5

Consolidated Statements of Cash Flows F-6

Notes to Financial Statements F-7 to F-33

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

Shareholders and Board of Directors

ESGEN Acquisition Corporation

Dallas, Texas

Board of Directors and Shareholders

Zeo Energy Corp.

Opinion on the financial statements

We have audited the accompanying balance sheets

of ESGEN Acquisition Corporation (the “Company”) as of December 31, 2023, and 2022, the related statements of operations,

changes in redeemable ordinary shares and shareholders’ deficit, and cash flows for each of the years then ended, and the related

notes (referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material

respects, the financial position at December 31, 2023 and 2022 of the Company, and the results of its operations and its cash flows for

each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Uncertainty

The accompanying financial statements have been

prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company does

not have sufficient cash and working capital to sustain its operations.

These conditions raise

substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters

are also described in Note 1.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We have audited the accompanying consolidated

balance sheets of Zeo Energy Corp.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023,

the related consolidated statements of operations, changes in shareholders’ deficit, and cash flows for each of the two years in

the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company

as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December

31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

These consolidated financial statements are the

responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial

statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United

States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

8 unchanged sentences

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of financial statements.

Our audits included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall

presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Emphasis of Matter – Business Combination

As discussed in Note 10 to the financial statements, the Company consummated the business

combination discussed in Note 6 on March 13, 2024.

/s/ BDO USA, P.C.

We have served as the Company’s auditor since 2021.

March 25, 2024

ESGEN ACQUISITION CORPORATION

BALANCE SHEETS

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor

Kansas City, Missouri

ZEO ENERGY CORP.

CONSOLIDATED BALANCE SHEETS

Current assets

Prepaid expenses

Cash and cash equivalents

Accounts receivable, including $ 191,662 and $ 396,488 from related parties, net of allowance for credit losses of $ 1,165,336 and $ 862,580 , as of December 31, 2024 and 2023, respectively

Contract assets

Prepaid expenses and other current assets

Total current assets

Non-current assets:

Marketable securities and cash held in Trust Account

$ 286,152,445

Liabilities, Redeemable Ordinary Shares and Shareholders’ Deficit

Property, equipment and other fixed assets, net

Right -of-use operating lease asset

Right-of-use finance lease asset

Intangibles, net

Related party note receivable

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

Current liabilities

Accounts payable and accrued expenses

Due to related party

Promissory note—related party

Accounts payable

Accrued expenses and other current liabilities, including $ 3,359,101 and $ 2,415,966 with related parties at December 31, 2024 and 2023, respectively

Current portion of long-term debt

Current portion of obligations under operating leases

Current portion of obligations under finance leases

Convertible promissory note, net of debt issuance costs

Contract liabilities, including $ 2,000 and $ 1,160,848 with related parties as of December 31, 2024 and 2023, respectively

Total current liabilities

Non-current liabilities:

Obligations under operating leases, non-current

Obligations under finance leases, non-current

Warrant liabilities

Deferred underwriters fee

Long-term debt

Total liabilities

Commitments and Contingencies

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

1,408,555 and 27,600,000 shares at redemption value as of December 31, 2023 and 2022, respectively

Shareholders’ Deficit:

Preferred shares, $ 0.0001 par value;

1,000,000 shares authorized;

none issued or outstanding

Class A shares, $ 0.0001 par value;

250,000,000 shares authorized;

5,619,077 and 0 issued or outstanding (excluding 1,408,555 and 27,600,000 shares subject to possible redemption) as of December 31, 2023 and 2022, respectively

Class B shares, $ 0.0001 par value;

25,000,000 shares authorized;

1,280,923 and 6,900,000 shares issued and outstanding, respectively

Commitments and contingencies (Note 17)

Redeemable noncontrolling interests

Convertible preferred units, 1,500,000 units issued and outstanding as of December 31, 2024 and no units issued and outstanding as of December 31, 2023

Class B Units

Stockholders’ (deficit) equity

Class V common stock, $ 0.0001 par value, 100,000,000 authorized shares;

35,230,000 and 33,730,000 shares issued and outstanding as of December 31, 2024, and December 31, 2023, respectively

Class A common stock, $ 0.0001 par value, 300,000,000 authorized shares;

13,252,964 and no shares issued and outstanding as of December 31, 2024, and December 31, 2023, respectively

Additional paid-in capital

Accumulated deficit

( 103,440,891 )

( 11,993,568 )

Total shareholders’ deficit

( 8,826,089 )

( 11,992,878 )

Total Liabilities, Redeemable Ordinary Shares and Shareholders’ Deficit

Total stockholders’ (deficit) equity

( 88,912,079 )

The accompanying notes are an integral part of

these financial statements.

ESGEN ACQUISITION CORPORATION

STATEMENTS OF OPERATIONS

Legal and professional fees

Other operating costs

Operating cost—related party

Loss from operations

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

The accompanying notes are an integral part

of the financial statements.

ZEO ENERGY CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

Related party revenue, net

Total revenue

Operating costs and expenses:

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

Depreciation and amortization

Sales and marketing

General and administrative

Total operating expenses

(Loss) income from operations

( 10,829,772 )

Other income (expenses), net:

Other income, net

Change in fair value of warrant liabilities

Interest expense

Total other income (expense), net

Net (loss) income before taxes

( 10,861,160 )

Other income (expense):

Change in fair value of warrants liabilities

Interest and investment income on marketable securities and cash held in Trust Account

Recovery of deferred offering costs allocated to warrants

Total other income, net

Income tax benefit

Net (loss) income

( 9,872,358 )

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

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

Basic and diluted weighted average shares outstanding of non-redeemable Class A and Class B ordinary shares

Basic and diluted net income per share, non-redeemable Class A and Class B

The accompanying notes are an integral part of

these financial statements.

ESGEN ACQUISITION CORPORATION

STATEMENTS OF CHANGES IN REDEEMABLE ORDINARY SHARES

AND SHAREHOLDERS’ DEFICIT

FOR THE YEAR ENDED DECEMBER 31, 2023 AND 2022

Class A Ordinary

share subject to possible

Ordinary share

Balance as of December 31, 2021

$ 281,520,000

$ ( 22,341,250 )

$ ( 22,340,560 )

Accretion of ordinary shares subject to possible redemption

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

Net loss subsequent to the ESGEN Business Combination

( 9,348,677 )

Net loss attributable to redeemable non-controlling interests

( 6,679,788 )

Balance as of December 31, 2022

Net loss attributable to Class A common stock

$ ( 2,668,889 )

Basic and diluted net loss per common share

Weighted average units outstanding, basic and diluted

The accompanying notes are an integral part

of the financial statements.

ZEO ENERGY CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Non-controlling

December 31, 2022

application of ESGEN Business Combination (Note 1)

December 31, 2022

distributions

December 31, 2023

distributions

loss prior to the ESGEN Business Combination

of ESGEN Business Combination

of Class A Shares to third party advisors

of Class A Shares to backstop investor

Recapitalization (Note 3)

Establishment

of redeemable noncontrolling interest

subsequent to ESGEN Business Combination

A common stock issued to vendor

Asset purchase

of Class A Shares to private placement investor

measurement of redeemable noncontrolling interest

( 105,672,002

Redemption of Class A ordinary shares subject to possible redemption

paid to Preferred unit holders

December 31, 2024

( 103,440,891

The accompanying notes are an integral part

of the financial statements.

ZEO ENERGY CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,

Cash Flows from Operating Activities

Net (loss) income

$ ( 9,872,358 )

Recovery of deferred offering costs

Conversion of Class B ordinary shares to Class A ordinary shares

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

Depreciation and amortization

Gain on disposal of fixed assets

Change in fair value of warrant liabilities

Provision for credit losses

Noncash operating lease expense

Stock based compensation expense

Income tax benefit

Changes in operating assets and liabilities:

Accounts receivable

( 8,785,973 )

Accretion of ordinary shares subject to possible redemption

( 3,475,661 )

Accounts receivable due from related parties

Contract assets

( 4,795,309 )

Prepaids and other current assets

( 1,757,354 )

Due from related party

Accounts payable

( 2,512,834 )

Balance as of December 31, 2023

Accrued expenses and other current liabilities

( 1,140,780 )

Accrued expenses and other current liabilities due to related parties

Contract liabilities

( 3,861,063 )

The accompanying notes are an integral part of

these financial statements.

ESGEN ACQUISITION CORPORATION

STATEMENTS OF CASH FLOWS

For the year ended

Cash flows from operating activities:

Net (loss) income

Contract liabilities due to related parties

( 1,158,848 )

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

Recovery of deferred offering costs allocated to warrants

Change in fair value of warrant liabilities

Operating lease payments

Net cash (used in) provided by operating activities

( 8,716,717 )

Changes in operating assets and liabilities:

Due to related party

Prepaid assets

Accounts payable and accrued expenses

Net cash provided by operating activities

Cash flows from Investing Activities

Extension funding used to purchase marketable securities and cash held in Trust Account

Purchases of property, equipment and other assets

( 1,034,666 )

Cash withdrawn from Trust Account in connection with redemptions

Proceeds from sale of marketable securities deposited into cash held in Trust Account

Reinvestment of marketable securities and cash held in Trust Account

Investment in related party note receivable

( 3,000,000 )

Asset acquisitions

( 4,000,000 )

Net cash provided by (used in) investing activities

Net cash used in investing activities

( 7,369,137 )

( 1,034,666 )

Cash flows from Financing Activities

Proceeds from note payable-related party

Redemptions of Class A ordinary shares subject to possible redemption

Proceeds from the issuance of debt

Repayments of finance lease liabilities

Proceeds from private placement

Proceeds from the issuance of convertible preferred stock, net of transaction costs

Repayments of debt

Proceeds from convertible promissory note, net of debt issuance costs

Dividends paid to Convertible preferred units

Distributions to members

( 5,173,396 )

Net cash used in financing activities

Net cash provided by (used in) financing activities

( 5,188,468 )

Net change in cash

Net (decrease) increase in cash and cash equivalents

( 2,388,191 )

Cash, beginning of the period

Cash, end of the period

Cash held in Trust Account

Total cash and cash in Trust Account

Supplemental disclosure of cash flow information:

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

Impact of the waiver of deferred commission by the underwriters

Conversion of Class B ordinary shares to Class A ordinary shares

The accompanying notes are an integral part of

these financial statements.

ESGEN ACQUISITION CORPORATION

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of the period

Supplemental Cash Flow Information

Cash paid for interest

Accrual of distribution to owners

Cash paid for income taxes

Noncash finance lease expense

Non-cash transactions

Deferred equity issuance costs

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

Issuance of Class A common stock to vendors

Issuance of Class A common stock to backstop investors

Preferred dividends

The accompanying notes

are an integral part of the financial statements.

ZEO ENERGY CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024

NOTE 1 - ORGANIZATION AND BUSINESS OPERATION

ESGEN Acquisition Corporation

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

was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business

combination with one or more businesses or entities (the “Business Combination”).

The Company will not be limited to a particular

industry or geographic region in its identification and acquisition of a target company.

The Company consummated the Business Combination on March 13,

2024 (see Note 10 – Subsequent Events).

As of December 31, 2023, the Company had not commenced

any operations.

All activity for the period from April 19, 2021 (inception) through December 31, 2023, relates to the Company’s

formation and the initial public offering (“Public Offering” or “IPO”) described below and since the closing of

the IPO, the search for a prospective initial Business Combination.

The Company will not generate any operating revenues until after the

completion of its initial Business Combination, at the earliest.

The Company will generate non-operating income in the form of interest

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

The Company’s sponsor is ESGEN LLC, a Delaware limited

liability company (the “Sponsor”).

The registration statement for the Company’s IPO was

declared effective on October 19, 2021.

On October 22, 2021, the Company consummated its IPO of 27,600,000 units (the “Units”

and, with respect to the ordinary shares included in the Units being offered, the “public shares”) at $ 10.00 per Unit and

the sale of 14,040,000 warrants (the “Private Placement Warrants”) each exercisable to purchase one Class A ordinary share

at $ 11.50 per share, at a price of $ 1.00 per Private Placement Warrant in a private placement to the Sponsor that closed simultaneously

with the Public Offering.

The Company must complete one or more initial Business Combinations

having an aggregate fair market value of at least 80 % of the net assets held in the Trust Account (as defined below) (excluding the deferred

underwriters fee and taxes payable on the interest or dividends earned on the Trust Account) at the time of signing a definitive agreement

in connection with the initial Business Combination.

However, the Company will complete the initial Business Combination only if the post-Business

Combination company in which its public shareholders own shares will own or acquire 50 % or more of the outstanding voting securities of

the target or is otherwise not required to register as an investment company under the Investment Company Act (the “Investment Company

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

the closing of the IPO on October 22, 2021, $ 281,520,000 ($ 10.20 per Unit) from the net proceeds sold in the IPO, including proceeds

of the sale of the Private Placement Warrants, was deposited in a trust account (“Trust Account”) and, until October 16,

2023, was only invested in United States “government securities” within the meaning of Section 2(a)(16) of the

Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7

promulgated under the Investment Company Act which invest only in direct U.S.

government treasury obligations.

To mitigate the risk

of being deemed to have been operating as an unregistered investment company under the Investment Company Act, on October 16, 2023,

the Company instructed the Trustee with respect to the Trust Account, to liquidate the U.S.

government securities or money market

funds held in the Trust Account and thereafter to hold all funds in the Trust Account in demand deposits (i.e., in one or more bank

accounts) until the earliest of ESGEN’s completion of an initial business combination or July 22, 2024 (assuming the Sponsor

deposits the required amount into the Trust Account for each New Additional Extension Date and unless the Company’s

shareholders approve one or more further Additional Extensions).

with respect to interest or other income earned on the funds held in the Trust Account that may be released to the Company to pay

its income taxes, if any, the amended and restated memorandum and articles of association, as discussed below and subject to the

requirements of law and regulation, will provide that the proceeds from the Public Offering and the sale of the Private Placement

Warrants held in the Trust Account will not be released from the Trust Account (1) to the Company, until the completion of the

initial Business Combination, or (2) to the public shareholders, until the earliest of (a) the completion of the initial Business

Combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem,

subject to the limitations described herein, (b) the redemption of any public shares properly tendered in connection with a

shareholder vote to amend the amended and restated memorandum and articles of association (A) to modify the substance or timing of

the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in

connection with the initial Business Combination or to redeem 100 % of the public shares if the Company did not complete its initial

Business Combination within 15 months (which was extended pursuant to shareholder approval of the Charter Amendment (as defined

below)) from the closing of this offering (the “Combination Period”) or (B) with respect to any other provision relating

to the rights of holders of the Class A ordinary shares, and (c) the redemption of the public shares if the Company has not

consummated the Business Combination within Combination Period, subject to applicable law.

Public shareholders who redeem their

Class A ordinary shares in connection with a shareholder vote described in clause (b) in the preceding sentence shall not be

entitled to funds from the Trust Account upon the subsequent completion of an initial Business Combination or liquidation if the

Company has not consummated an initial Business Combination within Combination Period, with respect to such Class A ordinary shares

The Company will provide its public shareholders with the opportunity

to redeem all or a portion of their public shares upon the completion of the initial Business Combination either (i) in connection with

a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer.

The decision as to whether the Company

will seek shareholder approval of a proposed Business Combination or conduct a tender offer will be made by the Company, solely in its

discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would

require the Company to seek shareholder approval under applicable law or stock exchange listing requirement.

Company will provide its public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon

the completion of its initial Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on

deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination,

including interest or dividends earned on the funds held in the Trust Account and not previously released to the Company to pay its

income taxes, if any, divided by the number of then-outstanding public shares, subject to the limitations described herein.

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

The per share amount the Company will distribute to investors who

properly redeem their shares will not be reduced by the deferred underwriters fee the Company will pay to the underwriters.

ordinary shares subject to redemption were recorded at redemption value and classified as temporary equity upon the completion of

the Public Offering, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards

Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will

proceed with a Business Combination if the Company has net tangible assets of at least $ 5,000,001 upon such consummation of a

Business Combination and, if the Company seeks shareholder approval, a majority of the issued and outstanding shares voted are voted

in favor of the Business Combination.

Company has until July 22, 2024 (assuming the Sponsor deposits the required amount into the Trust Account for each New Additional

Extension Date and unless the Company’s shareholders approve one or more further Additional Extensions), to consummate the

initial Business Combination.

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

Company will:

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

(ii) as promptly as reasonably possible but not more

than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount

then on deposit in the Trust Account, including interest or dividends earned on the funds held in the Trust Account and not

previously released to the Company to pay its income taxes, if any (less up to $ 100,000 of interest or dividends to pay winding up

and dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish

public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any);

(iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining

shareholders and its board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to the

Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable

18, 2023, the Company held an extraordinary general meeting of shareholders to consider and vote upon, among other things, a proposal

to amend the Company’s amended and restated memorandum and articles of association (the “First Extension Charter Amendment”)

to (i) extend the date by which the Company must consummate its initial Business Combination (the “Termination Date”) from

January 22, 2023 to April 22, 2023 and (ii) in the event that the Company has not consummated an initial business combination by April

22, 2023, to allow the Company, by resolution of the Company’s board of directors (the “Board”) and, without any approval

of the Company’s shareholders, upon five days’ advance notice prior to each Additional Extension, to extend the Termination

Date up to six times (with each such extension being upon five days’ advance notice), each by one additional month (for a total

of up to six additional months to complete a business combination) (each, an “Additional Extension” and such date, the “Additional

Extension Date”), provided that the Sponsor or the Sponsor’s affiliates or permitted designees will deposit into the Trust

Account for each Additional Extension Date the lesser of (a) $ 140,000 or (b) $ 0.04 for each public share that is then-outstanding, in

exchange for one or more non-interest bearing, unsecured promissory notes issued by the Company to the Sponsor or the Sponsor’s

affiliates or permitted designees (the “Lenders” and each a “Lender”).

