UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 19, 2024

ZEO ENERGY CORP.

(Exact name of registrant as specified in its charter)

Delaware

001-40927

98-1601409

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

7625 Little Rd, Suite 200A,

New Port Richey, FL

34654

(Address of principal executive offices)

(Zip Code)

(727) 375-9375

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share	ZEO	The Nasdaq Stock Market LLC
Warrants, each exercisable for one share of Class A Common Stock at a price of $11.50, subject to adjustment	ZEOWW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.

Results of Operations and Financial Condition.

On August 20, 2024, Zeo Energy Corp., a Delaware corporation (the “Company”), issued a press release announcing its financial results for the second quarter ended June 30, 2024. The press release is furnished hereto as Exhibit 99.1.

The information provided in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. Such information shall not be deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as otherwise expressly set forth by specific reference in such filing.

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Appointment of Cannon Holbrook as CFO

On August 20, 2024, the Company announced the appointment of Cannon Holbrook as Chief Financial Officer (“CFO”). Mr. Holbrook initially joined the Company in March 2024, serving as advisor to the Chief Executive Officer (the “CEO”) 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.

Mr. Holbrook (a) is not a party to any arrangement or understanding with any other person pursuant to which he was selected to serve as CFO of the Company, (b) has not been involved in any transactions with the Company or related persons of the Company that would require disclosure under Item 404(a) of the Regulation S-K, and (c) does not have any family relationship with any other director, executive officer, or person nominated or chosen by the Company to become a director or executive officer of the Company.

Below is certain biographical information about Mr. Holbrook:

Mr. Holbrook, 52, brings over two decades of experience in finance and accounting to the Company. Throughout his career, he has demonstrated expertise in strategic planning, mergers and acquisitions, and capital raising. He has managed accounting operations for global entities, implemented shared services, and developed and driven process improvements that have yielded significant cost savings and operational efficiencies. Prior to joining the Company as CFO, Mr. 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, Mr. Holbrook served as the CFO of Hawx Pest Control, a company in the business of residential pest services. While there, he led accounting, finance, and treasury functions, helped the company increase its revenue, and helped to close a major private equity financing. Prior to this, from September 2020 to December 2021, Mr. Holbrook served as the Head of Finance in Built Bar, a food manufacturer. In this role, he implemented key financial reporting functions and helped raise debt and equity financing. From July to September 2020, he was the Consulting CFO of Access CFO, a business that provides outsourced CFO services. While there, he drove company responses to quality of earnings processes and planned and drove preparation for a company audit. From December 2017 to July 2020, Mr. 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.

Employment Agreement with Cannon Holbrook

In connection with his appointment, Sunergy Solar, LLC (“Sunergy”), a subsidiary of the Company, entered into an employment agreement with Mr. Holbrook on August 19, 2024 (the “Holbrook Agreement”) pursuant to which Mr. Holbrook will serve as the Chief Financial Officer of both Sunergy and the Company, reporting to the Company’s Chief Executive Officer.

The period of the Holbrook Agreement commenced on August 19, 2024 (the “Effective Date”) and continues through the third anniversary of the Holbrook Agreement. 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. Holbrook’s responsibilitiess, the Company agreed to pay Mr. Holbrook a base salary of $225,000, which may be increased from time to time by the Compensation Committee (the “Committee”) of the Company’s board of directors (the “Board”) in its sole discretion.

A one-time payment of $25,000 will be paid 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. Holbrook, based on meeting positive EBITDA targets, an evaluation of his performance and peer group compensation practices, taking into account the Company and individual performance objectives, and/or such criteria as determined by the Committee in its sole discretion from time to time.

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; and

●

75,000 vested shares to be granted on the date that is 35 months after the Effective Date.

The Company may terminate Mr. Holbrook’s employment with or without Cause (as defined in the Holbrook Agreement). The Company has agreed to provide thirty (30) days in notice to Mr. Holbrook if he is terminated without Cause (or base salary in lieu of such notice),. The termination of Mr. 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.

Mr. Holbrook may terminate his employment with or without Good Reason (as defined in the Holbrook Agreement). If Mr. 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.

In the event of termination for any reason, 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.

If the Company terminates Mr. Holbrook without Cause or Mr. Holbrook terminates for Good Reason, and there is no Change of Control (as defined in the Holbrook Agreement), the Company has agreed to also provide Mr. Holbrook the following:

(i) a lump sum cash payment, payable on the date of termination, equal to the sum of the following: (x) one year’s base salary at the annualized rate then in effect (or the rate that should be in effect but for any base salary diminution), and (y) any unpaid annual bonus for the preceding calendar year and the greater of (I) any annual target cash bonus opportunity for the year of termination or (II) the average annual cash bonus for the three preceding calendar years in which an annual cash bonus was paid, and (z) the annual cash bonus and any other target long-term incentive award granted for the year of the date of termination;

(ii) accelerated vesting of any outstanding equity grants so that such equity grants vest completely as of the date of termination; and

(iii) to the extent eligible and Mr. Holbrook properly elects coverage, continued health insurance coverage under COBRA for twelve (12) months following termination at the same costs as applied to Mr. Holbrook prior to his termination, subject to early termination upon Mr. Holbrook becoming eligible for group health insurance coverage under another employer’s plan.

If the Company terminates Mr. Holbrook without Cause or 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; and

(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 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.

The foregoing description of the Holbrook Agreement does not purport to be complete and is qualified in its entirety by the full text of the agreement, which is attached hereto as Exhibit 10.1.

On August 20, 2024, the Company issued a press release announcing Mr. Holbrook’s appointment. A copy of such release is attached hereto as Exhibit 99.2.

Item 9.01.

Financial Statements and Exhibits.

(d)

Exhibits

Exhibit		Description
10.1		Employment Agreement, dated August 19, 2024, by and between the Company and Cannon Holbrook
99.1		Earnings Release, dated August 20, 2024
99.2		Press Release, dated August 20, 2024
104		Cover Page Interactive Data File (formatted as Inline XBRL)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: August 20, 2024	Zeo Energy Corp.

	By:	/s/ Timothy Bridgewater
	Name:	Timothy Bridgewater
	Title:	Chief Executive Officer and Chief Financial Officer

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (“Agreement”) is made as of August 19, 2024, by and between Sunergy Solar, LLC (together with its successors and assigns, the “Company”), and Cannon Holbrook (“Executive”).

WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company, and serve as the Chief Financial Officer of Company and its ultimate parent company, Zeo Energy Corp. (“Zeo”).

NOW, THEREFORE, the parties hereby agree as follows:

1. Employment and Term. Company agrees to employ Executive, and Executive accepts employment by the Company, on the terms herein. Executive’s term of employment by the Company under this Agreement (the “Term”) shall commence on the date this Agreement is executed by both parties (the “Effective Date”) and end on the third anniversary thereof, subject to automatic renewal of the Term for additional one-year periods unless either the Company or Executive gives the other party written notice of intent not to renew the Term not less than ninety days before the date on which the Term otherwise would automatically renew. Notwithstanding the foregoing, the Term may be terminated earlier in accordance with Section 5.

