Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

___________________________________

(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR

THE TRANSITION PERIOD FROM _________ TO _________

Commission File Number 001-38971

Spruce Power Holding Corporation

(Exact name of Registrant as specified in its Charter)


Delaware						83-4109918
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)


2000 S Colorado Blvd, Suite 2-825 Denver, Colorado						80222
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code: (866) 777-8235

___________________________________

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

Title of Each Class:

Trading Symbol(s)

Name of Each Exchange on Which Registered:

Shares of common stock, $0.0001 par value

SPRU

New York Stock Exchange

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 x No o

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted 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 x No o

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


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	o

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. o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of August 13, 2024, 18,557,200 shares of the registrant’s common stock, $0.0001 par value, were outstanding.

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		PAGE
PART I – FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements	1
	Condensed Consolidated Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023 (unaudited)	1
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023 (unaudited)	3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2024 and 2023 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 3 0 , 2024 and 2023 (unaudited)	6
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38

PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3	Defaults Upon Senior Securities	41
Item 4	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	41
SIGNATURES		43

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CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that relate to future events or our future financial performance including, but not limited to, statements regarding the plans, strategies and prospects, both business and financial, of Spruce Power Holding Corporation (the “Company”), our growth plans, future financial and operating results, costs and expenses, the outcome of contingencies, financial condition, results of operations, liquidity, cost savings, business strategies, and other statements that are not historical facts. Forward-looking statements can be identified by the use of forward-looking words or phrases such as “anticipate,” “believe,” “could,” “expect,” “intend,” “may,” “opportunity,” “plan,” “predict,” “potential,” “estimate,” “should,” “will,” “would” or the negative of these terms or other words of similar meaning. These statements are based upon the Company’s current plans and strategies and reflect the Company’s current assessment of the risks and uncertainties related to its business and are made as of the date of this report. These statements are inherently subject to known and unknown risks and uncertainties. You should read these statements carefully as they discuss our future expectations or state other “forward-looking” information. There may be events in the future that we are not able to accurately predict or control and our actual results may differ materially from the expectations we describe in our forward-looking statements. Factors that could cause actual results to differ materially from those currently anticipated include the following:

•Uncertainties relating to the solar energy industry and the risk that sufficient additional demand for home solar energy systems may not develop or take longer to develop than we anticipate.

•Disruptions to our solar monitoring systems could negatively impact our revenues and increase our expenses.

•Warranties provided by the manufacturers of equipment for our assets and maintenance obligations may be inadequate to protect us.

•The solar energy systems we own or may acquire may have a limited operating history and may not perform as we expect, including as a result of unsuitable solar and meteorological conditions.

•Problems with performance of our solar energy systems may cause us to incur expenses, may lower the value of our solar energy systems and may damage our market reputation.

•Developments in technology or improvements in distributed solar energy generation and related technologies or components may materially adversely affect demand for our offerings.

•We could be harmed by a material reduction in the retail price of traditional utility generated electricity, electricity from other sources or renewable energy credits.

•We may fail to grow by expanding our market penetration or to manage our growth effectively.

•We may not be able to identify adequate strategic relationship opportunities, or form strategic relationships, and we may experience difficulties in integrating strategic acquisitions.

•We may require additional financing to support the development of our business and implementation of our growth strategy.

•We are subject to risks relating to our outstanding debt, including risks relating to rising interest rates and the risk that we may not have sufficient cash flow to pay our debt.

•We may be adversely affected by the impact of natural disasters and other events beyond our control, such as hurricanes, wildfires or pandemics.

•We are subject to cybersecurity risks.

•We are subject to risks relating to global economic conditions.

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•Governmental investigations, litigation or other claims may cause us to incur significant expense, hinder execution of business and growth strategy or impact the price of our Common Stock.

•Changes in tax laws may materially adversely affect our business, prospects, financial condition, and operating results.

•Our ability to use net operating loss carryforwards and other tax attributes may be limited in connection with business combinations or other ownership changes.

•We are subject to risks associated with construction, regulatory compliance, relating to changes in, and our compliance with, laws and regulations affecting our business, and other contingencies.

•Violations of export control and/or economic sanctions laws and regulations to which we are subject could have a material adverse effect on our business operations, financial position and results of operations.

•Our insurance coverage may not be adequate to protect us from all business risks.

•We face competition from traditional energy companies as well as solar and other renewable energy companies.

These and other factors that could cause actual results to differ from those implied by the forward-looking statements in this Quarterly Report on Form 10-Q are more fully described in Part II, Item 1A under the heading “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and the risk factors set forth in Part I, Item 1A Risk Factors, within our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 9, 2024 (the “Annual Report”). These factors are not exhaustive. Other sections of this Quarterly Report on Form 10-Q, such as our Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in Item 2 describe additional factors that could adversely affect the business, financial condition or results of operations of the Company and its consolidated subsidiaries. New risk factors emerge from time to time, and it is not possible to predict all such risk factors, nor can the Company assess the impact of all such risk factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. The Company undertakes no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

This report includes certain registered trademarks, including trademarks that are the property of the Company and its affiliates. This report also includes other trademarks, service marks and trade names owned by the Company or other persons. All trademarks, service marks and traded names included herein are the property of their respective owners. Use or display by us of other parties’ trademarks, trade dress, or products in this report is not intended to, and does not, imply a relationship with, or endorsements or sponsorship of, us by the trademark or trade dress owners.

iii

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Part I - Financial Information

Item 1. Financial Statements

Spruce Power Holding Corporation

Condensed Consolidated Balance Sheets (Unaudited)


	As of
(In thousands, except share and per share amounts)	June 30, 2024		December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	116,588	$	141,354
Restricted cash	33,621		31,587
Accounts receivable, net of allowance of $1.1 million and $1.7 million as of June 30, 2024 and December 31, 2023, respectively	13,252		9,188
Interest rate swap assets, current	10,273		11,333
Prepaid expenses and other current assets	5,136		9,879
Total current assets	178,870		203,341
Investment related to SEMTH master lease agreement	141,078		143,095
Property and equipment, net	471,302		484,406
Interest rate swap assets, non-current	20,116		16,550
Intangible assets, net	9,577		10,196
Deferred rent assets	3,155		2,454
Right-of-use assets, net	5,324		5,933
Goodwill	28,757		28,757
Other assets	255		257
Long-term assets of discontinued operations	—		32
Total assets	$	858,434	$	895,021

Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	1,417	$	1,120
Non-recourse debt, current, net	28,374		27,914
Accrued expenses and other current liabilities	20,811		40,634
Deferred revenue, current	2,101		878
Lease liability, current	1,042		1,166
Current liabilities of discontinued operations	65		—
Total current liabilities	53,810		71,712
Non-recourse debt, non-current, net	584,478		590,866
Deferred revenue, non-current	2,537		1,858
Lease liability, non-current	5,269		5,731
Warrant liabilities	2		17
Unfavorable solar renewable energy agreements, net	4,376		6,108
Interest rate swap liabilities, non-current	174		843
Other long-term liabilities	3,157		3,047
Long-term liabilities of discontinued operations	68		170
Total liabilities	653,871		680,352
Commitments and contingencies (Note 13)

Stockholders’ equity:

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Common stock, $0.0001 par value; 350,000,000 shares authorized at June 30, 2024 and December 31, 2023; 19,357,850 and 18,557,200 shares issued and outstanding at June 30, 2024, respectively, and 19,093,186 and 18,292,536 shares issued and outstanding at December 31, 2023, respectively	2		2
Additional paid-in capital	476,711		475,654
Accumulated deficit	(268,920)		(257,888)
Treasury stock at cost, 800,650 shares at June 30, 2024 and December 31, 2023, respectively	(5,424)		(5,424)
Noncontrolling interests	2,194		2,325
Total stockholders’ equity	204,563		214,669
Total liabilities and stockholders’ equity	$	858,434	$	895,021

See notes to unaudited condensed consolidated financial statements.

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Spruce Power Holding Corporation

Condensed Consolidated Statements of Operations (Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share and share amounts)	2024		2023		2024		2023

Revenues	$	22,481	$	22,813	$	40,768	$	40,908
Operating expenses:
Cost of revenues	10,139		8,594		19,007		16,447
Selling, general and administrative expenses	16,701		15,985		30,170		31,702
Gain on asset disposal	(999)		(794)		(1,452)		(3,452)
Total operating expenses	25,841		23,785		47,725		44,697
Loss from operations	(3,360)		(972)		(6,957)		(3,789)
Other (income) expense:
Interest income	(5,257)		(3,240)		(10,643)		(5,591)
Interest expense, net	7,591		10,456		18,533		19,623
Change in fair value of warrant liabilities	(6)		(33)		(15)		(148)
Change in fair value of interest rate swaps	3,234		(9,190)		(3,175)		(3,602)
Other income, net	(130)		(752)		(416)		(880)
Net income (loss) from continuing operations	(8,792)		1,787		(11,241)		(13,191)
Net income (loss) from discontinued operations (including loss on disposal of $0 and $3,083 for the three and six months ended June 30, 2023, respectively)	219		(183)		218		(4,049)
Net income (loss)	(8,573)		1,604		(11,023)		(17,240)
Less: Net income (loss) attributable to redeemable noncontrolling interests and noncontrolling interests	5		(1,461)		9		(910)
Net income (loss) attributable to stockholders	$	(8,578)	$	3,065	$	(11,032)	$	(16,330)
Net income (loss) from continuing operations per share, basic	$	(0.46)	$	0.10	$	(0.59)	$	(0.71)
Net income (loss) from continuing operations per share, diluted	$	(0.46)	$	0.09	$	(0.59)	$	(0.71)
Net income (loss) from discontinued operations per share, basic	$	0.01	$	(0.01)	$	0.01	$	(0.22)
Net income (loss) from discontinued operations per share, diluted	$	0.01	$	(0.01)	$	0.01	$	(0.22)
Net income (loss) attributable to stockholders per share, basic	$	(0.45)	$	0.16	$	(0.57)	$	(0.88)
Net income (loss) attributable to stockholders per share, diluted	$	(0.45)	$	0.15	$	(0.57)	$	(0.88)
Weighted-average shares outstanding, basic	19,271,954		18,611,757		19,187,364		18,460,947
Weighted-average shares outstanding, diluted	19,271,954		20,200,832		19,187,364		18,460,947

See notes to unaudited condensed consolidated financial statements.

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Spruce Power Holding Corporation

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)


	Three and Six Months Ended June 30, 2024
	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Treasury Stock			Non controlling Interests		Total Stockholders’ Equity
(In thousands, except share data)	Shares	Amount						Shares	Amount
Balance at December 31, 2023	19,093,186	$	2	$	475,654	$	(257,888)	800,650	$	(5,424)	$	2,325	$	214,669
Issuance of restricted stock	5,060	—		—		—		—	—		—		—
Capital distributions to noncontrolling interests	—	—		—		—		—	—		(76)		(76)
Stock-based compensation expense, net	—	—		821		—		—	—		—		821
Net income (loss)	—	—		—		(2,454)		—	—		4		(2,450)
Balance at March 31, 2024	19,098,246	$	2	$	476,475	$	(260,342)	800,650	$	(5,424)	$	2,253	$	212,964

Issuance of restricted stock	259,604	—		—		—		—	—		—		—

Capital distributions to noncontrolling interests	—	—		—		—		—	—		(64)		(64)
Stock-based compensation expense, net	—	—		236		—		—	—		—		236
Net income (loss)	—	—		—		(8,578)		—	—		5		(8,573)
Balance at June 30, 2024	19,357,850	$	2	$	476,711	$	(268,920)	800,650	$	(5,424)	$	2,194	$	204,563

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			Three and Six Months Ended June 30, 2023
	Redeemable Noncontrolling Interests		Common Stock			Additional Paid-in Capital		Accumulated Deficit		Treasury Stock			Non controlling Interests		Total Stockholders’ Equity
(In thousands, except share data)			Shares	Amount						Shares	Amount
Balance at December 31, 2022	$	85	18,046,903	$	2	$	473,289	$	(193,342)	—	$	—	$	8,942	$	288,891
Cumulative-effect adjustment of ASC 326 adoption	—		—	—		—		1,285		—	—		—		1,285
Purchase accounting measurement period adjustments	240		—	—		(1,813)		—		—	—		(5,490)		(7,303)
Exercise of stock options	—		135,210			283		—		—	—		—		283
Issuance of restricted stock	—		341,490	—		—		—		—	—		—		—
Issuance of common stock	—		25,818	—		150		—		—	—		—		150
Capital distributions to noncontrolling interests	(108)		—	—		—		—		—	—		(88)		(88)
Stock-based compensation expense, net	—		—	—		796		—		—	—		—		796
Net income (loss)	(39)		—	—		—		(19,395)		—	—		590		(18,805)
Balance at March 31, 2023	$	178	18,549,421	$	2	$	472,705	$	(211,452)	—	$	—	$	3,954	$	265,209
Exercise of stock options	$	—	111,637	$	—	$	252	$	—	—	$	—	$	—	$	252
Issuance of restricted stock	—		106,928	—		—		—		—	—		—		—
Share repurchases	—		—	—		—		—		233,022	(1,614)		—		(1,614)
Stock-based compensation expense, net	—		—	—		593		—		—	—		—		593
Capital distributions to noncontrolling interests	—		—	—		—		—		—	—		(57)		(57)
Net income (loss)	21		—	—		—		3,065		—	—		(1,482)		1,583
Balance at June 30, 2023	$	199	18,767,986	$	2	$	473,550	$	(208,387)	233,022	$	(1,614)	$	2,415	$	265,966

See notes to unaudited condensed consolidated financial statements.

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Spruce Power Holding Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)


	Six Months Ended June 30,
(In thousands)	2024		2023

Operating activities:
Net loss	$	(11,023)	$	(17,240)
Adjust for net (income) loss from discontinued operations	(218)		4,049
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense, net	1,057		1,389
Bad debt expense	819		1,104
Amortization of deferred revenue	(77)		(35)
Depreciation and amortization expense	10,462		10,890
Accretion expense	119		—
Change in fair value of interest rate swaps	(3,175)		(3,602)
Change in fair value of warrant liabilities	(15)		(148)
Interest income related to SEMTH master lease agreement	(7,495)		(1,394)
Gain on disposal of assets	(1,452)		(3,379)
Change in operating right-of-use assets	23		(18)
Amortization of debt discount and deferred financing costs	2,930		2,914
Changes in operating assets and liabilities:
Accounts receivable, net	(4,649)		(5,240)
Deferred rent assets	(701)		41
Prepaid expenses and other current assets	4,775		(584)
Other assets	2		126
Accounts payable	297		387
Accrued expenses and other current liabilities	(21,095)		(5,898)
Other long-term liabilities	(9)		8
Deferred revenue	2,023		517
Net cash used in continuing operating activities	(27,402)		(16,113)
Net cash provided by (used in) discontinued operating activities	100		(2,158)
Net cash used in operating activities	(27,302)		(18,271)
Investing activities:
Proceeds from sale of solar energy systems	2,853		3,631
Proceeds from investment related to SEMTH master lease agreement	10,784		5,290
Cash paid for acquisitions, net of cash acquired	—		(23,360)
Purchases of other property and equipment	(150)		(124)
Net cash provided by (used in) continuing investing activities	13,487		(14,563)
Net cash provided by discontinued investing activities	—		325
Net cash provided by (used in) investing activities	13,487		(14,238)
Financing activities:
Repayments of long-term non-recourse debt	(136,750)		(14,305)
Proceeds from issuance of non-recourse debt	130,000		—
Repayments under financing leases	—		(21)
Payment of deferred financing costs	(2,108)		—
Proceeds from issuance of common stock	—		150

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Proceeds from exercise of stock options	—		535
Remittance of statutory tax withholding on stock-based payment awards	—		(17)
Share repurchases	—		(1,614)
Capital distributions to redeemable noncontrolling interests and noncontrolling interests	(140)		(253)
Net cash used in continuing financing activities	(8,998)		(15,525)
Net cash provided by discontinued financing activities	81		—
Net cash used in financing activities	(8,917)		(15,525)
Net change in cash and cash equivalents and restricted cash:	(22,732)		(48,034)
Cash and cash equivalents and restricted cash, beginning of period	172,941		240,144
Cash and cash equivalents and restricted cash, end of period	$	150,209	$	192,110
Supplemental disclosure of cash flow information:
Cash paid for interest	$	16,536	$	15,980
Supplemental disclosures of noncash investing and financing information:

Settlement of operating lease liability	$	—	$	1,170

See notes to unaudited condensed consolidated financial statements.

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Spruce Power Holding Corporation


Notes to Unaudited Condensed Consolidated Financial Statements

Note 1. Organization and Description of Business

Description of Business

Spruce Power Holding Corporation and its subsidiaries (“Spruce Power” or the “Company”) is a leading owner and operator of distributed solar energy assets across the United States (the “U.S.”), offering subscription-based services to approximately 75,000 home solar assets and customer contracts, making renewable energy more accessible to everyone.

