UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from     to    
Commission File No. 001-37707

iSUN, INC.
(Exact name of registrant as specified in its charter)

Delaware
​
47-2150172
(State or other jurisdiction of incorporation or organization)
​
(I.R.S. Employer Identification Number)

400 Avenue D, Suite 10
Williston, Vermont
​
05495
(Address of Principal Executive Offices)
​
(Zip Code)
(802) 658-3378
(Registrant’s telephone number)

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

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

Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, $0.0001 par value
 
ISUN
 
Nasdaq Capital Market

Common Stock, Par Value $0.0001

(Title of class)

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒     No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒     No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer
​
☐
​
Accelerated filer
​
☐
             
Non-accelerated filer
​
☒
​
Smaller reporting company
​
☒
             
 
​
 
​
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.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES  ☐ NO ☒

The number of shares of the Registrant’s Common Stock outstanding at November 12, 2021 was 11,050,476.
 
iSun, Inc.
 Form 10-Q
Table of Contents

Part I. Financial Information
 
     
Item 1. Financial Statements
3
     
 
3
     
 
4
     
 
5
     
  7
     
  8
     
28
     
 
28
     
 
28
     
  29
     
 
31
     
  36
   
 
36
     
37
     
37
     
  37
     
 
37
     
37
     
37
   
37
   
37
   
37
   
37
   
37
   
38
   
44

iSun, Inc.
Condensed Consolidated Balance Sheets
September 30, 2021 (Unaudited) and December 31, 2020

​
 
September 30, 2021
 
​
December 31, 2020
(Restated)
 
Assets
     
​
   
Current Assets:
     
​
   
Cash
 
$
27,460,078
 
​
$
699,154
 
Accounts receivable, net of allowance
   
5,528,020
 
​
 
6,215,957
 
Inventory
   
1,534,859
     
-
 
Costs and estimated earnings in excess of billings
   
3,350,251
 
​
 
1,354,602
 
Other current assets
   
292,276
 
​
 
214,963
 
Total current assets
   
38,165,484
 
​
 
8,484,676
 
                 
Property and Equipment, net of accumulated depreciation
   
6,371,351
     
6,119,800
 
Captive insurance investment
   
233,487
 
​
 
198,105
 
Intangible assets, net of amortization
   
3,856,681
     
-
 
Investments
   
7,520,496
     
4,820,496
 
Deferred tax asset
    448,914
      -
 
​
   
18,430,929
 
​
 
11,138,401
 
Total assets
 
$
56,596,413
 
​
$
19,623,077
 
Liabilities and Stockholders’ Equity
       
​
     
Current Liabilities:
       
​
     
Accounts payable, includes bank overdraft of  $0 and $1,246,437 at September 30, 2021 and December 31, 2020, respectively
 
$
3,407,320
 
​
$
4,086,173
 
Accrued expenses
   
102,351
 
​
 
172,021
 
Billings in excess of costs and estimated earnings on uncompleted contracts
   
1,652,106
 
​
 
1,140,125
 
Due to stockholders
   
-
 
​
 
24,315
 
Line of credit
   
2,080,671
 
​
 
2,482,127
 
Current portion of deferred compensation
   
28,656
 
​
 
28,656
 
Current portion of long-term debt
   
316,875
 
​
 
308,394
 
Total current liabilities
   
7,587,979
 
​
 
8,241,811
 
Long-term liabilities:
     
 
​
   
 
Deferred compensation, net of current portion
   
39,280
 
​
 
62,531
 
Deferred tax liability
   
-
 
​
 
610,558
 
Warrant liability
   
180,600
     
1,124,411
 
Long-term debt, net of current portion
   
11,624,939
 
​
 
1,701,495
 
Total liabilities
   
19,432,798
 
​
 
11,740,806
 
Commitments and Contingencies (Note 9)
           
Stockholders’ equity:
   
 
​
   
 
Preferred stock – 0.0001 par value 1,000,000 shares authorized, 0 and 200,000 issued and outstanding at September 30, 2021 and December 31, 2020, respectively
   
-
 
​
 
20
 
Common stock – 0.0001 par value 49,000,000 shares authorized, 9,103,433 and 5,313,268 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively
   
910
 
​
 
531
 
Additional paid-in capital
   
37,021,586
 
​
 
2,577,359
 
Retained earnings
   
141,119
 
​
 
5,304,361
 
Total Stockholders’ equity
   
37,163,615
 
​
 
7,882,271
 
Total liabilities and stockholders’ equity
 
$
56,596,413
 
​
$
19,623,077
 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3
iSun, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
For the Three and Nine Months Ended September 30, 2021 and 2020

 
 
Three Months ended
   
Nine Months ended
 
 
 
September 30,
   
September 30,
 
 
 
2021
   
2020 (restated)
   
2021
   
2020 (restated)
 
 
                       
Earned revenue
 
$
6,678,975
   
$
4,966,026
   
$
18,292,937
   
$
11,720,932
 
Cost of earned revenue
   
5,376,238
     
4,728,328
     
17,506,004
     
11,162,439
 
Gross profit
   
1,302,737
     
237,698
     
786,933
     
558,493
 
 
                               
Warehousing and other operating expenses
   
350,400
     
180,471
     
782,759
     
556,927
 
General and administrative expenses
   
2,357,516
     
709,353
     
5,477,439
     
2,190,763
 
Stock based compensation – general and administrative
   
218,155
     
-
     
1,554,539
     
-
 
Total operating expenses
   
2,926,071
     
889,824
     
7,814,737
     
2,747,690
 
Operating loss
   
(1,623,334
)
   
(652,126
)
   
(7,027,804
)
   
(2,189,197
)
 
                               
Other income (expenses)
                               
Gain on sale of fixed assets
    62,963
      -
      62,963
      -
 
Change in fair value of the warrant liability
   
126,305
     
(819,170
)
   
943,811
     
(1,201,850
)
Interest expense, net
   
(42,360
)
   
(72,554
)
   
(129,721
)
   
(218,730
)
 
                               
Loss before income taxes
   
(1,476,426
)
   
(1,543,850
)
   
(6,150,751
)
   
(3,609,777
)
(Benefit) provision for income taxes
   
(820,605
)
   
(209,000
)
   
(1,057,172
)
   
(630,585
)
 
                               
Net loss
   
(655,821
)
   
(1,334,850
)
   
(5,093,579
)
   
(2,979,192
)
 
                               
Net income applicable to preferred shareholders
   
-
     
(175,556
)
   
(69,663
)
   
(175,556
)
Net loss available to shares of common stockholders
 
$
(655,821
)
 
$
(1,510,406
)
 
$
(5,163,242
)
 
$
(3,154,748
)
                                 
                                 
Net loss per share of Common Stock - Basic and diluted
 
$
(0.07
)
 
$
(0.28
)
 
$
(0.60
)
 
$
(0.56
)
                                 
Weighted average shares of Common Stock - Basic and diluted
   
9,103,433
     
5,298,159
     
8,658,405
     
5,298,159
 


The accompanying notes are an integral part of these condensed consolidated financial statements.

4
iSun, Inc.
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)
For the Three and Nine Months Ended September 30, 2021

   
Preferred Stock
   
Common Stock
   
Additional
Paid-In
    Retained        
​
 
Shares
   
Amounts
   
Shares
   
Amounts
   
Capital
   
Earnings
   
Total
 
Balance as of January 1, 2021-restated
   
200,000
   
$
20
     
5,313,268
   
$
531
   
$
2,577,359
   
$
5,304,361
   
$
7,882,271
 
​
                                                       
Registered Direct Offering
   
-
     
-
     
840,000
      84
     
9,584,916
     
-
     
9,585,000
 
​
                                                       
Acquisition of iSun Energy, LLC
   
-
     
-
     
300,000
      30
      2,921,868      
-
     
2,921,898
 
                                                         
Exercise of Unit Purchase Option
   
-
     
-
     
133,684
      13       (13 )    
-
     
-
 
                                                         
Redemption of common stock
   
-
     
-
     
(34,190
)
    (3 )    
(672,856
)
   
-
     
(672,859
)
                                                         
Conversion of Preferred Shares
   
(200,000
)
   
(20
)
   
370,370
      37
      (17 )    
-
     
-
 
                                                         
Dividends payable on preferred shares
   
-
     
-
     
-
     
-
      -
     
(69,663
)
   
(69,663
)
                                                         
Conversion of Solar Project Partners, LLC warrant
   
-
     
-
     
117,376
      12
      (12 )    
-
     
-
 
                                                         
Issuance under equity incentive plan
   
-
     
-
     
126,083
      12
     
1,070,896
     
-
     
1,070,908
 
                                                         
Exercise of options
   
-
     
-
     
100,667
      10
     
149,983
     
-
     
149,993
 
                                                         
Exercise of warrants
   
-
     
-
      1,516,938
      152
     
17,444,335
     
-
     
17,444,487
 
                                                         
Net loss
   
-
     
-
     
-
     
-
     
-
     
(3,113,333
)
   
(3,113,333
)
                                                         
Balance as of March 31, 2021
   
-
     
-
     
8,784,196
      878      
33,076,459
     
2,121,365
     
35,198,702
 
                                                         
Exercise of Warrants
    -       -       303,571       30       3,461,498       -       3,461,528  
                                                         
Stock based compensation
    -       -       -       -       265,476       -       265,476  
                                                         
Net Loss
    -       -       -       -       -       (1,324,425 )     (1,324,425 )
                                                         
Balance as of June 30, 2021
    -     $
-       9,087,767     $
908     $
36,803,433     $
796,940     $
37,601,281  
                                                         
Issuance under equity incentive plan
    -
      -
      15,666
      2
      218,153
      -
      218,155
 
                                                         
Net Loss
    -
      -
      -
      -
      -
      (655,821 )     (655,821 )
                                                         
Balance as of September 30, 2021
    -
    $ -       9,103,433
    $ 910     $ 37,021,586     $ 141,119     $ 37,163,615  

5
iSun, Inc.
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)
For the Three and Nine Months Ended September 30, 2020 (Restated)

   
Preferred Stock
   
Common Stock
   
Additional
Paid-In
    Retained        
​
 
Shares
   
Amounts
   
Shares
   
Amounts
   
Capital
   
Earnings
   
Total
 
Balance as of January 1, 2020
   
-
    $ -      
5,298,159
   
$
529
   
$
(2,692,424
)
 
$
6,559,973
   
$
3,868,078
 
​
                                                       
Net loss
   
-
      -      
-
     
-
     
-
     
(790,237
)
   
(790,237
)
​
                                                       
Balance as of March 31, 2020
   
-
      -      
5,298,159
     
529
     
(2,692,424
)
   
5,769,736
     
3,077,841
 
                                                         
Investment in Green Seed Investors, LLC
    200,000       20       -       -       4,999,980       -       5,000,000  
                                                         
Investment in Solar Project Partners, LLC
    -       -       -       -       96,052       -       96,052  
                                                         
Net loss
    -       -       -       -       -       (854,105 )     (854,105 )
                                                         
Balance as of, June 30, 2020
    200,000       20       5,298,159       529       2,403,608       4,915,631       7,319,788  
                                                         
Preferred stock dividend
    -
      -
      -
      -
      -
      (175,556 )     (175,556 )
                                                         
Net loss
    -
      -
      -       -
      -
      (1,334,850 )     (1,334,850 )
                                                         
Balance as of September 30, 2020
    200,000
    $ 20       5,298,159
    $ 529     $ 2,403,608     $ 3,405,225     $ 5,809,382  

The accompanying notes are an integral part of these condensed consolidated financial statements.

6
iSun, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Nine Months Ended September 30, 2021 and 2020

​
 
2021
   
2020
(restated)
 
Cash flows from operating activities
           
Net loss
 
$
(5,093,579
)
 
$
(2,979,192
)
Adjustments to reconcile net loss to net cash used in operating activities:
               
Depreciation
   
575,754
     
448,189
 
Deferred finance charge amortization
   
2,309
     
3,277
 
Benefit for deferred income taxes
   
(1,059,472
)
   
(631,335
)
(Gain) on sale of fixed assets
    (62,963 )     -  
Bad debt expenses
    -
      164,292
 
Stock based compensation
   
1,554,539
     
-
 
Change in fair value of warrant liabilities
   
(943,811
)
   
1,201,850
 
Changes in operating assets and liabilities:
               
Accounts receivable
   
687,937
     
(2,868,150
)
Prepaid expenses
    (46,976 )    
53,895
 
Inventory
   
(1,534,859
)
   
-
 
Costs and estimated earnings in excess of billings
   
(1,995,649
)
   
30,705
 
Accounts payable
   
(678,853
)
   
(1,028,725
)
Accrued expenses
   
(69,670
)
   
(44,537
)
Billings in excess of costs and estimated earnings on uncompleted contracts
   
511,981
     
3,175,877
 
Deferred compensation
   
(23,251
)
   
(23,250
)
Net cash used in operating activities
   
(8,176,563
)
   
(2,497,104
)
Cash flows from investing activities:
               
Purchase of equipment
   
(613,990
)
   
-
 
Acquisition of iSun Energy, LLC
   
(85,135
)
   
-
 
Acquisition of Oakwood Construction Services, LLC
    (1,000,000 )     -  
Dividend receivable
    200,000       -  
Investment in captive insurance
   
(35,382
)
   
(57,230
)
Minority investments
   
(3,000,000
)
   
-
 
Net cash used in investing activities
   
(4,534,507
)
   
(57,230
)
Cash flows from financing activities:
               
Proceeds from line of credit
   
21,262,213
     
2,232,580
 
Payments to line of credit
   
(21,663,669
)
   
(510,100
)
Proceeds from long-term debt
    10,216,408       1,487,624  
Equity incentive program
    149,993       -  
Payments of long-term debt
   
(286,792
)
   
(327,847
)
Redemption of shares of Common Stock
   
(672,859
)
   
-
 
Due to stockholders
   
(24,315
)
   
(305,403
)
Proceeds from registered direct offering
   
9,585,000
     
-
 
Proceeds from warrant exercise
   
20,906,015
     
-
 
Net cash provided by financing activities
   
39,471,994
     
2,576,854
 
Net increase in cash
   
26,760,924
     
22,520
Cash, beginning of period
   
699,154
     
95,930
 
Cash, end of period
 
$
27,460,078
   
$
118,450
 
Supplemental disclosure of cash flow information
               
Cash paid during the year for:
               
Interest
 
$
127,412
   
$
215,453
 
Income taxes
 
$
-
   
$
366
 
Supplemental schedule of non-cash investing and financing activities:
               
Preferred dividends satisfied with distribution from investment
 
$
69,663
   
$
175,556
 
Shares of Common Stock issued for conversion of Solar Project Partners, LLC
 
$
12
   
$
-
 
Shares of Common Stock issued for exercise of Unit Purchase Option on a cashless basis
 
$
13
   
$
-
 
Shares of Common Stock issued for conversion of preferred stock
 
$
37
    $ -  
Shares issued for acquisition of iSun Energy, LLC
 
$
2,921,898
   
$
-
 
Shares of Preferred Stock issued for investment
  $ -     $ 5,000,000  
Warrants issued for investment
  $ -     $ 96,052  

The accompanying notes are an integral part of these condensed consolidated financial statements.

7
iSun, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

1.
SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

a) Organization

iSun, Inc.(formerly known as The Peck Company Holdings, Inc.) is a solar engineering, construction and procurement contractor for commercial and industrial customers across the Northeastern United States. The Company also provides electrical contracting services and data and communication services. The work is performed under fixed-price and modified fixed-price contracts and time and materials contracts. The Company is incorporated in the State of Delaware and has its corporate headquarters in Williston, Vermont.

Effective January 19, 2021, the Company changed its corporate name from The Peck Company Holdings, Inc. to iSun, Inc. (the “Name Change”). The Name Change was effected through a parent/subsidiary short-form merger of iSun, Inc., our wholly-owned Delaware subsidiary formed solely for the purpose of the name change, with and into us. We were the surviving entity. To effectuate the short-form merger, we filed a Certificate of Merger with the Secretary of State of the State of Delaware on January 19, 2021. The merger became effective on January 19, 2021 with the State of Delaware and, for purposes of the quotation of our Common Stock on the Nasdaq Capital Market (“Nasdaq”), effective at the open of the market on January 20, 2021.

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or any other period.  The accompanying financial statements should be read in conjunction with the Company’s audited financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2020.

b) Principles of Consolidation

The accompanying consolidated financial statements include the accounts of iSun, Inc. and its wholly-owned operating subsidiaries, Peck Electric Co, iSun Residential, Inc. and iSun Energy LLC. All material intercompany transactions have been eliminated upon consolidation of these entities.

c) Revenue Recognition

The majority of the Company’s revenue arrangements generally consist of a single performance obligation to transfer promised goods or services.

1) Revenue Recognition Policy

Solar Power Systems Sales and Engineering, Procurement, and Construction Services

The Company recognizes revenue from the sale of solar power systems, Engineering, Procurement and Construction (“EPC”) services, and other construction-type contracts over time, as performance obligations are satisfied, due to the continuous transfer of control to the customer. Construction contracts, such as the sale of a solar power system combined with EPC services, are generally accounted for as a single unit of account (a single performance obligation) and are not segmented between types of services. Our contracts often require significant services to integrate complex activities and equipment into a single deliverable, and are therefore generally accounted for as a single performance obligation, even when delivering multiple distinct services. For such services, the Company recognizes revenue using the cost to cost method, based primarily on contract cost incurred to date compared to total estimated contract cost. The cost to cost method (an input method) is the most faithful depiction of the Company’s performance because it directly measures the value of the services transferred to the customer. Cost of revenue includes an allocation of indirect costs including depreciation and amortization. Subcontractor materials, labor and equipment, are included in revenue and cost of revenue when management believes that the Company is acting as a principal rather than as an agent (i.e., the Company integrates the materials, labor and equipment into the deliverables promised to the customer). Changes to total estimated contract cost or losses, if any, are recognized in the period in which they are determined as assessed at the contract level. Pre-contract costs are expensed as incurred unless they are expected to be recovered from the customer. As of September 30, 2021 and December 31, 2020, the Company had $0 in pre-contract costs classified as a current asset under contract assets on its Consolidated Balance Sheet. Project mobilization costs are generally charged to project costs as incurred when they are an integrated part of the performance obligation being transferred to the client. Customer payments on construction contracts are typically due within 30 to 45 days of billing, depending on the contract. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue.

8
For sales of solar power systems in which the Company sells a controlling interest in the project to a customer, revenue is recognized for the consideration received when control of the underlying project is transferred to the customer. Revenue may also be recognized for the sale of a solar power system after it has been completed due to the timing of when a sales contract has been entered into with the customer.

Energy Generation

Revenue from net metering credits is recorded as electricity is generated from the solar arrays and billed to customers (PPA off-taker) at the price rate stated in the applicable power purchase agreement (PPA).

Operation and Maintenance and Other Miscellaneous Services

Revenue for time and materials contracts is recognized as the service is provided.

2) Disaggregation of Revenue from Contracts with Customers

The following table disaggregates the Company’s revenue based on the timing of satisfaction of performance obligations for the three and nine months ended September 30, 2021:

 
 
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
 
 
2021
   
2020
   
2021
   
2020
 
 
                       
Performance obligations satisfied over time
                       
Solar
 
$
5,378,390
   
$
3,840,231
   
$
14,987,118
   
$
9,162,303
 
Electric
   
931,197
     
679,339
     
2,425,554
     
1,653,545
 
Data and Network
   
369,388
     
446,456
     
880,265
     
90,504
 
Totals
 
$
6,678,975
   
$
4,966,026
   
$
18,292,937
   
$
11,720,932
 

For the three and nine months ended September 30, 2021 and 2020, the Company did not perform any service which the performance obligation was satisfied at a point in time.

3) Variable Consideration

The nature of the Company’s contracts gives rise to several types of variable consideration, including claims and unpriced change orders; award and incentive fees; and liquidated damages and penalties. The Company recognizes revenue for variable consideration when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The Company estimates the amount of revenue to be recognized on variable consideration using the expected value (i.e., the sum of a probability-weighted amount) or the most likely amount method, whichever is expected to better predict the amount. Factors considered in determining whether revenue associated with claims (including change orders in dispute and unapproved change orders in regard to both scope and price) should be recognized include the following: (a) the contract or other evidence provides a legal basis for the claim, (b) additional costs were caused by circumstances that were unforeseen at the contract date and not the result of deficiencies in the Company’s performance, (c) claim-related costs are identifiable and considered reasonable in view of the work performed, and (d) evidence supporting the claim is objective and verifiable. If the requirements for recognizing revenue for claims or unapproved change orders are met, revenue is recorded only when the costs associated with the claims or unapproved change orders have been incurred. Back charges to suppliers or subcontractors are recognized as a reduction of cost when it is determined that recovery of such cost is probable and the amounts can be reliably estimated. Disputed back charges are recognized when the same requirements described above for claims accounting have been satisfied.

9
4) Remaining Performance Obligation

Remaining performance obligations, or backlog, represents the aggregate amount of the transaction price allocated to the remaining obligations that the Company has not performed under its customer contracts. The Company has elected to use the optional exemption in ASC 606-10-50-14, which exempts an entity from such disclosures if a performance obligation is part of a contract with an original expected duration of one year or less.

5) Warranties

The Company generally provides limited workmanship warranties up to five years for work performed under its construction contracts. The warranty periods typically extend for a limited duration following substantial completion of the Company’s work on a project. Historically, warranty claims have not resulted in material costs incurred, and any estimated costs for warranties are included in the individual contract cost estimates for purposes of accounting for long-term contracts.

d) Concentration and Credit Risks

The Company occasionally has cash balances in a single financial institution during the year in excess of the Federal Deposit Insurance Corporation (FDIC) limit of up to $250,000 per financial institution. The differences between book and bank balances are outstanding checks and deposits in transit. At September 30, 2021, the uninsured balances were approximately $27.5 million.

e) Income Taxes

Through June 20, 2019 (the date of the completion of the Reverse Merger and Recapitalization between Peck Electric Co. and Jensyn Acquisition Corp, (the Company’s predecessor)) the former Peck Electric Co. had elected to be taxed as an S-Corporation under the Internal Revenue Code and similar codes in states in which the Company was subject to taxation. While this election was in effect, the income (whether distributed or not) was taxed for federal income tax purposes to former Peck Electric Co. stockholders. Accordingly, no provision for federal income tax was required. However, the Company did calculate a proforma provision. The provision for income taxes for former Peck Electric Co. was primarily for Vermont minimum taxes. As of the date of the completion of the Reverse Merger and Recapitalization, the Company effectively became a C-Corporation, which changed the level of taxation from the stockholders to the Company. The deferred tax assets and liabilities that arise out of the change of tax status have been recorded to account for the temporary differences that existed on the date of the change resulting in a deferred tax liability of $1,506,362. At September 30, 2021, the deferred tax asset was $448,914 and at December 31, 2020, the deferred tax liability was $610,558.

10
The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The financial statements of the Company account for deferred tax assets and liabilities in accordance with Accounting Standards Codification (“ASC”) 740, Income taxes.

The Company also uses a more-likely-than-not measurement for all tax positions taken or expected to be taken on a tax return in order for those tax positions to be recognized in the financial statements. If the Company were to incur interest and penalties related to income taxes, these would be included in the provision for income taxes. Generally, the three tax years previously filed remain subject to examination by federal and state tax authorities.

f) Use of Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates their estimates, including those related to inputs used to recognize revenue over time, goodwill, intangibles, investments, impairment on investments, warranty liability and valuation of deferred tax assets. Actual results could differ from those estimates.

g) Deferred Finance Costs

Deferred financing costs relate to the Company’s debt and equity instruments. Deferred financing costs relating to debt instruments are amortized over the terms of the related instrument using the effective interest method. Amortization expense associated with deferred financing costs, which is included in interest expense, totaled $770 for the three months ended September 30, 2021 and $207 for the three months ended September 30, 2020. Amortization expense associated with deferred financing costs, which is included in interest expense, totaled $2,309 and $3,277 for the nine months ended September 30, 2021 and September 30, 2020, respectively.

h) Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, accounts receivable, cash collateral deposited with insurance carriers, deferred compensation plan liabilities, accounts payable and other current liabilities, and debt obligations.

Fair value is the price that would be received to sell an asset or the amount paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value guidance establishes a valuation hierarchy, which requires maximizing the use of observable inputs when measuring fair value. The three levels of inputs that may be used are: (i) Level 1 - quoted market prices in active markets for identical assets or liabilities; (ii) Level 2 - observable market-based inputs or other observable inputs; and (iii) Level 3 - significant unobservable inputs that cannot be corroborated by observable market data, which are generally determined using valuation models incorporating management estimates of market participant assumptions. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Management’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

11
Fair values of financial instruments are estimated using public market prices, quotes from financial institutions and other available information. Due to their short-term maturity, the carrying amounts of cash, accounts receivable, accounts payable and other current liabilities approximate their fair values. Management believes the carrying values of notes and other receivables, cash collateral deposited with insurance carriers, and outstanding balances on its line of credit and long-term debt approximate their fair values as these amounts are estimated using public market prices, quotes from financial institutions and other available information.

The contingent provisions of the Assignment Agreement entered into with Oakwood Construction Services and Adani Solar USA, Inc. are considered Level 3 measurements. Given that the probability of such provisions being achieved is highly unlikely, no value was assigned to the contingent provision.

i) Segment Information

Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding the method to allocate resources and assess performance. The Company currently has one reportable segment with different product offerings for financial reporting purposes, which represents the Company’s core business.

j)  Recently Issued Accounting Pronouncements

On May 03, 2021, the FASB issued Accounting Standards Update (ASU) 2021-04, Earnings Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. The FASB issued ASU 2021-04 to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The ASU is effective years beginning after December 15, 2021, including interim periods within those years and the Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

k) Inventory

Inventory is valued at lower of cost or net realizable value determined by the first-in, first-out method. Inventory primarily consists of solar panels and other materials. The Company reviews the cost of inventories against their estimated net realizable value and records write-downs if any inventories have costs in excess of their net realizable values. Inventory is presented net of an allowance of $0 at September 30, 2021 and December 31, 2020.

l) Reclassification

Certain reclassifications have been made to prior year’s financial statement to conform to classifications used in the current year.

12
2.
RESTATEMENT OF FINANCIAL STATEMENTS

On April 12, 2021, the staff of the Securities and Exchange Commission (the “SEC Staff”) issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Staff Statement”). In the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s financial statements as opposed to equity. Since issuance, the Company’s Warrants were accounted for as equity within the Company’s previously reported financial statements, and after discussion and evaluation, management concluded that the Warrants should be presented as liabilities reported at fair value with subsequent fair value remeasurement at each reporting period.

 The Company concluded that, because of a misapplication of the accounting guidance related to its public and private placement warrants the Company’s predecessor previously issued, the Company’s previously issued financial statements for the Affected Periods (as defined below) should no longer be relied upon. As such, the Company is restating its unaudited and audited financial statements for the Affected Periods included in this Form 10-Q.

The affected periods are the years ended December 31, 2020 and 2019 and the quarters ended September 30, 2020, June 30, 2020, March 31, 2020, September 30, 2019 and June 30, 2019.

Impact of the Restatement

The impact of the restatement on the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2020 included in this filing is presented below.

   
As Previously
Reported
   
Adjustments
   
As Restated
 
Statement of Operations for the three months ended September 30, 2020 (unaudited)
                 
                   
Change in fair value of the warrant liability
 
$
-
   
$
(819,170
)
 
$
(819,170
)
Net loss
   
(515,680
)
   
(819,170
)
   
(1,334,850
)
Net loss per common share
   
(0.13
)
   
(0.15
)
   
(0.28
)

 
As Previously
Reported
 
Adjustments
 
As Restated
 
Statement of Operations for the nine months ended September 30, 2020 (unaudited)
           
             
Change in fair value of the warrant liability
 
$
-
   
$
(1,201,850
)
 
$
(1,201,850
)
Net loss
   
(1,777,342
)
   
(1,201,850
)
   
(2,979,192
)
Net loss per common share
   
(0.33
)
   
(0.23
)
   
(0.56
)

The impact of the restatement on the Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2020 included in this filing is presented below.

 
As Previously
Reported
 
Adjustments
 
As Restated
 
Statement of Cash Flows for the nine months ended September 30, 2020 (unaudited)
           
Net Loss
 
$
(1,777,342
)
 
$
(1,201,850
)
 
$
(2,979,192
)
Change in fair value of the warrant liability
   
-
     
1,201,850
     
1,201,850
 

13
3.
LIQUIDITY AND FINANCIAL CONDITION

In the nine months ended September 30, 2021, the Company experienced a net operating loss and negative cash flow from operations. At September 30, 2021, the Company had cash on hand of approximately $27.5 million and working capital of approximately $30.6 million. The Company utilized approximately $8.2 million in cash to support operations during the nine months ending September 30, 2021. In prior years, the Company has relied predominantly on operating cash flow to fund its operations and borrowings from its credit facilities. For the nine months ending September 30, 2021, the Company utilized the proceeds from the registered direct offering and exercise of warrants described below to generate cash flow to support its operations.

