NASDAQ: ZEO

In January 2022, we began selling and installing
residential solar energy systems and other energy efficiency-related equipment in Texas, in January 2023, we expanded into Arkansas, in
September 2023, we entered Missouri, and in February 2024, we entered Ohio and Illinois. In 2025, we expanded our services in California,
Colorado, Minnesota, Utah, and Virginia. In November 2024, we also began serving customers for whom Lumio HX, Inc. (as described under
Recent Developments below) had begun but not completed residential energy systems prior to completion of its bankruptcy, primarily in
California, Maryland, New Jersey, North Carolina, Oklahoma, and South Carolina. The number of our installations, sales support, and administrative
personnel was approximately 190 as of December 31, 2024.

Recent Developments

White Lion Transaction

On January 27, 2026, we entered into the Common
Stock Purchase Agreement (the “White Lion Purchase Agreement”) with White Lion. We also entered into a Registration Rights
Agreement with White Lion on January 27, 2026 (the “RRA”). Pursuant to the White Lion Purchase Agreement, the Company has
the right, but not the obligation, to require White Lion to purchase, from time to time, up to $30.0 million in aggregate gross purchase
price of newly issued shares of our Class A Common Stock, subject to certain limitations and conditions set forth in the White Lion Purchase
Agreement. Subject to the satisfaction of certain customary conditions, the Company’s right to sell shares to White Lion commenced
on the date of the execution of White Lion Purchase Agreement and extends until the earlier of (i) White Lion having purchased shares
of Class A Common Stock equal to $30.0 million and (ii) January 27, 2029 (the “White Lion Commitment Period”).

1

During the White Lion Commitment Period, subject
to the terms and conditions of the White Lion Purchase Agreement, the Company may notify White Lion when the Company exercises its right
to sell shares of its Class A Common Stock. The Company may deliver a Rapid Purchase Notice (as such term is defined in the White Lion
Purchase Agreement), where the Company can require White Lion to purchase up to a number of shares of Class A Common Stock equal to the
20% of Average Daily Trading Volume (as such term is defined in the White Lion Purchase Agreement). The Company may also deliver a Accelerated
Purchase Notice (as such term is defined in the White Lion Purchase Agreement), where the Company may require White Lion to purchase up
to a number of shares of Class A Common Stock equal to 20% of the Average Daily Trading Volume. White Lion may waive such limits under
any notice at its discretion and purchase additional shares.

The price to be paid by White Lion for any shares
that the Company requires White Lion to purchase will depend on the type of purchase notice that the Company delivers. For shares being
issued pursuant to Accelerated Purchase Notice, the purchase price per share will be equal to the lowest traded price of Class A Common
Stock during one (1) hour period following the White Lion’s written consent of the acceptance of the notice. For shares being issued
pursuant to a Rapid Purchase Notice, the purchase price per share will be equal to the average of the three (3) lowest traded prices on
the date that the notice is delivered.

No purchase notice shall result in White Lion
beneficially owning (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 thereunder) more than 4.99% of the number
of shares of the Class A Common Stock outstanding immediately prior to the issuance of shares of Class A Common Stock issuable pursuant
to a purchase notice.

The Company may deliver purchase notices under
the White Lion Purchase Agreement, subject to market conditions, and in light of our capital needs, from time to time and under the limitations
contained in the White Lion Purchase Agreement. Any proceeds that the Company receives under the White Lion Purchase Agreement are expected
to be used for working capital and general corporate purposes.

The White Lion Purchase Agreement may be terminated
by the Company at any time and for any reason, in its sole discretion, subject to the Company having delivered the applicable Commitment
Shares (as defined below). The White Lion Purchase Agreement will also terminate automatically upon the earlier of the expiration of the
White Lion Commitment Period or the occurrence of certain bankruptcy or insolvency-related events involving the Company.

In consideration for the commitments of White
Lion, as described above, the Company is contractually committed to issue to White Lion $100,000 worth of Class A Common Stock (the “Commitment
Shares”). The Commitment Shares are deemed fully earned and non-refundable as of the execution date of the White Lion Purchase Agreement;
however, if the White Lion Purchase Agreement is terminated by the Company as a result of a material breach by White Lion, the Company
may pursue all remedies available at law or in equity, including reimbursement or recovery of such Commitment Shares, to the extent permitted
by applicable law.

Concurrently with the White Lion Purchase Agreement,
the Company entered into the RRA with White Lion. The Purchase Agreement and the RRA contain customary representations, warranties, conditions
and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreements were made only
for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject
to limitations agreed upon by the contracting parties.

White Horse Energy Transaction

On January 30, 2026, Sunergy, a subsidiary of
the Company, increased the subordinated loan in the form of note receivable with White Horse Energy, LLC from $3.0 million to $6.15 million
under the same terms as the original note.