The Company is engaged in the ownership and maintenance of home solar energy systems for homeowners in the U.S. The Company provides clean, solar energy typically at savings compared to traditional utility energy. The Company’s primary customers are homeowners and the Company’s core solar service offerings generate revenues primarily through (i) the sale of electricity generated by its home solar energy systems to homeowners pursuant to long-term agreements, which requires the Company’s subscribers to make recurring monthly payments, (ii) third party contracts to sell solar renewable energy credits (“SRECs”) generated by the solar energy systems for fixed prices and (iii) the servicing of those agreements for other institutional owners of home solar energy systems. In addition, the Company generates cash flows and earns interest income from an investment through a master lease agreement described below.

The Company holds subsidiary fund companies, defined below as the Funds, that own and operate portfolios of home solar energy systems, which are subject to solar lease agreements (“SLAs”) and power purchase agreements (“PPAs”, together with the SLAs, “Customer Agreements”) with residential customers who benefit from the production of electricity generated by the solar energy systems. The solar energy systems may qualify for subsidies, renewable energy credits and other incentives as provided by various states and local agencies. These benefits have generally been retained by the Company's subsidiaries that own the systems, with the exception of the investment tax credit (“ITCs”) under Section 48 of the Internal Revenue Code, as amended, which were generally passed through to the various financing partners of the solar energy systems. The Company also offers services which include asset management services and operating and maintenance services for home solar energy systems.

Historically, the Company provided fleet electrification solutions for commercial vehicles in North America, offering its systems for vehicle electrification (the “Drivetrain” operations) and through its energy efficiency and infrastructure solutions business, offering and installing charging stations to enable customers develop the charging infrastructure required for their electrified vehicles (the “XL Grid” operations). The Company ceased the Drivetrain and XL Grid operations in late 2022, and both are presented as discontinued operations in the unaudited condensed consolidated financial statements (see Note 15. Discontinued Operations).

Note 2. Summary of Significant Accounting Policies

Basis of unaudited condensed consolidated financial statement presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and Article 8 of Regulation S-X. The Company has condensed or omitted certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. As such, these interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s 2023 annual audited consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2023. The Company’s interim unaudited condensed consolidated financial statements reflect all normal and recurring adjustments necessary, in its opinion, to state fairly the financial position and results of operations for the reported periods. Amounts reported for interim periods may not be indicative of a full year period due to the Company’s continual growth, seasonal fluctuations in solar energy generation, timing of maintenance and other expenditures, changes in interest expense and other factors.

The Company's accompanying unaudited condensed consolidated financial statements include the accounts of its wholly owned subsidiaries and variable interest entities (“VIEs”), for which the Company is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. Certain prior period amounts have been

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Spruce Power Holding Corporation


Notes to Unaudited Condensed Consolidated Financial Statements

Note 2. Summary of Significant Accounting Policies, continued

reclassified to conform to the Company’s current presentation and such reclassifications had no effect on the Company’s previously reported financial position, results of operations, or cash flows.

On October 6, 2023, the Company effected a one-for-eight reverse stock split with respect to its issued and outstanding shares of common stock (the “Reverse Stock Split”). Excluding the par value and the number of authorized shares of the Company’s common stock, all share amounts, all per share amounts, and the values of the common stock outstanding and related effect on additional paid in capital included in this Form 10-Q have been retrospectively presented as if the Reverse Stock Split had been effective from the beginning of the earliest period presented.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of income and expenses during the reporting period. The Company’s most significant estimates and judgments involve (i) deferred income taxes, (ii) warranty reserves, (iii) valuation of stock-based compensation, (iv) valuation of warrant liability, (v) the useful lives of certain assets and liabilities, (vi) the allowance for current expected credit losses and (vii) the valuation of business combinations, including the fair values and useful lives of acquired assets and assumed liabilities, goodwill and the fair value of purchase consideration of asset acquisitions. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to the Company’s financial statements.

Variable interest entities

The Company consolidates any VIE of which it is the primary beneficiary. The Company formed or acquired VIEs which are partially funded by tax equity investors in order to facilitate the funding and monetization of certain attributes associated with solar energy systems. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. A variable interest holder is required to consolidate a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company does not consolidate a VIE in which it has a majority ownership interest when the Company is not considered the primary beneficiary. The Company evaluates its relationships with the VIEs on an ongoing basis to determine if it is the primary beneficiary. The Company's initial investments in Volta Solar Owner II, LLC and ORE F4 HoldCo, LLC (collectively, the “Funds”) were determined to be VIEs and remained as such as of June 30, 2024.

Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents include cash held in banks, money market accounts, and U.S. Treasury securities. Cash equivalents are carried at cost, which approximates fair value due to their short-term nature. The Company’s cash and cash equivalents are placed with high-credit quality financial institutions and issuers, and at times exceed federally insured limits. To date, the Company has not experienced any credit loss relating to its cash and cash equivalents.

Concentration of credit and revenue risks

Financial instruments which potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents. At times, such cash may be in excess of the FDIC limit. At June 30, 2024 and December 31, 2023, the Company had cash in excess of the $250,000 federally insured limit. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents as most of the balances are kept in treasury bills, which are government backed securities.

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Spruce Power Holding Corporation


Notes to Unaudited Condensed Consolidated Financial Statements

Note 2. Summary of Significant Accounting Policies, continued

For the three and six months ended June 30, 2024 and 2023, the Company had no customers that represented at least 10% of the Company’s revenues. As of June 30, 2024 and December 31, 2023, the Company had no customers that represented at least 10% of the Company’s accounts receivable balances.

Restricted cash

Restricted cash held at June 30, 2024 and December 31, 2023 of $33.6 million and $31.6 million, respectively, primarily consists of cash that is subject to restriction due to provisions in the Company's financing agreements and the operating agreements of the Funds. The carrying amount reported in the unaudited condensed consolidated balance sheets for restricted cash approximates its fair value.

The following table provides a reconciliation of cash and cash equivalents and restricted cash reflected on the unaudited condensed consolidated balance sheets to the total amounts shown in the unaudited condensed consolidated statements of cash flows for the end of the periods:


	As of
(Amounts in thousands)	June 30, 2024		June 30, 2023
Cash and cash equivalents	$	116,588	$	162,749
Restricted cash	33,621		29,361
Total cash, cash equivalents and restricted cash	$	150,209	$	192,110

Accounts receivable, net

Accounts receivable primarily represent amounts due from the Company’s customers. Accounts receivable is recorded net of an allowance for expected credit losses, which is determined by the Company’s assessment of the collectability of customer accounts based on the best available data at the time of the assessment. Management reviews the allowance by considering factors such as historical experience, contractual term, aging category and current economic conditions that may affect customers. The following table presents the changes in the allowance for credit losses recorded against accounts receivable, net on the unaudited condensed consolidated balance sheets:


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023
Balance at the beginning of the period	$	1,693	$	12,164
Impact of ASC 326 adoption	—		(1,285)
Write-off of uncollectible accounts	(1,379)		(11,447)
Provision recognized upon valuation of assets acquired	—		420
Provision for current expected credit losses	819		1,841
Balance at the end of the period	$	1,133	$	1,693

Impairment of long-lived assets

The Company reviews long-lived assets, including solar energy systems, other property and equipment, and intangible assets with definite lives, for impairment whenever events or changes in circumstances indicate that an asset group’s carrying amount may not be recoverable. The Company groups assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluates the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset group is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value. There were no long-lived asset impairment charges for the three and six months ended June 30, 2024 and 2023.

Impairment of goodwill

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Spruce Power Holding Corporation


Notes to Unaudited Condensed Consolidated Financial Statements

Note 2. Summary of Significant Accounting Policies, continued

Goodwill represents the excess of cost over the fair market value of tangible and intangible assets acquired and liabilities assumed of acquired businesses. Goodwill is not amortized, however it is annually tested for impairment, or more frequently if events or circumstances indicate that the carrying amount of goodwill may be impaired. The Company has historically recorded goodwill in connection with its business acquisitions.

The Company performs its annual goodwill impairment assessment on October 1 of each fiscal year, or more frequently if events or circumstances arise which indicate that goodwill may be impaired. An assessment can be performed by first completing a qualitative assessment of the Company’s single reporting unit. The Company can also bypass the qualitative assessment in any period and proceed directly to the quantitative impairment test, and then resume the qualitative assessment in any subsequent period. Qualitative indicators that may trigger the need for annual or interim quantitative impairment testing include, among other things, deterioration in macroeconomic conditions, declining financial performance, deterioration in the operational environment, or an expectation of selling or disposing of a portion of the reporting unit. Additionally, a significant change in business climate, a loss of a significant customer, increased competition, a sustained decrease in share price, or a decrease in estimated fair value below book value may trigger the need for interim impairment testing of goodwill.

If the Company believes that, as a result of its qualitative assessment, it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the quantitative impairment test is required. The quantitative test involves comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recorded as a reduction to goodwill with a corresponding charge to earnings in the period the goodwill is determined to be impaired. The income tax effect associated with an impairment of tax-deductible goodwill is also considered in the measurement of the goodwill impairment. Any goodwill impairment is limited to the total amount of goodwill.

The Company evaluates the fair value of the Company’s reporting unit using the market and income approach. Under the market approach, the Company uses multiples of EBITDA or revenues of the comparable guideline public companies by selecting a population of public companies with similar operations and attributes. Using this guideline public company data, a range of multiples of enterprise value to EBITDA or revenue is calculated. The income approach of computing fair value is based on the present value of the expected future economic benefits generated by the asset or business, such as cash flows or profits which will then be compared to its book value.

There were no goodwill impairment charges for the three and six months ended June 30, 2024 and 2023.

Contingencies

When it is probable that a loss has occurred and the loss amount can be reasonably estimated, the Company records liabilities for loss contingencies. In certain cases, the Company may be covered by one or more corporate insurance policies, resulting in insurance loss recoveries. When such recoveries are in excess of a loss recognized in the Company’s financial statements, the Company recognizes a gain contingency at the earlier of when the gain has been realized or when it is realizable, however when the Company expects recovery of proceeds up to the amount of the loss recognized, a receivable, which offsets the related loss contingency, is recognized when realization of the claim for recovery is determined to be probable.

Fair value measurements

The fair value of the Company’s financial assets and liabilities reflects Management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. For assets and liabilities measured at fair value on a recurring and nonrecurring basis, a three-level hierarchy of measurements based upon observable and unobservable inputs is used to arrive at fair value. Observable inputs are developed based on market data obtained from independent sources, while unobservable inputs reflect the Company’s assumptions about valuation based on the best information available in the circumstances. Depending on the inputs, the Company classifies each fair value measurement as follows:

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 2. Summary of Significant Accounting Policies, continued

•Level 1: Observable inputs that reflect unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.

•Level 2: Observable inputs other than Level 1 prices, such as quoted market prices for similar assets or liabilities in active markets, quoted market prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy must be determined based on the lowest level input that is significant to the fair value measurement. An assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the asset or liability being measured.

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, net, accounts payable, accrued expenses and other current liabilities, non-recourse debt, and interest rate swaps. The carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses and other current liabilities approximates fair value due to the short-term nature of those instruments. See Note 10. Fair Value Measurements for additional information on assets and liabilities measured at fair value.

Revenues

The Company’s revenue is derived from its home solar energy portfolio and servicing platform, which primarily generates revenue through the sale to homeowners of power generated by the home solar energy systems and the rental of solar equipment by certain homeowners, pursuant to long-term agreements. Pursuant to Accounting Standard Codification 606 (“ASC 606”) defined below, the Company has elected the “right to invoice” practical expedient, and revenues for the performance obligations related to energy generation and servicing revenue are recognized as services are rendered based upon the underlying contractual arrangements.

The following table presents the detail of the Company’s revenues as reflected within the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2024 and 2023:


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	2024		2023		2024		2023
PPA revenues	$	12,320	$	12,234	$	19,839	$	19,361
SLA revenues	6,846		7,025		14,137		14,947
Solar renewable energy credit revenues	1,337		1,662		3,174		3,196
Government incentives	146		72		223		96
Servicing revenues	356		112		356		225
Intangibles amortization, unfavorable solar renewable energy agreements	747		976		1,493		1,419
Other revenues	729		732		1,546		1,664
Total	$	22,481	$	22,813	$	40,768	$	40,908

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Spruce Power Holding Corporation


Notes to Unaudited Condensed Consolidated Financial Statements

Note 2. Summary of Significant Accounting Policies, continued

Energy generation

Customers purchase solar energy from the Company under PPAs or SLAs, both defined above. Revenue is recognized from contracts with customers as performance obligations are satisfied at a transaction price reflecting an amount of consideration based upon an estimated rate of return which is expressed as the solar rate per kilowatt hour or a flat rate per month as defined in the customer contracts.

•PPA revenues - Under ASC 606, Revenue from Contracts with Customers issued by the Financial Accounting Standards Board (“FASB”), PPA revenue is recognized when generated based upon the amount of electricity delivered as determined by remote monitoring equipment at solar rates specified under the PPAs.

•SLA revenues - The Company has SLAs, which do not meet the definition of a lease under ASC 842, Leases, and are accounted for as contracts with customers under ASC 606. Revenue is recognized on a straight-line basis over the contract term as the obligation to provide continuous access to the solar energy system is satisfied. The amount of revenue recognized may not equal customer cash payments due to the performance obligation being satisfied ahead of cash receipt or evenly as continuous access to the solar energy system has been provided. The differences between revenue recognition and cash payments received are reflected as deferred rent assets on the unaudited condensed consolidated balance sheets.

Solar renewable energy credit revenues

The Company enters contracts with third parties to sell Solar Renewable Energy Credits ("SRECs") generated by the solar energy systems for fixed prices. Certain contracts that meet the definition of a derivative may be exempted as normal purchase or normal sales transactions ("NPNS"). NPNS are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Certain SREC contracts meet these requirements and are designated as NPNS contracts. Such SRECs are exempted from the derivative accounting and reporting requirements, and the Company recognizes revenues in accordance with ASC 606. The Company recognizes revenue for SRECs based on pricing predetermined within the respective contracts at a point in time when the SRECs are transferred. As SRECs can be sold separate from the actual electricity generated by the renewable-based generation source, the Company accounts for the SRECs it generates from its solar energy systems as governmental incentives and do not consider those SRECs output of the underlying solar energy systems. The Company classifies these SRECs as inventory held until sold and delivered to third parties. As the Company did not incur costs to obtain these governmental incentives, the inventory carrying value for the SRECs was $0 as of June 30, 2024 and December 31, 2023.

Deferred revenue

Deferred revenue consists of amounts for which the criteria for revenue recognition have not yet been met and includes prepayments received for unfulfilled performance obligations that will be recognized on a straight-line basis over the remaining term of the respective customer agreements. Deferred revenue, in the aggregate, as of June 30, 2024 and December 31, 2023 was $4.6 million and $2.7 million, respectively. The Company recognized revenues of less than $0.1 million related to deferred revenue as of the start of the period during each of the three and six months ended June 30, 2024 and 2023.

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 2. Summary of Significant Accounting Policies, continued

Income taxes

The Company accounts for income taxes using the asset and liability method under which deferred tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities and net operating loss and tax credit carryforwards. Deferred income taxes are provided for the temporary differences arising between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and net operating loss carry-forwards and credits. Deferred tax assets and liabilities are measured using enacted rates in effect for the year in which the differences are expected to be recovered or settled. The effect of changes in tax rates on deferred tax assets and liabilities is recognized in the unaudited condensed consolidated statements of operations in the period in which the enactment rate changes. The ultimate recovery of deferred tax assets is dependent upon the amount and timing of future taxable income and other factors, such as the taxing jurisdiction in which the asset is to be recovered. Deferred tax assets are reduced through the establishment of a valuation allowance if, based on available evidence, it is more likely than not that the deferred tax assets will not be realized.

Uncertain tax positions taken or expected to be taken in a tax return are accounted for using the more likely than not threshold for financial statement recognition and measurement. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. For the three and six months ended June 30, 2024 and 2023, there were no uncertain tax positions taken or expected to be taken in the Company’s tax returns.

In the normal course of business, the Company is subject to regular audits by U.S. federal and state and local tax authorities. With few exceptions, the Company is no longer subject to federal, state or local tax examinations by tax authorities in its major jurisdictions for tax years prior to 2021. However, net operating loss carryforwards remain subject to examination to the extent they are carried forward and impact a year that is open to examination by tax authorities.

The Company did not recognize any tax related interest or penalties during the periods presented in the accompanying unaudited condensed consolidated financial statements, however, would record any such interest and penalties as a component of the provision for income taxes.

There has historically been no federal or state provision for income taxes since the Company has historically incurred net operating losses and maintains a full valuation allowance against its net deferred tax assets. For the three and six months ended June 30, 2024 and 2023, the Company recognized no provision for income taxes consistent with its losses incurred and the valuation allowance against its deferred tax assets. As a result, the Company's effective income tax rate was 0% for the three and six months ended June 30, 2024 and 2023.