On January 8, 2021, the Company entered into a Securities Purchase Agreement with two institutional investors providing for the issuance and sale by the Company of an aggregate 840,000 shares of its Common Stock in a registered direct offering at a purchase price of $12.50 per share for gross proceeds of approximately $10.5 million before deducting fees and offering expenses. The Company’s Form S-3 Registration Statement is effective and allows the Company to offer, issue and sell up to $50,000,000 in the aggregate of our shares of Common Stock.

On June 21, 2021, the Company entered into a Sales Agreement with B. Riley Securities, Inc. as sales agent, pursuant to which the Company may offer and sell, from time to time, through B. Riley shares of Common Stock, par value $0.0001 per share. Upon delivery of a placement notice, and subject to the Company’s instructions in the notice, and the terms and conditions of the Sales Agreement, generally, B. Riley may sell the shares of Common Stock by any method permitted by law deemed to be an “at the market offering.” Shares of Common Stock will be offered and sold pursuant to the Registration Statement, the Base Prospectus, as supplemented, that forms a part of such Registration Statement, filed with the SEC on December 4, 2020 and declared effective by the SEC on December 11, 2020. On June 22, 2021, the Company filed a Prospectus Supplement with the SEC relating to the offer and sale of up to $39.5 million of Common Stock in the ATM Offering. As of September 30, 2021, no sales have been made in the ATM Offering.
On September 30, 2021, the Company entered into a Loan and Security Agreement with B. Riley Commercial Capital, LLC, as Lender. The proceeds of the Loan Agreement are expected to be used for acquisition finance, general corporate purposes and working capital. The Loan Agreement provides for a $10,000,000 loan facility with a maturity date of October 15, 2022, at an interest rate of 8.0% per annum. The outstanding balance of the Loan is due in full on the Maturity Date.

The Company believes its current cash on hand, the potential availability of proceeds of sale of shares of Common Stock under the ATM Offering, the collectability of its accounts receivable and project backlog are sufficient to meet its operating and capital requirements for at least the next twelve months from the date these financial statements are issued.

4.
ACCOUNTS RECEIVABLE

Accounts receivable consist of:

​
 
September 30,
2021
   
December 31,
2020
 
Accounts receivable - contracts in progress
 
$
5,509,167
   
$
6,206,760
 
Accounts receivable - retainage
   
102,853
     
93,197
 
​
   
5,612,020
     
6,299,957
 
Allowance for doubtful accounts
   
(84,000
)
   
(84,000
)
Total
 
$
5,528,020
   
$
6,215,957
 

Bad debt expense was $0 for the three and nine months ended September 30, 2021 and 2020, respectively.

14
Contract assets represent revenue recognized in excess of amounts billed, unbilled receivables, and retainage. Unbilled receivables represent an unconditional right to payment subject only to the passage of time, which are reclassified to accounts receivable when they are billed under the terms of the contract. Contract assets were as follows at September 30, 2021 and 2020:

​
 
September 30,
2021
   
December 31,
2020
 
Costs in excess of billings
 
$
3,165,598
   
$
216,261
 
Unbilled receivables, included in costs in excess of billings
   
184,653
     
1,138,341
 
​
   
3,350,251
     
1,354,602
 
Retainage
   
102,853
     
93,197
 
Total​
 
$
3,453,104
   
$
1,447,799
 
 
Contract liabilities represent amounts billed to clients in excess of revenue recognized to date, billings in excess of costs, and retainage. The Company anticipates that substantially all incurred cost associated with contract assets as of September 30, 2021 will be billed and collected within one year. Contract liabilities were as follows at September 30, 2021 and December 31, 2020:

​
 
September 30,
2021
   
December 31,
2020
 
Billings in excess of costs
 
$
1,652,106
   
$
1,140,125
 

5.
CONTRACTS IN PROGRESS

Information with respect to contracts in progress are as follows:

​
 
September 30,
2021
   
December 31,
2020
 
Expenditures to date on uncompleted contracts
 
$
9,727,034
   
$
7,764,622
 
Estimated earnings thereon
   
1,659,757
     
2,178,868
 
​
   
11,386,791
     
9,943,490
 
Less billings to date
   
(9,873,299
)
   
(10,867,354
)
​
   
1,513,492
   
(923,864
)
Plus under billings remaining on contracts 100% complete
   
184,653
     
1,138,341
 
Total
 
$
1,698,145
   
$
214,477
 

Included in accompany balance sheets under the following captions:

​
 
September 30,
2021
   
December 31,
2020
 
Cost and estimated earnings in excess of billings
 
$
3,350,251
   
$
1,354,602
 
Billings in excess of costs and estimated earnings on uncompleted contracts
   
(1,652,106
)
   
(1,140,125
)
Total​
 
$
1,698,145
   
$
214,477
 

15
6.
LONG-TERM DEBT

A summary of long-term debt is as follows:

​
 
September 30,
2021
   
December 31,
2020
 
NBT Bank, National Association, 4.25% interest rate, secured by all business assets, payable in monthly installments of $5,869 through September 2026, with a balloon payment at maturity.
 
$
652,103
   
$
683,268
 
NBT Bank, National Association, repaid in January 2021.
   
-
     
12,050
 
NBT Bank, National Association, 4.20% interest rate, secured by building, payable in monthly installments of $3,293 through September 2026, with a balloon payment at maturity.
   
224,057
     
246,135
 
NBT Bank, National Association, 4.15% interest rate, secured by all business assets, payable in monthly installments of $3,677 through April 2026.
   
183,660
     
210,475
 
NBT Bank, National Association, 4.20% interest rate, secured by all business assets, payable in monthly installments of $5,598 through October 2026, with a balloon payment at maturity.
   
389,355
     
426,624
 
NBT Bank, National Association, 4.85% interest rate, secured by a piece of equipment, payable in monthly installments of $2,932 including interest, through May 2023.
   
56,178
     
80,001
 
Various vehicle loans, interest ranging from 0% to 6.99%, total current monthly installments of approximately $8,150, secured by vehicles, with varying terms through September 2025.
   
396,830
     
294,799
 
National Bank of Middlebury, 3.95% interest rate for the initial 5 years, after which the loan rate will adjust equal to the Federal Home Loan Bank of Boston 5/10 – year Advance Rate plus 2.75%, loan is subject to a floor rate of 3.95%, secured by solar panels and related equipment, payable in monthly installments of $2,388 including interest, through December 2024.
   
54,252
     
73,467
 
​B. Riley Commercial Capital, LLC, 8.0% interest rate, payable in full on October 15, 2022     10,000,000       -  

   
11,956,435
     
2,026,819
 
Less current portion
   
(316,875
)
   
(308,394
)
​
   
11,639,560
     
1,718,425
 
Less debt issuance costs
   
(14,621
)
   
(16,930
)
Long-term debt
 
$
11,624,939
   
$
1,701,495
 

Maturities of long-term debt are as follows:

Year ending December 31:
 
Amount
 
Remainder of 2021
 
$
72,682
 
2022
   
10,324,279
 
2023
   
290,565
 
2024
   
264,879
 
2025
   
254,907
 
2026 and thereafter
   
749,123
 
​
 
$
11,956,435
 

On September 30, 2021, the Company entered into a Loan and Security Agreement with B. Riley Commercial Capital, LLC, as Lender. The proceeds of the Loan Agreement are expected to be used for acquisition finance, general corporate purposes and working capital. The Loan Agreement provides for a $10,000,000 loan facility with a maturity date of October 15, 2022, at an interest rate of 8.0% per annum. The outstanding balance of the Loan is due in full on the Maturity Date.

16
7.
LINE OF CREDIT

The Company’s wholly owned subsidiary, Peck Electric Co., has a working capital line of credit with NBT Bank with a limit of $6,000,000 and a variable interest rate based on the Wall Street Journal Prime rate, currently 3.25%. The line of credit is payable upon demand and is subject to an annual review which is currently occurring. The balance outstanding was $2,080,671 and $2,482,127 at September 30, 2021 and December 31, 2020, respectively. Borrowing is based on 80% of eligible accounts receivable. The line is secured by all business assets and is subject to certain financial covenants. These financial covenants consist of a minimum debt service coverage ratio of 1.20 to 1.00 measured on a quarterly basis. As of September 30, 2021, the Company was not in compliance with the financial covenants but received a waiver of covenant default from NBT Bank.

8.
COMMITMENTS AND CONTINGENCIES

Total rent expense for all of the non-cancelable leases were $37,715 and $2,547 for the three months ended September 30, 2021 and 2020, respectively. Total rent expense for all of the non-cancelable leases were $148,299 and $19,577 for the nine months ended September 30, 2021 and 2020, respectively.

The Company also rents equipment to be used on jobs under varying terms not exceeding one year. Total rent expense under short term rental agreements was $93,405 and $44,385 for the three months ended September 30, 2021 and 2020, respectively. Total rent expense under short term rental agreements was $289,554 and $160,639 for the nine months ended September 30, 2021 and 2020, respectively.

Future minimum lease payments required under all of the non-cancelable operating leases are as follows:

Years ending December 31:
 
Amount
 
Remainder of 2021
 
$
41,100
 
2022
   
145,561
 
2023
   
147,903
 
2024
   
150,291
 
2025
   
152,310
 
Thereafter
   
1,070,016
 
​
 
$
1,707,181
 
 
9.
FAIR VALUE MEASUREMENTS

The Public Warrants were traded under the symbol ISUNW and the fair values were based upon the closing price of the Public Warrants at each measurement date. The Private Warrants were valued using a Black-Scholes model, pursuant to the inputs provided in the table below:

Input
 
Mark-to-Market
Measurement at
September 30, 2021
   
Mark-to-Market
Measurement at
December 31, 2020
 
Risk-free rate
   
0.530
%
   
0.214
%
Remaining term in years
   
2.72
     
3.47
 
Expected volatility
   
120.73
%
   
81.0
%
Exercise price
 
$
11.50
   
$
11.50
 
Fair value of common stock
 
$
8.30
   
$
5.95
 

17
The following table sets forth the Company’s assets and liabilities which are measured at fair value on a recurring basis by level within the fair value hierarchy:

         
Fair Value Measurement as of
September 30, 2021
 
   
Total
   
Level 1
   
Level 2
   
Level 3
 
Liabilities:
                       
Public Warrants
 
$
-
   
$
-
   
$
-
   
$
-
 
Private Warrants
   
180,600
     
-
     
-
     
180,600
 

         
Fair Value Measurement as of
December 31, 2020
 
   
Total
   
Level 1
   
Level 2
   
Level 3
 
Liabilities:
                       
Public Warrants
 
$
773,956
   
$
773,956
   
$
-
   
$
-
 
Private Warrants
   
350,455
     
-
     
-
     
350,455
 
 
The following is a roll forward of the Company’s Level 3 instruments:

Balance, January 1, 2021
 
$
350,455
 
Fair value adjustment – Warrant liability
   
(169,855
)
Balance, September 30, 2021
 
$
180,600
 
 
The following is a roll forward of the Company’s Level 1 – warrant liability was as follows:
 
Balance, January 1, 2021
 
$
773,956
 
Fair value adjustment – Warrant liability
   
(773,956
)
Balance, September 30, 2021
 
$
-
 

10. WARRANTS

On March 9, 2021, the Company announced its intention to redeem all of its outstanding public warrants to purchase shares of the Company’s Common Stock that were issued under the Warrant Agreement.

On April 12, 2021, the Company redeemed approximately 453,764 Warrants that remained outstanding on the Redemption Date, in accordance with the Public Warrant terms. After the redemption, as of April 12, 2021, the Company had no public warrants outstanding.
 
As of September 30, 2021, the Company received notification that 3,641,018 warrants issued in connection with the Company’s (Jensyn Acquisition Corp.) initial public offering were exercised and 1,820,509 shares of Common Stock were issued in connection with such exercise resulting in cash proceeds to the Company of $20,906,015.

   
Number of
Warrants
 
Outstanding, beginning January 1, 2021
   
4,163,926
 
Granted
   
-
 
Exercised
   
3,641,018
 
Redeemed
   
453,764
 
Outstanding, ending September 30, 2021
   
69,144
 

18
11.
UNION ASSESSMENTS

The Company employs members of the International Brotherhood of Electrical Workers Local 300 (IBEW). The union fee assessments payable are both withholdings from employees and employer assessments. Union fees are for monthly dues, defined contribution pension, health and welfare funds as part of multi-employer plans. All union assessments are based on the number of hours worked or a percentage of gross wages as stipulated in the agreement with the Union.

The Company has an agreement with the IBEW in respect to rates of pay, hours, benefits, and other employment conditions that expires May 31, 2022. During the three and nine months ended September 30, 2021 and 2020, the Company incurred the following union assessments.

   
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2021
   
2020
   
2021
   
2020
 
                         
Pension fund
 
$
76,805
   
$
68,353
   
$
264,046
   
$
209,389
 
Welfare fund
   
231,467
     
218,428
     
805,441
     
585,134
 
National employees benefit fund
   
21,912
     
23,553
     
75,002
     
59,366
 
Joint apprenticeship and training committee
   
5,338
     
3,336
     
28,489
     
8,546
 
401(k) matching
   
25,365
     
11,485
     
80,773
     
30,987
 
Total
 
$
360,887
   
$
325,155
   
$
1,253,751
   
$
893,422
 

12.
PROVISION FOR INCOME TAXES

In connection with the closing of the Reverse Merger and Recapitalization, the Company’s tax status changed from an S-corporation to a C-corporation. As a result, the Company is responsible for Federal and State income taxes and must record deferred tax assets and liabilities for the tax effects of any temporary differences that exist on the date of the change. When push down accounting does not apply as part of a business combination, U.S. GAAP requires the effect of the change in tax status to be recognized in the financial statements and the effect is included in income (loss) from continuing operations. The Company recorded deferred income tax expense and a corresponding deferred tax liability of $1,098,481 as of and for the year ended December 31, 2019, of which $1,506,362 was recorded at the time of conversion to a C-corporation (see note 1 (e) income taxes). For the year ended December 31, 2020, the Company recorded deferred income tax benefit of $487,923 and had a net deferred tax liability of $610,558.

The Reverse Merger and Recapitalization between Jensyn Acquisition Corp. and Peck Electric Co. on June 20, 2019 caused a stock ownership change for purposes of Section 382 of the Internal Revenue Code. The Company recognized tax net operating losses which it expects to fully utilize over time subject to annual limitations as set forth in the Internal Revenue Code.

The provision for income taxes for September 30, 2021 and 2020 consists of the following:

   
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2021
   
2020
   
2021
   
2020
 
Current
                       
Federal
 
$
-
   
$
-
   
$
-
   
$
-
 
State
   
750
     
-
     
2,300
     
750
 
Total Current
   
750
     
-
     
2,300
     
750
 
                                 
Deferred
                               
Federal
   
(622,351
)
   
(158,262
)
   
(802,775
)
   
(478,370
)
State
   
(199,004
)
   
(50,738
)
   
(256,697
)
   
(152,965
)
Total Deferred
   
(821,355
)
   
(209,000
)
   
(1,059,472
)
   
(631,335
)
                                 
(Benefit) provision from Income Taxes
 
$
(820,605
)
 
$
(209,000
)
 
$
(1,057,172
)
 
$
(630,585
)

19
The Company’s total deferred tax assets and liabilities at September 30, 2021 and December 31, 2020 are as follows:

​
 
September 30,
2021
   
December 31,
2020
 
Deferred tax assets (liabilities)
           
Accruals and reserves
 
$
23,967
   
$
23,758
 
Net operating loss
   
3,013,252
     
812,996
 
Total deferred tax assets
   
3,037,219
     
836,754
 
​
               
Property and equipment
   
(2,275,825
)
   
(1,447,312
)
Stock-based compensation
   
(312,480
)
   
-
 
Total deferred tax liabilities
   
(2,588,305
)
   
(1,447,312
)
​
               
Net deferred tax asset (liabilities)
 
$
448,914
 
$
(610,558
)

The Company uses a more-likely-than-not measurement for all tax positions taken or expected to be taken on a tax return in order for those tax positions to be recognized in the financial statements. There were no uncertain tax positions as of September 30, 2021 and December 31, 2020. If the Company were to incur interest and penalties related to income taxes, these would be included in the provision for income taxes, there were none as of September 30, 2021 and December 31, 2020, respectively. Generally, the three tax years previously filed remain subject to examination by federal and state tax authorities. The Company does not expect a material change in uncertain tax positions to occur within the next 12 months.

Reconciliation between the effective tax on income from operations and the statutory tax rate is as follows:

   
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2021
   
2020
   
2021
   
2020
 
Income tax (benefit) expense at federal statutory rate
 
$
(310,825
)
 
$
(339,399
)
 
$
(1,292,433
)
 
$
(769,869
)
Permanent differences
   
(421,549
)
   
184,222
     
(192,034
)
   
279,750
 
Stock compensation subject to §162(m) limitation     66,729       -       66,729       -  
Non-deductible goodwill and other intangible
   
-
      -      
833,399
      -  
Other adjustments
   
1,843
     
(4,203
)
   
1,843
     
16,255
 
State and local taxes net of federal benefit
   
(156,803
)
   
(49,620
)
   
(474,676
)
   
(156,721
)
Total
 
$
(820,605
)
 
$
(209,000
)
 
$
(1,057,172
)
 
$
(630,585
)

13.
CAPTIVE INSURANCE

The Company and other companies are members of an offshore heterogeneous group captive insurance holding company entitled Navigator Casualty, LTD. (NCL). NCL is located in the Cayman Islands and insures claims relating to workers’ compensation, general liability, and auto liability coverage.

Premiums are developed through the use of an actuarially determined loss forecast. Premiums paid totaled $214,510 and $189,958 for the nine months ending September 30, 2021 and the year ended December 31, 2020, respectively. The loss funding, derived from the actuarial forecast, is broken-out into two categories by the actuary known as the “A & B” Funds. The “A” Fund pays for the first $100,000 of any loss and the “B” Fund contributes to the remainder of the loss layer up to $300,000 total per occurrence.

20
Each shareholder has equal ownership and invests a one-time cash capitalization of $36,000. This is broken out into two categories, $35,900 of redeemable preference shares and $100 for a single common share. Each shareholder represents a single and equal vote on NCL’s Board of Directors.

Summary financial information on NCL as of September 30, 2020 is:

Total assets
 
$
96,020,037
 
Total liabilities
 
$
46,176,680
 
Comprehensive income
 
$
8,820,830
 

NCL’s fiscal year end is September 30, 2020.

​
 
September 30,
2021
   
December 31,
2020
 
Investment in NCL
           
Capital
 
$
36,000
   
$
36,000
 
Cash security
   
194,167
     
158,785
 
Investment income in excess of losses (incurred and reserves)
   
3,320
     
3,320
 
Total
 
$
233,487
   
$
198,105
 

14.
RELATED PARTY TRANSACTIONS

In 2014, the minority stockholders of Peck Electric Co., who sold the building that the Company formerly occupied, lent the proceeds to the majority stockholders of Peck Electric Co. who contributed $400,000 of the net proceeds as paid in capital. At September 30, 2021 and December 31, 2020, the amount owed of $32,400 and $73,000, respectively, is included in the “due to stockholders” as there is a right to offset.

In May 2018, stockholders of the Company bought out a minority stockholder of Peck Electric Co. The Company advanced $250,000 for the stock purchase which is included in the “due from stockholders”. At September 30, 2021 and December 31, 2020, the amounts due of $38,530 and $602,463, respectively, are included in the “due to stockholders” as there is a right to offset.

In 2019, the Company’s majority stockholders lent proceeds to the Company to help with cash flow needs. At September 30, 2021 and December 31, 2020, the amounts owed of $77,552 and $286,964, respectively, are included in the “due to stockholders” as there is a right to offset.

The Company was an S-corporation through June 20, 2019 and as a result, the taxable income of the Company is reported on each stockholder’s tax returns and each stockholder are taxed individually. As a result, the Company has accrued a distribution for taxes of $6,622 at September 30, 2021 and December 31, 2020, respectively, to the former stockholders of Peck Electric Co. for the period during which the Company was an S-corporation, which is included in the “due to stockholders” value below.

The aforementioned transactions netted to $0 and $24,315 as of September 30, 2021 and December 31, 2020 respectively.

21
15.
DEFERRED COMPENSATION PLAN

In 2018, the Company entered into a deferred compensation agreement with a former minority stockholder. The agreement provides for deferred income benefits and is payable over the post-retirement period. The Company accrues the present value of the estimated future benefit payments over the period from the date of the agreement to the retirement date. The minimum commitment for future compensation under the agreement is $70,000, the net present value of which is $67,936. The Company will also pay the former stockholder a solar management fee of 24.5% of the available cash flow from the solar arrays put into service on or before December 31, 2017 over the life of the arrays. The amount is de minimis and therefore not recorded on the balance sheet as of September 30, 2021 and December 31, 2020 and recorded in the statement of operations when incurred.

16.
EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of Common Stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into Common Stock.

   
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2021
   
2020
   
2021
   
2020
 
                         
Earnout provision, includes new shares of common stock to be issued to former Peck Electric Co. shareholders
   
-
     
898,473
     
-
     
898,473
 
Earnout provision, includes new shares of Common Stock that may be issued to Exit Strategy
   
-
     
11,231
     
-
     
11,231
 
Earnout provision, including new shares of Common Stock that may be issued to holders of forfeited and canceled shares
   
-
     
257,799
     
-
     
257,799
 
Option to purchase Common Stock, from Jensyn’s IPO
   
429,000
     
429,000
     
429,000
     
429,000
 
Private warrants to purchase Common Stock, from Jensyn’s IPO
   
34,572
     
2,292,250
     
34,572
     
2,292,250
 
Warrants to purchase Common Stock, from Solar Project Partners, LLC. Exchange and Subscription Agreement
   
-
     
275,000
     
-
     
275,000
 
Conversion of Preferred Stock to Common Stock from GreenSeed Investors, LLC Exchange and Subscription Agreement
   
-
     
370,370
     
-
     
370,370
 
Unvested restricted stock awards
   
160,667
     
-
     
160,667
     
-
 
Unvested options to purchase Common Stock
   
201,334
     
-
     
201,334
     
-
 
Totals
   
825,573
     
4,534,123
     
825,573
     
4,534,123
 

The Company has contingent share arrangements and warrants with the potential issuance of additional shares of Common Stock from these arrangements were excluded from the diluted EPS calculation because the prevailing market and operating conditions at the present time do not indicate that any additional shares of Common Stock will be issued. These instruments could result in dilution in future periods.

22
17.
PREFERRED STOCK

The Company has authorized and designated 200,000 shares of convertible preferred stock (the “Preferred Stock”). Pursuant to the Exchange Agreement, the Company subscribed for 500,000 Units of Class B Preferred Membership units of GSI in exchange for 200,000 shares of the Company’s Series A Preferred Stock (the “Preferred Shares”). In addition, the Company subscribed for and purchased 100,000 Units of SPP in exchange for the issuance by the Company of a Warrant to acquire 275,000 shares of the Company’s Common Stock at an exercise price of $15.00 per share.

The Exchange Agreement provides that as long as the dividend payment on the Preferred Shares in each calendar quarter is equal to the aggregate distribution with respect to the GSI Units, such payments and distributions shall be offset and neither GSI nor the Company need to make any cash payments to the other.

The Company granted to GSI the right to repurchase up to 400,000 (in tranches of 50,000) of the Units at a valuation of $4,000,000.

The Company granted to GSI registration rights with respect to the Preferred Shares, the Warrant, and the Common Stock underlying the Warrant.

The Preferred Stock has the following rights and privileges:

Voting – The holders of the Preferred Stock are not entitled to voting rights.

Conversion – Each share of Preferred Stock, is convertible at the option of the holder into 1.85185 shares of Common Stock. The outstanding shares of Preferred Stock automatically convert into Common Stock upon the occurrence of (i) the trading of the shares of Common Stock is equal to or greater than $15.00 per share for any
 
20 days in a 30 day trading period, or (ii) when there is a change in control and the holder would receive consideration equal to or greater than the preferred liquidation preferences.
 
Dividends – The holders of the Preferred Stock in preference to the holders of Common Stock, are entitled to receive, if and when declared by the Board of Directors, dividends at the rate of $2.00 per share per annum.

Liquidation – In the event of any liquidation, dissolution, winding-up or sale or merger of the Company, whether voluntarily or involuntarily, each holder of Preferred Stock is entitled to receive, in preference to the holders of Common Stock, a per-share amount equal to the original issue price of $25.00 (as adjusted, as defined), plus all declared but unpaid dividends.

Redemption – The Company may redeem any or all of the shares at any time by paying in cash $27.50 per share plus any accrued and unpaid dividends solely at the Company’s option.

Pursuant to the First Amended Certificate of Designation, on February 22, 2021 the Company notified all holders of the Preferred Shares of the mandatory conversion of the Preferred Shares into shares of Common Stock. A total of 370,370 shares of Common Stock were issued pursuant to the conversion.

23
18.
RESTRICTED STOCK AND STOCK OPTIONS

Options

As of September 30, 2021, the Company has 201,333 non-qualified stock options outstanding to purchase 201,333 shares of Common Stock, per the terms set forth in the option agreements. The stock options vest at various times and are exercisable for a period of five years from the date of grant at an exercise price of $1.49 per share, the fair market value of the Company’s Common Stock on the date of each grant. The Company determined the fair market value of these options to be $1.7 million by using the Black Scholes option valuation model. The key assumptions used in the valuation of the options were as follows; a) volatility of 187.94%, b) term of 2 years, c) risk free rate of 0.13% and d) a dividend yield of 0%.

​
 
Nine Months Ended
September 30, 2021
 
   
Number of
Options
   
Weighted average
exercise price
 
Outstanding, beginning January 1, 2021
    -
   
$
-
 
Granted
   
302,000
   
$
1.49
 
Exercised
   
100,667
   
$
1.49
 
Outstanding, ending September 30, 2021
   
201,333
   
$
1.49
 
Exercisable at September 30, 2021
   
-
   
$
-
 

The above table does not include the 429,000 options issued as part of the Jensyn IPO.

During the three months ended September 30, 2021 and 2020, the Company charged a total of $0.1 million and $0, respectively, to operations to recognize stock-based compensation expense. During the nine months ended September 30, 2021 and 2020, the Company charged a total of $0.4 million and $0, respectively, to operations to recognize stock-based compensation expense. Unamortized stock-based compensation expense for stock options is $0.1 million. As of September 30, 2021, the Company had $1.0 million in unrecognized stock-based compensation expense related to 160,667 restricted stock awards, which is expected to be recognized over a weighted average period of less than three years. All units are expected to vest.

The stock options were exercised for 100,667 shares of Common Stock providing approximately $0.1 million of cash flow to the Company.

Restricted Stock Grant to Executives

With an effective date of January 4, 2021, subject to the iSun, Inc. 2020 Equity Incentive Plan, (the “2020 Plan”), the Company entered into a restricted stock grant agreement with our Chief Executive Officer Jeffrey Peck, Chief Financial Officer John Sullivan, Chief Operating Officer Fredrick Myrick, and Chief Strategy Officer Michael dAmato in January 2021 (the January 2021 RSGAs). All shares issuable under the January 2021 RSGA are valued as of the grant date at $6.15 per share representing the fair market value. The January 2021 RSGA provides for the issuance of up to 241,000 shares of the Company’s Common Stock. The restricted shares shall vest as follows: 80,333 of the restricted shares shall vest immediately, 80,333 of the restricted shares shall vest on the one (1) year anniversary of the effective date, and the balance, or 80,334 restricted shares, shall vest on the two (2) year anniversary of the effective date.

In the three months ended September 30, 2021 and 2020, stock-based compensation expense of $0.1 million and $0, respectively was recognized for the January 2021 RSGA. In the nine months ended September 30, 2021 and 2020, stock-based compensation expense of $0.7 million and $0, respectively was recognized for the January 2021 RSGA.

Stock-based compensation, excluding the January 2021 RSGA, related to employee and director options totaled $0.0 and $0 for the three months ended September 30, 2021 and 2020, respectively. Stock-based compensation, excluding the January 2021 RSGA, related to employee and director options totaled $0.5 and $0 for the nine months ended September 30, 2021 and 2020, respectively.

On February 25, 2021, the stockholders approved an amendment to the 2020 Equity Incentive Plan increasing the available shares of Common Stock to 1,000,000 shares of Common Stock.

24
19.
ACQUISITION
 

iSun Energy, LLC

On January 19, 2021, the Company entered into an Agreement and Plan of Merger and Reorganization with iSun Energy LLC.  iSun Energy LLC became a wholly-owned subsidiary of the Company. iSun Energy, LLC is a provider of products and services designed to support the electric vehicle market. In connection with Merger, Sassoon Peress, the sole member, will receive 400,000 shares of the Company’s Common Stock over five years valued at $2,404,000, 200,000 shares of which were issued at the closing, warrants to purchase up 200,000 shares of the Company’s Common Stock, valued at $517,898, cash considerations of $85,135 and up to 240,000 shares of the Company’s Common Stock based on certain performance milestones for an aggregate value of $3,007,033.