2

Products and Services

Residential Solar Energy Systems

Zeo Energy’s primary business activity is
selling and installing residential solar energy systems that homeowners use to supplement the amount of usable electricity required to
power their homes. We currently operate primarily in Florida, Texas, Arkansas, Missouri, Ohio, and Illinois, and have begun offering solutions
and services in California, Colorado, Minnesota, Utah, and Virginia. We are additionally serving customers for whom Lumio HX, Inc. had
begun but not completed residential energy systems prior to completion of its bankruptcy, in Maryland, New Jersey, North Carolina, Oklahoma,
and South Carolina.

Other Energy Efficient Equipment and Services

In 2025, approximately 5% of our customers purchased
one or more energy efficient products or services, including insulation services, such as adding insulation to a home’s attic or
walls, hybrid electric water heaters or swimming pool pumps, and battery-based energy storage systems.

Roofing Services

We install roofs in Florida, where our subsidiary,
Sunergy Roofing & Construction, Inc., is a licensed roofing contractor. In other states where we operate, for some solar energy system
customers that need roofing services, we may contract with roofing companies for the services. We plan to continue growing our roofing
operations, as we believe our roofing services complement our residential solar energy systems and for some customers helps to expedite
solar system installations.

Subcontractors

We use subcontractors to install some of our residential
solar energy systems at times when we do not have a sufficient number of our own installation teams to timely complete the project. We
also use subcontractors to provide all of our insulation services and to install some of the roofing services and energy efficient equipment
such as hybrid electric water heaters and pool pumps which we sell. Our subcontractor fees for residential solar energy system installations
are typically based on total wattage installed, and our arrangements with installation subcontractors allow either party to terminate
the agreement for convenience.

Marketing and Sales

We market our products and services to potential
customers directly through in-home visits carried out by our internal sales agents and indirectly through external sales dealers. In the
case of leases, a customer is approached by and communicates with the same sales personnel as if the customer were purchasing a system
directly from Zeo. We also engage in digital marketing efforts on our own or through third-party marketing specialists, including search
engine optimization and social media communications to strengthen our online marketing presence. Our code of conduct applies to our employees,
independent contractors and dealers, and it requires adherence to high ethical standards when carrying out business activities.

Internal Direct Sales Force

We have established an internal team of sales
agents that markets and sells directly to customers through door-to-door sales approaches. The team included approximately 260 sales agents
as of both December 31, 2025 and December 31, 2024. Our sales agents are engaged through full-time contracts lasting from April through
August, which is our primary selling season. Sales made through our internal sales team have lower customer acquisition costs than sales
sourced through our external dealers. In 2025, approximately 89% of the total systems we installed were sold through our internal sales
team.

3

Sales Through External Dealers

We also install systems sold by external sales
dealers that act as our sales representatives with potential customers. The number of active dealers that have entered into a current
arrangement to sell our solar panel systems was approximately 10 as of December 31, 2025 compared to approximately 20 as of December 31,
2024. The percentage of sales that originate with our external dealers increases during the fall and winter months when our internal sales
efforts are diminished. We provide field support and training to these dealers on our sales offerings, sales processes and other business
processes, including our software sales platform.

Upon our selection of and engagement with a dealer,
the dealer executes our dealer agreement. The majority of our dealer agreements require the dealers to exclusively represent our business
with respect to the particular products or services we sell. Dealers have the option of choosing to execute a contract that does not require
this exclusivity, and some select this option. Our dealer contracts are terminable for convenience by either party. For each residential
solar energy system that we install for a customer that was sold by a dealer, after we receive payment, we compensate the dealer with
a commission based on the number of watts of solar panels installed.

We recruit and select dealers based on their experience
in the market, ability to produce sales and general reputation for ethical behavior within the industry. As part of our dealer contract,
we require our dealers to agree in writing to comply with our code of conduct when carrying out their marketing and other activities.

Customer and Leasing Agreements

A homeowner becomes our customer typically by
signing a contract with us to purchase and receive installation of a solar energy system. We also install solar energy systems that are
leased by the customer under an agreement between the customer and a third-party leasing company under which the leasing company will
own and lease to a customer a solar energy system. A customer that chooses our products and services typically signs the contract after
meeting with one of our sales agents or dealers in the customer’s home and receiving a preliminary system design for their home
and pricing for the system. Whether the customer decides to purchase or lease the solar energy system, the sales agent or dealer determines
the pricing to be offered to the customer based on product and services price information stored in our sales software for the system
components included in a customer’s proposed system. After the customer signs the contract, we schedule and conduct a site survey.
If during the site survey we discover property code compliance or other complications with the planned design and installation, we may
issue a change order; if required changes represent additional costs to us or the customer, the party that would be responsible for those
costs may choose to cancel the contract. After the site survey, we prepare formal design and engineering documents and apply for applicable
permits from local government authorities. After required permits are obtained, we schedule and install the solar energy system and any
other equipment purchased on the customer’s home.