Related parties

A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, the board of directors, as well as members of their immediate families and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or that has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 2. Summary of Significant Accounting Policies, continued

SEC Climate Disclosure Rule

In March 2024, the SEC adopted final rules requiring public entities to disclose certain climate-related information in their registration statements and annual reports. The rules will be effective for non-accelerated filers and smaller reporting companies commencing with the fiscal year beginning on or after January 1, 2027. In April 2024, the SEC issued an administrative stay of the implementation of these rules, pending judicial review. The Company is evaluating the impact of the final rules on its unaudited condensed consolidated financial statements and related disclosures.

Recent Accounting Pronouncements

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, (“ASU 2023-09”), which requires enhancements regarding the transparency and decision usefulness of income tax disclosures. ASU 2023-09 is effective for the Company on December 31, 2025. The Company will adopt this ASU as of December 31, 2025 and will prospectively apply its requirements to income tax disclosures presented in the notes to the condensed consolidated financial statements in the period of adoption. The Company is currently evaluating the impact of this standard but does not expect that it will have a material impact on its unaudited condensed consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvement to Reportable Segment Disclosures, (“ASU 2023-07”), which requires enhanced disclosures for reportable segments, primarily in relation to significant segment expenses, even in the event an entity has a single reportable segment in accordance with Topic 280. ASU 2023-07 is effective for the Company on December 31, 2024. The Company will adopt this ASU as of December 31, 2024 and will retrospectively apply its requirements to all prior periods based on the significant segment expense categories identified and disclosed in its condensed consolidated financial statements in the period of adoption. The Company is currently evaluating the impact of this standard but does not expect that it will have a material impact on its unaudited condensed consolidated financial statements.

Note 3. Business Combinations

Legacy Spruce Power

On September 9, 2022 (the “Acquisition Date”), the Company acquired Spruce Holding Company 1 LLC, Spruce Holding Company 2 LLC, Spruce Holding Company 3 LLC, and Spruce Manager LLC (collectively and together with their subsidiaries, “Legacy Spruce Power”) for $32.6 million, which consisted of cash payments of $61.8 million less cash and restricted cash acquired of $29.2 million. Management evaluated which entity should be considered the accounting acquirer in the transaction by giving consideration to the form of consideration transferred, the composition of the equity holders, the composition of voting rights of the Board of Directors, continuity of management structure, and size of the respective organizations. Based on the evaluation of the applicable factors, management noted that all factors, with the exception of the relative size of organization, were indicators that the Company was the acquiring entity resulting in management’s conclusion that for accounting purposes, the Company acquired Legacy Spruce Power.

The acquisition was accounted for as a business combination. The Company allocated the Legacy Spruce Power purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the Acquisition Date. The excess of the purchase price over those fair values was recorded as goodwill.

The Company’s evaluations of the facts and circumstances available as of the Acquisition Date, to assign fair values to assets acquired and liabilities assumed, remained ongoing subsequent to the Acquisition Date. As the Company completed further analysis of assets including solar systems, intangible assets, as well as noncontrolling interests and non-recourse debt, additional information on the assets acquired and liabilities assumed became available. Changes in information related to the value of net assets acquired changed the amount of the purchase price initially assigned to goodwill, and as a result, the fair values set forth below were subject to adjustments as additional information was obtained and valuations completed. These provisional adjustments were recognized during the reporting period in which the adjustments were determined. The Company has finalized its purchase price allocation as of September 8, 2023.

Accounting for business combinations requires management to make significant estimates and assumptions, especially at the Acquisition Date, including the Company’s estimates of the fair value of solar systems, production based incentives,

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 3. Business Combinations, continued

solar renewable energy agreements, non-controlling interest, trade name and non-recourse debt, where applicable. The Company believes the assumptions and estimates are based on information obtained from the management of the acquired companies and are inherently uncertain. Critical estimates in valuing solar systems under the income approach include future expected cash flows and discount rate. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.

The following table summarizes the purchase price allocation of the fair value of assets acquired and liabilities assumed in the acquisition of Legacy Spruce Power, as adjusted, during the measurement period:


(Amounts in thousands)	Initial Purchase Price Allocation		Measurement Period Adjustments		Updated Purchase Price Allocation
Total purchase consideration:
Cash, net of cash acquired, and restricted cash	$	32,585	$	—	$	32,585
Allocation of consideration to assets acquired and liabilities assumed:
Accounts receivable, net	10,995		—		10,995
Prepaid expenses and other current assets	6,768		(2,405)		4,363
Solar energy systems	406,298		89,268		495,566
Other property and equipment	337		—		337
Intangible assets	—		11,980		11,980
Interest rate swap assets	26,698		—		26,698
Right-of-use asset	3,279		(328)		2,951
Other assets	358		(102)		256
Goodwill	158,636		(129,879)		28,757
Accounts payable	(2,620)		(22)		(2,642)
Unfavorable solar renewable energy agreements	—		(10,500)		(10,500)
Accrued expenses	(13,061)		(241)		(13,302)
Lease liability	(3,382)		42		(3,340)
Long-term debt	(510,002)		2,772		(507,230)
Other liabilities	(335)		292		(43)
Redeemable noncontrolling interests and noncontrolling interests	(51,384)		39,123		(12,261)
Total assets acquired and liabilities assumed	$	32,585	$	—	$	32,585

As reflected in the preceding table, as a result of third party valuation reports received in the first quarter of 2023, the Company adjusted solar energy systems and intangible assets with corresponding changes to goodwill. In the first quarter of 2023, due to a change in the provisional amounts assigned to intangible assets and solar energy systems, the Company recognized $0.4 million of revenue, $1.9 million of depreciation expense and $0.4 million of trade name amortization, of which $0.5 million of revenue, $0.9 million of depreciation expense and $0.3 million of trade name amortization related to the previous year.

During the first quarter of 2023, the Company adjusted the fair value of its noncontrolling interest and its redeemable noncontrolling interest in the Company's financials, which resulted in related downward revision of $5.5 million and upward revision of $0.2 million, respectively. Additional paid in capital was also downward revised by $1.8 million, which included the fair value adjustment associated with the purchase of 100% of the membership interests in Ampere Solar Owner IV, LLC, ORE F5A HoldCo, LLC, ORE F6 HoldCo, LLC, RPV Fund 11 LLC and RPV Fund 13 LLC, Sunserve Residential Solar I, LLC's and Level Solar Fund III, LLC in 2022.

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 3. Business Combinations, continued

The gross intangibles acquired are amortized over their respective estimated useful lives as follows:


(Amounts in thousands)	Asset		Liability		Estimated Life (in years)
Solar renewable energy agreements	$	340	$	10,500	3 to 6
Performance based incentives agreements	3,240		—		13
Trade name	8,400		—		30
Total intangibles acquired	$	11,980	$	10,500

The weighted-average useful life of the intangibles identified above is approximately 16 years, which approximates the period over which the Company expects to gain the estimated economic benefits.

Goodwill represents the excess of the purchase consideration over the estimated fair value of the net assets acquired. Goodwill is primarily attributable to the Company's ability to leverage and use its existing capital and access to capital markets along with Legacy Spruce Power's established operations and mergers and acquisition capabilities to grow the Spruce Power business.

Note 4. Acquisitions

SEMTH Master Lease Agreement

In furtherance of its growth strategy, on March 23, 2023, the Company completed the acquisition of all the issued and outstanding interests in SS Holdings 2017, LLC and its subsidiaries (“SEMTH”) from certain funds, pursuant to a membership interest purchase and sale agreement dated March 23, 2023 (the “SEMTH Acquisition”). The SEMTH related asset includes 20-year use rights to customer payment streams of approximately 22,500 home SLAs and PPAs (the “SEMTH Master Lease”). The Company acquired SEMTH for approximately $23.0 million of cash, net of cash received, and assumed $125.0 million of outstanding senior indebtedness under the SP4 Facility (See Note 8. Non-Recourse Debt) and interest rate swaps with Deutsche Bank AG, New York Bank held by SEMTH and its subsidiaries at the close of the acquisition.

The purchase of SEMTH's future revenue has been accounted for as an acquisition of financial assets. Under the acquisition method, the purchase price was allocated to the assets acquired and liabilities assumed based on their relative fair value. All fair value measurements of assets acquired and liabilities assumed were based on significant estimates and assumptions, including Level 3 (unobservable) inputs, which require judgment. Estimates and assumptions include the projected timing and amount of future cash flows, discount rates reflecting risk inherent in future cash flows and future utility prices.

For the purposes of establishing the fair value of the Company's investment in the SEMTH Master Lease, its analysis considered cash flows beginning in March 2023 (the effective date of the transaction). The Company estimated the fair value of its investment in the SEMTH Master Lease to be approximately $146.9 million on the transaction date.

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 5. Property and Equipment, Net

Property and equipment consisted of the following as of June 30, 2024 and December 31, 2023:


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023

Solar energy systems	$	511,887	$	513,526
Less: Accumulated depreciation	(41,094)		(29,594)
Solar energy systems, net	$	470,793	$	483,932

Equipment	$	157	$	157
Furniture and fixtures	494		461
Computers and related equipment	334		218
Software	2		8
Leasehold improvements	59		59
Gross other property and equipment	1,046		903
Less: Accumulated depreciation	(537)		(429)
Other property and equipment, net	$	509	$	474

Property and equipment, net	$	471,302	$	484,406

Depreciation expense related to solar energy systems is included within cost of revenues in the unaudited condensed statements of operations, and for the three and six months ended June 30, 2024 was $5.7 million and $11.4 million, respectively, and for the three and six months ended June 30, 2023 was $5.6 million and $11.6 million, respectively. Depreciation expense related to other property and equipment is included within selling, general and administrative expenses in the unaudited condensed statements of operations, and for each of the three and six months ended June 30, 2024 and 2023 was $0.1 million.

Note 6. Intangible Assets, Net

The following table presents the detail of intangible assets, net as recorded in the unaudited condensed consolidated balance sheets:


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023

Intangible assets:
Solar renewable energy agreements	$	340	$	340
Performance based incentives agreements	3,240		3,240
Trade name	8,400		8,400
Gross intangible assets	11,980		11,980
Less: Accumulated amortization	(2,403)		(1,784)

Intangible assets, net	$	9,577	$	10,196

Amortization of intangible assets for the three and six months ended June 30, 2024 was $0.3 million and $0.6 million, respectively, and for the three and six months ended June 30, 2023 was $0.3 million and $0.4 million, respectively. As of

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Notes to Unaudited Condensed Consolidated Financial Statements

June 30, 2024, expected amortization of intangible assets for each of the five succeeding fiscal years and thereafter is as follows:


	As of June 30,
(Amounts in thousands)	2024
Remainder of 2024	$	621
2025	1,126
2026	1,122
2027	978
2028	878
Thereafter	4,852
Total	$	9,577

Note 7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of June 30, 2024 and December 31, 2023:


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023
Accrued interest	$	7,273	$	8,587
Accrued professional fees	2,029		2,386
Accrued contingencies (See Note 13. Commitments and Contingencies)	1,882		21,300
Accrued compensation and related benefits	4,135		3,237
Accrued expenses, other	2,425		2,293
Accrued operating and maintenance expenses	1,993		2,079
Accrued taxes, stock-based compensation	1,074		752
Accrued expenses and other current liabilities	$	20,811	$	40,634

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 8. Non-Recourse Debt

The following table provides a summary of the Company’s debt as of June 30, 2024 and December 31, 2023:


		As of
(Amounts in thousands)	Due	June 30, 2024		December 31, 2023
SVB Credit Agreement, SP1 Facility (1)	April 2026	$	208,581	$	214,803
Second SVB Credit Agreement, SP2 Facility (1)	May 2027	82,070		85,231
KeyBank Credit Agreement, SP3 Facility (1)	November 2027	56,608		58,962
Second KeyBank Credit Agreement (1)	April 2030	162,712		162,725
Deutsche Bank Credit Agreement, SP4 Facility	August 2025	—		125,000
Barings GPSF Credit Agreement, SET Facility	April 2042	130,000		—
Less: Unamortized fair value adjustment (1)		(24,755)		(27,600)
Less: Unamortized deferred financing costs		(2,364)		(341)
Total Non-recourse debt		612,852		618,780
Less: Non-recourse debt, current		(28,374)		(27,914)
Non-recourse debt, non-current		$	584,478	$	590,866

(1) In connection with the acquisition of Legacy Spruce Power effective September 9, 2022, the Company assumed all non-recourse debt instruments valued at approximately $507.2 million as of that date. In connection with accounting for the business combination, the Company adjusted the carrying value of this non-recourse debt to its fair value as of the Acquisition Date. This fair value adjustment resulted in a reduction of the carrying value of the debt by $35.2 million. This adjustment to fair value is being amortized to interest expense over the life of the related debt instruments using the effective interest method. Amortization expense for the fair value adjustment for the three and six months ended June 30, 2024 were $1.4 million and $2.9 million, respectively, and for the three and six months ended June 30, 2023 were $1.5 million and $2.9 million, respectively.

On June 26, 2024, Spruce SET Borrower 2024, LLC (the “Borrower”), a wholly owned subsidiary of the Company, entered into a non-recourse Credit Agreement with Barings GPSF LLC, which provided a fixed interest term loan in the aggregate principal amount of $130.0 million (the “SET Facility”). The proceeds of the SET Facility were primarily used to repay the SP4 Facility of $125.0 million. The repayment of the SP4 Facility was treated as a debt extinguishment under ASC 470-50, Debt—Modifications and Extinguishments. In connection with the repayment of the SP4 Facility, the Company settled the related interest rate swap contracts (see Note 9. Interest Rate Swaps for further discussion). The Borrower incurred approximately $2.1 million of deferred financing costs related to the SET Facility, which are being amortized on a straight-line basis over the anticipated debt servicing period. The SET Facility matures on April 17, 2042 and requires quarterly interest payments at 6.889% per annum beginning August 2024. Effective December 26, 2027, the SET Facility requires additional interest to be accrued on any outstanding aggregate principal or unpaid accrued interest. The SET Facility is collateralized by all of the assets and property of the Borrower. The SET Facility requires the Borrower to be in compliance with various covenants, and the Borrower was in compliance with the required covenants under the SET Facility as of June 30, 2024.

Note 9. Interest Rate Swaps

The purpose of the Company’s swaps is to convert the floating interest rate on the Company's Credit Agreements to a fixed rate. As of June 30, 2024, the notional amount of the interest rate swaps covers approximately 98% of the balance of the Company’s floating rate term loans.

During the three and six months ended June 30, 2024, the change in the fair value of the interest rate swaps was $(3.2) million and $3.2 million, respectively, and for the three and six months ended June 30, 2023 was $9.2 million and $3.6 million, respectively, which are reflected as a component of other income (expense) within the unaudited condensed consolidated statements of operations. The Company also recognized $7.0 million and $10.8 million of realized gains for the three and six months ended June 30, 2024, and for the three and six months ended June 30, 2023, realized gains of $3.5 million and $6.0 million, respectively, reflected within interest expense, net.

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Spruce Power Holding Corporation


Notes to Unaudited Condensed Consolidated Financial Statements

Note 9. Interest Rate Swaps, continue

In June 2024, interest rate swaps related to the SP4 Facility were settled concurrently with the full repayment of the SP4 Facility (see Note 8. Non-Recourse Debt), and as a result, the Company recorded a gain of approximately $3.6 million within interest expense, net during the three and six months ended June 30, 2024.

See Note 10. Fair Value Measurements for further information on the Company’s determination of the fair value of its interest rate swaps.

Note 10. Fair Value Measurements

The Company uses various assumptions and methods in estimating the fair values of its financial instruments.

The Company’s private warrants are valued using a Black-Scholes model, pursuant to the inputs provided in the table below:


Input	June 30, 2024			December 31, 2023
Risk-free rate	4.9		%	4.2		%
Remaining term in years	1.48			1.98
Expected volatility	68.6		%	82.0		%
Exercise price	$	92.00		$	92.00
Fair value of common stock	$	3.65		$	4.42

The Company's interest rate swaps are not traded on a market exchange and the fair values are determined using a valuation model based on a discounted cash flow analysis. This analysis reflects the contractual terms of the interest rate swap agreements and uses observable market-based inputs, including estimated future SOFR interest rates. The fair value of the Company's interest rate swap is the net difference in the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on the expectation of future interest rates and are observable inputs available to a market participant. The interest rate swap valuation is classified in Level 2 of the fair value hierarchy.

The fair value of the Company’s non-recourse debt as of June 30, 2024 and December 31, 2023 was $626.1 million and $628.2 million, respectively.

