What changed in this filing

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Item 9A. Controls and Procedures

2026-04-01 compared with 2025-05-28 · 2478 added, 2196 removed, 917 unchanged (84% of the section changed)

54 unchanged sentences

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.

elements resulting in material adjustments that impacted revenue, expenses, assets, and liabilities in the financial statements, 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 plans include the following:

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.

● 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,

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

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

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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.

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-Based 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 Revenues Cutoff – Review revenue and related cost of revenues with executive

team to determine if revenue and related cost of revenues sold is properly recognized.

We cannot assure you that these measures will

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OTHER INFORMATION.

Insider Trading Arrangements

During the quarter ended December 31, 2025, none

of our directors or officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities

to satisfy the affirmative defense conditions of “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement”.

DISCLOSURE REGARDING FOREIGN

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Chief Operating Officer

Gianluca “Luke” Guy

Chief Installation and Strategy Officer and Director

Brandon Bridgewater

4 unchanged sentences

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.

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.

Bridgewater has been a founder and managing director

of Capitol Financial Strategies, LLC (also known as Interlink Capital Strategies), an investment advisory services company, where he has

advised on debt and private equity investments in industries ranging from mining, building materials, renewable energy, and automotive

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

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.

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 has been a founder and managing director of Capitol Financial Strategies,

LLC (also known as Interlink Capital Strategies), an investment advisory services company, where he has advised on debt and private equity

investments in industries ranging from mining, building materials, renewable energy, and automotive component manufacturing to electronics

and software technologies in the U.S.

Bridgewater is the manager of Sunergy Solar LLC.

From October 2018 to September 2020,

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,

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.

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.

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.

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

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

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,

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.

While there, he led accounting,

finance, and treasury functions, helped the company increase its revenue, and helped to close a major private equity financing.

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.

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.

Holbrook was the VP of Accounting and Finance

at HZO, Inc., a nanotechnology manufacturer.

While there, he implemented accounting and finance systems and processes necessary to enable

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

equity financing.

Kalen Larsen.

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

Larsen serves

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

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.

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.

an associate degree from Weber State University with an emphasis in Spanish.

We believe Mr.

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

and proven track record in the solar energy industry.

Gianluca “Luke” Guy.

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.

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 Sunergy’s business expansion through his expertise in

sales, finance, construction, and strategic leadership.

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.

Brandon Bridgewater.

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From September 2017 to December 2018, Mr.

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.

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.

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.

serves as Zeo’s General Counsel and Secretary.

as Zeo’s General Counsel and Secretary.

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

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.

Just prior to becoming

General Counsel and Secretary, he worked as a sole practitioner attorney since November 2022, focusing on renewable energy and nuclear

energy ventures and financing.

From August 2016 to October 2022, he served as Vice President, Associate General Counsel, and Head of Intellectual

Property at Micro Focus International plc (now owned by OpenText Corporation), where he oversaw the company’s efforts to develop

and protect intellectual property.

Prior to that, he spent 21 years as in-house counsel at Novell, Inc., which was acquired by Micro Focus

in 2014 through The Attachmate Group, where he served in various roles, including at times supervising legal affairs for one or more of

Novell’s business units, for its consulting services arm, and for its Latin American and emerging markets businesses.

most of his career, Mr.

Adams has been engaged in international business transactions, technology licensing, and M&A transactions.

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

He has taught as an adjunct professor

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

He has taught as an adjunct professor of law at Brigham Young University,

and holds a J.D.

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

in Computer Science and Statistics

from Brigham Young University.

We believe that Mr.

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

extensive legal expertise.

in Computer Science and Statistics from Brigham Young University.

believe that Mr.

Adams is qualified to serve as a member of our management team because of his extensive legal expertise.

serves as a director of Zeo.

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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.

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.

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

Allen was a Lecturer in the

Accounting and Management Unit at Harvard Business School.

Prior to academia, Dr.

Allen worked as an external

auditor for Deloitte.

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.

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 in the past.

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

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

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.

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.

is well qualified to serve on our board of directors.

Bush 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.

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 2015.

Bush has served as a partner for Asia & America

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

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 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.

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

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.

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

Due to his extensive investment experience in the energy industry,

we believe Mr.

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

Jacobs 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 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 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 U.S.

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

In that role, Mr.

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.

that role, Mr.

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

and repositioned the company to compete in the emerging competitive electricity market.

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

1 unchanged sentence

Jacobs received a B.B.A.

from Southern

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

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

17 unchanged sentences

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.

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

50 unchanged sentences

Bush serves as the chair of the compensation committee.

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.

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

5 unchanged sentences

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 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.

19 unchanged sentences

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.

During the fiscal year ended December 31, 2025,

our Board and audit committee met nine times, and the compensation committee met three times.

During the year ended December 31, 2025,

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

3 unchanged sentences

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.

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

21 unchanged sentences

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.

Cannon Holbrook CFO

Stirling Adams GC

(1) Amounts reflect the full grant-date

fair value of stock awards granted during the applicable fiscal year computed in accordance with ASC 718, rather than the amounts paid

to or realized by the named executive officer.

(2) For 2025 and 2024, the amounts

in this column represent the distributions paid in 2025 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.

in 2025 in connection with the execution of his employment agreement.

(4) Amounts paid to Mr.

2024 for legal services provided to the Company related to the ESGEN transaction prior to his joining the Company.

Narrative to Executive Compensation Table

7 unchanged sentences

(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.

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

of intent not to renew.

In recognition of Mr.

Bridgewater’s

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

and risk profiles, the Company agreed to pay Mr.

Bridgewater’s responsibilities

as the Company’s Chief Executive Officer, and based on comparison to peer organizations with similar activities and risk profiles,

the Company agreed to pay Mr.

Bridgewater a base salary of $390,000.

1 unchanged sentence

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.

Bridgewater, and such bonus shall

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

In addition, Mr.

Bridgewater is eligible

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

● 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 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

Bridgewater is eligible to receive

certain grants of vested shares under the 2024 Plan in accordance with the following schedule (collectively, the “Retention Award”):

● 50,000 vested shares to be

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

● 50,000 vested shares to be

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

● 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 additional vested equity from

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

Bridgewater will be granted vested equity from the 2024 Plan equal

to 1% of the total issued and outstanding capital stock of the Company, (ii) the volume-weighted average price of shares of the publicly

traded stock of the Company exceeds $12.50 for 20 or more days of any consecutive 30-day period, then Mr.

Bridgewater will be granted

additional vested equity from the 2024 Plan equal to 1% of the total issued and outstanding capital stock of the Company, (iii) and the

volume-weighted average price of shares of the publicly traded stock of the Company exceeds $15.00 for 20 or more days of any consecutive

30-day period, then Mr.

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

capital stock of the Company.

In addition, Mr.

Bridgewater is eligible

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

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

for its senior executives.

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

In addition, Mr.

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

by him in connection with this employment.

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.

2 unchanged sentences

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.

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

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 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.

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.

Bridgewater has agreed that

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

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

Bridgewater will terminate employment within fifteen

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

In the event of termination for any reason, Mr.

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 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.

Bridgewater without

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

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.

(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 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.

Bridgewater without

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

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

Bridgewater the following:

(i) pro-rated, based on the number

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

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

(ii) a lump sum cash payment equal

to the sum of the following:

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

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

(iii) 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 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.

3 unchanged sentences

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.

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.

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.

4 unchanged sentences

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.

Holbrook in connection with the execution of the Holbrook Agreement.

Though the agreement does not provide for a guaranteed annual target

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

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

1 unchanged sentence

In addition, Mr.

Holbrook is eligible to

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

in accordance with the following schedule:

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

the Effective Date;

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

after the Effective Date;

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

after the Effective Date;

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

after the Effective Date.

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.

3 unchanged sentences

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.

Holbrook’s employment

will not be deemed to be for Cause unless Mr.

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

allegations upon which a contemplated termination for Cause is based.

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.

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.

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 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.

4 unchanged sentences

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

(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.

(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

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.

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 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

(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

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.

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 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.

3 unchanged sentences

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.

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

5 unchanged sentences

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

Adams a base salary of $290,000, which may be increased from time to time by the Committee in its sole discretion.

Though the agreement does not provide for a guaranteed

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

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.

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.

2 unchanged sentences

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.

● 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).

Adams’ employment

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

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

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.

Adams’ employment will not be deemed

to be for Cause unless Mr.

Adams (with his attorney) is given a reasonable opportunity to respond to all relevant allegations upon which

a contemplated termination for Cause is based.

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.

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 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 without Cause

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

(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.

(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

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.

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 without Cause

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

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

Adams the following:

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

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

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

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

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

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

granted for the year of the date of termination;

(vii) 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

(v) severance payments pro-rated,

based on the number of days worked during the year in which the termination occurs, equal to the greater of any annual target cash bonus

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

(vi) a lump sum cash payment equal

to the sum of the following:

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

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

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

(vii) 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

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.

Adams becoming eligible for group

health insurance coverage under another employer’s plan.

Additionally, Mr.

13 unchanged sentences

Outstanding Equity Awards at 2025 Fiscal Year-End

Zeo did not have any outstanding equity-based

awards as of December 31, 2024.

Timothy Bridgewater

March 13, 2024

March 13, 2026

March 13, 2024

February 13, 2027

Cannon Holbrook

February 5, 2025

August 5, 2026

February 5, 2025

August 5, 2027

Stirling Adams

February 5, 2025

August 5, 2026

February 5, 2025

August 5, 2027

(1) The market value of unvested

restricted stock awards as of December 31, 2025, is calculated by multiplying the number of shares subject to such awards by the closing

price of our Class A common stock on December 31, 2025, the last trading day of the year, which was $1.09 per share.

2024 Omnibus Incentive Equity Plan

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(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).

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

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

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

the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the administrator of the 2024 Plan.

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

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

Shares of Zeo Class A Common Stock subject to an award that expires

or is cancelled, forfeited or otherwise terminated without delivery of shares, tendered in payment of an option, covered by a stock-settled

stock appreciation right or that were otherwise not issued upon settlement, and shares delivered or withheld to satisfy any tax withholding

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

No shares shall be deemed to have been

issued in settlement of a SAR, restricted stock unit or other award that only provides for settlement in, and settles only in, cash.

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

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

Non-Employee Director Compensation

Non-Employee Director Compensation Limits

The fair value of any awards granted under the

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

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

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

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

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.

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,

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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.

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.

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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.

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

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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.

Unless otherwise

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

including the right to vote the shares of Zeo Class A Common Stock subject to the restricted stock award or to receive dividends (or dividend

equivalents) on such shares of Zeo Class A Common Stock subject to the restricted stock award during the restriction period.

In the discretion

of the Committee, dividends distributed prior to vesting may be subject to the same restrictions and risk of forfeiture as the restricted

shares with respect to which the distribution was made.

Restricted Stock Units

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

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

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

RSUs may be subject to the restrictions,

including a risk of forfeiture, imposed by the Committee.

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

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

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

Dividend equivalent rights may be paid currently

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

dividend equivalent rights are granted.

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

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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.

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.

term of a SAR may not exceed ten years.

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

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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

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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 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

Non-Qualified Stock Options and Stock Appreciation

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.

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

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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

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

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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.

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.

unit award will recognize ordinary income at the time the stock is delivered equal to the excess, if any, of (i) the fair market value

of the stock received over any amount paid by the recipient in exchange for the stock or (ii) the amount of cash paid to the participant.

The recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a restricted

stock unit award will be the amount paid for such shares plus any ordinary income recognized when the stock is delivered, and the participant’s

capital gain holding period for those shares will begin on the day after they are transferred to the participant.

Subject to the discussion

under “ - Tax Consequences to Zeo ” below, Zeo and its subsidiaries or affiliates generally should be entitled to a federal

income tax deduction at the time and for the same amount as the participant recognizes ordinary income.

On March 13, 2024, the Board of Directors adopted

a clawback policy which provides for the recovery of certain executive compensation in the event of an accounting restatement resulting

from material non-compliance with financial reporting requirements under the federal securities laws.

Since the adoption of this policy,

there have been no accounting restatements, nor is there any compensation to be recovered.

Tax Consequences to Zeo

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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.

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

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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.

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.

Our directors did not receive any other fees for

their service in 2025.

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.

As of December 31, 2025, there were no outstanding stock 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 May 19, 2025 by:

beneficial ownership of shares of the Company’s common stock as of March 27, 2026, by:

● each person known by the Company

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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.

on 33,593,737 shares of Class A Common Stock issued and outstanding and 24,380,000 shares of Class V Common Stock issued and outstanding

as of March 27, 2026.

In accordance with SEC rules, shares of our common

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Timothy Bridgewater (2)

Gianluca Guy (3)

Brandon Bridgewater (3)

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Cannon Holbrook

All directors and executive officers as a group (9 individuals)

All directors and executive officers as

a group (9 individuals)

Five Percent Holders

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Less than 1%.

(1) Unless otherwise noted, the business address of each of the

directors and officers is 7625 Little Rd, Suite 200A, New Port Richey, FL 34654.

(2) The total number of shares of Class V Common Stock owned

by Timothy Bridgewater comprise (i) 750,000 shares of Class A Common Stock and 1,558,883 shares of Class V Common Stock owned of

record by LCB Trust, his family trust entity and (ii) 1,500,000 shares of Class A Common Stock and 6,651,527 shares of Class V Common

Stock held of record by Sun Managers, LLC for which as the manager he has voting and investment power.

Sun Managers, LLC is expected

to use such shares in connection with a management equity program.

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.

Unless otherwise noted, the business address of each of the directors and officers is 7625 Little Rd, Suite 200A, New Port Richey, FL 34654.

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.

Shares are held of record by Clarke Capital, LLC.

exercises voting and dispositive power over the shares held by such entity.

Bridgewater exercises voting and dispositive power over the shares held by such entity.

Shares are held of record by JKAE Holdings, LLC.

exercises voting and dispositive power over the shares held by such entity.

Larsen 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.

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.

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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.

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 19% 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

have entered into leasing agreements have done so with a third-party leasing company 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

through White Horse, holds 1% or less of the membership interests of the third-party leasing company 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.

For the year ended December 31, 2025, the third-party leasing company managed by White Horse Energy had purchased approximately

$18.1 million in solar energy systems from Zeo for their leasing customers.

As of December 31, 2024, the third-party leasing company managed

by White Horse Energy had purchased approximately $20.6 million in solar energy systems from Zeo for their leasing customers.

As of December

31, 2025, the third-party leasing company had entered into leasing agreements with customers for an additional approximately $1.5 million

in leased systems to be installed by Zeo, if the development and installation of all of those systems continued to completion.

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

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cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

The Sponsor advanced $262,268 to cover expenses related to our IPO

under the April 2021 Promissory Note.