In connection with the vote to approve

the First Extension Charter Amendment, the holders of 24,703,445 Class A ordinary shares properly exercised their right to redeem their

shares for cash at a redemption price of approximately $ 10.35 per share, for an aggregate redemption amount of $ 255,875,758 .

Sponsor and each member of the management team have entered into an agreement with the Company, pursuant to which they have agreed

to (i) waive their redemption rights with respect to their Founder Shares;

(ii) waive their redemption rights with respect to their

Founder Shares and public shares in connection with a shareholder vote to approve an amendment to the Company’s amended and

restated memorandum and articles of association (A) that would modify the substance or timing of the Company’s obligation to

provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business

Combination or to redeem 100 % of the public shares if the Company did not complete its initial Business Combination within 15 months

from the closing of the Public Offering (which was extended pursuant to shareholder approval of the Charter Amendment) or (B) with

respect to any other provision relating to the rights of holders of the Company’s Class A ordinary shares and (iii) waive

their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails

to consummate an initial Business Combination within Combination Period.

The Sponsor has agreed that it will be liable to the Company

if and to the extent any claims by a third party for services rendered or products sold to the Company (other than the Company’s

independent registered public accounting firm), or a prospective target business with which the Company has discussed entering into a

transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $ 10.00 per public share and (ii) the actual

amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $ 10.00 per public

share due to reductions in the value of the Trust Account, in each case net of the interest or dividends that may be withdrawn to pay

the Company’s income tax obligations, provided that such liability will not apply to any claims by a third party or prospective

target business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under

the Company’s indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the

Securities Act of 1933, as amended (the “Securities Act”).

In the event that an executed waiver is deemed to be unenforceable

against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims.

However, the Company

has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor

has sufficient funds to satisfy its indemnity obligations and the Company believe that the Sponsor’s only assets are securities

of the Company.

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

None of the Company’s

officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective

target businesses.

October 20, 2023, at the Company’s extraordinary general meeting, the shareholders approved, among other proposals, (i) (a)

the extension (such proposal, the “Extension Proposal”) of the time period the Company has to complete an initial

Business Combination from October 22, 2023 to January 22, 2024 (the “Charter Amendment”) and (b) in the event that the

Company has not consummated an initial Business Combination by January 22, 2024, to allow the Company, by resolution of the Board

and, without any approval of the Company’s shareholders, upon five days’ advance notice prior to each Additional

Extension, to complete six Additional Extensions, provided that the Sponsor or the Sponsor’s affiliates or permitted designees

will deposit into the Trust Account for each Additional Extension Date the lesser of (x) $ 35,000 or (y) $ 0.0175 for each public

share that is then-outstanding, in exchange for one or more non-interest bearing, unsecured promissory notes issued by a Lender, and

(ii) the amendment of the Company’s amended and restated memorandum and articles of association to change certain provisions

which restrict the Class B ordinary shares, par value $ 0.0001 , of the Company (the “Class B ordinary shares”) from

converting to Class A ordinary shares, par value $ 0.0001 (the “Class A ordinary shares”) prior to the consummation of an

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

As of the date of filing this report, the

Company has deposited the requisite amounts into the Trust Account for each Additional Extension Date until March 22, 2024.

Additionally, the shareholders approved a proposal to amend,

by special resolution, the Company’s amended and restated memorandum and articles of association to change certain provisions which

restrict the Class B ordinary shares from converting to Class A ordinary shares prior to the consummation of an initial Business Combination.

In connection with the vote to approve the above proposals,

the holders of 1,488,000 Class A ordinary shares of ESGEN exercised their right to redeem their shares for cash at a redemption price

of approximately $ 11.21 per share, for an aggregate redemption amount of $ 16,679,055 .

connection with the approval of the Extension Proposal at the Meeting and the adoption of the Charter Amendment, the Sponsor

contributed into the Trust Account $ 0.0525 per share for each Class A ordinary share that was not redeemed at the Meeting, for an

aggregate contribution of $ 73,949 .

connection with the approval of the Conversion Proposal at the Meeting and the adoption of the Charter Amendment, the Sponsor

converted all of its 5,619,077 Class B ordinary shares into Class A ordinary shares.

As a result of the Sponsor Share Conversion and

redemptions made in connection with the Extension Proposal and Conversion Proposal, 7,027,632 Class A ordinary shares remain

Notwithstanding the Sponsor Share Conversion, the Sponsor will be not entitled to receive any funds held in the Trust

Account with respect to any Class A ordinary shares issued to the Sponsor as a result of the Sponsor Share Conversion and no

additional amounts will be deposited into the Trust Account in respect of shares of Class A ordinary shares held by the Sponsor in

connection with the extension of the Termination Date to the Extended Date or any Additional Extension Dates.

On October 16, 2023 (the “Compliance Date”), the

Company was notified by The Nasdaq Stock Market LLC (the “Nasdaq”) that the Company was not in compliance with the minimum

number of round lot holders required for continued listing on the Nasdaq Global Market (the “Round Lot Requirement”).

Company has until April 15, 2024 to comply with the Round Lot Requirement.

If ESGEN does not regain compliance with the Round Lot Requirement

by the Compliance Date, ESGEN will receive written notification that its securities are subject to delisting, at which time ESGEN may

appeal the Nasdaq’s delisting determination to a Nasdaq Listing Qualifications Panel (the “Panel”).

There can be no

assurance that ESGEN will be able to regain compliance with the Round Lot Requirement or that any appeal of the Nasdaq’s delisting

determination to the Panel would be successful.

Founder Shares

Founder Shares refers to the Class B ordinary shares (the “Founder

Shares”) acquired by the initial shareholders prior to the Company’s IPO.

initial shareholders and each member of the management team have entered into an agreement with the Company, pursuant to which they

have agreed to (i) waive their redemption rights with respect to their Founder Shares and public shares in connection with the

completion of the Business Combination;

(ii) waive their redemption rights with respect to their Founder Shares and public shares in

connection with a shareholder vote to approve an amendment to the amended and restated memorandum and articles of association (A)

that would modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the

right to have their shares redeemed in connection with the Business Combination or to redeem 100 % of the Company’s public

shares if it does not complete the Business Combination by the Termination Date or (B) with respect to any other provision relating

to the rights of holders of the Class A ordinary shares and (iii) waive their rights to liquidating distributions from the Trust

Account with respect to any Founder Shares they hold if the Company fails to consummate an Business Combination by the Termination

Date (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold

if the Company fails to complete the Business Combination within the prescribed time frame).

If the Company seeks shareholder

approval, it will complete the Business Combination only if it is approved by an ordinary resolution or such higher approval

threshold as may be required by Cayman Islands law and pursuant to the amended and restated memorandum and articles of association.

In such case, the initial shareholders and each member of the management team have agreed to vote their Founder Shares and public

shares in favor of the Business Combination.

connection with the approval of the Conversion Proposal at the Meeting and the adoption of the Charter Amendment, the Sponsor

converted all of its 5,619,077 Class B ordinary shares into Class A ordinary shares (the “Sponsor Share Conversion”).

a result of the Sponsor Share Conversion and redemptions made in connection with the Extension Proposal and Conversion Proposal,

7,027,632 Class A ordinary shares remain outstanding.

Notwithstanding the Sponsor Share Conversion, the Sponsor will be not entitled

to receive any funds held in the Trust Account with respect to any Class A ordinary shares issued to the Sponsor as a result of the

Sponsor Share Conversion and no additional amounts will be deposited into the Trust Account in respect of shares of Class A ordinary

shares held by the Sponsor in connection with the extension of the Termination Date to the Extended Date or any Additional Extension

Risks and Uncertainties

The credit and financial markets have experienced

extreme volatility and disruptions due to the current conflict between Ukraine and Russia.

The conflict is expected to have further global

economic consequences, including but not limited to the possibility of severely diminished liquidity and credit availability, declines

in consumer confidence, declines in economic growth, increases in inflation rates and uncertainty about economic and political stability.

In addition, the United States and other countries have imposed sanctions on Russia which increases the risk that Russia, as a retaliatory

action, may launch cyberattacks against the United States, its government, infrastructure and businesses.

Any of the foregoing consequences,

including those we cannot yet predict, may cause our business, financial condition, results of operations and the price of our ordinary

shares to be adversely affected.

Additionally, recent military conflicts, including

the Russian invasion of Ukraine, the Israel-Hamas war, and increased military tensions, may have a material adverse effect on financial

and business conditions.

These circumstances could reduce the number of attractive targets for an initial Business Combination, increase

the cost of consummating an initial Business Combination and delay or prevent the Company from completing an initial Business Combination.

Going Concern

As of December 31, 2023, the Company had $ 60,518 in cash held outside

of the Trust Account and owes $ 5,669,349 in accounts payable and accrued expenses and $ 2,122,937 to related parties.

The Company anticipates

that its cash will not be sufficient to allow the Company to operate for at least the next 12 months from the

issuance of the financial statements.

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

plans and the closing of the business combination described in Note 10.

These conditions raise substantial doubt about the Company’s

ability to continue as a going concern.

The Company will seek additional capital through other financing alternatives.

There can be no assurance that new financings or other transactions will be available to the Company on commercially acceptable terms,

Should the Company fail to raise additional cash from outside sources, this would have a material adverse impact on its operations.

The accompanying financial statements have been prepared assuming the

Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the

normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification

of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going

— Significant Accounting Policies

Basis of Presentation

The accompanying audited financial statements

have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

summary of significant accounting policies presented below is designed to assist in understanding the Company’s financial statements.

Such financial statements and accompanying notes are the representations of the Company’s management, who is responsible for their

integrity and objectivity.

Emerging Growth Company Status

The Company is an “emerging growth company,”

as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”),

and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that

are not emerging growth companies.

Further, Section 102(b)(1) of the JOBS Act exempts

emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that

is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered

under the Exchange Act) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company

can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but

any such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period which means that

when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging

growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison

of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth

company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting

standards used.

Zeo Energy Corp.

(formerly known as ESGEN Acquisition Corporation or

“ESGEN”), collectively with its subsidiaries (the “Company” or “Zeo”) is in the business of marketing,

sales and installation, and maintenance of solar panel technology to individual households within the United States.

As part of this,

the Company may also provide roofing repairs and construction.

Zeo Energy Corp.

was a blank check company originally incorporated

on April 19, 2021 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share

purchase, reorganization or similar business combination with one or more businesses.

On October 22, 2021, ESGEN consummated an initial

public offering, after which its securities began trading on the Nasdaq Stock Market LLC (“Nasdaq”).

ESGEN Business Combination

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

its previously announced business combination (the “ESGEN Closing”), pursuant to that certain Business Combination Agreement,

dated as of April 19, 2023 (as amended on January 24, 2024, the “ESGEN Business Combination Agreement”), by and among Zeo

Energy Corp., a Delaware corporation (f/k/a ESGEN Acquisition Corporation, a Cayman Islands exempted company), ESGEN OpCo, LLC, a Delaware

limited liability company(“OpCo”), Sunergy Renewables, LLC, a Nevada limited liability company (“Sunergy”), the

Sunergy equity holders set forth on the signature pages thereto or joined thereto (collectively, “Sellers” and each, a “Seller”,

and collectively with Sunergy, the “Sunergy Parties”), for limited purposes, ESGEN LLC, a Delaware limited liability company

(the “Sponsor”), and for limited purposes, Timothy Bridgewater, an individual, in his capacity as the Sellers Representative

(collectively, the “ESGEN Business Combination”).

Prior to the ESGEN Closing, (i) except as otherwise specified in the ESGEN

Business Combination Agreement, each issued and outstanding Class B ordinary share of ESGEN was converted into one Class A ordinary share

of ESGEN (the “ESGEN Class A Ordinary Shares” and such conversion, the “ESGEN Share Conversion”);

and (ii) ESGEN

was domesticated into the State of Delaware so as to become a Delaware corporation (the “Domestication”).

In connection with

the ESGEN Closing, the registrant changed its name from “ESGEN Acquisition Corporation” to “Zeo Energy Corp.”

Upon the Domestication, each then-outstanding ESGEN Class A Ordinary

Share was cancelled and converted into one share of Class A common stock of the Company, par value $ 0.0001 per share (“Zeo Class

A Common Stock”), and each then-outstanding ESGEN Public Warrant was assumed and converted automatically into a warrant of the registrant,

exercisable for one share of Zeo Class A Common Stock.

Additionally, each outstanding unit of ESGEN was cancelled and converted into one

share of Zeo Class A Common Stock and one-half of one warrant of the Company.

In accordance with the terms of the ESGEN Business Combination Agreement,

Sunergy caused all holders of any options, warrants or rights to subscribe for or purchase any equity interests of Sunergy or its subsidiaries

or securities (including debt securities) convertible into or exchangeable for, or that otherwise confer on the holder any right to acquire,

any equity interests of Sunergy or any subsidiary thereof (collectively, the “Sunergy Convertible Interests”) existing immediately

prior to the ESGEN Closing to either exchange or convert all such holder’s Sunergy Convertible Interests into limited liability

interests of Sunergy (the “Sunergy Company Interests”) in accordance with the governing documents of Sunergy or the Sunergy

Convertible Interests.

At the ESGEN Closing, ESGEN contributed to OpCo (1) all of its assets

(excluding its interests in OpCo, but including the amount of cash in ESGEN’s Trust Account (the “Trust Account”) as

of immediately prior to the ESGEN Closing (after giving effect to the exercise of redemption rights by ESGEN stockholders), and (2) a

number of newly issued shares of Class V common stock of the registrant, par value $ 0.0001 per share, which generally have only voting

rights (the “Zeo Class V Common Stock”), equal to the number of Seller OpCo Units (as defined in the ESGEN Business Combination

Agreement) (the “Seller Class V Shares”).

In exchange, OpCo issued to ESGEN (i) a number of Class A common units of OpCo (the

“Manager OpCo Units”) which equaled the number of total shares of the Zeo Class A Common Stock issued and outstanding immediately

after the ESGEN Closing and (ii) a number of warrants to purchase Manager OpCo Units which equaled the number of SPAC Warrants (as defined

in the ESGEN Business Combination Agreement) issued and outstanding immediately after the ESGEN Closing (the transactions described above

in this paragraph, the “ESGEN Contribution”).

Immediately following the ESGEN Contribution, (x) the Sellers contributed to

OpCo the Sunergy Company Interests and (y) in exchange therefor, OpCo transferred to the Sellers the Seller OpCo Units and the Seller

Class V Shares.

Prior to the ESGEN Closing, the Sellers transferred 24.167 % of their

Sunergy Company Interests (which were thereafter exchanged for Seller OpCo Units and Seller Class V Shares at the ESGEN Closing, as described

above) pro rata to Sun Managers, LLC, a Delaware limited liability company (“Sun Managers”), in exchange for Class A Units

(as defined in the Sun Managers limited liability company agreement (the “SM LLCA”) in Sun Managers.

In connection with such

transfer, Sun Managers executed a joinder to, and became a “Seller” for purposes of, the ESGEN Business Combination Agreement.

Sun Managers intends to grant Class B Units (as defined in the SM LLCA) in Sun Managers through the Sun Managers, LLC Management Incentive

Plan (the “Management Incentive Plan”) adopted by Sun Managers to certain eligible employees or service providers of OpCo,

Sunergy or their subsidiaries, in the discretion of Timothy Bridgewater, as manager of Sun Managers.

Such Class B Units may be subject

to a vesting schedule, and once such Class B Units become vested, there may be an exchange opportunity through which the grantees may

request (subject to the terms of the Management Incentive Plan and the OpCo amended and restated limited liability company agreement in

its entirely (the “OpCo A&R LLC Agreement”)) the exchange of their Class B Units into Seller OpCo Units (together with

an equal number of Seller Class V Shares), which may then be converted into Zeo Class A Common Stock (subject to the terms of the Management

Incentive Plan and the OpCo A&R LLC Agreement).

Grants under the Management Incentive Plan will be made after ESGEN Closing.