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 Measurements as of June 30, 2024
(Amounts in thousands)	Level I		Level II		Level III		Total
Asset:
Interest rate swaps	$	—	$	30,389	$	—	$	30,389
Money market accounts	112,168		—		—		112,168
Total	$	112,168	$	30,389	$	—	$	142,557

Liabilities:
Private warrants	$	—	$	—	$	2	$	2
Total	$	—	$	—	$	2	$	2

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 10. Fair Value Measurements, continued


	Fair Value Measurements as of December 31, 2023
(Amounts in thousands)	Level I		Level II		Level III		Total
Asset:
Interest rate swaps	$	—	$	27,883	$	—	$	27,883
Money market accounts	21,475		—		—		21,475
U.S. Treasury securities	108,964		—		—		108,964
Total	$	130,439	$	27,883	$	—	$	158,322

Liabilities:
Private warrants	$	—	$	—	$	17	$	17
Total	$	—	$	—	$	17	$	17

The following is a roll forward of the Company’s Level 3 liability instruments:


	Three Months Ended June 30, 2024		Six Months Ended June 30, 2024
(Amounts in thousands)

Balance at the beginning of the period	$	8	$	17
Fair value adjustments – warrant liability	(6)		(15)
Balance at the end of the period	$	2	$	2

Note 11. Stock-Based Compensation Expense

Stock-based compensation expense related to stock options and restricted stock units for the three and six months ended June 30, 2024 was $0.5 million and $1.4 million, and for the three and six months ended June 30, 2023 was $0.8 million and $1.6 million, respectively. As of June 30, 2024, there was $8.6 million of unrecognized compensation cost related to stock options and restricted stock units which is expected to be recognized over the remaining vesting periods, with a weighted-average period of 3.2 years.

Stock Options

The Company grants stock options to certain employees that will vest over a period of one to four years. A summary of stock option award activity for the six months ended June 30, 2024 was as follows:


Options	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term

Outstanding at December 31, 2023	193,156	$	17.89	5.8
Granted	295,229	3.74
Exercised	—	—
Cancelled or forfeited	—	—
Outstanding at June 30, 2024	488,385	$	9.34	8.0
Exercisable at June 30, 2024	192,227	$	17.67	5.3

The aggregate intrinsic value of stock options outstanding as of June 30, 2024 was $0.4 million. During the three and six months ended June 30, 2024, the Company granted 295,229 stock options to its President and Chief Executive Officer (“CEO”) upon his appointment to such positions effective April 12, 2024.

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 11. Stock-Based Compensation Expense, continued

A summary of stock option award activity for the six months ended June 30, 2023 was as follows:


Options	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term

Outstanding at December 31, 2022	761,408	$	11.12	2.7
Granted	—	—
Exercised	(246,847)	1.92
Cancelled or forfeited	(79,797)	51.52
Outstanding at June 30, 2023	434,764	$	9.12	3.2
Exercisable at June 30, 2023	427,787	$	8.80	3.2

Restricted Stock Units

The Company grants restricted stock units to certain employees that will generally vest over a period of four years. The fair value of restricted stock unit awards is estimated by the fair value of the Company’s common stock at the date of grant. Restricted stock units activity during the six months ended June 30, 2024 was as follows:


	Number of Shares	Weighted Average Grant Date Fair Value Per Share
Non-vested, at December 31, 2023	1,102,095	$	7.74
Granted	1,629,335	3.58
Vested	(264,664)	6.22
Cancelled or forfeited	(520,226)	5.08
Non-vested, at June 30, 2024	1,946,540	$	5.18

During the three and six months ended June 30, 2024, the Company granted restricted stock unit awards of 88,636 shares of common stock to the CEO upon his appointment effective April 12, 2024. In addition, upon the separation of the prior President and Chief Executive Officer (“Former CEO”) from the Company effective April 12, 2024, 97,994 and 244,267 restricted stock units awarded to the Former CEO were vested and forfeited, respectively. The Company recorded $0.5 million of expense related to the 97,994 vested awards during the three and six months ended June 30, 2024.

Restricted stock units activity during the six months ended June 30, 2023 was as follows:


	Number of Shares	Weighted Average Grant Date Fair Value Per Share
Non-vested, at December 31, 2022	1,229,089	$	10.40
Granted	653,425	6.48
Vested	(448,418)	12.56
Cancelled or forfeited	(203,116)	11.04
Non-vested, at June 30, 2023	1,230,980	$	8.00

Former CEO's Ladder Restricted Stock Unit Award

On September 9, 2022, in connection with the acquisition of Legacy Spruce Power and his appointment as the Company's President, the Company granted to its Former CEO, a restricted stock unit award (the “Ladder RSUs”) of 208,333 shares of common stock. The Ladder RSUs vest in 10% increments on the dates the Plan administrator certifies the applicable

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 11. Stock-Based Compensation Expense, continued

milestone stock prices have been achieved or exceeded, provided that the Former CEO remains employed on the date of certification and such achievement occurs within ten years of the date of the grant.

The Company used a Monte Carlo simulation valuation model to determine the fair value of the award as of the Acquisition Date. The following inputs were used in the simulation: grant date stock price of $9.36 per share, annual volatility of 85.0%, risk-free interest rate of 3.3% and dividend yield of 0.0%. For each tranche, a fair value was calculated as well as a derived service period which represents the median number of years it is expected to take for the Ladder RSUs to meet their corresponding milestone stock price excluding the simulation paths that result in the Ladder RSUs not vesting within the 10-year term of the agreement. Each tranche's fair value will be amortized ratably over the respective derived service period.

The Company recognized expense related to the Ladder RSUs of approximately $0.1 million and $0.2 million for the three and six months ended June 30, 2023, respectively. Upon separation of the Former CEO from the Company effective April 12, 2024, the Ladder RSUs were terminated and the Company recorded a gain of $0.7 million during the three months ended June 30, 2024.

Note 12. Noncontrolling Interests

The following table summarizes the Company’s noncontrolling interests as of June 30, 2024:


Tax Equity Entity						Date Class A Member Admitted




ORE F4 Holdco, LLC						August 2014
Volta Solar Owner II, LLC						August 2017

The tax equity entities were structured at inception so that the allocations of income and loss for tax purposes will flip at a future date. The terms of the tax equity entities' operating agreements contain allocations of taxable income (loss), Section 48(a) ITCs and cash distributions that vary over time and adjust between the members on an agreed date (referred to as the flip date). The operating agreements specify either a certain flip date or an internal rate of return ("IRR") flip date. The certain flip date is based on the passage of a fixed period of time as defined in the operating agreements for each entity. The IRR flip date is the date on which the tax equity investor has achieved a contractual rate of return. From inception through the flip date, the Class A members' allocation of taxable income (loss) and Section 48(a) ITCs is generally 99% and the Class B members' allocation of taxable income (loss) and Section 48(a) ITCs is generally 1%. After the related flip date (or, if the tax equity investor has a deficit capital account, typically after such deficit has been eliminated), the Class A members' allocation of taxable income (loss) will typically decrease to 5% (or, in some cases, a higher percentage if required by the tax equity investor) and the Class B members' allocation of taxable income (loss) will increase by an inverse amount.

The historical redeemable noncontrolling interests and noncontrolling interests are comprised of Class A units, which represent the tax equity investors' interest in the tax equity entities. Both the Class A members and Class B members may have call options to allow either member to redeem the other member's interest in the tax equity entities upon the occurrence of certain contingent events, such as bankruptcy, dissolution/liquidation and forced divestitures of the tax equity entities. Additionally, the Class B members may have the option to purchase all Class A units, which is typically exercisable at any time during the periods specified under their respective governing documents, and, in regards to the tax equity entities historically classified as redeemable noncontrolling interests, they had the contingent obligation to purchase all Class A units if the Class A members exercise their right to withdraw, which is typically exercisable at any time during the three-month period commencing upon the applicable flip date. The Company had no redeemable noncontrolling interests as of June 30, 2024 and December 31, 2023.

Total assets on the unaudited condensed consolidated balance sheets includes $37.4 million as of June 30, 2024 and $38.0 million as of December 31, 2023 of assets held by the Company's VIEs, which can only be used to settle obligations of the VIEs.

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 12. Noncontrolling Interests, continued

Total liabilities on the unaudited condensed consolidated balance sheets includes $0.7 million as of June 30, 2024 and $0.8 million as of December 31, 2023 of liabilities that are the obligations of the Company's VIEs.

Note 13. Commitments and Contingencies

Legal Proceedings

The Company is periodically involved in legal proceedings and claims arising in the normal course of business, including proceedings relating to intellectual property, employment and other matters. Management believes the outcome of these proceedings will not have a significant adverse effect on the Company’s financial position, operating results, or cash flow.

Securities Class Action Proceedings

On March 8, 2021, two putative securities class action complaints were filed against the Company, and certain of its current and former officers and directors in the federal district court for the Southern District of New York. Those cases were ultimately consolidated under C.A. No. 1:21-cv-2002, and a lead plaintiff was appointed in June 2021. On July 20, 2021, an amended complaint was filed alleging that certain public statements made by the defendants between October 2, 2020, and March 2, 2021, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Following negotiations with a mediator, in September 2023, the Company and the plaintiffs agreed on a settlement in principle in the aggregate amount of $19.5 million (the “Settlement Amount”), and on December 6, 2023, the lead plaintiff and the defendants entered into a stipulation and agreement of settlement requiring the Company to pay the Settlement Amount to resolve the class action litigation and the related legal fees and administration costs. On April 30, 2024, the New York Court approved a final settlement of the Class Action Litigation. The Settlement Amount was offset by approximately $4.5 million of related loss recoveries from the Company’s directors and officers liability insurance policy with third parties, which was paid out in February 2024. The Company paid the $15.0 million net settlement amount to the settlement claims administrator in February 2024.

On September 20, 2021, and October 19, 2021, two class action complaints were filed in the Delaware Court of Chancery against certain of the Company’s current officers and directors, and the Company’s sponsor of its special purpose acquisition company merger, Pivotal Investment Holdings II LLC. These actions were consolidated as in re XL Fleet Corp. (Pivotal) Stockholder Litigation, C.A. No. 2021-0808, and an amended complaint was filed on January 31, 2022. The amended complaint alleges various breaches of fiduciary duty against the Company and/or its officers, several allegedly misleading statements made in connection with the merger, and aiding and abetting breaches of fiduciary duty in connection with the negotiation and approval of the December 21, 2020 merger and organization of XL Hybrids, Inc., a Delaware corporation (“Legacy XL”) to become XL Fleet Corp. The Company believes the allegations asserted in both class action complaints are without merit and is vigorously defending the lawsuit. At this time, the Company is unable to estimate potential losses, if any, related to the lawsuit.

Shareholder Derivative Actions

On June 23, 2022, the Company received a shareholder derivative complaint filed in the U.S. District Court for the District of Massachusetts, captioned Val Kay derivatively on behalf of nominal defendant XL Fleet Corp., against all current directors and former officers and directors, C.A. No. 1:22-cv-10977. The action was filed by a shareholder purportedly on XL Fleet Corp.’s behalf, and raises claims for contribution, as well as claims for breach of fiduciary duty, waste of corporate assets, unjust enrichment, and abuse of control. On December 8, 2023, the parties submitted a joint status report advising the court that they had reached a settlement-in-principle to settle this action, the Reali v. Griffin, et al. action, the Tucci v. Ledecky, et al. action, and a stockholder litigation demand (collectively, the “Derivative Matters”). Plaintiffs filed a motion for preliminary approval of the settlement on March 1, 2024, which is pending a decision from the court. The settlement provides for certain corporate governance enhancements and no monetary payments. There was no agreement as to attorneys’ fees for the Plaintiffs’ attorneys and Plaintiffs filed a petition for attorneys’ fees, which defendants have opposed. At this time, the Company is unable to estimate potential losses, if any, related to the potential fee petition.

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 13. Commitments and Contingencies, continued

In March 2023, two shareholder derivative actions were filed in the U.S. District Court for the District of Delaware (the “Delaware Derivative Actions”). One action is captioned Reali v. Griffin, et al., C.A. No. 1:23-cv-00289 and the other action is captioned Tucci v. Ledecky, et al., C.A. 1:23-cv-00322. These actions were consolidated and captioned In re Spruce Power Holding Corporation Shareholder Derivative Litigation, C.A. No. 1:23-cv-00289. As noted above, the consolidated action is part of a settlement agreement that has been filed in the U.S. District Court for the District of Massachusetts.

In August 2023, an additional derivative action was filed in the U.S. District Court for the Southern District of New York, captioned Boyce v. Ledecky, et al., C.A. No. 1:23-cv-8591. On March 11, 2024, all defendants filed motions to dismiss the complaint in its entirety, which are pending before the court. The settlement agreement for the Derivative Matters described above contains a release that would apply to claims in this action if the settlement agreement is approved by the U.S. District Court for the District of Massachusetts. On March 22, 2024, Boyce agreed to voluntarily dismiss the lawsuit.

On May 1, 2024, the United States District Court for the District of Massachusetts, granted preliminary approval of the settlement of the following shareholder derivative actions: (i) Kay v. Frodl, et al., Case No. 22-cv-10977, pending in the Massachusetts Court; (ii) In re Spruce Power Holding Corp. S'holder Derivative Litig., Case No. 1:23-cv-00289-MN, pending in the United States District Court for the District of Delaware; and (iii) Sham Lakhani, shareholder to a shareholder litigation demand made on the Board of Directors of the Company. The District of Massachusetts approved the proposed settlement on August 8, 2024, but deferred the ruling over the amount of the plaintiffs’ attorneys’ fees until a later date.

State Attorney Generals' Investigations

The Company has been asked to provide information and documents in response to subpoenas and other requests for information from certain state attorney generals’ offices regarding, among other things, its sales and marketing protocols. The Company has been cooperating with these investigations and intends to continue to do so until they are resolved. At this time, the Company is unable to estimate potential losses, if any, related to these matters.

Securities and Exchange Commission Civil Enforcement Action

On January 6, 2022, the Company received a subpoena from the Division of Enforcement of the SEC requesting, among other things, information and documents concerning the XL Fleet Corp. business combination with Legacy XL, the Company’s sales pipeline and revenue projections, California Air Resources Board approvals, and other related matters. In June 2023, the SEC proposed an Offer of Settlement for the purpose of resolving the proposed SEC action against the Company. Following negotiations with the SEC staff, in September 2023, the Company reached a settlement with the SEC pursuant to which the Company did not admit or deny the SEC’s allegations regarding the above-referenced issues. In connection with the settlement, in October 2023, the Company (among other things) paid a civil monetary penalty of $11.0 million which, subject to the discretion of the SEC, will be made available to eligible legacy shareholders through a Fair Fund, termed and administered by the SEC.

US Bank

On February 9, 2023, US Bank, through its affiliate, Firstar Development, LLC (“Firstar”), filed a motion for summary judgment in lieu of a complaint in New York Supreme Court (the trial level in New York) alleging that the Company failed to fulfill its reimbursement obligations under a 2019 tax recapture guaranty agreement between the parties arising from the alleged recapture by the Internal Revenue Service of tax credits taken by Firstar as an investor in the Company’s subsidiary, Ampere Solar Owner I, LLC. On May 23, 2023, the Company reached a settlement agreement with Firstar, as the plaintiff, for $2.3 million whereby the plaintiff discharged all claims filed against the Company.

BMZ USA, Inc.

On February 11, 2022, BMZ USA Inc. (“BMZ”), a battery manufacturer, sued XL Hybrids for breach of contract, alleging that XL Hybrids failed to timely purchase the full allotment of batteries required under a certain master supply agreement between the parties. In January 2024, BMZ obtained a judgment for $3.9 million against XL Hybrids, Inc. The Company is appealing the ruling while simultaneously pursuing a settlement. The Company currently estimates the potential loss to be

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 13. Commitments and Contingencies, continued

approximately $1.2 million, which has been accrued for as of June 30, 2024 (See Note 7. Accrued Expenses and Other Current Liabilities).

ITC Recapture Provisions

The IRS may disallow and recapture some, or all, of the Investment Tax Credits due to improperly calculated basis after a project was placed in service ("Recapture Event"). If a Recapture Event occurs, Spruce Power is obligated to pay the applicable Class A Member a recapture adjustment, which includes the amounts the Class A Members are required to repay the IRS, including interest and penalties, as well as any third-party legal and accounting fees incurred by the Class A Members in connection to the Recapture Event, as specified in the operating agreements. Such a payment by Spruce Power to the Class A Members are not to be considered a capital contribution to the fund per the operating agreements, nor would it be considered a distribution to the Class A Members. With the exception of the tax matter related to Ampere Solar Owner I noted above, a Recapture Event was not deemed to be probable by the Company, therefore no accrual has been recorded as of June 30, 2024.

Plastic Omnium

Plastic Omnium is the assignee of the contractual rights of Actia Corp. under a certain battery purchase order between XL Hybrids and Actia Corp. On March 17, 2023, Plastic Omnium sued Legacy XL and the Company for breach of contract, alleging that Legacy XL ordered a total of 1,000 batteries from Plastic Omnium, paid for 455 of those batteries, and then reneged on 545 of those products. While Plastic Omnium admits it never actually delivered the remaining 545 products, it claims it purchased materials to complete the order, and as a result, Legacy XL and the Company are liable for at least approximately $2.5 million. The Company believes the allegations asserted in this action lack substantial merit, and as a result, is vigorously defending the lawsuit. At this time, the Company is unable to estimate potential losses, if any, related to the lawsuit.