As of December 31, 2024, no covered expenses remained outstanding and due to the Sponsor.

The Sponsor advanced $262,268 to cover expenses

related to our IPO under the April 2021 Promissory Note.

As of December 31, 2025, no covered expenses remained outstanding and due to

On April 5, 2023, ESGEN issued the April 2023

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As of December

31, 2023, ESGEN reported on the balance sheets $120,000 pursuant to this agreement, in “Due to related party”.

31, 2025, there are amounts due to ESGEN reported on the balance sheet pursuant to this agreement.

Amendment to the Letter Agreement

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PRINCIPAL ACCOUNTANT FEES AND SERVICES.

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

On October 31, 2025,

the audit committee of the Board and the Board, after discussion with the management of the Company, approved the dismissal of Grant Thornton

LLP (“GT”), the Company’s independent registered public accounting firm, and approved the appointment of Tanner

LLC (“Tanner”) as the Company’s independent registered public accounting firm for the fiscal year ending December

31, 2025, effective immediately.

GT’s reports on

the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2024 and 2023 did not contain

any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles.

During the period from

April 16, 2024, the date GT was appointed, to October 31, 2025, the date of dismissal, there were no (a) disagreements (as defined in

Item 304(a)(1)(iv) of Regulation S-K and the related instructions) with GT on any matter of accounting principles or practices, financial

statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of GT, would have caused

GT to make reference to such disagreement in its report on the Company’s consolidated financial statements for the relevant year

or (b) “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K and the related instructions), except that there

were material weaknesses in the Company’s internal control over financial reporting, related to ineffective controls over information

and communication and 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 Company’s management also did not design and maintain effective controls over the calculation

of earnings per share and the classification of the reinvestment of interest and dividend income in the statement of cash flows.

material weaknesses in internal control over financial reporting have been disclosed in the company’s quarterly reports on Form

10-Q for 2024 and 2025 and annual report on Form 10-K for the year ended December 31, 2024.

The Audit Committee discussed the subject

matter of each of these reportable events with GT, and the Company authorized GT to respond fully to the inquiries of the successor auditor

concerning the subject matter of each of these reportable events.

During the fiscal years

ended December 31, 2024 and 2023, and the subsequent interim period through October 31, 2025, the Company did not consult with Tanner

regarding the application of accounting principles to a specific completed or contemplated transaction or regarding the type of audit

opinions that might be rendered by Tanner on the Company’s financial statements, and Tanner did not provide any written or oral

advice that was an important factor considered by the Company in reaching a decision as to any such accounting, auditing or financial

reporting issue.

Tanner served as the independent registered public

accounting firm to audit our books and accounts for the fiscal year ended December 31, 2025.

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.

for professional services rendered by Tanner for the year ended December 31, 2025.

Audit-related fees

4 unchanged sentences

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.

provided by Tanner were compatible with maintaining the independence of Tanner as our independent registered public accounting firm.

The table below presents the aggregate fees billed for professional

services rendered by GT for the years ended December 31, 2025 and 2024.

Audit-related fees

4 unchanged sentences

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.

provided by GT were compatible with maintaining the independence of GT as our independent registered public accounting firm.

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES.

4 unchanged sentences

( 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.

5 unchanged sentences

January 25, 2024

Agreement and Plan of Merger and Reorganization, dated as of May 28, 2025, by and among Zeo Energy Corp., Heliogen, Inc., Hyperion Merger Corp.

and Hyperion Acquisition LLC

Certificate of Incorporation of Zeo Energy Corp.

2 unchanged sentences

March 20, 2024

Description of Securities

Amended and Restated Subscription Agreement, dated as of January 24, 2024, by and among ESGEN, OpCo and the Sponsor.

29 unchanged sentences

March 20, 2024

Employment Agreement, dated March 13, 2024, by and between Opco and Cannon Holbrook.

August 20, 2024

Zeo Energy Corp.

1 unchanged sentence

March 20, 2024

Promissory Note, dated December 24, 2024, between Zeo Energy Corp.

and LHX Intermediate LLC.

Promissory Note, dated December 24, 2024, between the Company and LHX Intermediate LLC.

December 26, 2024

Form of Voting Agreement, dated December 24, 2024, between Zeo Energy Corp., LHX Intermediate LLC and certain stockholders of the Company.

December 26, 2024

Asset Purchase Agreement, dated as of October 25, 2024, by and between the Company and the sellers party thereto.

October 31, 2024

Subscription Agreement, dated as of October 25, 2024, by and between the Company and LHX Intermediate LLC.

October 31, 2024

Form of Voting and Support Agreement.

Engagement Letter Third Amendment, dated August 11, 2025

August 19, 2025

Common Stock Purchase Agreement effective January 27, 2026 between the Company and White Lion

January 27, 2026

Registration Rights Agreement effective January 27, 2026 between the Company and White Lion

January 27, 2026

Code of Ethics

Letter from Grant Thornton LLP, dated November 4, 2025 to the Securities and Exchange Commission regarding change in certifying accountant.

November 4, 2025

Letter from BDO, USA P.C.

4 unchanged sentences

April 1, 2024

Consent of Grant Thornton LLP

Certification of Chief Executive

Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Consent of Tanner LLC, independent registered public accounting firm of Zeo Energy Corp.

Consent of Grant Thornton LLP, independent registered public accounting firm of Zeo Energy Corp.

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 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.

5 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 May 27, 2025.

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 31, 2026.

Zeo Energy Corp.

2 unchanged sentences

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.

Pursuant to the requirements of the Securities Exchange Act of 1934,

this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 31, 2026.

/s/ Timothy Bridgewater

1 unchanged sentence

Timothy Bridgewater

(Principal Executive Officer)

/s/ Cannon Holbrook

1 unchanged sentence

Cannon Holbrook

/s/ Gianluca “Luke” Guy

Chief Installation and Strategy Officer and Director

Gianluca “Luke” Guy

(Principal Financial and Accounting Officer)

/s/ Neil Bush

1 unchanged sentence

ZEO ENERGY CORP.

AND SUBSIDIARIES

INDEX TO FINANCIAL STATEMENTS

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

Financial Statements

Report of Independent Registered Public Accounting Firm (Tanner, PCAOB ID 270 ) F-2

Report of Independent Registered Public Accounting Firm (Grant Thornton

LLP, PCAOB ID 248) F-3

Consolidated Balance Sheets as of December 31, 2025 and 2024 F-4

Consolidated Statements of Operations for the Years Ended December 31, 2025 and 2024 F-5

Consolidated Statements of Changes in Redeemable Noncontrolling Interests and Stockholders’ Equity (Deficit) for the Years Ended December 31, 2025 and 2024 F-6

Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024 F-8

Notes to Consolidated Financial Statements F-9

REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of ZEO Energy Corp.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated

balance sheet of Zeo Energy Corp.

and subsidiaries (collectively, the Company) as of December 31, 2025, and the related consolidated statements

of operations, changes in redeemable noncontrolling interests and stockholders’ equity (deficit), and cash flows for the year ended

December 31, 2025, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements

present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations

and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States

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.

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit 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 audit 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 audit provides a reasonable basis for our opinion.

We have served as the Company’s auditor

March 31, 2026

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

Board of Directors and Shareholders

Zeo Energy Corp.

Board of Directors and

Stockholders of ZEO Energy Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheets of Zeo Energy Corp.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023,

the related consolidated statements of operations, changes in shareholders’ deficit, and cash flows for each of the two years in

the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

balance sheet of Zeo Energy Corp.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024, the related

consolidated statements of operations, changes in redeemable noncontrolling interests and stockholders’ equity (deficit), and cash

flows for the year 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.

as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with

accounting principles generally accepted in the United States of America.

Basis for Opinion

2 unchanged sentences

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

statements based on our audit.

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 audit in accordance with the

standards of the PCAOB.

3 unchanged sentences

to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding

As part of our audit, we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s

1 unchanged sentence

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.

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.

Our audit 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 audit 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 audit provides a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor

We served as the Company’s auditor from

2023 to 2025.

Kansas City, Missouri

3 unchanged sentences

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

Accounts receivable, net

Accounts receivable – related parties

Contract assets

1 unchanged sentence

Total Current Assets

Property, equipment and other fixed assets, net

Right -of-use operating lease asset

Right-of-use finance lease asset

Interest receivable – related parties

Deferred tax asset, net

Property and equipment, net

Operating lease right-of-use assets

Finance lease right-of-use assets

Note receivable – related party

Intangibles, net

Related party note receivable

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

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current Liabilities

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

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities – related parties

Contract liabilities

Contract liabilities – related parties

Current portion of operating lease obligations

Current portion of finance lease obligations

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

Convertible promissory note, net

Total Current Liabilities

Obligations under operating leases, non-current

Obligations under finance leases, non-current

Operating lease obligations, net of current portion

Finance lease obligations, net of current portion

Long-term debt, net of current portion

Warrant liabilities

Long-term debt

TOTAL LIABILITIES

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 A convertible preferred units, 1,500,000 units issued and outstanding as of December 31, 2025 and 2024

Class B units, 22,880,000 and 33,730,000 units issued and outstanding as of December 31, 2025 and 2024, respectively

Stockholders’ Equity (Deficit)

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

24,380,000 and 35,230,000 shares issued and outstanding as of December 31, 2025 and 2024, 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

33,180,843 and 13,252,964 shares issued and outstanding as of December 31, 2025 and 2024, respectively

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

( 103,440,891

Total stockholders’ (deficit) equity

( 88,912,079 )

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

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)

TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY (DEFICIT)

The accompanying notes are an integral part

of the financial statements.

of these consolidated financial statements.

ZEO ENERGY CORP.

1 unchanged sentence

Related party revenue, net

Total revenue

Operating costs and expenses:

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

Total Net Revenues

Operating Expenses

Cost of revenues

Depreciation and amortization

2 unchanged sentences

Total Operating Expenses

(Loss) income from operations

LOSS FROM OPERATIONS

( 20,532,132 )

Other income (expenses), net:

Other income, net

Change in fair value of warrant liabilities

( 10,804,760 )

Other Income (Expense)

Interest expense

Total other income (expense), net

Net (loss) income before taxes

Gain on disposal of property and equipment

Gain on change in fair value of warrant liabilities

Total Other Income (Expense)

NET LOSS FROM OPERATIONS BEFORE INCOME TAXES

( 19,365,984 )

Income tax benefit

Net (loss) income

( 10,836,148 )

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

Net loss subsequent to the ESGEN Business Combination

Income tax benefit (provision)

$ ( 19,629,633 )

Net loss attributable to redeemable non-controlling interests

$ ( 9,872,358 )

Net loss attributable to Class A common stock

Net loss attributable to Sunergy Renewables LLC prior to the business combination

$ ( 523,681 )

Basic and diluted net loss per common share

Weighted average units outstanding, basic and diluted

NET LOSS SUBSEQUENT TO THE BUSINESS COMBINATION

( 19,629,633 )

( 9,348,677 )

Net loss attributable to redeemable noncontrolling interests

( 5,620,879 )

( 6,679,788 )

NET LOSS ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS

$ ( 14,008,754 )

$ ( 2,668,889 )

LOSS PER CLASS A COMMON SHARE – BASIC AND DILUTED

WEIGHTED-AVERAGE CLASS A COMMON SHARES OUTSTANDING – BASIC AND DILUTED

COMPREHENSIVE LOSS

Foreign currency translation adjustments

NET COMPREHENSIVE LOSS

$ ( 14,013,649 )

$ ( 2,668,889 )

The accompanying notes are an integral part

of the financial statements.

of these consolidated 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

CONSOLIDATED STATEMENTS OF CHANGES

IN REDEEMABLE

NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE YEAR ENDED DECEMBER 31,

Redeemable Noncontrolling Interests

Preferred Units

Class B Units

Additional Paid-in

Stockholders’ Equity

Balance, December 31, 2023

$ ( 533,345 )

paid to Preferred unit holders

December 31, 2024

Retroactive application of Business Combination

( 1,000,000 )

( 31,155,864 )

Balance, December 31, 2023

Stockholder distributions

Net loss prior to the Business Combination

Effects of Business Combination

Issuance of Class A Shares to third party advisors

Issuance of Class A Shares to backstop investor

Reverse Recapitalization

( 2,498,380 )

( 2,497,805 )

Transaction costs

( 2,890,061 )

Establishment of redeemable noncontrolling interests

( 26,116,548 )

Activities subsequent to business combination

Stock-based compensation

Class A common stock issued for services

Class A common stock issued in the asset acquisition of Lumio

Class A common stock issued private placement

Dividends paid to preferred unit holders

Subsequent measurement of redeemable noncontrolling interests

( 6,047,026 )

( 99,624,976 )

( 105,672,002 )

Net income (loss)

( 16,094,650 )

( 2,668,889 )

Balance, December 31, 2024

$ 115,693,900

$ ( 103,440,891 )

$ ( 88,912,079 )

ZEO ENERGY CORP.

CONSOLIDATED STATEMENTS OF CHANGES

IN REDEEMABLE

NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE YEAR ENDED DECEMBER 31,

Noncontrolling Interests

Preferred Units

Comprehensive

Stockholders’

Balance, December 31,

$ 115,693,900

$ ( 103,440,891 )

$ ( 88,912,079 )

Stock-based compensation

Class A common stock issued upon

vesting of restricted stock awards

Tax withholding paid related to stock-based

Class A common stock issued to employees

Class A common stock issued in exchange

for OpCo class B units and corresponding class V common stock

( 10,850,000 )

( 24,051,500 )

( 10,850,000 )

Class A common stock issued in the

acquisition of Heliogen, Inc.

Class A common stock issued in settlement

of accrued advisory fees

Class A common stock issued upon

conversion of convertible note payable

Dividends paid to preferred unit

Foreign currency translation

Subsequent measurement of redeemable

noncontrolling interests

( 59,384,660 )

( 7,318,540 )

( 14,008,754 )

Balance, December

$ ( 58,064,985 )

The accompanying notes are an integral part

of the financial statements.

of these consolidated financial statements.