The 400,000 shares of Company’s Common Stock were valued utilizing the market close price of $6.01 on the date, December 30, 2020, which the binding letter of intent was executed. For the warrants, the Company determined the fair market value of these options by using the Black Scholes option valuation model. The key assumptions used in the valuation of the warrants were as follows; a) volatility of 103.32%, b) term of 3 years, c) risk free rate of 0.36% and d) a dividend yield of 0%.

At September 30, 2021, the amount of $2,856,681, net of amortization of $150,352, is included as an Intangible Asset. The Company deemed the acquisition an asset acquisition in as much as the acquired assets consisted primarily of the iSun brand and know-how and contained no other business processes. Amortization is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful life is 10 years. For the three months ending September 30, 2021 and 2020, amortization expense is $150,352 and $0, respectively. For the nine months ending September 30, 2021 and 2020, amortization expense is $150,352 and $0, respectively.

Assignment Agreement

On April 6, 2021, iSun Utility, LLC (“iSun Utility”), a Delaware limited liability company and wholly-owned subsidiary of Company, Adani Solar USA, Inc., a Delaware corporation (Adani”), and Oakwood Construction Services, Inc., a Delaware corporation (“Oakwood”) entered into an Assignment Agreement (the “Assignment”), pursuant to which iSun Utility will acquire all rights to the intellectual property of Oakwood and its affiliates (the “Project IP”). Oakwood is a utility-scale solar EPC company and a wholly-owned subsidiary of Adani. The Project IP includes all of the intellectual property, project references, templates, client lists, agreements, forms and processes of Adani’s U.S. solar business.


Under the Assignment, iSun Utility purchased the Project IP from Adani and Oakwood for total consideration of $2.7 million, with $1.0 million due immediately and the remaining $1.7 million contingent upon the achievement of certain milestones, as described in this paragraph. Under the Assignment provides that iSun Utility acquired all membership interests in Hartsel Solar, LLC (“Hartsel”), and through this transaction iSun Utility acquired all rights to Hartsel’s in-process solar project (the “Hartsel Project”). If Hartsel achieves certain milestones, iSun Utility will pay to Adani $0.7 million to secure equipment previously purchased allowing for safe harbor of the 30% ITC and an additional amount of $1.0 million for key development milestones. The contingent provisions of the Assignment Agreement entered into with Oakwood and Adani are considered Level 3 measurements. Given that the probability of such provisions being achieved is highly unlikely, no value was assigned to the contingent provision.

At September 30, 2021, the amount of $1,000,000 is included as an Intangible Asset. The Company deemed the acquisition an asset acquisition in as much as the acquired assets consisted primarily of the know-how and contained no other business processes. Amortization is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful life is 10 years.

25
20.
INVESTMENTS

Investments consist of:

​
 
September 30,
2021
   
December 31,
2020
 
GreenSeed Investors, LLC
 
$
4,424,444
   
$
4,724,444
 
Investment in Solar Project Partners, LLC
   
96,052
     
96,052
 
Investment in Gemini Electric Mobility Co.
   
2,000,000
     
-
 
Investment in NAD Grid Corp. d/b/a AmpUp
   
1,000,000
     
-
 
Total
 
$
7,520,496
   
$
4,820,496
 

GreenSeed Investors, LLC and Solar Project Partners, LLC

The Company entered into an Exchange and Subscription Agreement (the “Exchange Agreement”) dated April 22, 2020 with GreenSeed Investors, LLC, a Delaware limited liability company (“GSI”), and Solar Project Partners, LLC, a Delaware limited liability company (“SPP”).

The primary purpose of GSI is to facilitate the green bond platform and provide capital for the acquisition of solar projects by SPP. The investment in GSI provides access to early stage financing to support the Company’s EPC operations while establishing a large pipeline of projects. The investment in SPP provides the Company with the opportunity to retain a long-term ownership in the completed solar projects. As such, the Company recorded the investments as long-term other assets.

Pursuant to the Exchange Agreement, the Company subscribed for 500,000 Units of Class B Preferred Membership units of GSI in exchange for 200,000 shares of the Company’s Series A Preferred Stock (the “Preferred Shares”). In addition to the investment by GSI in the Preferred Shares, GSI obtained additional capital contributions which valued the Units at $10.00 per Unit. As the Company acquired 500,000 Units, the market transactions were utilized as a Level 1 fair value instruments in determining the valuation of the investment. As of April 22, 2020, the fair value of the investment in GSI was $5,000,000. Separately, the Company subscribed for and purchased 100,000 Units of SPP in exchange for the issuance by the Company of a Warrant to acquire 275,000 shares of the Company’s Common Stock at an exercise price of $15.00 per share. As of September 30, 2021, the warrant was converted to 117,376 shares of Common Stock on a cashless basis.

The Exchange Agreement provides that as long as the dividend payment on the Preferred Shares in each calendar quarter is equal to the aggregate distribution with respect to the GSI Units, such payments and distributions shall be offset and neither GSI nor the Company need to make any cash payments to the other. For the three months ended September 30, 2021, the Company received a return of capital from GSI in the amount of $100,000. The dividend receivable of $100,000 is included in other current assets as of September 30, 2021.

The Company granted to GSI the right to repurchase up to 400,000 (in tranches of 50,000) of the Units at a valuation of $10.00 per Unit totaling $4,000,000.

The Company granted to GSI registration rights with respect to the Preferred Shares, the Warrant, and the Common Stock underlying the Warrant.

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The GSI and SPP investments are measured at cost, less impairment, if any, plus or minus changes resulting from observable price changes in ordinary transactions for the identical or similar investment of the same issuer. As the Company does not have significant influence over operating or financial policies of GSI and SPP, the cost method of accounting for the investment was determined to be appropriate. Changes in the fair value of the investment are recorded as net appreciation in fair value of investment in the Consolidated Statements of Operations. No net appreciation or depreciation in fair value of the investments was recorded during the year ended September 30, 2021, as there were no observable price changes.

Gemini and AmpUp

On March 18, 2021, the Company made a minority investment of $1,500,000 in Gemini Electric Mobility Co. (“Gemini”) utilizing a Simple Agreement for Future Equity.

On March 18, 2021, the Company made a minority investment of $1,000,000 in Nad Grid Corp (“AmpUp”) utilizing a Simple Agreement for Future Equity. On May 6, 2021, the Company made an additional minority  investment of $500,000 in AmpUp.

The Gemini and AmpUp investments are measured at cost, less impairment, if any, plus or minus changes resulting from observable price changes in ordinary transactions for the identical or similar investment of the same issuer. These investments are minority investments intended to support electric vehicle infrastructure development. The Company has no control in these entities. Changes in the fair value of the investment are recorded as net appreciation in fair value of investment in the Consolidated Statements of Operations. At September 30, 2021, the equity investment for Gemini and AmpUp was $2,000,000 and $1,000,000, respectively. No net appreciation or depreciation in fair value of the investments was recorded during the nine months ending September 30, 2021, as there were no observable price changes.

21.
STOCK REDEMPTION
 
On January 25, 2021, the Company purchased 34,190 shares of Common Stock from certain executives at $19.68, which was the 5-day average of the closing prices for the Common Stock as reported by the Nasdaq Capital Market for the five trading days immediately preceding January 22, 2021, for a total of approximately $673,000. Upon redemption, the shares of Common Stock were retired.

22.
SUBSEQUENT EVENTS

Agreement and Plan of Merger

On September 8, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, iSun Residential Merger Sub, Inc., a Vermont corporation (the “Merger Sub”) and wholly-owned subsidiary of iSun Residential, Inc., a Delaware corporation (“iSun Residential”) and wholly-owned subsidiary of the Company, SolarCommunities, Inc., a Vermont benefit corporation (“SunCommon”), and Jeffrey Irish, James Moore, and Duane Peterson as a “Shareholder Representative Group” of the holders of SunCommon’s capital stock (the “SunCommon Shareholders”), pursuant to which the Merger Sub will merge with and into SunCommon (the “Merger”) with SunCommon as the surviving company in the Merger and SunCommon becoming a wholly-owned subsidiary of iSun Residential. In connection with Merger, the SunCommon Shareholders received merger consideration totaling $41,500,000 consisting of (i) cash in the amount of $25,534,621; (ii) Common Stock of the Company (“Common Stock”) in the amount of $15,965,379, priced at $83,816 per share; and (iii) earn out consideration of up to $10,000,000 upon the fulfillment of certain conditions. The information necessary to present the preliminary allocation of fair value of assets acquired and liabilities assumed is currently not available and have not been included in these condensed consolidated financial statements. The shares of the Common Stock issued in connection with the Merger were listed on the NASDAQ Capital Market. The Merger closed and was effective on October 1, 2021. The Company intends to utilize the merger as entry into the Residential installation segment.

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Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2021 and 2020 and related notes included in Part 1, Item 1 of this Quarterly Report on Form 10-Q. The following discussion and analysis should also be read together with our audited consolidated financial statements and related notes for the year ended December 31, 2020.

Forward-Looking Statements

This discussion and analysis contains forward-looking statements about our plans and expectations of what may happen in the future. Forward-looking statements are based on a number of assumptions and estimates that are inherently subject to significant risks and uncertainties, and our actual results could differ materially from the results anticipated by our forward-looking statements. Our future results and financial condition may also differ materially from those that we currently anticipate as a result of the factors described in the sections entitled “Risk Factors” in the filings that we make with the U.S. Securities and Exchange Commission (the “SEC”). Throughout this section, unless otherwise noted, “we,” “us,” “our” and the “Company” refer to iSun, Inc.

Business Introduction / Overview

iSun, Inc., the principal office of which is located in Williston, Vermont, is one of the largest commercial solar engineering, procurement and construction (“EPC”) companies in the country and is expanding across the Northeastern United States (“U.S.”). The Company is a second-generation business founded under the name Peck Electric Co. (“Peck Electric”) in 1972 as a traditional electrical contractor. The Company’s core values are to align people, purpose, and profitability, and since taking leadership in 1994, Jeffrey Peck, the Company’s Chief Executive Officer, has applied such core values to expand into the solar industry. Today, the Company is guided by the mission to facilitate the reduction of carbon emissions through the expansion of clean, renewable energy and we believe that leveraging such core values to deploy resources toward profitable business is the only sustainable strategy to achieve these objectives.

The world recognizes the need to transition to a reliable, renewable energy grid in the next 50 years. Vermont and Hawaii are leading the way in the U.S. with renewable energy goals of 75% by 2032 and 100% by 2045, respectively. California committed to 100% carbon-free energy by 2045. The majority of the other states in the U.S. also have renewable energy goals regardless of current Federal solar policy. We are a member of Renewable Energy Vermont, an organization that advocates for clean, practical and renewable solar energy. The Company intends to use near-term incentives to take advantage of long-term, sustainable energy transformation with a commitment to the environment and to its shareholders. Our triple bottom line, which is geared towards people, environment, and profit, has always been our guide since we began installing renewable energy and we intend that it remain our guide over the next 50 years as we construct our energy future.

After installing more than 200 megawatts of solar energy, we believe that we are well-positioned for what we believe to be the coming transformation to an all renewable energy economy. As a result of the completion of our business combination transaction with Jensyn Acquisition Corp. (“Jensyn”) on June 20, 2019, pursuant to which we acquired Peck Electric Co. (the “Reverse Merger and Recapitalization”), we have now opened our company to the public market as part of our strategic growth plan. We are expanding across the Northeastern U.S. to serve the fast-growing demand for clean renewable energy. We are open to partnering with others to accelerate our growth process, and we are expanding our portfolio of company-owned solar arrays to establish recurring revenue streams for many years to come. We have established a leading presence in the market after five decades of successfully serving our customers, and we are now ready for new opportunities and the next five decades of success.

We have a three-pronged growth strategy that includes (1) organic expansion across the Northeastern United States, (2) conducting accretive merger and acquisition transactions to expand geographically, and (3) investing into company-owned solar assets.

On January 19, 2021, we entered in an agreement to acquire iSun Energy LLC based in Burlington, Vermont. iSun Energy, LLC offers a portfolio of products that supports the growing electric vehicle market, specifically carports, charging stations and user-facing technology. The flagship iSun Energy & Mobility Hub is the result of 30 years of passion, dedication, and innovation through sustainability. The iSun solar EV carport charging systems incorporate solar panels to charge electric vehicles while providing unparalleled software insights into data surrounding the energy produced, consumed, air quality effects and other key metrics. The iSun Oasis Smart Solar Bench is expected to be an integral part in developing smart cities and campuses and has the ability to charge any mobile device through integrated solar panels that collect and store energy throughout the day. iSun’s accompanying data platform allows for monitoring and analysis of key metrics through built in IoT (Internet of Things) sensors. The platform also affords both physical and digital advertising and branding, for additional recurring revenue opportunities. iSun’s Augmented Reality 3D software platform helps clients visualize their projects before they are built, making it easy for our clients to adopt sustainable solutions and to understand their impact on sustainability. As we continue to execute on our three-pronged growth strategy, the iSun Energy, LLC acquisition allows to further enable the transition to renewable and clean energy. As our portfolio of offerings continues to expand, we are able to further provide energy as a service to the marketplace.

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With the filing of our Form S-3 Registration Statement on December 4, 2020, we have the ability to access the capital markets for up to $50,000,000 in aggregate to support our statement growth strategy. The access to capital accelerates our growth process and allows us to continue our expansion plans into new territories, aggressively pursue accretive merger and acquisition transactions and continue investing in our Company-owned solar assets which now consist of the product offerings of iSun Energy LLC. There is currently approximately $39.5 million in gross proceeds that may be available to the Company in connection with the potential sale of shares of Common Stock under the Registration Statement as we raised approximately $10.5 million through our Registered Direct Offering.
 
On April 24, 2020, we were fortunate to obtain a loan under the CARES Act Payroll Protection Program (“PPP”) of $1,487,624. The loan allowed us to maintain our workforce during the shutdown caused by the COVID-19 pandemic. On December 1, 2020, the Company received notification from NBT Bank that the Small Business Administration has approved the forgiveness of the PPP loan in its entirety and as such, the full $1,496,468 has been recognized in the income statement as a gain upon debt extinguishment for the year ended December 31, 2020.
 
On October 1, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, iSun Residential Merger Sub, Inc., a Vermont corporation (the “Merger Sub”) and wholly-owned subsidiary of iSun Residential, Inc., a Delaware corporation (“iSun Residential”) and wholly-owned subsidiary of the Company, SolarCommunities, Inc., a Vermont benefit corporation (“SunCommon”), and Jeffrey Irish, James Moore, and Duane Peterson as a “Shareholder Representative Group” of the holders of SunCommon’s capital stock (the “SunCommon Shareholders”), pursuant to which the Merger Sub will merge with and into SunCommon (the “Merger”) with SunCommon as the surviving company in the Merger and SunCommon becoming a wholly-owned subsidiary of iSun Residential. In connection with Merger, the SunCommon Shareholders will receive merger consideration consisting of (i) cash in the amount of $25,534,621; (ii) Common Stock of the Company (“Common Stock”) in the amount of $15,965,379, priced at $8.816 per share; and (iii) earn out consideration of up to $10,000,000 upon the fulfillment of certain conditions. The shares of the Common Stock to be issued in connection with the Merger will be listed on the NASDAQ Capital Market. The Company intends to operate SunCommon independent as we enter the Residential installation segment.
 
Equity and Ownership Structure
 
On June 20, 2019, Jensyn Acquisition Corp. (“Jensyn”)consummated the Reverse Merger and Recapitalization, which resulted in the acquisition of 100% of the issued and outstanding equity securities of Peck Electric by Jensyn, and in Peck Electric Co. becoming a wholly-owned subsidiary of Jensyn. Jensyn was originally incorporated as a special purpose acquisition company, formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar Recapitalization. Simultaneously with the Reverse Merger and Recapitalization, we changed our name to “The Peck Company Holdings, Inc.” Until the acquisition of iSun Energy, LLC in January 2021, we conducted all of our business operations exclusively through our wholly-owned subsidiary, Peck Electric Co. In addition, we formed iSun Utility, LLC in April 2021.
 
Unless the context otherwise requires, “we,” “us,” “our” and the “Company” refers to iSun, Inc. (formerly The Peck Company Holdings, Inc.) and its subsidiaries after June 20, 2019, and “Peck Electric Co.” refers to the business of Peck Electric Co. before June 20, 2019. Upon closing of the Reverse Merger and Recapitalization, Peck Electric Co. was deemed the accounting acquirer and takes over the historical information for the Company.
 
Effective January 19, 2021, the Company changed its corporate name from The Peck Company Holdings, Inc. to iSun, Inc. (the “Name Change”). The Name Change was effected through a parent/subsidiary short-form merger of iSun, Inc., our wholly-owned Delaware subsidiary formed solely for the purpose of the name change, with and into us. We were the surviving entity. To effectuate the short-form merger, we filed a Certificate of Merger with the Secretary of State of the State of Delaware on January 19, 2021. The merger became effective on January 19, 2021 with the State of Delaware and, for purposes of the quotation of our Common Stock on the Nasdaq Capital Market (“Nasdaq”), effective at the open of the market on January 20, 2021. We conduct all of our business operations exclusively through our wholly-owned subsidiaries, Peck Electric Co., iSun Energy LLC and iSun Utility, LLC.
 
Critical Accounting Policies
 
The following discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities.
 
Use of Estimates
 
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates include estimates used to review the Company’s impairments and estimations of long-lived assets, impairment on investment, goodwill, intangibles, revenue recognition utilizing a cost to cost method, allowances for uncollectible accounts, warrant liability and the valuation allowance on deferred tax assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
 
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Revenue Recognition
 
We recognize revenue from contracts with customers under Accounting Standards Codification (“ASC”) Topic 606 (“Topic 606”). Under Topic 606, revenue is recognized when, or as, control of promised goods and services is transferred to customers, and the amount of revenue recognized reflects the consideration to which an entity expects to be entitled in exchange for the goods and services transferred. We primarily recognize revenue over time utilizing the cost-to-cost measure of progress on contracts for specific projects and for certain master service and other service agreements.
 
Contracts. We derive revenue primarily from construction projects performed under: (i) master and other service agreements, which are typically priced using either a time and materials or a fixed price per unit basis; and (ii) contracts for specific projects requiring the construction and installation of an entire infrastructure system or specified units within an infrastructure system, which are subject to multiple pricing options, including fixed price, unit price, time and materials, or cost plus a markup.
 
The total contract transaction price and cost estimation processes used for recognizing revenue over time under the cost-to-cost method is based on the professional knowledge and experience of our project managers, engineers and financial professionals. Management reviews estimates of total contract transaction price and total project costs on an ongoing basis. Changes in job performance, job conditions and management’s assessment of expected variable consideration are factors that influence estimates of the total contract transaction price, total costs to complete those contracts and our profit recognition. Changes in these factors could result in revisions to revenue in the period in which the revisions are determined, which could materially affect our consolidated results of operations for that period. Provisions for losses on uncompleted contracts are recorded in the period in which such losses are determined. For the three months ended September 30, 2021 and 2020, project profit was affected by less than 5% as a result of changes in contract estimates included in projects that were in process as of September 30, 2021 and 2020.
 
Performance Obligations. A performance obligation is a contractual promise to transfer a distinct good or service to a customer and is the unit of account under Topic 606. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied. Our contracts often require significant services to integrate complex activities and equipment into a single deliverable and are therefore generally accounted for as a single performance obligation, even when delivering multiple distinct services. Contract amendments and change orders, which are generally not distinct from the existing contract, are typically accounted for as a modification of the existing contract and performance obligation. The vast majority of our performance obligations are completed within one year.
 
When more than one contract is entered into with a customer on or close to the same date, management evaluates whether those contracts should be combined and accounted for as a single contract as well as whether those contracts should be accounted for as one, or more than one, performance obligation. This evaluation requires significant judgment and is based on the facts and circumstances of the various contracts.
 
Union Labor
 
The Company uses union labor in order to construct and maintain the solar, electric and data work that comprise the core activities of its business. As such, contributions were made by the Company to the National Joint Apprenticeship and Training Committee, the National Electrical Benefit Funds, Union Pension Plans and a union Health and Welfare Fund. Each employee contributes monthly to the International Brotherhood of Electrical Workers (“IBEW”). The Company’s contract with the IBEW expires May 31, 2022.
 
The Company’s management believes that access to unionized labor provides a unique advantage for growth, because workforce resources can be scaled efficiently utilizing labor unions in other states to meet specific project needs in other states without substantially increasing fixed costs for the Company.
 
Business Insurance / Captive Insurance Group
 
In 2018, Peck Electric Co. joined a captive insurance group. The Company’s management believes that belonging to a captive insurance group will stabilize business insurance expenses and will lock in lower rates that are not subject to change from year-to-year and instead are based on the Company’s favorable experience modification rate.
 
Warrant Liability
 
On April 12, 2021, the staff of the SEC issue a public statement regarding the treatment of accounting for public and private warrants issued by SPAC companies, stating that these warrants should be accounted for as liabilities as opposed to equity. Since our acquisitions by Jensyn Acquisition Corp in 2019, we were accounting for our warrants as equity and therefore had to restate our financials for prior periods. The restatement has no effect on our cash balances or adjusted EBITDA. As of the May 24, 2021, we have no public warrants outstanding as all public warrants have been exercised or redeemed.
 
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Stock-Based Compensation
 
We periodically issue stock grants and stock options to employees and directors. We account for stock option grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board (FASB) whereas the value of the award is measured on the date of grant and recognized over the vesting period.
 
We account for stock grants issued to non-employees in accordance with the authoritative guidance of the FASB whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date.
 
Revenue Drivers
 
The Company’s business includes the design and construction of solar arrays for its customers. Revenue is recognized for each construction project on a percentage of completion basis. From time to time, the Company constructs solar arrays for its own account or purchases a solar array that must still be constructed. In these instances, no revenue is recognized for the construction of the solar array. In instances where the Company owns the solar array, revenue is recognized for the sale of the electricity generated to third parties. As a result, depending on whether it is building for others or for its own account, the Company’s revenue is subject to significant variation.
 
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2020
 
REVENUE AND COST OF EARNED REVENUE
 
For the three months ended September 30, 2021, our revenue increased 36.7% to $6.7 million compared to $5.0 million for the three months ended September 30, 2020. Cost of earned revenue for the three months ended September 30, 2021, was 14.9% higher at $5.4 million compared to $4.7 million for the three months ended September 30, 2020. As revenue increased at a higher rate than cost of earned revenue, we realized an overall improvement to margins. Our revenue increased in comparison to the same period in the prior year as operations returned to a more normal pre-COVID-19 pace. We still experienced project delays related to supply chain issues which impacted revenue growth but we are optimistic that the results of the quarter are reflective of a healthy return to normalized operations.
 
Gross profit was $1.3 million for the three months ended September 30, 2021. This compares to $0.2 million of gross profit for the three months ended September 30, 2020. The gross margin was 19.5% in the three months ended September 30, 2021 compared to 4.8% in the three months ended September 30, 2020. The gross margin for the quarter improved significantly as commodity pricing and the labor force stabilized. As our workforce has stabilized, project execution becomes more effective preventing the cost overruns that impact the first and second quarter of 2021. In addition, our new Development and Professional Services division generates a revenue stream at a margin that is higher than our traditional EPC project margins. Our solar assets were in peak production during the third quarter which provides recurring revenue and a strong margin.
 
For the remainder of 2021, we anticipate an increase in revenue over 2020 due to several factors. The sum of our Commercial and Industrial project backlog is already near $80.7 million and is anticipated to be completed within twelve to eighteen months. We are not typically bidding competitively for projects, but instead engage with our customers over a long-term basis to develop project designs and to help customers reduce project costs. Therefore, the $80.7 million in project-based revenue anticipated for the next twelve to eighteen months represents projects that have a high probability for conversion. Historically, we have been awarded over 90% of the projects we have reviewed for construction. The upfront assistance and coordination with our clients can be considered our marketing effort, which is a significant advantage for converting a high percentage of its pipeline projects.
 
In addition, we are engaging existing customers and new partners outside of Vermont as part of our planned 2021 expansion across the Northeast and additional strategic geographical areas. Our current project backlog includes projects in Vermont, Connecticut, Massachusetts, Maine, New Hampshire, Maryland and Tennessee.
 
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SELLING AND MARKETING EXPENSES
 
We rely on referrals from customers and on its industry reputation, and therefore have not historically incurred significant selling and marketing expenses.
 
GENERAL AND ADMINISTRATIVE EXPENSES
 
Total general and administrative (“G&A”) expenses were $2.4 million for the three months ended September 30, 2021, compared to $0.7 million for the three months ended September 30, 2020. As a percentage of revenue, G&A expenses increased to 35.3% in the three months ended September 30, 2021 compared to 14.3% in the three months ended September 30, 2020. In total dollars, G&A expense increased as we added personnel to support our EV Charging and Branded Product initiatives as well as our Utility Division which includes our Development and Professional Services team. Also reflected in our G&A expenses are professional services related to our strategic and M&A operations.
 
WAREHOUSE AND OTHER OPERATING EXPENSES
 
Warehousing and other operating expenses for 2021 are expected to be stable or decrease compared to prior years as we continue to look for opportunities to streamline our operations and decrease our cost structure. To date, we have reduced certain administrative and insurance costs and restructured our utilization of skilled labor in order to reduce the overhead burden, without compromising the ability to operate effectively.
 
STOCK-BASED COMPENSATION EXPENSES
 
During the three months ended September 30, 2021 we incurred $0.2 million in total non-cash stock-based compensation expense compared to $0 for the same period in the prior year.
 
We entered into a restricted stock grant agreement with our Chief Executive Officer Jeffrey Peck, Chief Financial Officer John Sullivan, Chief Operating Officer Fredrick Myrick, and Chief Strategy Officer Michael dAmato in January 2021 (the January 2021 RSGAs). All shares issuable under the January 2021 RSGAs are valued as of the grant date at $6.15 per share. For the three months ended September 30, 2021 and 2020, stock-based compensation expense of $0.1 million and $0, respectively, was recognized for the January 2021 RSGAs.
 
Stock-based compensation, excluding the January 2021 RSGAs, related to employee and director options totaled $0.1 million and $0 for the three months ended September 30, 2021 and 2020, respectively.
 
OTHER INCOME (EXPENSES)
 
Interest expense for the three months ended September 30, 2021, was $42,360 compared to $72,554 for the same period of the prior year as a result of decreased utilization of our line of credit.
 
INCOME (BENEFIT) TAX EXPENSE
 
The US GAAP effective tax rate for the three months ended September 30, 2021 was 55.6% and September 30, 2020 was 13.5%. The proforma effective tax rate for the three months September 30, 2021 was 21.0% and September 30, 2020 was 27.72%. Please see the rate reconciliation in FN 12 for an explanation of the effective tax rate.
 
NET LOSS
 
The net loss for the three months ended September 30, 2021 was $0.7 million compared to a net loss of $1.3 million for the three months September 30, 2020.
 
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RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 COMPARED TO THE NINE MONTHS ENDED SEPTMBER 30, 2020

REVENUE AND COST OF EARNED REVENUE

For the nine months ended September 30, 2021, our revenue increased 56.1% to $18.3 million compared to $11.7 million for the nine months ended September 30, 2020. Cost of earned revenue for the nine months ended September 30, 2021, was 56.8% higher at $17.5 million compared to $11.2 million for the nine months ended September 30, 2020. Our revenue increased in comparison to the same period in the prior year as operations returned to a more normal pre-COVID-19 pace. We still experienced project delays related to supply chain issues which impacted revenue growth but we are optimistic that the results of the quarter are reflective of a healthy return to normalized operations.

Gross profit was $0.8 million for the nine months ended September 30, 2021. This compares to $0.6 million of gross profit for the nine months ended September 30, 2020. The gross margin was 4.3% in the nine months ended September 30, 2021 compared to 4.8% in the nine months ended September 30, 2020. The gross margin for the third quarter improved significantly as commodity pricing and the labor force stabilized. As our workforce has stabilized, project execution becomes more effective preventing the cost overruns that impact the first and second quarter of 2021. In addition, our new Development and Professional Services revenue stream generates a margin that is higher than our traditional EPC project margins. Our solar assets were in peak production during the third quarter which provides recurring revenue and a strong margin. The negative impact of the first and second quarter will impact the overall margin but we are optimistic that the existing projects in our backlog can be exec

For 2021, we anticipate an increase in revenue over 2020 due to several factors. The sum of our backlog projects is already near $80.7 million and is anticipated to be completed within twelve to eighteen months. We are not typically bidding competitively for projects, but instead engage with our customers over a long-term basis to develop project designs and to help customers reduce project costs. Therefore, the $80.7 million in project-based revenue anticipated for the next twelve to eighteen months represents projects that have a high probability for conversion. Historically, we have been awarded over 90% of the projects we have reviewed for construction. The upfront assistance and coordination with our clients can be considered our marketing effort, which is a significant advantage for converting a high percentage of its pipeline projects.