4

Purchase Contract
Warranties. As the owner of the residential solar energy system under the purchase and installation agreement, customers receive
a manufacturer’s limited warranty for system components. For the principal components of solar panels, inverter, and racking, the
manufacturer’s limited warranty typically lasts 25 years. Manufacturers control whether the warranty periods they offer will change
for equipment purchased in the future. Though we are not responsible for a manufacturer’s compliance with warranty obligations,
we assist customers in contacting the manufacturer if a warranty issue arises. We provide customers at least a ten-year limited warranty
for our installation work and at least a five-year limited warranty against roof penetrations.

Purchase Contracts and Financed Sales. For
the year ended December 31, 2025, approximately 8% of our customers who purchased residential solar energy systems from us entered into
a loan arrangement with a third party to finance the purchase over an extended period of time. The loan agreement between the customer
and the third-party lender typically has a repayment term of between 7 and 25 years and requires the customer to pay either a minimal
or no down payment. The lender pays us our portion of the purchase payment after completion of system installation.

Purchase Contracts and Cash Sales. For
the year ended December 31, 2025, an immaterial amount of our orders were from customers paying in cash for the purchase of residential
solar energy systems. For those sales, our purchase contract typically requires the customer to pay 25% of the purchase price upon execution
of the purchase agreement, 50% when we begin installation, and the final 25% on the last day of installation. Installation is usually
commenced and completed either in a single day or within several days.

System Leases. In December 2022, we launched
a program offering customers the option of leasing our solar energy systems from third-party leasing companies. The customer agrees to
pay the leasing company a predetermined monthly fee for the electricity produced by the residential solar energy system. As of December
31, 2025, approximately 74% of the systems we installed in 2025 are leased by the customer. The lease term between the leasing company
and the customer is 25 years. The customer agrees to pay the leasing company a predetermined monthly fee for the electricity produced
by the solar energy system. The monthly fee generally increases annually over the lease term at a predetermined rate, and the customer
typically has the option to renew the lease for five to ten years. The potential advantage to the customer of a lease agreement is that
a third-party owner of the residential solar energy system may take more advantage of available government tax incentives for solar energy
production, which may allow them to lease the system to the customer at monthly rates that are lower for the customer than if the customer
were financing its own purchase of the system. We installed the first leased solar energy system in April 2023 and during the year ended
December 31, 2025, we installed approximately 1,550 leased solar energy systems. In the lease model offered to our customers, the third-party
leasing company contracts with the homeowner customer to install a solar energy system owned by the leasing company and leased to the
customer. The leasing company contracts with Zeo to purchase system equipment and install the solar energy system. Some leasing companies
may contract with Zeo to maintain and service the system on the leasing company’s behalf during the life of the lease.

Approximately 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, LC
(“White Horse Energy”), a holding company of which Mr. Bridgewater, Zeo’s Chairman and Chief Executive
Officer is the owner and manager. Subject to investor and customer demand, White Horse Energy intends to attract more investors to form
third-party leasing companies. No assurance can be given that White Horse Energy will be able to do so or that arrangements can be made
with other funds to act as lessors of Zeo’s solar energy systems in the future. Zeo has entered into leasing arrangements with several
other unrelated third parties to offer customers a choice of purchase or lease options, and continues to explore similar arrangements
with other unrelated third-parties.

5

Supply

The main components of our residential solar energy
systems are solar panels, inverters and racking systems. Common related components or systems that we may additionally supply are battery-based
energy storage systems, insulation, hybrid electric water heaters, swimming pool pumps and roofing. All of the products that we install
are manufactured by third parties. We select products and system components, suppliers and distributors based on cost, reliability, warranty
coverage, performance characteristics and ease of installation, among other factors.

While we procure products and components from
multiple suppliers and distributors to reduce the likelihood that we experience an inability to procure those products and components,
the primary supplier from which we purchase the equipment that we install is Consolidated Electrical Distributors, Inc. (d/b/a Greentech
Renewables) (“Greentech”). Greentech also provides us inventory management services by holding equipment in
its inventory until it delivers directly to the customer site for installation. We purchase from Greentech through a credit agreement
under which Greentech extends us credit for purchases, and we are obligated to make payments by the 15th day of the month following
each purchase. A purchase discount is available for early cash payment, and a service charge of 1.5% per month can be assessed for payments
made more than 30 days after the invoice date. Our agreement with Greentech does not require either party to continue to conduct new business
with the other party. During 2025, we purchased approximately 46% of the equipment that we installed through Greentech. We believe our
relationship with Greentech, and the volume of business we do through them, has established us as a preferred customer and enables us
to procure components at attractive terms. If our relationship with Greentech were to be terminated, there are other distributors of the
same or similar equipment, and we believe we could readily obtain supplies from those other distributors, though they may take some time
to develop the efficient logistics system Greentech employs now on our behalf delivering products to the customer installation sites.

Heightened inflation in the costs of labor and
components beginning in 2020 and continuing today has contributed to fluctuating prices for solar energy equipment. At times, we have
had to pay increased prices to obtain equipment. This has not yet prevented us from obtaining the products we need to install systems
purchased by our customers, but there can be no assurance that this will continue. We do not have information that allows us to quantify
the specific amount of cost increases attributable to inflationary pressures.