ZEO ENERGY CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) income

$ ( 19,629,633 )

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

$ ( 9,872,358 )

Adjustment to reconcile net loss to net cash used in operating activities

Depreciation and amortization

Amortization of debt discount

Gain on change in fair value of warrant liabilities

Gain on disposal of fixed assets

Change in fair value of warrant liabilities

Stock-based compensation

Class A common stock issued to employees for services

Provision for credit losses

Noncash operating lease expense

Stock based compensation expense

Income tax benefit

Deferred taxes

Non-cash operating lease expense

Changes in operating assets and liabilities:

2 unchanged sentences

( 8,785,973 )

Accounts receivable due from related parties

Accounts receivable – related parties

Contract assets

2 unchanged sentences

( 1,076,486 )

Due from related party

( 1,757,354 )

Interest receivable – related parties

Accounts payable

2 unchanged sentences

( 1,996,262 )

Accrued expenses and other current liabilities due to related parties

( 1,140,780 )

Accrued expenses and other current liabilities – related parties

( 3,309,832 )

Contract liabilities

( 3,861,063 )

Contract liabilities due to related parties

Contract liabilities – related parties

( 1,158,848 )

Operating lease payments

Net cash (used in) provided by operating activities

Net cash used in operating activities

( 8,691,421 )

Cash flows from Investing Activities

Purchases of property, equipment and other assets

( 8,716,717 )

Investment in related party note receivable

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property and equipment

( 1,223,400 )

Asset acquisitions

Investment in note receivable – related party

( 3,000,000 )

Net cash used in investing activities

Cash paid in the asset acquisition of Lumio

( 4,000,000 )

Cash acquired in the acquisition of Heliogen

Net cash provided by (used in) investing activities

( 7,369,137 )

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from the issuance of debt

Net proceeds from the issuance of convertible preferred stock

Proceeds from the issuance of Class A common stock in a private placement

Net proceeds from the issuance of convertible promissory note

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

( 3,256,424 )

Net cash provided by (used in) financing activities

Dividends paid to OpCo Class A preferred unit holders

Tax withholdings paid related to stock-based compensation

Distributions to members

Net cash (used in) provided by financing activities

( 4,172,727 )

Net (decrease) increase in cash and cash equivalents

Effect on foreign exchange on cash

NET CHANGE IN CASH AND CASH EQUIVALENTS

( 2,388,191 )

1 unchanged sentence

Cash and cash equivalents, end of the period

Supplemental Cash Flow Information

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid for interest

Accrual of distribution to owners

Cash paid for income taxes

Noncash finance lease expense

Non-cash transactions

NON-CASH INVESTING AND FINANCING ACTIVITIES

Net loss attributable to redeemable noncontrolling interest

OpCo Class A preferred dividends

Subsequent measurement of redeemable noncontrolling interest

$ 105,672,002

Class A common stock issued upon vesting of restricted stock awards

Class A common stock issued in exchange for Class V common stock

Fair value of Class A common stock issued in exchange for OpCo Class B units

Class A common stock issued in settlement of accrued advisory fees

Class A common stock issued upon conversion of convertible note payable

Operating lease right-of-use asset and liability measurement

Accounts payable settled for loan payable

Net assets acquired in the acquisition of Heliogen

Class A common stock issued in the acquisition of Heliogen

Class A common stock issued in the asset acquisition of Lumio

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

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.

The accompanying notes are an integral part

of these consolidated financial statements.

to the Consolidated Financial Statements

NOTE 1 —ORGANIZATION

AND NATURE OF BUSINESS

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.

(“Zeo” or the “Company”)

was incorporated on April 19, 2021 as ESGEN Acquisition Corporation, a Cayman Islands exempted blank check company formed to effect a

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

Sunergy Renewables, LLC, formed in October 2021, and its wholly owned subsidiaries Sunergy Solar LLC (formed in 2005), Sun First Energy,

LLC, and Sunergy Roofing and Construction, LLC (collectively, “Sunergy”) market, sell, design, procure, install and service

residential solar photovoltaic systems and provide related roofing repair and construction services to homeowners in the United States.

The Company is headquartered in New Port Richey, Florida.

ESGEN OpCo, LLC (“OpCo”), a Delaware

limited liability company, holds the operating businesses of Sunergy.

The Company operates under an Up-C organizational structure in which

Zeo’s principal asset is its equity interest in OpCo.

Zeo is the managing member of OpCo and controls its management and operations,

holding OpCo manager units representing its economic interest.

Other members hold exchangeable OpCo units representing their economic

interests, which are exchangeable into shares of the Company’s Class A common stock on a one-for-one basis.

On March 13, 2024, ESGEN Acquisition Corporation

consummated a business combination with Sunergy and domesticated to the State of Delaware, changing its name to Zeo Energy Corp.

business combination was accounted for as a reverse recapitalization, with Sunergy treated as the accounting acquirer.

Accordingly, the

consolidated financial statements for periods prior to March 13, 2024 represent the historical financial statements of Sunergy, with the

equity structure retroactively adjusted to reflect the capital structure of Zeo.

See Note 4—Reverse Recapitalization for additional

On August 8, 2025, Zeo completed the acquisition

of Heliogen, Inc.

and its subsidiaries (collectively, “Heliogen”), a provider of concentrated solar power and long-duration

energy generation and storage technology solutions for commercial and industrial applications.

Heliogen became a wholly owned subsidiary

The acquisition was accounted for as a business combination.

See Note 6—Business Combinations for additional information.

Zeo, together with OpCo and its subsidiaries,

including Sunergy and Heliogen, is referred to collectively as the “Company.” The accompanying consolidated financial statements

include the accounts of Zeo, OpCo and its subsidiaries, including Sunergy, and Heliogen.

Ownership interests in OpCo held by members other

than Zeo represent noncontrolling interests (“NCI”).

All intercompany balances and transactions have been eliminated in consolidation.

The Company’s Class A common stock and public warrants are listed on The Nasdaq Stock Market LLC (“Nasdaq”) under the

symbols “ZEO” and “ZEOWW,” respectively.

NOTE 2 —LIQUIDITY

AND GOING CONCERN ASSESSMENT

As of December 31, 2025, the Company had cash

and cash equivalents of $ 6.1 million, positive working capital of $ 14.2 million, and total stockholders’ equity of $ 5.3 million.

For the year ended December 31, 2025, the Company incurred a net loss of $ 19.6 million and $ 8.7 million of cash used in operating activities.

Management has assessed the going concern assumptions of the Company during the preparation of these consolidated financial statements.

The Company has operational plans to increase

revenue and profitability in 2026 which are expected to improve cash flows.

The operational plan includes an increase in the number of

sales agents to increase revenue and improved efficiency in the operations of the Company through centralization of field offices and

labor and productivity improvement in the corporate operations through the implementation of a new CRM software.

The Company is also working with partners to see

to short-term cash needs through the use of the common stock purchase agreement with White Lion Capital LLC (the “White Lion ELOC”),

which provides the Company the right to sell up to $ 30.0 million in shares of Class A common stock.

See Note 23—Subsequent Events

for additional information.

The Company also has other opportunities to raise capital, such as through a private investment in public

equity or repricing of warrants.

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.

NOTE 3 —SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements of the Company

are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

codified in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”).

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.

consolidated financial statements include the results of operations of Heliogen subsequent to the acquisition date of August 8, 2025.

See Note 6—Business Combinations for additional information.

Principles of Consolidation

The consolidated financial statements include

the accounts of Zeo and its subsidiaries.

Zeo consolidates OpCo because Zeo is the managing member of OpCo and controls its management

and operations.

Ownership interests in OpCo held by members other than Zeo represent NCI.

Because these interests are redeemable at the

option of the holders, they are classified as redeemable NCI and presented outside of permanent equity in the consolidated balance sheets.

See Note 17—Redeemable Noncontrolling Interests and Equity for additional information.

All intercompany balances and transactions

have been eliminated in consolidation.

Variable Interest Entities

The Company evaluates its interests in other entities

to determine whether those entities are variable interest entities (“VIEs”) and whether the Company is the primary beneficiary

of any such VIE in accordance with ASC 810, “ Consolidation.

” An entity is considered a VIE if it lacks sufficient equity

at risk to finance its activities without additional subordinated financial support, or if the equity holders, as a group, lack the characteristics

of a controlling financial interest.

The Company is deemed the primary beneficiary

of a VIE if it has both (a) the power to direct the activities that most significantly impact the VIE’s economic performance and

(b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

The Company performs

this assessment at the inception of any arrangement that may involve a VIE and reassesses on an ongoing basis if certain reconsideration

events occur.

If the Company determines that it is the primary beneficiary of a VIE, the VIE is consolidated in the Company’s financial

If the Company holds a variable interest in a VIE but is not the primary beneficiary, the interest is not consolidated and

is accounted for under other applicable guidance.

The Company has evaluated certain related party

arrangements involving entities under common management and has concluded that it is not the primary beneficiary of those entities.

Note 5—Variable Interest Entities for additional information.

Use of Estimates

The preparation of the Company’s consolidated financial statements

in conformity with US GAAP requires it to make estimates and assumptions that affect the reported amounts of assets and liabilities

and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues

and expenses for the reporting period.

Some of the more significant estimates include fair value of preferred shares, fair value of assets

acquired and liabilities assumed in asset acquisitions, share-based compensation, fair value of warrant liabilities, redemption value

of non-controlling interest, subsequent realizability of intangible assets, depreciation and amortization periods and collectability of

accounts receivable.

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

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

The Company bases its estimates and assumptions on historical experience

and other factors, including the current economic environment and on various other judgements that it believes to be reasonable under

the circumstances.

The Company adjusts such estimates and assumptions when facts and circumstances dictate.

Changes in those estimates

resulting from continuing changes in the economic environment could have a material effect on the financial condition and results of operations

in future periods.

Segment Information

Operating segments are defined as components of an enterprise for which

separate discrete financial information is evaluated regularly by the chief operating decision maker (“CODM”), in deciding

how to allocate resources and assess performance.

The CODM reviews financial information presented on a consolidated basis for the purposes

of allocating resources and evaluating financial performance.

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

and reportable segment.

(See Note 19)

The preparation of consolidated financial statements

in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities

and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported

amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Significant estimates include, but are not limited

to, revenue recognition for solar system installations, allowance for credit losses, reserves for excess and obsolete inventory, impairment

evaluations of long-lived assets and goodwill, fair value measurements of warrant liabilities, fair value of assets acquired and liabilities

assumed in business combinations, stock-based compensation, and assessments of contingent liabilities.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with

original maturities of three months or less from the purchase date to be cash equivalents.

The Company maintains its cash in checking

and savings accounts.

Income generated from cash held in savings accounts is recorded as interest income.

The carrying value of the Company’s

savings accounts is included in cash and cash equivalents and approximates the fair value.

Accounts receivable, net of allowance for credit losses

Accounts receivable is presented at the invoiced receivable amounts,

less any allowance for any potential expected credit loss amounts, and do not bear interest.

The Company estimates allowance for credit

losses based on the creditworthiness of each customer, historical collections experience, forward looking information and other information

including the aging of the receivables.

The majority of our customers lease or finance their purchase and installation of solar panels

through various financing companies.

The financing companies remit payment to the Company typically within 3 weeks after installation.

The Company is not deemed a borrower with these financing agreements and as a result is not subject to any of the terms of the financing

transaction between the financing company and the customer.

In September 2024, based on a reassessment of creditworthiness of customers,

historical collections experience, forward looking information and other information including the aging of the receivables, the Company

revised its estimate of allowance for credit losses.

This change in estimate has been accounted for prospectively in accordance

with ASC 250 , Accounting Changes and Error Corrections .

In accordance with

its policy, the Company reviews the estimated allowance for credit losses on an ongoing basis.

This review indicated that the estimated

allowance for credit losses in the Company’s consolidated financial statements should be increased.

As a result, effective September

30, 2024, the Company recorded a change in estimate to increase the three and nine months provision for credit losses by $ 1,820,365 , increase

net loss by $ 1,820,365 for the three and nine months ended September 30, 2024, and increase basic and diluted net loss per common share

by $ 0.30 and $ 0.49 for the three and nine months ended September 30, 2024.

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

Cash and cash equivalents consist of cash on hand

and highly liquid investments with original maturities of three months or less.

The Company maintains deposits in several financial institutions,

which may at times exceed amounts covered by insurance provided by the U.S.

Federal Deposit Insurance Corporation (“FDIC”).

The Company has not experienced any losses related to amounts in excess of FDIC limits.

As of December 31, 2025 and 2024, the Company

had $ 5,294,023 and $ 5,234,292 in excess of FDIC limits, respectively.

Concentration of Credit Risk

Financial instruments that potentially subject

the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

The Company maintains

its cash balances with high-credit-quality financial institutions.

At times, such balances may exceed federally insured limits provided

The Company has not experienced any losses related to these balances.

The Company’s accounts receivable are primarily

due from third-party financing companies that provide financing to the Company’s customers for the purchase and installation of

solar systems.

The Company incurred losses due to the bankruptcy of two third-party financing companies in 2025.

The Company makes efforts

to monitor the credit worthiness of these companies through communication with the companies and discussions with peer companies who also

do business with these third-party financing companies.

The Company is regularly pursuing opportunities to diversify the third-party financing

companies with who it works in an effort to minimize the concentration of risk.

During the year ended December 31, 2025, approximately

46 % of the equipment installed by the Company was purchased through a single distributor, Greentech Renewables.

The Company’s agreement

with Greentech does not obligate either party to continue conducting business with the other.

While the Company believes alternative distributors

are available, the loss of this relationship could temporarily disrupt procurement and installation activities.

The Company has certain

revenue and accounts receivable concentrations among a limited number of third-party financing companies, including a related party.

Note 8—Disaggregation of Revenues and Segment Reporting and Note 16—Related Party Transactions for additional

Accounts Receivable and Allowance for Credit

Accounts receivable consist of trade receivables

arising from credit sales to customers in the normal course of business.

A significant portion of the Company’s customers lease

or finance the purchase and installation of solar systems through third-party financing companies.

These financing companies typically

remit payment to the Company within three weeks following installation.

The Company is not deemed a borrower under these financing arrangements

and is not subject to the terms of the financing agreements between the financing companies and the customers.

Accounts receivable are recorded at the

invoiced amount, net of an allowance for current expected credit losses.

In accordance with ASC 326, “ Financial

Instruments—Credit Losses ,” the Company estimates expected credit losses on accounts receivable using an aging

analysis that incorporates historical loss experience, customer creditworthiness, prevailing economic conditions, and reasonable and

supportable forward-looking information.

The Company also provides an allowance for customers determined to be insolvent.

receivable balances are written off when they are determined to be uncollectible.

As of December 31, 2025, the Company has chosen

not to write off the accounts receivable associated with bankrupt customers pending the outcome of the bankruptcy proceedings.

The following table presents activity in the allowance

for current expected credit losses for the years ended December 31, 2025 and 2024:

Allowance for credit losses – beginning balance

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.

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

Allowance for credit losses – ending balance

Revenue Recognition and Cost of Revenues

The Company recognizes revenue in accordance with

ASC 606, “ Revenue from Contracts with Customers .” Revenue is recognized when control of promised goods or services

transfers to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those

goods or services.

The Company generates revenue primarily from the

design, engineering, procurement, and installation of residential solar energy systems and related roofing services.

Solar installation

contracts typically include equipment and installation services that are highly integrated and combined to deliver a completed solar energy

Because the individual goods and services are not distinct within the context of the contract and are significantly integrated,

the Company accounts for each solar installation contract as a single performance obligation.

