Business Combination and Corporate Changes - Following the Business Combination on March 13, 2024, the company changed its name from "ESGEN Acquisition Corporation" to "Zeo Energy Corp."[361] - The Business Combination was accounted for as a reverse recapitalization, with Sunergy being treated as the accounting acquirer[367]. - The company retains majority control post-Business Combination, with the Primary Sellers owning 83.8% of the equity[372]. Financial Performance - Revenue decreased by approximately $36.4 million, from $109.7 million in 2023 to $73.2 million in 2024, a decline of 33.2%[400]. - Gross profit fell to $34.4 million in 2024, down from $49.8 million in 2023, with a gross margin of 47.0% compared to 45.4% in the previous year[378]. - Adjusted EBITDA decreased to $1.96 million in 2024, with an adjusted EBITDA margin of 2.7%, down from $6.98 million and 6.4% in 2023[378]. - Net loss increased to $9.87 million in 2024, compared to a net income of $4.85 million in 2023, representing a significant decline[378]. - Contribution profit for 2024 was $14.6 million, a decrease from $19.7 million in 2023, with a contribution margin of 19.9% compared to 18.0% in 2023[419]. Expenses and Cost Management - General and administrative expenses rose by $8.7 million to $21.6 million in 2024, primarily due to $7.8 million in stock compensation expenses[404]. - Sales and marketing expenses decreased by $10.7 million to $19.6 million in 2024, attributed to reduced commissions from lower revenue[403]. - Cost of goods sold decreased by $21.4 million, from $59.4 million in 2023 to $38.0 million in 2024, maintaining a cost of goods sold percentage of 52.4%[401]. Cash Flow and Capital Management - As of December 31, 2024, cash and cash equivalents were approximately $5.6 million, down from $8.0 million in 2023[407]. - Net cash used in operating activities was approximately $8.7 million in 2024, a decrease of $20.7 million compared to a net cash provided of approximately $12.0 million in 2023[412]. - Net cash used in investing activities was approximately $7.4 million in 2024, significantly higher than $1.0 million in 2023, primarily due to a $4.0 million asset purchase[413]. - The company cannot assure that its cash and cash equivalents will be sufficient for its business needs over the next twelve months, indicating potential future capital requirements[410]. Sales and Market Strategy - The company has approximately 290 sales agents and 22 independent sales dealers as of December 31, 2024, focusing on a capital-light business strategy[358]. - The majority of sales in 2023 were generated in Florida, with a significant split between Florida and Ohio in 2024, indicating a focus on operational efficiency due to revenue decreases[359]. - The company aims to expand into new markets with favorable net metering policies and cost incentives, enhancing its customer base[359]. - The company plans to expand its residential sales into new markets, currently operating in eight states and servicing customers in 16 states[384]. - The company intends to grow its in-house sales force and introduce a year-round sales team in 2025 to enhance operational efficiency[386]. Financing Activities - The company raised approximately $13.7 million in net cash from financing activities in 2024, primarily from the issuance of convertible preferred stock[414]. - The company has approximately $3.6 million in trade-credit with solar equipment distributors and $2.4 million in a convertible promissory note with a related party[415]. - The company entered into a promissory note for $2.4 million in December 2024 to fund the creation of a year-round sales team[409]. Revenue Composition - Revenues associated with lease arrangements accounted for 64% of sales in 2024, up from 21% in 2023[412]. - Total revenue for 2024 was $73.2 million, down from $109.7 million in 2023, resulting in a gross profit of $34.4 million compared to $49.8 million in 2023[419].
ESGEN Acquisition (ESAC) - 2024 Q4 - Annual Report