We have previously experienced price increases
and temporary supply delays resulting from multiple market phenomena. The majority of the solar panels and other major system equipment
components that we install are manufactured outside of the United States. Government tariffs on solar energy equipment, including tariffs
placed on solar equipment manufactured in China, have also contributed to higher prices on solar equipment. Additionally, Russia’s
war against Ukraine caused price and supply pressure on solar energy equipment, as the war has impacted fuel prices and has led to increased
demand in European markets for solar energy equipment as consumers and governments in Europe have sought to establish greater energy independence.
From 2020 through 2022, we experienced periods of temporary delay in obtaining supplies. We believe these delays reduced the number of
installations in comparison to what we would have been able to install without the delays. In 2023 and 2024, we did not experience appreciable
delays in supply. Following new tariffs introduced by the U.S. government in April 2025, as further detailed below, we expect to experience
an increase in prices for solar system equipment. We have not experienced consequent delays in procuring equipment, but such delays may
occur.

For more information on risks related to our supply
chain, see “Risk Factors — Risks Related to Zeo Energy’s Operations — Due to the limited number of suppliers in
our industry, the acquisition of any of these suppliers by a competitor or any shortage, delay, price change, announcement and imposition
of tariffs or duties or other limitation in our ability to obtain components or technologies we use could result in sales and installation
delays, cancellations and loss of customers” and “Risk Factors — Risks Related to Zeo Energy’s Operations —
Increases in the cost or reductions in supply of solar energy system and energy storage system components due to tariffs or trade restrictions
announced or imposed by the U.S. government could have an adverse effect on our business, financial condition and results of operations.”

6

Seasonality

Historically, our sales volume and installation
activity has been highest during late spring and summer. During this time, consumers in many locations see greater energy needs due to
operating air conditioning systems and warm-weather appliances such as swimming pool pumps. Our door-to-door sales efforts are also aided
during these months by daylight savings time providing increased daylight hours into the evening, and we have more sales personnel, many
of whom are college students, working during these months, as described above. We typically have largely or entirely scaled down our internal
sales efforts during the fall, winter, and early spring. Snow, cold weather or other inclement weather can also delay our installation
of products and services.

Strategy

We plan to increase our market impact and grow
our revenue and profits by pursuing the following strategic objectives:

Expand our operations into additional geographic
markets. We plan to continue to expand in new geographic markets, both organically and through strategic M&A, considering factors
such as the rates consumers pay for electricity, where favorable net metering policies or cost incentives exist, the percentage of the
addressable residential market that already has residential solar energy systems, and where we believe the market is not already oversaturated
with competitors.

Increase capacity for efficient growth by investing
in people and systems. In 2025, we experienced a decrease in sales and installations that generally affected the solar industry during
the same period. Prior to 2025, we have generally increased the number of solar energy systems we sell and install by growing and training
our internal seasonal sales force, and we plan to continue to do so, as well as increasing our number of external dealers. We have also
grown and plan to continue growing our installation capacity in markets we serve by hiring and training more skilled technicians and investing
in technology. Where we do not yet have installation teams in place, we plan to continue to collaborate with subcontractors to fulfill
our installation needs.

Continue to grow our external dealer sales
channel. We plan to increase the number of external dealers working to bring us customers. We believe we will continue to have success
in attracting dealers to our business because of our scalable business platform that allows dealers to participate in the residential
solar energy sales and installation life cycle with limited investments in personnel and capital.

Expand customer options for buying affordable
solar energy. We plan to expand our roofing business in certain markets we enter in the future. Roofing facilitates a faster processing
time for our solar installations in cases where the residential customer is in need of a roof replacement prior to installing solar systems.
We believe offering customers the option to lease a residential solar energy system installed on their home will increase the number of
systems we can sell and install due to the potential savings for some customers that cannot otherwise take full advantage of certain tax
incentives. As described above, in December 2022, we launched a program offering customers the option of leasing residential solar energy
systems from third parties that we install on the customer’s home.

Diversify operations through acquisition.
In August of 2025, we acquired Heliogen, Inc. (“Heliogen”). Heliogen had an expertise around commercial and utility scale
long-duration storage solutions. We have retained a team of engineers to pursue opportunities to implement solar and long-duration storage
solutions starting with data centers. We will continue to look for acquisition opportunities to grow and diversify the company.

Strengths

Lean Business Model. We have a lean business
model that supported revenue growth and net income in each of the four years prior to 2024. During 2024 and 2025, in the face of a challenging
economic environment across the residential solar industry, we believe our lean cost structure has enabled us to manage operating expenses
and preserve liquidity while continuing to invest in our growth initiatives.