Revenue from roofing services is recognized at

a point in time upon completion of the roofing project when control transfers to the customer.

The transaction price is generally fixed based

on the contractual price specified in the installation agreement.

The Company evaluates contracts for the existence of variable consideration

and significant financing components.

Variable consideration, if present, is included in the transaction price only to the extent that

it is probable that a significant reversal of revenue will not occur.

Due to the short duration of the Company’s installation projects,

contracts generally do not contain significant financing components.

The Company satisfies its performance obligation

and recognizes revenue at a point in time when control of the installed solar system transfers to the customer.

Control transfers when

installation of the system is complete and the system is capable of operating as intended (the “Installation Verified” milestone).

At this stage, the system is fully installed, permanently affixed to the property, and no substantive construction or integration services

remaining to be performed by the Company.

Following completion of installation, the system

must receive Permission to Operate (“PTO”) from the local utility before electricity can be exported to the grid.

PTO represents

a regulatory authorization issued by the utility and does not represent a separate performance obligation.

Accordingly, PTO does not constitute

a separate performance obligation and does not affect the timing of revenue recognition.

Many customers finance the purchase and installation

of solar systems through third-party financing companies.

In these arrangements, the financing company remits payment to the Company upon

completion of installation, typically net of financing-related fees.

Revenue is recognized at the contractual amount with the customer,

net of financing-related fees.

Cash payments received from customers or third-party financing companies prior to completion of the Company’s

performance obligation are recorded as contract liabilities and recognized as revenue when installation is complete and control of the

system transfers to the customer.

Cost of revenues consists primarily of equipment,

materials, subcontractor costs, and direct labor associated with the installation of solar energy systems and roofing projects.

incurred in connection with installation activities are generally expensed as incurred.

Equipment and materials purchased prior to installation

may be recorded as inventory or prepaid expenses and are recognized in cost of revenues when the related installation project is completed.

See Note 8—Disaggregation of Revenues and Segment Reporting for additional information.

Segment Reporting

The Company reports segment information in accordance

with ASC 280, “ Segment Reporting .” Operating segments are defined as components of an enterprise for which separate

financial information is available and whose operating results are regularly reviewed by the chief operating decision maker (“CODM”)

to allocate resources and assess performance.

The Company’s CODM is its Chief Executive Officer (“CEO”).

Following the acquisition of Heliogen on August

8, 2025, the Company reassessed its segment structure and determined that it operates in two operating and reportable segments:

which includes the design, procurement, installation, and servicing of residential solar photovoltaic systems and related roofing services;

and (2) Heliogen, which includes concentrated solar power and long-duration energy generation and storage technology solutions for commercial

and industrial applications.

Prior to the acquisition of Heliogen, the Company

operated as a single operating and reportable segment consisting of its solar installation and related services operations.

8—Disaggregation of Revenues and Segment Reporting for additional information.

Notes 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 each reporting period

under the current expected credit loss model in accordance with ASC 326.

An allowance for expected credit losses is recorded when necessary

to reflect estimated uncollectible amounts.

See Note 16—Related Party Transactions for additional information.

Inventories are primarily comprised of solar panels

and other related components necessary for installations and service needs.

Inventories are measured at the lower of cost or net realizable

value, with cost determined using the 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 revenues in the consolidated statements of operations in the period identified.

As of December 31, 2025 and 2024, inventory was

$ 852,179 and $ 872,470 , respectively.

Contract Assets and Liabilities

Contract assets represent revenue recognized in

excess of amounts billed to customers when the Company has satisfied performance obligations but does not yet have an unconditional right

Contract assets are reclassified to accounts receivable when the Company’s right to payment becomes unconditional.

liabilities represent payments received in advance of the satisfaction of performance obligations and are recognized as revenue when the

related performance obligations are satisfied.

Changes in contract asset and contract liability balances during the reporting period primarily

result from the timing differences between the Company’s performance of services and customer billing or cash collections and are

reflected in the corresponding balances within accounts receivable and deferred revenue in the accompanying consolidated balance sheets.

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.

Prepaid expenses and other current assets consist

primarily of employee advances, advanced sales commissions, prepaid insurance, and other similar current assets.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation.

Depreciation is computed using the straight-line method over the estimated useful lives of the related assets.

Leasehold improvements

are amortized over the shorter of the lease term or the estimated useful life of the related asset.

Maintenance and repairs are expensed

Expenditures that substantially extend the useful lives of existing assets or improve the efficiency or functionality of

the assets are capitalized.

Upon retirement or disposal, the cost and related accumulated depreciation are removed from the accounts and

any resulting gain or loss is recognized in the consolidated statements of operations.

Estimated useful lives of property and equipment

are as follows:

Leasehold improvements

Office furniture and equipment

Internally-developed software

Internally-Developed Software

The Company capitalizes certain costs incurred

in connection with the development of internally-developed software in accordance with ASC 350-40, “ Intangibles—Internal-Use

Software .” Costs incurred during the preliminary project stage and post-implementation stage are expensed as incurred.

incurred during the application development stage are capitalized once management authorizes and commits to funding the project and it

is probable that the project will be completed and used as intended.

Capitalized internally-developed software costs

include payroll and payroll-related costs for employees directly involved in the development of the software and external costs incurred

in connection with the development of the software.

Capitalization ceases when the software is substantially complete and ready for its

intended use.

Capitalized internally-developed software costs are amortized using the straight-line method over the estimated useful life

of the software.

The Company evaluates all contracts at inception

or upon modification to determine whether the contract contains a lease in accordance with ASC 842, “ Leases .” A contract

is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Control over the use of the identified asset exists when the lessee has both the right to obtain substantially all of the economic benefits

from the use of the asset and the right to direct the use of the asset.

Contracts containing a lease are further evaluated for classification

as operating or finance leases.

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.

At the commencement of a lease, the Company recognizes

right-of-use (“ROU”) assets and related lease liabilities on the consolidated balance sheets for leases with a term greater

than one year.

Lease liabilities and the corresponding ROU assets are initially measured at the present value of the unpaid lease payments

as of the lease commencement date.

If a lease contains renewal or termination options, the exercise of those options is included in the

lease term when the Company is reasonably certain the option will be exercised.

Because the Company’s leases generally do not provide

an implicit rate, the Company uses an estimated incremental borrowing rate (“IBR”) based on information available at the lease

commencement date to determine the present value of lease payments.

The IBR represents the rate the Company would incur to borrow on a

collateralized basis over a similar term in an amount equal to the lease payments.

When calculating the present value of lease payments,

the Company accounts for lease and non-lease components as a single lease component.

Variable lease payments are expensed as incurred.

The Company does not recognize ROU assets and lease liabilities for short-term leases with an initial lease term of 12 months or less.

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 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

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 )

( 1,149,047 )

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.

Leases that transfer substantially all of the

risks and benefits of ownership of the underlying asset to the Company are accounted for as finance leases.

At lease commencement, the

Company recognizes a ROU asset and a corresponding lease liability.

Lease cost for finance leases consists of amortization of the ROU

asset and interest expense on the lease liability.

The ROU asset is amortized on a straight-line basis and recorded in depreciation and

amortization, while interest on the lease liability is recognized using the effective interest method and recorded as interest expense

in the consolidated statements of operations.

Finance lease ROU assets are amortized over the shorter of the lease term or the estimated

useful life of the underlying asset.

If the Company is reasonably certain to exercise a purchase option, the ROU asset is amortized over

the estimated useful life of the underlying asset.

Commitments and Contingencies

The Company accounts for commitments and contingencies

in accordance with ASC 450, “ Contingencies .” Liabilities for loss contingencies are recorded when it is probable that

a liability has been incurred and the amount of the loss can be reasonably estimated.

If a range of loss is determined to be probable

and no amount within the range is a better estimate than another, the minimum amount of the range is recorded.

If a loss is reasonably

possible but not probable, the Company discloses the nature of the contingency and an estimate of the possible loss or range of loss if

such estimate can be made.

Contingencies include, but are not limited to, litigation, regulatory matters, contractual obligations, and

other claims arising in the normal course of business.

Business Combinations

The Company accounts for business combinations

under the acquisition method of accounting in accordance with ASC 805, “ Business Combinations .” The Company allocates

the purchase price of an acquisition to the tangible and intangible assets acquired, liabilities assumed, and any NCI based on their estimated

fair values at the acquisition date.

The Company recognizes the amount by which the purchase price of an acquired entity exceeds the net

of the fair values assigned to the assets acquired and liabilities assumed as goodwill.

In determining the fair values of assets acquired

and liabilities assumed, the Company uses various recognized valuation methods, including the income, cost, and market approaches, in

accordance with ASC 820, “ Fair Value Measurement.

” The Company makes assumptions within certain valuation techniques,

including discount rates, royalty rates, and the amount and timing of future cash flows.

The Company initially performs these valuations

based on preliminary estimates and assumptions by management or, where appropriate, independent valuation specialists under the Company’s

The Company may revise these estimates and assumptions as additional information becomes available during the measurement

period, which may extend up to one year from the acquisition date.

Acquisition-related expenses are recognized separately from business

combinations and are expensed as incurred.

Intangible Assets

Acquired identifiable intangible assets are recorded

at fair value at the acquisition date and are amortized on a straight-line basis over their estimated useful lives.

Estimated useful lives

are determined based on the period over which the assets are expected to contribute to future cash flows.

The Company has no intangible

assets with indefinite lives.

In accordance with ASC 350, “ Intangibles—Goodwill

and Other ,” goodwill is not amortized but is tested for impairment annually on December 31, or more frequently if events or

circumstances indicate that goodwill may be impaired.

When assessing the recoverability of goodwill,

the Company may first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting

unit is less than its carrying amount.

The qualitative assessment considers factors including the current operating environment, industry

and market conditions, cost factors, overall financial performance, and other relevant events.

If the Company bypasses the qualitative

assessment, or concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the

Company performs a quantitative assessment by comparing the estimated fair value of the reporting unit with its carrying amount.

estimates the fair value of its reporting units based on the present value of estimated future cash flows.

Considerable management judgment

is required in evaluating operating and macroeconomic conditions and estimating future cash flows, including assumptions related to growth

rates and discount rates.

If the carrying amount of a reporting unit exceeds

its estimated fair value, an impairment loss is recognized for the amount of the excess, limited to the total amount of goodwill allocated

to the reporting unit.

Long-Lived Assets

The Company reviews the carrying value of long-lived

assets, including property and equipment, ROU assets, and definite-lived intangible assets, for impairment in accordance with ASC 360,

“ Property, Plant, and Equipment, ” whenever events or changes in circumstances indicate that the carrying amount of

an asset or asset group may not be recoverable.

Such events or circumstances may include significant decreases in the market price of

an asset, significant changes in the extent or manner in which an asset is used or in its physical condition, significant adverse changes

in legal factors or in the business climate, a history or forecast of operating or cash flow losses, significant disposal activity, a

significant decline in revenue, or other indicators that the carrying value of an asset may not be recoverable.

If indicators of impairment

are present, the Company evaluates recoverability by comparing the carrying amount of the asset or asset group to the estimated undiscounted

future cash flows expected to result from the use and eventual disposition of the asset or asset group.

If the carrying amount exceeds

the estimated undiscounted future cash flows, an impairment loss is recognized for the amount by which the carrying amount exceeds the

asset’s fair value.

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.

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.

The Company applies the fair value hierarchy in accordance with ASC 820, which prioritizes the inputs used to measure fair value.

hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to

unobservable 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.

Level 1 – Inputs based on unadjusted quoted

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, quoted prices for identical or

similar instruments in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Inputs that 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

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 based on the lowest level input that is significant to the fair value measurement.

See Note 20—Fair

Value Measurements for additional information.

Warrant Liabilities

The Company accounts for warrants in accordance

with ASC 480, “ Distinguishing Liabilities from Equity ,” and ASC 815-40, “ Derivatives and Hedging—Contracts

in Entity’s Own Equity .” The Company evaluates the terms of each warrant instrument to determine whether the warrants should

be classified as equity or as liabilities.

This evaluation includes an assessment of whether the warrants are freestanding financial instruments,

whether the warrants are indexed to the Company’s own common stock, and whether the warrant terms could require net cash settlement

or otherwise fail to meet the conditions for equity classification.

Warrants that meet the criteria for equity classification

are recorded in additional paid-in capital and are not subsequently remeasured.

Warrants that do not meet the criteria for equity classification

are recorded as liabilities at fair value on the date of issuance.

Liability-classified warrants are remeasured at fair value at each

reporting date, with changes in fair value recognized in the consolidated statements of operations until the warrants are exercised, expire,

or are otherwise settled.

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 NCI represents the ownership interests

in OpCo held by legacy OpCo unitholders other than Zeo.

Zeo consolidates OpCo as the managing member;

however, the legacy OpCo unitholders

retain an economic interest in OpCo through their ownership of OpCo common units.

In connection with the Sunergy business combination,

legacy OpCo unitholders received OpCo common units together with a corresponding number of shares of Zeo’s Class V common stock.

Each OpCo common unit, together with the cancellation of the paired share of Class V common stock, may be exchanged at the election of

the holder for either (i) one share of Zeo’s Class A common stock or (ii) cash equal to the fair value of a share of Class A common

stock, subject to the terms of the exchange agreement and approval of Zeo’s board of directors.

Because these exchange rights are not solely within

the control of the Company, the related NCI is classified as redeemable NCI and is presented outside of permanent equity as temporary

equity on the consolidated balance sheets.

Redeemable NCI were initially measured at the

legacy OpCo unitholders’ proportionate share of OpCo’s net assets at the closing of the Sunergy business combination.

Subsequently,

the carrying value of the redeemable NCI is remeasured at each reporting date based on the fair value of the Company’s Class A common

Changes in the redemption value are recorded as deemed dividends, which reduce additional paid-in capital or, in the absence of

additional paid-in capital, retained earnings.

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

Redeemable convertible preferred units represent

preferred equity interests issued at the OpCo level.

These units are presented as NCI in the Company’s consolidated financial statements

because they are issued by OpCo and are not owned by Zeo.

The redeemable convertible preferred units 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

As a result, these units are classified outside of permanent equity as temporary

equity on the consolidated balance sheets.

The redeemable convertible preferred units are initially recorded at fair value on the date

of issuance, net of issuance costs.

Subsequent adjustments to the carrying value are recorded in accordance with the terms of the applicable

unit agreements and relevant accounting guidance.

See Note 17—Redeemable Noncontrolling Interests and Equity for additional

Stock-based Compensation

The Company accounts for stock-based compensation

in accordance with ASC 718, “ Compensation—Stock Compensation .” Stock-based awards granted to employees, non-employee

directors, and consultants are measured at the grant-date fair value of the award and recognized as compensation expense over the requisite

service period, which is generally the vesting period.

