Zeo Energy Corp. (ZEO) - Form 8-K Summary
Business Context and Reporting Period
Date of Report: June 9, 2026
Company: Zeo Energy Corp.
Event: Entry into a Material Definitive Agreement (Note Purchase Agreement) and creation of a direct financial obligation.
Counterparty: White Lion Capital, LLC.
Key Financial Metrics and Transaction Details
This filing details a debt financing transaction rather than periodic financial results. Key metrics include:
- Total Facility Size: Up to $7,500,000 in aggregate funded amount.
- Initial Closing (June 9, 2026):
- Principal Amount: $1,670,000.
- Gross Proceeds to Company: $1,500,000.
- Original Issue Discount (OID): 10%.
- Remaining Capacity: Up to $6,000,000 available for future closings prior to June 9, 2027, subject to mutual agreement.
- Interest Rate: 5% per annum.
- Maturity: 24 months from the date of issuance.
- Security Status: Unsecured promissory notes.
Material Changes and Terms
The filing introduces new debt obligations and potential equity dilution with the following material terms:
- Conversion Features: Notes are convertible at the option of White Lion into Class A Common Stock.
- Conversion Price: The greater of (i) $0.50 per share (Floor Price) or (ii) 95% of the lowest daily VWAP during the 5 trading days prior to conversion (subject to Nasdaq Minimum Price).
- Floor Price Waiver: The $0.50 floor ceases to apply if the Company raises equity below $0.50, if the 30-day VWAP average falls below $0.50, or upon an event of default.
- Conversion Cap: Issuance upon conversion cannot exceed 19.99% of outstanding shares immediately prior to the First Closing without stockholder approval. The Company must seek such approval within 60 days of the filing date.
- Default Provisions: Upon an event of default, the principal amount automatically increases to 120% of the outstanding principal plus accrued interest, and the full amount becomes immediately due.
- Restrictions: The agreement includes a "most favored nation" clause and restricts the Company from entering variable rate debt or equity lines of credit with other providers without White Lion's consent.
Outlook, Risks, and Contingencies
- Liquidity Risk: The Company has secured immediate liquidity of $1.5 million with the option to access up to $6 million more, contingent on future agreements.
- Dilution Risk: Significant potential dilution exists if the stock price falls below the conversion price, particularly given the 95% discount mechanism and the potential removal of the $0.50 floor price.
- Default Risk: The 120% penalty upon default creates a significant financial contingency if the Company fails to meet payment or covenant obligations.
- Regulatory Requirement: The Company is obligated to file a Registration Statement within 30 days of the First Closing to allow White Lion to resell conversion shares.
Investor Verification Checklist
- Verify the Company's current cash position and burn rate to assess the necessity of the remaining $6 million tranche.
- Monitor the stock price relative to the $0.50 Floor Price and the 5-day VWAP to estimate potential dilution.
- Confirm the timeline for the required stockholder vote to exceed the 19.99% conversion cap.
- Review the specific covenants in the Note Purchase Agreement (Exhibit 10.01) to understand triggers for the 120% default penalty.
- Check for any subsequent equity raises below $0.50 that would trigger the removal of the conversion floor.