Master SREC Purchase and Sale Agreement

The Company has forward sales agreements, which are related to a certain number of SRECs, to be generated from the Company’s solar energy systems located in Maryland, Massachusetts, Delaware, and New Jersey to be sold at fixed prices over varying terms of up to 20 years. In the event the Company does not deliver such SRECs to the counterparty, the Company could be forced to pay additional penalties and fees as stipulated within the contracts.

Guarantees

In connection with the acquisition of RPV Holdco 1, LLC, a wholly owned subsidiary of the Company, guaranty agreements were established in May 2020 by and between Spruce Holding Company 1, LLC, Spruce Holding Company 2, LLC, and Spruce Holding Company 3, LLC (“Spruce Guarantors”) and the investor members in the Funds. The Spruce Guarantors entered into guarantees in favor of the tax equity investors wherein they guaranteed the payment and performance of Solar Service Experts, LLC, a wholly owned subsidiary of the Company, under the Spruce Power 2 Maintenance Services Agreement and the Class B Member under the Limited Liability Company Agreement (“LLCA”).

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 13. Commitments and Contingencies, continued

These guaranties are subject to a maximum of the aggregate amount of capital contributions made by the Class A Member under the LLCA.

Indemnities and Guarantees

During the normal course of business, the Company has made certain indemnities and guarantees under which it may be required to make payments in relation to certain transactions. The duration of the Company’s indemnities and guarantees varies, however the majority of these indemnities and guarantees are limited in duration. No liabilities have been recorded for these indemnities and guarantees as of June 30, 2024.

Insurance Claims and Recoveries related to Maui Fires

In August 2023, a series of wildfires broke out in Hawaii, predominantly on the island of Maui, resulting in real and personal property and natural resource damage, personal injuries and loss of life and widespread power outages. The Company has recorded $0.2 million of receivables as of June 30, 2024 related to the insurance recoveries, with a corresponding entry to gain on asset disposal within the unaudited condensed statements of operations for the three and six months ended June 30, 2024.

Note 14. Net Income (Loss) Per Share

The following is a reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share for the three months ended June 30, 2024 and 2023:


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands, except share data)	2024		2023		2024		2023
Numerator:
Net income (loss) attributable to stockholders	$	(8,578)	$	3,065	$	(11,032)	$	(16,330)
Denominator:
Weighted average shares outstanding, basic	19,271,954		18,611,757		19,187,364		18,460,947
Dilutive effect of stock options and restricted stock units	—		1,589,075		—		—
Weighted average shares outstanding, diluted	19,271,954		20,200,832		19,187,364		18,460,947
Net income (loss) attributable to stockholders per share, basic	$	(0.45)	$	0.16	$	(0.57)	$	(0.88)
Net income (loss) attributable to stockholders per share, diluted	$	(0.45)	$	0.15	$	(0.57)	$	(0.88)

For any periods presented with a net loss, potentially dilutive outstanding securities, which include stock options, restricted stock units, and warrants, have been excluded from the computation of diluted net loss per share as their effect would be anti-dilutive for those periods. As such, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share are the same for those periods.

Note 15. Discontinued Operations

In the fourth quarter of 2022, the Company discontinued the operations of its Drivetrain and XL Grid operations. The following table provides supplemental detail of the Company’s discontinued operations contained within the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2024 and 2023:

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 15. Discontinued Operations, continued


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	2024		2023		2024		2023
Net income (loss) from discontinued operations:
Drivetrain	219		(183)		218		(4,049)
Total	$	219	$	(183)	$	218	$	(4,049)

XL Grid

The following table presents financial results of XL Grid operations:


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	2024		2023		2024		2023

Revenues	$	—	$	—	$	—	$	149
Operating expenses:
Cost of revenues - inventory and other direct costs	—		—		—		148
Selling, general, and administrative expenses	—		—		—		743
Gain on asset disposal	—		—		—		(742)

Total operating expenses	—		—		—		149
Net loss from discontinued operations	$	—	$	—	$	—	$	—

Drivetrain

The following table presents financial results of Drivetrain operations:


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	2024		2023		2024		2023

Revenues	$	16	$	12	$	37	$	20
Operating expenses:
Cost of revenues - inventory and other direct costs	(122)		168		(100)		29
Gain on asset disposal	(81)		—		(81)		—
Other	—		27		—		4,040
Total operating expenses	(203)		195		(181)		4,069
Net income (loss) from discontinued operations	$	219	$	(183)	$	218	$	(4,049)

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Spruce Power Holding Corporation


Notes to Unaudited Condensed Consolidated Financial Statements

Note 15. Discontinued Operations, continued

The following table presents aggregate carrying amounts of assets and liabilities of discontinued operations contained within the unaudited condensed consolidated balance sheets:


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023
Assets from discontinued operations:
Drivetrain	$	—	$	32

Total assets from discontinued operations	$	—	$	32

Liabilities from discontinued operations:
Drivetrain	$	133	$	170
Total liabilities from discontinued operations	$	133	$	170

Note 16. Subsequent Events

In July 2024, a series of wildfires broke out across the state of California destroying thousands of acres of forest and causing real and personal property damage. The Company is currently assessing the impact of these wildfires on its home solar systems and customer contracts in the area; however, the Company has not been able to validate the extent of the related damages.

Management has reviewed events subsequent to June 30, 2024 and prior to the filing of financial statements, and except as referenced within this Form 10-Q, the Company has determined there have been no other events that have occurred that would require adjustments or disclosures within the unaudited condensed consolidated financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information which our management believes is relevant to an assessment and understanding of our financial condition and results of operations. This discussion and analysis should be read together with our results of operations and financial condition and the unaudited condensed consolidated financial statements and related notes that are included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 9, 2024 (the “Annual Report”). In addition to historical financial information, this discussion and analysis contains forward-looking statements based upon current expectations that involve risks, uncertainties and assumptions. See the section entitled “Cautionary Note Regarding Forward-Looking Statements.” Actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors. The following information and any forward-looking statements should be considered in light of factors discussed elsewhere in this Quarterly Report on Form 10-Q and under “Risk Factors” in Item 1A of the Annual Report.

Certain figures, such as interest rates and other percentages, included in this section have been rounded for ease of presentation. Percentage figures included in this section have not in all cases been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this section may vary slightly from those obtained by performing the same calculations using the figures in our unaudited condensed consolidated financial statements or in the associated text. Certain other amounts that appear in this section may similarly not sum due to rounding.

As used in this discussion and analysis, references to “SPRU,” “the Company,” “we,” “us” or “our” refer only to Spruce Power Holding Corporation and its consolidated subsidiaries. Depending on the context, "Spruce Power" may refer to Legacy Spruce Power prior to its acquisition by the Company on September 9, 2022, or it may also refer to the operation of Legacy Spruce Power's business by the Company after such acquisition.

Overview

Spruce Power is a leading owner and operator of distributed solar energy assets across the United States, owning cash flows from approximately 75,000 home solar assets and contracts across the United States and making renewable energy more accessible to everyone. We generate revenues primarily through the sale of electricity generated by our home solar energy systems to homeowners pursuant to long-term agreements that obligate our subscribers to make recurring monthly payments, and the servicing of those agreements for other institutional owners of home solar energy systems. In addition, we also earn interest income from the investment made under the master lease with SS Holdings 2017, LLC and its subsidiaries ("SEMTH").

Corporate Strategy

Our corporate strategy has three key elements:

Leveraging the Spruce Power platform to become a leading provider of subscription-based solutions for distributed energy resources

We have more than a decade of experience owning and operating rooftop solar systems, as well as energy efficiency upgrades. We believe our proven platform for managing home solar can be extended to other categories of distributed energy resources, and by leveraging our platform, we intend to grow our revenues by providing subscription-based solutions for rooftop solar and energy storage and other future energy-related products to homeowners and businesses, including commercial and industrial (“C&I”) solar developers. We are focused on delivering best-in-class customer service, with investment into process and platform improvement for on-site monitoring, customer billing and working with qualified partners for field services.

Profitably growing return on assets by focusing on channels with the lowest customer acquisition cost

We seek to grow our subscriber revenues by focusing on those channels that have lowest customer acquisition costs and the ability to increase return on assets, including acquiring existing systems from other companies or investment funds, selling additional services to existing subscribers, selling services to new customers online and partnering with selected independent installers to provide a subscription-based solution for their customers.

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Increasing shareholder value by delivering predictable revenues, profits and cash flow

By focusing on subscription-based solutions with long-term customer contracts, we seek to generate consistent revenues, profits and cash flow.

Key Factors Affecting Operating Results

We are a leading owner and operator of distributed solar energy assets across the United States, offering subscription-based solutions to homeowners for rooftop solar energy storage and other energy-related products. Additionally, we provide servicing functions for our assets and customers, as well as for other institutional owners of home solar energy systems. Our operating results and ability to grow its business over time could be impacted by certain factors and trends that affect our industry, as well as elements of our strategy, such as:

Development of Distributed Energy Assets

Our future growth depends significantly on our ability to acquire operating home solar energy systems “in-bulk” from other companies. Industry data suggests there is a substantial existing base of operating home solar energy systems, providing us opportunities to pursue acquisitions. Over the long-term, the continued ability to pursue acquisitions is dependent on development of distributed energy assets, namely home solar energy systems, by third parties. This development may be impacted by numerous factors that influence homeowner demand for home solar energy systems including but not limited to macroeconomic dynamics, climate change impacts, and government policy and incentives.

Availability of Financing

Our ability to raise capital from third parties at reasonable terms is a critical element in supporting ownership of our existing home solar energy assets as well as enabling our future growth. We have historically utilized non-recourse, project-level debt as a primary source of capital for acquisitions. Our ability to raise debt either as means to refinance existing indebtedness or for future acquisitions may be impacted by general macroeconomic conditions, the health of debt capital markets, the interest rate environment, and general concerns over its industry or specific concerns over its business.

Results of Operations

The results of operations related to our Drivetrain and XL Grid businesses, which were determined to be discontinued operations in the fourth quarter of 2022, are presented as net income (loss) from discontinued operations in our unaudited condensed consolidated statements of operations. As a result, the continuing operational results reflect the operations related to our corporate functions and the results of operations for Legacy Spruce Power since its acquisition on September 9, 2022.

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Comparison of the Three Months Ended June 30, 2024 and 2023

Information with respect to our unaudited condensed consolidated statements of operations for the three months ended June 30, 2024 and 2023 are presented below:


	Three Months Ended June 30,
(In thousands, except per share and share amounts)	2024		2023		$ Change		% Change
Revenues	$	22,481	$	22,813	$	(332)	(1)	%
Operating expenses:
Cost of revenues	10,139		8,594		1,545		18
Selling, general and administrative expenses	16,701		15,985		716		4
Gain on asset disposal	(999)		(794)		(205)		26
Loss from operations	(3,360)		(972)		(2,388)		246
Other (income) expense:
Interest income	(5,257)		(3,240)		(2,017)		62
Interest expense, net	7,591		10,456		(2,865)		(27)
Other (income) expense, net	3,098		(9,975)		13,073		(131)
Net income (loss) from continuing operations	(8,792)		1,787		(10,579)		(592)
Net income (loss) from discontinued operations	219		(183)		402		(220)
Net income (loss)	(8,573)		1,604		(10,177)		(634)
Less: Net loss attributable to redeemable noncontrolling interests and noncontrolling interests	5		(1,461)		1,466		(100)
Net income (loss) attributable to stockholders	$	(8,578)	$	3,065	$	(11,643)	(380)

Net income (loss) per common share:
Basic	$	(0.45)	$	0.16	$	(0.61)	(381)
Diluted	$	(0.45)	$	0.15	$	(0.60)	(400)

Revenues and Cost of Revenues

Revenues decreased by $0.3 million, or 1.5%, to $22.5 million in the three months ended June 30, 2024 from $22.8 million for the three months ended June 30, 2023. The decrease was primarily due to a decrease in SREC revenues during the three months ended June 30, 2024.

Cost of revenues increased by $1.5 million, or 18.0%, to $10.1 million in the three months ended June 30, 2024 from $8.6 million for the three months ended June 30, 2023. The increase was primarily attributed to an increase in operating and maintenance costs. Cost of revenues related to our Drivetrain and XL Grid operations are included in net income (loss) from discontinued operations.

Selling, General and Administrative

Selling, general and administrative expenses increased by $0.7 million, or 4.5%, to $16.7 million in the three months ended June 30, 2024 from $16.0 million for the three months ended June 30, 2023. The increase was primarily due to higher compensation expenses of $2.2 million, which included one-time severance costs of $1.9 million recognized in the current period upon separation of the Former CEO from the Company effective April 12, 2024. This increase was partially offset by a reduction of $1.8 million in legal expenses for the three months ended June 30, 2024 resulting from the settlement of

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certain Legacy XL legal proceedings. Selling, general and administrative expenses related to the Drivetrain and XL Grid operations are included in net income (loss) from discontinued operations.

Gain on Asset Disposal

Gain on asset disposal increased by $0.2 million, or 25.8%, to $1.0 million in the three months ended June 30, 2024 from $0.8 million for the three months ended June 30, 2023. The increase is primarily due to a $0.2 million gain recognized during the three months ended June 30, 2024 for insurance proceeds related to the Maui fires, see Note 13. Commitments and Contingencies to the accompanying unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Interest Income

Interest income increased by $2.0 million, or 62.3%, to $5.3 million in the three months ended June 30, 2024 from $3.2 million for the three months ended June 30, 2023. The increase is due to incremental interest income of $2.4 million associated with the SEMTH Master Lease, slightly offset by a $0.4 million decrease in interest income earned on investments in U.S. Treasury securities during the current period.

Interest Expense, net

Interest expense, net decreased by $2.9 million, or 27.4%, to $7.6 million in the three months ended June 30, 2024, from $10.5 million for the three months ended June 30, 2023. The decrease is primarily due to a gain of $3.6 million recognized during the current period associated with the settlement of the Company’s interest rate swaps related to the SP4 Facility (see Note 9. Interest Rate Swaps to the accompanying unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q), which was partially offset by an increase in interest expense of $0.6 million during the current period.

Other (Income) Expense, net

Other (income) expense, net was a $3.1 million expense for the three months ended June 30, 2024, a decrease of $13.1 million from an income of $10.0 million for the three months ended June 30, 2023. The decrease is primarily the result of change in fair value of our interest rate swap agreements.

Comparison of the Six Months Ended June 30, 2024 and 2023

Information with respect to our unaudited condensed consolidated statements of operations for the six months ended June 30, 2024 and 2023 are presented below:

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	Six Months Ended June 30,
(In thousands, except per share and share amounts)	2024		2023		$ Change		% Change
Revenues	$	40,768	$	40,908	$	(140)	—	%
Operating expenses:
Cost of revenues	19,007		16,447		2,560		16
Selling, general and administrative expenses	30,170		31,702		(1,532)		(5)
Gain on asset disposal	(1,452)		(3,452)		2,000		(58)
Loss from operations	(6,957)		(3,789)		(3,168)		84
Other (income) expense:
Interest income	(10,643)		(5,591)		(5,052)		90
Interest expense, net	18,533		19,623		(1,090)		(6)
Other income, net	(3,606)		(4,630)		1,024		(22)
Net loss from continuing operations	(11,241)		(13,191)		1,950		(15)
Net income (loss) from discontinued operations	218		(4,049)		4,267		(105)
Net loss	(11,023)		(17,240)		6,217		(36)	%
Less: Net income (loss) attributable to redeemable noncontrolling interests and noncontrolling interests	9		(910)		919		(101)
Net loss attributable to stockholders	$	(11,032)	$	(16,330)	$	5,298	(32)

Net loss per common share:
Basic and diluted	$	(0.57)	$	(0.88)	$	0.31	(35)

Revenues and Cost of Revenues

Revenues decreased by $0.1 million, or 0.3%, to $40.8 million in the six months ended June 30, 2024 from $40.9 million for the six months ended June 30, 2023. The decrease is primarily due to a $0.1 million decrease in other revenues during the current period.

Cost of revenues increased by $2.6 million, or 15.6%, to $19.0 million in the six months ended June 30, 2024 from $16.4 million for the six months ended June 30, 2023. The increase is primarily due to an increase in certain operation and maintenance costs. Cost of revenues related to our Drivetrain and XL Grid operations are included in net income (loss) from discontinued operations.

Selling, General and Administrative

Selling, general and administrative expenses decreased by $1.5 million, or 4.8%, to $30.2 million in the six months ended June 30, 2024 from $31.7 million for the six months ended June 30, 2023. The decrease is primarily due to decreases in legal costs associated with Legacy XL legal matters and certain professional services, partially offset by one-time severance costs of $1.9 million recognized in the current period upon separation of the Former CEO from the Company effective April 12, 2024. Selling, general and administrative expenses related to the Drivetrain and XL Grid operations are included in net income (loss) from discontinued operations.