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

Combination, the only outstanding shares of capital stock of the registrant were shares of Zeo Class A Common Stock and Zeo Class V Common

In connection with entering into the ESGEN Business Combination Agreement,

ESGEN and the Sponsor entered into a subscription agreement, dated April 19, 2023, which ESGEN, the Sponsor and OpCo subsequently amended

and restated on January 24, 2024 (the “Sponsor Subscription Agreement”), pursuant to which, among other things, the Sponsor

agreed to purchase an aggregate of 1,000,000 OpCo preferred units (and be issued an equal number of shares of Zeo Class V Common Stock)

(“Convertible OpCo Preferred Units”) concurrently with the ESGEN Closing at a cash purchase price of $ 10.00 per unit and up

to an additional 500,000 Convertible OpCo Preferred Units (together with the concurrent issuance of an equal number of shares of Zeo Class

V Common Stock) during the nine months after ESGEN Closing if called for by Zeo (the “Sponsor PIPE Investment”).

the ESGEN Closing, ESGEN informed the Sponsor that it wished to call for the additional 500,000 Convertible OpCo Preferred Units at the

Closing and, as a result, a total of 1,500,000 Convertible OpCo Preferred Units were issued to Sponsor in return for aggregate consideration

of $ 15,000,000 .

Accounting for the ESGEN Business Combination

The ESGEN Business Combination was accounted for as a reverse recapitalization

with ESGEN being treated as the acquired company since there was no change in control in accordance with the guidance for common control

transactions in Accounting Standards Codification (“ASC”) 805-50, Business Combinations – Related Issues (“ASC

Accordingly, the financial statements of the combined entity will represent a continuation of the financial statements

of Sunergy with the ESGEN Business Combination treated as the equivalent of Sunergy issuing stock for the net assets of ESGEN, accompanied

by a recapitalization.

The net assets of ESGEN were stated at historical cost, with no goodwill or other intangible assets recorded.

prior to the ESGEN Business Combination were those of Sunergy.

Sunergy was determined to be the accounting acquirer based on evaluation

of the following facts and circumstances:

Based upon the evaluation of the OpCo A&R LLC Agreement, OpCo is

considered to be a Variable Interest Entity (“VIE”) and ESGEN is considered to be the primary beneficiary through its membership

interest and manager powers conferred to it through the Class A Units.

For VIEs, the accounting acquirer is always considered to be the

primary beneficiary.

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

however, further consideration

of whether the entities are under common control was required in order to determine whether there is an ultimate change in control and

the acquisition method of accounting is required under ASC 805.

While Sunergy did not control or have common ownership of ESGEN prior

to the consummation of the ESGEN Business Combination, the Company evaluated the ownership of the new entity subsequent to the consummation

of the transaction to determine if common control existed.

If the business combination is between entities under common control, then

the acquisition method of accounting is not applicable and the guidance in ASC 805-50 regarding common control should be applied instead.

The Financial Accounting Standards Board (“FASB”) ASC does not include a definition of common control.

In practice, entities

with a common parent entity, as determined under ASC 810, Consolidation , are generally considered to be under common control.

Issues Task force (“EITF”) Issue 02-5, “Definition of ‘Common Control’ in Relation to FASB Statement No.

141 (“EITF Issue 02-5”)”, which was never finalized or codified, has also been applied in practice to determine when

entities are under common control.

EITF Issue 02-5 indicates that common control would exist in any of the following situations:

● An individual (including trusts in which the individual is the beneficial owner) or entity holds more than 50 percent of the voting ownership of each entity.

● Immediate family members hold more than 50 percent of the voting ownership interest of each entity, and there is no evidence that those family members would vote their shares in any way other than in concert.

Immediate family members include a married couple and their children, but not the married couple’s grandchildren.

Entities might be owned in varying combinations among living siblings and their children.

Those situations require careful consideration of the substance of the ownership and voting relationships.

● Group of stockholders holds more than 50 percent of the voting ownership of each entity, and contemporaneous written evidence of an agreement to vote a majority of the entities’ shares in concert exists.

Prior to the ESGEN Business Combination and the contributions to Sun

Managers, Sunergy was majority owned by 5 entities (the “Primary Sellers”):

● Southern Crown Holdings, LLC (wholly owned by Anton Hruby) — 230,000 Common Units ( 23 %)

● LAMADD LLC (wholly owned by Gianluca Guy) — 230,000 Common Units ( 23 %)

● JKae Holdings, LLC (wholly owned by Kalen Larsen) — 215,000 Common Units ( 21.5 %)

● Clarke Capital, LLC (wholly owned by Brandon Bridgewater) — 215,000 Common Units ( 21.5 %)

● White Horse Energy, LC (wholly owned by Timothy Bridgewater) — 90,000 Common Units ( 9 %)

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

The term of the Voting Agreement is for five years from the date of the Voting Agreement.

The consummation of the ESGEN Business

Combination occurred within the term of the Voting Agreement.

Prior to the ESGEN Business Combination and the contributions to Sun

Managers, the Primary Sellers had 98 % ownership in Sunergy.

Immediately following the ESGEN Business Combination, the Primary Sellers

owned 83.8 % of the Common Stock of the registrant through their Zeo Class V Common Stock that have voting interests.

The Voting Agreement

constitutes contemporaneous written evidence of an agreement to vote a majority of the Primary Sellers’ shares of the registrant

Accordingly, the Primary Sellers retain majority control through the voting of their units in conjunction with the Voting

Agreement immediately prior to the ESGEN Business Combination and their shares following the ESGEN Business Combination and, therefore,

there is no change of control before or after the ESGEN Business Combination.

This conclusion is appropriate even though there was no

relationship or common ownership or control between Sunergy and ESGEN prior to the ESGEN Business Combination.

Accordingly, the ESGEN

Business Combination should be accounted for in accordance with the guidance for common control transactions in ASC 805-50.

Additional factors that were considered include the following:

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

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

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

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

the reporting entity is required to account for the transaction in accordance with the procedural guidance in ASC 805-50.

The C Corporation

(ESGEN) is considered to be a substantive entity, the LLC (OpCo) is a business and VIE, and the C Corporation is considered to be the

accounting acquirer since it is the primary beneficiary of the LLC.

In a transaction that is a combination of entities under common control,

the acquirer (ESGEN) should recognize the acquired entity (OpCo and Sunergy) on the same basis as the entities’ common parent.

NOTE 2 - LIQUIDITY AND GOING CONCERN

As of December 31, 2024, the Company had approximately $ 3.9 million

of working capital including $ 5.6 million of cash and cash equivalents.

Management has assessed the going concern assumptions of the Company

during the preparation of these consolidated financial statements.

The Company’s consolidated financial statements have been prepared

on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

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

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and principles of Consolidation

The consolidated financial statements for the Company as of December

31, 2024 and 2023 include the accounts of the Company’s wholly-owned subsidiaries for years ended 2024 and 2023.

The accompanying

consolidated financial statements have been prepared pursuant to the accounting principles generally accepted in the United States of

America (“US GAAP”).

References to the “ASC” hereafter refer to the Accounting Standards Codification established

by the Financial Accounting Standards Board (“FASB”) as the source of authoritative US GAAP.

All intercompany balances and

transactions have been eliminated in consolidation.

Reclassification

Certain amounts from prior period financial statements

have been reclassified to align with the presentation used in the current consolidated financial statements for comparative purposes.

These reclassifications had no effect on the Company’s previously reported results of operations.

An adjustment has been made to the Consolidated Statements of Cash Flows for the year ended December 31, 2023, to match this current year’s

presentation of noncash financing lease expense.

This change in classification does not affect previously reported cash flows from

operating activities in the Consolidated Statements of Cash Flows.

Use of Estimates

The preparation of financial statements in conformity

with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities

and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses

during the reporting period.

Making estimates requires management to exercise significant judgment.

It is at least reasonably possible

that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements,

which management considered in formulating its estimate, could change in the near term due to one or more future confirming events.

the actual results could differ significantly from those estimates.

The preparation of the Company’s consolidated financial statements

in conformity with US GAAP requires it to make estimates and assumptions that affect the reported amounts of assets and liabilities

and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues

and expenses for the reporting period.

Some of the more significant estimates include fair value of preferred shares, fair value of assets

acquired and liabilities assumed in asset acquisitions, share-based compensation, fair value of warrant liabilities, redemption value

of non-controlling interest, subsequent realizability of intangible assets, depreciation and amortization periods and collectability of

accounts receivable.

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

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

The Company bases its estimates and assumptions on historical experience

and other factors, including the current economic environment and on various other judgements that it believes to be reasonable under

the circumstances.

The Company adjusts such estimates and assumptions when facts and circumstances dictate.

Changes in those estimates

resulting from continuing changes in the economic environment could have a material effect on the financial condition and results of operations

in future periods.

Segment Information

Operating segments are defined as components of an enterprise for which

separate discrete financial information is evaluated regularly by the chief operating decision maker (“CODM”), in deciding

how to allocate resources and assess performance.

The CODM reviews financial information presented on a consolidated basis for the purposes

of allocating resources and evaluating financial performance.

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

and reportable segment.

(See Note 19)

Cash and Cash Equivalents

The Company considers all short-term investments

with an original maturity of three months or less when purchased to be cash and cash equivalents.

The Company had no cash equivalents

The Company considers all highly liquid investments purchased with

original maturities of three months or less from the purchase date to be cash equivalents.

The Company maintains its cash in checking

and savings accounts.

Income generated from cash held in savings accounts is recorded as interest income.

The carrying value of the Company’s

savings accounts is included in cash and cash equivalents and approximates the fair value.

Accounts receivable, net of allowance for credit losses

Accounts receivable is presented at the invoiced receivable amounts,

less any allowance for any potential expected credit loss amounts, and do not bear interest.

The Company estimates allowance for credit

losses based on the creditworthiness of each customer, historical collections experience, forward looking information and other information

including the aging of the receivables.

The majority of our customers lease or finance their purchase and installation of solar panels

through various financing companies.

The financing companies remit payment to the Company typically within 3 weeks after installation.

The Company is not deemed a borrower with these financing agreements and as a result is not subject to any of the terms of the financing

transaction between the financing company and the customer.

In September 2024, based on a reassessment of creditworthiness of customers,

historical collections experience, forward looking information and other information including the aging of the receivables, the Company

revised its estimate of allowance for credit losses.

This change in estimate has been accounted for prospectively in accordance

with ASC 250 , Accounting Changes and Error Corrections .

In accordance with

its policy, the Company reviews the estimated allowance for credit losses on an ongoing basis.

This review indicated that the estimated

allowance for credit losses in the Company’s consolidated financial statements should be increased.

As a result, effective September

30, 2024, the Company recorded a change in estimate to increase the three and nine months provision for credit losses by $ 1,820,365 , increase

net loss by $ 1,820,365 for the three and nine months ended September 30, 2024, and increase basic and diluted net loss per common share

by $ 0.30 and $ 0.49 for the three and nine months ended September 30, 2024.

The following represents a roll forward of the allowance for credit

losses for the years ended December 31, 2024 and 2023:

Allowance for credit losses, beginning of the period

Provision for credit losses

( 2,525,100 )

( 1,411,415 )

Allowance for credit losses, as of the end of the period

Significant judgement is involved in determination of the collectability

of accounts receivable.

Management assesses the reasonability of collectability of accounts receivable on a quarterly basis to record

the allowance for credit losses.

Contract assets

Contract assets costs include prepaid installation costs incurred prior

to completion of installations of solar systems and accrued revenues for which the invoicing criteria have not been met.

Prepaid installation

costs include the cost of engineering, permits, governmental fees, and other related solar installation costs were $ 64,202 and $ 4,915,064

as of December 31, 2024 and 2023, respectively.

Marketable Securities and Cash Held in Trust Account

As of December 31, 2023, investments held in the

Trust Account consisted of interest bearing demand deposits.

As of December 31, 2022, substantially all of the assets held in the Trust

Account were held in U.S.

Money Market Funds.

Such investments are presented on the condensed balance sheets at fair value at the end

of the reporting period.

Interest, dividends, gains and losses resulting from the change in fair value of these investments are included

in income from investments held in Trust Account in the accompanying condensed statements of operations.

The estimated fair values of

investments held in the Trust Account are determined using available market information.

Fair Value Measurement

The fair value of the Company’s assets and

liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying

amounts represented in the balance sheet, primarily due to its short-term nature.

Fair value is defined as the price that would

be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement

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

The hierarchy gives

the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the

lowest priority to unobservable inputs (Level 3 measurements).

The Company’s financial instruments are classified as either Level

1, Level 2 or Level 3.

These tiers include:

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

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

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

Derivative Financial Instruments

The Company evaluates its financial instruments

to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic

815, “Derivatives and Hedging”.

The Company’s derivative instruments are recorded at fair value on the balance sheet

with changes in the fair value reported in the statements of operations.

Derivative liabilities are classified on the balance sheets as

current or non-current based on whether or not net-cash settlement or conversion of the instrument is reasonably expected to require the

use of existing resources properly classifiable as current assets, or the creation of other current liabilities.

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

following table summarizes the change in contract assets:

Contract asset, beginning of the period

Cost of goods sold recognized during the period

( 4,915,064 )

Cash paid prior to completion of performance obligation

Contract assets, as of the end of the period

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of employee advances,

advanced sales commissions, prepaid insurance, and other current assets.

Note receivable

The Company records notes receivable when it extends credit or financing

to related parties or third parties.

The Company evaluates notes receivable for collectability at each reporting period under the current

expected credit loss (CECL) model, in accordance with ASC 326, Financial Instruments - Credit Losses (“ASC 326”).

necessary, an allowance for doubtful accounts is recorded to reflect potential losses.

As of December 31, 2024, we evaluated the need

for an allowance for credit loss using the guidelines set forth in ASC 326, and have determined this note is fully collectible and, therefore,

we have not recorded an allowance against the note receivable balance.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations

of credit risk consist of cash and cash equivalents and trade accounts receivable.

The Company maintains its cash and cash equivalent

balances in highly rated financial institutions, which at times may exceed federally insured limits.

The amounts over these insured limits

as of December 31, 2024, and December 31, 2023 were $ 5,389,013 and $ 7,772,306 , respectively.

The Company mitigates this concentration

of credit risk by monitoring the credit worthiness of the financial institutions.

No losses have been incurred to date on any deposits.

The Company performs periodic credit evaluations of its customers’

financial condition and also monitors the financial condition of the financial counterparties that finance customer transactions and generally

does not require collateral.

For customers who finance their systems through a lease product, the Third Party Operator (TPO) of the lease

product is the contracted customer with the Company.

Where the Company has a concentration of credit risk, it is with these TPO customers.

At December 31, 2024, the Company had two customers who exceeded 10% of accounts receivable.

Their balances were $ 3,192,077 and $ 2,306,096 .

No one customer or financing counterparty exceeded 10% of accounts receivable as of December 31, 2023.

For the years ended December 31,

2024 and 2023, the Company had three and one customers, respectively, who exceeded 10% of revenue recognized.

Their revenue recognized

was $ 17,834,595 , $ 23,386,284 and $ 8,781,244 for 2024 and $ 13,083,458 for 2023, respectively.

See Note 20 – subsequent events for

further information.

Advertising and Marketing

The Company charges the costs of advertising to

expense as incurred.

For the years ended December 31, 2024 and 2023, the Company incurred $173,903 and $188,526, respectively, of advertising

and marketing costs.

Inventories are primarily comprised of solar panels and other related

items necessary for installations and service needs.

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

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

When evidence exists that the net

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

of operations in the period identified.

As of December 31, 2024 and 2023, inventory was $ 872,470 and $ 350,353 , respectively.

Property, equipment and other fixed assets, net

Property, equipment and other fixed assets are carried at cost less

accumulated depreciation and includes expenditures that substantially increase the useful lives of existing property and equipment.

repairs, and minor renovations are charged to expense as incurred.

When property and equipment is retired or otherwise disposed of, the

related costs and accumulated depreciation are removed from their respective accounts, and any difference between the sale proceeds and

the carrying amount of the asset is recognized as a gain or loss on disposal in the consolidated Statements of Operations.

Software that is developed for internal use and is accounted for accordance

with ASC 350 , Intangibles, Goodwill and Other-Internal-Use Software .

Qualifying costs incurred to develop internal-use software

are capitalized when (i) the preliminary project stage is completed, (ii) management has authorized further funding for the completion

of the project and (iii) it is probable that the project will be completed and perform as intended.

These capitalized costs include compensation

for employees who develop internal-use software and external costs related to development of internal-use software.

Capitalization of

these costs ceases once the project is substantially complete and the software is ready for its intended purpose.

Internally developed

software is amortized using the straight-line method over an estimated useful life.

All other expenditures, including those incurred to

maintain an internal-use software’s current level of performance, are expensed as incurred.

When these assets are retired or disposed

of, the cost and accumulated amortization thereon are removed, and any resulting gain or losses are included in the consolidated statements

of operations.

Depreciation is computed using the straight-line method over the estimated

useful lives of the assets, which is five years, across all asset classes.

The estimated useful lives and depreciation methods are reviewed at

each year-end, with the effect of any changes in estimates accounted for prospectively.

All depreciation expense is included with depreciation

and amortization in the consolidated statements of operations.

Impairment of long-lived assets

Management reviews each asset or asset group for impairment whenever

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

impairment charges were recorded by the Company during the years ended December 31, 2024, and 2023.

Business Combinations

The Company accounts for an acquisition as a business combination if

the assets acquired and liabilities assumed in the transaction constitute a business in accordance with ASC Topic 805.

Such acquisitions

are accounted using the acquisition method by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed,

and any non-controlling interest in the acquired business, measured at their acquisition date fair values.