2. Position, Duties and Responsibilities, Location, and Commuting.

(a)

Position and Duties. During the Term, the Company shall employ Executive, and Executive shall serve, as Chief Financial Officer of Company and its ultimate parent company Zeo Energy Corp. Executive shall report directly to Zeo’s Chief Executive Officer (“CEO”). Executive shall have, subject to the direction of the CEO and Zeo’s Board of Directors (the “Board”), the duties, powers, and authority as are commensurate with the above-described roles, and such other duties and responsibilities as are delegated to Executive from time to time by the CEO or Board.

(b)

Level of Efforts. Executive agrees to devote his full-time efforts, energies, and skill to the discharge of his assigned duties and responsibilities, and shall at a minimum devote sufficient professional time and attention to satisfactorily carry out Executive’s responsibilities. To the extent such activities do not either individually or in the aggregate materially interfere with the performance of his responsibilities to the Company, Executive shall be entitled to engage in (a) services as a board member for one for-profit businesses or trade organization during the Term, provided that Executive shall not serve on the board of any entity that materially competes with the Company, (b) service on the board of directors of a not-for-profit organization, (c) other charitable activities and community affairs, and (d) management of his personal and family investments and affairs. With the prior written consent of the Board (which consent will not be unreasonably withheld or delayed), Executive may act or serve as a director, trustee, member, or principal of any type of organization for which such activities are disclosed in writing to the Company in accordance with Zeo’s Conflict of Interest Policy.

(c)

Compliance with Company Policies. To the extent not inconsistent with the terms and conditions of this Agreement and with due regard for his or her or their position, Executive shall be subject to the Bylaws, policies, practices, procedures, and rules of Zeo, including those policies and procedures set forth in Zeo’s Code of Conduct, but in no event shall anything in such documents be construed to expand the definition of Cause hereunder.

(d)

Location of Employment and Commuting. Executive’s principal office, and principal place of employment, shall be at the Company’s offices in Utah. Executive may be required to travel on Company business. Executive may work remotely from Executive’s residence from time to time, provided that the remote working does not interfere with the Executive’s responsibilities under this Agreement and provided Executive cooperates with Company to reasonably minimize any resulting tax and other regulatory compliance burdens resulting; provided that, subject to any health or safety concerns related to the COVID-19 pandemic or other similar extraordinary circumstances, Executive may be required to spend an average of at least 3 days per week in a Company office.

3. Compensation.

(a)

Base Salary. The Company shall pay to the Executive an annual salary of $225,000 (“Base Salary”), which may be increased from time to time by the Compensation Committee of the Board (“Committee”) in its sole discretion. All payments made to or on behalf of Executive under the terms of this Agreement, including all payments of Base Salary and any bonuses, shall be subject to all withholding required or permitted by law (such as income and payroll taxes) and such additional withholding as may be agreed upon by Executive. For the first year in which Executive is hired, Executive’s annual salary will be paid on a pro-rated based on the proportion of the year that Executive is employed under this Agreement.

(b)

Annual Cash Bonus. A one-time payment of $25,000 will be provided to the Executive upon execution of the Agreement. During the Term, this Agreement provides for no guaranteed annual target cash bonus. The Committee may choose to award Executive, at the Committee’s sole discretion, an annual cash bonus based on meeting positive EBITDA targets, an evaluation of Executive’s performance and Peer Group compensation practices, taking into account Zeo and individual performance objectives, and/or such criteria as determined by the Committee in its sole discretion from time to time. Any annual cash bonuses the Committee chooses to award Executive shall be deemed “earned” if Executive is employed as of the date of the payment of such annual cash bonus, provided, however, that such bonus shall be paid no later than March 15th of the year immediately following the year to which the annual bonus relates.

(c)

Equity Award. During the Term, subject to approval by the Zeo Board of Directors, Executive will receive grants of shares in Zeo under the 2024 Omnibus Incentive Equity Plan in accordance with the terms and conditions of the underlying equity grant and award agreements, according to the following schedule:

(i)

15,000 vested shares to be issued as soon as possible following the Effective Date.

(ii)

75,000 vested shares to be issued on the date that is 12 months after the Effective Date.

(iii)

75,000 vested shares to be granted on the date that is 24 months after the Effective Date.

(iv)

75,000 vested shares to be granted on the date that is 35 months after the Effective Date.

4. Employee Benefits and Perquisites.

(a)

Benefits. Executive shall be entitled to participate in such health, group insurance, welfare, pension, and other employee benefit plans, programs, and arrangements as are made generally available from time to time to senior executives of Zeo (which shall include customary health, life insurance, and disability plans), such participation in each case to be on terms and conditions no less favorable to Executive than to other senior executives of Zeo generally.

(b)

Fringe Benefits, Perquisites, and Paid Time Off. During the Term, Executive shall be entitled to participate in all fringe benefits and perquisites made available to other senior executives of Zeo, such participation to be at levels, and on terms and conditions, that are commensurate with his or her or their position and responsibilities at Zeo and that are no less favorable than those applicable to other senior executives of Zeo. In addition, Executive shall be eligible for up to 6 weeks of paid time off (“PTO”) per calendar year in accordance with the Company’s (or its Affiliates’) vacation and PTO policy, inclusive of vacation days and sick days and excluding standard paid Company holidays. Unused PTO may not be carried over into a subsequent year.

(c)

Reimbursement of Expenses. The Company shall reimburse Executive for all reasonable business and travel expenses (first class airplane travel may only be used in exceptional circumstances) incurred in the performance of job duties, promptly upon presentation of appropriate supporting documentation and otherwise in accordance with the expense reimbursement policy of the Company or its Affiliates.

5. Termination; Change in Control.

(a)

General. The Company may terminate Executive’s employment at any time for Cause and effective as of the date of delivery of a notice from the Company. Executive may terminate his employment at any time for Good Reason in accordance with the terms set forth herein. The Company may terminate Executive’s employment without Cause, or Executive may terminate Executive’s employment without Good Reason, in each case, upon providing the other party at least thirty days’ written notice thereof, provided, however, that the Company may pay Executive his Base Salary in lieu of such notice. Upon termination of Executive’s employment, Executive shall be entitled to the applicable compensation and benefits described in this Section 5. The following terms as used in this Agreement have the following meanings:

(i)

“Accrued Benefits” shall mean: (i) accrued but unpaid Base Salary through the Termination Date, payable within thirty days following the Termination Date; (ii) reimbursement for any unreimbursed business expenses incurred through the Termination Date and any expenses incurred through the Termination Date under Section 4(c) above, payable within thirty days following the Termination Date; (iii) accrued but unused PTO days; and (iv) all other payments, benefits, or fringe benefits to which Executive shall be entitled as of the Termination Date under the terms of this Agreement or any other applicable compensation arrangement or benefit, equity, or fringe benefit plan or program or grant.