Gain on Asset Disposal

Gain on asset disposal decreased by $2.0 million, or 57.9%, to $1.5 million in the six months ended June 30, 2024 from $3.5 million for the six months ended June 30, 2023. The decrease is primarily the result of updated valuation reports and adjustments to provisional amounts assigned to gain on asset disposal recognized in the prior period, partially offset by a $0.2 million gain recognized in the current period for insurance proceeds related to the Maui fires.

Interest Income

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Interest income increased by $5.1 million, or 90.4%, to $10.6 million in the six months ended June 30, 2024 from $5.6 million for the six months ended June 30, 2023. The increase is primarily due to two full quarters of interest income related to the SEMTH Acquisition, which was completed in March 2023, recognized in the current period as compared to the prior period.

Interest Expense, net

Interest expense, net decreased by $1.1 million, or 5.6%, to $18.5 million in the six months ended June 30, 2024 from $19.6 million for the six months ended June 30, 2023. The decrease is primarily due to a gain of $3.6 million recognized during the current period due to settlement of the Company’s interest rate swaps related to the settlement of SP4 Facility, partially offset by incremental expenses of $2.6 million associated with two full quarters of interest expense related to the SP4 Facility assumed in connection with the SEMTH acquisition completed in 2023.

Other (Income) Expense, net

Other income, net was $3.6 million for the six months ended June 30, 2024, a decrease of $1.0 million from an expense of $4.6 million for the six months ended June 30, 2023. The decrease is primarily due to an unfavorable settlement of interest swaps recognized in the prior period.

Liquidity and Capital Resources

Our cash requirements depend on many factors, including the execution of our business strategy. We remain focused on carefully managing costs, including capital expenditures, maintaining a strong balance sheet, and ensuring adequate liquidity. Our primary cash needs are for debt service, acquisition of solar systems, operating expenses, working capital and capital expenditures to support the growth of our business. Working capital is impacted by the timing and extent of the business needs. As of June 30, 2024, we had net working capital of $125.1 million, including cash and cash equivalents and restricted cash of $150.2 million.

With the acquisition of Legacy Spruce Power in September 2022, we assumed all of the outstanding non-recourse debt of Legacy Spruce Power, which had a principal balance of $542.5 million on the date of the acquisition. With the SEMTH acquisition in the first quarter of 2023, we assumed $125.0 million of non-recourse debt, which was repaid in full in June 2024, see Note 8. Non-Recourse Debt to the accompanying unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. During the third quarter of 2023, we entered into a second amendment to our existing SP2 Facility, resulting in incremental term loans of approximately $21.4 million, proceeds of which were used to primarily fund the Tredegar acquisition.

During the second quarter of 2024, we obtained new term loans in the aggregate principal amount of $130.0 million, the proceeds of which were primarily used to repay $125.0 million related to the SEMTH acquisition. As of June 30, 2024, we had $612.9 million of aggregate non-recourse debt, including current portions. We are required to complete debt service coverage ratio calculations on a quarterly basis as part of our debt covenants. All debt covenant requirements were satisfied as of June 30, 2024. Based on our current liquidity, management believes that no additional capital will be needed to execute its current business plan over the next 12 months. We continually evaluate our cash needs to raise additional funds or seek alternative sources to invest in growth opportunities and other purposes.

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Cash Flows Summary

Presented below is a summary of our operating, investing and financing cash flows:


	Six Months Ended
(Amounts in thousands)	June 30, 2024		June 30, 2023
Net cash provided by (used in)
Continuing operating activities	$	(27,402)	$	(16,113)
Discontinued operating activities	100		(2,158)
Continuing investing activities	13,487		(14,563)
Discontinued investing activities	—		325
Continuing financing activities	(8,998)		(15,525)
Discontinued financing activities	81		—
Net change in cash and cash equivalents and restricted cash	$	(22,732)	$	(48,034)

Cash Flows Used in Operating Activities

The net cash used in continuing operations for the six months ended June 30, 2024 consists of the Company’s corporate costs and certain other costs that were not allocated to our discontinued operations.

Cash Flows Provided by Investing Activities

Cash provided by investing activity related to continuing operations for the six months ended June 30, 2024 primarily includes $10.8 million of proceeds from the SEMTH investment and $2.9 million of proceeds from the sale of solar energy systems.

Cash Flows Used in Financing Activities

The net cash used in financing activities related to continuing operations for the six months ended June 30, 2024 primarily includes $136.8 million for the repayment of the Company’s long term non-recourse debt, partially offset by new long term non-recourse debt obtained via the SET Facility of $130.0 million.

Critical Accounting Policies and Estimates

The unaudited condensed consolidated financial statements have been prepared in accordance with the generally accepted accounting principles of the U.S. as set forth in the Financial Accounting Standards Board’s Accounting Standards Codification, and we evaluate the various staff accounting bulletins and other applicable guidance issued by the SEC. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the consolidated balance sheet date, as well as the reported expenses incurred during the reporting periods. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to our unaudited condensed consolidated financial statements.

Our significant accounting policies are consistent with those discussed in Note 2. Summary of Significant Accounting Policies of the consolidated financial statements and the MD&A sections of our Annual Report on Form 10-K for the year ended December 31, 2023 and Note 2. Summary of Significant Accounting Policies to the accompanying unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

New and Recently Adopted Accounting Pronouncements

For information with respect to recent accounting pronouncements and the impact of these pronouncements in our unaudited condensed consolidated financial statements, see Note 2. Summary of Significant Accounting Policies to the accompanying unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The term “disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as “controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms.” The Company’s disclosure controls and procedures are designed to ensure that material information relating to the Company and its consolidated subsidiaries is accumulated and communicated to its management, including its Chief Executive Officer and its Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of its disclosure controls and procedures as of June 30, 2024. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of that date, due to the material weaknesses in internal control over financial reporting described below.

Material Weaknesses in Internal Control over Financial Reporting

A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the financial statements would not be prevented or detected on a timely basis. These deficiencies could result in misstatements to the Company's condensed consolidated financial statements that would be material and would not be prevented or detected on a timely basis.

As previously disclosed under “Item 9A – Controls and Procedures” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, management concluded that the Company did not maintain an effective control environment based on the criteria established in the Committee of Sponsoring Organizations (“COSO”) Framework, and its relevant components, which resulted in deficiencies that constitute material weaknesses, either individually or in the aggregate.

Control Environment

The Company failed to maintain a sufficient complement of qualified personnel to perform control activities. The lack of sufficient appropriately qualified personnel contributed to our failure to: (i) design and implement certain risk-mitigating internal controls; and (ii) consistently operate our internal controls. The control environment material weaknesses contributed to material weaknesses within our system of internal control over financial reporting in the Control Activities component of the Committee of Sponsoring Organizations (“COSO”) Framework.

Control Activities

The Company did not maintain effective control activities based on the criteria established in the COSO Framework and identified the following control deficiencies that constitute material weaknesses from the lack of effectively designed and implemented controls, either individually or in the aggregate:

•review and approval of manual journal entries, including implementing appropriate segregation of duties;

•complex transactions, inclusive of accounting for business combinations and the Company’s investment related to the SEMTH Master Lease Agreement and the related interest income; and

•revenue recognition, including the review of the contracts upon inception and/or acquisition and the accounting for revenue recognition under ASC 606, Revenue from Contracts with Customers.

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These deficiencies in control activities contributed to the potential for there to have been material accounting errors in multiple financial statement account balances and disclosures that would not have been prevented or detected timely.

However, after giving full consideration to these material weaknesses, and the additional analyses and other procedures that were performed to ensure that the Company’s unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q were prepared in accordance with GAAP, management has concluded that our unaudited condensed consolidated financial statements present fairly, in all material respects, our financial position, results of operations and cash flows as of and for the periods disclosed in conformity with GAAP.

Remediation Plan

The Company is committed to maintaining strong internal control over financial reporting. In response to the material weaknesses described above, management, with the oversight of the Audit Committee, has taken and is taking comprehensive actions to remediate the above material weaknesses. The remediation plan includes the following:

•developed and presented a training program educating control owners concerning financial statement risk and the principles of the Internal Control - Integrated Framework issued by COSO;

•implemented a formal journal entry review policy to govern the process by which all manual journal entry approvers would adhere to;

•implemented a system-based journal entry approval workflow to ensure manual journal entries have proper segregation of duties between journal entry creators and approvers;

•hiring professionals with the appropriate skills to perform control activities, including those involving complex and/or non-routine transactions;

•designing and implementing additional and/or enhanced controls in the areas of account reconciliations, contract accounting, revenue recognition, and financial statement analysis prepared in conformity with GAAP, and manual journal entries; and

•designing and implementing controls to address the identification, accounting, review and reporting of complex and/or non-routine transactions.

While management believes that these efforts will improve the Company's internal control over financial reporting, the implementation of these measures is ongoing and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles.

Management believes the Company is making progress toward achieving the effectiveness of its internal controls and disclosure controls. The actions that management is taking are subject to ongoing management review, as well as Audit Committee oversight. Management will continue to assess the effectiveness of the Company’s internal control over financial reporting and take steps to remediate the known material weaknesses expeditiously.

Changes in Internal Control Over Financial Reporting

Other than described above, there were no changes in the Company's internal control over financial reporting during the quarter ended June 30, 2024, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Securities Exchange Act of 1934, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

For a description of our material pending legal proceedings, see Legal Proceedings in Note 13. Commitments and Contingencies to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q and incorporated herein by reference.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risks and uncertainties relating to the Company's business disclosed in Part I, Item 1A, "Risk Factors," in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023. There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K, except as described below. Additional risks that we do not yet know of or that we currently think are immaterial may also impair our business operations.

Our performance may be negatively impacted by our recent Chief Executive Officer transition

On April 12, 2024, we announced that our Chairman, Christopher Hayes, had been named President and Chief Executive Officer to replace our Former CEO. There are a number of risks associated with a CEO transition, any of which may harm the Company. If the new CEO is unsuccessful at leading the management team or is unable to articulate and execute the Company’s strategy and vision, our business may be harmed, and our stock price may decline. If we do not successfully manage our CEO transition, it could be viewed negatively by our customers, employees or investors and could have an adverse impact on our business, financial condition, and operating results. With the change in leadership, there is a risk to retention of other members of senior management, as well as to continuity of business initiatives, plans, and strategies through the transition period and if we are unable to execute an orderly transition, our business may be adversely affected.

We are subject to risks associated with proxy contests and other actions of activist stockholders.

Publicly traded companies have increasingly become subject to campaigns by activist investors advocating corporate actions such as governance changes, financial restructurings, increased borrowings, special dividends, stock repurchases or even sales of assets or entire companies to third parties or the activists themselves. We received a notice dated April 17, 2024 from Clayton Capital Appreciation Fund, L.P. and its affiliates, Clayton Partners LLC, the JSCC Family Trust, and Jason Stankowski (collectively, “Clayton”), which owned approximately 2.1% of the Company’s outstanding shares at the time of submission, purporting to nominate a slate of two candidates for election as directors at our 2024 Annual Meeting of Stockholders. On June 21, 2024, we entered into a Cooperation Agreement with Clayton (the “Cooperation Agreement”) pursuant to which, among other things, we agreed to increase the size of our Board from six to seven directors and to take all necessary actions to appoint Clara Nagy McBane to our Board to fill the directorship resulting from the increase in the size of our Board and Clayton agreed to certain customary standstill provisions that will remain in effect until the date that is the earlier of (i) the date Clayton receives notice that we will not nominate Ms. McBane for re-election to our Board at the 2025 Annual Meeting of Stockholders, (ii) immediately following the closing of the polls on the election of directors at the 2025 Annual Meeting of Stockholders, (iii) August 31, 2025 if the 2025 Annual Meeting of Stockholders has not been held by that date, and (iv) in the event that any party materially breaches the Cooperation Agreement, the date that is 30 calendar days following written notice of such breach from the non-breaching party, if such breach (if capable of being cured) has not been cured by such date, or, if impossible to cure within 30 calendar days, such party has not taken substantive action to correct by such date. A proxy contest or related activities on the part of activist stockholders could adversely affect our business for a number of reasons, including, without limitation, the following:

•responding to proxy contests and other actions by activist stockholders can be costly and time-consuming, disrupting our operations and diverting the attention of our Board of Directors, management and our employees;

•perceived uncertainties as to our future direction may result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel, business partners, customers and others important to our success, any of which could negatively affect our business and our results of operations and financial condition;

•actions by activist stockholders may be exploited by our competitors, cause concern to our current or potential customers and make it more difficult to attract and retain qualified personnel;

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•if nominees advanced by activist stockholders are elected or appointed to our Board of Directors with a specific agenda, it may adversely affect our ability to effectively and timely implement our strategic plans or to realize long-term value from our assets, and this could in turn have an adverse effect on our business and on our results of operations and financial condition; and

•proxy contests may cause our stock price to experience periods of volatility.

We have received subpoenas from states attorneys general requesting information about our business. These investigations could result in substantial legal fees, fines, penalties or damages and may divert Management’s time and attention from our business

We have received subpoenas from state attorneys general requesting information about our business. These investigations could result in substantial legal fees, fines, penalties, or damages and may divert Management’s time and attention from our business. Specifically, we have received subpoenas from the attorneys general for the states of Connecticut, New Jersey, New York, and Texas regarding, among other things, our sales, marketing and billing practices. We are cooperating with these investigations, each of which have involved requests for a substantial volume of documents to be produced by the Company. While we are responding to these subpoenas with the assistance of counsel, it is possible that these investigations may result in a fine, penalty or injunction which may adversely affect our ability to operate in these states.

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

There were no share repurchases during the three months ended June 30, 2024.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

Exhibit No.

Description

Included

Form

Filing Date

3.1

Second Amended and Restated Certificate of Incorporation.

By Reference

8-K

December 23, 2020

3.2

Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation

By Reference

8-K

October 6, 2023

3.3

Certificate of Amendment changing name of Registrant to Spruce Power Holding Corporation

By Reference

8-K

November 14, 2022

3.4

Amended and Restated Bylaws, as amended as of November 10, 2022

By Reference

8-K

November 14, 2022

10.1*

Amended and Restated At-will Employ ment, Confidential Informat ion Invention Assignment, and Ar bitration Agreement , dated January 1, 2022, by and between Solar Service Experts and Jonathan M . Norling

Herewith

10.2*

E xecutive Employment Agreement, dated April 12, 2024, by and between Spr uce Power Holding Corporation and Christopher Hayes

Herewith

10.3*

Executive Separation Agreement, dated April 12, 2024, by and between Spruce Power Holding Corporation and Christian Fong

Herewith

Table of Contents

10.4*

Amended O ffer L etter, dated June 13, 2024, by and between Spruce Power Holding Corporation and Sarah Wells

Herewith

10.5

C ooperation Agreement, dated June 21, 202 4, by and among Spruce Power Holding Corporation , Clayton C apital Appreciation Fund, L.P. and Clayton Partners LLC

By Reference

8-K

June 24, 2024

10.6

C redit Agreement, dated as of June 26, 202 4, among Spruce SET Borrower 2024, LLC, as Borrower, Barings GPSF LLC, as Facility Agent for the financial institutions that may from time to time become parties hereto as Lenders, Com putershare Trust Company, National Association , as Collateral Agent and as Paying Agent and Lenders from time to time party thereto

By Reference

8-K

July 1, 2024

31.1*

Certification of Principal Executive Officer Pursuant to Rule 13a- 14(a) and Rule 15d-14(a) of the Securities and Exchange Act of 1934, as amended, pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.

Herewith

31.2*

Certification of Principal Financial Officer Pursuant to Rule 13a- 14(a) and Rule 15d-14(a) of the Securities and Exchange Act of 1934, as amended, pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.

Herewith

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.

Herewith

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.

Herewith

101.INS*

Inline XBRL Instance Document

Herewith

101.SCH*

Inline XBRL Taxonomy Extension Schema Document

Herewith

101.CAL*

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase Document

Herewith

101.LAB*

Inline XBRL Taxonomy Extension Label Linkbase Document

Herewith

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

Herewith

104*

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Herewith


*			Filed herewith

+			Indicates a management contract or compensatory plan or arrangement.

∧			In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act or deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933 except to the extent that the registrant specifically incorporates it by reference.

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.


	SPRUCE POWER HOLDING CORPORATION

Date: August 14, 2024	By:	/s/ Christopher Hayes
	Name:	Christopher Hayes
	Title:	Chief Executive Officer (Principal Executive Officer)

Date: August 14, 2024	By:	/s/ Sarah Weber Wells
	Name:	Sarah Weber Wells
	Title:	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

ENERGY SERVICE EXPERTS

AMENDED AND RESTATED AT-WILL EMPLOYMENT, CONFIDENTIAL INFORMATION, INVENTION ASSIGNMENT, AND ARBITRATION AGREEMENT

This Amended and Restated At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement (this “Agreement”) is made by and between Solar Service Experts, LLC, d/b/a Energy Service Experts (the “Company”), on behalf of itself, its parent, subsidiaries, affiliates, successors, and assigns (together with the Company, the “Company Parties”), and Jonathan M. Norling (“Employee”), amended and restated as of January 1, 2022 and effective as of March 15, 2019 (“Effective Date”). Employee and the Company Parties may sometimes be referenced herein individually as “Party” or collectively as the “Parties.”