Our Sales Model. Our sales methodology
produces a high volume of sales. We believe our internal sales process drives a high volume of sales per sales representative and results
in low customer acquisition costs. The success of our sales processes starts with quality, hands-on training for each sales representative.
Our self-produced digital learning platform presents our sales representatives with sample customer scenarios and guides them in learning
effective communication techniques, as well as how to efficiently carry out administrative steps required for completing sales. Each sales
representative’s responses to sample customer scenarios are reviewed and critiqued by managers of our internal sales team.

In our sales model, a majority of personnel knock
on doors of potential customers and explain the benefits of solar energy and our offerings with the objective of scheduling a subsequent
sales meeting. In the scheduled meetings, a more experienced sales representative or sales manager provides a homeowner additional information
about system design, energy savings and other benefits, pricing, incentives and financing options.

7

We believe that the key elements to our successful
business model include (i) effective training and time spent with senior sales managers, (ii) our use of our customer relationship management
software platform which concurrently tracks key performance indicators across the sales cycle, and (iii) our multi-step setter-closer
sales model, which enables senior sales personnel to focus on greater sales success in presentations, while setters focus on developing
and filtering quality, qualified leads, all of which then contributes to maximizing the percentage of leads converted into sales and sales
into installations because of satisfied customers throughout the process.

Our vertical integration leads to customer
satisfaction and personnel retention. We believe our vertically integrated business model, in which we market, design, sell, procure,
install and service systems, has a major benefit of enhancing the speed of project completion after an initial sale is made. It also allows
us to price projects strategically with information from both the sales and installation sides of the process. Our greater control over
the total process and our resulting success rates in navigating the local municipal permit process is intended to increase customer satisfaction
and reduce potential sales force frustration from losing many jobs due to delays in the installation process. Our ratio of sales converted
to completed installations is higher for sales that come from our internal agents than that that come from our dealer sales. We believe
this higher rate helps increase the job satisfaction and retention rate for our personnel, as it enhances commissions that are paid out
to sales personnel and managers, and provides work for installation teams.

Our scalable business platform allows us to
grow efficiently. We believe that we have established a scalable business platform for efficiently completing the life-cycle of tasks
involved in offering and fulfilling customers’ residential solar power needs. This platform is principally: (a) software we use
in designing, selling, installing and servicing systems, and in tracking key performance indicators across the sales cycle; and (b) the
business processes of our employees that perform field work, system design, permitting, installation and back-office support tasks. This
platform is intended to allow us to undergo rapid sales and installation growth by efficiently adding new personnel and collaborating
effectively with external dealers who bring us additional customers. We have carefully designed these processes and our pre- and post-installation
operations to be effective systems which can be easily explained to new employees and replicated in the new cities and regions in which
we operate and expand.

Competition

The solar energy and renewable energy industries
are both highly competitive and continually evolving as participants strive to distinguish themselves within their markets and compete
with large electric utilities.

We consider our primary competitors to be electric
utilities that supply electricity to our potential customers. We compete with these electric utilities primarily based on price (cents
per kWh), predictability of future prices and the ease by which customers can switch to electricity generated by our residential solar
energy systems. We may also compete with them based on other value-added benefits. These include reliability and carbon-friendly power,
benefits which consumers have historically paid a premium to secure, but which customers can obtain by purchasing a solar energy system
for monthly costs that are sometimes equal to or less than a traditional monthly power bill from the utility.

We also compete with retail electric providers
and independent power producers that are not regulated like electric utilities, but which have access to the utilities’ electricity
transmission and distribution infrastructure pursuant to state, territorial and local pro-competition and consumer choice policies. These
retail electric providers and independent power producers can offer customers electricity solutions that are competitive with our residential
solar energy system options on both price and usage of renewable energy technology while avoiding the physical installations that our
current business model requires.

We compete with community solar products offered
by solar companies or sponsored by local governments and municipal power companies, as well as utility companies that provide renewable
power purchase programs. Some customers might choose to subscribe to a community solar project or renewable subscriber program instead
of having a residential solar energy system installed on their home, which could affect our sales. Additionally, some utility companies
(and some utility-like entities, such as community choice aggregators) have power generation portfolios that are increasingly renewable
in nature. As utility companies offer increasingly renewable portfolios to retail customers, those customers might be less inclined to
have a residential solar energy system installed on their home or business, which could adversely affect our growth.

8

We also compete with solar energy companies with
vertically integrated business models like our own, many of which are larger than we are. For example, some of our competitors offer their
own consumer financing products to customers and/or produce one or more components of the residential solar energy system or energy storage
system. In addition to financing and manufacturing, some other business models also include sales, engineering, installation, maintenance
and monitoring services. Some of our competitors also have an established complementary construction, electrical contracting or roofing
services.

Some competitors also offer customers the option
of leasing a residential solar energy system installed on the customer’s residence. In such a scenario, the provider or a third
party owns the residential solar energy system, and the customer typically pays a predetermined fee for the electricity produced by the
residential solar energy system. The fee generally increases annually at a predetermined rate over the lease term, which is typically
20 to 25 years, with a renewal option. Such a lease program can take fuller advantage of some of the available tax incentives and, therefore,
can reduce the customer’s monthly costs in comparison to owning the residential solar energy system.