Where the set of assets acquired and liabilities assumed doesn’t

constitute a business, it is accounted for as an asset acquisition and the individual assets and liabilities are recorded at their respective

relative fair values corresponding to the consideration transferred.

Goodwill is recognized and initially measured as any excess of the

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

assets acquired.

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

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

First, the Company assesses qualitative factors to determine

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

If the Company concludes

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

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

If the carrying amount of

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

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

The Company performs its annual

goodwill impairment test at December 31 of each year.

There was no goodwill impairment for the years ended December 31, 2024, and

Intangible assets subject to amortization

Intangible assets include tradenames, customer lists, order backlog

and non-compete agreements.

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

subject to annual impairment consideration.

Costs incurred to renew or extend the term of a recognized intangible asset, such as the acquired

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

Intangible assets are reviewed for impairment whenever events or changes

in circumstances indicate the carrying amount of the intangible assets may not be recoverable.

Conditions that would necessitate an impairment

assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which

an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets

may not be recoverable.

The Company evaluates the recoverability of intangible assets by comparing their carrying amounts to future net

undiscounted cash flows expected to be generated by the intangible assets.

If such intangible assets are considered to be impaired, the

impairment recognized is measured as the amount by which the carrying amount of the intangible assets exceeds the fair value of the assets.

The Company determines fair value based on discounted cash flows using a discount rate commensurate with the risk inherent in the Company’s

current business model for the specific intangible asset being valued.

No impairment charges were recorded for the years ended December

31, 2024, and 2023.

The Company evaluates the contracts it enters into to determine whether

such contracts contain leases at inception.

A contract contains a lease if the contract conveys the right to control the use of identified

property, plant or equipment for a period of time in exchange for consideration.

At commencement, contracts containing a lease are further

evaluated for classification as an operating or finance lease where the Company is a lessee.

When the arrangements include lease and non-lease

components, the Company accounts for them as a single lease component.

Operating Leases

A lease for which substantially all the benefits and risks incidental

to ownership remain with the lessor is classified by the lessee as an operating lease.

Operating leases are included in the line items

right-of-use (“ROU”) operating lease asset, current portion of obligations under operating leases, and obligations under operating

leases, non-current in the consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for

the lease term and obligations under lease represents its obligation to make lease payments arising from the lease.

For operating leases,

the Company measures its lease obligations based on the present value of the total lease payments not yet paid.

These payments are then

discounted based on the more readily determinable of the rate implicit in the lease or the Company’s incremental borrowing rate,

which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over

the term of the lease.

The Company uses its incremental borrowing rate based on the information available at lease commencement date in

determining the present value of lease payments.

The Company measures ROU assets based on the corresponding lease obligation adjusted

for payments made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease.

The Company begins

recognizing lease expense when the lessor makes the underlying asset available to the Company.

Lease expenses for lease payments is recognized

on a straight-line basis over the lease term.

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

the Company has elected not to recognize an obligation or ROU asset on its consolidated balance sheet.

Instead, it recognizes the lease

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

Short-term lease costs are immaterial to its consolidated statements

of operations and cash flows.

Finance leases

Leases that transfer substantially all of the benefits and risks incidental

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

at the inception of the lease.

Lease cost for finance leases where the Company is the lessee includes the amortization of the ROU asset,

which is amortized on a straight-line basis and recorded to depreciation and amortization and interest expense on the finance lease obligation,

which is calculated using the effective interest method and recorded to interest expense on the accompanying consolidated statements of

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.

Warrant Liabilities

The Company accounts for the Public and Private

Placement warrants issued in connection with the Public Offering in accordance with the guidance contained in ASC Topic 815-40 and ASC

Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must

be recorded as a liability.

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

These liabilities are

subject to re-measurement at each balance sheet date.

With each such re-measurement, the warrant liabilities will be adjusted to fair

value, with the change in fair value recognized in the Company’s statements of operations.

Net (Loss) Income Per Ordinary Share

The Company has two classes of shares, which are

referred to as redeemable Class A ordinary shares and non-redeemable Class A and Class B ordinary shares.

Income and losses are shared

pro rata between the two classes of shares.

Net (loss) income per ordinary share is calculated by dividing the net (loss) income by the

weighted average ordinary shares outstanding for the respective period.

With respect to the accretion of Class A ordinary shares subject

to possible redemption, the Company treated accretion in the same manner as a dividend, paid to the shareholder in the calculation of

the net (loss) income per ordinary share.

The earnings per share presented in the statement of operations is

based on the following:

Net (loss) income

The Company evaluates all of its financial instruments, including issued

share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant

to ASC 815-40, Derivatives and Hedging (“ASC 815-40”).

The classification of derivative instruments, including whether

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

The Company accounts

for the Public Warrants (as defined in Note 13) in accordance with the guidance contained in ASC 815-40 under which the Warrants do not

meet the criteria for equity treatment and must be recorded as liabilities.

Accordingly, the Company classifies the Warrants as liabilities

at their fair value and adjusts the Warrants to fair value at each reporting period.

This liability is subject to re-measurement at each

balance sheet date until exercised, and any change in fair value is recognized in the consolidated statements of operations.

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

Revenue Recognition

The Company accounts for revenue in accordance with ASC 606, Revenue

from Contracts with Customers (“ASC 606”).

The Company applies judgment in the determination of performance obligations

in accordance with ASC 606.

Performance obligations in a contract are identified based on the services that will be transferred to the

customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with

other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby

the transfer of the services is separately identifiable from other promises in the contract.

In addition, a single performance obligation

may comprise a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the

This principle is achieved through applying the following five-step approach:

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

Step 2 - Identification of the performance obligations in the contract.

Step 3 - Determination of the transaction price.

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

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

The Company recognizes and records revenue from its operations upon

completion of installation for both solar system installations and roofing installations.

In connection with the sales and installation,

a signed contract between the Company and the purchaser defines the duties and obligations of each party.

The contract is specific as

to the duties and responsibilities which govern the accounting for these transactions.

Once the Company’s performance obligations

are met with installation completed, according to the signed contract, the Company’s obligations are completed, and title is transferred

to the buyer.

The Company believes its performance obligation is completed once the installation of the solar panels is completed, which

is prior to the customer receiving permission to operate the solar panels from the local utility company.

The Company records sales revenue

at this point in time.

Many of the Company’s customers finance their obligations with third parties.

In these situations, the finance

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

Revenue recorded is equal to the contract amount signed

by the purchaser, net of the financing fees.

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

In accordance with ASC 340, Other Assets and Deferred Costs, installation-related costs are recorded as prepaid expenses and other

current assets and in turn are expensed when installation is completed.

Thus, revenue recognition is in turn matched with the installation

equipment costs and expense associated with the completion of each project.

Solar systems installations, net

Roofing installations

Total net revenues

$ 109,691,001

Accretion of temporary equity to redemption value

Contract liabilities

The Company receives both customer advances and

may receive lender advances from third-party financing companies on behalf of customers.

These amounts are recorded on the consolidated

balance sheets as contract liabilities and are considered a liability of the Company until the installation is completed.

When the permission

to turn on (“PTO”) the solar panels from the local municipality is significantly delayed, the lender may withdraw their previous

payments for a customer account until the PTO is completed.

The contract liabilities amounts are expected to be recognized as revenue

within twelve months of the Company’s receipt of the funds.

The following table summarizes the change in contract liabilities:

Contract liabilities, beginning of the period

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

( 5,223,518 )

Net income including accretion of temporary equity to redemption value

Year Ended December 31, 2023

Year Ended December 31, 2022

Non-redeemable

Basic and diluted net (loss) income per share

Allocation of net (loss) income including accretion of temporary equity

Allocation of accretion of temporary equity to redemption value

( 1,149,047 )

Allocation of net (loss) income

Cash received prior to completion of performance obligation

Contract liabilities, end of the period

Contract acquisition costs

The Company pays sales commissions to sales representatives based on

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

Payment is made to the sales representative

once installation is completed.

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

commission payments are subject to completion of the installation, payment is made commensurate with the recognition of revenue from the

sale, and therefore the full expense is incurred as the Company does not have any remaining performance obligations.

Costs to obtain a contract are not considered

to be incremental or material, and project duration generally does not span more than one year.

Accordingly, the Company applies a practical

expedient for these types of costs and as such, they are expensed in the period incurred.

Earnings per share

The Company reports both basic and diluted earnings per share.

earnings per share is calculated based on the weighted average number of shares of Class A Common Stock outstanding and excludes the dilutive

effect of warrants, stock options, and other types of convertible securities.

Diluted earnings per share is calculated based on the weighted

average number of shares of Class A Common Stock outstanding and the dilutive effect of warrants and other types of participating securities

are included in the calculation.

Dilutive securities are excluded from the diluted earnings per share calculation if their effect is anti-dilutive,

such as in periods where a net loss is reported.

Prior to the ESGEN Business Combination, the membership structure of

Sunergy Renewable, LLC included membership units.

In conjunction with the closing of the ESGEN Business Combination, the Company effectuated

a recapitalization whereby all membership units were converted to common units of ESGEN OpCo, LLC, and Zeo Energy Corp.

implemented a

revised class structure including Class A Common Stock having one vote per share and economic rights and Class V Common Stock having one

vote per share and no economic rights.

Stock-based Compensation

The Company recognizes an expense for stock-based compensation awards

based on the estimated fair value of the award on the date of grant.

The Company has elected to account for restricted stock awards with

market conditions using a graded vesting method.

This method recognizes the compensation cost in the consolidated statements of operations

over the requisite service period for each separately vesting tranche of awards.

The Company has elected to recognize forfeitures as they

occur rather than estimate expected forfeitures.

Fair value of Financial Instruments

Fair value is the price that would be received to sell an asset, or

the amount paid to transfer a liability in an orderly transaction between market participants at the measurement date.

There is a fair

value hierarchy that prioritizes the inputs used to measure fair value.

The hierarchy gives the highest priority to quoted prices in active

markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

We classify fair value balances based on the observability of those inputs.

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

Level 1 — Inputs based on unadjusted quoted market prices

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

Level 2 — Observable inputs other than quoted prices included

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

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

Level 3 — Inputs reflect management’s best estimate

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

The inputs are both unobservable for

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

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

be categorized within different levels of the fair value hierarchy.

In those instances, the fair value measurement is categorized in its

entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

The recorded amounts

of certain financial instruments, including cash and cash equivalents, accounts receivable, accrued expenses, advanced funding, accounts

payable, and debt approximate fair value due to their relatively short maturities.

Redeemable Noncontrolling Interests

Noncontrolling interests represent the portion of OpCo that Zeo Energy

controls and consolidates but does not own.

The noncontrolling interests were created as a result of the ESGEN Business Combination

and represent 33,730,000 common units issued by Zeo Energy Corp.

to the prior investors.

As of the close of the ESGEN Business Combination,

Zeo Energy Corp.

held a 13.0 % interest in OpCo with the remaining 87.0 % interest held by OpCo’s prior investors.

At December 31,

2024, Zeo Energy Corp.

held a 28.2 % interest in ESGEN OpCo, LLC with the remaining 71.8 % interest held by OpCo’s prior investors.

The prior investors’ interests in OpCo represent a redeemable noncontrolling interest.

At its discretion, the members have the right

to exchange their common units in OpCo (along with the cancellation of the paired shares of Zeo Energy Corp.

or the Class V Common Stock)

for either shares of Class A Common Stock on a one-to-one basis or cash proceeds of equal value at the time of redemption.

Any redemption

of OpCo common units in cash must be funded through a private or public offering of Class A Common Stock and is subject to the Company’s

Board’s approval.

As of December 31, 2024, the prior investors of OpCo hold the majority of the voting rights on the Board.

As the redeemable noncontrolling interests are redeemable upon the

occurrence of an event that is not solely within the Company’s control, the Company classifies redeemable noncontrolling interests

as temporary equity.

The redeemable noncontrolling interests in common units were initially measured at the OpCo prior investors’

share in the net assets of the Company upon consummation of the ESGEN Business Combination.

Subsequent remeasurements of the Company’s

redeemable noncontrolling interests are recorded as a deemed dividend each reporting period, which reduces retained earnings, if any,

or additional paid-in capital of Zeo Energy Corp.

Remeasurements of the Company’s redeemable noncontrolling interests are based

on the fair value of our Class A Common Stock.

Redeemable Convertible Preferred Units

The Company records redeemable convertible preferred units at fair

value on the dates of issuance, net of issuance costs.

The redeemable convertible preferred units have been classified outside of stockholders’

(deficit) equity as temporary equity on the accompanying consolidated balance sheets because the shares contain certain redemption features

that are not solely within the control of the Company.

See Note 11 – Redeemable Noncontrolling Interests and Equity.

redeemable convertible preferred units are held by the Sponsor at the OpCo level, the preferred units are presented as a noncontrolling

interests on the consolidated balance sheets.

Zeo Energy Corp.

is a corporation and thus is subject to United States

(“U.S.”) federal, state and local income taxes.

OpCo is a partnership for U.S.

federal income tax purposes and therefore does

federal income tax.

Instead, the OpCo unitholders, including Zeo Energy Corp., are liable for U.S.

federal income tax on

their respective shares of OpCo’s taxable income.

OpCo is liable for income taxes in those states which tax entities classified

as partnerships for U.S.

federal income tax purposes.

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

for the Company.

Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences

attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax

bases and net operating loss (“NOL”) and tax credit carry forwards.

Deferred tax assets and liabilities are measured using

enacted income tax rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in the results of operations in the period

that includes the enactment date.

The realizability of deferred tax assets is evaluated quarterly based on a “more likely than not”

standard and, to the extent this threshold is not met, a valuation allowance is recorded.

ASC 740 prescribes a recognition threshold and a measurement attribute

for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.

For those benefits

to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.

The Company recognizes

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

Management has evaluated the Company’s

tax positions, including its previous status as a pass-through entity for federal and state tax purposes, and has determined that the

Company has taken no uncertain tax positions that require adjustment to the consolidated financial statements.

The Company’s reserve

related to uncertain tax positions was zero as of December 31, 2024 and December 31, 2023.

There were no unrecognized tax benefits and

no amounts accrued for interest and penalties as of December 31, 2024 and December 31, 2023.

The Company is currently not aware of any

issues under review that could result in significant payments, accruals or material deviation from its position.

Interest and penalties associated with tax positions are recorded in

the period assessed as general and administrative expenses.

The open tax years for U.S.

federal and state income tax purposes are 2021

Tax Receivable Agreement

In conjunction with the consummation of the ESGEN

Business Combination, Zeo Energy Corp entered into a Tax Receivable Agreement (the “TRA”) with Opco and certain Opco members

(the “TRA Holders”).

Pursuant to the TRA, Zeo Energy Corp.

is required to pay the TRA Holders 85 % of the net cash savings,

if any, in U.S.

federal, state and local income and franchise tax (computed using simplifying assumptions to address the impact of state

and local taxes) that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the ESGEN Business

Combination as a result of, as applicable to each such TRA Holder, (i) certain increases in tax basis that occur as a result of the acquisition

(or deemed acquisition for U.S.

federal income tax purposes) of all or a portion of such TRA Holder’s Exchangeable OpCo Units pursuant

to the exercise of the OpCo Exchange Rights or a Mandatory Exchange and (ii) imputed interest deemed to be paid by the Company as a result

of, and additional tax basis arising from, any payments it makes under the TRA.

All such payments to the TRA Holders are the obligations

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

As of December 31, 2024, there have been no exchanges of Opco units for Class A Common Stock

of Zeo Energy Corp.

and, accordingly, no TRA liabilities currently exist.

Future exchanges will result in incremental tax attributes and

potential cash tax savings for Zeo Energy Corp.

The associated liability for the TRA will be recorded as a decrease to additional paid-in

capital in the consolidated statement of changes in stockholders’ deficit.

As of December 31,2024, assuming a hypothetical

exchange of all outstanding units, the total TRA would be $ 27.6 million.

In accordance with ASC Topic 450, Contingencies, any changes

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

exchanges, will be recorded as tax receivable agreement in other income (expense), net in the consolidated statement of operations.

if utilization of the deferred tax assets subject to the TRA becomes more likely than not in the future, the Company will record a liability

related to the TRA which will be recorded in the consolidated statement of operations.

See Note 14 – Related Party Transactions.

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting-Improvements

to Reportable Segment Disclosures (Topic 280) (“ASU 2023-07”), which requires an enhanced disclosure of segments on an annual

and interim basis, including the title of the chief operating decision maker, significant segment expenses, and the composition of other

segment items for each segment’s reported profit or loss.

ASU 2023-07 is effective for fiscal years beginning after December 15,

2023, and interim periods within fiscal years beginning after December 15, 2024.

The adoption of ASU 2023-07 did not have a

material impact on the consolidated financial statements.

Refer to Note 19, Segment Reporting.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic

740) - Improvements to income tax disclosures (“ASU 2023-09”), expanding the disclosures requirement for income taxes primarily

by requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation.

ASU 2023-09 is effective for annual

periods beginning after December 15, 2024.

Early adoption is permitted, and adoption of ASU 2023-09 can be applied prospectively or retrospectively.