In addition, we are engaging existing customers and new partners outside of Vermont as part of our planned 2021 expansion across the Northeast and additional strategic geographical areas. Our current project backlog includes projects in Vermont, Connecticut, Massachusetts, Maine, New Hampshire, and Tennessee.

SELLING AND MARKETING EXPENSES

We rely on referrals from customers and on its industry reputation, and therefore have not historically incurred significant selling and marketing expenses.

GENERAL AND ADMINISTRATIVE EXPENSES

Total general and administrative (“G&A”) expenses were $5.5 million for the nine months ended September 30, 2021, compared to $2.2 million for the nine months ended September 30, 2020. As a percentage of revenue, G&A expenses increased to 29.9% in the nine months ended September 30, 2021 compared to 18.7% in the nine months ended September 30, 2020. In total dollars, G&A expense increased primarily due to added expenses related to conducting a Special Meeting of Shareholders, 2020 Annual Meeting and 2021 Annual Meeting compared to the nine months ended September 30, 2020. In January 2021, we acquired iSun Energy LLC which resulted in an increase in G&A. In addition, G&A expense increased as we added personnel to support our EV Charging and Branded Product initiatives as well as our Utility Division which includes our Development and Professional Services team. Also reflected in our G&A expenses are professional services related to our strategic and M&A operations.

WAREHOUSE AND OTHER OPERATING EXPENSES

Warehousing and other operating expenses for 2021 are expected to be stable or decrease compared to prior years as we continue to look for opportunities to streamline our operations and decrease our cost structure. To date, we have reduced certain administrative and insurance costs and restructured our utilization of skilled labor in order to reduce the overhead burden, without compromising the ability to operate effectively.

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STOCK-BASED COMPENSATION EXPENSES

During the nine months ended September 30, 2021 we incurred $1.6 million in total non-cash stock-based compensation expense compared to $0 for the same period in the prior year.

We entered into a restricted stock grant agreement with our Chief Executive Officer Jeffrey Peck, Chief Financial Officer John Sullivan, Chief Operating Officer Fredrick Myrick, and Chief Strategy Officer Michael dAmato in January 2021 (the January 2021 RSGA). All shares issuable under the January 2021 RSGA are valued as of the grant date at $6.15 per share. For the nine months ended September 30, 2021 and 2020, stock-based compensation expense of $1.3 million and $0, respectively, was recognized for the January 2021 RSGA.

Stock-based compensation, excluding the January 2021 RSGA, related to employee and director options totaled $0.6 and $0 for the nine months ended September 30, 2021 and 2020, respectively.

OTHER INCOME (EXPENSES)

Interest expense for the nine months ended September 30, 2021, was $129,721 compared to $218,730 for the same period of the prior year as a result of decreased utilization of our line of credit.

INCOME (BENEFIT)TAX EXPENSE

The US GAAP effective tax rate for the nine months ended September 30, 2021 was 17.2% and September 30, 2020 was 17.5%. The proforma effective tax rate for the nine months September 30, 2021 was 21.0% and September 30, 2020 was 27.72%. Please see the rate reconciliation in FN 12 for an explanation of the effective tax rate.

NET LOSS

The net loss for the nine months ended September 30, 2021 was $5.1 million compared to a net loss of $3.0 million for the nine months September 30, 2020.

Certain Non-GAAP Measures

We periodically review the following key non-GAAP measures to evaluate our business and trends, measure our performance, prepare financial projections and make strategic decisions.

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EBITDA and Adjusted EBITDA

Included in this presentation are discussions and reconciliations of earnings before interest, income tax and depreciation and amortization (“EBITDA”) and EBITDA adjusted for certain non-cash, non-recurring or non-core expenses (“Adjusted EBITDA”) to net loss in accordance with GAAP. Adjusted EBITDA excludes certain non-cash and other expenses, certain legal services costs, professional and consulting fees and expenses, and one-time Reverse Merger and Recapitalization expenses and certain adjustments. We believe that these non-GAAP measures illustrate the underlying financial and business trends relating to our results of operations and comparability between current and prior periods. We also use these non-GAAP measures to establish and monitor operational goals.

These non-GAAP measures are not in accordance with, or an alternative to, GAAP and should be considered in addition to, and not as a substitute or superior to, the other measures of financial performance prepared in accordance with GAAP. Using only the non-GAAP financial measures, particularly Adjusted EBITDA, to analyze our performance would have material limitations because such calculations are based on a subjective determination regarding the nature and classification of events and circumstances that investors may find significant. We compensate for these limitations by presenting both the GAAP and non-GAAP measures of our operating results. Although other companies may report measures entitled “Adjusted EBITDA” or similar in nature, numerous methods may exist for calculating a company’s Adjusted EBITDA or similar measures. As a result, the methods that we use to calculate Adjusted EBITDA may differ from the methods used by other companies to calculate their non-GAAP measures.

The reconciliations of EBITDA and Adjusted EBITDA to net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, are shown in the table below:

   
Three months ended
September 30,
   
Nine months ended
September 30,
 
   
2021
   
2020
   
2021
   
2020
 
Net income (loss)
 
$
(655,821
)
 
$
(1,334,850
)
 
$
(5,093,579
)
 
$
(2,979,192
)
Depreciation and amortization
   
270,601
     
138,164
     
575,754
     
448,188
 
Interest expense
   
42,360
     
72,554
     
129,721
     
218,730
 
Stock based compensation
   
218,155
     
-
     
1,554,539
     
-
 
Change in fair value of warrant liability
   
(126,305
)
   
819,170
     
(943,811
)
   
1,201,850
 
Income tax (benefit)
   
(820,605
)
   
(209,000
)
   
(1,057,172
)
   
(630,585
)
Adjusted EBITDA
   
(1,071,615
)
   
(513,962
)
   
(4,834,548
)
   
(1,741,009
)
                                 
Weighted Average shares outstanding
   
9,103,433
     
5,298,159
     
8,658,405
     
5,298,159
 
                                 
Adjusted EPS
   
(0.12
)
   
(0.10
)
   
(0.56
)
   
(0.33
)

35
LIQUIDITY AND CAPITAL RESOURCES

We had $27.5 million in unrestricted cash at September 30, 2021, as compared to $0.7 million at December 31, 2020.

As of September 30, 2021, our working capital surplus was $30.6 million compared to a working capital surplus of $0.25 million at December 31, 2020. On January 8, 2021, we entered into a Securities Purchase Agreement with two institutional investors providing for the issuance and sale by the Company of an aggregate 840,000 shares of our Common Stock in a registered direct offering at a purchase price of $12.50 per Share for gross proceeds of approximately $10.5 million before deducting fees and offering expenses.

On September 30, 2021, the Company entered into a Loan and Security Agreement with B. Riley Commercial Capital, LLC, as Lender. The proceeds of the Loan Agreement are expected to be used for acquisition finance, general corporate purposes and working capital. The Loan Agreement provides for a $10,000,000 loan facility with a maturity date of October 15, 2022, at an interest rate of 8.0% per annum. The outstanding balance of the Loan is due in full on the Maturity Date.

We believe that the aggregate of our existing cash and cash equivalents, including our working capital line of credit, shelf registration, will be sufficient to meet our operating cash requirements until at least June 30, 2022.

As of November 8, 2021 we have approximately $3.5 million in cash availability. During the nine months ended September 30, 2021, we received cash proceeds of approximately $20.9 million from the exercise of our Public Warrants and an additional approximately $9.6 million from the registered direct offering. On September 30, 2021, the Company entered into a Loan and Security Agreement with B. Riley Commercial Capital, LLC, as Lender. The proceeds of the Loan Agreement are expected to be used for acquisition finance, general corporate purposes and working capital. The Loan Agreement provides for a $10,000,000 loan facility with a maturity date of October 15, 2022, at an interest rate of 8.0% per annum. The outstanding balance of the Loan is due in full on the Maturity Date.

On October 1, 2021, we acquired SolarCommunities, Inc., for approximately $41.5 million consisting of $25.5 million in cash consideration and $16.0 million in stock consideration. The available funds will support the execution of our approximate $80.7 million in backlog. We believe the backlog is executable within the next twelve to eighteen months which would support our transition back to profitability in 2022.

With the filing of our Form S-3 Registration Statement on December 4, 2020, we have the ability to access the capital markets up to $50,000,000 in aggregate to support our statement growth strategy. The access to capital accelerates our growth process and allows us to continue our expansion plans into new territories, aggressively pursue accretive merger and acquisition transactions and continue investing in our company-owned solar assets which now consist of the product offerings of iSun Energy LLC. There is currently approximately $39.5 million available under the Registration Statement as we drew down approximately $10.5 million through our Registered Direct Offering.

Cash flow used in operating activities was $8.2 million for the nine months ended September 30, 2021, compared to $2.5 million of cash used by operating activities in the nine months ended September 30, 2020. The decrease in cash provided by operating activities was primarily the result of the decrease in accounts payable of $0.7 million, inventory of $1.5 million, and costs in excess of earnings of $2.0 million.

Net cash used in investing activities was $4.5 million for the nine months ended September 30, 2021, compared to $0.06 million used in the nine months ended September 30, 2020. This increase was related to the minority investments in Gemini Electric Mobility Co. and NAD Grid Corp. d/b/a AmpUp and acquisition of Oakwood Construction Services, LLC.

Net cash provided by financing activities was $39.5 million for the nine months ended September 30, 2021 compared to $2.6 million of cash provided by financing activities for the nine months ended September 30, 2020. The cash flow provided by financing activities consisted of $1.2 million of borrowings from the line of credit, $20.9 million from warrants exercised, $9.6 million from a registered direct offering and a $10.0 million loan from B. Riley Commercial Capital, LLC to support our acquisition of SolarCommunities, Inc. d/b/a SunCommon.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on its financial condition, revenues, results of operations, liquidity, or capital expenditures.

36
Item 3.
Quantitative and Qualitative Disclosures about Market Risk

As a smaller reporting company, as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are not required to provide the information required by this Item.

Item 4.
Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2021, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Management has determined there is a lack of supervisory review of the financial statement closing process due to limited resources and formal documentation of procedures and controls which is evidenced by the warrant valuation issue. This control deficiency constitutes a material weakness in internal control over financial reporting. As a result, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were not effective. We plan to take steps to remedy this material weakness in with the implementation of an “Internal Control-Integrated Framework”

Disclosure controls and procedures are designed to ensure that the information that is required to be disclosed by us in our Exchange Act report is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the three months ended September 30, 2021, there were no changes in internal control over financial reporting.

PART II – Other Information
Item 1.
Legal Proceedings

None.

Item 1A.
Risk Factors

As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this Item.

Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.
Defaults Upon Senior Securities

None.

Item 4.
Mine Safety Disclosures

None.

Item 5.
Other Information

None.

37
Item 6.
Exhibits

Exhibits Index

Exhibit
No.
​
Description
​
Included
​
Form
​
Filing
Date
2.1(a)
​
​
By Reference
​
8-K
​
March 1, 2019
 
​
 
​
 
​
 
​
 
2.1(b)
​
​
By Reference
​
DEFM14A
​
June 3, 2019
 
​
 
​
 
​
 
​
 
2.2
​
​
By Reference
​
8-K
​
November 9, 2017
 
​
 
​
 
​
 
​
 
2.3
​
​
By Reference
​
10-Q
​
August 20, 2018
 
​
 
​
 
​
 
​
 
2.4
​
​
By Reference
​
8-K
​
April 28, 2020
 
​
 
​
 
​
 
​
 
2.5
​
​
By Reference
​
8-K
​
January 25, 2021
                 
2.6
   
By Reference
 
8-K
 
September 13, 2021
                 
2.7
   
By Reference
 
8-K
 
October 5, 2021
 
​
 
​
 
​
 
​
 
3.1
​
​
By Reference
​
8-K
​
March 10, 2016
                 
3.1(a)
​
​
By Reference
​
8-K
​
March 6, 2018
 
​
 
​
 
​
 
​
 
3.1(b)
​
​
By Reference
​
8-K
​
June 8, 2018
 
​
 
​
 
​
 
​
 
3.1(c)
​
​
By Reference
​
8-K
​
September 4, 2018
 
​
 
​
 
​
 
​
 
3.1(d)
​
​
By Reference
​
8-K
​
January 3, 2019
 
38
3.1(e)
​
​
By Reference
​
8-K
​
April 28, 2020
                 
3.1(f)
   
By Reference
 
8-K
 
January 25, 2021
                 
3.1(g)
   
By Reference
 
8-K
 
February 26, 2021
 
​
 
​
 
​
 
​
 
3.2
   
By Reference
 
S-1
 
November 23, 2015
                 
4.1
​
​
By Reference
​
S-1
​
November 23, 2015
 
​
 
​
 
​
 
​
 
4.2
​
​
By Reference
​
S-1
​
November 23, 2015
 
​
 
​
 
​
 
​
 
4.3
​
​
By Reference
​
S-1
​
November 23, 2015
 
​
 
​
 
​
 
​
 
4.4
​
​
By Reference
​
S-1
​
November 23, 2015
 
​
 
​
 
​
 
​
 
4.5
​
​
By Reference
​
10-Q
​
November 18, 2019
 
​
 
​
 
​
 
​
 
4.6
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
4.7
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
4.8
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
4.9
​
​
By Reference
​
8-K
​
April 28, 2020
 
​
 
​
 
​
 
​
 
4.10
​
​
By Reference
​
8-K
​
April 28, 2020
 
​
 
​
 
​
 
​
 
4.11
​
​
By Reference
​
8-K
​
April 28, 2020
 
​
 
​
 
​
 
​
 
4.12
   
By Reference
 
8-K
 
March 9, 2021
                 
4.13
   
By Reference
 
8-K
 
March 9, 2021
                 
4.14
   
By Reference
 
8-K
 
January 12, 2021

39
10.1
​
​
By Reference
​
10-Q
​
November 18, 2019
 
​
 
​
 
​
 
​
 
10.2
​
​
By Reference
​
10-Q
​
November 18, 2019
 
​
 
​
 
​
 
​
 
10.3
​
​
By Reference
​
10-Q
​
November 18, 2019
 
​
 
​
 
​
 
​
 
10.4(a)
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
10.4(b)
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
10.4(c)
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
10.4(d)
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
10.4(e)
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
10.4(f)
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
10.4(g)
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
10.4(h)
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
10.5
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
10.5(a)
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
10.5(b)
​
​
By Reference
​
8-K
​
June 8, 2018
 
​
 
​
 
​
 
​
 
10.5(c)
​
​
By Reference
​
8-K
​
August 29, 2018
 
​
 
​
 
​
 
​
 
10.5(d)
​
​
By Reference
​
8-K
​
January 3, 2019
 
​
 
​
 
​
 
​
 
10.6
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
10.7
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
10.8
​
​
By Reference
​
S-1
​
November 23, 2015
 
​
 
​
 
​
 
​
 
10.9
​
​
By Reference
​
S-1
​
November 23, 2015
 
​
 
​
 
​
 
​
 
10.10
​
​
By Reference
​
8-K
​
March 10, 2016

40
10.11
​
​
By Reference
​
8-K
​
March 10, 2016
 
​
 
​
 
​
 
​
 
10.12
​
​
By Reference
​
S-1
​
November 23, 2015
 
​
 
​
 
​
 
​
 
10.13
​
​
By Reference
​
S-1
​
November 23, 2015
 
​
 
​
 
​
 
​
 
10.14
​
​
By Reference
​
10-K
​
March 27, 2017
 
​
 
​
 
​
 
​
 
10.15
​
​
By Reference
​
10-K
​
March 27, 2017
 
​
 
​
 
​
 
​
 
10.16
​
​
By Reference
​
10-K
​
March 29, 2018
 
​
 
​
 
​
 
​
 
10.17
​
​
By Reference
​
10-Q
​
May 21, 2018
 
​
 
​
 
​
 
​
 
10.18
​
​
By Reference
​
10-Q
​
August 20, 2018
 
​
 
​
 
​
 
​
 
10.19
​
​
By Reference
​
8-K
​
March 14, 2019
 
​
 
​
 
​
 
​
 
10.20
​
​
By Reference
​
8-K
​
March 14, 2019
 
​
 
​
 
​
 
​
 
10.21
​
​
By Reference
​
10-K
​
April 14, 2020
 
​
 
​
 
​
 
​
 
10.22
​
​
By Reference
​
8-K
​
April 28, 2020
 
​
 
​
 
​
 
​
 
10.23
​
​
By Reference
​
8-K
​
April 28, 2020
                 
10.24
   
By Reference
 
S-8
 
October 28, 2020
 
​
 
​
 
​
 
​
 
10.25
​
​
By Reference
​
8-K
​
December 10, 2020
                 
10.26
   
By Reference
 
8-K
 
January 12, 2021
                 
10.27
   
By Reference
 
8-K
 
January 25, 2021
                 
10.28
   
By Reference
 
8-K
 
January 25, 2021
                 
10.29
   
By Reference
 
8-K
 
January 25, 2021
                 
10.30
   
By Reference
 
8-K
 
January 25, 2021
 
​
 
​
 
​
 
​
 
10.31
   
By Reference
 
8-K
 
April 8, 2021

41
10.32
   
By Reference
 
8-K
 
April 8, 2021
                 
10.33
   
By Reference
 
8-K
 
June 22, 2021
 
​
 
​
 
​
 
​
 
10.34
   
By Reference
 
8-K
 
September 13, 2021
                 
10.35
   
By Reference
 
8-K
 
September 13, 2021
                 
10.36
   
By Reference
 
8-K
 
September 13, 2021
                 
10.37
   
By Reference
 
8-K
 
September 13, 2021
                 
10.38
   
By Reference
 
8-K
 
October 5, 2021
                 
10.39
   
By Reference
 
8-K
 
October 5, 2021
                 
10.40
   
By Reference
 
8-K
 
October 5, 2021
                 
 
Employment Agreement between iSun, Inc. and Michael D’Amato, dated July 1, 2021
 
Herewith
 
10-Q
   
                 
 
Change of Control Agreement between iSun, Inc. and Michael D’Amato, dated July 1, 2021
 
Herewith
 
10-Q
   
                 
 
Employment Agreement between iSun, Inc. and Frederick Myrick, dated July 1, 2021
 
Herewith
 
10-Q
   
                 
 
Change of Control Agreement between iSun, Inc. and Frederick Myrick, dated July 1, 2021
 
Herewith
 
10-Q
   
                 
 
Employment Agreement between iSun, Inc. and Jeffrey Peck, dated July 1, 2021
 
Herewith
 
10-Q
   
                 
 
Change of Control Agreement between iSun, Inc. and Jeffrey Peck, dated July 1, 2021
 
Herewith
 
10-Q
   
                 
 
Employment Agreement between iSun, Inc. and John Sullivan, dated July 1, 2021
 
Herewith
 
10-Q
   
                 
 
Change of Control Agreement between iSun, Inc. and John Sullivan, dated July 1, 2021
 
Herewith
 
10-Q
   
                 
​
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
​
Herewith
​
10-Q
​
 
 
​
 
​
 
​
 
​
 
​
Certification of Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
​
Herewith
​
10-Q
​
 
 
​
 
​
 
​
 
​
 
​
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
​
Herewith
​
10-Q
​
 
                 
32.2
  Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.    Herewith   10-Q
   

42
101.INS
 
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
           
                 
101.SCH
 
Inline XBRL Taxonomy Extension Schema Document.
           
                 
101.CAL
 
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
           
                 
101.DEF
 
Inline XBRL Taxonomy Extension Definition Linkbase Document.
           
                 
101.LAB
 
Inline XBRL Taxonomy Extension Label Linkbase Document.
           
                 
101.PRE
 
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
           
                 
104
 
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
           

43
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, thereunto duly authorized on the 15th day of November 2021.

 
iSUN, INC.
     
 
By:
/s/ Jeffrey Peck
     
   
Jeffrey Peck
     
   
Chief Executive Officer
     
   
(Principal Executive Officer)
     
 
By:
/s/ John Sullivan
     
   
John Sullivan
     
   
Chief Financial Officer
     
   
(Principal Financial and Accounting Officer)
     
Dated: November 15, 2021
   


44
Exhibit 10.41

EMPLOYMENT AGREEMENT
 
This Employment Agreement is entered into as of the date of the last signature affixed hereto, by and between iSun Inc, a Delaware corporation ("the Company"), and Michael d’Amato ("Employee").
 
In consideration of the mutual promises and covenants set forth herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Company and Employee hereby agree as follows:
 

1.
Position of Employment. The Company will employ the Employee in the position of Chief Strategy Officer having the duties and responsibilities set forth on Exhibit A attached hereto of the Company and, in that position, Employee will report to the Board of Directors of the Company. The Company retains the right to change Employee's title, duties, and reporting relationships as may be determined to be in the best interests of the Company; provided, however, that any such change in Employee's duties shall be consistent with Employee's training, experience, and qualifications.
 
The terms and conditions of the Employee's employment shall, to the extent not addressed or described in this Employment Agreement, be governed by the Company's Employee Handbook and existing practices. In the event of a conflict between this Employment Agreement and the Employee Handbook or existing practices, the terms of this Agreement shall govern.
 

2.
Term of Employment. Employee's employment with the Company shall begin on July 1, 2021, and shall continue for a period of 5 years, after which time continued employment shall be on an "at will" basis, unless:


a.
Employee's employment is terminated by either party in accordance with the terms of Section 5 of this Employment Agreement; or


b.
Such term of employment is extended or shortened by a subsequent agreement duly executed by each of the parties to this Employment Agreement, in which case such employment shall be subject to the terms and conditions contained in the subsequent written agreement.


3.
Compensation and Benefits.
 

a.
Base Salary. Employee shall be paid a base salary of $18,750 monthly, which is $225,000 annually ("Base Salary"), subject to applicable federal, state, and local withholding, such Base Salary to be paid to Employee in the same manner and on the same payroll schedule in which all the Company employees receive payment. Any increases in Employee's Base Salary for years beyond the first year of Employee's employment shall be in the sole discretion of the Company’s Board of Directors, and nothing herein shall be deemed to require any such increase.


b.
Incentive and Deferred Compensation. Employee shall be eligible to participate in all incentive and deferred compensation programs available to other executives or officers of the Company, such participation to be in the same form, under the same terms, and to the same extent that such programs are made available to other such executives or officers. Nothing in this Employment Agreement shall be deemed to require the payment of bonuses, awards, or incentive compensation to Employee if such payment would not otherwise be required under the terms of the Company's incentive compensation programs, with the exception of terms of Section 3(c) below.
 

c.
Mergers and Acquisitions. The Company intends to accelerate its growth through potential mergers and acquisitions. As these activities place additional responsibilities on the Employee, incentive compensation not to exceed 3% of the transaction price will be awarded to the Employee in the form of unrestricted stock award.
 

d.
Employee Benefits. Employee shall be eligible to participate in all employee benefit plans, policies, programs, or perquisites in which other the Company executive or officers participate. The terms and conditions of Employee's participation in the Company's employee benefit plans, policies, programs, or perquisites shall be governed by the terms of each such plan, policy, or program.
 

4.
Duties and Performance. The Employee acknowledges and agrees that he is being offered a position of employment by the Company with the understanding that the Employee possesses a unique set of skills, abilities, and experiences which will benefit the Company, and he agrees that his continued employment with the Company, whether during the term of this Employment Agreement or thereafter, is contingent upon his successful performance of his duties in his position as noted above, or in such other position to which he may be assigned.
 

a.
General Duties.
 

1.
Employee shall render to the very best of Employee's ability, on behalf of the Company, services to and on behalf of the Company, and shall undertake diligently all duties assigned to him by the Company.
 

2.
Employee shall devote his full time, energy and skill to the performance of the services in which the Company is engaged, at such time and place as the Company may direct.


3.
Employee shall faithfully and industriously assume and perform with skill, care, diligence and attention all responsibilities and duties connected with his employment on behalf of the Company.
 

b.
Specific Duties. See job description attached to this Agreement as Exhibit A.


5.
Termination of Employment. Employee's employment with the Company may be terminated, prior to the expiration of the term of this Employment Agreement, in accordance with any of the following provisions:


a.
Termination by Employee. The Employee may terminate his employment at any time during the course of this Agreement by giving three (3) months’ notice in writing to the CEO of the Company. During the notice period, Employee must fulfill all his duties and responsibilities set forth above and use his best efforts to train and support his replacement, if any. Failure to comply with this requirement may result in Termination for Cause described below, but otherwise Employee's salary and benefits will remain unchanged during the notification period.


b.
Termination by the Company Without Cause. The Company may terminate Employee's employment at any time during the course of this Agreement by giving twelve (12) months’ notice in writing to the Employee. During the notice period, Employee must fulfill all of Employee's duties and responsibilities set forth above and use Employee's best efforts to train and support Employee's replacement, if any. Failure of Employee to comply with this requirement may result in Termination for Cause described below, but otherwise Employee's salary and benefits will remain unchanged during the notification period. The Company, may, in its sole discretion, give Employee severance pay in the amount of the remaining notice period in lieu of actual employment, and nothing herein shall require Company to maintain employee in active employment for the duration of the notice period.
 

c.
Termination by the Company For Cause. The Company may, at any time and without notice, terminate the Employee for "cause". Termination by the Company of the Employee for "cause" shall include but not be limited to termination based on any of the following grounds: (a) failure to perform the duties of the Employee's position in a satisfactory manner; (b) fraud, misappropriation, embezzlement or acts of similar dishonesty; (c) conviction of a felony involving moral turpitude; (d) illegal use of drugs or excessive use of alcohol in the workplace; (e) intentional and willful misconduct that may subject the Company to criminal or civil liability; (f) breach of the Employee's duty of loyalty, including the diversion or usurpation of corporate opportunities properly belonging to the Company; (g) willful disregard of Company policies and procedures; (h) breach of any of the material terms of this Agreement; and (i) insubordination or deliberate refusal to follow the instructions of the President of the Company.
 

d.
Termination By Death or Disability. The Employee's employment and rights to compensation under this Employment Agreement shall terminate if the Employee is unable to perform the duties of his position due to death or disability lasting more than 90 days, and the Employee's heirs, beneficiaries, successors, or assigns shall not be entitled to any of the compensation or benefits to which Employee is

entitled under this Agreement, except: (a) to the extent specifically provided in this Employment Agreement (b) to the extent required by law; or (c) to the extent that such benefit plans or policies under which Employee is covered provide a benefit to the Employee's heirs, beneficiaries, successors, or assigns.


6.
Confidentiality. Employee agrees that at all times during Employee's employment and following the conclusion of Employee's employment, whether voluntary or involuntary, Employee will hold in strictest confidence and not disclose Confidential Information (as defined below) to anyone who is not also an employee of the Company or to any employee of the Company who does not also have access to such Confidential Information, without following Company procedures to protect Confidential Information of Company.


a.
"Confidential Information" shall mean any trade secrets or Company proprietary information, including but not limited to manufacturing techniques, processes, formulas, customer lists, inventions, experimental developments, research projects, operating methods, cost, pricing, financial data, business plans and proposals, data and information the Company receives in confidence from any other party, or any other secret or confidential matters of the Company. Additionally, Employee will not use any Confidential Information for Employee's own benefit or to the detriment of the Company during Employee's employment or thereafter. Employee also certifies that employment with the Company does not and will not breach any agreement or duty that Employee has to anyone concerning confidential information belonging to others.
 

b.
“Immunity from Liability for Confidential Disclosure of a Trade Secret to the Government or in a Court Filing:
(1) Immunity—An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that—(A) is made—(i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. (2) Use of Trade Secret Information in Anti-Retaliation Lawsuit—An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual—(A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.”
 
  7.
Noncompetition. Employee hereby agrees not to directly or indirectly compete with the business of the Company and its successors and assigns during the period of employment and for a period of two (2) years following termination of employment and notwithstanding the cause or reason for termination. Employee shall not own, manage, operate, consult or to be employed in a business substantially similar to, or competitive

with, the present business of the Company or such other business activity in which the Company may substantially engage during the term of employment. The jurisdiction for Non competition includes the entire United States.


8.
Expenses. The Company shall pay or reimburse Employee for any expenses reasonably incurred by him in furtherance of his duties hereunder, including expenses for entertainment, travel, meals and hotel accommodations, upon submission by him of vouchers or receipts maintained and provided to the Company in compliance with such rules and policies relating thereto as the Company may from time to time adopt.


9.
General Provisions.
 
Notices. All notices and other communications required or permitted by this Agreement to be delivered by the Company or Employee to the other party shall be delivered in writing to the address shown below, either personally, by facsimile transmission or by registered, certified or express mail, return receipt requested, postage prepaid, to the address for such party specified below or to such other address as the party may from time to time advise the other party, and shall be deemed given and received as of actual personal delivery, on the first business day after the date of delivery shown on any such facsimile transmission or upon the date or actual receipt shown on any return receipt if registered, certified or express mail is used, as the case may be.
 
The Company:
iSun, Inc.
400 Avenue D, Suite 10
Williston, VT 05495
 
Employee:
 
Michael d’Amato
208 Midwood St
Brooklyn, NY 11223
 

10.
Amendments and Termination; Entire Agreement. This Agreement may not be amended or terminated except by a writing executed by all of the parties hereto. This Agreement constitutes the entire agreement of the Company and Employee relating to the subject matter hereof and supersedes all prior oral and written understandings and agreements relating to such subject matter.
 