We compete against companies that are not vertically
integrated, such as companies that offer only installation services, or provide only equipment to be installed, or dealers that sell systems
for which another entity or entities will provide and install equipment. Some of these entities finance products directly to consumers,
inclusive of programs like Property-Assessed Clean Energy financing programs established by local governments. For example, we face competition
from solar installation businesses that seek financing from external parties or utilize competitive loan products or state and local programs.

We expect the competition to evolve as the market
continues to grow, evolve and attract new market entrants. We believe that with our business model and sales strategy, we can compete
effectively and favorably within the industry.

For more information on risks relating to increased
competition in our industry, see “Risk Factors — Risks Related to the Solar Industry — We face competition from electric
utilities, retail electric providers, independent power producers, renewable energy companies and other market participants.”

Intellectual Property

We protect our intellectual property rights by
relying on common law protections and through contractual arrangements. We typically require our personnel, consultants and third parties
such as our suppliers with access to our proprietary information to execute confidentiality agreements. Our principal trade secrets and
copyrighted materials consist of our sales methodologies and data regarding our personnel, customers and suppliers.

We also license third-party software and services
that we use in operating our business. These third-party solutions include, among others, software that we use in selling and designing
our products services, a customer relationship management system to actively track key performance indicators across the sales cycle and
software to augment our sales and marketing efforts.

Heliogen

Heliogen is a renewable energy technology company
focused on delivering round-the-clock, low-carbon U.S. energy production, using concentrated sunlight and thermal energy storage to deliver
cost-effective, load-following, high-capacity factor thermal and electric energy.

9

Heliogen continues to prioritize commercial deployment
of its energy solutions with a technology-centric business model, by focusing on:

●the development and implementation
of its enhanced concentrated solar energy technology and thermal energy storage;

●providing engineering, maintenance
and project development support to third parties seeking reliable, low-carbon energy and storage solutions;

●supporting owner-operators
to deploy Heliogen’s technology (Heliogen will partner with engineering, procurement and construction companies for facility construction);
and

●the long-term, licensing of
Heliogen’s intellectual property and providing engineering and maintenance support to third parties interested in manufacturing
and installing the hardware.

Products & Services

Heliogen has developed innovations for concentrating
sunlight which Heliogen believes enhance the fundamentally proven chassis technology for efficiently and cost-effectively capturing energy.
Heliogen is among the leading technology providers capable of delivering cost-effective renewable energy solutions that complement traditional
energy sources and facilitate a pragmatic reduction of carbon emissions for industrial operations.

Without storage, energy generation by traditional
forms of renewable power such as wind and solar photovoltaic (“PV”) can rapidly fluctuate between over-supply and under-supply
depending upon resource availability. As the grid penetration of intermittent resources increases, these fluctuations may become more
extreme. Concentrated solar energy technology can address this challenge by integrating thermal energy storage, which is an integral part
of Heliogen’s hybrid power solution. This stored energy can then be dispatched when needed, including during times without sunlight,
to cost-effectively deliver near 24/7 carbon-free energy in the form of electric power and/or heat.

The energy solutions Heliogen offers are:

●Hybrid & Tri-Brid Low-Carbon
Power Generation — Heliogen’s hybrid approach integrates a steam turbine generator with CSP, PV and long-duration (thermal)
energy storage (“LDES”) to achieve low-carbon emissions for electricity production, combining sustainability with practicality,
while maintaining a low-cost solution. Heliogen’s tri-brid approach further integrates a natural gas-fired system capable of delivering
up to 100% firm power for mission critical operations.

●Carbon-Free Steam Production
— This baseline solution produces heat or steam for use in industrial processes, eliminating carbon emissions through innovative
technology.

The use of molten salt has been successfully demonstrated
as a heat transfer and thermal energy storage medium in CSP plants worldwide, and is recognized as a mature, commercially deployable technology.
Modern installations incorporate CSP, PV and thermal energy storage — which Heliogen refers to as its hybrid power solution. This
hybrid power solution leverages the low cost of electricity generated by PV during the day and the cost-effective LDES during the night
for dispatchable, near-continuous operation.

10

For near-term projects, Heliogen’s designs
aim to improve upon this established approach in two ways. First, Heliogen utilizes a modular architecture, deploying multiple smaller
towers per project instead of a single large tower. This streamlines project engineering by allowing for smart replication across multiple
projects, while enhancing efficiencies, improving land utilization, and providing redundancy for greater operational reliability and uptime.
Second, Heliogen’s closed-loop software is designed to detect optical inaccuracies and automatically correct them, substantially
improving upon the efficiency of existing CSP plants worldwide. Using Heliogen’s software on heliostats at the National Solar Thermal
Test Facility (NSTTF) corrected the aim of the heliostats and reduced tracking error substantially compared to the current industry benchmark.
The software also measures the alignment of the mirror facets to improve beam quality. The software’s automated correction of heliostat
pointing inaccuracies is expected to reduce operational and maintenance costs by reducing the need for offline calibration and continuously
optimizing system efficiency for maximum sunlight collection.