(ii)

“Cause” shall mean: (i) Executive’s refusal to perform, or repeated failure to undertake good faith efforts to perform, the duties or responsibilities reasonably assigned to Executive by the Board, which is not cured within thirty days after Executive’s written receipt of notice thereof from the Company; (ii) Executive’s engagement in willful gross misconduct or willful gross negligence in the course of carrying out his or her or their duties that results in material economic or reputational harm to the Company or its Affiliates; (iii) Executive’s violation of any material Company policy which is not cured within thirty days after Executive’s written receipt of notice thereof from the Company; (iv) Executive’s conviction of or plea of guilty or nolo contendere to a felony; or (v) a material breach by Executive of this Agreement or any agreement with the Company or its Affiliates which is not cured within thirty days after Executive’s receipt of written notice thereof from the Company; (vi) willful or grossly negligent violation of applicable laws and regulations; (vii) dependence on alcohol or drugs without the supervision of a physician or the illegal use, possession or sale of drugs; or (viii) theft, misappropriation, embezzlement or conversion of the assets or opportunities of the Company or its Affiliates. Termination of Executive’s employment shall not be deemed to be for Cause unless Executive has had a reasonable opportunity, together with counsel, to respond to all relevant allegations upon which a contemplated termination for Cause is based.

(iii)

“Change in Control” shall have the same meaning as the definition of Change in Control as set forth in the 2024 Omnibus Incentive Equity Plan.

(iv)

“Change-in-Control Severance Payments” shall mean (i) pro-rated based on the number of days worked by Executive during the year as of the Termination Date, 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, payable on the Termination Date, 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 any other target long-term incentive award granted Executive for the year of the Termination Date; (iii) accelerated vesting of any outstanding equity grants to Executive so that such equity grants vest completely as of the Termination Date; and (iv) continuation health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) during the twelve-month period following the Termination Date (the “COBRA Coverage Period”), provided, however, that, these payments for continuation coverage under COBRA shall cease prior to the end of the COBRA Coverage Period if the Executive becomes eligible for other group health insurance coverage from a new employer, and provided further that such coverage provided during the COBRA Coverage Period shall be included in (and not in addition to) the continuation period under COBRA; provided, further, that such payments shall be limited to the employer contribution that the Company would have made to provide health insurance to Executive and any dependents if Executive had remained employed by the Company following the Termination Date.

(v)

“Disability” shall mean that Executive has been unable, with or without reasonable accommodation and due to physical or mental incapacity, to substantially perform his or her or their duties and responsibilities hereunder for 120 consecutive days.

(vi)

“Good Reason” shall mean any of the following that has not been approved in writing in advance by Executive: (i) a diminution of Executive’s titles, duties, responsibilities, or authorities as set forth in this Agreement or Executive being required to report to another person other than the Board or as otherwise provided for in Section 2(a); (ii) a reduction in Executive’s Base Salary, annual cash bonus opportunity, or annual long-term incentive award opportunity, or failure to pay earned compensation, with the exception of across-the-board reductions in compensation of less than 15% that affect all similarly-situated employees; (iii) relocation of the Company’s offices such that Executive is required to work in a different office that is fifty (50) or more miles away from the Executive’s assigned office location(s); or (iv) a material breach by the Company of this Agreement or any equity award agreement; provided, however, that Executive must, within thirty (30) days after Executive’s receipt of notice of any of the foregoing events, notify the Company in writing of his intention to terminate his employment on account of such event(s), and the Company shall have thirty (30) days from receipt of such written notice to cure the Good Reason condition (which, in the event of clause (i) of this definition, must be retroactive to the date of the applicable reduction to constitute a cure); provided, further, that Executive must terminate Executive’s employment within fifteen (15) days following the expiration of the foregoing cure period.

(vii)

“Severance Payments” shall mean (i) a lump sum cash payment, payable on the Termination Date, 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 completed years (provided, however, that if Executive 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) the incentive award described in 3.b above and any other target long-term incentive award granted Executive for the year of the Termination Date; (ii) accelerated vesting of any outstanding equity grants to Executive so that such equity grants vest completely as of the Termination Date; (iii) if Executive is eligible for and elects coverage under COBRA, continuation health insurance coverage under COBRA during the COBRA Coverage Period as set forth above, provided, however, that, these payments for continuation coverage under COBRA shall cease prior to the end of the COBRA Coverage Period if the Executive becomes eligible for other group health insurance coverage from a new employer, and provided further that such coverage provided during the COBRA Coverage Period shall be included in (and not in addition to) the continuation period under COBRA; provided, further, that such payments shall be limited to the employer contribution that the Company would have made to provide health insurance to Executive and any dependents if Executive had remained employed by the Company following the Termination Date.

(viii)

“Termination Date” shall mean the date on which Executive’s employment hereunder terminates in accordance with this Agreement (which, in the case of a notice of non-renewal of the Term in accordance with Section 1 hereof, shall mean the date on which the Term expires).

(b)

Termination for Cause or Termination by Executive Without Good Reason. If Executive’s employment hereunder is terminated by the Company for Cause or by Executive without Good Reason, which shall include a non-renewal of the Term by Executive, Executive shall be entitled to receive the Accrued Benefits, but shall not receive any equity described above in section 3.C, Equity Award, that has not vested as of the date of termination.

(c)

Termination Without Cause or Termination by Executive for Good Reason. If Executive’s employment hereunder is terminated by the Company without Cause (which shall include a non-renewal of the Term by the Company) or by Executive for Good Reason, Executive shall be entitled to receive the Accrued Benefits and the Severance Payments, except as otherwise provided pursuant to Section 5(d).

(d)

Termination Without Cause or Termination by Executive for Good Reason Due to a Change in Control. If Executive’s employment hereunder is terminated by the Company without Cause or by Executive for Good Reason within two years following or six months prior to a Change in Control, Executive shall receive the benefits described in Section 5(c), except that Executive shall receive the Change-in-Control Severance Payments in lieu of the Severance Payments.

(e)

Termination Due to Death or Disability. If Executive’s employment hereunder is terminated due to Executive’s death or Disability, Executive shall receive the Accrued Benefits, but shall not receive any equity described above in section 3.C, Equity Award, that has not vested as of the date of termination.

(f)

As a precondition to the payment of any amounts in addition to earned but unpaid Accrued Benefits upon termination of Executive’s employment under this Agreement, Executive shall be required to execute a separation agreement and release of any claims against the Company, Affiliates, and their employee, officers, directors, and shareholders arising out of Executive’s employment or termination in a form acceptable to the Company.

(g)

Return of Company Property. Upon termination of Executive’s employment for any reason or under any circumstances, or earlier upon the Company’s request, Executive shall promptly return any and all of the property of the Company and any Affiliates (including, without limitation, all computers, keys, credit cards, identification tags, documents, data, confidential information, work product, and other proprietary materials), and other materials. Executive may retain Executive’s rolodex and similar address books provided that such items only include contact information.

(h)

Post-Termination Reasonable Cooperation. Following the Term Executive shall, to the extent reasonably requested by the Company, cooperate in good faith with the Company to assist the Company and/or its Affiliates in the pursuit or defense of (except if Executive is adverse with respect to) any claim, administrative charge, or cause of action by or against the Company or its Affiliates as to which Executive, by virtue of his or her or their employment with the Company or any other position that Executive holds that is affiliated with or was held at the request of the Company or its Affiliates, has relevant knowledge or information, including by acting as the Company’s representative in any such proceeding and, without the necessity of a subpoena, providing truthful testimony in any jurisdiction or forum. The Company shall reimburse Executive for his or her or their reasonable out-of-pocket expenses incurred in compliance with this Section 5(g), including any reasonable travel expenses and reasonable attorneys’ fees incurred by Executive. If Executive is required to spend substantial time on such matters following his termination of employment, the Company shall compensate Executive at an hourly rate of $200 per hour. The Company shall use reasonable business efforts to provide Executive with reasonable advance written notice of its need for Executive’s reasonable cooperation and shall attempt to coordinate with Executive the time and place at which Executive’s reasonable cooperation shall be provided with the goal of minimizing the impact of such reasonable cooperation on any other material pre-scheduled business commitment that Executive may have. Executive’s cooperation described in this Section 5(g) shall be subject to the maintenance of the indemnification and D&O insurance policy provided under Sections 6(a) and 6(b) hereof.