Restricted stock awards are measured based on

the closing market price of the Company’s common stock on the grant date.

Compensation cost for awards with only service-based vesting

conditions is recognized on a straight-line basis over the requisite service period.

For awards with graded vesting features, the Company

recognizes compensation expense for each separate vesting tranche over its respective service period.

For awards with market-based vesting conditions,

the Company estimates grant-date fair value using a Monte Carlo simulation model.

Compensation cost for market-condition awards is recognized

over the derived service period regardless of whether the market condition is achieved.

The Company has elected to recognize forfeitures

as they occur rather than estimate expected forfeitures.

The Company accounts for income taxes in accordance

with ASC 740, “ Income Taxes .” Zeo is subject to U.S.

federal, state, and local income taxes.

OpCo is treated as a partnership

federal income tax purposes and generally does not pay U.S.

federal income taxes.

Instead, the OpCo unitholders, including Zeo,

are liable for U.S.

federal income taxes on their respective shares of OpCo’s taxable income.

OpCo may be subject to certain state

and local income or franchise taxes in jurisdictions that tax entities classified as partnerships.

Under the asset and liability method,

deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial

statement carrying amounts of assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured

using enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered

The effect of changes in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment

The Company evaluates the realizability of deferred

tax assets and records a valuation allowance when, based on the weight of available evidence, it is more likely than not that some or

all of the deferred tax assets will not be realized.

The Company recognizes the tax benefit of uncertain

tax positions only when it is more likely than not that the position will be sustained upon examination by taxing authorities, including

resolution of any related appeals or litigation.

The tax benefit recognized is measured as the largest amount that has a greater than

50 percent likelihood of being realized upon ultimate settlement.

Interest and penalties related to unrecognized tax benefits are recognized

as a component of income tax expense.

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

In connection with the Sunergy business combination,

the Company entered into a Tax Receivable Agreement (“TRA”) with certain former equity holders of Sunergy.

The TRA generally

provides for the payment by the Company to the TRA holders of 85 % of the cash tax savings, if any, that the Company realizes, or is deemed

to realize, as a result of increases in the tax basis of OpCo’s assets attributable to the exchange of Exchangeable OpCo Units for

shares of the Company’s Class A common stock and certain other tax benefits.

The Company records a liability under the TRA when

it is probable that future tax savings associated with exchanges or other tax attributes will be realized.

The liability is measured based

on the enacted tax rates expected to apply when the tax benefits are realized.

Changes in the estimated liability under the TRA are recognized

in the consolidated statements of operations in the period of change.

See Note 16—Related Party Transactions for additional

Loss Per Share

Basic loss per share is calculated by dividing

net loss attributable to Zeo by the weighted average number of shares of Class A common stock outstanding during the period.

Diluted loss per share is calculated by adjusting

the weighted average number of shares of Class A common stock outstanding for the potential dilutive effect of common stock equivalents,

including warrants, stock options, restricted stock awards, and other convertible instruments, if applicable.

The Company uses the treasury stock method to

determine the dilutive effect of certain potential common stock equivalents.

Instruments that are convertible into shares of Class A common

stock, including Exchangeable OpCo Units, are evaluated using the if-converted method, which assumes the conversion of such instruments

at the beginning of the reporting period and adjusts the numerator and denominator of the earnings per share calculation accordingly.

Potential common stock equivalents whose effect

would be anti-dilutive are excluded from the computation of diluted loss per share.

See Note 22—Net Loss Per Share for additional

Advertising and Marketing Costs

Advertising and marketing costs are expensed as

incurred and are included in sales and marketing expenses in the consolidated statements of operations.

Reclassifications

Certain prior period amounts have been reclassified

to conform to the current period presentation of the consolidated financial statements.

These reclassifications had no impact on previously

reported net loss, total assets, total liabilities, stockholders’ deficit, or cash flows from operating activities.

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.

In August 2023, the FASB issued Accounting Standards

Update (“ASU”) 2023-05, “ Business Combinations—Joint Venture Formations (Subtopic 805-60):

Recognition and

Initial Measurement ,” which requires a newly-formed joint venture to apply a new basis of accounting to its contributed net

assets, resulting in the joint venture initially measuring its contributed net assets at fair value on the formation date.

is effective for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted.

amendments are to be applied prospectively, with retrospective application permitted for joint ventures formed before the effective date.

The adoption of ASU 2023-05 did not have a material impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09,

“ Income Taxes (Topic 740):

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.

Improvements to Income Tax Disclosures ,” which enhances the transparency and decision usefulness

of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation

and (2) income taxes paid disaggregated by jurisdiction.

It also includes certain other amendments to improve the effectiveness of income

tax disclosures.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

These amendments

are to be applied prospectively, with retrospective application permitted.

The adoption of ASU 2023-09 did not have a material impact

on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

Not Yet Adopted

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 ,” which requires disaggregated disclosure of specific expense categories, including purchases of

inventory, employee compensation, depreciation, and amortization included in each relevant expense caption presented on the statement

of operations.

The standard also requires a qualitative description of the amounts remaining in relevant expense captions that are not

separately disaggregated quantitatively, as well as the total amount of selling expenses and an entity’s definition of selling expenses.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

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.

In May 2025, the FASB issued ASU 2025-03, “ Business

Combinations (Topic 805) and Consolidation (Topic 810):

Determining the Accounting Acquirer in the Acquisition of a Variable Interest

Entity ,” which requires entities to consider existing factors in ASC 805 when identifying the accounting acquirer in a transaction

effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity that meets the definition

of a business.

ASU 2025-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted.

is currently evaluating the impact this standard will have on its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, “ Financial

Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets ,” which

introduces a practical expedient for the application of the current expected credit loss model to current accounts receivable and contract

The amendment is effective for interim and annual periods beginning after December 15, 2025, with early adoption permitted.

amendment is to be applied on a prospective basis.

The Company is currently evaluating the impact this standard will have on its consolidated

financial statements.

In September 2025, the FASB issued ASU 2025-06,

“ Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting

for Internal-Use Software.

” This guidance removes references to project stages throughout ASC 350-40 and clarifies the threshold

entities apply to begin capitalizing costs.

Under the new standard, cost capitalization should only commence when an entity has committed

to funding a software project and it is probable the project will be completed and the software will be used for its intended purpose.

The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those

annual reporting periods.

Entities may apply the guidance using a prospective, retrospective or modified transition approach.

Early adoption

is permitted as of the beginning of an annual reporting period.

The Company is currently evaluating the impact this standard will have

on its consolidated financial statements.

The Company currently believes there are no other

issued and not yet effective accounting standards that are materially relevant to its consolidated financial statements.

NOTE 4 —REVERSE

RECAPITALIZATION

On March 13, 2024, the Company consummated the

Sunergy business combination described in Note 1—Organization and Nature of Business .

Prior to the closing of the transaction,

ESGEN domesticated from the Cayman Islands to the State of Delaware and changed its name to Zeo Energy Corp.

In connection with the Sunergy

business combination, Sunergy and its subsidiaries were contributed to OpCo, and ESGEN contributed substantially all of its assets, including

cash held in its trust account after stockholder redemptions, to OpCo in exchange for OpCo common units.

Following the transaction, the

Company operates under an Up-C organizational structure in which the Company’s principal asset is its equity interest in OpCo.

Legacy OpCo unitholders received OpCo common units

together with a corresponding number of shares of the Company’s Class V common stock.

The Class V shares provide voting rights but

no economic rights and are paired with OpCo common units.

The OpCo common units are exchangeable, together with the cancellation of the

paired Class V shares, for shares of the Company’s Class A common stock on a one-for-one basis or, at the Company’s election,

cash equal to the fair value of such shares.

The Sunergy business combination was accounted

for as a reverse recapitalization in accordance with U.S.

GAAP, with Sunergy treated as the accounting acquirer and ESGEN treated as the

acquired company for financial reporting purposes.

As a result, the consolidated financial statements represent a continuation of the

historical financial statements of Sunergy, with the net assets of ESGEN recorded at historical cost and no goodwill or other intangible

assets recognized in connection with the transaction.

The equity structure of the Company was retroactively adjusted to reflect the capital

structure of Zeo Energy Corp.

Operations prior to March 13, 2024 represent those of Sunergy.

Earnings per share for periods prior to the

Sunergy business combination have been retroactively adjusted to reflect the capital structure of Zeo Energy Corp.

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

Upon closing of the transaction, the Company received

gross proceeds of approximately $ 17.7 million, consisting primarily of cash remaining in ESGEN’s trust account following stockholder

redemptions and proceeds from the sponsor investment in OpCo preferred units.

Transaction costs and other fees totaled approximately $ 7.4

Liabilities assumed consisted primarily of accrued transaction costs, deferred underwriting fees, and other obligations of ESGEN

assumed by the Company at closing.

The following table reconciles the elements of

the transaction to the consolidated statements of cash flows and consolidated statements of changes in stockholders’ deficit for

the year ended December 31, 2024:

Cash received from trust account, net of redemptions

Transaction costs and other fees paid

( 7,350,088 )

Proceeds from Sponsor PIPE Investment

Net proceeds from the ESGEN Business Combination

Sponsor investment in OpCo preferred units

Net proceeds from the Sunergy business combination

Liabilities assumed

2 unchanged sentences

$ ( 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

Equity Issued

Immediately following the closing of the Sunergy

business combination, the Company had the following shares of common stock outstanding:

Legacy OpCo unitholders

Public and founder shares

Shares issued to advisors and backstop investors

Sponsor – convertible OpCo preferred units and paired Class V shares

Total shares outstanding after closing

The 13,800,000 public warrants issued in ESGEN’s

initial public offering remained outstanding following the Sunergy business combination and became warrants exercisable for shares of

the Company’s Class A common stock.

The 14,040,000 private placement warrants were forfeited in connection with the transaction.

See Note 20—Fair Value Measurements for additional information.

NOTE 5 —VARIABLE

INTEREST ENTITIES

The Company evaluates its involvement with other

entities to determine whether those entities are VIEs and, if so, whether the Company is the primary beneficiary required to consolidate

the entity under ASC 810.

Based on this evaluation, the Company determined that it holds variable interests in White Horse Energy, LLC

(“White Horse”) and Solar Leasing I, LLC (“SLI”).

However, the Company concluded that it is not the primary beneficiary

of either entity and therefore does not consolidate either entity in its consolidated financial statements.

White Horse Energy, LLC

White Horse is an entity wholly owned and controlled

by Tim Bridgewater, the Company’s CEO.

White Horse provides management and consulting services across several industries, including

commercial solar and energy-related services.

Although Tim Bridgewater serves as the Company’s CEO, the Company evaluated whether

Bridgewater acts as a de facto agent of the Company with respect to White Horse under ASC 810-10-25-43 and concluded that he does

White Horse maintains independent business activities outside of the Company’s operations, and Mr.

Bridgewater’s economic

interests in White Horse provide an incentive to act independently of the Company when directing White Horse’s activities.

Sunergy, a subsidiary of the Company, extended

a $ 3.0 million subordinated loan in the form of a note receivable to White Horse.

As a result of this subordinated financial support,

White Horse is considered a VIE.

The Company evaluated whether it is the primary beneficiary of White Horse and concluded that it is not

the primary beneficiary because (i) White Horse’s activities are directed solely by its owner, and the Company does not have the

power to direct the activities that most significantly impact White Horse’s economic performance, and (ii) the Company’s economic

exposure to White Horse is limited to the subordinated loan and does not represent an obligation to absorb losses or the right to receive

benefits that could potentially be significant to White Horse.

Accordingly, White Horse is not consolidated in the Company’s consolidated

financial statements.

Solar Leasing I, LLC

SLI is an entity formed to acquire, own, and lease

residential solar energy systems to homeowners.

SLI is owned primarily by third-party investors, including Second Century Ventures and

Nexus Capital Partners (the “investing members”), which collectively hold a 99 % membership interest.

White Horse holds a 1 %

membership interest and serves as the manager of SLI.

Under the terms of SLI’s operating agreement, the investing members have the

right to remove White Horse as the manager if certain return thresholds are not met by December 31, 2026, subject to the removal of White

Horse’s personal guarantee on SLI’s outstanding indebtedness.

Sunergy provides engineering, procurement, and

construction services to SLI.

These services are provided at market-based terms consistent with arrangements Sunergy maintains with unrelated

third-party customers.

The Company evaluated SLI under the VIE model

and concluded that SLI is considered a VIE.

SLI is considered a VIE because Tim Bridgewater, the Company’s CEO is also the manager

of SLI through his company, White Horse.

The Company evaluated whether it is the primary beneficiary of SLI and concluded that it is not

the primary beneficiary because (i) the Company does not have the power to direct the activities that most significantly impact SLI’s

economic performance, as the investing members hold substantive participating rights, including approval rights over significant expenditures

and operating decisions, and (ii) the Company’s economic exposure to SLI includes service fees earned under the engineering, procurement,

and construction agreement and related accounts receivable balances, which are at market terms and do not represent exposure to losses

or rights to benefits that could potentially be significant to SLI.

Accordingly, SLI is not consolidated in the Company’s consolidated

financial statements.

Maximum Exposure to Loss

The Company’s maximum exposure to loss associated

with these variable interests is limited to its $ 3.0 million subordinated loan in the form of a note receivable from White Horse, plus

any accrued interest of $ 153,485 , immaterial accounts receivable balances from SLI related to services performed, and a guarantee of SLI’s

outstanding indebtedness under a Business Loan Agreement with a bank for up $ 10 million.

As of December 31, 2025 and 2024, the outstanding

balance of the guaranteed loan was $ 9,976,752 and $ 3,460,840 , respectively.

The loan is also personally guaranteed by the Company’s

The Company does not have any contractual obligation or implicit commitment to provide additional financial support to White Horse

or SLI beyond the amounts described above.

NOTE 6 —BUSINESS

Heliogen Acquisition

On May 28, 2025, the Company entered into a plan

of merger and reorganization agreement with Heliogen, a renewable-energy technology company that provides solutions for delivering low-carbon

energy production by combining commercially proven solar technologies with thermal systems and storage expertise.

The transaction was

completed on August 8, 2025, at which time Heliogen became a wholly owned subsidiary of the Company.

The acquisition of Heliogen aligns

with the Company’s strategy to expand its clean-energy platform beyond residential markets into large-scale commercial and industrial

energy generation and storage.

The acquisition is expected to complement the Company’s existing solar operations, create operational

synergies, and broaden the Company’s market reach.

The total consideration transferred consisted

entirely of the Company’s Class A common stock, measured at fair value on the acquisition date.

