Risk Factors Update Summary

• Added measures to protect intellectual property, including laws, contracts, and information security. This change might result in improved IP protection and reduced misappropriation risks.
• Entities holding equity interests may face limitations on distributions due to Tax Receivable Agreement payments.
• Ability to enter into debt instruments may be restricted by Sponsor consent rights, impacting business flexibility.
• Identification of material weaknesses in internal controls over financial reporting, requiring significant remediation efforts.
• Increased expenses to comply with laws, regulations, and industry standards, including significant monetary damages and fines.
• Potential for increased personal liability may hinder attracting and retaining qualified Board members. This could impact the liquidity and price of Zeo's securities negatively.
• Increased scrutiny on ESG matters may damage reputation and financials if not addressed promptly.
• Increases in the cost or reduction in supply of residential solar energy system components due to tariffs could adversely affect business operations.
• Payments under the Tax Receivable Agreement could be substantial, impacting OpCo's liquidity negatively.
• Mentioned the extension of the Termination Date for completing a business combination by up to six additional months. This change could impact the timeline for business combination completion.
• Potential exposure to significant damages and penalties due to alleged violations of law by third parties.
• Change in warranty terms from 25-year to 10-year may increase future maintenance costs.
• Uncertainty and increased costs due to changing laws, regulations, and standards affecting compliance and governance.
• The absence of a specified maximum redemption threshold may make it difficult to sell securities without depressing the market price.
• The Residential Clean Energy Credit provides homeowners a 30% tax credit for solar equipment.
• Expansion of solar service offerings may be hindered by changes in laws and regulations.
• Risks related to ownership of Zeo securities, including limited experience managing a public company.
• Potential impact on stock price due to restricted access to capital markets and inadequate internal controls.
• Tax distributions to OpCo unitholders may complicate maintaining the intended capital structure.
• Competition from electric utilities could impact business growth due to their greater resources.
• Highlighted the importance of intellectual property and the challenges in policing unauthorized use, potentially affecting competitive advantage. This change emphasizes the significance of IP protection.
• Tariffs and trade restrictions could increase costs of solar products, impacting competitive pricing.
• Inactive trading market may impair Zeo's ability to attract and motivate employees through equity incentive awards.
• Concentration of sales in Florida (92%) poses regional risk to operations and financials.
• Implementation of disclosure requirements regarding the use of conflict minerals, incurring additional compliance costs.
• Issuing additional shares without stockholder approval could dilute ownership interests significantly.
• Changes in utility rates or peak hour pricing policies could affect the competitiveness of solar energy offerings.
• Changes in utility rate structures, like net metering policies, may reduce demand for solar energy systems.
• Disclosed the intention to identify, acquire, and maximize the value of a business in North America. This change indicates a strategic shift towards North American business opportunities.
• Noncompliance with laws governing customer interactions could lead to fines, negative publicity, and investigations.
• Climate change poses risks to operations, including delays in system installation and decreased energy output.
• Noted the risks associated with open-source software components and potential litigation, emphasizing the importance of software licensing and compliance.
• Zeo's ability to operate may be adversely affected by securities class action litigation.
• Increased regulation of customer interactions may require operational modifications and incur significant expenses.
• The company may face challenges in sustaining profitability and achieving positive cash flows due to increased spending.
• Zeo's ability to issue additional securities and obtain financing could be adversely affected by a decline in the market price of its stock.
• Addressed the risks related to cybersecurity incidents, including unauthorized access, data theft, and system disruptions. This change highlights the potential impact on operations and reputation.
• Reliance on a limited number of suppliers for solar components may lead to delays and loss of customers.
• Zeo's governing documents contain provisions that could delay or prevent takeover attempts, potentially depressing the trading price of Class A Common Stock.
• Mentioned the fluctuation in operating results due to seasonal and quarterly variations, impacting sales volume and installation timelines. This change underscores the seasonal nature of the business and its effects on financial performance.