6. Indemnification; D&O Insurance.

(a)

Indemnification. If Executive is made a party, is threatened to be made a party, or reasonably anticipates being made a party, to any Proceeding (as hereinafter defined) by reason of the fact that Executive is or was a director, officer, shareholder, employee, agent, trustee, consultant, or representative of the Company or any of its Affiliates or is or was serving at the request of the Company or any of its Affiliates, or in connection with his or her or their service hereunder as a director, officer, shareholder, employee, agent, trustee, consultant, or representative of another Person, or if any Claim (as hereinafter defined) is made, is threatened to be made, or is reasonably anticipated to be made, that arises out of or relates to Executive’s service in any of the foregoing capacities, then Executive shall promptly be indemnified and held harmless to the fullest extent permitted or authorized by any Company arrangement, or if greater, by applicable law, against any and all costs, expenses, liabilities, and losses (including, without limitation, advancement and payment of attorney’s and other professional fees and charges, judgments, interest, expenses of investigation, penalties, fines, ERISA excise taxes or penalties, and amounts paid or to be paid in settlement, with such legal fees advanced to the maximum extent permitted by law) incurred or suffered by Executive in connection therewith or in connection with seeking to enforce his or her or their rights under this Section 6(a), and such indemnification shall continue even if Executive has ceased to be a director, officer, shareholder, employee, agent, trustee, consultant, or representative of the Company or other Person and shall inure to the benefit of his or her or their heirs, executors, and administrators.

(b)

D&O Insurance. A directors’ and officers’ liability insurance policy (or policies) shall be kept in place, during the Term and thereafter until the sixth anniversary of the Termination Date, providing coverage to Executive that is no less favorable to Executive in any respect than the coverage then being provided to any other current or former director or officer of the Company.

(c)

Definitions. For purposes of this Agreement, the following terms shall have the following meanings: “Affiliate” of a Person shall mean any Person that directly or indirectly controls or owns, is controlled by or owned, or is under common control or ownership with, such Person; “Claim” shall mean any claim, demand, request, investigation, dispute, controversy, threat, discovery request, or request for testimony or information; “Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, trust, estate, board, committee, agency, body, employee benefit plan, or other person or entity; and “Proceeding” shall mean any threatened or actual action, suit, or proceeding, whether civil, criminal, administrative, investigative, appellate, formal, informal, or other.

7. Intellectual Property. Executive hereby conveys, transfers, and assigns to the Company, it successors and assigns, all right, title and interest, including, without limitation, all copyright rights, patent rights, trade secret rights and other intellectual property rights, associated with any ideas, concepts, techniques, inventions, processes or works of authorship developed or created by Executive on behalf of, or for the benefit of, the Company or its Affiliates at any time (the “Works”). All Works created by Executive pursuant to this Agreement on behalf of, or for the benefit of, the Company or its Affiliates shall belong exclusively to the Company or its Affiliates. All Works created by Executive, or by any person or entity provided by the Executive, for the Company or its Affiliates pursuant to this Agreement shall be deemed works made for hire within the meaning of the copyright laws of the United States. The Company, its successor and Affiliates shall retain all right, title, and interest in and to all Works, and any inventions (patentable or otherwise), discoveries, improvements or copyrightable works (collectively, “Intellectual Property”) that Executive creates in connection with its performance of the Executive’s services under this Agreement. At the Company’s expense, Executive shall provide all reasonable assistance requested by the Company in its protection of the Intellectual Property. In the event that any Works are determined not to be a work made for hire, then Executive hereby assigns to the Company or its designee all right, title, and interest in such Works, including any and all copyright rights or other intellectual property rights in and to such Works, in all media, now or hereafter known, worldwide. Executive also agrees to execute such additional documents as may be reasonably requested by the Company to further evidence, perfect or record the Company’s rights in the Works.

8. Confidential Information. Executive agrees that, during Executive’s employment with the Company or its Affiliates and following termination of Executive’s employment, except as required by law, Executive will not, directly or indirectly, at any time, disclose to any third person or use in any way any non-public information or Confidential Information.

(a)

Definition. For purposes of this Agreement, “Confidential Information” shall mean any confidential or proprietary information of the Company and/or its Affiliates, including but not limited to: (a) technical, operational and financial information, data, Trade Secrets, formulae, processes, techniques, formats, specifications, manufacturing methods, treatment methods, designs, sketches, photographs, plans, drawings, specifications, samples, reports, pricing information, studies, findings, marketing plans or proposals, inventions, ideas, customer and client lists, information related to business opportunities and business development, and confidential programs or procedures; (b) Intellectual Property owned or licensed by the Company or its Affiliates; (c) any information maintained by the Company or its Affiliates as confidential or proprietary information, whether or not it is marked as confidential; and (d) information received by the Company or its Affiliates from third parties under confidential conditions.

(b)

Notwithstanding the foregoing, Confidential Information shall not include information: (i) that at the date hereof is in the public domain; (ii) that has come within the public domain through no fault or action of the Executive that has the obligation of confidentiality; (iii) that after the date hereof has been obtained lawfully from any third party which was entitled to disclose such information; and/or (iv) that the Executive is compelled to disclose by any judicial or administrative order after having given prompt notice of such order to the Company.

(c)

Obligations with respect to Confidential Information. Executive agrees to:

(i)

hold the Confidential Information in strict confidence;

(ii)

not give, sell or disclose Confidential Information to any other third party, unless such party is an auditor or contractor hired by the Company and then only upon written approval of the Board of Directors of the Company;

(iii)

not share or otherwise use the Confidential Information in violation of or in any manner inconsistent with the Company’s information protection and transfer policies in place from time to time, applicable privacy laws, applicable state and federal law, any other applicable laws, and GDPR (EU General Data Protection Regulation 2016/679) to the extent that it applies; and

(iv)

not share or otherwise use the Confidential Information in violation of or in any manner inconsistent with the Company’s policies or reasonable requests made by the Company from time to time.

(d)

For avoidance of doubt, nothing in this Agreement shall prevent the Executive from (i) responding to any lawful subpoena or legal process, provided that the Executive shall, to the extent permitted by applicable law, provide the Company with prior notice of the contemplated disclosure of any confidential information or trade secrets and cooperate with the Company or its Affiliates (at the Company’s expense) in seeking a protective order or other appropriate protection of such information, or (ii) sharing any confidential information or other information with regulators or appropriate governmental agencies without notice to the Company or its Affiliates, whether in response to subpoena or otherwise, under the whistleblower provisions of federal law or regulation, and no prior authorization or notification is required prior to the Company making any such reports or disclosures, provided, that no attorney client privilege shall be waived. The Executive will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that is made: (i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If the Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Executive may disclose trade secrets to his attorney and use the trade secret information in the court proceeding if the Executive (x) files any document containing the trade secret under seal, and (y) does not disclose the trade secret, except pursuant to court order.