Concentrated solar energy technology is fundamentally
a thermal energy collection system, which Heliogen believes is particularly well-suited to meeting the energy needs of industrial processes.
For example, many industrial facilities use steam to supply energy to their process. Heliogen’s solution, in the form of a steam
plant, can supply steam nearly 24/7 by collecting thermal energy while the sun is shining, storing it in a thermal energy storage system,
and using that thermal energy to supply heat to a boiler when the industrial process needs steam.

Insurance

We maintain the types and amounts of insurance
coverage and on terms deemed adequate by management based on our actual claims experience and expectations for future claims. However,
future claims could exceed our applicable insurance coverage. Our insurance policies cover employee-and contractor-related accidents and
injuries, property damage, business interruption, storm damage, inventory, vehicles, fixed assets, facilities, and crime and general liability
deriving from our activities. We have also obtained insurance policies covering directors, officers, employment practices, auto liability,
and commercial general liability. We may also be covered in some circumstances for certain liabilities by insurance policies owned by
third parties, including, but not limited to, our dealers and vendors.

Government Regulation

U.S. tariffs, duties and other trade regulations
impact the prices of components in the residential solar energy systems and energy storage systems we sell, in addition to the pricing
pressures caused by supply chain factors as discussed above. As further discussed below, these U.S. government-based pricing influences
currently include various tariffs, such as antidumping (“AD”) and countervailing duties (“CVD”)
and other trade restrictions, applied to imported crystalline silicon PV cells and solar panels imported into the U.S. Also, China is
a major producer of solar panels, inverters and other components that we use in the systems that we install, and the U.S. currently assesses
various tariffs and antidumping and countervailing duties on equipment produced in China, including solar panels and inverters. The U.S.
has also placed certain geographic, company-specific and other trade restrictions on Chinese sources of supply based on foreign policy
and national security interests. The scope and timing of these regulatory efforts change over time, and the government may introduce new
regulations as world events occur and public policy evolves. In response to the market uncertainty and price fluctuations caused by these
government actions and other supply chain pressures, we carefully and periodically evaluate our suppliers of system components and make
purchasing decisions based on our judgments of product quality, warranties, pricing and availability.

For more information on risks relating to government
tariffs, duties or trade restrictions, see “Risk Factors — Risks Related to Zeo Energy’s Operations — Increases
in the cost or reduction in supply of residential solar energy system and energy storage system components due to tariffs or trade restrictions
announced or imposed by the U.S. government could have an adverse effect on our business, financial condition and results of operations.”

Our operations are subject to various national,
state and local laws and regulations. These include regulations regarding license requirements for electricians or other professionals
involved in the installation of residential solar energy systems and energy storage systems. Many states and/or local governments and
utilities have regulated procedures for interconnecting residential solar energy systems and related energy storage systems to the utility’s
local distribution system. There are also local building codes or other local regulations for installing the products we sell on a customer’s
property. We employ or contract with licensed professionals as needed to comply with regulatory requirements, and as part of our process
of installing residential solar energy systems and related equipment, we assist our customers in obtaining interconnection permission
from the applicable local electric distribution utility, and applicable permits from other local offices.

11

Our operations, as well as those of our suppliers
and subcontractors, are subject to stringent and complex U.S. federal, state, territorial and local laws, including regulations governing
the occupational health and safety of employees, wage regulations and environmental protection. For example, we and our suppliers and
subcontractors are subject to the regulations OSHA, the U.S. Department of Transportation (“DOT”), the U.S.
Environmental Protection Agency (“EPA”) and comparable state entities that protect and regulate employee health
and safety and the protection of the environment. Various environmental, health and safety laws can result in the imposition of costs
and liability in connection with system and equipment installation, the repair or replacement of parts, and disposal of hazardous substances
(such as the disposal and recycling of batteries).

We and the dealers that supply us with sales opportunities
or completed sales are also subject to laws and regulations related to interactions with consumers, including those applicable to sales
and trade practices, privacy and data security, equal protection, consumer financial and credit transactions, consumer collections, mortgages
and re-financings, home or business improvements, trade and professional licensing, warranties, and various means of customer solicitation,
as well as specific regulations pertaining to solar installations.

Government Incentives

There are U.S. federal, state and local governmental
bodies that provide incentives to owners, distributors, installers and manufacturers of solar energy systems and energy storage systems,
to promote solar energy and energy resilience. These incentives include tax credits offered by the federal government under, among others,
the Energy Policy Act of 2005, as amended, and the IRA, as amended by the new Pub. L. No. 119-21, as well as other tax credits, rebates
and SRECs associated with solar energy generation. Commercial taxpayers, including solar energy system owners and tax-equity partners,
may claim a federal investment tax credit equal to 30% of eligible project costs for solar and energy storage facilities that meet certain
requirements. Under the terms of the new Pub. L. No. 119-21, for solar energy systems this credit will phase out and no longer be available
for installations completed after December 31, 2027, with some exceptions, and higher domestic content percentages will be required for
projects to qualify for the full credit. Qualified energy storage solutions are eligible for credits on projects starting construction
by December 31, 2032.