In consideration of the mutual promises below, Employee’s employment with the Company, Employee’s receipt of previously undisclosed Company Confidential Information (as defined below), and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree to the following terms:

1.At-Will Employment

EMPLOYEE UNDERSTANDS AND ACKNOWLEDGES THAT EMPLOYEE’S EMPLOYMENT WITH THE COMPANY IS FOR NO SPECIFIED TERM AND CONSTITUTES “AT- WILL” EMPLOYMENT. EMPLOYEE ALSO UNDERSTANDS THAT ANY REPRESENTATION TO THE CONTRARY IS UNAUTHORIZED AND NOT VALID UNLESS IN WRITING AND SIGNED BY THE CEO OF ENERGY SERVICE EXPERTS. ACCORDINGLY, EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE’S EMPLOYMENT RELATIONSHIP MAY BE TERMINATED AT ANY TIME, WITH OR WITHOUT CAUSE (AS DEFINED BELOW) AND WITH OR WITHOUT PRIOR NOTICE, AT EMPLOYEE’S OPTION OR AT THE OPTION OF THE COMPANY. EMPLOYEE FURTHER ACKNOWLEDGES THAT THE COMPANY MAY MODIFY JOB TITLES, SALARIES, AND BENEFITS FROM TIME TO TIME AS IT DEEMS NECESSARY.

2.Termination of Employment

A.By the Company for Cause. Employee’s employment with the Company may be terminated by the Company, at any time, for “Cause” if, as determined by the Company in its sole discretion, Employee: (i) has committed an act involving fraud, dishonesty, disloyalty, or a conflict of interest against any of the Company Parties, (ii) has been convicted of or enters a plea of nolo contendere to any felony or a misdemeanor involving honesty, integrity, moral turpitude, or unethical conduct, (iii) has engaged in misconduct that results or could have resulted in serious injury (monetary or otherwise) to any of the Company Parties or is detrimental to any of the Company Parties’ business, reputation, or goodwill,

(iv) in carrying out Employee’s assigned duties, has engaged in negligence that results in material injury, monetary or otherwise, to any of the Company Parties, (v) uses illegal drugs or becomes intoxicated by alcohol or drugs in a manner that adversely affects Employee’s ability to perform Employee’s duties,

(vi) fails to cooperate in any respect with any investigation or inquiry authorized by any of the Company Parties or conducted by a governmental authority related to any of the Company Parties’ business,

(vii) fails to comply in any respect with any written or oral direction of any of the Parties that relates to the performance of Employee’s duties that Employee can physically perform, (viii) has violated any of the Company Parties’ written policies or rules, or (ix) fails to perform or uphold in any material respect any duty under this Agreement.

B.By the Company without Cause. Employee’s employment with the Company may be terminated by the Company, at any time, without Cause.

C.By the Employee for Good Reason. Employee shall have the right to terminate Employee’s employment with the Company for Good Reason, which shall mean: (i) a material

diminution in Employee’s base salary; (ii) a material diminution in Employee’s authority, duties and responsibilities;

(iii) a material breach by the Company of any of its covenants or obligations, in each case, to Employee under this Agreement; or (iv) the relocation of the geographic location of Employee’s principal place of employment by more than fifty miles from the location of Employee’s principal place of employment as of the Effective Date. Notwithstanding the foregoing provisions of this Section 2 or any other provision of this Agreement to the contrary, any assertion by Employee of a termination for Good Reason shall not be effective unless all of the following conditions are satisfied: (A) the condition giving rise to Employee’s termination of employment must have arisen without Employee’s written consent; (B) Employee must provide written notice to the Company of the existence of such condition(s) within sixty days after the initial occurrence of such condition(s); (C) the condition(s) specified in such notice must remain uncorrected for thirty (30) days following the Company’s receipt of such written notice; and (D) the date of Employee’s termination of employment must occur within 180 days after the initial occurrence of the condition(s) specified in such notice, otherwise, the Employee shall be deemed to have accepted the condition(s), or the Company’s correction of such condition(s), that may have given rise to the existence of Good Reason.

D.By the Employee Without Good Reason. Employee shall have the right to terminate Employee’s employment with the Company for convenience at any time and for any other reason, or no reason at all, upon notice to the Company; provided, however, that if Employee has provided notice to the Company of Employee’s termination of employment without Good Reason, the Company may determine, in it sole discretion, that such termination shall be effective on any date prior to the effective date of termination provided in such notice (and, if such earlier date is so required, then it shall not change the basis for Employee’s termination of employment nor be construed or interpreted as a termination of employment pursuant to Section 2.b).

E.Payments Upon Certain Terminations. If Employee’s employment is terminated by the Company without Cause or by the Employee with Good Reason, the Company shall pay Employee a one-time lump sum “Termination Payment” equal to the sum of (i) three months’ of Employee’s regular base pay and benefits, less applicable withholdings and deductions, (ii) any unpaid bonus awarded to Employee prior to the employment termination (including without limitation any amounts awarded pursuant to the Company’s Short Term Incentive Compensation Plan or Long Term Compensation Plan),

(iii) any bonus to which Employee would have been entitled under the Company’s Short Term Incentive Compensation Plan or other agreement had the Employee remained employed by the Company as of the date such bonus would have been awarded, pro-rated to the termination date, and (iv) if the employment termination is by the Company without Cause and the Company does not provide Employee with at least 30 days’ advance notice of such employment termination, a one-time lump sum “Notice Differential Payment,” less applicable withholdings and deductions. For purposes of this Agreement, the Notice Differential Payment shall be an amount equal to the difference between (x) the base salary that Employee earns between the date the Company provides notice of termination without Cause and the last date of Employee’s employment, and (y) the base salary and benefits that Employee would have received if the Company had given Employee 30 days’ advance notice of termination without Cause. If Employee’s employment is terminated by the Company without Cause in the event of the death or disability of the Employee, the Company shall pay Employee or his heirs an amount equal to one-half of the Termination Payment and one-half of the Notice Differential Payment that would be owed to the Employee. As a condition to receiving the Termination Payment, Employee must sign a separation agreement that shall be presented to Employee in connection with the ending of Employee’s employment, substantially in the form attached hereto as Exhibit C, which shall include a release of all claims against the Company Parties and such other terms as may be required by the Company. Employee will also be entitled to receive all payments for benefits after termination, including payments required under the Consolidated Omnibus Budget Reconciliation Act of 1985, in one lump sum.

3.Confidentiality

A.Definition of Confidential Information. In exchange for Employee’s promises made

in this Agreement, the Company will provide Employee access to previously undisclosed valuable, proprietary, confidential, or trade secret information (including any and all combinations of individual items of information), without regard to the length of Employee’s employment, that the Company has or will develop, acquire, create, compile, discover, or own that has value in or to the Company’s (or any of the other Company Parties’) business which is not generally known and which the Company (or any of the other Company Parties) wishes to maintain as confidential (“Company Confidential Information”). Company Confidential Information includes both information disclosed by the Company to Employee, and information developed or learned by Employee during the course of Employee’s employment with the Company. Company Confidential Information also includes all information of which the unauthorized disclosure could be detrimental to the interests of any of the Company Parties, whether or not such information is identified as Company Confidential Information. By example, and without limitation, Company Confidential Information includes any and all non-public information that relates to the any of the Company Parties’ actual or anticipated business and/or products, research or development, or technical data, trade secrets (as defined by applicable law), or know-how, including, but not limited to, research, product plans, or other information regarding any of the Company Parties’ products or services and markets therefor, customer lists and customers (including, but not limited to, customers of the Company on which Employee called or with which Employee may become acquainted during the term of Employee’s employment), software, developments, inventions, discoveries, ideas, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances, and other business information disclosed by any of the Company Parties, directly or indirectly, in writing, orally, or by drawings or inspection of premises, parts, equipment, or other Company property. Notwithstanding the foregoing, Company Confidential Information shall not include any such information that (i) was publicly known or made generally available prior to the time of disclosure by the Company to Employee; (ii) becomes publicly known or made generally available after disclosure by the Company to Employee through no wrongful action or omission by Employee; or (iii) is in Employee’s rightful possession, without confidentiality obligations, at the time of disclosure by the Company as shown by Employee’s then-contemporaneous written records; provided that any combination of individual items of information shall not be deemed to be within any of the foregoing exceptions merely because one or more of the individual items are within such exception, unless the combination as a whole is within such exception. Employee understands that nothing in this Agreement is intended to limit Employee’s rights to discuss the terms, wages, and working conditions of Employee’s employment, as protected by applicable law. In addition, Employee shall be permitted without violating this Agreement to disclose Company Confidential Information to the extent the disclosure is required by applicable state, federal, or other laws.

B.Nonuse and Nondisclosure. Employee agrees that during and after Employee’s employment with the Company, Employee will hold in the strictest confidence, and take all reasonable precautions to prevent any unauthorized use or disclosure of, Company Confidential Information. Employee agrees that Employee will not, at any time during or after Employee’s employment with the Company, (i) use Company Confidential Information for any purpose whatsoever other than for the benefit of the Company in the course of Employee’s employment, or (ii) disclose, directly or indirectly, any Company Confidential Information, in whole or in part, to any third party without the prior written authorization of the President, CEO, or the Board of Directors of the Company. Employee agrees that Employee obtains no title to any Company Confidential Information, and that as between the Parties, Energy Service Experts retains all Company Confidential Information as the sole property of Energy Service Experts. Employee understands that Employee’s unauthorized use or disclosure of Company Confidential Information during Employee’s employment may lead to disciplinary action, up to and including immediate termination and legal action by the Company. Employee also understands that Employee’s obligations under this Section 3.B shall continue after termination of Employee’s employment.

(1)Permitted Disclosures. Nothing in this Agreement will prevent Employee from: (i) making a report (other than in bad faith) of possible violations of applicable law to any governmental agency or entity; or (ii) making disclosures that are protected under the whistleblower

provisions of applicable law. Prior to disclosure when compelled by applicable law; Employee shall provide prior written notice to the Company’s CEO and General Counsel (as applicable).

(2)Notice of Immunity Under the Economic Espionage Act of 1996, as amended by the Defend Trade Secrets Act of 2016. Notwithstanding any other provision of this Agreement, Employee will not be held criminally or civilly liable under federal or state trade secret law for any disclosure of a trade secret that is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If Employee files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Employee may disclose the Company’s trade secrets to Employee's attorney and use the trade secret information in the court proceeding if the Employee (x) files any document containing the trade secret under seal; and (y) does not disclose the trade secret, except pursuant to court order.

C.Former Employer Confidential Information. Employee agrees that during Employee’s employment with the Company, Employee will not improperly use, disclose, or induce the Company to use any proprietary information or trade secrets of any former employer or other person or entity with which Employee has an obligation to keep in confidence. Employee further agrees that Employee will not bring onto the Company’s premises or transfer onto the Company’s technology systems any non-public document, proprietary information, or trade secrets belonging to any such third party unless disclosure to, and use by, the Company has been consented to in writing by such third party.

D.Third Party Information. Employee acknowledges that, as a result of Employee’s employment by the Company, Employee will have access to, or knowledge of, confidential or proprietary information or trade secrets of third parties, such as the Company’s customers, suppliers, licensors, licensees, partners, or collaborators (“Third Party Confidential Information”). Employee agrees to preserve and protect the confidentiality of such Third Party Confidential Information to the same extent as the Company Confidential Information and consistent with the Company’s agreement with any such third parties. Employee further agrees to comply with any and all Company policies and guidelines that may be adopted from time to time regarding Third Party Confidential Information. Employee understands that any unauthorized use or disclosure of Third Party Confidential Information or violation of any Company policies during Employee’s employment may lead to disciplinary action, up to and including immediate termination and legal action by the Company.

4.Ownership

A.Assignment of Inventions. Employee agrees that all right, title, and interest in and to any and all copyrightable material, notes, records, ideas, drawings, designs, logos, inventions, improvements, developments, discoveries and trade secrets conceived, discovered, authored, invented, developed or reduced to practice by Employee, solely or in collaboration with others, during the period of time Employee is in the employ of the Company (whether during business hours or otherwise and whether on the Company’s premises or otherwise), or with the use of the Company Parties’ equipment, supplies, facilities, or Company Confidential Information, and any copyrights, patents, trade secrets, mask work rights or other intellectual property rights relating to the foregoing, except as provided in Section 4.G below (collectively, “Inventions”), are the sole property of the Company. Employee agrees to promptly make full written disclosure to the Company of any Inventions, and to deliver and assign, and hereby does irrevocably assign fully to the Company, all of Employee’s rights, title, and interest in and to Inventions. Employee agrees that this assignment includes a present conveyance to the Company of ownership of Inventions that are not yet in existence. Employee further acknowledges that all original works of authorship that are made by Employee (solely or jointly with others) within the scope of and during Employee’s employment with the Company and that are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act. Employee understands and agrees that the decision whether or not to commercialize or market any Inventions is within the Company’s sole

discretion and for the Company’s sole benefit, and that no royalty or other consideration will be due to Employee as a result of the Company’s efforts to commercialize or market any such Inventions.

B.Pre-Existing Materials. Employee will inform the Company in writing before incorporating any inventions, discoveries, ideas, original works of authorship, developments, improvements, trade secrets and other proprietary information or intellectual property rights owned by Employee or in which Employee has an interest prior to, or separate from, Employee’s employment with the Company, including without limitation, any such inventions that meet the criteria set forth herein under Section 4.G (“Prior Inventions”) into any Invention or otherwise utilizing any such Prior Invention in the course of Employee’s employment with the Company, and the Company is hereby granted a nonexclusive, royalty-free, perpetual, irrevocable, transferable worldwide license (with the right to grant and authorize sublicenses) to make, have made, use, import, offer for sale, sell, reproduce, distribute, modify, adapt, prepare derivative works of, display, perform, and otherwise exploit such Prior Inventions, without restriction, including, without limitation, as part of or in connection with such Invention, and to practice any method related thereto. Employee will not incorporate any inventions, discoveries, ideas, original works of authorship, developments, improvements, trade secrets, and other proprietary information or intellectual property rights owned by any third party into any Invention without the Company’s prior written permission. Employee has attached hereto as Exhibit A, a list describing all Prior Inventions or, if no such list is attached, Employee represents and warrants that there are no such Prior Inventions. Furthermore, Employee represents and warrants that if any Prior Inventions are included on Exhibit A, they will not materially affect Employee’s ability to perform all obligations under this Agreement.

C.Moral Rights. Any assignment to Energy Service Experts of Inventions includes all rights of attribution, paternity, integrity, modification, disclosure, and withdrawal, and any other rights throughout the world that may be known as or referred to as “moral rights,” “artist’s rights,” “droit moral,” or the like (collectively, “Moral Rights”). To the extent that Moral Rights cannot be assigned under applicable law, Employee hereby irrevocably waives and agrees not to enforce any and all Moral Rights, including without limitation, any limitation on subsequent modification, to the extent permitted under applicable law.

D.Maintenance of Records. Employee agrees to keep and maintain adequate, current, accurate, and authentic written records of all Inventions made by Employee (solely or jointly with others) during the term of Employee’s employment with the Company. The records will be in the form of notes, sketches, drawings, electronic files, reports, or any other format that may be specified by the Company. As between the Company and Employee, the records are and will be available to and remain the sole property of Energy Service Experts at all times.

E.Further Assurances. Employee agrees to assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, and all other instruments that the Company shall deem proper or necessary in order to apply for, register, obtain, maintain, defend, and enforce such rights, and in order to deliver, assign and convey to the Company and its nominees the sole and exclusive rights, title, and interest in and to all Inventions, and testifying in a suit or other proceeding relating to such Inventions. Employee agrees that Employee’s obligations under this Section 4.E shall continue after the termination of Employee’s employment with the Company.

F.Attorney-in-Fact. Employee agrees that, if the Company is unable because of Employee’s unavailability, mental or physical incapacity, or for any other reason to secure Employee’s signature with respect to any Inventions, including, without limitation, for the purpose of applying for or pursuing any application for any United States or foreign patents or mask work or copyright registrations covering the Inventions assigned to Energy Service Experts in Section 4.A, then Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Employee’s agent and attorney-in-fact, to act for and on Employee’s behalf to execute and file any papers and oaths, and to do all other lawfully permitted acts with respect to such Inventions to further the

prosecution and issuance of patents, copyright and mask work registrations with the same legal force and effect as if executed by Employee. This power of attorney shall be deemed coupled with an interest, and shall be irrevocable.