11.
Successors and Assigns. The rights and obligations of the parties hereunder are not assignable to another person without prior written consent; provided, however, that the Company, without obtaining Employee's consent, may assign its rights and obligations hereunder to a wholly-owned subsidiary and provided further that any post-employment restrictions shall be assignable by the Company to any entity which purchases all or substantially all of the Company's assets.
 

12.
Severability; Provisions Subject to Applicable Law. All provisions of this Agreement shall be applicable only to the extent that they do not violate any applicable law, and are intended to be limited to the extent necessary so that they will not render this Agreement invalid, illegal or unenforceable under any applicable law. If any provision of this Agreement or any application thereof shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of other provisions of this Agreement or of any other application of such provision shall in no way be affected thereby.


13.
Arbitration; Except as provided in subsection 8(j)(iv) below, the parties hereto agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination of this Agreement, and/or any other dispute arising from or relating to Employee's employment with Company, shall be finally settled by binding arbitration, unless otherwise required by law, administered by JAMS in accordance with the JAMS Employment Arbitration Rules as then in effect (the "Rules"). A current copy of the JAMS Employment Arbitration Rules can be obtained at https://www.jarnsadr.com/rules- employment-arbitration/. The arbitration proceedings will be held before a single, neutral arbitrator in the State of Vermont. The fees of the arbitrator and all other costs that are unique to the arbitration process shall be paid by the Company to the extent required by law; otherwise, each party shall be solely responsible for paying its own costs for the arbitration, including but not limited to attorneys' fees. However, if either party prevails on a claim which affords the prevailing party attorneys' fees pursuant to law, statute, or contract, the arbitrator may award reasonable attorneys' fees to the prevailing party.
 

14.
Waiver of Rights. No waiver by the Company or Employee of a right or remedy hereunder shall be deemed to be a waiver of any other right or remedy or of any subsequent right or remedy of the same kind.
 

15.
Definitions; Headings; and Number. A term defined in any part of this Employment Agreement shall have the defined meaning wherever such term is used herein. The headings contained in this Agreement are for reference purposes only and shall not affect in any manner the meaning or interpretation of this Employment Agreement. Where appropriate to the context of this Agreement, use of the singular shall be deemed also to refer to the plural, and use of the plural to the singular.
 

16.
Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original but both of which taken together shall constitute but one and the same instrument.


17.
Governing Laws and Forum. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Vermont. The parties hereto further agree that any action brought to enforce any right or obligation under this Agreement shall be subject to the exclusive jurisdiction of the courts of the State of Vermont The Company and the Employee consent to personal jurisdiction in the courts of the State of Vermont.

IN WITNESS WHEREOF, the Company and Employee have executed and delivered this Agreement as of the date written below.

 
Employee
 
The Company
 
 
 
Michael d’Amato
  iSun, Inc. 
        
 
By:
/s/ Michael d’Amato  
By:
/s/ Jeffrey Peck  
       
 
Name: Michael d’Amato
 
Name: Jeffrey Peck
     
 
Title: Chief Strategy Officer
 
Title: CEO, Chairman of the Board

EXHIBIT A
 
Job Description

Chief Strategy Officer shall have the duties and responsibilities customary for such a position in an organization of the size and nature of the Company.


Exhibit 10.42

CHANGE OF CONTROL AGREEMENT
 
This Change of Control Agreement (the "Agreement") is made and entered into effective as of July 1, 2021 (the "Effective Date"), by and between Michael d’Amato, an individual (the "Employee") and iSun, Inc., a Delaware corporation (the "Company" ).
 
RECITALS
 
A.          It is expected that the Company, from time to time, will consider the possibility of merging with or being acquired by another company, or otherwise entering into a change of control transaction. The Board of Directors of the Company (the "Board”) recognizes that such consideration can be a distraction to the Employee and can result in Employee considering alternative employment opportunities.
 
B.        The Board has determined that it is in the best interests of the Company and its stockholders to take steps towards assuring that the Company will have the continued dedication and objectivity of the Employee, notwithstanding the possibility, threat or occurrence of a merger, acquisition or change of control transaction. As a result, the Board believes the Company should provide the Employee with certain severance benefits in the event the Employee's employment with the Company terminates under certain circumstances, such benefits to provide the Employee with enhanced financial security, sufficient incentive to remain with the Company, and sufficient motivation to maximize the value of the Company for the benefit of its stockholders.
 
C.          Certain capitalized terms used in the Agreement are defined in Section 4 below.
 
AGREEMENT
 
In consideration of the mutual covenants herein contained, and the continuing employment of the Employee by the Company, the parties agree as follows:

I.        At-Will Employment. Except as may be provided in an Employment Agreement between the Company and the Employee, the Company and the Employee acknowledge that the Employee's employment is and shall continue to be "at-will," as defined or interpreted under applicable law. If the Employee's employment terminates for any reason, the Employee shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be available in accordance with the Company's established employee plans and practices or in accordance with other agreements between the Company and the Employee.
 
2.           Change of Control Benefits.
 
(a)        Benefits upon Termination in Connection with a Change of Control. If, within 3 months prior to a Change of Control or 24 months after a Change of Control (the "Change of Control Period''), the Employee's employment terminates as a result of an Involuntary Termination or a Resignation for Good Reason, then, subject to subsection 2(c), the Employee shall receive the following benefits:

(i)           on the Termination Date, payment of any base salary that has accrued but was not paid as of the Termination Date (the "Accrued Base Salary");

(ii)         on the Termination Date, payment of the value of any unused paid time off (PTO) days that have accrued but remain unpaid as of the Termination Date calculated in accordance with the Company's PTO policies then in effect ("Accrued PTO");
 
(iii)       on the Termination Date, reimbursement for expenses incurred by Employee prior to the Termination Date that are subject to reimbursement in accordance with the Company's policies then in effect ("Accrued Reimbursable Expenses");

(iv)         on the Termination Date, payment of any cash incentive bonus with respect to the fiscal year prior to year in which the Termination Date occurred that has been earned and accrued as of the Termination Date, but has not been paid (the "Accrued Incentive Bonus");
 
(v)       a lump sum payment to be paid no more than 30 days following the Termination Date equal to the sum of the following (the "Severance Payments"):
 
a)           an amount equal to the Employee's highest monthly base salary at any time within the 12-month period immediately preceding the Termination Date multiplied by 24; and

b)           an amount equal to 100% of the Employee's target incentive bonus for the year in which the Termination Date occurs (as previously determined by the Board or a committee of the Board);

(vi)        the Company shall permit Employee to elect to continue health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), in accordance therewith, for a period of 12 months from the Termination Date or until Employee commences new employment providing substantially similar benefits, whichever is earlier (the "Change of Control Severance Benefit Period") and the Company shall reimburse Employee for the amount of the monthly premium charged Employee by the applicable insurance carriers for such continuation coverage under COBRA. In the event that either the Change in Control Severance Benefit Period exceeds the maximum continuation coverage period permissible under COBRA, would subject the Company to excise tax, or such coverage is not available for any other reason, the Company shall reimburse Employee directly for the expenses incurred by him or her and his or her covered dependents, if any, to obtain substantially similar benefits during the remainder of the Change in Control Severance Benefit Period, which payments shall be deemed to be separate payments for purposes Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"); and
 
(vii)      immediate vesting and the right to exercise 100% of the Employee's outstanding options, stock appreciation rights, restricted stock awards, restricted stock units and other equity based awards that were otherwise unvested as of the Termination Date, and the immediate lapse of any Company rights to repurchase any vested or unvested shares of common

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stock, restricted stock awards, restricted stock units and other equity awards (including under any existing right of first refusal agreement (or similar provision) pursuant to which any Company right of repurchase existed as of the Termination Date.
 
(b)         Benefits upon Voluntary Resignation or Termination for Cause. If the Employee's employment with the Company terminates during the Change of Control Period other than as a result of an Involuntary Termination or a Resignation for Good Reason, including termination due to Employee's Disability or death, then the Employee shall receive the following benefits payable on the Termination Date:
 
 
(i)
the Accrued BaseSalary;
 

(ii)
the Accrued PTO;
 

(iii)
the Accrued Reimbursable Expenses; and
 

(iv)
the Accrued Incentive Bonus.
 
However, Employee will not be entitled to receive any other severance benefits described in this Section 2 or other benefits except for those (if any) as may then be established under the Company's then-existing severance and benefits plans and practices, or pursuant to other written agreements with the Company.
 
(c)        Release. Notwithstanding any provision herein to the contrary, prior to the payment of any Severance Payments and the reimbursement of health benefit premiums during the Change of Control Severance Benefit Period, Employee shall have executed, and not revoked, a Release of Claims. Any payments subject to a Release of Claims may be delayed by the Company until the effective date and expiration of any revocation period of a Release of Claims.
 
3.           Limitations on Payments.
 
(a)          Code Section 409A.
 
(i)        Notwithstanding anything to the contrary in this Agreement, if the Company reasonably determines, after consultation and agreement with Employee (and Employee's legal counsel as applicable) that Section 409A of the Code will result in the imposition of interest and additional tax, Employee shall not be paid any compensation or benefits hereunder upon a separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code and the regulations promulgated thereunder) until the date which is six (6) months after the date of such separation from service (or, if earlier, the date of death of Employee). Such severance or other benefits otherwise due to Employee on or within the six (6) month period following Employee's termination of employment will accrue during such six (6) month period and will become payable in a lump sum payment on the date six (6) months and one (1) day following the Termination Date. All subsequent payments, if any, will be payable as provided in this Agreement.
 
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(ii)        The benefits under this Agreement are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to comply with this intention. The Company and the Employee agree to work together in good faith to consider amendments to this Agreement, and to take such further actions, which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to the Employee under Section 409A.
 
(b)        Code Section 2800. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to the Employee (i) constitute "parachute payments" within the meaning of Section 280G of the Code and (ii) but for this Section 3(b) would be subject to the excise tax imposed by Section 4999 of the Code, then the Employee's benefits under Section 2 of this Agreement shall be either:
 
(i)           delivered in full, or
 
(ii)         delivered as to such lesser extent which would result in no portion of such severance and other benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999 of the Code, results in the receipt by the Employee on an after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code. Unless the Company and the Employee otherwise agree in writing, any determination required under this Section 3(b) shall be made in writing by the Company's independent public accountants immediately prior to the Change of Control (the "Accountants"), whose determination shall be conclusive and binding upon the Employee and the Company for all purposes. For purposes of making the calculations required by this Section 3(b) the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 3(b). The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 3(b).
 
4.           Definition of Terms. The following terms referenced to in this Agreement shall have the following meanings:
 
(a)          Cause. "Cause" means:

(i)          The Employee's continued intentional and demonstrable failure to perform his or her duties customarily associated with the Employee's position as an employee of the Company or its respective successors or assigns, as applicable (other than any such failure resulting from the Employee's mental or physical Disability) after the Employee has received a written demand of performance from the Company which specifically sets forth the factual basis for the Company's belief that the Employee has not devoted sufficient time and effort to the

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performance of his or her duties and has failed to cure such non-performance within thirty (30) days after receiving such notice (it being understood that if the Employee is in good faith performing his or her duties, but is not achieving results the Company deems satisfactory for the Employee's position, it will not be considered to be grounds for termination of the Employee for "Cause");
 
(ii)        The Employee's conviction of, or plea of nolo contendere to, a felony that the Board reasonably believes has had or will have a material detrimental effect on the Company's reputation or business;

(iii)        The Employee's engagement in dishonest or illegal conduct, which is, in each case, materially injurious to the Company or its affiliates;
 
(iv)       The Employee's commission of an act of fraud, embezzlement, misappropriation, willful misconduct, or breach of fiduciary duty against, and causing material harm to, the Company or its respective successors or assigns, as applicable;
 
(v)          The Employee's unauthorized use of the Company's material confidential information; or

(vi)         The Employee's prohibited  or unauthorized competitive activity.
 
(a)        Change of Control. "Change of Control” means (A) the acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any merger, consolidation or other form of reorganization in which outstanding shares of the Company are exchanged for securities or other consideration issued, or caused to be issued, by the acquiring entity or its subsidiary, but excluding any transaction effected primarily for the purpose of changing the Company's jurisdiction of incorporation), unless the Company's stockholders of record as constituted immediately prior to such transaction or series of related transactions will, immediately after such transaction or series of related transactions hold at least a majority of the voting power of the surviving or acquiring entity, except that any change in the ownership of the stock of the Company as a result of a financing by the Company that is approved by the Board and in which both the Board and Employee determine is not a Change of Control for the purposes of this Agreement will not be considered a Change of Control, or (B) a sale, lease, transfer or other disposition of all or substantially all of the assets of the Company. Notwithstanding the foregoing provisions of this definition, a transaction will not be deemed a Change of Control unless the transaction qualifies as a change in control event within the meaning of Section 409A.

(b)        Disability. "Disability" means Employee's failure substantially to perform the Employee's duties on a full-time basis for a period exceeding one hundred eighty (180) consecutive days or for periods aggregating more than one hundred eighty (180) days during any twelve (12) month period as a result of incapacity due to physical or mental illness. If there is a dispute as to whether the Employee is or was physically or mentally unable to perform the Employee's duties, such dispute will be determined by a physician selected by the Company or its insurers and acceptable to the Employee or the Employee's legal representative (such agreement as to acceptability not to be unreasonably withheld). Notwithstanding the foregoing, if the Employee

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participates in any group disability plan provided by the Company, which offers long-term disability benefits, "Disability" will mean disability as defined therein.

(c)          Involuntary Termination. "Involuntary Termination" means termination of the Employee's employment, without the Employee's consent, by the Company for any reason other than Cause.
 
(d)        Release of Claims. "Release of Claims" shall mean a waiver by the Employee, in a form satisfactory to the Company, of all employment-related obligations of and claims and causes of action against the Company, and a non-disparagement agreement by the Employee in a form satisfactory to the Company. The Release of Claims shall not release claims that cannot be released as a matter of law. Whenever in this Agreement a payment or benefit is conditioned on Employee's execution of a Release of Claims, such Release of Claims must be executed, and all applicable revocation periods shall have expired, within 60 days after the Termination Date, failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes non-exempt "deferred compensation" for purposes of Section 409A of the Code, and if such 60 day period begins in one calendar year and ends in the next calendar year, the payment or benefit shall not be made or commence before the second such calendar year, even if the Release of Claims becomes irrevocable in the first such calendar year.
 
(e)          Resignation for Good Reason. "Resignation for Good Reason" shall mean a resignation by Employee following the occurrence of one of the following:
 
(i)         a material reduction in the amount of the Employee's base salary, other than a general reduction in base salary that affects all similarly situated employees in substantially the same proportions;
 
(ii)       a material reduction in the aggregate amount of Employee's target incentive cash bonus and other benefit plans (including, without limitation, insurance coverage, bonus plans, equity compensation plans and similar plans and arrangements);
 
(iii)        any material breach by the Company of any material provision of this Agreement which continues uncured for 30 days following notice thereof;
 
(iv)        a material reduction in the Employee's duties or responsibilities; or

(v)         a change of fifty (50) miles or more of the geographic location at which the Employee must primarily perform services for the Company, other than a relocation which does not increase Employee's commute time.
 
Any purported Resignation for Good Reason pursuant to Section 4(e)(i) through 4(e)(v) above will not be effective until the Employee has delivered to the Company, within 60 days of the initial existence of the Good Reason condition, a written explanation that describes the basis for the Employee's belief that the Employee should be permitted to terminate the Employee's

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employment and have it treated as a Resignation for Good Reason and the Company has been given 30 days following delivery of such notice to cure any curable violation.
 
(f)          Termination Date. "Termination Date" shall mean the effective date of termination of employment, subject to the expiration of any applicable cure period, or in the case of a termination upon Employee's death, the date on which Employee dies as determined by reference to the final death certificate.
 
5.           Successors.
 
(a)        Company's Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company's business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term "Company" shall include any successor to the Company's business and/or assets which executes and delivers the assumption agreement pursuant to this subsection (a) or which becomes bound by the terms of this Agreement by operation of law.
 
(b)       Employee's Successors. The terms of this Agreement and all rights of the Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

6.           Notice.
 
(a)        General. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Employee, mailed notices shall be addressed to the Employee at the home address that the Employee most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of the Chairman of the Board.
 
(b)         Notice of Termination. Any termination by the Company for Cause or by the Employee as a result of a voluntary resignation or an Involuntary Termination or Resignation for Good Reason shall be communicated by a notice of termination to the other party hereto given in accordance with Section 6(a) of this Agreement. Such notice shall indicate the specific termination provision in this Agreement relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the termination date (which shall be not more than 30 days after the giving of such notice). The failure by the Employee to include in the notice any fact or circumstance which contributes to a showing of Involuntary Termination or Resignation for Good Reason shall not waive any right of the Employee hereunder or preclude the Employee from asserting such fact or circumstance in enforcing the Employee's rights hereunder.

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7.          Term and Termination. The term of this Agreement shall be 5 years from the Effective Date; provided, however, that this Agreement shall automatically renew for successive 1- year periods unless either party gives the other party notice, at least 180 days in advance of the next renewal date, of such party's intent that this Agreement terminate effective as of such next renewal date, in which case the Agreement shall terminate as of such next renewal date; provided further, however, that in the event of a Change of Control that precedes the effective date of any such termination, the term of this Agreement shall extend at least until the second anniversary of such Change of Control. Notwithstanding the foregoing, if the Employee becomes entitled to benefits pursuant to Section 2 of this Agreement, this Agreement will not terminate until, but will terminate at, such time that all of the obligations of the parties hereto with respect to this Agreement have been satisfied.
 
8.           Miscellaneous Provisions.
 
(a)          No Duty to Mitigate. The Employee shall not be required to mitigate the amount of any payment contemplated by this Agreement.
 
(b)          Waiver and Amendment. No provision of this Agreement shall be modified, amended, waived or discharged unless the modification, amendment, waiver or discharge is agreed to in writing and signed by the Employee and by an authorized officer of the Company (other than the Employee). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(c)         No Reliance. No agreements, representations or understandings (whether oral or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof.
 
(d)         Entire Agreement. This Agreement contains all of the terms agreed upon between the Employee and the Company with respect to the subject matter hereof and replaces and supersedes all prior change in control agreements between the Employee and the Company.
 
(e)          Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware.

(t)         Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.
 
(g)         No Assignment of Benefits. The rights of any person to payments or benefits under this Agreement shall not be made subject to option or assignment, either by voluntary or involuntary assignment or by operation of law, including (without limitation) bankruptcy, garnishment, attachment or other creditor's process, and any action in violation of this subsection shall be void.

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(h)       Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income, employment and other taxes. If the Company does not make such withholdings on Employee's behalf Employee shall pay when due all such taxes (and any related penalties and interest) imposed on Employee and shall indemnify the Company for Employee's failure to do so.
 
(i)          Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

G)          Arbitration.

(i)          Except as provided in subsection 8(j)(iv) below, the parties hereto agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination of this Agreement, and/or any other dispute arising from or relating to Employee's employment with Company, shall be finally settled by binding arbitration, unless otherwise required by law, administered by JAMS in accordance with the JAMS Employment Arbitration Rules as then in effect (the "Rules"). A current copy of the JAMS Employment Arbitration Rules can be obtained at https://www.jarnsadr.com/rules-employment-arbitration/. The arbitration proceedings will be held before a single, neutral arbitrator in the State of Vermont. The fees of the arbitrator and all other costs that are unique to the arbitration process shall be paid by the Company to the extent required by law; otherwise, each party shall be solely responsible for paying its own costs for the arbitration, including but not limited to attorneys' fees. However, if either party prevails on a claim which affords the prevailing party attorneys' fees pursuant to law, statute, or contract, the arbitrator may award reasonable attorneys' fees to the prevailing party.

(ii)       The arbitrator shall have the authority to order such discovery by way of deposition, interrogatory, document production, or otherwise, as the arbitrator considers necessary to a full and fair exploration of the issues in dispute, consistent with the expedited nature of arbitration. The arbitrator may grant injunctions or other relief in such dispute or controversy. The arbitrator is authorized to award any remedy or relief available under applicable law that the arbitrator deems just and equitable, including any remedy or relief that would have been available to the parties had the matter been heard in a court. The award of the arbitrator shall be in writing and shall contain the arbitrator's factual findings, legal conclusions and reasons for the award. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration, and judgment may be entered on the decision of the arbitrator in any court having jurisdiction.
 
(iii)        The arbitrator shall apply Vermont law to the merits of any dispute or claim, without reference to rules of conflicts of law.

(iv)      The parties may apply to any court of competent jurisdiction for a temporary restraining order, preliminary injunction, or other interim or conservatory relief as

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necessary, without breach of this arbitration agreement and without abridgement of the powers of the arbitrator.
 
(v)       EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EMPLOYEE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF, OR EMPLOYEE'S EMPLOYMENT WITH COMPANY TO BINDING ARBITRATION, UNLESS OTHERWISE REQUIRED BY LAW. EMPLOYEE FURTHER UNDERSTANDS THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE'S RIGHT TO A JURY TRIAL. EMPLOYEE FURTHER UNDERSTANDS THAT THIS ARBITRATION CLAUSE RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO EMPLOYEE'S RELATIONSHIP WITH THE COMPANY, INCLUDING BUT NOT LIMITED TO CLAIMS OF HARASSMENT, DISCRIMINATION, WRONGFUL TERMINATION, AND ANY STATUTORY CLAIMS.
 
[Signature Page Follows]

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IN WITNESS WHEREOF, each of the parties has executed this Change of Control Agreement as of the Effective Date.

 
EMPLOYEE:
 
COMPANY:
 
 
 
Michael d’Amato
 
ISUN, INC.
         
 
By:
/s/ Michael d’Amato  
By:
/s/ Jeffrey Peck  
       
 
Name: Michael d’Amato
  Name: Jeffrey Peck
     
 
Title: Chief Strategy Officer
 
Title: CEO, Chairman of the Board


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Exhibit 10.43
 
EMPLOYMENT AGREEMENT

This Employment Agreement is entered into as of the date of the last signature affixed hereto, by and between iSun Inc, a Delaware corporation ("the Company"), and Frederick Myrick ("Employee").
 
In consideration of the mutual promises and covenants set forth herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Company and Employee hereby agree as follows:


1.
Position of Employment. The Company will employ the Employee in the position of Executive Vice-President having the duties and responsibilities set forth on Exhibit A attached hereto of the Company and, in that position, Employee will report to the Board of Directors of the Company. The Company retains the right to change Employee's title, duties, and reporting relationships as may be determined to be in the best interests of the Company; provided, however, that any such change in Employee's duties shall be consistent with Employee's training, experience, and qualifications.
 
 

The terms and conditions of the Employee's employment shall, to the extent not addressed or described in this Employment Agreement, be governed by the Company's Employee Handbook and existing practices. In the event of a conflict between this Employment Agreement and the Employee Handbook or existing practices, the terms of this Agreement shall govern.
 

2.
Term of Employment. Employee's employment with the Company shall begin on July 1, 2021, and shall continue for a period of 5 years, after which time continued employment shall be on an "at will" basis, unless:


a.
Employee's employment is terminated by either party in accordance with the terms of Section 5 of this Employment Agreement; or


b.
Such term of employment is extended or shortened by a subsequent agreement duly executed by each of the parties to this Employment Agreement, in which case such employment shall be subject to the terms and conditions contained in the subsequent written agreement.


3.
Compensation and Benefits.
 

a.
Base Salary. Employee shall be paid a base salary of $33,333 monthly, which is
 


$400,000 annually ("Base Salary"), subject to applicable federal, state, and local withholding, such Base Salary to be paid to Employee in the same manner and on the same payroll schedule in which all the Company employees receive payment. Any increases in Employee's Base Salary for years beyond the first year of Employee's employment shall be in the sole discretion of the Company’s Board of Directors, and nothing herein shall be deemed to require any such increase.


b.
Incentive and Deferred Compensation. Employee shall be eligible to participate in all incentive and deferred compensation programs available to other executives or officers of the Company, such participation to be in the same form, under the same terms, and to the same extent that such programs are made available to other such executives or officers. Nothing in this Employment Agreement shall be deemed to require the payment of bonuses, awards, or incentive compensation to Employee if such payment would not otherwise be required under the terms of the Company's incentive compensation programs, with the exception of terms of Section 3(c) below.
 

c.
Mergers and Acquisitions. The Company intends to accelerate its growth through potential mergers and acquisitions. As these activities place additional responsibilities on the Employee, incentive compensation not to exceed 3% of the transaction price will be awarded to the Employee in the form of unrestricted stock award.
 

d.
Employee Benefits. Employee shall be eligible to participate in all employee benefit plans, policies, programs, or perquisites in which other the Company executive or officers participate. The terms and conditions of Employee's participation in the Company's employee benefit plans, policies, programs, or perquisites shall be governed by the terms of each such plan, policy, or program.
 

4.
Duties and Performance. The Employee acknowledges and agrees that he is being offered a position of employment by the Company with the understanding that the Employee possesses a unique set of skills, abilities, and experiences which will benefit the Company, and he agrees that his continued employment with the Company, whether during the term of this Employment Agreement or thereafter, is contingent upon his successful performance of his duties in his position as noted above, or in such other position to which he may be assigned.
 

a.
General Duties.
 

1.
Employee shall render to the very best of Employee's ability, on behalf of the Company, services to and on behalf of the Company, and shall undertake diligently all duties assigned to him by the Company.
 

2.
Employee shall devote his full time, energy and skill to the performance of the services in which the Company is engaged, at such time and place as the Company may direct.


3.
Employee shall faithfully and industriously assume and perform with skill, care, diligence and attention all responsibilities and duties connected with his employment on behalf of the Company.
 

b.
Specific Duties. See job description attached to this Agreement as Exhibit A.


5.
Termination of Employment. Employee's employment with the Company may be terminated, prior to the expiration of the term of this Employment Agreement, in accordance with any of the following provisions:


a.
Termination by Employee. The Employee may terminate his employment at any time during the course of this Agreement by giving three (3) months’ notice in writing to the President of the Company. During the notice period, Employee must fulfill all his duties and responsibilities set forth above and use his best efforts to train and support his replacement, if any. Failure to comply with this requirement may result in Termination for Cause described below, but otherwise Employee's salary and benefits will remain unchanged during the notification period.


b.
Termination by the Company Without Cause. The Company may terminate Employee's employment at any time during the course of this Agreement by giving twelve (12) months’ notice in writing to the Employee. During the notice period, Employee must fulfill all of Employee's duties and responsibilities set forth above and use Employee's best efforts to train and support Employee's replacement, if any. Failure of Employee to comply with this requirement may result in Termination for Cause described below, but otherwise Employee's salary and benefits will remain unchanged during the notification period. The Company, may, in its sole discretion, give Employee severance pay in the amount of the remaining notice period in lieu of actual employment, and nothing herein shall require Company to maintain employee in active employment for the duration of the notice period.
 

c.
Termination by the Company For Cause. The Company may, at any time and without notice, terminate the Employee for "cause". Termination by the Company of the Employee for "cause" shall include but not be limited to termination based on any of the following grounds: (a) failure to perform the duties of the Employee's position in a satisfactory manner; (b) fraud, misappropriation, embezzlement or acts of similar dishonesty; (c) conviction of a felony involving moral turpitude; (d) illegal use of drugs or excessive use of alcohol in the workplace; (e) intentional and willful misconduct that may subject the Company to criminal or civil liability; (f) breach of the Employee's duty of loyalty, including the diversion or usurpation of corporate opportunities properly belonging to the Company; (g) willful disregard of Company policies and procedures; (h) breach of any of the material terms of this Agreement; and (i) insubordination or deliberate refusal to follow the instructions of the President of the Company.
 

d.
Termination By Death or Disability. The Employee's employment and rights to compensation under this Employment Agreement shall terminate if the Employee is unable to perform the duties of his position due to death or disability lasting more than 90 days, and the Employee's heirs, beneficiaries, successors, or 

 
assigns shall not be entitled to any of the compensation or benefits to which Employee is entitled under this Agreement, except: (a) to the extent specifically provided in this Employment Agreement (b) to the extent required by law; or (c) to the extent that such benefit plans or policies under which Employee is covered provide a benefit to the Employee's heirs, beneficiaries, successors, or assigns.


6.
Confidentiality. Employee agrees that at all times during Employee's employment and following the conclusion of Employee's employment, whether voluntary or involuntary, Employee will hold in strictest confidence and not disclose Confidential Information (as defined below) to anyone who is not also an employee of the Company or to any employee of the Company who does not also have access to such Confidential Information, without following Company procedures to protect Confidential Information of Company.
 

a.
"Confidential Information" shall mean any trade secrets or Company proprietary information, including but not limited to manufacturing techniques, processes, formulas, customer lists, inventions, experimental developments, research projects, operating methods, cost, pricing, financial data, business plans and proposals, data and information the Company receives in confidence from any other party, or any other secret or confidential matters of the Company. Additionally, Employee will not use any Confidential Information for Employee's own benefit or to the detriment of the Company during Employee's employment or thereafter. Employee also certifies that employment with the Company does not and will not breach any agreement or duty that Employee has to anyone concerning confidential information belonging to others.
 

b.
“Immunity from Liability for Confidential Disclosure of a Trade Secret to the Government or in a Court Filing:

(1) Immunity—An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that—(A) is made—(i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. (2) Use of Trade Secret Information in Anti-Retaliation Lawsuit—An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual—(A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.”
 