Our business model also may benefit from tax
exemptions offered at the state and local levels. For example, some states have property tax exemptions that exempt the value of residential
solar energy systems in determining values for calculation of local and state real and personal property taxes, and there are some state
and local tax exemptions that apply to the sale of equipment. State and local tax exemptions can have sunset dates or triggers for loss
of the exemption, and the exemptions can be changed by state legislatures and other regulators.

A majority of states have adopted net metering
policies, including our sales areas of Florida, Texas, Missouri, Ohio and Illinois. Net metering policies allow homeowners to serve their
own energy load using on-site generation while avoiding the full retail volumetric charge for electricity. Electricity that is generated
by a residential solar energy system and consumed on-site avoids a retail energy purchase from the applicable utility, and excess electricity
that is exported back to the electric grid generates a retail credit within a homeowner’s monthly billing period. At the end of
the monthly billing period, if the homeowner has generated excess electricity within that month, the homeowner typically carries forward
a credit for any excess electricity to be offset against future utility energy purchases. At the end of an annual billing period or calendar
year, utilities either continue to carry forward a credit or reconcile the homeowner’s final annual or calendar year bill using
different rates (including zero credit) for the exported electricity.

Utilities, their trade associations, and other
entities are currently challenging net metering policies in various locations by seeking to eliminate them, cap them, reduce the value
of the credit provided to homeowners for excess generation or impose charges on homeowners that have net metering. States where we sell
now or in the future may change, eliminate or reduce net metering benefits.

We rely on a mix of the incentives mentioned above
to reduce the net price our customers that are eligible for incentives would otherwise pay for our solar offerings or per kilowatt hour
used.

12

Employees and Human Capital Management

As of December 31, 2025, we had approximately
190 full-time employees that work year-round processing orders, installing and servicing systems and fulfilling administrative tasks.
We also engage sales agents as independent contractors as described in “Business - Internal Direct Sales Force”
above. None of our employees are covered by collective bargaining agreements, and we have not experienced any work stoppages due to labor
disputes.

Facilities

Our corporate headquarters are located in Florida
under a lease that expires at the end of October 2026. In Florida, we maintain offices for operations personnel and warehouses, and we
have warehouses in Texas and Ohio, and warehouse, sales, marketing, and executive offices in Utah. We currently lease the office and warehouse
spaces that we use in our operations, and we do not own any real property. We believe that our facility space adequately meets our needs
and that we will be able to obtain any additional operating space that may be required on commercially reasonable terms.

Litigation

We are not currently a party to any material litigation
or governmental or other proceeding. However, from time to time, we have been, are and will likely continue to be involved in legal proceedings,
administrative proceedings and claims that arise in the ordinary course of business with customers, subcontractors, suppliers, regulatory
bodies or others. In general, litigation claims or regulatory proceedings can be expensive and time consuming to bring or defend against,
which may result in the diversion of management’s attention and resources from our business and business goals and could result
in settlement or damages that could significantly affect financial results and the conduct of our business.

Change of Accountants of Zeo Energy

Change in Independent Registered Accounting
Firm April 2024

In connection with the closing of the Business
Combination, Grant Thornton LLP (“GT”) became the independent registered public accounting firm for Zeo Energy. On April 16,
2024 (the “Dismissal Date”), Zeo Energy dismissed BDO USA P.C. (“BDO”) as the independent registered public accounting
firm for Zeo Energy. The dismissal was approved by Zeo Energy’s 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 Zeo Energy did not provide an adverse opinion or disclaimer of opinion to Zeo Energy’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 Zeo Energy’s ability to continue as a going concern.

For Zeo Energy’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 Zeo Energy 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 Zeo Energy 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. Our 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).

13

On the same date as the Dismissal Date, on April
16, 2024, as recommended and approved by Zeo Energy’s Audit Committee, Zeo Energy engaged GT as Zeo Energy’s independent public
accounting firm to audit Zeo Energy’s consolidated financial statements for the fiscal year ending December 31, 2024 and to review
Zeo Energy’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.

For Zeo Energy’s two most recent fiscal
years, and in the subsequent interim period through the Dismissal Date, neither Zeo Energy nor anyone on its behalf consulted with GT
regarding: (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 Zeo Energy’s financial statements, and neither a written report nor oral advice was provided to
Zeo Energy that GT concluded was an important factor considered by Zeo Energy 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 S-K).

Change in Independent Registered Public Accounting
Firm October 2025

On October 31, 2025, the Audit Committee and the
Board, after discussion with the management of the Company, approved the dismissal of GT, the Company’s independent registered public
accounting firm, and approved the appointment of 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. These 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.

14