9. Restrictive Covenants.

(a)

No Solicitation of Employees. The Executive agrees that, both during the Term and for the period ending on the date that is one (1) year from the date of the termination of the Executive’s employment with the Company at any time and for any reason (the “Restricted Period”), the Executive will not, directly or indirectly, on behalf of himself or any other person or entity, hire, solicit, take away or attempt to hire, solicit or take away any person who is (or in the preceding six months was), at the time of such solicitation, an employee, director or independent contractor of the Company or any of its Affiliates, either on behalf of himself or any other person or entity. This includes, but is not limited to, inducing or attempting to induce, or influencing or attempting to influence, any person employed by the Company or its Affiliates to terminate his or her employment with the Company or any such affiliate.

(b)

No Solicitation of Customers. The Executive agrees that, during the Restricted Period, the Executive will not solicit any Restricted Business (as defined below) from any Person or entity that is, or in the prior six (6) months was a customer of the Company or its Affiliates or any prospective customer of the Company or its Affiliates with respect to which the Company or its Affiliates actively solicits or has solicited the sale of Company products and services including, without limitation, products and services of any Affiliates.

(c)

Non-Competition. The Executive acknowledges that, in the course of the Executive’s employment with the Company, the Executive will become familiar with the Trade Secrets of the Company and its Affiliates and with other Confidential Information concerning the Company and its Affiliates and that the Executive’s services shall be of special, unique and extraordinary value to the Company. The Executive agrees that, during the Restricted Period, the Executive shall not, on behalf of himself or for others, directly or indirectly, (whether as employee, officer, director, shareholder, member, manager, consultant, investor, partner, sole proprietor or otherwise) enter into, conduct or carry on, or engage in, be employed by, perform services for or be concerned with or interested in, financially or otherwise, any Restricted Business in any geographic area or location where any of the Company’s products, software or services are offered or where the Company was, during the prior six (6) months, actively pursuing efforts to offer such products, software or services. For purposes of this Agreement, Restricted Business shall mean the business of selling and installing residential solar systems. Notwithstanding the foregoing, the Executive shall not be prohibited from the passive ownership of up to one percent (1%) of the securities of any entity engaged in any Restricted Business, where the securities of such entity are traded on a national securities exchange.

(d)

Non-Disparagement. The Executive agrees that during the Term and thereafter, the Executive will make no disparaging or detrimental comments about the Company, any of its officers, directors, employees or agents nor will the Executive authorize, encourage or participate with anyone on the Executive’s behalf to make such statements.

(e)

The Executive acknowledges and agrees that the services to be provided by the Executive under this Agreement are of a special, unique and extraordinary nature. The Executive further acknowledges and agrees that the restrictions contained in this Section are necessary to prevent the use and disclosure of Confidential Information and to protect other legitimate business interests of the Company and its Affiliates. The Executive acknowledges that all of the restrictions in this Section are reasonable in all respects, including duration, territory and scope of activity. The Executive acknowledges and agrees that the Company competes with businesses on a world-wide basis and that the geographic restrictions contained herein are therefore reasonable and necessary to protect the Company’s legitimate business interests. The Executive agrees that the restrictions contained in this Section shall be construed as separate agreements independent of any other provision of this Agreement or any other agreement between the Executive and the Company. The Executive agrees that the existence of any claim or cause of action by the Executive against the Company or its Affiliates, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and restrictions in this Section. The Executive agrees that the restrictive covenants contained in this Section are a material part of the Executive’s obligations under this Agreement for which the Company has agreed to compensate the Executive as provided in this Agreement. The Executive agrees that the injury the Company will suffer in the event of the breach by the Executive of any clause of Sections 7-9 will cause the Company and its Affiliates irreparable injury that cannot be adequately compensated by monetary damages alone. Therefore, the Executive agrees that the Company, without limiting any other legal or equitable remedies available to it, shall be entitled to obtain equitable relief by injunction or otherwise from any court of competent jurisdiction, including, without limitation, injunctive relief to prevent the Executives’ failure to comply with the terms and conditions of Sections 7-9. The time year periods referenced in this Section shall be extended on a day-for-day basis for each day during which the Executive violates the provisions of this Section in any respect, so that the Executive is restricted from engaging in the activities prohibited by this Section for the full time period, as applicable.

10. Other Tax Matters.

(a)

Withholding. The Company shall withhold all applicable federal, state, and local taxes, social security, and workers’ compensation contributions and other amounts as may be required by law with respect to compensation payable to Executive pursuant to this Agreement.

(b)

Section 409A. Notwithstanding anything herein to the contrary, this Agreement is intended to be interpreted and applied so that the payment of the benefits set forth herein shall either be exempt from, or in the alternative, comply with, the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the published guidance thereunder (“Section 409A”). A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment that are considered “nonqualified deferred compensation” under Section 409A unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “Termination Date” or like terms shall mean “separation from service.” Notwithstanding any provision of this Agreement to the contrary, if Executive is a “specified employee” within the meaning of Section 409A on the date of Executive’s “separation from service,” any payments or arrangements due upon a termination of Executive’s employment under any arrangement that constitutes a “nonqualified deferral of compensation” within the meaning of Section 409A and which do not otherwise qualify under the exemptions under Treas. Regs. Section 1.409A-1 (including without limitation, the short-term deferral exemption or the permitted payments under Treas. Regs. Section 1.409A-1(b)(9)(iii)(A)), shall be delayed and paid or provided on the earlier of (a) the date which is six months after Executive’s “separation from service” for any reason other than death, or (b) the date of Executive’s death. All tax gross-up payments provided under this Agreement or any other agreement with Executive shall be made or provided by the end of Executive’s taxable year next following Executive’s taxable year in which Executive remits the related taxes, in accordance with the requirements of Section 409A.

(c)

Separation from Service. After any Termination Date, Executive shall have no duties or responsibilities that are inconsistent with having a “separation from service” within the meaning of Section 409A as of the Termination Date and, notwithstanding anything in the Agreement to the contrary, distributions upon termination of employment of nonqualified deferred compensation may only be made upon a “separation from service” as determined under Section 409A and such date shall be the Termination Date for purposes of this Agreement. Each payment under this Agreement or otherwise shall be treated as a separate payment for purposes of Section 409A. In no event may Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement which constitutes a “nonqualified deferral of compensation” within the meaning of Section 409A and to the extent an amount is payable within a time period, the time during which such amount is paid shall be in the discretion of the Company.

(d)

Reimbursements. All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A. To the extent that any reimbursements are taxable to Executive, such reimbursements shall be paid to Executive on or before the last day of Executive’s taxable year following the taxable year in which the related expense was incurred. Reimbursements shall not be subject to liquidation or exchange for another benefit and the amount of such reimbursements that Executive receives in one taxable year shall not affect the amount of such reimbursements that Executive receives in any other taxable year.