The Company is currently evaluating the impact of this standard.

In November 2024, the FASB issued ASU 2024-03, “ Income Statement

- Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):Disaggregation of Income Statement Expenses ”

(“ASU 2024-03”).

The standard requires additional disclosure of certain costs and expenses within the notes to the financial

The provisions of the standard are effective for annual reporting periods beginning after December 15, 2026, and interim reporting

periods beginning after December 15, 2027, with early adoption permitted.

This accounting standards update may be applied either prospectively

or retrospectively.

The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

NOTE 4 - REVERSE RECAPITALIZATION

As discussed in Note 1, “Organization and Business Operation”,

the ESGEN Business Combination was consummated on March 13, 2024, which, for accounting purposes, was treated as the equivalent of Zeo

issuing stock for the net assets of ESGEN, accompanied by recapitalization.

Under this method of accounting, ESGEN was treated as the

acquired company for financial accounting and reporting purposes under US GAAP.

Transaction Proceeds

Upon closing of the ESGEN Business Combination, the Company received

gross proceeds of $ 17.7 million from the ESGEN Business Combination, offset by total transaction costs and other fees totaling $ 7.4 million.

The following table reconciles the elements of the ESGEN Business Combination to the consolidated statements of cash flows and the consolidated

statements of changes in stockholders’ deficit for the period ended December 31, 2024:

Cash-trust and cash, net of redemptions

transaction costs, promissory note and professional fees, paid

( 7,350,088 )

Weighted-average shares outstanding

Basic and diluted net (loss) income per share

Net (loss) income per share is computed by dividing

net (loss) income by the weighted average number of ordinary shares outstanding during the period.

The Company has not considered the

effect of the 27,840,000 ordinary shares issuable upon exercise of the Public Warrants and Private Placement Warrants in the calculation

of diluted (loss) income per share, since the exercise of such warrants are contingent upon the occurrence of future events and the inclusion

of such warrants would be anti-dilutive.

Class A Ordinary Shares Subject to Possible Redemption

The Company accounts for its Class A ordinary

shares subject to possible redemption in accordance with the guidance in ASC Topic 480.

Class A ordinary shares subject to mandatory redemption

(if any) are classified as a liability instrument and are measured at fair value.

Conditionally redeemable ordinary shares (including

shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of

uncertain events not solely within the Company’s control) are classified as temporary equity.

At all other times, ordinary shares

are classified as shareholders’ equity.

The Company’s Class A ordinary shares sold in the IPO feature certain redemption rights

that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events.

The Company has made a policy election in accordance

with ASC 480-10-S99-3A and recognizes changes in redemption value in additional paid-in capital (or accumulated deficit in the absence

of additional paid-in capital) immediately as they occur.

The Company recorded accretion of $ 3,066,977 and $ 3,986,568 , respectively, in

accumulated deficit for year ended December 31, 2023 and 2022.

For the period ended December 31, 2023, the Company recorded redemption

of $ 272,554,813 and $ 1,116,710 was deposited in the Trust Account for extension funding.

For the year ended December 31, 2022 there were

no redemptions or deposits in the Trust Account for extension funding.

ASC Topic 740, “Income Taxes”, requires

the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and

tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards.

ASC Topic 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred

tax assets will not be realized.

ASC Topic 740 prescribes a recognition threshold

and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in

a tax return.

For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing

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

The Company’s management determined that

the Cayman Islands is the Company’s only major tax jurisdiction.

There is currently no taxation imposed on income by the Government

of the Cayman Islands.

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

Consequently, income

taxes are not reflected in the Company’s financial statements.

The Company recognizes accrued interest and penalties

related to unrecognized tax benefits as income tax expense.

As of December 31, 2023 and 2022, there were no unrecognized tax benefits

and no amounts were accrued for the payment of interest and penalties.

The Company is currently not aware of any issues under review that

could result in significant payments, accruals or material deviation from its position.

Recent Accounting Pronouncements

Management does not believe that any other recently

issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial

Note 3 — Related Party Transactions

Promissory Notes — Related Party

On April 27, 2021, the Sponsor agreed to loan

the Company up to $ 300,000 to be used for a portion of the expenses of the Public Offering.

The Company borrowed a total of $ 262,268 .

This loan was non-interest bearing, unsecured and due at the earlier of December 31, 2021 or the closing of the Public Offering.

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

In connection with

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

As of December 31, 2023 and 2022, the Company

had $ 171,346 outstanding under the promissory note and as is included on the balance sheet as promissory note—related party.

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

On April 5, 2023, the Company issued an unsecured

promissory note (the “Note”) in the principal amount of up to $ 1,500,000 to the Sponsor, which may be drawn down by the Company

from time to time prior to the consummation of the Company’s Business Combination.

The Note does no t bear interest, matures on the

date of consummation of the Business Combination and is subject to customary events of default.

On October 17, 2023, ESGEN issued an amended and

restated promissory note (the “October 2023 Promissory Note”) in the principal amount of up to $ 2,500,000 to the Sponsor.

The October 2023 Promissory Note amends, restates, replaces and supersedes the Note dated April 5, 2023.

The October 2023 Promissory Note

may be drawn down by ESGEN from time to time prior to the consummation of ESGEN’s initial Business Combination.

The October 2023

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

The October 2023 Promissory Note, as well as the promissory note issued on April 17, 2021 to the Sponsor (“April 2021

Promissory Note”), will not be repaid and will be cancelled at the closing of the Business Combination.

Proceeds from Sponsor PIPE Investment

Net proceeds from the ESGEN Business Combination

liabilities assumed

( 12,861,808 )

Reverse recapitalization, net

$ ( 2,497,805 )

The number of shares of Common Stock issued immediately following the

consummation of the ESGEN Business Combination was:

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

Forfeiture of Class A founder shares

( 2,900,000 )

Less redemptions

( 1,159,976 )

Class A common stock of ESGEN

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

ESGEN Business Combination shares

Sunergy Shares

Issuance of Class A Shares to third party advisors

Issuance of Class A Shares to backstop investor

Shares issued to sponsor

Common Stock immediately after the ESGEN Business Combination

Public and private placement warrants

The 13,800,000 Public Warrants issued at the time of ESGEN’s

initial public offering remained outstanding and became warrants for the Company and the 14,040,000 private placement warrants were forfeited.

Prior to the closing of the ESGEN Business Combination, certain ESGEN

public stockholders exercised their right to redeem certain of their outstanding shares for cash, resulting in the redemption of 1,159,976

shares of ESGEN Class A common stock for an aggregate payment from the Trust of $ 13,336,056 .

NOTE 5 – ASSET PURCHASE

Lumio Purchase Agreement

On October 25, 2024, the Company, entered into an Asset Purchase Agreement

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

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

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

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

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

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

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

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

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

The Asset Purchase Agreement contains customary representations, warranties

and covenants of the parties for a transaction involving the acquisition of assets from a debtor in bankruptcy, including the condition

that the Bankruptcy Court (as defined below) enter an order authorizing and approving the Transaction.

The Lumio Sellers are debtors in a voluntary Chapter 11 case before

the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), which commenced on September 3,

The Company evaluated this acquisition under ASC

805, Business Combinations (“ASC 805”).

ASC 805 requires that an acquirer determine whether it has acquired a business.

If the criteria of ASC 805 are met, a transaction would be accounted for as a business combination and the purchase price is allocated

to the respective net assets and liabilities assumed based on their fair values and a determination is made whether any goodwill results

from the transaction.

In evaluating the criteria outlined by this standard, the Company concluded that the acquired set of assets did

not meet the US GAAP definition of a business.

The Company did not acquire an assembled workforce nor a substantive process.

the Company accounted for the purchase as an asset acquisition rather than a business combination, and allocated the total consideration

transferred on the date of the acquisition to the assets and liabilities acquired on a relative fair value basis.

The acquisition cost was allocated to the assets

acquired as follows:

October 24, 2024

Purchase consideration:

Initial Cash Purchase Price

Issuance of Stock

Assumed liabilities

Total purchase consideration

Purchase price allocation:

Accounts receivable

Order backlog

Fair value of net assets acquired

The Company determined the fair value of the Order Backlog intangible

asset by applying the multi-period excess earnings method.

The excess earnings valuation method estimates the value of the order backlog

equal to the present value of the incremental after-tax cash flows attributable to that order backlog over its remaining economic life.

Some of the more significant assumptions utilized in our asset valuations included projected revenues, probability of cancellation, and

the discount rate.

The fair value using the excess earnings valuation method was determined using an estimated weighted average cost of

capital of 15.5 %, which reflects the risks inherent in future cash flow projections and represents a rate of return that a market participant

would expect for this asset.

This fair value measurement was based on significant inputs not observable in the market and thus represent

Level 3 fair value measurement.

The fair value was then adjusted based on relative fair value as compared to the other assets acquired.

NOTE 6 - PROPERTY, EQUIPMENT, AND OTHER FIXED ASSETS

Property, equipment and other fixed assets, net consisted of the following:

Internally-developed software

Equipment and vehicles

Leasehold improvements

Property and equipment

Accumulated depreciation

( 1,383,664 )

Depreciation expense related to the Company’s property and equipment

was $ 691,373 and $ 444,660 for the years ended December 31, 2024, and 2023, respectively, which are included in depreciation and amortization

expense on the accompanying consolidated statements of operations.

NOTE 7 - INTANGIBLE ASSETS

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

net as of December 31, 2024 and 2023:

Average Useful December 31, 2024

Remaining Gross

Carrying Accumulated

(in years) Amount Amortization Total

Trade names - $ 3,084,100 $ 3,084,100 $ -

Customer lists - 496,800 496,800 -

Non-compete - 224,000 224,000 -

Order backlog 0.6 10,808,821 3,237,665 7,571,156

$ 14,613,721 7,042,565 $ 7,571,156

Average Useful December 31, 2023

Remaining Gross

Carrying Accumulated

(in years) Amount Amortization Total

Trade names 0.8 $ 3,084,100 $ 2,313,072 $ 771,028

Customer lists - 496,800 496,800 -

Non-compete - 224,000 224,000 -

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

The Company periodically reviews the estimated useful lives of its

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

or revised useful life.

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

December 31, 2024, and 2023.

Amortization expense relating to the Company’s intangible assets was $ 4,008,693 and $ 1,298,333 for

the years ended December 31, 2024, and 2023, respectively, which is included in depreciation and amortization expenses on the accompanying

consolidated statements of operations.

As of December 31, 2024, all of the intangible asset for order backlog

will be amortized in 2025.

NOTE 8 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

The following table summarizes accrued expenses and other current liabilities:

Accrued payroll

Accrued commissions

Accrued dealer fees

Accrued interest

Transaction costs

Professional fees

Accrued Other

NOTE 9 - LEASES

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

Lease maturities vary from 2 to 5 years.

These leases are recorded as operating leases and as such periodic payments (monthly) are

expensed according to the period for which payment is made.

Operating lease costs recorded in general and administrative expenses

in the consolidated statements of operations were $ 719,049 and $ 599,873 for the years ended December 31, 2024, and 2023, respectively.

The Company also leases multiple vehicles for its operations.

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

Finance lease costs recorded in depreciation and amortization in the

consolidated statements of operations were $ 136,472 and $ 98,881 for the years ended December 31, 2024, and 2023, respectively.

lease costs recorded in interest expense in the consolidated statements of operations were $ 52,100 and $ 44,506 for the years ended December

31, 2024, and 2023, respectively.

The following amounts were recorded in the Company’s consolidated

balance sheets relating to its operating and finance lease and other supplemental information:

Other supplemental information:

Weighted average remaining lease term (years)

Operating leases 2.39 2.86

Finance leases 3.28 4.28

Weighted average discount rate

Operating leases 4.97 % 4.26 %

Finance leases 9.76 % 9.75 %

The following tables present the maturity of operating and finance

lease liabilities as of December 31, 2024:

Operating leases

Total lease payments

Less interest

Present value of lease liabilities

Finance leases

Total lease payments

Less interest

Present value of lease liabilities

The Company has deposited security payments related to the facility

leases of $ 80,794 included in the accompanying consolidated balance sheets as other assets.

NOTE 10 - DEBT

Vehicle Loans

The Company has financing arrangements for many of the vehicles in

The financing includes direct loans for each vehicle being financed.

The Company entered into new vehicle financing arrangements

totaling $0 and $ 311,029 for the years ended December 31, 2024, and 2023, respectively.

Payments of debt obligations are based on equal

monthly payments for 60 months and include interest rates ranging from 4.94 % - 11.09 %.

As of December 31, 2024, the weighted average

interest rate on the Company’s short debt obligations was 6.75 %.

The combined amounts of these financial obligations are included

in the consolidated balance sheets as current portion of long-term debt and Long-term debt.

The company does not have debt covenants associated

with these arrangements.

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

debt as of December 31, 2024:

Less current portion

Long-term debt

Notes payable

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

the Company, issued a Promissory Note (the “Promissory Note”) to LHX Intermediate LLC (“LHX”), pursuant to which

the Company could borrow up to an aggregate principal amount of $ 4,000,000 (the “Loan”).

Subject to the terms and conditions

set forth in the Promissory Note, the Loan shall be provided to the Company in three tranches:

(i) $ 2,500,000 upon execution of the Promissory

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

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

Tranche 2 Advance.

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

340 permits to install solar energy systems sold through the Company’s year-round sales program.

“Tranche 3 Milestone”

means the completion by the Company of the installation of at least 296 solar energy systems sold through the Company’s year-round

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

As of December

the Company had $ 1,612,398 outstanding under the October 2023 Promissory Note and is included on the balance sheet as promissory note—related

On January 24, 2024, ESGEN issued a new promissory

note (“January 2024 Promissory Note”) in the principal amount of up to $ 750,000 to the Sponsor.

The January 2024 Promissory

Note may be drawn down by ESGEN from time to time prior to the consummation of ESGEN’s initial Business Combination for specific

uses as designated therein.

The January 2024 Promissory Note does no t bear interest, matures on the date of consummation of the Business

Combination and is subject to customary events of default.

The principal amount under the January 2024 Promissory Note will be paid at

the closing of the Business Combination from the funds that ESGEN has available to it outside of its Trust Account (See Note 10).

Due to Related Party

In the ordinary course of business, the Sponsor

or an affiliate of the Sponsor, or certain of the Company’s officers and directors may pay for certain expenses on behalf of the

These amounts paid for on behalf of the Company are due upon demand and are non-interest bearing.

At December 31, 2023 and 2022,

$ 75,000 and $ 0 , respectively, is included in due to related party on the balance sheet for expenses the Sponsor paid for on behalf of

Including the amounts paid for by the Sponsor and the office space, utilities, secretarial support and administrative services

(discussed below), the aggregate amount for due to related party on the balance sheet was $ 339,193 and $ 144,193 at December 31, 2023 and

2022, respectively.

Working Capital Loans

In order to finance transaction costs in connection

with an intended Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors

may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”).

If the Company completes

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

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

In the event that the

initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay

the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans.

Up to $ 1,500,000 of

such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $ 1.00 per warrant at

the option of the lender.

The warrants would be identical to the Private Placement Warrants.

As of December 31, 2023 and 2022, the Company

had no borrowings under the Working Capital Loans.

Office Space, Secretarial and Administrative Services

Through the earlier of consummation of the initial

Business Combination and the liquidation, the Company incurs $ 10,000 per month for office space, utilities, secretarial support and administrative

services provided by the Sponsor.

For each of the years ended December 31, 2023 and 2022, the Company incurred $ 120,000 .

No amounts have

been paid for these services.

As of December 31, 2023 and 2022, the Company has accrued and reported on the balance sheets $ 264,193 and

$ 144,193 , respectively, pursuant to this agreement, and included in “Due to related party”.

Note 4 — Prepaid Expenses

The Company’s prepaid expenses as of December 31, 2023 and 2022

primarily consisted of the following:

Prepaid insurance

Other prepaid expenses

Note 5 — Accounts Payable and Accrued Expense

The Company’s accounts payable and accrued expenses as of December

31, 2023 and 2022 primarily consisted of legal accruals.

Legal accrual

Other payables and expenses

Note 6 — Commitments & Contingencies

Registration and Shareholder Rights

The holders of the Founder Shares, Private Placement

Warrants and any warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the

exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans) will be entitled

to registration rights pursuant to a registration and expected shareholder rights agreement signed at the closing of our Public Offering.

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

In addition, the holders have certain “piggy-back” registration rights with respect to registration statements

filed subsequent to the Company’s completion of its initial Business Combination.

However, the registration and expected shareholder

rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective

until termination of the applicable lock-up period, which occurs (i) in the case of the Founder Shares, and (ii) in the case of the private

placement warrants and the respective Class A ordinary shares issuable upon exercise of the private placement warrants, 30 days after

the completion of the initial Business Combination.

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

registration statements.

The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion

of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Working Capital Loans and warrants that may

be issued upon conversion of Working Capital Loans) will be entitled to registration rights pursuant to a registration and expected shareholder

rights agreement signed at the closing of our Public Offering.

The holders of these securities are entitled to make up to three demands,

excluding short form demands, that the Company’s register such securities.