7.
Noncompetition. Employee hereby agrees not to directly or indirectly compete with the business of the Company and its successors and assigns during the period of employment and for a period of two (2) years following termination of employment and notwithstanding the cause or reason for termination. Employee shall not own, manage,
   
operate, consult or to be employed in a business substantially similar to, or competitive with, the present business of the Company or such other business activity in which the Company may substantially engage during the term of employment. The jurisdiction for Noncompetition includes the entire United States.


8.
Expenses. The Company shall pay or reimburse Employee for any expenses reasonably incurred by him in furtherance of his duties hereunder, including expenses for entertainment, travel, meals and hotel accommodations, upon submission by him of vouchers or receipts maintained and provided to the Company in compliance with such rules and policies relating thereto as the Company may from time to time adopt.


9.
General Provisions.
 
 

Notices. All notices and other communications required or permitted by this Agreement to be delivered by the Company or Employee to the other party shall be delivered in writing to the address shown below, either personally, by facsimile transmission or by registered, certified or express mail, return receipt requested, postage prepaid, to the address for such party specified below or to such other address as the party may from time to time advise the other party, and shall be deemed given and received as of actual personal delivery, on the first business day after the date of delivery shown on any such facsimile transmission or upon the date or actual receipt shown on any return receipt if registered, certified or express mail is used, as the case may be.

The Company:
iSun, Inc.
400 Avenue D, Suite 10
Williston, VT 05495

Employee:
Frederick Myrick
1 Hickory Lane
Essex Junction, VT 05452
 

10.
Amendments and Termination; Entire Agreement. This Agreement may not be amended or terminated except by a writing executed by all of the parties hereto. This Agreement constitutes the entire agreement of the Company and Employee relating to the subject matter hereof and supersedes all prior oral and written understandings and agreements relating to such subject matter.
 

11.
Successors and Assigns. The rights and obligations of the parties hereunder are not assignable to another person without prior written consent; provided, however, that the Company, without obtaining Employee's consent, may assign its rights and obligations hereunder to a wholly-owned subsidiary and provided further that any post-employment restrictions shall be assignable by the Company to any entity which purchases all or substantially all of the Company's assets.


12.
Severability; Provisions Subject to Applicable Law. All provisions of this Agreement shall be applicable only to the extent that they do not violate any applicable law, and are intended to be limited to the extent necessary so that they will not render this Agreement invalid, illegal or unenforceable under any applicable law. If any provision of this Agreement or any application thereof shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of other provisions of this Agreement or of any other application of such provision shall in no way be affected thereby.


13.
Arbitration; Except as provided in subsection 8(j)(iv) below, the parties hereto agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination of this Agreement, and/or any other dispute arising from or relating to Employee's employment with Company, shall be finally settled by binding arbitration, unless otherwise required by law, administered by JAMS in accordance with the JAMS Employment Arbitration Rules as then in effect (the "Rules"). A current copy of the JAMS Employment Arbitration Rules can be obtained at https://www.jarnsadr.com/rules- employment-arbitration/. The arbitration proceedings will be held before a single, neutral arbitrator in the State of Vermont. The fees of the arbitrator and all other costs that are unique to the arbitration process shall be paid by the Company to the extent required by law; otherwise, each party shall be solely responsible for paying its own costs for the arbitration, including but not limited to attorneys' fees. However, if either party prevails on a claim which affords the prevailing party attorneys' fees pursuant to law, statute, or contract, the arbitrator may award reasonable attorneys' fees to the prevailing party.
 

14.
Waiver of Rights. No waiver by the Company or Employee of a right or remedy hereunder shall be deemed to be a waiver of any other right or remedy or of any subsequent right or remedy of the same kind.
 

15.
Definitions; Headings; and Number. A term defined in any part of this Employment Agreement shall have the defined meaning wherever such term is used herein. The headings contained in this Agreement are for reference purposes only and shall not affect in any manner the meaning or interpretation of this Employment Agreement. Where appropriate to the context of this Agreement, use of the singular shall be deemed also to refer to the plural, and use of the plural to the singular.
 

16.
Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original but both of which taken together shall constitute but one and the same instrument.


17.
Governing Laws and Forum. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Vermont. The parties hereto further agree that any action brought to enforce any right or obligation under this Agreement shall be subject to the exclusive jurisdiction of the courts of the State of Vermont The Company and the Employee consent to personal jurisdiction in the courts of the State of Vermont.

IN WITNESS WHEREOF, the Company and Employee have executed and delivered this Agreement as of the date written below.
 
Employee
 
The Company
 
       
Frederic Myrick    iSun, Inc.  
 
   
 
 
 
By:
/s/ Frederick Myrick  
By:
/s/ Jeffrey Peck  

Name:
Frederick Myrick
Name:
Jeffrey Peck
       
Title:
EVP
Title:
CEO, Chairman of the Board

EXHIBIT A

Job Description

EVP shall have the duties and responsibilities customary for such a position in an organization of the size and nature of the Company.


Exhibit 10.44

CHANGE OF CONTROL AGREEMENT
 
This Change of Control Agreement (the "Agreement") is made and entered into effective as of July 1, 2021 (the "Effective Date"), by and between Frederick Myrick, an individual (the "Employee") and iSun, Inc., a Delaware corporation (the "Company" ).
 
RECITALS

A.        It is expected that the Company, from time to time, will consider the possibility of merging with or being acquired by another company, or otherwise entering into a change of control transaction. The Board of Directors of the Company (the "Board”) recognizes that such consideration can be a distraction to the Employee and can result in Employee considering alternative employment opportunities.
 
B.        The Board has determined that it is in the best interests of the Company and its stockholders to take steps towards assuring that the Company will have the continued dedication and objectivity of the Employee, notwithstanding the possibility, threat or occurrence of a merger, acquisition or change of control transaction. As a result, the Board believes the Company should provide the Employee with certain severance benefits in the event the Employee's employment with the Company terminates under certain circumstances, such benefits to provide the Employee with enhanced financial security, sufficient incentive to remain with the Company, and sufficient motivation to maximize the value of the Company for the benefit of its stockholders.
 
C.        Certain capitalized terms used in the Agreement are defined in Section 4 below.
 
AGREEMENT
 
In consideration of the mutual covenants herein contained, and the continuing employment of the Employee by the Company, the parties agree as follows:
 
I.          At-Will Employment. Except as may be provided in an Employment Agreement between the Company and the Employee, the Company and the Employee acknowledge that the Employee's employment is and shall continue to be "at-will," as defined or interpreted under applicable law. If the Employee's employment terminates for any reason, the Employee shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be available in accordance with the Company's established employee plans and practices or in accordance with other agreements between the Company and the Employee.
 
2.          Change of Control Benefits.
 
(a)          Benefits upon Termination in Connection with a Change of Control. If, within 3 months prior to a Change of Control or 24 months after a Change of Control (the "Change of Control Period''), the Employee's employment terminates as a result of an Involuntary Termination or a Resignation for Good Reason, then, subject to subsection 2(c), the Employee shall receive the following benefits:

(i)          on the Termination Date, payment of any base salary that has accrued but was not paid as of the Termination Date (the "Accrued Base Salary");
 
(ii)         on the Termination Date, payment of the value of any unused paid time off (PTO) days that have accrued but remain unpaid as of the Termination Date calculated in accordance with the Company's PTO policies then in effect ("Accrued PTO");
 
(iii)         on the Termination Date, reimbursement for expenses incurred by Employee prior to the Termination Date that are subject to reimbursement in accordance with the Company's policies then in effect ("Accrued Reimburseable Expenses");

(iv)         on the Termination Date, payment of any cash incentive bonus with respect to the fiscal year prior to year in which the Termination Date occurred that has been earned and accrued as of the Termination Date, but has not been paid (the "Accrued Incentive Bonus");
 
(v)          a lump sum payment to be paid no more than 30 days following the Termination Date equal to the sum of the following (the "Severance Payments"):
 
a)          an amount equal to the Employee's highest monthly base salary at any time within the 12-month period immediately preceding the Termination Date multiplied by 24; and
 
b)          an amount equal to 100% of the Employee's target incentive bonus for the year in which the Termination Date occurs (as previously determined by the Board or a committee of the Board);

(vi)          the Company shall permit Employee to elect to continue health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), in accordance therewith, for a period of 12 months from the Termination Date or until Employee commences new employment providing substantially similar benefits, whichever is earlier (the "Change of Control Severance Benefit Period") and the Company shall reimburse Employee for the amount of the monthly premium charged Employee by the applicable insurance carriers for such continuation coverage under COBRA. In the event that either the Change in Control Severance Benefit Period exceeds the maximum continuation coverage period permissible under COBRA, would subject the Company to excise tax, or such coverage is not available for any other reason, the Company shall reimburse Employee directly for the expenses incurred by him or her and his or her covered dependents, if any, to obtain substantially similar benefits during the remainder of the Change in Control Severance Benefit Period, which payments shall be deemed to be separate payments for purposes Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"); and
 
(vii)           immediate vesting and the right to exercise 100% of the Employee's outstanding options, stock appreciation rights, restricted stock awards, restricted stock units and other equity based awards that were otherwise unvested as of the Termination Date, and the immediate lapse of any Company rights to repurchase any vested or unvested shares of common

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stock, restricted stock awards, restricted stock units and other equity awards (including under any existing right of first refusal agreement (or similar provision) pursuant to which any Company right of repurchase existed as of the Termination Date.

(b)          Benefits upon Voluntary Resignation or Termination for Cause. If the Employee's employment with the Company terminates during the Change of Control Period other than as a result of an Involuntary Termination or a Resignation for Good Reason, including termination due to Employee's Disability or death, then the Employee shall receive the following benefits payable on the Termination Date:
 
(i)           the Accrued BaseSalary;
 
(ii)          the Accrued PTO;
 
(iii)         the Accrued Reimburseable Expenses; and
 
(iv)         the Accrued Incentive Bonus.
 
However, Employee will not be entitled to receive any other severance benefits described in this Section 2 or other benefits except for those (if any) as may then be established under the Company's then-existing severance and benefits plans and practices, or pursuant to other written agreements with the Company.
 
(c)          Release. Notwithstanding any provision herein to the contrary, prior to the payment of any Severance Payments and the reimbursement of health benefit premiums during the Change of Control Severance Benefit Period, Employee shall have executed, and not revoked, a Release of Claims. Any payments subject to a Release of Claims may be delayed by the Company until the effective date and expiration of any revocation period of a Release of Claims.

3.            Limitations on Payments.
 
(a)           Code Section 409A.
 
(i)          Notwithstanding anything to the contrary in this Agreement, if the Company reasonably determines, after consultation and agreement with Employee (and Employee's legal counsel as applicable) that Section 409A of the Code will result in the imposition of interest and additional tax, Employee shall not be paid any compensation or benefits hereunder upon a separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code and the regulations promulgated thereunder) until the date which is six (6) months after the date of such separation from service (or, if earlier, the date of death of Employee). Such severance or other benefits otherwise due to Employee on or within the six (6) month period following Employee's termination of employment will accrue during such six (6) month period and will become payable in a lump sum payment on the date six (6) months and one (1) day following the Termination Date. All subsequent payments, if any, will be payable as provided in this Agreement.

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(ii)          The benefits under this Agreement are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to comply with this intention. The Company and the Employee agree to work together in good faith to consider amendments to this Agreement, and to take such further actions, which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to the Employee under Section 409A.
 
(b)          Code Section 2800. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to the Employee (i) constitute "parachute payments" within the meaning of Section 280G of the Code and (ii) but for this Section 3(b) would be subject to the excise tax imposed by Section 4999 of the Code, then the Employee's benefits under Section 2 of this Agreement shall be either:
 
  (i)             delivered in full, or
 
(ii)          delivered as to such lesser extent which would result in no portion of such severance and other benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999 of the Code, results in the receipt by the Employee on an after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code. Unless the Company and the Employee otherwise agree in writing, any determination required under this Section 3(b) shall be made in writing by the Company's independent public accountants immediately prior to the Change of Control (the "Accountants"), whose determination shall be conclusive and binding upon the Employee and the Company for all purposes. For purposes of making the calculations required by this Section 3(b) the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 3(b). The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 3(b).
 
4.          Definition of Terms. The following terms referenced to in this Agreement shall have the following meanings:
 
(a)           Cause. "Cause" means:
 
(i)          The Employee's continued intentional and demonstrable failure to perform his or her duties customarily associated with the Employee's position as an employee of the Company or its respective successors or assigns, as applicable (other than any such failure resulting from the Employee's mental or physical Disability) after the Employee has received a written demand of performance from the Company which specifically sets forth the factual basis for the Company's belief that the Employee has not devoted sufficient time and effort to the

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performance of his or her duties and has failed to cure such non-performance within thirty (30) days after receiving such notice (it being understood that if the Employee is in good faith performing his or her duties, but is not achieving results the Company deems satisfactory for the Employee's position, it will not be considered to be grounds for termination of the Employee for "Cause");

(ii)          The Employee's conviction of, or plea of nolo contendere to, a felony that the Board reasonably believes has had or will have a material detrimental effect on the Company's reputation or business;
 
(iii)          The Employee's engagement in dishonest or illegal conduct, which is, in each case, materially injurious to the Company or its affiliates;
 
(iv)          The Employee's commission of an act of fraud, embezzlement, misappropriation, willful misconduct, or breach of fiduciary duty against, and causing material harm to, the Company or its respective successors or assigns, as applicable;
 
  (v)            The Employee's unauthorized use of the Company's material confidential information; or

  (vi)           The Employee's prohibited  or unauthorized competitive activity.

(a)          Change of Control. "Change of Control” means (A) the acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any merger, consolidation or other form of reorganization in which outstanding shares of the Company are exchanged for securities or other consideration issued, or caused to be issued, by the acquiring entity or its subsidiary, but excluding any transaction effected primarily for the purpose of changing the Company's jurisdiction of incorporation), unless the Company's stockholders of record as constituted immediately prior to such transaction or series of related transactions will, immediately after such transaction or series of related transactions hold at least a majority of the voting power of the surviving or acquiring entity, except that any change in the ownership of the stock of the Company as a result of a financing by the Company that is approved by the Board and in which both the Board and Employee determine is not a Change of Control for the purposes of this Agreement will not be considered a Change of Control, or (B) a sale, lease, transfer or other disposition of all or substantially all of the assets of the Company. Notwithstanding the foregoing provisions of this definition, a transaction will not be deemed a Change of Control unless the transaction qualifies as a change in control event within the meaning of Section 409A.
 
(b)          Disability. "Disability" means Employee's failure substantially to perform the Employee's duties on a full-time basis for a period exceeding one hundred eighty (180) consecutive days or for periods aggregating more than one hundred eighty (180) days during any twelve (12) month period as a result of incapacity due to physical or mental illness. If there is a dispute as to whether the Employee is or was physically or mentally unable to perform the Employee's duties, such dispute will be determined by a physician selected by the Company or its insurers and acceptable to the Employee or the Employee's legal representative (such agreement as to acceptability not to be unreasonably withheld). Notwithstanding the foregoing, if the Employee

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participates in any group disability plan provided by the Company, which offers long-term disability benefits, "Disability" will mean disability as defined therein.

(c)          Involuntary Termination. "Involuntary Termination" means termination of the Employee's employment, without the Employee's consent, by the Company for any reason other than Cause.
 
(d)          Release of Claims. "Release of Claims" shall mean a waiver by the Employee, in a form satisfactory to the Company, of all employment-related obligations of and claims and causes of action against the Company, and a non-disparagement agreement by the Employee in a form satisfactory to the Company. The Release of Claims shall not release claims that cannot be released as a matter of law. Whenever in this Agreement a payment or benefit is conditioned on Employee's execution of a Release of Claims, such Release of Claims must be executed, and all applicable revocation periods shall have expired, within 60 days after the Termination Date, failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes non-exempt "deferred compensation" for purposes of Section 409A of the Code, and if such 60 day period begins in one calendar year and ends in the next calendar year, the payment or benefit shall not be made or commence before the second such calendar year, even if the Release of Claims becomes irrevocable in the first such calendar year.
 
(e)         Resignation for Good Reason. "Resignation for Good Reason" shall mean a resignation by Employee following the occurrence of one of the following:
 
 (i)          a material reduction in the amount of the Employee's base salary, other than a general reduction in base salary that affects all similarly situated employees in substantially the same proportions;

 (ii)        a material reduction in the aggregate amount of Employee's target incentive cash bonus and other benefit plans (including, without limitation, insurance coverage, bonus plans, equity compensation plans and similar plans and arrangements);
 
 (iii)          any material breach by the Company of any material provision of this Agreement which continues uncured for 30 days following notice thereof;
 
 (iv)           a material reduction in the Employee's duties or responsibilities; or

 (v)            a change of fifty (50) miles or more of the geographic location at which the Employee must primarily perform services for the Company, other than a relocation which does not increase Employee's commute time.
 
Any purported Resignation for Good Reason pursuant to Section 4(e)(i) through 4(e)(v) above will not be effective until the Employee has delivered to the Company, within 60 days of the initial existence of the Good Reason condition, a written explanation that describes the basis for the Employee's belief that the Employee should be permitted to terminate the Employee's

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employment and have it treated as a Resignation for Good Reason and the Company has been given 30 days following delivery of such notice to cure any curable violation.

(f)          Termination Date. "Termination Date" shall mean the effective date of termination of employment, subject to the expiration of any applicable cure period, or in the case of a termination upon Employee's death, the date on which Employee dies as determined by reference to the final death certificate.

5.           Successors.
 
(a)          Company's Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company's business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term "Company" shall include any successor to the Company's business and/or assets which executes and delivers the assumption agreement pursuant to this subsection (a) or which becomes bound by the terms of this Agreement by operation of law.
 
(b)          Employee's Successors. The terms of this Agreement and all rights of the Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

6.          Notice.
 
(a)          General. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Employee, mailed notices shall be addressed to the Employee at the home address that the Employee most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of the Chairman of the Board.
 
(b)          Notice of Termination. Any termination by the Company for Cause or by the Employee as a result of a voluntary resignation or an Involuntary Termination or Resignation for Good Reason shall be communicated by a notice of termination to the other party hereto given in accordance with Section 6(a) of this Agreement. Such notice shall indicate the specific termination provision in this Agreement relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the termination date (which shall be not more than 30 days after the giving of such notice). The failure by the Employee to include in the notice any fact or circumstance which contributes to a showing of Involuntary Termination or Resignation for Good Reason shall not waive any right of the Employee hereunder or preclude the Employee from asserting such fact or circumstance in enforcing the Employee's rights hereunder.

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7.          Term and Termination. The term of this Agreement shall be 5 years from the Effective Date; provided, however, that this Agreement shall automatically renew for successive 1- year periods unless either party gives the other party notice, at least 180 days in advance of the next renewal date, of such party's intent that this Agreement terminate effective as of such next renewal date, in which case the Agreement shall terminate as of such next renewal date; provided further, however, that in the event of a Change of Control that precedes the effective date of any such termination, the term of this Agreement shall extend at least until the second anniversary of such Change of Control. Notwithstanding the foregoing, if the Employee becomes entitled to benefits pursuant to Section 2 of this Agreement, this Agreement will not terminate until, but will terminate
 
at, such time that all of the obligations of the parties hereto with respect to this Agreement have been satisfied.
 
8.          Miscellaneous Provisions.
 
(a)            No Duty to Mitigate. The Employee shall not be required to mitigate the amount of any payment contemplated by this Agreement.
 
(b)          Waiver and Amendment. No provision of this Agreement shall be modified, amended, waived or discharged unless the modification, amendment, waiver or discharge is agreed to in writing and signed by the Employee and by an authorized officer of the Company (other than the Employee). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.
 
(c)            No Reliance. No agreements, representations or understandings (whether oral or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof.

(d)           Entire Agreement. This Agreement contains all of the terms agreed upon between the Employee and the Company with respect to the subject matter hereof and replaces and supersedes all prior change in control agreements between the Employee and the Company.
 
(e)            Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware.

(t)            Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.
 
  (g)           No Assignment of Benefits. The rights of any person to payments or benefits under this Agreement shall not be made subject to option or assignment, either by voluntary or involuntary assignment or by operation of law, including (without limitation) bankruptcy, garnishment, attachment or other creditor's process, and any action in violation of this subsection shall be void.

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(h)           Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income, employment and other taxes. If the Company does not make such withholdings on Employee's behalf Employee shall pay when due all such taxes (and any related penalties and interest) imposed on Employee and shall indemnify the Company for Employee's failure to do so.
 
(i)          Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.
 
G)          Arbitration.

(i)          Except as provided in subsection 8(j)(iv) below, the parties hereto agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination of this Agreement, and/or any other dispute arising from or relating to Employee's employment with Company, shall be finally settled by binding arbitration, unless otherwise required by law, administered by JAMS in accordance with the JAMS Employment Arbitration Rules as then in effect (the "Rules"). A current copy of the JAMS Employment Arbitration Rules can be obtained at https://www.jarnsadr.com/rules-employment-arbitration/. The arbitration proceedings will be held before a single, neutral arbitrator in the State of Vermont. The fees of the arbitrator and all other costs that are unique to the arbitration process shall be paid by the Company to the extent required by law; otherwise, each party shall be solely responsible for paying its own costs for the arbitration, including but not limited to attorneys' fees. However, if either party prevails on a claim which affords the prevailing party attorneys' fees pursuant to law, statute, or contract, the arbitrator may award reasonable attorneys' fees to the prevailing party.

(ii)          The arbitrator shall have the authority to order such discovery by way of deposition, interrogatory, document production, or otherwise, as the arbitrator considers necessary to a full and fair exploration of the issues in dispute, consistent with the expedited nature of arbitration. The arbitrator may grant injunctions or other relief in such dispute or controversy. The arbitrator is authorized to award any remedy or relief available under applicable law that the arbitrator deems just and equitable, including any remedy or relief that would have been available to the parties had the matter been heard in a court. The award of the arbitrator shall be in writing and shall contain the arbitrator's factual findings, legal conclusions and reasons for the award. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration, and judgment may be entered on the decision of the arbitrator in any court having jurisdiction.

(iii)          The arbitrator shall apply Vermont law to the merits of any dispute or claim, without reference to rules of conflicts of law.

(iv)          The parties may apply to any court of competent jurisdiction for a temporary restraining order, preliminary injunction, or other interim or conservatory relief as
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necessary, without breach of this arbitration agreement and without abridgement of the powers of the arbitrator.
 
(v)      EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EMPLOYEE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF, OR EMPLOYEE'S EMPLOYMENT WITH COMPANY TO BINDING ARBITRATION, UNLESS OTHERWISE REQUIRED BY LAW. EMPLOYEE FURTHER UNDERSTANDS THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE'S RIGHT TO A JURY TRIAL. EMPLOYEE FURTHER UNDERSTANDS THAT THIS ARBITRATION CLAUSE RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO EMPLOYEE'S RELATIONSHIP WITH THE COMPANY, INCLUDING BUT NOT LIMITED TO CLAIMS OF HARASSMENT, DISCRIMINATION, WRONGFUL TERMINATION, AND ANY STATUTORY CLAIMS.
 
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the parties has executed this Change of Control Agreement as of the Effective Date.

EMPLOYEE:
  COMPANY:
     
Frederic Myrick    ISUN, INC.
 
   
 
 
By:
/s/ Frederick Myrick  
By:
/s/ Jeffrey Peck

Name:
Frederick Myrick
Name:
Jeffrey Peck
Title:
Executive Vice President
Title:
CEO, Chairman of the Board


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Exhibit 10.45

EMPLOYMENT AGREEMENT
 
This Employment Agreement is entered into as of the date of the last signature affixed hereto, by and between iSun Inc, a Delaware corporation ("the Company"), and Jeffrey Peck ("Employee").
 
In consideration of the mutual promises and covenants set forth herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Company and Employee hereby agree as follows:
 

1.
Position of Employment. The Company will employ the Employee in the position of CEO having the duties and responsibilities set forth on Exhibit A attached hereto of the Company and, in that position, Employee will report to the Board of Directors of the Company. The Company retains the right to change Employee's title, duties, and reporting relationships as may be determined to be in the best interests of the Company; provided, however, that any such change in Employee's duties shall be consistent with Employee's training, experience, and qualifications.
 
The terms and conditions of the Employee's employment shall, to the extent not addressed or described in this Employment Agreement, be governed by the Company's Employee Handbook and existing practices. In the event of a conflict between this Employment Agreement and the Employee Handbook or existing practices, the terms of this Agreement shall govern.
 

2.
Term of Employment. Employee's employment with the Company shall begin on July 1, 2021, and shall continue for a period of 5 years, after which time continued employment shall be on an "at will" basis, unless:


a.
Employee's employment is terminated by either party in accordance with the terms of Section 5 of this Employment Agreement; or
 

b.
Such term of employment is extended or shortened by a subsequent agreement duly executed by each of the parties to this Employment Agreement, in which case such employment shall be subject to the terms and conditions contained in the subsequent written agreement.


3.
Compensation and Benefits.
 

a.
Base Salary. Employee shall be paid a base salary of $37,500 monthly, which is
 
$450,000 annually ("Base Salary"), subject to applicable federal, state, and local withholding, such Base Salary to be paid to Employee in the same manner and on the same payroll schedule in which all the Company employees receive payment. Any increases in Employee's Base Salary for years beyond the first year of Employee's employment shall be in the sole discretion of the Company’s Board of Directors, and nothing herein shall be deemed to require any such increase.

b.
Incentive and Deferred Compensation. Employee shall be eligible to participate in all incentive and deferred compensation programs available to other executives or officers of the Company, such participation to be in the same form, under the same terms, and to the same extent that such programs are made available to other such executives or officers. Nothing in this Employment Agreement shall be deemed to require the payment of bonuses, awards, or incentive compensation to Employee if such payment would not otherwise be required under the terms of the Company's incentive compensation programs, with the exception of terms of Section 3(c) below.
 

c.
Mergers and Acquisitions. The Company intends to accelerate its growth through potential mergers and acquisitions. As these activities place additional responsibilities on the Employee, incentive compensation not to exceed 3% of the transaction price will be awarded to the Employee in the form of unrestricted stock award.
 

d.
Employee Benefits. Employee shall be eligible to participate in all employee benefit plans, policies, programs, or perquisites in which other the Company executive or officers participate. The terms and conditions of Employee's participation in the Company's employee benefit plans, policies, programs, or perquisites shall be governed by the terms of each such plan, policy, or program.
 

4.
Duties and Performance. The Employee acknowledges and agrees that he is being offered a position of employment by the Company with the understanding that the Employee possesses a unique set of skills, abilities, and experiences which will benefit the Company, and he agrees that his continued employment with the Company, whether during the term of this Employment Agreement or thereafter, is contingent upon his successful performance of his duties in his position as noted above, or in such other position to which he may be assigned.
 

a.
General Duties.
 

1.
Employee shall render to the very best of Employee's ability, on behalf of the Company, services to and on behalf of the Company, and shall undertake diligently all duties assigned to him by the Company.


2.
Employee shall devote his full time, energy and skill to the performance of the services in which the Company is engaged, at such time and place as the Company may direct.
 

3.
Employee shall faithfully and industriously assume and perform with skill, care, diligence and attention all responsibilities and duties connected with his employment on behalf of the Company.


b.
Specific Duties. See job description attached to this Agreement as Exhibit A.