11. Notices. Except as otherwise specifically provided herein, any notice, consent, demand, or other communication to be given under or in connection with this Agreement shall be in writing and shall be deemed duly given when delivered personally, when transmitted by facsimile transmission, one day after being deposited with Federal Express or other nationally recognized overnight delivery service, or three days after being mailed by first class mail, charges or postage prepaid, properly addressed, if to the Company, at its principal office with a copy to the company’s counsel, and, if to Executive, at Executive’s address set forth following Executive’s signature below. Either party may change such address from time to time by notice to the other.

12. Governing Law; Forum; Attorneys’ Fees and Costs. This Agreement shall be governed by and construed and interpreted in accordance with the laws of Utah, without giving effect to any choice of law rules or other conflicting provision or rule that would cause the laws of any jurisdiction to be applied. The parties each submit to the exclusive jurisdiction of the federal courts (or state courts if federal jurisdiction is lacking) located within Utah County or Salt Lake County. In the event of a lawsuit or other legal proceeding arising out of or related to this Agreement in which Executive prevails (as determined by the deciding court), the Company shall reimburse Executive for Executive’s reasonable attorneys’ fees and costs incurred in connection with such lawsuit or legal proceeding, in addition to any other relief to which Executive may be entitled.

13. Amendments; Waivers. This Agreement may not be modified or amended or terminated except by an instrument in writing, signed by Executive and a duly-authorized officer of the Company (other than Executive). By an instrument in writing similarly executed (and not by any other means), either party may waive compliance by the other party with any provision of this Agreement that such other party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, or power hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, or power provided herein or by law or in equity. To be effective, any written waiver must specifically refer to the condition(s) or provision(s) of this Agreement being waived.

14. Inconsistencies. In the event of any inconsistency between any provision of this Agreement and any provision of any Company arrangement, the provisions of this Agreement shall control, unless Executive and the Company otherwise agree in a writing that expressly refers to the provision of this Agreement that is being waived.

15. Assignment. Except as otherwise specifically provided herein, neither party shall assign or transfer this Agreement nor any rights hereunder without the consent of the other party, and any attempted or purported assignment without such consent shall be void; provided, however, that any assignment or transfer pursuant to a merger or consolidation, or the sale or liquidation of all or substantially all of the business and assets of the Company shall be valid, so long as the assignee or transferee (a) is the successor to all or substantially all of the business and assets of the Company, and (b) assumes the liabilities, obligations and duties of the Company, as contained in this Agreement, either contractually or as a matter of law. Executive’s consent shall be required for any such transaction. Notwithstanding the foregoing, the Company may assign the Agreement to an Affiliate at any time without Executive’s consent. This Agreement shall otherwise bind and inure to the benefit of the parties hereto and their respective successors, penalties, assigns, heirs, legatees, devisees, executors, administrators, and legal representatives.

16. Voluntary Execution; Representations. Executive acknowledges that (a) Executive has consulted with or has had the opportunity to consult with independent counsel of their own choosing concerning this Agreement and has been advised to do so by the Company, and (b) Executive has read and understands this Agreement, is competent and of sound mind to execute this Agreement, is fully aware of the legal effect of this Agreement, and has entered into it freely based on Executive’s own judgment and without duress. The Company represents and warrants that it is fully authorized, by any person or body whose authorization is required, to enter into this Agreement and to perform its obligations hereunder.

17. Headings. Headings of Sections and subsections in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement.

18. Construction. Language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party.

19. Beneficiaries/References. Executive shall be entitled, to the extent permitted under applicable law, to select and change a beneficiary or beneficiaries to receive any compensation or benefit hereunder following Executive’s death by giving written notice thereof. In the event of Executive’s death or a judicial determination of Executive’s incompetence, references in this Agreement to Executive shall be deemed, where appropriate, to refer to Executive’s beneficiary, estate, or other legal representative.

20. Survivorship. Except as otherwise set forth in this Agreement, the respective rights and obligations of the parties shall survive any termination of Executive’s employment.

21. Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction or arbitrator to be invalid, prohibited, or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited, or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

22. No Mitigation/No Offset. Executive shall be under no obligation to seek other employment or to otherwise mitigate the obligations of the Company under this Agreement, and there shall be no offset against amounts or benefits due to Executive under this Agreement or otherwise on account of any claim (other than any preexisting debts then due in accordance with their terms) the Company may have against Executive or any remuneration or other benefit earned or received by Executive after such termination.

23. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. Signatures delivered by facsimile or PDF shall be effective for all purposes.

24. Entire Agreement. This Agreement contains the entire agreement of the parties and supersedes all prior or contemporaneous negotiations, correspondence, understandings, and agreements between the parties, regarding the subject matter of this Agreement.

Company		Executive

By:	/s/ Timothy Bridgewater	By:	/s/ Cannon Holbrook
Timothy Bridgewater, Chief Executive Officer		Cannon Holbrook
Date: August 19, 2024		Date: August 19, 2024

Exhibit 99.1

Zeo Energy Corp. Reports Second Quarter 2024 Financial Results

NEW PORT RICHEY, FL – August 19, 2024 – Zeo Energy Corp. (Nasdaq: ZEO) (“Zeo”, “Zeo Energy”, or the “Company”), a leading Florida-based provider of residential solar and energy efficiency solutions, today reported financial results for the second quarter and six months ended June 30, 2024.

Recent Financial and Operational Highlights

●

Recent launch into next Ohio and Illinois markets have yielded encouraging initial results

●

Appointment of experienced finance and accounting executive Cannon Holbrook as Chief Financial Officer

●

Decline in revenue for residential solar in the quarter to $14.7 million

●

Positive adjusted EBITDA for the second quarter 2024 at $0.7 million driven by flexible operating model and disciplined cost management

Management Commentary

“While the second quarter of 2024 presented well-documented and significant challenges across the solar industry, we believe we have successfully navigated through this turbulent period thanks to our flexible operating model and disciplined expense management,” said Zeo Energy Corp. CEO Tim Bridgewater. “We also believe that our strategic decision to emphasize profitability in the current environment has us positioned to benefit long-term as the market recovers and consolidation opportunities present themselves. Additionally, our recent launch into the Ohio and Illinois markets has been encouraging, and we’ll be looking to build on our initial progress over the coming months as we continue pursuing expansion plans.

“As macroeconomic and industry pressures eventually dissipate, we plan to take advantage of the consolidating and more favorable market environment. We anticipate that this offensive stance will mean reigniting our sales efforts through the return of a significant number of successful sales managers as well as bringing new representatives to the field later this year. Additionally, with the appointment of our new CFO Cannon Holbrook, we believe we have the necessary experience and team resources to pursue strategic M&A opportunities currently available in the market. Put together, we are executing a plan that will we hope will enable us to emerge from this period with a stronger overall position in the residential solar market.”

First Six Months 2024 Financial Results

Results compare the six months ended June 30, 2024 to the six months ended June 30, 2023, unless otherwise indicated.

●

Total revenue was $34.6 million, a 29% decrease from $48.8 million in the comparable 2023 period. The decrease was primarily due to higher interest rates creating a challenging environment for residential solar direct sales in 2024.