Shares were issued to Heliogen shareholders

at an exchange ratio of 0.9591 shares of the Company’s Class A common stock for each share of Heliogen common stock, resulting in

the issuance of 6,217,612 shares of Class A common stock.

No contingent consideration was included in the transaction.

In connection with

the merger, all outstanding Heliogen SPAC warrants and restricted stock units (“RSUs”) were automatically accelerated and

fully vested and were settled in the same equity consideration, net of applicable tax withholding.

All stock options and commercial warrants

were out-of-the-money at the acquisition date and were canceled with no value.

The Company accounted for the acquisition using

the acquisition method of accounting in accordance with ASC 805.

Accordingly, the purchase price was allocated to the assets acquired

and liabilities assumed based on their estimated fair values at the acquisition date, with the excess of the purchase price over the fair

value of the net assets acquired recorded as goodwill.

Goodwill recognized in the transaction is not deductible for tax purposes.

goodwill recognized is primarily attributable to expected operational synergies and the anticipated future growth opportunities from integrating

Heliogen’s technology platform with the Company’s existing operations.

The following table summarizes the purchase price

allocation as of the acquisition date:

Purchase Price Allocation

Purchase consideration at fair value:

Class A common stock

Assets acquired and liabilities assumed at fair value:

Accounts receivable

Prepaid expenses and other current assets

Operating lease right-of-use assets

Accounts payable

Accrued expenses

Operating lease liabilities

Net assets acquired

The Company evaluated whether any identifiable

intangible assets met the recognition criteria under ASC 805 and concluded that no separately identifiable intangible assets were recognized

in connection with the transaction.

From the date of acquisition, Heliogen contributed

revenues of $ 0 and a net loss of $ 2,405,711 , which are included in the consolidated statement of operations for year ended December 31,

Pro Forma Information

The following unaudited pro forma results include

the effects of the Heliogen acquisition as if it had been consummated on January 1, 2024.

The unaudited pro forma information includes

adjustments to give effect to pro forma events that are directly attributable to the acquisition.

Net income (loss)

( 35,286,945 )

Less redemptions

Net income (loss) attributable to Class A common stockholders

( 29,666,066 )

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

Earnings (loss) per share attributable to common stockholders – basic and diluted

These unaudited pro forma results are presented

for informational purposes only and are not necessarily indicative of the results of operations that would have occurred if the acquisition

had been completed at the beginning of the period presented, nor are they indicative of the Company’s future results of operations.

NOTE 7 —ASSET

Lumio Asset Purchase

On October 25, 2024, the Company completed the

acquisition of certain assets from Lumio Holdings, Inc.

and Lumio HX, Inc.

(collectively, the “Lumio Sellers”) pursuant to

an asset purchase agreement.

The assets acquired primarily consisted of uninstalled residential solar energy customer contracts, inventory,

equipment, intellectual property rights, customer records, and other related assets associated with Lumio’s residential solar operations.

The Lumio Sellers were debtors in a voluntary Chapter 11 bankruptcy proceeding before the United States Bankruptcy Court for the District

of Delaware at the time of the transaction.

Total consideration transferred in the transaction

consisted of $ 4.0 million in cash, 6,206,897 shares of the Company’s Class A common stock, and the assumption of approximately $ 1.0

million of liabilities.

The fair value of the shares issued was $ 8,131,656 , resulting in total purchase consideration of $ 13,131,656 .

Based on this evaluation, the Company concluded

that the acquired assets did not meet the definition of a business under U.S.

GAAP because the Company did not acquire an assembled workforce

or a substantive process capable of producing outputs.

Accordingly, the transaction was accounted for

as an asset acquisition rather than a business combination.

Under asset acquisition accounting, the total purchase consideration was allocated

to the assets acquired and liabilities assumed on a relative fair value basis.

No goodwill was recognized in the transaction.

The allocation of the purchase consideration to

the assets acquired and liabilities assumed is summarized below:

Purchase Price Allocation

Purchase consideration at fair value:

Class A common stock

Liabilities assumed

Amount of consideration

Assets acquired:

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:

Property and equipment

Customer-related intangible (order backlog)

Net assets acquired

The Company determined the fair value of the order

backlog intangible asset using the multi-period excess earnings method, which estimates the present value of the incremental after-tax

cash flows expected to be generated from the backlog over its remaining economic life.

Key assumptions used in the valuation included

projected revenues from the underlying solar contracts, estimated probability of contract cancellation, and an appropriate discount rate.

The valuation applied an estimated weighted-average cost of capital of 15.5 %, which reflects the risks inherent in the projected cash

flows and represents the rate of return that a market participant would require for this asset.

Because the valuation relies on significant

unobservable inputs, the fair value measurement is classified as Level 3 within the fair value hierarchy.

The resulting fair value of

the order backlog intangible asset was subsequently adjusted as part of the relative fair value allocation applied to the assets acquired

in the transaction.

NOTE 8 —DISAGGREGATION

OF REVENUES AND SEGMENT REPORTING

Disaggregation of Revenues

The Company’s revenues are disaggregated

based on revenue type, including (i) solar system installations, (ii) roofing installations, and (iii) energy storage solutions.

The Company’s net revenues for the years ended December 31, 2025

and 2024 are disaggregated as follows:

Solar system installations, net

Roofing installations

Energy storage solutions

Total net revenues

For the years ended December 31, 2025 and 2024, the Company had three

customers that accounted for more than 10% of revenue.

Aggregate revenue from these customers was $ 56,929,240 and $ 50,002,123 for the

years ended December 31, 2025 and 2024, respectively.

Segment Reporting

The Company reports segment information in accordance

with ASC 280.

Operating segments are defined as components of an enterprise for which separate financial information is available and

whose operating results are regularly reviewed by the Company’s CODM to allocate resources and assess performance.

Following the acquisition of Heliogen on August

8, 2025, the Company reassessed its segment structure and determined that it operates in two operating and reportable segments:

which includes the design, procurement, installation, and servicing of residential solar photovoltaic systems and related roofing services;

and (2) Heliogen, which includes concentrated solar power and long-duration energy generation and storage technology solutions for commercial

and industrial applications.

The CODM evaluates segment performance and allocates

resources based on the operating results of each reportable segment, including revenues, cost of revenues, operating expenses, and net

Prior to the acquisition of Heliogen on August

8, 2025, the Company operated as a single operating and reportable segment consisting of its solar installation and related services operations.

Corporate public company costs and other activities

that are not allocated to Heliogen are included within the Sunergy segment.

Segment information for the years ended December

31, 2025 and 2024 is as follows:

For the Year Ended December 31, 2025

cost of revenues (exclusive of depreciation and amortization shown below):

Cost of revenues (exclusive of depreciation and amortization):

depreciation and amortization related to cost of revenues

Total gross profit

Depreciation and amortization

Commissions expense

Sales and marketing (exclusive of commissions expense above)

General and administrative

Interest expense

Gain on change in fair value of warrant liabilities

Total net loss before income taxes

( 16,960,273 )

( 2,405,711 )

( 19,365,984 )

Income tax benefit (provision)

$ ( 17,223,922 )

$ ( 2,405,711 )

$ ( 19,629,633 )

For the Year Ended December 31, 2024

cost of revenues (exclusive of depreciation and amortization shown below):

Cost of revenues (exclusive of depreciation and amortization):

depreciation and amortization related to cost of revenues

Total gross profit

Depreciation and amortization

Commissions expense

Sales and marketing (exclusive of commissions expense above)

General and administrative

Interest expense

Gain on disposal of property and equipment

Gain on change in fair value of warrant liabilities

Total net loss before income taxes

( 10,836,148 )

Income tax benefit (provision)

$ ( 9,872,358 )

NOTE 9 —PREPAID

EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets as of

December 31, 2025 and 2024 consisted of the following:

Prepaid expenses

Deferred installation material costs

Receivable related to Lumio asset purchase

Tax receivables

Employee receivables and advances on sales commissions

Lease deposit

Total prepaid expenses and other current assets

NOTE 10 —PROPERTY

AND EQUIPMENT

Property and equipment as of December 31, 2025

and 2024 consisted of the following:

Internally-developed software

Equipment and vehicles

Office furniture and equipment

Leasehold improvements

Property and equipment

Total property and equipment

accumulated depreciation

( 2,252,537 )

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 $ -

( 1,383,664 )

Total property and equipment, net

Depreciation expense for the years ended December

31, 2025 and 2024 was $ 868,873 and $ 691,375 , respectively.

NOTE 11 —INTANGIBLE

ASSETS AND GOODWILL

Intangible assets as of December 31, 2025 and

2024 consisted of the following:

Customer lists

Non-compete - 224,000 224,000 -

Non-compete agreements

Order backlog

Total intangible assets

accumulated amortization

( 14,613,721 )

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 -

( 7,042,565 )

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

Total intangible assets, net

Amortization expense for intangible assets for

the years ended December 31, 2025 and 2024 was $ 7,571,156 and $ 4,008,690 , respectively.

The following table summarizes the changes in

the carrying amount of goodwill for the years ended December 31, 2025 and 2024:

Balance as of December 31, 2023

Impairment losses

Balance as of December 31, 2024

Goodwill recognized in connection with the acquisition of Heliogen

Impairment losses

Balance as of December 31, 2025

NOTE 12 —ACCRUED

EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities as of December 31, 2025

and 2024 consisted of the following:

Accrued payroll liabilities

Accrued commissions

Accrued dealer fees

Accrued interest

Transaction costs

Professional fees

Accrued Other

Accrued taxes

Accrued credit cards

Accrued transaction costs

Other accrued liabilities

Total accrued expenses and other current liabilities

Accrued expenses and other current liabilities

– related parties as of December 31, 2025 and 2024 consisted of the following:

Customer advances

Total accrued expenses and other current liabilities – related parties

NOTE 13 —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

Finance leases 3.28 4.28

In November 2021, the Company entered into a lease

agreement for office space located in New Port Richey, Florida.

The lease commenced on November 4, 2021 and is for a term of 5 years.

Under the terms of the lease, the Company will lease the premises at the monthly rate of $ 4,793 for the first year, with scheduled annual

The lease agreement contains customary events of default, representations, warranties, and covenants.

The measurement of the

ROU asset and liability associated with this operating lease was $ 277,948 .

In June 2023, the Company entered into a lease

agreement for office space located in Orlando, Florida.

The lease commenced on June 1, 2023 and is for a term of 5 years.

Under the terms

of the lease, the Company will lease the premises at the monthly rate of $ 10,011 for the first year, with scheduled annual increases.

The lease agreement contains customary events of default, representations, warranties, and covenants.

The measurement of the ROU asset

and liability associated with this operating lease was $ 578,285 .

In July 2024, the Company entered into a lease

agreement for office space located in Provo, Utah.

The lease commenced on July 1, 2024 and is for a term of 32 months.

Under the terms

of the lease, the Company will lease the premises at the monthly rate of $ 14,845 for the first year, with scheduled annual increases.

The lease agreement contains customary events of default, representations, warranties, and covenants.

The measurement of the ROU asset

and liability associated with this operating lease was $ 751,619 .

In October 2024, the Company entered into a lease

agreement for office space located in Euclid, Ohio.

The lease commenced on October 1, 2024 and is for a term of two years .

Under the terms

of the lease, the Company will lease the premises at the monthly rate of $ 2,000 for the first year, with scheduled annual increases.

lease agreement contains customary events of default, representations, warranties, and covenants.

The measurement of the ROU asset and

liability associated with this operating lease was $ 47,149 .

In June 2025, the Company entered into a lease

agreement for office space located in Richmond, Virginia.

The lease commenced on June 1, 2025 and is for a term of three years .

the terms of the lease, the Company will lease the premises at the monthly rate of $ 1,995 for the first year, with scheduled annual increases.

The lease agreement contains customary events of default, representations, warranties, and covenants.

The measurement of the ROU asset

and liability associated with this operating lease was $ 68,760 .

In July 2025, the Company entered into a lease

agreement for office space located in Sardinia, Ohio.

The lease commenced on July 1, 2025 and is for a term of two years .

Under the terms

of the lease, the Company will lease the premises at the monthly rate of $ 3,150 for the first year, with scheduled annual increases.

lease agreement contains customary events of default, representations, warranties, and covenants.

The measurement of the ROU asset and

liability associated with this operating lease was $ 72,215 .

In August 2025, in connection with the acquisition

of Heliogen, the Company entered into a lease agreement for office space located in Houston, Texas.

The lease commenced on August 8, 2025

and is for a term of 13 months.

Under the terms of the lease, the Company will lease the premises at the monthly rate of $ 10,451 .

lease agreement contains customary events of default, representations, warranties, and covenants.

The measurement of the ROU asset and

liability associated with this operating lease was $ 130,225 and is part of the net assets acquired in the acquisition of Heliogen in the

non-cash investing and financing activities of the consolidated statements of cash flows.

Operating leases as of December 31, 2025 and 2024

consisted of the following:

2025 December 31,

Operating lease right-of-use assets $ 897,476 $ 1,268,139

Operating lease liabilities, current portion 684,819 583,429

Operating lease liabilities, long-term 304,295 799,385

Total operating lease liabilities $ 989,114 $ 1,382,814

Weighted-average remaining lease term (years) 1.58 2.39

Weighted-average discount rate 4.97 % 5.00 %

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

The components of operating lease expense consist

of the following for the years ended December 31, 2025 and 2024:

Fixed operating lease expense

Short-term and variable operating lease expense

Total operating lease expense

Sublease income

Total net operating lease expense

For the years ended December 31, 2025 and 2024,

cash paid for amounts included in the measurement of operating lease liabilities totaled $ 718,824 and $ 645,724 , respectively.

As of December 31, 2025, future minimum lease

payments under operating lease liabilities were as follows:

Year Ending December 31,

imputed interest

Total operating 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.

The Company leases vehicles for its operations

under finance leases.

These leases generally have five-year terms with interest rates ranging from 9.24 % to 10.59 %.

Finance leases ROU assets and liabilities as of

December 31, 2025 and 2024 consisted of the following:

2025 December 31,

Finance lease right-of-use assets $ 310,539 $ 447,012

Finance lease liabilities, current portion 142,095 130,464

Finance lease liabilities, long-term 208,865 348,807

Total finance lease liabilities $ 350,960 $ 479,271

Weighted-average remaining lease term (years) 2.28 3.28

Weighted-average discount rate 9.76 % 9.76 %

Finance lease costs included in depreciation and

amortization in the consolidated statements of operations were $ 136,473 for the years ended December 31, 2025 and 2024.

Interest expense

related to finance leases was $ 39,364 and $ 52,100 for the years ended December 31, 2025, and 2024, respectively.

For the years ended December

31, 2025 and 2024, cash paid for amounts included in the measurement of finance lease liabilities and interest expense totaled $ 171,569

and $ 171,476 , respectively.