In addition, the holders have certain “piggy-back”

registration rights with respect to registration statements filed subsequent to the completion of its initial Business Combination.

the registration and expected shareholder rights agreement provides that the Company will not permit any registration statement filed

under the Securities Act to become effective until termination of the applicable lockup period, which occurs (i) in the case of the Founder

Shares, as described in the following paragraph, and (ii) in the case of the Private Placement Warrants and the respective Class A ordinary

shares underlying such warrants, 30 days after the completion of the initial Business Combination.

The Company will bear the expenses

incurred in connection with the filing of any such registration statements.

Except as described herein, the Sponsor and its

directors and executive officers have agreed not to transfer, assign or sell any of their Founder Shares until the earliest of (A) one

year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the closing

price of the Class A ordinary shares equals or exceeds $ 12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations,

recapitalizations and the like) for any 20 trading days within any 30 -trading day period commencing at least 150 days after the initial

Business Combination, or (y) the date on which the Company complete a liquidation, merger, share exchange or other similar transaction

that results in all of the public shareholders having the right to exchange their ordinary shares for cash, securities or other property.

Any permitted transferees would be subject to the same restrictions and other agreements of the Sponsor and its directors and executive

officers with respect to any founder shares.

Any permitted transferees will be subject to the same restrictions and other agreements of

the Sponsor with respect to any Founder Shares.

The Company refers to such transfer restrictions throughout the Public Offering as the

In addition, pursuant to the registration and

expected shareholder rights agreement, the Sponsor, upon and following consummation of an initial Business Combination, will be entitled

to nominate three individuals for election to the board of directors, as long as the Sponsor holds any securities covered by the registration

and expected shareholder rights agreement.

Underwriting Agreement

The underwriters were entitled to a deferred underwriters

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

2023, the underwriters waived any right to receive the deferred underwriters fee and will therefore receive no additional underwriters

fee in connection with the Closing.

As a result, the Company recognized $ 425,040 of other income on the statement of operations and $ 9,234,960

was recorded to accumulated deficit on the statements of changes in redeemable ordinary shares and shareholders’ deficit in relation

to the reduction of the deferred underwriters fee.

As of December 31, 2023 and 2022, the deferred underwriters fee is $ 0 and $ 9,660,000 ,

respectively.

To account for the waiver of the deferred underwriters

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

Upon the waiver of the deferred underwriters fee, the Company reduced the deferred underwriters fee to $ 0 and reversed the previously

recorded cost of issuing the instruments in the IPO, which included recognizing a contra-expense of $ 425,040 , which is the amount previously

allocated to liability classified warrants and expensed upon the IPO, and reduced the accumulated deficit and increased income available

to Class B ordinary shares by $ 9,234,960 , which was previously allocated to the Class A ordinary shares subject to redemption and accretion

recognized at the IPO date.

Additionally, as the amount is a component of accretion of Class A ordinary shares subject to possible redemption,

the Company treated it in the same manner as a dividend paid to the shareholder in the calculation of the net (loss) income per ordinary

Business Combination

On April 19, 2023, the Company entered into a Business Combination Agreement, by and among the Company, ESGEN OpCo,

LLC, a Delaware limited liability company and wholly-owned subsidiary of ESGEN (“OpCo”), Sunergy Renewables, LLC, a Nevada

limited liability company (“Sunergy”), the Sunergy equity holders set forth on the signature pages thereto (collectively,

“Sellers” and each, a “Seller”, and collectively with Sunergy, the “Sunergy Parties”), for limited

purposes, the Sponsor, and for limited purposes, Timothy Bridgewater, an individual, in his capacity as the Sellers Representative (the

“Business Combination Agreement”).

The Company consummated the Business Combination on March 13, 2024 (see Note 10 –

Subsequent Events)

31, 2024, $ 2.5 million has been advanced and the balance of $ 2.4 million, net of debt discount is included in Convertible promissory note

on the accompanying Consolidated Balance Sheet.

No interest shall be charged or accrue on the balance outstanding on

The Loan will be repaid in full (the “Repayment”) by issuing to LHX or its designee of a number of the Company’s

shares of Class A common stock (“Class A Common Stock”) equal to the quotient of (i) the outstanding and unpaid amount of

the Loan, divided by (ii) $ 1.35 (the “Share Issuance”).

The Repayment shall take place immediately following the later of:

(x) the day falling on the first anniversary of the Issue Date (or the immediately previous business day) and (y) the date on which the

stockholders of the Company approve the Share Issuance.

Due to this provision, the Company considered whether the embedded conversion

option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging.” As the note is

not convertible until maturity, no derivative liability was recognized as of December 31, 2024.

Based on the Company’s

stock price on the date the note was entered into, the computed effective interest rate on the loan is 58 %.

In connection with the Promissory Note, on December 24, 2024, LHX entered

into a Voting Agreement with the Company and certain stockholders of the Company (the “Voting Agreement”), pursuant to which

such stockholders agreed to vote (or cause to be voted), in person or by proxy, all the shares of Class A Common Stock and Class V common

stock owned by such stockholders (i) in favor of the nomination and appointment of LHX’s designee to the board of directors of the

Company (ii) in favor of the issuance by the Company to LHX of shares of Class A Common Stock in connection with an option that may be

granted to LHX to purchase up to 4,000,000 shares of Class A Common Stock, subject to the terms and conditions therein and (iii) in favor

of the Share Issuance, when required pursuant to the Promissory Note.

NOTE 11- REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

ESGEN Business Combination

The consolidated statements of changes in stockholders’ deficit

reflect the reverse recapitalization and ESGEN Business Combination as described in Note 1 – Organization and Business Operation

and Note 4 – Reverse Recapitalization.

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

periods prior to the consummation of the ESGEN Business Combination reflect the balances and activity of Sunergy Renewables, LLC.

consolidated balances as of December 31, 2023 from the financial statements of Sunergy Renewables, LLC as of that date and membership

unit activity in the consolidated statements of change in stockholders’ equity, prior to the consummation of the ESGEN Business

Combination have not been retroactively adjusted.

Upon consummation of the ESGEN Business Combination, the Company’s

capital stock consisted of (i) 3,257,436 shares of Class A Common Stock held by the Sponsor, (ii) 1,026,960 shares of Class A Common Stock

issued to public stockholders, net of redemptions as well as certain service providers, (iii) 742,568 shares of Class A Common Stock issued

to Sunergy Renewables, LLC initial Stockholders other than Sponsor, (iv) 32,230,000 shares of Class V Common Stock issued to Sun Managers

and other prior investors of Sunergy;

and (v) 1,500,000 shares of Series A Preferred Stock and 1,500,000 shares of Class V Common Stock

issued to Sponsor investors pursuant to the Sponsor PIPE Investment.

Private Placement

As described in Note 1- Organization and Business Operation, pursuant

to the Sponsor Subscription Agreement, at the Closing, a total of 1,500,000 Convertible OpCo Preferred Units (including an equal number

of shares of the Company’s Class V Common Stock) were issued to the Sponsor in return for aggregate consideration of $ 15,000,000 .

Lock-Up Agreements

Concurrently with the execution of the ESGEN Business Combination Agreement,

on April 19, 2023, the Sponsor, ESGEN’s independent directors at the time of its initial public offering (“IPO”) and

one or more client accounts of Westwood Group Holdings, Inc.

(successor to Salient Capital Advisors, LLC) (the “Westwood Client

Accounts” and, together with the Sponsor and certain independent directors of ESGEN, the “Initial Shareholders”), entered

into an amendment to that certain Letter Agreement, dated as of October 22, 2021 (the “Letter Agreement”) (and

as further amended on January 24, 2024, the “Letter Agreement Amendment”), pursuant to which, among other things, (i) the

Initial Shareholders agreed not to transfer his, her or its ESGEN Class B ordinary shares (or the Class A Common Stock) prior to the earlier

of (a) six months after the Closing or (b) subsequent to the Closing (A) if the last sale price of the Zeo Class A Common Stock quoted

on Nasdaq is greater than or equal to $ 12 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations

and the like) for any 20 trading days within a 30 -consecutive trading day period commencing at least 90 days after Closing,

or (B) the date on which Zeo completes a liquidation, merger, share exchange or other similar transaction that results in all of Zeo’s

stockholders having the right to exchange their Zeo Class A Common Stock for cash, securities or other property;

and (ii) the Initial

Shareholders and Sponsor agreed to forfeit an additional 500,000 shares of Zeo Class A Common Stock if, within two years of Closing, the

Convertible OpCo Preferred Units are redeemed or converted (with such shares subject to a lock-up for two years after Closing).

On March 13, 2024, concurrently with the Closing, the Sellers entered

into the Lock-Up Agreement, pursuant to which each of the Sellers agreed not to transfer its Exchangeable OpCo Units,

as defined below, and corresponding shares of Zeo Class V Common Stock received in connection with the ESGEN Business Combination

until the earlier of (i) six months after the Closing and (ii) subsequent to the Closing, (a) satisfaction of the Early Lock-Up Termination or

(b) the date on which Zeo completes a PubCo Sale (as defined in the Lock-Up Agreement).

Registration Rights

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

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

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

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

to the ESGEN Business Combination Agreement, the OpCo A&R LLC Agreement (as defined below) or the Company’s certificate of incorporation

filed on March 13, 2024 (the “Zeo Charter”).

The table below reflects share information about the Company’s

capital stock as of December 31, 2024.

Class A Common Stock

Class V Common Stock

Class A convertible preferred units

Class A Common Stock

Each holder of Class A Common Stock is entitled to one vote for each

share of Class A Common Stock held of record in person or by proxy on all matters which stockholders generally are entitled to vote,

except that, in each case, to the fullest extent permitted by law, each holder has no voting power with respect to, and will not be entitled

to vote on, any amendment to its Certificate of Incorporation (including any certificate of designations relating to any series of Preferred

Stock) that relates solely to the terms of any outstanding Preferred Stock if the holders of such Preferred Stock are entitled to vote

as a separate class thereon (including any certificate of designations relating to any series of Preferred Stock) or under the General

Corporation Law of the State of Delaware (the “ DGCL ”).

The holders of the outstanding shares of Class A Common Stock

shall be entitled to vote separately upon any amendment to its Certificate of Incorporation (including by merger, consolidation, reorganization

or similar event) that would alter or change the powers, preferences or special rights of such class of Common Stock in a manner that

is disproportionately adverse as compared to the Class V Common Stock.

Except as otherwise required in its Certificate of Incorporation

or by applicable law, the holders of Common Stock will vote together as a single class on all matters (or, if any holders of Preferred

Stock are entitled to vote together with the holders of Common Stock, as a single class with the holders of Preferred Stock).

Class A Common Stockholders have rights to the economics of the Company

and to receive dividend distributions, subject to applicable laws and the rights and preferences of holders of Series A Preferred Stock

or any other series of stock having preference over or participation rights with Class A Common Stock.

In the event of liquidation, dissolution

or winding up of the affairs of Company, Class A Common Stock has rights to assets and funds of the Company available for distribution

after making provisions for preferential and other amounts to the holders of Series A Preferred Stock or any other series of stock having

preference over or participation rights with Class A Common Stock.

LHX Subscription Agreement

On October 25, 2024, the Company and LHX entered

into a Subscription Agreement (the “LHX Subscription Agreement”) pursuant to which LHX purchased 1,873,103 shares of Common

Stock (the “Shares”) at a purchase price per share of $ 1.45 for an aggregate purchase price of $ 2,716,000 (the “Share

Purchase”) which is reflected on the statement of changes in stockholders’

deficit and statement of cash flows.

Pursuant to the LHX Subscription Agreement, the Company has also (i) appointed one individual designated

by LHX to its board of directors (the “Board”) and (ii) filed a registration statement registering the resale of the Shares

within 15 days of the Share Purchase and to use reasonable efforts to have such registration statement declared effective as soon as practicable

Class V Common Stock

Each holder of Class V Common Stock is entitled to one vote for each

share of Class V Common Stock held of record in person or by proxy on all matters which stockholders generally are entitled to vote, except

that, in each case, to the fullest extent permitted by law, each holder has no voting power with respect to, and will not be entitled

to vote on, any amendment to its Certificate of Incorporation (including any certificate of designations relating to any series of Preferred

Stock) that relates solely to the terms of any outstanding Preferred Stock if the holders of such Preferred Stock are entitled to vote

as a separate class thereon (including any certificate of designations relating to any series of Preferred Stock) or under the DGCL.

holders of the outstanding shares of Class V Common Stock are entitled to vote separately upon any amendment to its Certificate of Incorporation

(including by merger, consolidation, reorganization or similar event) that would alter or change the powers, preferences or special rights

of such class of Common Stock in a manner that is disproportionately adverse as compared to the Class A Common Stock.

Except as otherwise

required in its Certificate of Incorporation or by applicable law, the holders of Common Stock will vote together as a single class on

all matters (or, if any holders of Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class with

the holders of Preferred Stock).

Class V Common Stockholders do not have rights to the economics of

the Company nor to receive dividend distributions, and would not be entitled to receive, with respect to such shares, any assets of the

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

Class A Convertible Preferred Units (Mezzanine Equity)

The Class A Convertible Preferred Unitholders have no voting rights

and only have certain consent rights.

However, as outlined above, the Preferred Units were issued in conjunction with Class V Common Stock,

which entitle the holders to voting rights.

The Class A Convertible Preferred Unitholders are to be paid dividends, quarterly in arrears

at the rate of 10 % per annum of the original price per share, plus the amount of previously accrued, but unpaid dividends, compounded

monthly On each Dividend Payment Date, the Company must:

(i) pay the Sponsor an amount equal to 30 % of the Preferred Unit Dividends that

have accrued for such Dividend Period (or portion of a Dividend Period, as applicable) and (ii) may elect to either (A) pay the remainder

of the Preferred Unit Dividends that have accrued for the applicable Dividend Period in cash or (B) to the extent the remaining portion

of any such Preferred Unit Dividends are not paid on the Dividend Payment Date in cash, the remaining portion of the Preferred Unit Dividends

will continue to accrue and compound, as described above.

Following the first anniversary of the date on which the first Class

A Convertible Preferred Unit was issued (the “Class A Convertible Preferred Unit Original Issue Date”) and continuing until

the earlier of (A) March 13, 2027, the “Maturity Date,” (B) a Required Redemption (as described in the OpCo A&R LLC Agreement),

(C) the date the Sponsor elects for a Put Option Redemption, or (D) a Transaction Event Conversion (as described in the OpCo A&R LLC

Agreement) , the Sponsor has the option to convert all, but not less than all, of the outstanding Class A Convertible Preferred Units

into such number of Class B Units (an “ Optional Conversion”) as is determined by dividing the Class A Convertible Preferred

Unit Original Issue Price plus the aggregate accumulated and unpaid Class A Convertible Preferred Unit Accruing Dividends with respect

to such Class A Convertible Preferred Units, if any, through the date the conversion occurs, by $ 11.00 (the “ Optional Conversion

The Sponsor must elect to convert all, but not less than all, of the outstanding Class A Convertible Preferred Units.

Each Class A Convertible Preferred Unit that is outstanding on the

Maturity Date will be converted into such number of Class B Units (a “ Maturity Date Conversion ”) as is determined by

dividing the Class A Convertible Preferred Unit Original Issue Price plus the aggregate accumulated and unpaid Class A Convertible Preferred

Unit Accruing Dividends with respect to such Class A Convertible Preferred Units, if any, through and until the Maturity Date, by the

Market Price (the “ Maturity Date Conversion Price ”).

The “ Market Price ” shall mean the average of

the daily VWAP of the Class A Common Stock during the five (5) Trading Days prior to the Maturity Date.

means, for any Trading Day, the per share daily volume weighted average price of the Class A Common Stock for such Trading Day on the

principal trading exchange or market for the Common Stock (the “ Principal Market ”) from 9:30 a.m.

Eastern Time through

Eastern Time (the “ Measurement Period ”) or, if such price is not available, “ VWAP ” shall

mean the market value per share of Class A Common Stock on such Trading Day as determined, using a volume-weighted average method, by

an independent investment banking firm or other similar party chosen by the Company.

A “ Trading Day ” means any days

during the course of which the Principal Market on which the Class A Common Stock is listed or admitted to trading is open for the exchange

of securities.

If, after the Class A Convertible Preferred Unit Original Issue Date,

the Company (i) makes a distribution on its Class B Units in securities (including Class B Units), (ii) subdivides or splits its outstanding

Class B Units into a greater number of Class B Units, (iii) combines or reclassifies its Class B Units into a smaller number of Class

B Units or (iv) issues by reclassification of its Class B Units any securities (including any reclassification in connection with a merger,

consolidation or business combination in which the Company is the surviving person), then the Conversion Price in effect at the time of

the record date for such distribution or of the effective date of such subdivision, split, combination, or reclassification shall

be proportionately adjusted so that the Conversion of the Class A Convertible Preferred Units after such time shall entitle the Sponsor

to receive the aggregate number of Class B Units that such holder would have been entitled to receive if the Class A Convertible Preferred

Units had been converted into Class B Units immediately prior to such record date or effective date, as the case may be.