●

Gross profit decreased to $6.0 million (17.3% of total revenue) from $8.6 million (17.7% of total revenue) in the comparable 2023 period. The decrease in gross profit was primarily due to the decrease in revenue.

●

Net loss was $3.2 million (9.2% of total revenue) compared to net income of $2.4 million (4.9% of total revenue) in the comparable 2023 period. The decrease was primarily due to stock compensation of $2.9 million in the current period compared to none in the prior period as well as public company required costs and software development costs.

●

Adjusted EBITDA, a non-GAAP measurement of operating performance reconciled below, decreased to a loss of $0.1 million (0.3% of total revenue) from $3.4 million (6.9% of total revenue) in the comparable 2023 period. The decrease was primarily due to higher interest rates resulting in lower demand and a decrease in sales.

Second Quarter 2024 Financial Results

Results compare the 2024 second quarter ended June 30, 2024 to the 2023 second quarter ended June 30, 2023, unless otherwise indicated.

●

Total revenue was $14.7 million, a 51% decrease from $30.1 million in the comparable 2023 period. This decrease was primarily due to higher interest rates creating a challenging environment for residential solar direct sales in 2024.

●

Gross profit decreased to $4.4 million (29.8% of total revenue) from $5.6 million (18.7% of total revenue) in the comparable 2023 period. The decrease in gross profit was driven in part by the decrease in sales compared to the prior period. The improvement in gross profit as a percentage of revenue was the result of improved operational efficiencies in labor and a reduction in materials cost.

●

Net loss for the quarter was $1.3 million (8.8% of total revenue) compared to net income of $0.8 million (2.7% of total revenue) in the comparable 2023 period. This decrease was primarily due to the decrease in gross profit and a decrease in operating expenses, offset by $2.4 million in stock compensation expense in 2024 compared to none in 2023.

●

Adjusted EBITDA, a non-GAAP measurement of operating performance reconciled below, decreased to $0.7 million (4.6% of total revenue) from approximately $1.3 million (4.4% of total revenue) in the comparable 2023 period. This decrease was primarily attributable to the decrease in gross profit and a decrease in operating expenses, offset by $2.4 million in stock compensation expense in 2024 compared to none in 2023.

For more information, please visit the Zeo Energy Corp. investor relations website at investors.zeoenergy.com.

About Zeo Energy Corp.

Zeo Energy Corp. is a Florida-based regional provider of residential solar, distributed energy, and energy efficiency solutions. Zeo focuses on high-growth markets with limited competitive saturation. With its differentiated sales approach and vertically integrated offerings, Zeo, through its Sunergy business, serves customers who desire to reduce high energy bills and contribute to a more sustainable future. For more information on Zeo Energy Corp., please visit www.zeoenergy.com.

Non-GAAP Financial Measures

Adjusted EBITDA

Zeo Energy defines Adjusted EBITDA, a non-GAAP financial measure, as net income (loss) before interest and other expenses, net, income tax expense, and depreciation and amortization, as adjusted to exclude stock-based compensation. Zeo utilizes Adjusted EBITDA as an internal performance measure in the management of the Company’s operations because the Company believes the exclusion of these non-cash and non-recurring charges allows for a more relevant comparison of Zeo’s results of operations to other companies in the industry. Adjusted EBITDA should not be viewed as a substitute for net loss calculated in accordance with GAAP, and other companies may define Adjusted EBITDA differently.

The following table provides a reconciliation of net income (loss) to Adjusted EBITDA for the periods presented:

	Three Months Ended June 30,					Six Months Ended June 30,
	2024			2023		2024			2023
Adjustments to net income
Net income	$	(1,289,798	)	$	797,248	$	(3,181,873	)	$	2,400,187
Interest expense		34,233			23,999		71,287			39,543
Taxes		(61,185	)		0		(101,818	)		0
Depreciation and amortization		456,841			489,566		919,542			922,165
EBITDA		(859,909	)		1,310,813		(2,292,862	)		3,361,895
Other Income		(50,821	)		7,169		(50,821	)		2,169
Change in fair value of warrant liabilities		(828,000	)		0		(690,000	)		0
Stock compensation expense		2,417,888			0		2,922,722			0
Adjusted EBITDA	$	679,158		$	1,317,982	$	(110,961	)	$	3,364,064

Adjusted EBITDA Margin

Zeo Energy defines Adjusted EBITDA margin, a non-GAAP financial measure, expressed as a percentage, as the ratio of Adjusted EBITDA to revenue, net. Adjusted EBITDA margin measures net income (loss) before interest and other expenses, net, income tax expense, depreciation and amortization, as adjusted to exclude stock-based compensation and is expressed as a percentage of revenue. In the table above, Adjusted EBITDA is reconciled to the most comparable GAAP measure, net income (loss). Zeo utilizes Adjusted EBITDA margin as an internal performance measure in the management of the Company’s operations because the Company believes the exclusion of these non-cash and non-recurring charges allows for a more relevant comparison of the Company’s results of operations to other companies in Zeo’s industry.

The following table sets forth Zeo’s calculations of Adjusted EBITDA margin for the periods presented:

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023

Total Revenue	$	14,711,826		$	30,079,365		$	34,575,616		$	48,810,854
Adjusted EBITDA	$	679,158		$	1,317,982		$	(110,961	)	$	3,364,064
Adjusted EBITDA margin		4.6	%		4.4	%		-0.3	%		6.9	%

Forward-Looking Statements

This news release contains certain forward-looking statements within the meaning of section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act of 1934, as amended, that are based on beliefs and assumptions and on information currently available to the Company. Such statements may include, but are not limited to, statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions. The words “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and similar references to future periods may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements may include, for example, statements about the future financial performance of the Company; changes in the Company’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, the ability to raise additional funds, and plans and objectives of management. These forward-looking statements are based on information available as of the date of this news release, and current expectations, forecasts, and assumptions, and involve a number of judgments, risks, and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date, and the Company does not undertake any obligation to update such forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws. You should not place undue reliance on these forward-looking statements. As a result of a number of known and unknown risks and uncertainties, the Company’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include: (i) the outcome of any legal proceedings that may be instituted against the Company or others; (ii) the Company’s success in retaining or recruiting, or changes required in, its officers, key employees, or directors; (iii) the Company’s ability to maintain the listing of its common stock and warrants on Nasdaq; (iv) limited liquidity and trading of the Company’s securities; (v) geopolitical risk and changes in applicable laws or regulations; (vi) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; (vii) operational risk; (viii) litigation and regulatory enforcement risks, including the diversion of management time and attention and the additional costs and demands on the Company’s resources; and (ix) other risks and uncertainties, including those included under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2023 and in its subsequent periodic reports and other filings with the SEC.

In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by the Company, its respective directors, officers or employees or any other person that the Company will achieve its objectives and plans in any specified time frame, or at all. The forward-looking statements in this news release represent the views of the Company as of the date of this news release. Subsequent events and developments may cause that view to change. However, while the Company may elect to update these forward-looking statements at some point in the future, there is no current intention to do so, except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing the views of the Company as of any date subsequent to the date of this news release.