5.
Termination of Employment. Employee's employment with the Company may be terminated, prior to the expiration of the term of this Employment Agreement, in accordance with any of the following provisions:


a.
Termination by Employee. The Employee may terminate his employment at any time during the course of this Agreement by giving three (3) months’ notice in writing to the President of the Company. During the notice period, Employee must fulfill all his duties and responsibilities set forth above and use his best efforts to train and support his replacement, if any. Failure to comply with this requirement may result in Termination for Cause described below, but otherwise Employee's salary and benefits will remain unchanged during the notification period.
 

b.
Termination by the Company Without Cause. The Company may terminate Employee's employment at any time during the course of this Agreement by giving twelve (12) months’ notice in writing to the Employee. During the notice period, Employee must fulfill all of Employee's duties and responsibilities set forth above and use Employee's best efforts to train and support Employee's replacement, if any. Failure of Employee to comply with this requirement may result in Termination for Cause described below, but otherwise Employee's salary and benefits will remain unchanged during the notification period. The Company, may, in its sole discretion, give Employee severance pay in the amount of the remaining notice period in lieu of actual employment, and nothing herein shall require Company to maintain employee in active employment for the duration of the notice period.
 

c.
Termination by the Company For Cause. The Company may, at any time and without notice, terminate the Employee for "cause". Termination by the Company of the Employee for "cause" shall include but not be limited to termination based on any of the following grounds: (a) failure to perform the duties of the Employee's position in a satisfactory manner; (b) fraud, misappropriation, embezzlement or acts of similar dishonesty; (c) conviction of a felony involving moral turpitude; (d) illegal use of drugs or excessive use of alcohol in the workplace; (e) intentional and willful misconduct that may subject the Company to criminal or civil liability; (f) breach of the Employee's duty of loyalty, including the diversion or usurpation of corporate opportunities properly belonging to the Company; (g) willful disregard of Company policies and procedures; (h) breach of any of the material terms of this Agreement; and (i) insubordination or deliberate refusal to follow the instructions of the President of the Company.
 

d.
Termination By Death or Disability. The Employee's employment and rights to compensation under this Employment Agreement shall terminate if the Employee is unable to perform the duties of his position due to death or disability lasting more than 90 days, and the Employee's heirs, beneficiaries, successors, or assigns

shall not be entitled to any of the compensation or benefits to which Employee is entitled under this Agreement, except: (a) to the extent specifically provided in this Employment Agreement (b) to the extent required by law; or (c) to the extent that such benefit plans or policies under which Employee is covered provide a benefit to the Employee's heirs, beneficiaries, successors, or assigns.
 

6.
Confidentiality. Employee agrees that at all times during Employee's employment and following the conclusion of Employee's employment, whether voluntary or involuntary, Employee will hold in strictest confidence and not disclose Confidential Information (as defined below) to anyone who is not also an employee of the Company or to any employee of the Company who does not also have access to such Confidential Information, without following Company procedures to protect Confidential Information of Company.
 

a.
"Confidential Information" shall mean any trade secrets or Company proprietary information, including but not limited to manufacturing techniques, processes, formulas, customer lists, inventions, experimental developments, research projects, operating methods, cost, pricing, financial data, business plans and proposals, data and information the Company receives in confidence from any other party, or any other secret or confidential matters of the Company. Additionally, Employee will not use any Confidential Information for Employee's own benefit or to the detriment of the Company during Employee's employment or thereafter. Employee also certifies that employment with the Company does not and will not breach any agreement or duty that Employee has to anyone concerning confidential information belonging to others.
 

b.
“Immunity from Liability for Confidential Disclosure of a Trade Secret to the Government or in a Court Filing:
(1) Immunity—An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that—(A) is made—(i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. (2) Use of Trade Secret Information in Anti-Retaliation Lawsuit—An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual—(A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.”
 

7.
Noncompetition. Employee hereby agrees not to directly or indirectly compete with the business of the Company and its successors and assigns during the period of employment and for a period of two (2) years following termination of employment and notwithstanding the cause or reason for termination. Employee shall not own, manage, operate, consult or to be employed in a business substantially similar to, or competitive with, the present business of the Company or such other business activity in which the Company may substantially engage during the term of employment. The jurisdiction for Noncompetition includes the entire United States.


8.
Expenses. The Company shall pay or reimburse Employee for any expenses reasonably incurred by him in furtherance of his duties hereunder, including expenses for entertainment, travel, meals and hotel accommodations, upon submission by him of vouchers or receipts maintained and provided to the Company in compliance with such rules and policies relating thereto as the Company may from time to time adopt.
 

9.
General Provisions.
 
Notices. All notices and other communications required or permitted by this Agreement to be delivered by the Company or Employee to the other party shall be delivered in writing to the address shown below, either personally, by facsimile transmission or by registered, certified or express mail, return receipt requested, postage prepaid, to the address for such party specified below or to such other address as the party may from time to time advise the other party, and shall be deemed given and received as of actual personal delivery, on the first business day after the date of delivery shown on any such facsimile transmission or upon the date or actual receipt shown on any return receipt if registered, certified or express mail is used, as the case may be.
 
The Company:
iSun, Inc.
400 Avenue D, Suite 10
Williston, VT 05495
 
Employee:
Jeffrey Peck
618 Brennan Woods Dr
Williston, VT 05495
 

10.
Amendments and Termination; Entire Agreement. This Agreement may not be amended or terminated except by a writing executed by all of the parties hereto. This Agreement constitutes the entire agreement of the Company and Employee relating to the subject matter hereof and supersedes all prior oral and written understandings and agreements relating to such subject matter.
 

11.
Successors and Assigns. The rights and obligations of the parties hereunder are not assignable to another person without prior written consent; provided, however, that the Company, without obtaining Employee's consent, may assign its rights and obligations hereunder to a wholly-owned subsidiary and provided further that any post-employment restrictions shall be assignable by the Company to any entity which purchases all or substantially all of the Company's assets.


12.
Severability; Provisions Subject to Applicable Law. All provisions of this Agreement shall be applicable only to the extent that they do not violate any applicable law, and are intended to be limited to the extent necessary so that they will not render this Agreement invalid, illegal or unenforceable under any applicable law. If any provision of this Agreement or any application thereof shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of other provisions of this Agreement or of any other application of such provision shall in no way be affected thereby.
 

13.
Arbitration; Except as provided in subsection 8(j)(iv) below, the parties hereto agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination of this Agreement, and/or any other dispute arising from or relating to Employee's employment with Company, shall be finally settled by binding arbitration, unless otherwise required by law, administered by JAMS in accordance with the JAMS Employment Arbitration Rules as then in effect (the "Rules"). A current copy of the JAMS Employment Arbitration Rules can be obtained at https://www.jarnsadr.com/rules- employment-arbitration/. The arbitration proceedings will be held before a single, neutral arbitrator in the State of Vermont. The fees of the arbitrator and all other costs that are unique to the arbitration process shall be paid by the Company to the extent required by law; otherwise, each party shall be solely responsible for paying its own costs for the arbitration, including but not limited to attorneys' fees. However, if either party prevails on a claim which affords the prevailing party attorneys' fees pursuant to law, statute, or contract, the arbitrator may award reasonable attorneys' fees to the prevailing party.


14.
Waiver of Rights. No waiver by the Company or Employee of a right or remedy hereunder shall be deemed to be a waiver of any other right or remedy or of any subsequent right or remedy of the same kind.


15.
Definitions; Headings; and Number. A term defined in any part of this Employment Agreement shall have the defined meaning wherever such term is used herein. The headings contained in this Agreement are for reference purposes only and shall not affect in any manner the meaning or interpretation of this Employment Agreement. Where appropriate to the context of this Agreement, use of the singular shall be deemed also to refer to the plural, and use of the plural to the singular.
 

16.
Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original but both of which taken together shall constitute but one and the same instrument.


17.
Governing Laws and Forum. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Vermont. The parties hereto further agree that any action brought to enforce any right or obligation under this Agreement shall be subject to the exclusive jurisdiction of the courts of the State of Vermont The Company and the Employee consent to personal jurisdiction in the courts of the State of Vermont.

IN WITNESS WHEREOF, the Company and Employee have executed and delivered this Agreement as of the date written below.
 

Employee
The Company






Jeffrey Peck

iSun, Inc.






By:
/s/ Jeffrey Peck
By: /s/ Stewart Martin
         

Name: Jeffrey Peck

Name: Stewart Martin

         

Title: CEO

Title: Independent Board Member






      By: /s/ Andy Matthy  
         
      Name: Andy Matthy  
         
     
Title: Independent Board Member
 
         
      By: /s/ Claudia Meer  
         
     
Name: Claudia Meer
 
         
     
Title: Independent Board Member
 

EXHIBIT A
Job Description

Chief Executive Officer shall have the duties and responsibilities customary for such a position in an organization of the size and nature of the Company.


Exhibit 10.46

CHANGE OF CONTROL AGREEMENT

This Change of Control Agreement (the "Agreement") is made and entered into effective as of July 1, 2021 (the "Effective Date"), by and between Jeffrey Peck, an individual (the "Employee") and iSun, Inc., a Delaware corporation (the "Company" ).

RECITALS

A.          It is expected that the Company, from time to time, will consider the possibility of merging with or being acquired by another company, or otherwise entering into a change of control transaction. The Board of Directors of the Company (the "Board”) recognizes that such consideration can be a distraction to the Employee and can result in Employee considering alternative employment opportunities.

B.         The Board has determined that it is in the best interests of the Company and its stockholders to take steps towards assuring that the Company will have the continued dedication and objectivity of the Employee, notwithstanding the possibility, threat or occurrence of a merger, acquisition or change of control transaction. As a result, the Board believes the Company should provide the Employee with certain severance benefits in the event the Employee's employment with the Company terminates under certain circumstances, such benefits to provide the Employee with enhanced financial security, sufficient incentive to remain with the Company, and sufficient motivation to maximize the value of the Company for the benefit of its stockholders.

C. Certain capitalized terms used in the Agreement are defined in Section 4 below.

AGREEMENT

In consideration of the mutual covenants herein contained, and the continuing employment of the Employee by the Company, the parties agree as follows:

I.          At-Will Employment. Except as may be provided in an Employment Agreement between the Company and the Employee, the Company and the Employee acknowledge that the Employee's employment is and shall continue to be "at-will," as defined or interpreted under applicable law. If the Employee's employment terminates for any reason, the Employee shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be available in accordance with the Company's established
employee plans and practices or in accordance with other agreements between the Company and the Employee.

2.        Change of Control Benefits.

(a)          Benefits upon Termination in Connection with a Change of Control. If, within 3 months prior to a Change of Control or 24 months after a Change of Control (the "Change of Control Period''), the Employee's employment terminates as a result of an Involuntary Termination or a Resignation for Good Reason, then, subject to subsection 2(c), the Employee shall receive the following benefits:

(i)         on the Termination Date, payment of any base salary that has accrued but was not paid as of the Termination Date (the "Accrued Base Salary");

(ii)          on the Termination Date, payment of the value of any unused paid time off (PTO) days that have accrued but remain unpaid as of the Termination Date calculated in accordance with the Company's PTO policies then in effect ("Accrued PTO");

(iii)        on the Termination Date, reimbursement for expenses incurred by Employee prior to the Termination Date that are subject to reimbursement in accordance with the Company's policies then in effect ("Accrued Reimburseable Expenses");

(iv)          on the Termination Date, payment of any cash incentive bonus with respect to the fiscal year prior to year in which the Termination Date occurred that has been earned and accrued as of the Termination Date, but has not been paid (the "Accrued Incentive Bonus");

(v)          a lump sum payment to be paid no more than 30 days following the Termination Date equal to the sum of the following (the "Severance Payments"):

a)  an amount equal to the Employee's highest monthly base salary at any time within the 12-month period immediately preceding the Termination Date multiplied by 24; and

b) an amount equal to 100% of the Employee's target incentive bonus for the year in which the Termination Date occurs (as previously determined by the Board or a committee of the Board);

(vi)     the Company shall permit Employee to elect to continue health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), in accordance therewith, for a period of 12 months from the Termination Date or until Employee commences new employment providing substantially similar benefits, whichever is earlier (the "Change of Control Severance Benefit Period') and the Company shall reimburse Employee for the amount of the monthly premium charged Employee by the applicable insurance carriers for such continuation coverage under COBRA. In the event that either the Change in Control Severance Benefit Period exceeds the maximum continuation coverage period permissible under COBRA, would subject the Company to excise tax, or such coverage is not available for any other reason, the Company shall reimburse Employee directly for the expenses incurred by him or her and his or her covered dependents, if any, to obtain substantially similar benefits during the remainder of the Change in Control Severance Benefit Period, which payments shall be deemed to be separate payments for purposes Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"); and

(vii)        immediate vesting and the right to exercise 100% of the Employee's outstanding options, stock appreciation rights, restricted stock awards, restricted stock units and other equity based awards that were otherwise unvested as of the Termination Date, and the immediate lapse of any Company rights to repurchase any vested or unvested shares of common stock, restricted stock awards, restricted stock units and other equity awards (including under any existing right of first refusal agreement (or similar provision) pursuant to which any Company right of repurchase existed as of the Termination Date.
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(b)     Benefits upon Voluntary Resignation or Termination for Cause. If the Employee's employment with the Company terminates  during  the  Change  of Control Period  other than as a result of an Involuntary Termination or a Resignation  for  Good  Reason,  including termination due to Employee's Disability or death, then the Employee shall receive the  following benefits payable on the Termination Date:


(i)
the Accrued Base Salary;


(ii)
the Accrued PTO;


(iii)
the Accrued Reimburseable Expenses; and


(iv)
the Accrued Incentive Bonus.

However, Employee will not be entitled to receive any other severance benefits described in this Section 2 or other benefits except for those (if any) as may then be established under the Company's then-existing severance and benefits plans and practices, or pursuant to other written agreements with the Company.

(c)      Release. Notwithstanding any provision herein to  the  contrary, prior to the payment of any Severance Payments and the reimbursement of health benefit premiums during the Change of Control Severance Benefit Period, Employee shall have executed, and not revoked, a Release of Claims. Any payments subject to  a Release of Claims may  be delayed  by  the Company until the effective date and expiration of any revocation period of a Release of Claims.

3.            Limitations on Payments.

(a)       Code Section 409A.

(i)          Notwithstanding anything to the contrary in this Agreement, if the Company reasonably determines, after consultation and agreement with Employee (and Employee's legal counsel as applicable) that Section 409A of the Code will result in the imposition of interest and additional tax, Employee shall not be paid any compensation or benefits hereunder upon a separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code and the regulations promulgated thereunder) until the date which is six (6) months after the date of such separation from service (or, if earlier, the date of death of Employee).  Such  severance  or  other benefits otherwise due to Employee on or within the six (6) month period following Employee's termination  of employment will accrue during  such  six  (6) month  period  and  will become payable in a lump sum payment on the date six (6) months and one (1) day following the Termination Date. All subsequent payments, if any, will be payable as provided in this Agreement.

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(ii)        The benefits under this Agreement are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to comply with this intention. The Company and the Employee agree to work together in good faith to consider amendments to this Agreement, and to take such further actions, which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to the Employee under Section 409A.

(b)      Code Section 2800. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to the Employee (i) constitute "parachute payments" within the meaning of Section 280G of the Code and (ii) but for this Section 3(b) would be subject to the excise tax imposed by Section 4999 of the Code, then the Employee's benefits under Section 2 of this Agreement shall be either:

(i)           delivered in full, or

(ii)         delivered as to such lesser extent which would result in no portion of such severance and other benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999 of the Code, results in the receipt by the Employee on an after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code. Unless the Company and the Employee otherwise agree in writing, any determination required under this Section 3(b) shall be made in writing by the Company's independent public accountants immediately prior to the Change of Control (the "Accountants"), whose determination shall be conclusive and binding upon the Employee and the Company for all purposes. For purposes of making the calculations required by this Section 3(b) the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 3(b). The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 3(b).

4.        Definition of Terms. The following terms referenced to in this Agreement shall have the following meanings:

(a)        Cause. "Cause" means:

(i)        The Employee's continued intentional and demonstrable failure to perform his or her duties customarily associated with the Employee's position as an employee of the Company or its respective successors or assigns, as applicable (other than any such failure resulting from the Employee's mental or physical Disability) after the Employee has received a written demand of performance from the Company which specifically sets forth the factual basis for the Company's belief that the Employee has not devoted sufficient time and effort to the performance of his or her duties and has failed to cure such non-performance within thirty (30) days after receiving such notice (it being understood that if the Employee is in good faith performing his or her duties, but is not achieving results the Company deems satisfactory for the Employee's position, it will not be considered to be grounds for termination of the Employee for "Cause");

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(ii)        The Employee's conviction of, or plea of nolo contendere to, a felony that the Board reasonably believes has had or will have a material detrimental effect on the Company's reputation or business;

(iii)       The Employee's engagement in dishonest or illegal conduct, which is, in each case, materially injurious to the Company or its affiliates;

(iv)       The Employee's commission of an act of fraud, embezzlement, misappropriation, willful misconduct, or breach of fiduciary duty against, and causing material harm to, the Company or its respective successors or assigns, as applicable;

(v)         The Employee's unauthorized use of the Company's material confidential information; or

(vi)         The Employee's prohibited or unauthorized competitive activity.

(a)          Change of Control. "Change of Control” means (A) the acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any merger, consolidation or other form of reorganization in which outstanding shares of the Company are exchanged for securities or other consideration issued, or caused to be issued, by the acquiring entity or its subsidiary, but excluding any transaction effected primarily for the purpose of changing the Company's jurisdiction of incorporation), unless the Company's stockholders of record as constituted immediately prior to such transaction or series of related transactions will, immediately after such transaction or series of related transactions hold at least a majority of the voting power of the surviving or acquiring entity, except that any change in the ownership of the stock of the Company as a result of a financing by the Company that is approved by the Board and in which both the Board and Employee determine is not a Change of Control for the purposes of this Agreement will not be considered a Change of Control, or (B) a sale, lease, transfer or other disposition of all or substantially all of the assets of the Company. Notwithstanding the foregoing provisions of this definition, a transaction will not be deemed a Change of Control unless the transaction qualifies as a change in control event within the meaning of Section 409A.

(b)          Disability. "Disability" means Employee's failure substantially to perform the Employee's duties on a full-time basis for a period exceeding one hundred eighty (180) consecutive days or for periods aggregating more than one hundred eighty (180) days during any twelve (12) month period as a result of incapacity due to physical or mental illness. If there is a dispute as to whether the Employee is or was physically or mentally unable to perform the Employee's duties, such dispute will be determined by a physician selected by the Company or its insurers and acceptable to the Employee or the Employee's legal representative (such agreement as to acceptability not to be unreasonably withheld). Notwithstanding the foregoing, if the Employee participates in any group disability plan provided by the Company, which offers long-term disability benefits, "Disability" will mean disability as defined therein.

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(c)        Involuntary Termination. "Involuntary Termination" means termination of the Employee's employment, without the Employee's consent, by the Company for any reason other than Cause.

(d)       Release of Claims. "Release of Claims" shall mean a waiver by the Employee, in a form satisfactory to the Company, of all employment-related obligations of and claims and causes of action against the Company, and a non-disparagement agreement by the Employee in a form satisfactory to the Company. The Release of Claims shall not release claims that cannot be released as a matter of law. Whenever in this Agreement a payment or benefit is conditioned on Employee's execution of a Release of Claims, such Release of Claims must be executed, and all applicable revocation periods shall have expired, within 60 days after the Termination Date, failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes non-exempt "deferred compensation" for purposes of Section 409A of the Code, and if such 60 day period begins in one calendar year and ends in the next calendar year, the payment or benefit shall not be made or commence before the second such calendar year, even if the Release of Claims becomes irrevocable in the first such calendar year.

(e)          Resignation for Good Reason. "Resignation for Good Reason" shall mean a resignation by Employee following the occurrence of one of the following:

(i)           a material reduction in the amount of the Employee's base salary, other than a general reduction in base salary that affects all similarly situated employees in substantially the same proportions;

(ii)          a material reduction in the aggregate amount of Employee's target incentive cash bonus and other benefit plans (including, without limitation, insurance coverage, bonus plans, equity compensation plans and similar plans and arrangements);

(iii)         any material breach by the Company of any material provision of this Agreement which continues uncured for 30 days following notice thereof;

(iv)         a material reduction in the Employee's duties or responsibilities; or

(v)          a change of fifty (50) miles or more of the geographic location at which the Employee must primarily perform services for the Company, other than a relocation which does not increase Employee's commute time.

Any purported Resignation for Good Reason pursuant to Section 4(e)(i) through 4(e)(v) above will not be effective until the Employee has delivered to the Company, within 60 days of the initial existence of the Good Reason condition, a written explanation that describes the basis for the Employee's belief that the Employee should be permitted to terminate the Employee's employment and have it treated as a Resignation for Good Reason and the Company has been given 30 days following delivery of such notice to cure any curable violation.

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(f)          Termination Date. "Termination Date" shall mean the effective date of termination of employment, subject to the expiration of any applicable cure period, or in the case of a termination upon Employee's death, the date on which Employee dies as determined by reference to the final death certificate.

5.        Successors.

(a)      Company's Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company's business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term "Company" shall include any successor to the Company's business and/or assets which executes and delivers the assumption agreement pursuant to this subsection (a) or which becomes bound by the terms of this Agreement by operation of law.

(b)          Employee's Successors. The terms of this Agreement and all rights of the Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

6.        Notice.

(a)          General. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Employee, mailed notices shall be addressed to the Employee at the home address that the Employee most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of the Chairman of the Board.

(b)          Notice of Termination. Any termination by the Company for Cause or by the Employee as a result of a voluntary resignation or an Involuntary Termination or Resignation for Good Reason shall be communicated by a notice of termination to the other party hereto given in accordance with Section 6(a) of this Agreement. Such notice shall indicate the specific termination provision in this Agreement relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the termination date (which shall be not more than 30 days after the giving of such notice). The failure by the Employee to include in the notice any fact or circumstance which contributes to a showing of Involuntary Termination or Resignation for Good Reason shall not waive any right of the Employee hereunder or preclude the Employee from asserting such fact or circumstance in enforcing the Employee's rights hereunder.

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7.        Term and Termination. The term of this Agreement shall be 5 years from the Effective Date; provided, however, that this Agreement shall automatically renew for successive 1- year periods unless either party gives the other party notice, at least 180 days in advance of the next renewal date, of such party's intent that this Agreement terminate effective as of such next renewal date, in which case the Agreement shall terminate as of such next renewal date; provided further, however, that in the event of a Change of Control that precedes the effective date of any such termination, the term of this Agreement shall extend at least until the second anniversary of such Change of Control. Notwithstanding the foregoing, if the Employee becomes entitled to benefits pursuant to Section 2 of this Agreement, this Agreement will not terminate until, but will terminate at, such time that all of the obligations of the parties hereto with respect to this Agreement have been satisfied.

8.        Miscellaneous Provisions.

(a)          No Duty to Mitigate. The Employee shall not be required to mitigate the amount of any payment contemplated by this Agreement.

(b)          Waiver and Amendment. No provision of this Agreement shall be modified, amended, waived or discharged unless the modification, amendment, waiver or discharge is agreed to in writing and signed by the Employee and by an authorized officer of the Company (other than the Employee). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(c)          No Reliance. No agreements, representations or understandings (whether oral or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof.

(d)          Entire Agreement. This Agreement contains all of the terms agreed upon between the Employee and the Company with respect to the subject matter hereof and replaces and supersedes all prior change in control agreements between the Employee and the Company.

(e)         Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware.

(t)        Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

(g)         No Assignment of Benefits. The rights of any person to payments or benefits under this Agreement shall not be made subject to option or assignment, either by voluntary or involuntary assignment or by operation of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor's process, and any action in violation of this subsection shall be void.

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(h)         Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income, employment and other taxes. If the Company does not make such withholdings on Employee's behalf Employee shall pay when due all such taxes (and any related penalties and interest) imposed on Employee and shall indemnify the Company for Employee's failure to do so.

(i)          Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

G)           Arbitration.

(i)         Except as provided in subsection 8(j)(iv) below, the parties hereto agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination of this Agreement, and/or any other dispute arising from or relating to Employee's employment with Company, shall be finally settled by binding arbitration, unless otherwise required by law, administered by JAMS in accordance with the JAMS Employment Arbitration Rules as then in effect (the "Rules"). A current copy of the JAMS Employment Arbitration Rules can be obtained at https://www.jarnsadr.com/rules-employment-arbitration/. The arbitration proceedings will be held before a single, neutral arbitrator in the State of Vermont. The fees of the arbitrator and all other costs that are unique to the arbitration process shall be paid by the Company to the extent required by law; otherwise, each party shall be solely responsible for paying its own costs for the arbitration, including but not limited to attorneys' fees. However, if either party prevails on a claim which affords the prevailing party attorneys' fees pursuant to law, statute, or contract, the arbitrator may award reasonable attorneys' fees to the prevailing party.

(ii)         The arbitrator shall have the authority to order such discovery by way of deposition, interrogatory, document production, or otherwise, as the arbitrator considers necessary to a full and fair exploration of the issues in dispute, consistent with the expedited nature of arbitration. The arbitrator may grant injunctions or other relief in such dispute or controversy. The arbitrator is authorized to award any remedy or relief available under applicable law that the arbitrator deems just and equitable, including any remedy or relief that would have been available to the parties had the matter been heard in a court. The award of the arbitrator shall be in writing and shall contain the arbitrator's factual findings, legal conclusions and reasons for the award. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration, and judgment may be entered on the decision of the arbitrator in any court having jurisdiction.

(iii)         The arbitrator shall apply Vermont law to the merits of any dispute or claim, without reference to rules of conflicts of law.

(iv)        The parties may apply to any court of competent jurisdiction for a temporary restraining order, preliminary injunction, or other interim or conservatory relief as necessary, without breach of this arbitration agreement and without abridgement of the powers of the arbitrator.

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(v)          EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EMPLOYEE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF, OR EMPLOYEE'S EMPLOYMENT WITH COMPANY TO BINDING ARBITRATION, UNLESS OTHERWISE REQUIRED BY LAW. EMPLOYEE FURTHER UNDERSTANDS THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE'S RIGHT TO A JURY TRIAL. EMPLOYEE FURTHER UNDERSTANDS THAT THIS ARBITRATION CLAUSE RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO EMPLOYEE'S RELATIONSHIP WITH THE COMPANY, INCLUDING BUT NOT LIMITED TO CLAIMS OF HARASSMENT, DISCRIMINATION, WRONGFUL TERMINATION, AND ANY STATUTORY CLAIMS.

[Signature Page Follows]

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IN WITNESS WHEREOF, each of the parties has executed this Change of Control Agreement as of the Effective Date.

EMPLOYEE:  
COMPANY:
 




Jeffrey Peck

ISUN, INC.





By: /s/ Jeffrey Peck
By: /s/ Andrew Matthy
       
Name: Jeffrey Peck

Name: Andy Matthy

       
Title: CEO

Title: Independent Board Member







By: /s/ Stewart Martin
       


Name: Stewart Martin

       


Title: Independent Board Member







By: /s/ Claudia Meer
       


Name: Claudia Meer

       


Title: Independent Board Member



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Exhibit 10.47

EMPLOYMENT AGREEMENT

This Employment Agreement is entered into as of the date of the last signature affixed hereto, by and between iSun Inc, a Delaware corporation ("the Company"), and John Sullivan ("Employee").

In consideration of the mutual promises and covenants set forth herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Company and Employee hereby agree as follows:


1.
Position of Employment. The Company will employ the Employee in the position of Chief Financial Officer having the duties and responsibilities set forth on Exhibit A attached hereto of the Company and, in that position, Employee will report to the Board of Directors of the Company. The Company retains the right to change Employee's title, duties, and reporting relationships as may be determined to be in the best interests of the Company; provided, however, that any such change in Employee's duties shall be consistent with Employee's training, experience, and qualifications.

The terms and conditions of the Employee's employment shall, to the extent not addressed or described in this Employment Agreement, be governed by the Company's Employee Handbook and existing practices. In the event of a conflict between this Employment Agreement and the Employee Handbook or existing practices, the terms of this Agreement shall govern.


2.
Term of Employment. Employee's employment with the Company shall begin on July 1, 2021, and shall continue for a period of 5 years, after which time continued employment shall be on an "at will" basis, unless:


a.
Employee's employment is terminated by either party in accordance with the terms of Section 5 of this Employment Agreement; or


b.
Such term of employment is extended or shortened by a subsequent agreement duly executed by each of the parties to this Employment Agreement, in which case such employment shall be subject to the terms and conditions contained in the subsequent written agreement.


3.
Compensation and Benefits.


a.
Base Salary. Employee shall be paid a base salary of $20,833 monthly, which is $250,000 annually ("Base Salary"), subject to applicable federal, state, and local withholding, such Base Salary to be paid to Employee in the same manner and on the same payroll schedule in which all the Company employees receive payment. Any increases in Employee's Base Salary for years beyond the first year of Employee's employment shall be in the sole discretion of the Company’s Board of Directors, and nothing herein shall be deemed to require any such increase.


b.
Incentive and Deferred Compensation. Employee shall be eligible to participate in all incentive and deferred compensation programs available to other executives or officers of the Company, such participation to be in the same form, under the same terms, and to the same extent that such programs are made available to other such executives or officers. Nothing in this Employment Agreement shall be deemed to require the payment of bonuses, awards, or incentive compensation to Employee if such payment would not otherwise be required under the terms of the Company's incentive compensation programs, with the exception of terms of Section 3(c) below.


c.
Mergers and Acquisitions. The Company intends to accelerate its growth through potential mergers and acquisitions. As these activities place additional responsibilities on the Employee, incentive compensation not to exceed 3% of the transaction price will be awarded to the Employee in the form of unrestricted stock award.


d.
Employee Benefits. Employee shall be eligible to participate in all employee benefit plans, policies, programs, or perquisites in which other the Company executive or officers participate. The terms and conditions of Employee's participation in the Company's employee benefit plans, policies, programs, or perquisites shall be governed by the terms of each such plan, policy, or program.