As of December 31, 2025, future minimum lease

payments under finance leases were as follows:

Year Ending December 31,

imputed interest

Total finance lease liabilities

NOTE 14 —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

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 Company has financing arrangements for certain

vehicles used in its operations.

These financing arrangements consist of direct loans associated with individual vehicles in the Company’s

Payments of debt obligations are based on equal monthly payments for 60 months and include interest rates ranging from 4.94 % to

As of December 31, 2025, the weighted-average interest rate on the Company’s vehicle loan obligations was 11.09 %.

outstanding under these arrangements are presented in the consolidated balance sheets as the current portion of long-term debt and long-term

The Company does not have debt covenants associated with these vehicle loan arrangements.

As of December 31, 2025, estimated future minimum

principal payments of vehicle loans were as follows:

Year Ending December 31,

current portion

Total long-term debt

On July 1, 2025, the Company converted $ 2,547,877

of outstanding accounts payable to a vendor into a loan payable with the same vendor.

The loan bears interest at an annual rate of 18 %

( 1.5 % monthly) and provided for scheduled principal payments beginning in July 2025, with maturity on August 22, 2025.

As a result of

the transaction, the related accounts payable balance was reclassified to a loan payable in the consolidated balance sheet.

including accrued interest, was repaid during the period.

Convertible Note Payable

On December 24, 2024, the Company issued a convertible

promissory note (the “Promissory Note”) to LHX Intermediate LLC (“LHX”) with a maximum borrowing capacity of $ 4.0

The Promissory Note allowed the Company to draw funds in multiple tranches upon the achievement of specified operational milestones

or upon waiver of such milestones by LHX.

The Promissory Note did not bear interest and was required to be repaid through the issuance

of the Company’s Class A common stock at a fixed conversion price of $ 1.35 per share.

The conversion was scheduled to occur upon

the later of (i) the first anniversary of the issuance date or (ii) the date the Company’s stockholders approved the issuance of

the shares required to settle the obligation.

The Company received proceeds of $ 2.5 million

under the Promissory Note.

The Company evaluated the embedded conversion feature under ASC 815 and concluded that the conversion option

did not require bifurcation as a derivative liability because the instrument was indexed to the Company’s own stock and qualified

for the scope exception.

The Promissory Note was initially recorded at its estimated fair value, and the difference between the proceeds

received and the fair value of the shares issuable upon conversion was recorded as a debt discount.

The debt discount was amortized to

interest expense over the expected term of the note using the effective interest method.

On October 30, 2025, the outstanding balance of

the Promissory Note totaling $ 2.5 million was converted into 1,851,851 shares of the Company’s Class A common stock.

Upon conversion,

the remaining unamortized debt discount was recognized and the carrying value of the Promissory Note was reclassified to equity.

remained outstanding under the Promissory Note as of December 31, 2025.

NOTE 15 —COMMITMENTS

AND CONTINGENCIES

Workmanship and Warranties

The Company typically provides workmanship warranties

for solar energy systems installed for customers for periods ranging from one to ten years against defects in design and workmanship and

that installations will remain watertight.

The manufacturers’ warranties on solar energy system components are generally passed

through to customers and typically include product warranty periods ranging from 10 to 20 years and limited performance warranties of

up to 25 years.

Based on historical experience, the Company has

not incurred significant warranty costs associated with these obligations.

Accordingly, no warranty reserve was recorded as of December

31, 2025 and 2024.

The Company continues to evaluate warranty claims on an ongoing basis and may, at its discretion, provide reimbursements

to customers if certain solar equipment does not operate as intended.

From time to time, the Company may be involved

in various claims, lawsuits, and legal proceedings arising in the ordinary course of business.

The Company records a liability for loss

contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated in accordance with

As of December 31, 2025 and 2024, the Company

was not aware of any pending or threatened legal proceedings that it believes would have a material adverse effect on the Company’s

consolidated financial position, results of operations, or cash flows.

Legal costs associated with loss contingencies are expensed as

NOTE 16 —RELATED

PARTY TRANSACTIONS

Solar Leasing Arrangements

Certain customers of the Company finance their

solar energy system purchases through SLI.

These arrangements are substantially similar to those with unrelated third-party financing

Under these arrangements, SLI deducts financing fees and remits the net proceeds to the Company upon completion of the related

solar installation.

For the years ended December 31, 2025 and 2024,

the Company recognized revenue of $ 18,141,871 and $ 22,156,018 , respectively, from installations financed through SLI, net of financing

fees of $ 0 and $ 8,246,532 , respectively.

Included within revenue recognized for the years ended December 31, 2025 and 2024 is discretionary

rebate paid by SLI of $ 3,150,000 and $ 2,943,979 , respectively.

As of December 31, 2025 and 2024, the Company had accounts receivable of

$ 611,807 and $ 191,662 , respectively, due from SLI related to these arrangements.

See Note 5—Variable Interest Entities for

additional information regarding the Company’s involvement with SLI.

In August 2024, the Company entered into a guarantee

of SLI’s obligations under a Business Loan Agreement between SLI and a bank for borrowings up to $ 10 million.

The loan is also personally

guaranteed by the Company’s CEO, who serves as the manager of SLI through White Horse.

As of December 31, 2025 and 2024, the outstanding

balance under the loan was $ 9,976,752 and $ 3,460,840 , respectively.

Note Receivable

During 2024, SLI performed a fair-market-value

assessment of certain lease assets.

As a result of this assessment, SLI paid a discretionary rebate of $ 2,943,979 to the Company based

on the excess of fair value over the carrying value of the assets.

The Company subsequently transferred the rebate proceeds as a subordinated

loan, recorded as a note receivable from White Horse.

For the years ended December 31, 2025 and 2024,

the Company recognized interest income of $ 153,485 and $ 0 , respectively, related to the note receivable, which is included in other income

in the consolidated statements of operations.

As of December 31, 2025 and 2024, the outstanding principal balance of the loan was $ 3.0

million, which is included in related party note receivable in the consolidated balance sheets.

Accrued interest of $ 153,485 and $ 0 , respectively,

is included in interest receivable – related parties in the consolidated balance sheets.

See Note 5—Variable Interest Entities

for additional information regarding the note receivable.

Tax Receivable Agreement

In connection with the consummation of the Sunergy

business combination on March 13, 2024, the Company entered into a TRA with OpCo and certain OpCo members (the “TRA Holders”).

Pursuant to the TRA, the Company 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 taxes that the Company actually realizes, or is deemed to realize in certain circumstances, as a result of increases

in tax basis and certain other tax attributes arising from the Sunergy business combination and related transactions.

As of December 31, 2025, the Company had not recorded

a liability related to the TRA because realization of the related tax benefits was not considered more likely than not.

The estimated

unrecorded TRA liability was approximately $ 5.7 million as of December 31, 2025 and $ 27.6 million as of December 31, 2024.

If realization

of the related tax benefits becomes more likely than not in future periods, the Company will record a liability related to the TRA with

a corresponding charge to expense in the consolidated statements of operations.

NOTE 17 —REDEEMABLE

NONCONTROLLING INTERESTS AND EQUITY

The table below reflects share information about the Company’s

capital stock as of December 31, 2025:

Treasury Stock

Class A common stock

Class V common stock

Preferred stock

Class A convertible preferred units

Class A units

Class B units

Class A common stock, Class V common stock, and

preferred stock represent capital stock of Zeo.

Class A convertible preferred units, Class A units, and Class B units represent limited

liability company interests of OpCo.

Class A convertible preferred units are held by the Sponsor and are classified as redeemable noncontrolling

interests on the consolidated balance sheet.

Class B units are exchangeable for shares of Class A common stock on a one-for-one basis,

together with cancellation of an equal number of shares of Class V common stock, and are classified as redeemable noncontrolling interests

on the consolidated balance sheet.

Class A units are held by Zeo as managing member of OpCo and are eliminated in consolidation.

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.

During the year ended December 31, 2025, 10,850,000

shares of Class A common stock were issued in exchange for OpCo Class B units and the cancellation of corresponding shares of Class V

common stock.

During the year ended December 31, 2025, an aggregate

of 80,913 shares of Class A common stock were issued to employees for services valued at $ 100,698 .

On March 13, 2025, 50,000 shares of Class A common

stock were issued upon vesting of restricted stock awards granted in March 2024.

See Note 18—Stock-Based Compensation for

additional information.

On August 5, 2025, 199,792 shares of Class A common

stock, net of tax withholding, were issued upon vesting of restricted stock awards granted in February 2025.

See Note 18—Stock-Based

Compensation for additional information.

On August 8, 2025, in connection with the acquisition

of Heliogen, the Company issued 6,217,612 shares of Class A common stock to Heliogen shareholders.

See Note 6—Business Combinations

for additional information.

On August 11, 2025, the Company issued 677,711

shares of Class A common stock to settle accrued buyside advisory fees of $ 1.6 million related to the Heliogen acquisition.

On October 30, 2025, the outstanding balance of

the Promissory Note totaling $ 2.5 million was converted into 1,851,851 shares of the Company’s Class A common stock.

14—Debt for additional information.

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

During the year ended December 31, 2025, 10,850,000

OpCo units were exchanged for shares of the Company’s Class A common stock.

As a result, as of December 31, 2025, 22,880,000 OpCo

units remained outstanding.

The prior investors’ interests in OpCo represent redeemable noncontrolling interests.

Holders of OpCo

units may exchange their units, together with the cancellation of a corresponding number of shares of Class V common stock, for shares

of the Company’s Class A common stock on a one-for-one basis, or cash proceeds of equal value at the time of redemption.

Any redemption

of OpCo units for cash must be funded through a private or public offering of Class A common stock and is subject to approval by the Company’s

Board of Directors.

Future exchanges of OpCo units may generate incremental tax attributes and related cash tax savings for the Company.

Pursuant to the TRA, the Company is generally required to pay the TRA holders 85 % of the net cash tax savings realized as a result of

increases in tax basis and certain other tax attributes arising from such exchanges.

See Note 16—Related Party Transactions

for additional information regarding the TRA.

As of December 31, 2025 and 2024, the noncontrolling

interest holders owned approximately 40.8 % and 71.8 %, respectively, of the outstanding OpCo common units.

The OpCo amended and restated agreement provides,

among other things, for the issuance of corresponding economic, non-voting Class B units of OpCo.

Holders of exchangeable OpCo units may

cause OpCo to redeem one or more units, together with the cancellation of a corresponding number of shares of the Company’s Class

V common stock, for shares of the Company’s Class A common stock on a one-for-one basis, subject to certain restrictions.

certain circumstances, the Company may be required to redeem OpCo units.

Subject to certain conditions, the Class A convertible preferred

OpCo units may be redeemed by the Company following the first anniversary of closing and converted by the Sponsor into exchangeable OpCo

units, which may then be exchanged for Class A common stock.

The Class A convertible preferred units accrue

distributions at a rate of 10 % per annum.

During the year ended December 31, 2025, the Company recognized $ 1,697,661 of preferred unit

distributions and paid cash distributions of $ 621,063 to holders of the Class A preferred units.

The financial results of OpCo are consolidated

with those of the Company, with the redeemable noncontrolling interests’ share of net loss presented separately in the consolidated

financial statements.

NOTE 18 —STOCK-BASED

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.

On March 6, 2024, the shareholders of ESGEN approved

the Zeo 2024 Omnibus Incentive Equity Plan (the “Incentive Plan”), which became effective upon the closing of the Sunergy

business combination.

A total of 3,220,400 shares of Class A common stock were initially reserved for issuance under the Incentive Plan

(the “Plan Share Reserve”).

Each award granted under the Incentive Plan reduces the Plan Share Reserve by the number of shares

underlying the award.

The Plan Share Reserve automatically increases

on the first day of each fiscal year beginning in 2025 through 2029 by a number of shares equal to the lesser of (i) 2 % of the outstanding

shares of common stock on the last day of the immediately preceding fiscal year or (ii) a lesser number of shares determined by the Board

of Directors.

The purpose of the Incentive Plan is to enable the Company and its subsidiaries to attract and retain key personnel and

to align the interests of directors, officers, employees, consultants, and advisors with those of the Company’s stockholders through

equity-based compensation.

March 2024 Grant

On March 13, 2024, the Company entered into an

executive employment agreement with its 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:

certain equity awards under the Incentive Plan as follows:

● 50,000 vested shares to be granted 12 months after the employment agreement date,

● 50,000 vested shares to be granted 24 months after the employment agreement date;

● 50,000 vested shares to be granted 36 months after the employment agreement date.

The Company determined the grant date fair value

to be $ 6.97 per share, based on the quoted market price of the Company’s Class A common stock on March 13, 2024 (Level 1 fair value

measurement).

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:

Fair Value Summary Tranche 1 Tranche 2 Tranche 3

2 unchanged sentences

Derived service period 0.35 years 1.19 years 1.47 years

During the 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.

During the years ended December 31, 2025 and 2024,

the Company recognized $ 1,642,043 and $ 4,746,984 , respectively, in equity compensation expense related to these awards.

As of December

an unrecognized compensation expense of $ 2,059,288 was determined and is expected to be recognized over the remaining 2.5 years.

NOTE 13 - WARRANT LIABILITIES

As part of ESGEN’s IPO, as defined in Note 11, ESGEN issued warrants

to third-party investors where each whole warrant entitles the holder to purchase one share of the Company’s common stock at an

exercise price of $ 11.50 per share.

Simultaneously with the closing of the IPO, ESGEN completed the private sale of warrants where each

warrant allows the holder to purchase one share of the Company’s Class A Common Stock at $ 11.50 per share.

Upon the closing of the

ESGEN Business Combination the 14,040,000 Private Warrants were forfeited.

As of December 31, 2024, there are 13,800,000 Public Warrants

and no private placement warrants outstanding.

These warrants expire on the fifth anniversary of the ESGEN Business

Combination or earlier upon redemption or liquidation and are exercisable commencing 30 days after the ESGEN Business Combination, provided

that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise

of the warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their warrants on a

cashless basis under the circumstances specified in the warrant agreement) and registered, qualified or exempt from registration under

the securities, or blue sky, laws of the state of residence of the holder.

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

in whole and not in part;

● at a price of $ 0.01 per warrant;

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

● 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:

31, 2025, the remaining unrecognized compensation expense was $ 417,245 and is expected to be recognized over the remaining 1.12 year vesting

February 2025 Grants

On February 5, 2025, the Company granted an aggregate

of 765,000 restricted shares of Class A common stock under the Incentive Plan to 10 employees and two executives.

The restricted shares

vest in three equal installments as follows.

● One-third (1/3) six months following the grant date;

● One-third (1/3) 18 months following the grant date;

● One-third (1/3) 30 months following the grant date.

On February 5, 2025, the Company granted an aggregate

of 275,000 restricted shares of Class A common stock under the Incentive Plan to eight employees.