An adjustment

made pursuant to the applicable section of the OpCo A&R LLC Agreement shall become effective immediately after the record date

in the case of a distribution and shall become effective immediately after the effective date in the case of a subdivision, combination,

reclassification (including any reclassification in connection with a merger, consolidation or business combination in which the Company

is the surviving person) or split.

Such adjustment shall be made successively whenever any event described above shall occur.

and the ESGEN OpCo, LLC, as the case may be, agree that it will act in good faith to make any adjustment(s) required by the applicable

sections of the OpCo A&R LLC Agreement equitably and in such a manner as to afford the Sponsor the benefits of the provisions

hereof, and will not intentionally take any action to deprive such holders of the express benefit hereof.

The Class A Convertible Preferred Units are redeemable in whole but

not in part, at the then-applicable rate of return (” Required Return”), at the option of the Company (subject to the

OpCo A&R LLC Agreement ) , at any time prior to the Maturity Date (a “ Required Redemption ”), or (ii)

if required by the Company upon the Sponsor’s delivery to the Company of a notice in accordance with the Sponsor electing a Put

Option Redemption.

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

A&R LLC Agreement), the Preferred Units will be entitled to distributions as follows:

Following the satisfaction of all of the Company’s debts and liabilities to creditors, and the satisfaction of all of the Company’s Liabilities to Members in satisfaction of liabilities for previously declared distributions, the Sponsor is entitled to an amount equal to the then-remaining Required Return with respect to each Preferred Unit then outstanding (the “Liquidation Redemption”).

● The Sponsor does not participate in further distributions following the receipt of the Required Return (i.e., the Preferred Units are non-participating instruments).Upon any liquidation or deemed liquidation event, the holders of Class A Convertible Preferred Units will be entitled to receive out of the available proceeds, before any distribution is made to holders of Common Stock or any other junior securities, an amount per share equal to the greater of (i) 100 % of the Accrued Value (as defined in the Certificate of Designation) or (ii) such amount per share as would have been payable had all shares of Series A Preferred Stock been converted into Class A Common Stock immediately prior to the liquidation event.

The Class A Convertible Preferred Units are carried at their current

redemption value of $ 16,130,871 on the accompany balance sheet as of December 31, 2024.

Redeemable Noncontrolling Interests

As of December 31, 2024, the prior investors of Sunergy own 71.8 % of

the common units of the Company.

The OpCo A&R LLC Agreement provides among other things, a holder of corresponding economic, non-voting

Class B units of OpCo (the “Exchangeable OpCo Units”) has the right to cause OpCo to redeem one or more of such Exchangeable

OpCo Units, together with the cancellation of an equal number of shares of such holder’s Zeo Class V Common Stock, for shares of

Zeo Class A Common Stock on a one-for-one basis, or, at the election of Zeo (as manager of OpCo), cash, in each case, subject to certain

restrictions set forth in the OpCo A&R LLC Agreement and the Charter.

The OpCo A&R LLC Agreement also provides for mandatory OpCo

Unit Redemptions in certain limited circumstances, including in connection with certain changes of control.

Subject to certain conditions,

the Class A Convertible OpCo Preferred Units are redeemable by Zeo and following the first anniversary of the Closing may be converted

by the Sponsor into Exchangeable OpCo Units (and then would be immediately exchanged on a one-for-one basis, together with an equal number

of accompanying shares of Zeo Class V Common Stock, for shares Zeo Class A Common Stock).

The Convertible OpCo Preferred Units have accruing

distributions of 10 % per annum and the Sponsor as holder thereof has certain consent rights over the taking of certain actions of OpCo

and its subsidiaries.

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

with the redeemable noncontrolling interests’ share of our net loss separately allocated.

NOTE 12- STOCK-BASED COMPENSATION

2024 Omnibus Incentive Plan

On March 6, 2024, the shareholders of ESGEN approved the Zeo Energy

2024 Omnibus Incentive Equity Plan (the “Incentive Plan”), which became effective upon the Closing.

3,220,400 of the

outstanding shares of Class A Common Stock of the Company (the “Plan Share Reserve”) shall be available for awards under the

Incentive Plan.

Each Award granted under the Plan will reduce the Plan Share Reserve by the number of shares of Common Stock underlying

Notwithstanding the foregoing, the Plan Share Reserve shall be automatically increased on the first day of the 2025 fiscal

year through the 2029 fiscal year by a number of shares of Common Stock equal to the lesser of (i) the positive difference, if any, between

2 % of the then-outstanding shares of Common Stock on the last day of the immediately preceding fiscal year, and (ii) a lower number of

shares of Common Stock as may be determined by the Board.

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

the Company and the other members of the Company and its subsidiaries (the “Company Group”) may attract and retain key

personnel and to provide a means whereby directors, officers, employees, consultants and advisors of the Company and the other members

of the Company Group can acquire and maintain an equity interest in the Company, or be paid incentive compensation measured by reference

to the value of Common Stock, thereby strengthening their commitment to the welfare of the Company Group and aligning their interests

with those of the Company’s stockholders.

On the Closing Date the Company entered into an Executive Employment

Agreement with the Company’s CEO.

In addition to the CEO’s annual salary and cash bonus, the CEO became eligible to receive

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

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

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

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

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

a Level 1 measurement, by reference to the publicly traded stock price on March 13, 2024.

Further, if, within three (3) years of the effective date of the Closing,

(i) the volume-weighted average price of shares of the publicly traded stock of the Company exceeds $ 7.50 for 20 or more days of any consecutive

30-day period, then the CEO will be granted vested equity from the Incentive Plan equal to 1 % of the total issued and outstanding capital

stock of the Company, (ii) the volume-weighted average price of shares of the publicly traded stock of the Company exceeds $ 12.50 for

20 or more days of any consecutive 30-day period, then the CEO will be granted additional vested equity from the Incentive Plan equal

to 1 % of the total issued and outstanding capital stock of the Company, (iii) and the volume-weighted average price of shares of the publicly

traded stock of the Company exceeds $ 15.00 for 20 or more days of any consecutive 30-day period, then the CEO will be granted additional

vested equity from the Incentive Plan equal to 1 % of the total issued and outstanding capital stock of the Company.

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

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

Tranche 1 hurdle price

Tranche 2 hurdle price

Tranche 3 hurdle price

Risk-free rate

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

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

Fair Value Summary Tranche 1 Tranche 2 Tranche 3

Tranche per unit fair value $ 5.96 $ 4.53 $ 3.82

Stock price on valuation date $ 6.97 $ 6.97 $ 6.97

Derived service period 0.35 years 1.19 years 1.47 years

During the year ended December 31, 2024, $7,951,248, respectively,

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

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

As of December 31, 2024,

an unrecognized compensation expense of $ 2,059,288 was determined and is expected to be recognized over the remaining 2.5 years.

NOTE 13 - WARRANT LIABILITIES

The Company accounts for the 27,840,000 warrants

issued in connection with the IPO ( 13,800,000 Public Warrants and 14,040,000 Private Placement Warrants) in accordance with the guidance

contained in ASC Topic 815-40.

Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder,

each warrant must be recorded as a liability.

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

liability is subject to remeasurement at each balance sheet date.

With each such remeasurement, the warrant liabilities

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

Public Warrants

Each whole warrant entitles the holder to purchase

one Class A ordinary share at a price of $ 11.50 per share, subject to adjustment as discussed herein.

In addition, if (x) the Company

issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the

initial Business Combination at an issue price or effective issue price of less than $ 9.20 per ordinary share (with such issue price or

effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to

the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior

to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60 %

of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation

of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares

during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination

(such price, the “Market Value”) is below $ 9.20 per share, the exercise price of the warrants will be adjusted (to the nearest

cent) to be equal to 115 % of the higher of the Market Value and the Newly Issued Price, the $ 18.00 per share redemption trigger price

described adjacent to “Redemption of warrants when the price per Class A ordinary share equals or exceeds $ 18.00 ” will be

adjusted (to the nearest cent) to be equal to 180 % of the higher of the Market Value and the Newly Issued Price, and the $ 10.00 per share

redemption trigger price described adjacent to the caption “Redemption of warrants when the price per Class A ordinary share equals

or exceeds $ 10.00 ” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.

The warrants will become exercisable 30 days after

the completion of the Company’s initial Business Combination and will expire five years after the completion of the Company’s

initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the initial Business

Combination, it will use its commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement

of which this prospectus forms a part or a new registration statement for the registration, under the Securities Act, of the Class A ordinary

shares issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become

effective within 60 business days after the closing of the initial Business Combination, and to maintain the effectiveness of such registration

statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in

the warrant agreement;

provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national

securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities

Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis”

in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain

in effect a registration statement, but the Company will use its commercially reasonably efforts to register or qualify the shares under

applicable blue sky laws to the extent an exemption is not available.

The “fair market value” as used in this paragraph shall

mean the volume weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to the date

on which the notice of exercise is received by the warrant agent.

If a registration statement covering the Class A ordinary shares issuable

upon exercise of the warrants is not effective by the 60th day after the closing of the initial Business Combination, warrant holders

may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain

an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities

Act or another exemption, but it will use its commercially reasonably efforts to register or qualify the shares under applicable blue

sky laws to the extent an exemption is not available.

In such event, each holder would pay the exercise price by surrendering the warrants

for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number

of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” (defined below) less

the exercise price of the warrants by (y) the fair market value and (B) 0.361 .

The “fair market value” as used in this paragraph

shall mean the volume weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to

the date on which the notice of exercise is received by the warrant agent.

Redemption of warrants when the price per Class

A ordinary share equals or exceeds $ 18.00 .

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

warrants (except as described herein with respect to the Private Placement Warrants):

As part of ESGEN’s IPO, as defined in Note 11, ESGEN issued warrants

to third-party investors where each whole warrant entitles the holder to purchase one share of the Company’s common stock at an

exercise price of $ 11.50 per share.

Simultaneously with the closing of the IPO, ESGEN completed the private sale of warrants where each

warrant allows the holder to purchase one share of the Company’s Class A Common Stock at $ 11.50 per share.

Upon the closing of the

ESGEN Business Combination the 14,040,000 Private Warrants were forfeited.

As of December 31, 2024, there are 13,800,000 Public Warrants

and no private placement warrants outstanding.

These warrants expire on the fifth anniversary of the ESGEN Business

Combination or earlier upon redemption or liquidation and are exercisable commencing 30 days after the ESGEN Business Combination, provided

that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise

of the warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their warrants on a

cashless basis under the circumstances specified in the warrant agreement) and registered, qualified or exempt from registration under

the securities, or blue sky, laws of the state of residence of the holder.

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

in whole and not in part;

● at a price of $ 0.01 per warrant;

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

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

Redemption of warrants when the price per Class

A ordinary share equals or exceeds $ 10.00 .

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

in whole and not in part;

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

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

Private Warrants

If the Private Placement Warrants are held by

holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption

scenarios and exercisable by the holders on the same basis as the warrants included in the units sold in the Public Offering.

Any amendment

to the terms of the Private Placement Warrants or any provision of the warrant agreement with respect to the Private Placement Warrants

will require a vote of holders of at least 50 % of the number of the then outstanding Private Placement Warrants.

The accounting treatment of derivative financial

instruments requires that the Company record a derivative liability upon the closing of the IPO.

Accordingly, the Company has classified

each warrant as a liability at its fair value and the warrants were allocated a portion of the proceeds from the issuance of the Units

equal to its fair value.

These liabilities are subject tore-measurement at each balance sheet date.

With each such re-measurement, the

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

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

If the classification changes as a result of events during the

period, the warrants will be reclassified as of the date of the event that causes the reclassification.

Note 8 — Recurring Fair Value Measurements

As of December 31, 2023 and 2022, marketable securities

and cash held in Trust Account are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets.

The Company’s Public Warrants are traded

on the Nasdaq.

As such, the Public Warrant valuation is based on unadjusted quoted prices in active markets for identical assets or liabilities

that the Company has the ability to access.

The fair value of the Public Warrant liabilities is classified within Level 1 of the fair

value hierarchy.

At December 31, 2023 and 2022, the Company considers

the Private Warrants to be economically equivalent to the Public Warrants.

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

the Private Warrants.

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

The following tables presents fair value information

as of December 31, 2023 and 2022 of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring

basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

December 31, 2023

Cash held in Trust Account

Public Warrants

Private Warrants

Total liabilities

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

● if, and only if, the reported last sale price of the Class A Common Stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 -trading day period commencing once the warrants become exercisable and ending three business days before the Company sends the notice of redemption to the warrant holders.

The Public Warrants are recognized as derivative liabilities in accordance

with ASC 815, Derivatives and Hedging (“ASC 815”).

Accordingly, the Company recognized the warrant instruments as liabilities

at fair value as of the Closing Date, with an offsetting entry to additional paid-in capital and adjusts the carrying value of the instruments

to fair value through other income (expense) on the consolidated statements of operations at each reporting period until they are exercised.

As of December 31, 2024, the Public Warrants are presented as warrant liabilities on the accompanying consolidated balance sheets.

NOTE 14 - RELATED PARTY TRANSACTIONS

There was one operating lease with a related party, which expired by

December 31, 2024 and was not renewed.

Operating lease cost relating to this lease was $ 15,009 and $ 28,880 for the years ended December

31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, the related party operating lease ROU asset was $ 0 and $ 75,378 , respectively,

and the related party operating lease liability was $ 0 and $ 58,134 , respectively.

In 2023, some of the Company’s customers

financed their obligations with a related party, Solar Leasing, whose CEO is also the CEO of the Company.

These arrangements are similar

to those with other third-party lenders.

As such, Solar Leasing deducts their financing fees and remits the net amount to the Company.

For the years ended December 31, 2024, and 2023, the Company recognized $ 22,156,018 and $ 15,464,852 of revenue, net of financing fees

of $ 8,246,532 and $ 6,851,232 , respectively, from these arrangements.

As of December 31, 2024, and 2023, the Company had $ 191,662 and $ 396,488

of accounts receivable, $ 3,359,101 and $ 2,415,966 of accrued expenses and $ 2,000 and $ 1,160,848 of contract liabilities due to related

parties relating to these arrangements, respectively.

On December 24, 2024, the Company entered into a Promissory Note with

LHX (See Note 10).

LHX owns 14.1 % of the Company’s Class A Common Stock.

During the year ended December 31, 2024, Solar Leasing performed a

fair-market-value assessment of its lease assets.

As a result, Solar Leasing paid a discretionary rebate to the Company of $ 3,000,000

based on the excess of fair-market-value over the carrying value of its assets, primarily to optimize certain tax positions for its owners.

The Company agreed to transfer the received rebate to White Horse Energy, LC (“White Horse Energy”), a entity wholly owned

by the Company’s CEO, in the form of convertible debt.

Additionally, the Company guarantees the outstanding indebtedness of Solar

Leasing (approximately $ 10 million) which results in the Company having a variable interest in Solar Leasing.

The Company determined it

was not the primary beneficiary as defined in ASC 810-10-25-38A.

Although the Company’s CEO, wholly owns White Horse Energy, the

Company does not have any control over White Horse Energy or Solar Leasing, nor any obligation to absorb losses from Solar leasing.

on the Company’s reassessment, the flow of funds resulting from the discretionary rebate does not transfer control or economic exposure

to the Company in a manner that would require consolidation under ASC 810-10.

White Horse Energy remains the primary beneficiary, and

no changes to the Company’s financial statement presentation are required.

The $ 3,000,000 convertible note is recorded as a Related

Party Note Receivable on the consolidated balance sheet as of December 31, 2024.

The balances relating to Solar Leasing are reflected

as related party balances in the accompany consolidated financial statements.

As described in Note 3, Zeo Energy Corp.

into the TRA with the TRA Holders.

As of December 31, 2024, the Company has not recorded a liability related to the tax savings it may

realize from utilization of such deferred tax assets.

As of December 31, 2024, assuming a hypothetical exchange of all outstanding units,

the total TRA would be $ 27.6 million.

If utilization of the deferred tax assets subject to the TRA becomes more likely than not in the

future, the Company will record a liability related to the TRA which will be recognized as expense within its consolidated statements

of operations.

On August 27, 2024, the Company entered into a

guarantee for a Business Loan Agreement (Loan) between Solar Leasing I, LLC and a bank.

The Loan is for up to $ 10,000,000 .

At 12/31/2024,

Solar Leasing I, LLC had an outstanding loan balance of $ 3,460,840 .

This Loan is also personally guaranteed by the Company's CEO and manager

of Solar Leasing I, LLC, Tim Bridgewater.

NOTE 15- FAIR VALUE MEASUREMENTS

Items Measured at Fair Value on a Recurring Basis:

The Company accounts for certain liabilities at fair value on a recurring

basis and classifies these liabilities within the fair value hierarchy (Level 1, Level 2, or Level 3).

Liabilities subject to fair value measurements are as follows:

December 31, 2024

Marketable securities held in Trust Account

Warrant liabilities

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

the Warrant valuation is based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has

the ability to access.

The fair value of the Warrant liabilities is classified within Level 1 of the fair value hierarchy.

no warrant liabilities as of December 31, 2023.