4.
Duties and Performance. The Employee acknowledges and agrees that he is being offered a position of employment by the Company with the understanding that the Employee possesses a unique set of skills, abilities, and experiences which will benefit the Company, and he agrees that his continued employment with the Company, whether during the term of this Employment Agreement or thereafter, is contingent upon his successful performance of his duties in his position as noted above, or in such other position to which he may be assigned.


a.
General Duties.


1.
Employee shall render to the very best of Employee's ability, on behalf of the Company, services to and on behalf of the Company, and shall undertake diligently all duties assigned to him by the Company.


2.
Employee shall devote his full time, energy and skill to the performance of the services in which the Company is engaged, at such time and place as the Company may direct.


3.
Employee shall faithfully and industriously assume and perform with skill, care, diligence and attention all responsibilities and duties connected with his employment on behalf of the Company.


b.
Specific Duties. See job description attached to this Agreement as Exhibit A.


5.
Termination of Employment. Employee's employment with the Company may be terminated, prior to the expiration of the term of this Employment Agreement, in accordance with any of the following provisions:


a.
Termination by Employee. The Employee may terminate his employment at any time during the course of this Agreement by giving three (3) months’ notice in writing to the CEO of the Company. During the notice period, Employee must fulfill all his duties and responsibilities set forth above and use his best efforts to train and support his replacement, if any. Failure to comply with this requirement may result in Termination for Cause described below, but otherwise Employee's salary and benefits will remain unchanged during the notification period.


b.
Termination by the Company Without Cause. The Company may terminate Employee's employment at any time during the course of this Agreement by giving twelve (12) months’ notice in writing to the Employee. During the notice period, Employee must fulfill all of Employee's duties and responsibilities set forth above and use Employee's best efforts to train and support Employee's replacement, if any. Failure of Employee to comply with this requirement may result in Termination for Cause described below, but otherwise Employee's salary and benefits will remain unchanged during the notification period. The Company, may, in its sole discretion, give Employee severance pay in the amount of the remaining notice period in lieu of actual employment, and nothing herein shall require Company to maintain employee in active employment for the duration of the notice period.


c.
Termination by the Company For Cause. The Company may, at any time and without notice, terminate the Employee for "cause". Termination by the Company of the Employee for "cause" shall include but not be limited to termination based on any of the following grounds: (a) failure to perform the duties of the Employee's position in a satisfactory manner; (b) fraud, misappropriation, embezzlement or acts of similar dishonesty; (c) conviction of a felony involving moral turpitude; (d) illegal use of drugs or excessive use of alcohol in the workplace; (e) intentional and willful misconduct that may subject the Company to criminal or civil liability; (f) breach of the Employee's duty of loyalty, including the diversion or usurpation of corporate opportunities properly belonging to the Company; (g) willful disregard of Company policies and procedures; (h) breach of any of the material terms of this Agreement; and (i) insubordination or deliberate refusal to follow the instructions of the President of the Company.


d.
Termination By Death or Disability. The Employee's employment and rights to compensation under this Employment Agreement shall terminate if the Employee is unable to perform the duties of his position due to death or disability lasting more than 90 days, and the Employee's heirs, beneficiaries, successors, or assigns shall not be entitled to any of the compensation or benefits to which Employee is entitled under this Agreement, except: (a) to the extent specifically provided in this Employment Agreement (b) to the extent required by law; or (c) to the extent that such benefit plans or policies under which Employee is covered provide a benefit to the Employee's heirs, beneficiaries, successors, or assigns.


6.
Confidentiality. Employee agrees that at all times during Employee's employment and following the conclusion of Employee's employment, whether voluntary or involuntary, Employee will hold in strictest confidence and not disclose Confidential Information (as defined below) to anyone who is not also an employee of the Company or to any employee of the Company who does not also have access to such Confidential Information, without following Company procedures to protect Confidential Information of Company.


a.
"Confidential Information" shall mean any trade secrets or Company proprietary information, including but not limited to manufacturing techniques, processes, formulas, customer lists, inventions, experimental developments, research projects, operating methods, cost, pricing, financial data, business plans and proposals, data and information the Company receives in confidence from any other party, or any other secret or confidential matters of the Company. Additionally, Employee will not use any Confidential Information for Employee's own benefit or to the detriment of the Company during Employee's employment or thereafter. Employee also certifies that employment with the Company does not and will not breach any agreement or duty that Employee has to anyone concerning confidential information belonging to others.


b.
“Immunity from Liability for Confidential Disclosure of a Trade Secret to the Government or in a Court Filing:

(1) Immunity—An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that—(A) is made—(i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. (2) Use of Trade Secret Information in Anti-Retaliation Lawsuit—An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual—(A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.”


7.
Noncompetition. Employee hereby agrees not to directly or indirectly compete with the business of the Company and its successors and assigns during the period of employment and for a period of two (2) years following termination of employment and notwithstanding the cause or reason for termination. Employee shall not own, manage, operate, consult or to be employed in a business substantially similar to, or competitive with, the present business of the Company or such other business activity in which the Company may substantially engage during the term of employment. The jurisdiction for Noncompetition includes the entire United States.


8.
Expenses. The Company shall pay or reimburse Employee for any expenses reasonably incurred by him in furtherance of his duties hereunder, including expenses for entertainment, travel, meals and hotel accommodations, upon submission by him of vouchers or receipts maintained and provided to the Company in compliance with such rules and policies relating thereto as the Company may from time to time adopt.


9.
General Provisions.
Notices. All notices and other communications required or permitted by this Agreement to be delivered by the Company or Employee to the other party shall be delivered in writing to the address shown below, either personally, by facsimile transmission or by registered, certified or express mail, return receipt requested, postage prepaid, to the address for such party specified below or to such other address as the party may from time to time advise the other party, and shall be deemed given and received as of actual personal delivery, on the first business day after the date of delivery shown on any such facsimile transmission or upon the date or actual receipt shown on any return receipt if registered, certified or express mail is used, as the case may be.

The Company:
iSun, Inc.
400 Avenue D, Suite 10
Williston, VT 05495

Employee:
John Sullivan
97 Overlake Park
Burlington, VT 05401


10.
Amendments and Termination; Entire Agreement. This Agreement may not be amended or terminated except by a writing executed by all of the parties hereto. This Agreement constitutes the entire agreement of the Company and Employee relating to the subject matter hereof and supersedes all prior oral and written understandings and agreements relating to such subject matter.


11.
Successors and Assigns. The rights and obligations of the parties hereunder are not assignable to another person without prior written consent; provided, however, that the Company, without obtaining Employee's consent, may assign its rights and obligations hereunder to a wholly-owned subsidiary and provided further that any post-employment restrictions shall be assignable by the Company to any entity which purchases all or substantially all of the Company's assets.

12.
Severability; Provisions Subject to Applicable Law. All provisions of this Agreement shall be applicable only to the extent that they do not violate any applicable law, and are intended to be limited to the extent necessary so that they will not render this Agreement invalid, illegal or unenforceable under any applicable law. If any provision of this Agreement or any application thereof shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of other provisions of this Agreement or of any other application of such provision shall in no way be affected thereby.


13.
Arbitration; Except as provided in subsection 8(j)(iv) below, the parties hereto agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination of this Agreement, and/or any other dispute arising from or relating to Employee's employment with Company, shall be finally settled by binding arbitration, unless otherwise required by law, administered by JAMS in accordance with the JAMS Employment Arbitration Rules as then in effect (the "Rules"). A current copy of the JAMS Employment Arbitration Rules can be obtained at https://www.jarnsadr.com/rules- employment-arbitration/. The arbitration proceedings will be held before a single, neutral arbitrator in the State of Vermont. The fees of the arbitrator and all other costs that are unique to the arbitration process shall be paid by the Company to the extent required by law; otherwise, each party shall be solely responsible for paying its own costs for the arbitration, including but not limited to attorneys' fees. However, if either party prevails on a claim which affords the prevailing party attorneys' fees pursuant to law, statute, or contract, the arbitrator may award reasonable attorneys' fees to the prevailing party.


14.
Waiver of Rights. No waiver by the Company or Employee of a right or remedy hereunder shall be deemed to be a waiver of any other right or remedy or of any subsequent right or remedy of the same kind.


15.
Definitions; Headings; and Number. A term defined in any part of this Employment Agreement shall have the defined meaning wherever such term is used herein. The headings contained in this Agreement are for reference purposes only and shall not affect in any manner the meaning or interpretation of this Employment Agreement. Where appropriate to the context of this Agreement, use of the singular shall be deemed also to refer to the plural, and use of the plural to the singular.


16.
Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original but both of which taken together shall constitute but one and the same instrument.


17.
Governing Laws and Forum. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Vermont. The parties hereto further agree that any action brought to enforce any right or obligation under this Agreement shall be subject to the exclusive jurisdiction of the courts of the State of Vermont The Company and the Employee consent to personal jurisdiction in the courts of the State of Vermont.

IN WITNESS WHEREOF, the Company and Employee have executed and delivered this Agreement as of the date written below.

  Employee
The Company
 



  John Sullivan
iSun, Inc.
 



  By:
/s/ John Sullivan

By:
/s/ Jeffrey Peck

         
  Name: John Sullivan
Name: Jeffrey Peck
         
  Title: CFO
Title: CEO, Chariman of the Board

EXHIBIT A
Job Description

Chief Financial Officer shall have the duties and responsibilities customary for such a position in an organization of the size and nature of the Company.


Exhibit 10.48

CHANGE OF CONTROL AGREEMENT

This Change of Control Agreement (the "Agreement") is made and entered into effective as of July 1, 2021 (the "Effective Date"), by and between John Sullivan, an individual (the "Employee") and iSun, Inc., a Delaware corporation (the "Company" ).

RECITALS

A.          It is expected that the Company, from time to time, will consider the possibility of merging with or being acquired by another company, or otherwise entering into a change of control transaction. The Board of Directors of the Company (the "Board”) recognizes that such consideration can be a distraction to the Employee and can result in Employee considering alternative employment opportunities.

B.          The Board has determined that it is in the best interests of the Company and its stockholders to take steps towards assuring that the Company will have the continued dedication and objectivity of the Employee, notwithstanding the possibility, threat or occurrence of a merger, acquisition or change of control transaction. As a result, the Board believes the Company should provide the Employee with certain severance benefits in the event the Employee's employment with the Company terminates under certain circumstances, such benefits to provide the Employee with enhanced financial security, sufficient incentive to remain with the Company, and sufficient motivation to maximize the value of the Company for the benefit of its stockholders.

C.          Certain capitalized terms used in the Agreement are defined in Section 4 below.

AGREEMENT

In consideration of the mutual covenants herein contained, and the continuing employment of the Employee by the Company, the parties agree as follows:

I.          At-Will Employment. Except as may be provided in an Employment Agreement between the Company and the Employee, the Company and the Employee acknowledge that the Employee's employment is and shall continue to be "at-will," as defined or interpreted under applicable law. If the Employee's employment terminates for any reason, the Employee shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be available in accordance with the Company's established employee plans and practices or in accordance with other agreements between the Company and the Employee.

2.           Change of Control Benefits.

(a)      Benefits upon Termination in Connection with a Change of Control. If, within 3 months prior to a Change of Control or 24 months after a Change of Control (the "Change of Control Period''), the Employee's employment terminates as a result of an Involuntary Termination or a Resignation for Good Reason, then, subject to subsection 2(c), the Employee shall receive the following benefits:

(i)         on the Termination Date, payment of any base salary that has accrued but was not paid as of the Termination Date (the "Accrued Base Salary");

(ii)         on the Termination Date, payment of the value of any unused paid time off (PTO) days that have accrued but remain unpaid as of the Termination Date calculated in accordance with the Company's PTO policies then in effect ("Accrued PTO");

(iii)     on the Termination Date, reimbursement for expenses incurred by Employee prior to the Termination Date that are subject to reimbursement in accordance with the Company's policies then in effect ("Accrued Reimburseable Expenses");

(iv)        on the Termination Date, payment of any cash incentive bonus with respect to the fiscal year prior to year in which the Termination Date occurred that has been earned and accrued as of the Termination Date, but has not been paid (the "Accrued Incentive Bonus");

(v)       a lump sum payment to be paid no more than 30 days following the Termination Date equal to the sum of the following (the "Severance Payments"):

a)          an amount equal to the Employee's highest monthly base salary at any time within the 12-month period immediately preceding the Termination Date multiplied by 24; and

b)          an amount equal to 100% of the Employee's target incentive bonus for the year in which the Termination Date occurs (as previously determined by the Board or a committee of the Board);

(vi)        the Company shall permit Employee to elect to continue health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), in accordance therewith, for a period of 12 months from the Termination Date or until Employee commences new employment providing substantially similar benefits, whichever is earlier (the "Change of Control Severance Benefit Period') and the Company shall reimburse Employee for the amount of the monthly premium charged Employee by the applicable insurance carriers for such continuation coverage under COBRA. In the event that either the Change in Control Severance Benefit Period exceeds the maximum continuation coverage period permissible under COBRA, would subject the Company to excise tax, or such coverage is not available for any other reason, the Company shall reimburse Employee directly for the expenses incurred by him or her and his or her covered dependents, if any, to obtain substantially similar benefits during the remainder of the Change in Control Severance Benefit Period, which payments shall be deemed to be separate payments for purposes Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"); and

(vii)      immediate vesting and the right to exercise 100% of the Employee's outstanding options, stock appreciation rights, restricted stock awards, restricted stock units and other equity based awards that were otherwise unvested as of the Termination Date, and the immediate lapse of any Company rights to repurchase any vested or unvested shares of common stock, restricted stock awards, restricted stock units and other equity awards (including under any existing right of first refusal agreement (or similar provision) pursuant to which any Company right of repurchase existed as of the Termination Date.

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(b)         Benefits upon Voluntary Resignation or Termination for Cause. If the Employee's employment with the Company terminates during the Change of Control Period other than as a result of an Involuntary Termination or a Resignation for Good Reason, including termination due to Employee's Disability or death, then the Employee shall receive the following benefits payable on the Termination Date:

 
(i)
the Accrued BaseSalary;


(ii)
the Accrued PTO;


(iii)
the Accrued Reimburseable Expenses; and


(iv)
the Accrued Incentive Bonus.

However, Employee will not be entitled to receive any other severance benefits described in this Section 2 or other benefits except for those (if any) as may then be established under the Company's then-existing severance and benefits plans and practices, or pursuant to other written agreements with the Company.

(c)          Release. Notwithstanding any provision herein to the contrary, prior to the payment of any Severance Payments and the reimbursement of health benefit premiums during the Change of Control Severance Benefit Period, Employee shall have executed, and not revoked, a Release of Claims. Any payments subject to a Release of Claims may be delayed by the Company until the effective date and expiration of any revocation period of a Release of Claims.

3.           Limitations on Payments.

(a)          Code Section 409A.

(i)          Notwithstanding anything to the contrary in this Agreement, if the Company reasonably determines, after consultation and agreement with Employee (and Employee's legal counsel as applicable) that Section 409A of the Code will result in the imposition of interest and additional tax, Employee shall not be paid any compensation or benefits hereunder upon a separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code and the regulations promulgated thereunder) until the date which is six (6) months after the date of such separation from service (or, if earlier, the date of death of Employee). Such severance or other benefits otherwise due to Employee on or within the six (6) month period following Employee's termination of employment will accrue during such six (6) month period and will become payable in a lump sum payment on the date six (6) months and one (1) day following the Termination Date. All subsequent payments, if any, will be payable as provided in this Agreement.

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(ii)          The benefits under this Agreement are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to comply with this intention. The Company and the Employee agree to work together in good faith to consider amendments to this Agreement, and to take such further actions, which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to the Employee under Section 409A.

(b)        Code Section 2800. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to the Employee (i) constitute "parachute payments" within the meaning of Section 280G of the Code and (ii) but for this Section 3(b) would be subject to the excise tax imposed by Section 4999 of the Code, then the Employee's benefits under Section 2 of this Agreement shall be either:

(i)            delivered in full, or

(ii)         delivered as to such lesser extent which would result in no portion of such severance and other benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999 of the Code, results in the receipt by the Employee on an after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code. Unless the Company and the Employee otherwise agree in writing, any determination required under this Section 3(b) shall be made in writing by the Company's independent public accountants immediately prior to the Change of Control (the "Accountants"), whose determination shall be conclusive and binding upon the Employee and the Company for all purposes. For purposes of making the calculations required by this Section 3(b) the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 3(b). The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 3(b).

4.           Definition of Terms. The following terms referenced to in this Agreement shall have the following meanings:

(a)          Cause. "Cause" means:

(i)           The Employee's continued intentional and demonstrable failure to perform his or her duties customarily associated with the Employee's position as an employee of the Company or its respective successors or assigns, as applicable (other than any such failure resulting from the Employee's mental or physical Disability) after the Employee has received a written demand of performance from the Company which specifically sets forth the factual basis for the Company's belief that the Employee has not devoted sufficient time and effort to the performance of his or her duties and has failed to cure such non-performance within thirty (30) days after receiving such notice (it being understood that if the Employee is in good faith performing his or her duties, but is not achieving results the Company deems satisfactory for the Employee's position, it will not be considered to be grounds for termination of the Employee for "Cause");

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(ii)         The Employee's conviction of, or plea of nolo contendere to, a felony that the Board reasonably believes has had or will have a material detrimental effect on the Company's reputation or business;

(iii)         The Employee's engagement in dishonest or illegal conduct, which is, in each case, materially injurious to the Company or its affiliates;

(iv)          The Employee's commission of an act of fraud, embezzlement, misappropriation, willful misconduct, or breach of fiduciary duty against, and causing material harm to, the Company or its respective successors or assigns, as applicable;

(v)           The Employee's unauthorized use of the Company's material confidential information; or

(vi)          The Employee's prohibited or unauthorized competitive activity.

(a)         Change of Control. "Change of Control” means (A) the acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any merger, consolidation or other form of reorganization in which outstanding shares of the Company are exchanged for securities or other consideration issued, or caused to be issued, by the acquiring entity or its subsidiary, but excluding any transaction effected primarily for the purpose of changing the Company's jurisdiction of incorporation), unless the Company's stockholders of record as constituted immediately prior to such transaction or series of related transactions will, immediately after such transaction or series of related transactions hold at least a majority of the voting power of the surviving or acquiring entity, except that any change in the ownership of the stock of the Company as a result of a financing by the Company that is approved by the Board and in which both the Board and Employee determine is not a Change of Control for the purposes of this Agreement will not be considered a Change of Control, or (B) a sale, lease, transfer or other disposition of all or substantially all of the assets of the Company. Notwithstanding the foregoing provisions of this definition, a transaction will not be deemed a Change of Control unless the transaction qualifies as a change in control event within the meaning of Section 409A.

(b)       Disability. "Disability" means Employee's failure substantially to perform the Employee's duties on a full-time basis for a period exceeding one hundred eighty (180) consecutive days or for periods aggregating more than one hundred eighty (180) days during any twelve (12) month period as a result of incapacity due to physical or mental illness. If there is a dispute as to whether the Employee is or was physically or mentally unable to perform the Employee's duties, such dispute will be determined by a physician selected by the Company or its insurers and acceptable to the Employee or the Employee's legal representative (such agreement as to acceptability not to be unreasonably withheld). Notwithstanding the foregoing, if the Employee participates in any group disability plan provided by the Company, which offers long-term disability benefits, "Disability" will mean disability as defined therein.

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(c)       Involuntary Termination. "Involuntary Termination" means termination of the Employee's employment, without the Employee's consent, by the Company for any reason other than Cause.

(d)       Release of Claims. "Release of Claims" shall mean a waiver by the Employee, in a form satisfactory to the Company, of all employment-related obligations of and claims and causes of action against the Company, and a non-disparagement agreement by the Employee in a form satisfactory to the Company. The Release of Claims shall not release claims that cannot be released as a matter of law. Whenever in this Agreement a payment or benefit is conditioned on Employee's execution of a Release of Claims, such Release of Claims must be executed, and all applicable revocation periods shall have expired, within 60 days after the Termination Date, failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes non-exempt "deferred compensation" for purposes of Section 409A of the Code, and if such 60 day period begins in one calendar year and ends in the next calendar year, the payment or benefit shall not be made or commence before the second such calendar year, even if the Release of Claims becomes irrevocable in the first such calendar year.

(e)        Resignation for Good Reason. "Resignation for Good Reason" shall mean a resignation by Employee following the occurrence of one of the following:

(i)           a material reduction in the amount of the Employee's base salary, other than a general reduction in base salary that affects all similarly situated employees in substantially the same proportions;

(ii)          a material reduction in the aggregate amount of Employee's target incentive cash bonus and other benefit plans (including, without limitation, insurance coverage, bonus plans, equity compensation plans and similar plans and arrangements);

(iii)         any material breach by the Company of any material provision of this Agreement which continues uncured for 30 days following notice thereof;

(iv)          a material reduction in the Employee's duties or responsibilities; or

(v)          a change of fifty (50) miles or more of the geographic location at which the Employee must primarily perform services for the Company, other than a relocation which does not increase Employee's commute time.

Any purported Resignation for Good Reason pursuant to Section 4(e)(i) through 4(e)(v) above will not be effective until the Employee has delivered to the Company, within 60 days of the initial existence of the Good Reason condition, a written explanation that describes the basis for the Employee's belief that the Employee should be permitted to terminate the Employee's employment and have it treated as a Resignation for Good Reason and the Company has been given 30 days following delivery of such notice to cure any curable violation.

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(f)         Termination Date. "Termination Date" shall mean the effective date of termination of employment, subject to the expiration of any applicable cure period, or in the case of a termination upon Employee's death, the date on which Employee dies as determined by reference to the final death certificate.

5.           Successors.

(a)      Company's Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company's business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term "Company" shall include any successor to the Company's business and/or assets which executes and delivers the assumption agreement pursuant to this subsection (a) or which becomes bound by the terms of this Agreement by operation of law.

(b)        Employee's Successors. The terms of this Agreement and all rights of the Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

6.           Notice.

(a)         General. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Employee, mailed notices shall be addressed to the Employee at the home address that the Employee most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of the Chairman of the Board.

(b)        Notice of Termination. Any termination by the Company for Cause or by the Employee as a result of a voluntary resignation or an Involuntary Termination or Resignation for Good Reason shall be communicated by a notice of termination to the other party hereto given in accordance with Section 6(a) of this Agreement. Such notice shall indicate the specific termination provision in this Agreement relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the termination date (which shall be not more than 30 days after the giving of such notice). The failure by the Employee to include in the notice any fact or circumstance which contributes to a showing of Involuntary Termination or Resignation for Good Reason shall not waive any right of the Employee hereunder or preclude the Employee from asserting such fact or circumstance in enforcing the Employee's rights hereunder.

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7.           Term and Termination. The term of this Agreement shall be 5 years from the Effective Date; provided, however, that this Agreement shall automatically renew for successive 1- year periods unless either party gives the other party notice, at least 180 days in advance of the next renewal date, of such party's intent that this Agreement terminate effective as of such next renewal date, in which case the Agreement shall terminate as of such next renewal date; provided further, however, that in the event of a Change of Control that precedes the effective date of any such termination, the term of this Agreement shall extend at least until the second anniversary of such Change of Control. Notwithstanding the foregoing, if the Employee becomes entitled to benefits pursuant to Section 2 of this Agreement, this Agreement will not terminate until, but will terminate at, such time that all of the obligations of the parties hereto with respect to this Agreement have been satisfied.

8.           Miscellaneous Provisions.

(a)          No Duty to Mitigate. The Employee shall not be required to mitigate the amount of any payment contemplated by this Agreement.

(b)         Waiver and Amendment. No provision of this Agreement shall be modified, amended, waived or discharged unless the modification, amendment, waiver or discharge is agreed to in writing and signed by the Employee and by an authorized officer of the Company (other than the Employee). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(c)         No Reliance. No agreements, representations or understandings (whether oral or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof.

(d)          Entire Agreement. This Agreement contains all of the terms agreed upon between the Employee and the Company with respect to the subject matter hereof and replaces and supersedes all prior change in control agreements between the Employee and the Company.

(e)         Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware.

(t)        Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

(g)         No Assignment of Benefits. The rights of any person to payments or benefits under this Agreement shall not be made subject to option or assignment, either by voluntary or involuntary assignment or by operation of law, including (without limitation) bankruptcy, garnishment, attachment or other creditor's process, and any action in violation of this subsection shall be void.

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(h)        Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income, employment and other taxes. If the Company does not make such withholdings on Employee's behalf Employee shall pay when due all such taxes (and any related penalties and interest) imposed on Employee and shall indemnify the Company for Employee's failure to do so.

(i)          Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

G)          Arbitration.

(i)         Except as provided in subsection 8(j)(iv) below, the parties hereto agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination of this Agreement, and/or any other dispute arising from or relating to Employee's employment with Company, shall be finally settled by binding arbitration, unless otherwise required by law, administered by JAMS in accordance with the JAMS Employment Arbitration Rules as then in effect (the "Rules"). A current copy of the JAMS Employment Arbitration Rules can be obtained at https://www.jarnsadr.com/rules-employment-arbitration/. The arbitration proceedings will be held before a single, neutral arbitrator in the State of Vermont. The fees of the arbitrator and all other costs that are unique to the arbitration process shall be paid by the Company to the extent required by law; otherwise, each party shall be solely responsible for paying its own costs for the arbitration, including but not limited to attorneys' fees. However, if either party prevails on a claim which affords the prevailing party attorneys' fees pursuant to law, statute, or contract, the arbitrator may award reasonable attorneys' fees to the prevailing party.

(ii)          The arbitrator shall have the authority to order such discovery by way of deposition, interrogatory, document production, or otherwise, as the arbitrator considers necessary to a full and fair exploration of the issues in dispute, consistent with the expedited nature of arbitration. The arbitrator may grant injunctions or other relief in such dispute or controversy. The arbitrator is authorized to award any remedy or relief available under applicable law that the arbitrator deems just and equitable, including any remedy or relief that would have been available to the parties had the matter been heard in a court. The award of the arbitrator shall be in writing and shall contain the arbitrator's factual findings, legal conclusions and reasons for the award. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration, and judgment may be entered on the decision of the arbitrator in any court having jurisdiction.

(iii)          The arbitrator shall apply Vermont law to the merits of any dispute or claim, without reference to rules of conflicts of law.

(iv)         The parties may apply to any court of competent jurisdiction for a temporary restraining order, preliminary injunction, or other interim or conservatory relief as necessary, without breach of this arbitration agreement and without abridgement of the powers of the arbitrator.

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(v)          EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EMPLOYEE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF, OR EMPLOYEE'S EMPLOYMENT WITH COMPANY TO BINDING ARBITRATION, UNLESS OTHERWISE REQUIRED BY LAW. EMPLOYEE FURTHER UNDERSTANDS THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE'S RIGHT TO A JURY TRIAL. EMPLOYEE FURTHER UNDERSTANDS THAT THIS ARBITRATION CLAUSE RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO EMPLOYEE'S RELATIONSHIP WITH THE COMPANY, INCLUDING BUT NOT LIMITED TO CLAIMS OF HARASSMENT, DISCRIMINATION, WRONGFUL TERMINATION, AND ANY STATUTORY CLAIMS.

[Signature Page Follows]

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IN WITNESS WHEREOF, each of the parties has executed this Change of Control Agreement as of the Effective Date.

EMPLOYEE:

COMPANY:

       
John Sullivan

ISUN, INC.

       
By:
/s/ John Sullivan

By:
/s/ Jeffrey Peck

       
Name: John Sullivan

Name: Jeffrey Peck

       
Title: Chief Financial Officer

Title: CEO, Chairman of the Board



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Exhibit 31.1
 
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
 
I, Jeffrey Peck, certify that:
 
1.
I have reviewed this quarterly report on Form 10-Q of iSun, Inc.;
 
 
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
 
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
 
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
 
 
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
 
 
 
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
 
 
 
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
 
 
 
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
 
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
 
 
 
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: November 15, 2021
By:
/s/ Jeffrey Peck
 
 
Jeffrey Peck
 
 
Chief Executive Officer
 
 
(Principal Executive Officer)
 

Exhibit 31.2
 
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
 
I, John Sullivan, certify that:
 
1.
I have reviewed this quarterly report on Form 10-Q of iSun, Inc.;
 
 
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
 
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
 
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
 
 
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
 
 
 
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
 
 
 
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
 
 
 
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
 
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
 
 
 
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: November 15, 2021
By:
/s/ John Sullivan
 
 
John Sullivan
 
 
Chief Financial Officer
 
 
(Principal Financial Officer)
 


Exhibit 32.1
 
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
 
In connection with the Quarterly Report of iSun, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey Peck, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
 
 
(1)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
 
 
 
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
Date: November 15, 2021
By:
/s/ Jeffrey Peck
 
 
Jeffrey Peck
 
 
Chief Executive Officer
 
 
(Principal Executive Officer)
 

Exhibit 32.2
 
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
 
In connection with the Quarterly Report of iSun, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Sullivan, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
 
 
(1)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
 
 
 
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
Date: November 15, 2021
By:
/s/ John Sullivan
 
 
John Sullivan
 
 
Chief Financial Officer
 
 
(Principal Financial Officer)