Zeo Energy Corp. Contacts

For Investors:

Tom Colton and Greg Bradbury

Gateway Group

[email protected]

For Media:

Christina Lockwood and Anna Rutter

Gateway Group

[email protected]

-Financial Tables to Follow-

ZEO ENERGY CORP.

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

	As of June 30,			As of December 31,
	2024			2023
Assets
Current assets
Cash and cash equivalents	$	5,342,120		$	8,022,306
Accounts receivable, including $819,212 and $396,488 from related parties, net of allowance for credit losses of $1,112,580 and $862,580, as of June 30, 2024 and December 31, 2023, respectively		7,207,854			2,905,205
Inventories		436,859			350,353
Prepaid installation costs		865,327			4,915,064
Prepaid expenses and other current assets		4,043,640			40,403
Total current assets		17,895,800			16,233,331
Other assets		235,442			62,140
Property, equipment and other fixed assets, net		2,843,624			2,918,320
Operating lease right of use assets		828,447			1,135,668
Intangibles, net		257,011			771,028
Goodwill		27,010,745			27,010,745
Total assets	$	49,071,069		$	48,131,232

Liabilities, mezzanine equity and stockholders’ equity
Current liabilities
Accounts payable	$	3,389,656		$	4,699,855
Accrued expenses and other current liabilities, including $784,527 and $2,415,966 with related parties at June 30, 2024 and December 31, 2023, respectively		3,759,367			4,646,365
Current portion of long-term debt		420,745			404,871
Current operating lease liabilities		384,415			539,599
Contract liabilities, including $9,900 and $1,160,848 with related parties as of June 30, 2024 and December 31, 2023, respectively		279,901			5,223,518
Total current liabilities		8,234,084			15,514,208
Non-current operating lease liabilities		468,796			636,414
Other liabilities		1,500,000			-
Warrant liabilities		828,000			-
Long-term debt		1,175,047			1,389,545
Total liabilities		12,205,927			17,540,167
Commitments and contingencies (Note 14)

Redeemable noncontrolling interests
Convertible preferred units		15,463,555			-
Class B Units		72,519,500			-

Stockholders’ equity
Class V common stock		3,523			3,373
Class A common stock		503			-
Additional paid in capital		2,033,500			31,152,491
Accumulated deficit		(53,155,439	)		(564,799	)
Total stockholders’ equity		(51,117,913	)		30,591,065
Total liabilities, mezzanine equity and stockholders’ equity	$	49,071,069		$	48,131,232

ZEO ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Revenue, net of financing fees of $1,439,725 and $12,533,767 for the three months ended June 30, 2024 and 2023, respectively and $5,521,083 and $18,784,295 for the six months ended June 30, 2024 and 2023, respectively	$	7,714,200		$	30,079,365		$	18,765,221		$	48,810,854
Related party revenue, net of financing fees of $3,127,622 and $0 for the three months ended June 30, 2024 and 2023, respectively and $6,983,841 and $0 for the six months ended June 30, 2024 and 2023, respectively		6,997,626			-			15,810,395			-
Total revenue		14,711,826			30,079,365			34,575,616			48,810,854
Operating costs and expenses:
Cost of goods sold (exclusive of depreciation and amortization shown below)		10,325,979			24,444,491			27,689,680			39,253,706
Depreciation and amortization		456,841			489,566			919,542			922,165
Sales and marketing		215,192			490,875			334,175			1,040,480
General and administrative		5,909,385			3,826,017			9,585,444			5,152,604
Total operating expenses		16,907,397			29,250,949			38,528,841			46,368,955
(Loss) income from operations		(2,195,571	)		828,416			(3,953,225	)		2,441,899
Other (expenses) income, net:
Other income, net		50,821			(7,169	)		50,821			(2,169	)
Change in fair value of warrant liabilities		828,000			-			690,000			-
Interest expense		(34,233	)		(23,999	)		(71,287	)		(39,543	)
Total other expense, net		844,588			(31,168	)		669,534			(41,712	)
Net (loss) income before taxes		(1,350,983	)		797,248			(3,283,691	)		2,400,187
Income tax benefit		61,185			-			101,818			-
Net (loss) income		(1,289,798	)		797,248			(3,181,873	)		2,400,187
Net (loss) attributable to Sunergy Renewables LLC prior to the Business Combination		-			-			(523,681	)		-
Net (loss) income subsequent to the Business Combination		(1,289,798	)		-			(2,658,192	)		-
Net (loss) income attributable to redeemable non-controlling interests		(1,457,036	)		-			(1,581,239	)		-
Net (loss) income attributable to Class A common stock	$	167,238		$	-		$	(1,076,953	)	$	-

Basic and diluted net (loss) income per common unit	$	0.03		$	-		$	(0.36	)	$	-
Weighted average units outstanding, basic and diluted		5,026,964			-			3,010,654			-

ZEO ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Six Months Ended June 30,
	2024			2023
Cash Flows from Operating Activities
Net (loss) income	$	(3,181,873	)	$	2,400,187
Adjustment to reconcile net (loss) income to cash (used in) provided by operating activities
Depreciation and amortization		919,542			922,165
Change in fair value of warrant liabilities		(690,000	)		-
Gain on preferred stock forward		-			-
PPP loan forgiveness		-			-
Provision for credit losses		250,000			452,541
Noncash lease expense		307,221			-
Stock based compensation expense		2,922,722			-
Stock issued to vendors		-			-
Changes in operating assets and liabilities:
Accounts receivable		(1,859,808	)		(1,834,200	)
Accounts receivable due from related parties		(2,692,841	)		-
Inventories		(86,506	)		34,530
Prepaid installation costs		4,049,737			-
Prepaids and other current assets		(1,459,636	)		(992,377	)
Other assets		(111,993	)		(127,500	)
Accounts payable		(2,459,688	)		50,288
Accrued expenses and other current liabilities		(829,506	)		2,083,766
Accrued expenses and other current liabilities due to related parties		(2,148,960	)		-
Due to officers		-			(94,056	)
Contract liabilities		(3,889,354	)		-
Contract liabilities due to related parties		(1,054,263	)		-
Operating lease payments		(322,802	)		(1,046,093	)
Net cash (used in) provided by operating activities		(12,338,008	)		1,849,251

Cash flows from Investing Activities
Purchases of property, equipment and other assets		(330,829	)		(784,209	)
Net cash used in investing activities		(330,829	)		(784,209	)

Cash flows from Financing Activities
Proceeds from the issuance of debt		-			745,975
Proceeds from the issuance of convertible preferred stock, net of transaction costs		10,277,275			-
Repayments of debt		(198,624	)		(138,347	)
Distributions to members		(90,000	)		(527,642	)
Net cash provided by financing activities		9,988,651			79,986
Net (decrease) increase in cash and cash equivalents		(2,680,186	)		1,145,028
Cash and cash equivalents, beginning of period		8,022,306			2,268,306
Cash and cash equivalents, end of the period	$	5,342,120		$	3,413,334

Supplemental Cash Flow Information
Cash paid for interest	$	70,284		$	37,851

Non-cash transactions
Transaction costs	$	3,269,039		$	-
Issuance of Class A common stock to vendors	$	2,478,480		$	-
Issuance of Class A common stock to backstop investors	$	1,569,440		$	-
Preferred dividends	$	8,224,091		$	-