NOTE 16- NET LOSS PER SHARE

Basic net loss per share of Class A common stock is computed by dividing

net loss attributable to Class A common stockholders from March 13, 2024, or the Closing Date, to December 31, 2024, by the weighted-average

number of shares of Class A common stock outstanding for the same periods.

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

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

Prior to the ESGEN Business Combination, the membership structure of

Sunergy Renewables, LLC included membership units.

In conjunction with the closing of the ESGEN Business Combination, the Company effectuated

a recapitalization whereby all membership units were converted to common units of OpCo and the Company implemented a revised class structure

including Class A Common Stock having one vote per share and economic rights, and Class V Common Stock having one vote per share and no

economic rights.

Shares of the Company’s Class V Common Stock do not participate in the earnings or losses of the Company and are

therefore not participating securities.

The basic and diluted net income per share for the year ended December 31, 2024 represents only

the period of March 13, 2024 to December 31, 2024.

The following table presents the computation of the basic and diluted

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

Net income attributable to Class A common shareholders

$ ( 2,668,889 )

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

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

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.

Series A Preferred Stock (2)

Convertible promissory notes (3)

(1) Represents number of instruments outstanding at the end of the period that were evaluated under the treasury stock method for potentially dilutive effects and were determined to be anti-dilutive.

(2) Represents number of Preferred Units outstanding at the end of the period that were excluded using the if-converted method.

(3) Represents number of shares that would be issued to settle the convertible promissory note as of the end of the period

NOTE 17 - COMMITMENTS AND CONTINGENCIES

Workmanship and Warranties

The Company typically warrants solar energy systems sold to customers

for periods of one to ten years against defects in design and workmanship, and that installations will remain watertight.

The manufacturers’ warranties on the solar energy system components,

which are typically passed through to the customers, typically have product warranty periods of 10 to 20 years and a limited performance

warranty period of 25 years.

As of December 31, 2024, and 2023, the Company did not record a warranty reserve as the historical costs

incurred that the Company is required to pay have not been significant or indicative of the Company performing warranty work in the future.

The Company, at its discretion, may provide certain reimbursements to customers if certain solar equipment is not operating as intended

during future periods.

In the normal course of business, the Company may become involved in

various lawsuits and legal proceedings.

While the ultimate results of these matters cannot be predicted with certainty, management does

not expect them to have a material adverse effect on the financial position or results of operations of the Company.

Accrual for Probable Loss Contingencies

In the normal course of business, the Company is involved in various

claims and legal proceedings.

A liability is recorded for such matters when it is probable that a loss has been incurred and the amounts

can be reasonably estimated.

When only a range of possible loss can be established, the most probable amount in the range is accrued.

If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued.

Legal costs associated with loss contingencies are expensed as incurred.

NOTE 18 – INCOME TAXES

Prior to the close of the ESGEN Business Combination,

the Company’s financial reporting predecessor, Sunergy Renewables, LLC, was treated as a pass-through entity for tax purposes and no provision

was recorded.

As of the date of the ESGEN Business Combination (March 2024), the operations of the Company ceased to be taxed as an partnership

resulting in a change in tax status for federal and state income tax purposes.

This change in tax status requires immediate recognition

of any deferred tax assets or liabilities as of the transaction date as the Company will now be directly liable for income taxes.

recognition of these initial deferred balances, if any, would be recorded as an additional tax expense in the period of the transaction.

In addition, the Company will accrue current and deferred tax expense based on ongoing activity from that date.

The components of the provision (benefit) for

income taxes were as follows:

State and local

Total current provision

$ ( 814,350 )

Public Warrants

Private Warrants

Total liabilities

There were no transfers to or from Levels 1, 2 or 3 for the year ended

December 31, 2023 or 2022.

Note 9 — Shareholders’ Deficit

Preference shares— The Company is authorized

to issue 1,000,000 preference shares with a par value of $ 0.0001 and with such designations, voting and other rights and preferences as

may be determined from time to time by the Company’s board of directors.

As of December 31, 2023 and 2022, there were no preference

shares issued or outstanding.

Class A ordinary shares— The Company is

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

As of December 31, 2023 and 2022, there

were 5,619,077 and 0 Class A ordinary shares issued or outstanding other than the 1,408,555 and 27,600,000 Class A ordinary shares subject

to possible redemption that are accounted for outside of the shareholders’ deficit section of the balance sheets, respectively.

In connection with the approval of the Conversion

Proposal at the October 20, 2023 shareholder meeting and the adoption of the Charter Amendment, the Sponsor converted all of its 5,619,077

Class B ordinary shares into Class A ordinary shares.

As a result of the Sponsor Share Conversion and redemptions made in connection with

the Extension Proposal and Conversion Proposal, 1,408,555 and 5,619,077 redeemable Class A ordinary shares and non-redeemable Class A

ordinary shares, respectively, remain outstanding.

Notwithstanding the Sponsor Share Conversion, the Sponsor will be not entitled to receive

any funds held in the Trust Account with respect to any Class A ordinary shares issued to the Sponsor as a result of the Sponsor Share

Conversion and no additional amounts will be deposited into the Trust Account in respect of shares of Class A ordinary shares held by

the Sponsor in connection with the extension of the Termination Date to the Extended Date or any Additional Extension Dates.

Class B ordinary shares— The Company is

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

Holders are entitled to one vote for each

share of Class B ordinary shares.

As of December 31, 2023 and 2022, there were 1,280,923 and 6,900,000 Class B ordinary shares issued

and outstanding, respectively.

Holders of Class A ordinary shares and holders

of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders

except as required by law.

Unless specified in the Company’s amended and restated memorandum and articles of association, or as

required by applicable provisions of the Companies Act or applicable stock exchange rules, the affirmative vote of a majority of the Company’s

ordinary shares that are voted is required to approve any such matter voted on by its shareholders.

The Class B ordinary shares will automatically

convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have any redemption rights

or be entitled to liquidating distributions from the Trust Account if the Company fails to consummate an initial Business Combination)

at the time of the initial Business Combination or earlier at the option of the holders thereof at a ratio such that the number of Class

A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20 % of the sum

of (i) the total number of ordinary shares issued and outstanding upon completion of the Public Offering, plus (ii) the total number of

Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued

or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding

any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued,

or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor, any of its

affiliates or any members of the Company’s management team upon conversion of Working Capital Loans.

In no event will the Class

B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.

This is different than some other similarly structured

blank check companies in which the initial shareholders will only be issued an aggregate of 20 % of the total number of shares to be outstanding

prior to the initial Business Combination.

State and local

Total deferred benefit

Total benefit

The effective tax rate differs from the statutory tax rates as follows:

Tax at statutory federal rate

State income taxes, less federal income tax benefits

Investment in Sunergy Renewables, LLC

Noncontrolling interest in Sunergy Renewables, LLC

Income attributable to Sunergy Renewables prior to ESGEN Business Combination

Provision for income taxes

Deferred income tax assets and liabilities result

primarily from temporary differences in the recognition of various expenses for tax and financial statement purposes, and from the recognition

of the tax benefits of net operating loss carryforwards.

The components of the deferred income tax assets

and liabilities were as follows:

Deferred tax assets:

Net operating losses and tax credit carry-forward

Accrued stock compensation

Accrued liabilities

Gross deferred tax asset

Less valuation allowance

Net deferred tax asset

Deferred tax liabilities:

Total deferred tax liability

$ ( 423,413 )

Net deferred tax asset

The net deferred tax asset as of December 31,

2024 is included in other assets in the accompanying consolidated balance sheet.

As of December 31, 2024, the Company had

federal NOL of approximately $ 0.7 million, and state NOL carryforwards of approximately $ 0.9 million.

As of December 31, 2024, the

Company had NOL carryforwards of approximately $ 0 million.

The federal NOL carryforwards generated in the tax years 2024 will never expire

and the state NOL carryforwards have varying expiration dates based on the jurisdiction.

Utilization of the NOL carryforwards may be subject

to an annual limitation according to Section 382 of the Internal Revenue Code of 1986 as amended, and similar provisions.

ASC 740, Income Taxes, requires a valuation

allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion

or all of the deferred tax assets will not be realized.

After consideration of all of the evidence, has determined it is more likely than

not that the Company will be able to recognize the benefits of its net deferred tax assets.

At December 31, 2023, the Company did not

record a valuation allowance as there were not any deferred tax assets recorded as the Company is taxed as a partnership.

There was an increase in deferred tax assets of $ 238,491 which resulted

in $ 997,702 thousand of deferred tax benefit and an offsetting $ 759,211 recorded in additional paid-in-capital.

The total net deferred

tax asset of $ 238,491 includes $ 423,413 deferred tax liability as a result of the Business Combination.

The excess of the Company’s

book carrying value in its investment in OpCo over its tax basis in this investment resulted in a deferred tax liability, with an offsetting

effect recorded to deferred income tax expense of $ 335,798 and additional paid-in-capital of $ 759,211 .

The Company recognizes interest accrued to unrecognized

tax benefits and penalties as income tax expense.

There were no penalties or interest accrued as of, nor recognized during the years ended

December 31, 2024 and 2023.

As of December 31, 2024 and 2023, the Company

has not recorded an amount of gross unrecognized tax benefits for uncertain tax positions for the current or prior year planned tax filing

No unrecognized tax benefits are applicable for prior periods.

The Company files tax returns as prescribed by

the tax laws of the jurisdictions in which it operates.

In the normal course of business, the Company is subject to examination by federal

and state jurisdictions where applicable based on the statute of limitations that apply in each jurisdiction.

The Company has no open tax audits with any taxing

authority as of December 31, 2024.

The Company actively monitors domestic and global

tax law changes to account for the effects in the period the legislation is enacted, as applicable.

NOTE 19- SEGMENT REPORTING

The Company has one operating segment and one

reportable segment, the business of sales and installation of solar panel technology to individual households within the United States.

The Company’s chief operating decision-maker (“CODM”) is our chief executive officer.

Our CODM reviews and evaluates

consolidated net income (loss) for purposes of evaluating financial performance, making operating decisions, allocating resources, and

planning and forecasting for future periods.

All the Company’s long-lived assets and

revenues are maintained in the U.S.

Refer to Note 3 for further information on revenues.

The following presents the significant financial

information with respect to the Company’s reportable segment for the years ended December 31, 2024 and 2023 (in thousands):

Year ended December 31,

Total revenue

$ 109,691,001

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

Depreciation and amortization related to Cost of goods sold

Depreciation and amortization

Commissions expense

Sales and marketing (exclusive of Commissions expense above)

General and administrative

Other expense, net

Change in fair value of warrant liabilities

Interest expense

Net (loss) income before taxes

( 10,861,159 )

Income tax benefit

Net (loss) income

( 9,872,357 )

NOTE 20 - SUBSEQUENT EVENTS

On each of January 18, 2024 and February 16, 2024,

the Company deposited $ 24,650 into the Trust Account in connection with Additional Extensions.

First Amendment to the Business Combination Agreement

On January 24, 2024, ESGEN and Sunergy entered

into the First Amendment to the Initial Business Combination Agreement (the “First Amendment” and, the Initial Business Combination

Agreement as amended by the First Amendment, the “Business Combination Agreement”).

The First Amendment provides for, among

other things, the:

(i) reduction of the aggregate

consideration to the pre-transaction Sunergy equity holders from $ 410 million to $ 337.3 million;

(ii) removal of the (a) $ 20

million minimum cash condition and (b) provision requiring forfeiture of founder shares in connection with excess transaction expenses;

(iii) modification of the

terms and structure of the Sponsor PIPE Investment (as defined below) from $ 10.0 million in shares of Class A common stock, par value

$ 0.0001 per share (“New PubCo Class A Common Stock”), of the continuing entity following the continuation of ESGEN by way

of domestication of ESGEN into a Delaware corporation, which continuing entity will be renamed Zeo Energy Corp.

(“New PubCo”),

to up to $ 15.0 million in convertible preferred units of OpCo (the “Convertible OpCo Preferred Units”) to be issued to the

Sponsor pursuant to the Amended and Restated Subscription Agreement (as defined below);

(iv) forfeiture of an aggregate

of 2.9 million founder shares and an additional 500,000 founder shares if, within two years of closing of the Business Combination (the

“Closing”), the Convertible OpCo Preferred Units are redeemed or converted (with such shares subject to a lock-up for two

years after the Closing);

(v) forfeiture of all private

warrants to purchase one ESGEN Class A ordinary share, par value $ 0.0001 per share, of ESGEN (“ESGEN Private Placement Warrants”);

(vi) Sponsor will contribute

those certain promissory notes, dated as of April 27, 2021 and October 17, 2023 (which promissory note amended and restated that certain

promissory note dated as of April 5, 2023), by and between Sponsor and ESGEN, to ESGEN as a contribution to the capital of ESGEN and all

amounts due thereunder will be cancelled;

(vii) the outside date for

the Business Combination to be extended to April 22, 2024.

Non-redemption Agreement

On March 11, 2024, ESGEN,

entered into a non-redemption agreement (the “Non-Redemption Agreement”) with The K2 Principal Fund L.P.

(“K2”), pursuant to which K2 agreed (i) to purchase at least 174,826 of ESGEN’s Class A ordinary shares, par

value $ 0.0001 per share (the “Class A ordinary shares”), in the open market from investors who had elected to redeem

such shares in connection with the Company’s extraordinary general meeting of shareholders held to approve the proposed Business

Combination Agreement.

In exchange for the foregoing

commitments to purchase and not redeem such Class A ordinary shares, ESGEN agreed to issue, for no consideration an aggregate of

225,174 shares of Class A common stock, par value $ 0.0001 per share, of Zeo Energy Corp., a Delaware corporation and the successor

to ESGEN following the close of the Business Combination Agreement.

Business Combination

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

the registrant consummated its previously announced business combination (the “Closing”), pursuant to that certain Business

Combination Agreement, dated as of April 19, 2023 (as amended on January 24, 2024, the “Business Combination Agreement”),

by and among Zeo Energy Corp., a Delaware corporation (f/k/a ESGEN Acquisition Corporation, a Cayman Islands exempted company), ESGEN

OpCo, LLC, a Delaware limited liability company(“OpCo”), Sunergy Renewables, LLC, a Nevada limited liability company (“Sunergy”),

the Sunergy equityholders set forth on the signature pages thereto or joined thereto (collectively, “Sellers” and each, a

“Seller”, and collectively with Sunergy, the “Sunergy Parties”), for limited purposes, ESGEN LLC, a Delaware limited

liability company (the “Sponsor”), and for limited purposes, Timothy Bridgewater, an individual, in his capacity as the Sellers

Representative (collectively, the “Business Combination”).

Prior to the Closing, (i) except as otherwise specified in the

Business Combination Agreement, each issued and outstanding Class B ordinary share of ESGEN was converted into one Class A ordinary share

of ESGEN (the “ESGEN Class A Ordinary Shares” and such conversion, the “ESGEN Share Conversion”);

and (ii) ESGEN

was domesticated into the State of Delaware so as to become a Delaware corporation (the “Domestication”).

In connection with

the Closing, the registrant changed its name from “ESGEN Acquisition Corporation” to “Zeo Energy Corp.”

In connection with entering into the Business

Combination Agreement, ESGEN and the Sponsor entered into a subscription agreement, dated April 19, 2023, which ESGEN, the Sponsor and

OpCo subsequently amended and restated on January 24, 2024 (the “Sponsor Subscription Agreement”), pursuant to which, among

other things, the Sponsor agreed to purchase an aggregate of 1,000,000 preferred units of OpCo (“Convertible OpCo Preferred Units”)

convertible into Exchangeable OpCo Unites (as defined below) (and be issued an equal number of shares of Zeo Class V Common Stock) concurrently

with the Closing at a cash purchase price of $ 10.00 per unit and up to an additional 500,000 Convertible OpCo Preferred Units (together

with the concurrent issuance of an equal number of shares of Zeo Class V Common Stock) during the six months after Closing if called

Prior to the Closing, ESGEN informed the Sponsor that it wished to call for the additional 500,000 Convertible OpCo Preferred

Units at the Closing and, as a result, a total of 1,500,00 Convertible OpCo Preferred Units and an equal number of shares of Zeo Class

V Common Stock were issued to Sponsor pursuant to the Sponsor Subscription Agreement for aggregate consideration of $ 15,000,000 .

On April 17, 2025, the Company received a notice (the “Notice”)

from Nasdaq notifying the Company that it is not in compliance with the periodic filing requirements for continued listing set forth in

Nasdaq Listing Rule 5250(c)(1) because the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (“Fiscal

Year 2024 10-K”) was not filed with the Securities and Exchange Commission (the “SEC”) by the required due date of March

This Notice received from Nasdaq has no immediate effect on the listing or trading of the Company’s shares.

provided the Company with 60 calendar days, until Sunday, June 16, 2025, to submit a plan to regain compliance.

If Nasdaq accepts the

Company’s plan, then Nasdaq may grant the Company an exception until October 13, 2025 to regain compliance with the Nasdaq Listing

In the disclosure on “Concentration of

credit risk” found in Note 3 - Summary of Significant Accounting Policies, the company identified that two customers

exceeded 10% of accounts receivable.

As of the date of this report, one of those customers has not made payment towards those

accounts receivable and may pose a credit risk of $ 2,306,096 .

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 9A. Controls and Procedures