The restricted shares vest in three

equal installments as follows.

● One-third (1/3) 12 months following the grant date;

● One-third (1/3) 24 months following the grant date;

● One-third (1/3) 36 months following the grant date.

The Company determined the grant date fair value

to be $ 2.57 per share, based on the quoted market price of the Company’s Class A common stock on February 5, 2025 (Level 1 fair

value measurement).

During the year ended December 31, 2025, the Company

recognized $ 1,056,505 in equity compensation expense related to these awards.

As of December 31, 2025, the remaining unrecognized compensation

expense was $ 1,414,977 and is expected to be recognized over the remaining 2.10 year vesting period.

July 2025 Grants

On July 5, 2025, the Company granted an aggregate

of 140,000 restricted shares of Class A common stock under the Incentive Plan to four employees.

The restricted shares vest in three equal

installments as follows.

● One-third (1/3) 12 months following the grant date;

● One-third (1/3) 24 months following the grant date;

● One-third (1/3) 36 months following the grant date.

The Company determined the grant date fair value

to be $ 2.79 per share, based on the quoted market price of the Company’s Class A common stock on July 5, 2025 (Level 1 fair value

measurement).

During the year ended December 31, 2025, the Company

recognized $ 38,767 in equity compensation expense related to these awards.

As of December 31, 2025, the remaining unrecognized compensation

expense was $ 198,383 and is expected to be recognized over the remaining 2.51 year vesting period.

November 2025 Grants

On November 5, 2025, the Company granted an aggregate

of 70,000 restricted shares of Class A common stock under the Incentive Plan to seven employees.

The restricted shares vest in three equal

installments as follows.

● One-third (1/3) 12 months following the grant date;

● One-third (1/3) 24 months following the grant date;

● One-third (1/3) 36 months following the grant date.

The Company determined the grant date fair value

to be $ 1.56 per share, based on the quoted market price of the Company’s Class A common stock on November 5, 2025 (Level 1 fair

value measurement).

During the year ended December 31, 2025, the Company

recognized $ 5,586 in equity compensation expense related to these awards.

As of December 31, 2025, the remaining unrecognized compensation

expense was $ 103,607 and is expected to be recognized over the remaining 2.85 year vesting period.

Sun Managers, LLC Management Incentive Plan

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 entirety (the “OpCo A&R LLC Agreement”))

the exchange of their Class B units into Seller OpCo Units (together with an equal number of Zeo 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).

the Management Incentive Plan will be made after ESGEN Closing.

Although Sun Managers is the legal issuer of the

awards, all compensatory payments made by Sun Managers to individuals providing services to or for the benefit of the Company or its subsidiaries

(including equity interests in Sun Managers) are treated as compensation paid by the Company under ASC 718.

In accordance with the OpCo

A&R LLC Agreement, the Company allocates 100 % of all related expense and deduction items to Sun Managers.

These compensatory payments

are accounted for as capital contributions from Sun Managers to the Company, with no new equity units issued in return.

On March 31, 2025, Sun Managers granted an aggregate

of 875,000 restricted shares of Zeo Class A common stock under the Management Incentive Plan to three employees and one executive.

restricted shares vested immediately upon grant.

During the year ended December 31, 2025, the Company recognized $ 1,321,250 in equity

compensation expense related to these awards.

On August 4, 2025, Sun Managers granted an aggregate

of 350,000 restricted shares of Zeo Class A common stock under the Management Incentive Plan to two employees.

The restricted shares vested

immediately upon grant.

During the year ended December 31, 2025, the Company recognized $ 840,000 in equity compensation expense related

to these awards.

On August 13, 2025, Sun Managers granted an aggregate

of 168,500 restricted shares of Zeo Class A common stock under the Management Incentive Plan to four employees.

The restricted shares

vested immediately upon grant.

During the year ended December 31, 2025, the Company recognized $ 384,180 in equity compensation expense

related to these awards.

On September 17, 2025, Sun Managers granted an

aggregate of 255,000 restricted shares of Zeo Class A common stock under the Management Incentive Plan to three employees.

The restricted

shares vested immediately upon grant.

During the year ended December 31, 2025, the Company recognized $ 288,150 in equity compensation

expense related to these awards.

Seasonal Manager Stock Compensation Plan

Beginning January 1, 2025, certain eligible sales

managers may earn shares of the Company’s Class A common stock under the Seasonal Manager Stock Compensation Plan, which operates

under the umbrella of the Management Incentive Plan.

Managers are eligible to earn 40 shares per kW installed for projects sold by the

manager’s organization, provided they exceed 1,500 kW installed during a calendar year, and as long as the manager sells 700kW the

subsequent calendar year.

The number of shares awarded may be reduced if the average price for Zeo stock during the quarter in which installations

are completed exceeds $ 5 per share, the number of shares granted per kW will be correspondingly decreased.

The managers become eligible to receive certain

grants of vested shares under the Seasonal Manager Stock Compensation Plan as follows:

● 50 % of the shares for which Manager becomes eligible during a calendar year will be granted in Q1 (prior to the end of March) of the following calendar year (the “Tranche 1 Grant”) if Manager remains eligible at the time of the grant.

● The remaining 50 % of the shares for which Manager becomes eligible during a calendar year are granted in the Q1 of the second year following the calendar year in which eligibility is earned (the “Tranche 2 Grant”) if Manager remains eligible at the time of the grant.

On March 31, 2025, Sun Managers granted an aggregate

of 577,910 restricted shares of Zeo Class A common stock under the Management Incentive Plan to 10 sales managers.

The restricted shares

vest in two equal installments as follows.

● One-half (1/2) immediately on the grant date;

● One-half (1/2) 12 months following the grant date.

During the year ended December 31, 2025, the Company

recognized $ 765,061 in equity compensation expense related to these awards.

As of December 31, 2025, the remaining unrecognized compensation

expense was $ 107,585 and is expected to be recognized over the remaining 0.25 year vesting period.

NOTE 19 —WARRANTS

In connection with ESGEN’s initial public

offering (“IPO”), ESGEN issued public warrants to investors.

Each public warrant entitles the holder to purchase one share

of the Company’s Class A common stock at an exercise price of $ 11.50 per share.

Simultaneously with the closing of the IPO, ESGEN

issued private placement warrants to the sponsor and certain investors.

Each private warrant entitled the holder to purchase one share

of the Company’s Class A common stock at an exercise price of $ 11.50 per share.

Upon the closing of the Sunergy business combination,

the 14,040,000 private placement warrants were forfeited.

Accordingly, as of December 31, 2025 and 2024, there were 13,800,000 public

warrants outstanding, and no private placement warrants outstanding.

The public warrants expire on the fifth anniversary of the Sunergy

business combination, unless earlier exercised, redeemed, or liquidated.

The warrants became exercisable 30 days following the closing

of the Sunergy business combination, provided that the Company maintains an effective registration statement covering the shares of Class

A common stock issuable upon exercise of the warrants or permits holders to exercise the warrants on a cashless basis as permitted under

the warrant agreement.

Once the warrants become exercisable, the Company may redeem the outstanding public warrants for $ 0.01 per warrant,

upon 30 days’ prior written notice, if the reported last sale price of the Company’s Class A common stock equals or exceeds

$ 18.00 per share for 20 trading days within a 30-trading-day period ending three business days prior to the notice of redemption.

The public warrants are accounted for as warrant

liabilities in accordance with ASC 815.

Accordingly, the Company recognized the warrants as liabilities at fair value on the date of the

Sunergy business combination and remeasures the warrant liabilities to fair value at each reporting date.

Changes in the fair value of

the warrant liabilities are recognized in the consolidated statements of operations within changes in fair value of warrant liabilities.

As of December 31, 2025 and 2024, the public warrants are presented as warrant liabilities in the consolidated balance sheets.

20—Fair Value Measurements for additional information

NOTE 20 —FAIR

VALUE MEASUREMENTS

The carrying amounts of the Company’s financial

instruments, including cash and cash equivalents, accounts receivable, inventories, prepaid expenses and other current assets, accounts

payable, accrued expenses, and contract assets and liabilities, approximate fair value due to the short-term nature of these instruments.

The carrying amounts of lease liabilities and

notes payable also approximate fair value as these instruments bear interest rates that are consistent with current market rates for similar

Recurring Fair Value Measurements

The Company measures certain financial instruments

at fair value on a recurring basis.

As of December 31, 2025, the Company’s financial instruments measured at fair value on a recurring

basis consist of warrant liabilities.

See Note 19—Warrants for additional information.

The fair value of financial instruments measured

at fair value on a recurring basis as of December 31, 2025 consisted of the following:

Fair Value Measurements as of

December 31, 2025

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

The following table presents changes in the Company’s

warrant liabilities measured at fair value on a recurring basis:

Warrant Liabilities

Balance as of December 31, 2023

Fair value of warrant liabilities upon issuance

Gain on change in fair value of warrant liabilities

Extinguishment of warrant liabilities upon settlement

Balance as of December 31, 2024

Gain on change in fair value of warrant liabilities

Extinguishment of warrant liabilities upon settlement

Balance as of December 31, 2025

NOTE 21 —INCOME

The Company accounts for income taxes in accordance

with ASC 740, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events

that have been included in the consolidated financial statements.

Deferred tax assets and liabilities are determined based on differences

between the financial statement carrying amounts and the tax bases of existing assets and liabilities and are measured using enacted tax

rates expected to apply in the years in which those temporary differences are expected to reverse.

The Company’s effective tax rate from continuing

operations was a ( 1.7 )% provision and a 9.1 % benefit for the years ended December 31, 2025 and 2024, respectively.

The effective tax rate

differs from the U.S.

federal statutory tax rate primarily due to the noncontrolling interest ownership in OpCo, which is treated as a

partnership for U.S.

federal income tax purposes, as well as changes in the valuation allowance on deferred tax assets.

The Company evaluated the realizability of its

deferred tax assets based on all available positive and negative evidence.

Based on this evaluation, the Company determined that it is

not more likely than not that certain deferred tax assets will be realized and therefore recorded a valuation allowance against those

deferred tax assets as of December 31, 2025.

Due to the Company’s Up-C organizational

structure, a portion of the Company’s earnings is attributable to noncontrolling interests in OpCo, which is treated as a partnership

federal income tax purposes.

Accordingly, income attributable to these noncontrolling interests is generally not subject to corporate-level

income taxes, which reduces the Company’s overall effective tax rate.

The components for the provision of income taxes

Current Federal and State

Deferred Federal and State

Total benefit (provision) for income taxes

$ ( 263,649 )

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.

A reconciliation of the statutory US Federal income

tax rate to the Company’s effective income tax rate is as follows:

December 31, 2025

December 31, 2024

Investment in OpCo

Noncontrolling interest in OpCo

Income attributable to Sunergy prior to business combination

Change in valuation allowance

Remeasurement of warrant liability

Effective income tax rate

The components of the deferred income tax assets

4 unchanged sentences

Accrued liabilities

Gross deferred tax asset

Less valuation allowance

Net deferred tax asset

Deferred tax liabilities:

Total deferred tax liability

Section 743(b)

Investment in Sunergy

Total deferred tax assets

Valuation allowance

( 11,398,158 )

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

Deferred tax liabilities:

Investment in Sunergy

Total deferred tax liabilities

Net deferred tax assets

In connection with the Sunergy business combination,

the Company recorded deferred tax assets and liabilities related to the difference between the book carrying value of its investment in

OpCo and the tax basis of that investment.

The resulting deferred tax liability was partially offset by deferred tax assets generated

in the transaction.

The net impact resulted in the recognition of deferred tax benefits in the consolidated statement of operations and

a corresponding adjustment to additional paid-in capital related to the reverse recapitalization accounting.

LOSS PER SHARE

Basic net loss per share is calculated by dividing

net loss attributable to Class A common stockholders by the weighted-average number of Class A common shares outstanding during the period.

Diluted net loss per share is calculated by adjusting the weighted-average number of Class A common shares outstanding for the potentially

dilutive effect of securities that could be converted into or settled in shares of Class A common stock.

Potentially dilutive securities

include exchangeable OpCo units and other instruments that may be settled in shares of Class A common stock.

The Company applies the treasury stock method

to restricted stock awards and warrants, which assumes that all Class A common share equivalents have been exercised at the beginning

of the period and that the proceeds from those exercises are assumed to be used to repurchase Class A common shares at the average closing

market price during the period.

The Company applies the if-converted method to securities that are convertible into Class A common shares.

For the years ended December 31, 2025 and 2024,

the Company reported a net loss.

Accordingly, all potentially dilutive securities were excluded from the calculation of diluted net loss

per share because their effect would be anti-dilutive, and diluted net loss per share equals basic net loss per share.

As of December

31, 2025 and 2024, 39,155,002 and 51,031,852 potential common share equivalents, respectively, consisting of convertible OpCo Class A

Preferred Units, exchangeable OpCo Class B units, convertible notes, warrants, and restricted stock awards, were excluded from the calculation

of diluted net loss per share because their effect would be anti-dilutive.

The following table presents the computation of

the basic and diluted loss per share of Class A common stock for the years ended December 31, 2025 and 2024:

Net loss attributable to Class A common stockholders

$ ( 14,008,754 )

Income tax benefit

Net (loss) income

$ ( 2,668,889 )

NOTE 20 - SUBSEQUENT EVENTS

On April 17, 2025, the Company received a notice (the “Notice”)

from Nasdaq notifying the Company that it is not in compliance with the periodic filing requirements for continued listing set forth in

Nasdaq Listing Rule 5250(c)(1) because the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (“Fiscal

Year 2024 10-K”) was not filed with the Securities and Exchange Commission (the “SEC”) by the required due date of March

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 .

Weighted-average Class A common shares outstanding – basic and diluted

Loss per Class A common share – basic and diluted

NOTE 23 —SUBSEQUENT

On January 27, 2026, the Company entered into

the White Lion ELOC with White Lion Capital LLC (“White Lion”), pursuant to which the Company has the right, but not the obligation,

to sell to White Lion up to $ 30.0 million in aggregate gross purchase price of newly issued shares of Class A common stock, subject to

certain limitations and conditions, over a period ending on the earlier of January 27, 2029 or the purchase of the full commitment amount.

In consideration for the commitment, the Company agreed to issue to White Lion $ 100,000 worth of Class A common stock.

Concurrently, the

Company entered into a Registration Rights Agreement with White Lion.

As of the date of this filing, the Company sold 241,000 shares for

proceeds of $ 272,020 .

The Company settled the $ 100,000 commitment amount for 66,225 shares.

On January 30, 2026, the Company increased the

subordinated loan in the form of a note receivable with White Horse Energy, LLC from $ 3.0 million to $ 6.15 million under the same terms

as the original note.

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