G.Exception to Assignments. Employee understands that the provisions of this Agreement requiring assignment of Inventions to the Company do not apply to any Invention that Employee has developed entirely on Employee’s own time without using any of the Company Parties’ equipment, supplies, facilities, trade secret information, or Company Confidential Information (an “Other Invention”) except for those Other Inventions that either (i) relate at the time of conception or reduction to practice of such Other Invention to any of the Company Parties’ business, or actual or anticipated research or development, or (ii) result from or relate to any work that Employee performed for any of the Company Parties or to any Company Confidential Information or Inventions. Employee will not incorporate, or permit to be incorporated, any Other Invention owned by Employee or in which Employee has an interest into a Company product, process, or service without the Company’s prior written consent. Notwithstanding the foregoing sentence, if, in the course of Employee’s employment with the Company, Employee incorporates into a Company (or any of the other Company Parties) product, process, or service an Other Invention owned by Employee or in which Employee has an interest, Employee hereby grants to the Company a nonexclusive, royalty-free, fully paid-up, irrevocable, perpetual, transferable, sublicensable, worldwide license to reproduce, make derivative works of, distribute, perform, display, import, make, have made, modify, use, sell, offer to sell, and exploit in any other way such Other Invention, and to practice any method related thereto.

5.Conflicting Obligations

A.Current Obligations. Employee agrees that during the term of Employee’s employment with the Company, Employee will not engage, directly or indirectly, in any other business or undertake any other employment, occupation, consulting relationship, or commitment that is directly related to the business in which the Company is now involved or becomes involved or has plans to become involved, nor will Employee engage in any other activities that conflict with Employee’s obligations to the Company; provided, however, that in the event that Employee’s position is reduced to part-time, Employee may provide legal services to clients other than the Company, subject to the Company’s consent to any clients that may reasonably pose a conflict of interest.

B.Prior Relationships. Without limiting Section 5.A, Employee represents and warrants to the Company that Employee has no other agreements, relationships, or commitments to any other person or entity that conflict with the provisions of this Agreement, Employee’s obligations to the Company under this Agreement, or Employee’s ability to become employed and perform the services for which Employee is being hired by the Company. Employee further agrees that if Employee has signed a confidentiality agreement or similar type of agreement with any former employer or other entity, Employee will comply with the terms of any such agreement to the extent that its terms are lawful under applicable law. Employee represents and warrants that after undertaking a careful search (including searches of Employee’s computers, cell phones, electronic devices, and documents), Employee has returned all property and confidential information belonging to all prior employers (and/or other third parties for which Employee has performed services in accordance with the terms of any applicable agreement). Moreover, Employee agrees to fully indemnify the Company Parties, and their directors, officers, agents, employees, investors, shareholders, administrators, and divisions for all verdicts, judgments, settlements, and other losses incurred by any of them resulting from Employee’s breach of Employee’s obligations under any agreement with a third party to which Employee is a party or obligation to which Employee is bound, as well as any reasonable attorneys’ fees and costs if the plaintiff is the prevailing party in such an action, except as prohibited by law.

6.Company Property and Materials

A.Definition of Electronic Media Equipment and Electronic Media Systems. Employee understands that “Electronic Media Equipment” includes, but is not limited to, computers, external storage devices, thumb drives, handheld electronic devices, telephone equipment, and other

electronic media devices. Employee understands that “Electronic Media Systems” includes, but is not limited to, computer servers, messaging and email systems or accounts, and web-based services (including cloud- based information storage accounts), whether provided for Employee’s use directly by the Company or by third-party providers on behalf of the Company.

B.Return of Company Property. Employee understands that anything that Employee created or worked on for any of the Company Parties during Employee’s employment with the Company belongs solely to the Company and that Employee cannot remove, retain, or use such information without the Company’s express written permission. Accordingly, upon request by the Company and upon the Employee’s separation from employment with the Company, Employee agrees to immediately deliver to Energy Service Experts, and not to keep in Employee’s possession, recreate, or deliver to anyone else, any and all property belonging to any of the Company Parties, including, but not limited to, Company Confidential Information, Third Party Confidential Information, all Company equipment including all Company Electronic Media Equipment, all tangible embodiments of the Inventions, all electronically stored information and passwords to access such property, Company credit cards, records, data, notes, notebooks, reports, files, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, photographs, charts, any other documents and property, and reproductions of any of the foregoing items, including, without limitation, those records maintained pursuant to Section 4.D.

C.Return of Company Information on Company Electronic Media Equipment. In connection with Employee’s obligation to return information to the Company, Employee agrees not to copy, delete, or alter any information, including personal information voluntarily created or stored, contained upon Employee’s Company Electronic Media Equipment before Employee returns the information to the Company. In addition, if Employee has used any personal Electronic Media Equipment or personal Electronic Media Systems to create, receive, store, review, prepare, or transmit any Company information, including but not limited to, Company Confidential Information, Employee agrees to make a prompt and reasonable search for such information in good faith, including reviewing any personal Electronic Media Equipment or personal Electronic Media Systems to locate such information and, if Employee locates such information, Employee agrees to notify the Company of that fact and then provide the Company with a computer-useable copy of all such Company information from those equipment and systems. Employee agrees to cooperate reasonably with the Company to verify that the necessary copying is completed (including upon request providing a sworn declaration confirming the return of property and deletion of information), and, upon confirmation of compliance by the Company, Employee agrees to delete and expunge all Company information.

D.No Expectation of Privacy in Company Property. Employee understands that Employee has no expectation of privacy in Company property, and Employee agrees that any property situated on the Company’s premises, or held by third-party providers for the benefit of the company, is subject to inspection by Company personnel at any time with or without further notice. Employee also understands and agrees that as it relates to the Company’s desire to protect its confidential and proprietary information, Employee has no expectation of privacy as to any personal Electronic Media Equipment or personal Electronic Media Systems that Employee has used for Company purposes. Employee further agrees that the Company, at its sole discretion, may have access to such personal Electronic Media Equipment or personal Electronic Media Systems to retrieve, destroy, or ensure the permanent deletion of Company information from such equipment or systems. Employee also consents to an exit interview and an audit to confirm compliance with this Section 6, and Employee will certify in writing that Employee has complied with the requirements of this Section 6.

E.Waiver of Statutory Information Rights. Employee hereby waives any current or future rights Employee may have under Section 220 of the Delaware General Corporation Law (and similar rights under other applicable law) to inspect, or make copies and extracts from, the Company’s stock ledger, any list of its stockholders, or any other books and records of any of the Company Parties, in Employee’s capacity as a holder of stock, shares, units, options, or any other equity instrument, to the

maximum extent permitted by law.

F.Company Obligations Regarding Directors and Officers Insurance. During the term hereof, and for all periods applicable to Employee’s employment with the Company, the Company shall have the obligation to obtain and maintain directors’ and officers’ insurance covering Employee in his capacity as an officer of the Company.

7.No Solicitation

A.No Solicitation.

(1)Non-Solicitation of Customers. Employee agrees that, during Employee’s employment for the Company and for a period of three (3) months immediately following the ending of Employee’s relationship with the Company (the “Restriction Period”), Employee shall not contact, or cause to be contacted, directly or indirectly, or engage in any form of oral, verbal, written, recorded, transcribed, or electronic communication with any customer with whom Employee had contact relating to the business of the Company, or about whom Employee had or has access to Company Confidential Information, (“Customer”), for the purposes of conducting business that is competitive or similar to that of any of the Company Parties or for the purpose of disadvantaging any of the Company Parties’ business in any way. Employee acknowledges and agrees that the Customers did not use or inquire of the Company’s services solely as a result of Employee’s efforts, and that the efforts of other Company personnel and resources are responsible for the Company’s relationship with the Customers. Employee further acknowledges and agrees that the identity of the Customers is not readily ascertainable or discoverable through public sources, and that the Company’s list of Customers was cultivated with great effort and secured through the expenditure of considerable time and money by the Company.

(2)Non-Solicitation of Employees. Employee understands and acknowledges that the Company has expended and continues to expend significant time and expense in recruiting and training its employees and that the loss of employees would cause significant and irreparable harm to the Company. Employee agrees that, during the Restriction Period, Employee will not directly or indirectly hire, solicit, or recruit, or attempt to hire, solicit, or recruit, any employee of the Company to leave their employment with the Company, nor will Employee contact any employee of the Company, or cause an employee of the Company to be contacted, for the purpose of leaving employment with the Company.

(3)Non-Solicitation of Others. Employee agrees that, during the Restriction Period, Employee will not solicit, encourage, or induce, or cause to be solicited, encouraged or induced, directly or indirectly, any franchisee, joint venture, supplier, vendor, or contractor who conducted business with any of the Company Parties at any time during the preceding two year period, to terminate or adversely modify any business relationship with any of the Company Parties or not to proceed with, or enter into, any business relationship with any of the Company Parties, nor shall Employee otherwise interfere with any business relationship between any of the Company Parties and any such franchisee, joint venture, supplier, vendor or contractor.

B.Acknowledgements. Employee acknowledges that Employee will derive significant value from the Company’s agreement to provide Employee with previously undisclosed Company Confidential Information to enable Employee to optimize the performance of Employee’s duties to the Company. Employee further acknowledges that Employee’s fulfillment of the obligations contained in this Agreement, including, but not limited to, Employee’s obligation neither to disclose nor to use Company Confidential Information other than for the Company’s exclusive benefit and Employee’s obligations not to solicit contained in subsection (A) above, is necessary to protect Company Confidential Information and, consequently, to preserve the value and goodwill of the Company Parties. Employee also acknowledges the time, geographic, and scope limitations of Employee’s obligations under subsection

(A) above are fair and reasonable in all respects, especially in light of the Company’s need to protect Company Confidential Information and the international scope and nature of the Company’s business, and that Employee will not be precluded from gainful employment if Employee is obligated not to solicit

Company customers or others during the period as described above. In the event of Employee’s breach or violation of this Section 7, or good faith allegation by the Company of Employee’s breach or violation of this Section 7, the restricted periods set forth in this Section 7 shall be tolled until such breach or violation, or dispute related to an allegation by the Company that Employee has breached or violated this Section 7, has been duly cured or resolved, as applicable.

C.Separate Covenants. The covenants contained in subsection (A) above shall be construed as a series of separate covenants, one for each city, county and state of the United States. Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant contained in subsection (A) above. If, in any judicial or arbitral proceeding, a court or arbitrator refuses to enforce any of such separate covenants (or any part thereof), then such unenforceable covenant (or such part) shall be revised, or if revision is not permitted it shall be eliminated from this Agreement, to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced. In the event that the provisions of subsection (A) above are deemed to exceed the time, geographic, or scope limitations permitted by applicable law, then such provisions shall be reformed to the maximum time, geographic, or scope limitations, as the case may be, then permitted by such law. In the event that the applicable court or arbitrator does not exercise the power granted to it in the prior sentence, the Parties agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term.

1.Notification of New Employer

In the event that Employee’s employment with the Company ends, Employee hereby consents to notification by the Company to Employee’s new and prospective employers about Employee’s obligations under this Agreement.

2.Use of Name & Likeness

Employee authorizes the Company to use, reuse, and to grant others the right to use and reuse, Employee’s name, photograph, likeness (including caricature), voice, and biographical information, and any reproduction or simulation thereof, in any form of media or technology now known or hereafter developed, during Employee’s employment, for any purposes related to the Company’s business, such as marketing, advertising, credits, and presentations.

3.Conflict of Interest Guidelines

Employee agrees to diligently adhere to all policies of the Company, including the Company’s insider trading policies and the Company’s Conflict of Interest Guidelines, as may be revised from time to time. A copy of the Company’s current Conflict of Interest Guidelines is attached as Exhibit B hereto.

4.Representations

Without limiting Employee’s obligations under Section 4.E above, Employee agrees to execute any proper oath or verify any proper document required to carry out the terms of this Agreement. Employee represents and warrants that Employee’s performance of all the terms of this Agreement will not breach any agreement to keep in confidence information acquired by Employee in confidence or in trust prior to employment by the Company. Employee hereby represents and warrants that Employee has not entered into, and will not enter into, any oral or written agreement in conflict herewith.

5.AUDIT

Employee acknowledges that Employee has no reasonable expectation of privacy in any computer, handheld device, telephone, voicemail, email or other technology system that is used to conduct the business of any of the Company Parties. All information, data, and messages created, received, sent, or stored in these systems are, at all times, the property of the Company. As such, the Company has the right to audit and search all such items and systems, without further notice to Employee, to ensure that the Company is licensed to use the software on the Company’s devices in compliance with the Company’s software licensing policies, to ensure compliance with the Company’s policies, and for any other business- related purposes in the Company’s sole discretion. Employee understands that Employee is not permitted to add any unlicensed, unauthorized, or non-compliant applications to any of the Company Parties’ technology systems, including, without limitation, open source or free software not authorized by the Company, and that Employee shall refrain from copying unlicensed software onto the Company’s technology systems or using non-licensed software or websites. Employee understands that it is Employee’s responsibility to comply with the Company’s policies governing use of the Company’s documents and the internet, email, telephone, and technology systems to which Employee will have access in connection with Employee’s employment.

Employee is aware that the Company has or may acquire software and systems that are capable of monitoring and recording all Company network traffic to and from any computer, handheld device, telephone, voicemail, email, or other technology system Employee may use to access the Company’s internal networks. The Company reserves the right to access, review, copy, and delete any of the information, data, or messages accessed through these systems with or without notice to Employee and/or in Employee’s absence. This includes, but is not limited to, all e-mail messages sent or received, all website visits, all chat sessions, all news group activity (including groups visited, messages read, and postings by Employee), and all file transfers into and out of the Company’s internal networks. The Company further reserves the right to retrieve previously deleted messages from e-mail or voicemail and monitor usage of the Internet, including websites visited and any information Employee has downloaded. In addition, the Company may review Internet and technology systems activity and analyze usage patterns, and may choose to publicize this data to assure that technology systems are devoted to legitimate business purposes.

6.Mandatory Arbitration

A.Arbitration. IN EXCHANGE FOR THE MUTUAL PROMISES CONTAINED IN THIS AGREEMENT, AND AS A CONDITION OF EMPLOYEE’S EMPLOYMENT WITH THE COMPANY, THE COMPANY PARTIES AND EMPLOYEE MUTUALLY CONSENT TO THE RESOLUTION BY ARBITRATION OF ALL DISPUTES, CONTROVERSIES, OR CLAIMS (“CLAIMS”), PAST, PRESENT, OR FUTURE, INCLUDING, WITHOUT LIMITATION, ANY CLAIMS ARISING OUT OF, RELATING TO, OR RESULTING FROM EMPLOYEE’S EMPLOYMENT OR RELATIONSHIP WITH THE COMPANY, THE ENDING OF EMPLOYEE’S EMPLOYMENT OR RELATIONSHIP WITH THE COMPANY, OR THAT THE COMPANY PARTIES MAY HAVE AGAINST EMPLOYEE OR THAT EMPLOYEE MAY HAVE AGAINST ANY OF THE FOLLOWING: (1) THE COMPANY PARTIES, AS DEFINED IN THIS AGREEMENT, (2) THE COMPANY PARTIES’ OFFICERS, DIRECTORS, EMPLOYEES, OR AGENTS IN THEIR CAPACITY AS SUCH OR OTHERWISE, (3) BENEFIT PLANS OF THE COMPANY PARTIES, AND/OR (4) ALL SUCCESSORS OR ASSIGNS OF ANY OF THEM.

(1)The Federal Arbitration Act shall govern this Agreement, which evidences a transaction involving commerce.

(2)Covered Claims. The only claims that are subject to arbitration are those that, in the absence of this Agreement, would have been justiciable under applicable state or federal law. The claims subject to arbitration include, but are not limited to: claims for breach of any contract or covenant, including but not limited to any breach of this Agreement, tort claims, claims for wages or other compensation due, claims incidental to the employment relationship but arising after that relationship ends, claims for wrongful termination, discrimination, or harassment, claims for violation of any federal,

state, local, or other governmental law, statute, regulation, or ordinance, except claims excluded in the next section titled “Claims Not Subject to Arbitration.”

(3)Claims Not Subject to Arbitration. Claims for workers’ compensation benefits, unemployment compensation benefits, or any other claims that, as a matter of law, the Parties cannot agree to arbitrate, are not subject to arbitration. The Parties may also pursue initial injunctive relief in a court of competent jurisdiction where either Party alleges or claims a violation of this Agreement or any other agreement regarding trade secrets, confidential information, non-competition, or non-solicitation. Employee understands that any breach or threatened breach of such an agreement will cause irreparable injury and that money damages will not provide an adequate remedy therefor and the Parties hereby consent to the issuance of an injunction without posting of a bond. In the event either Party seeks injunctive relief, the prevailing Party shall be entitled to recover reasonable costs and attorneys’ fees without regard for the prevailing Party in the final judgment, if any. Such attorneys’ fees and costs shall be recoverable on written demand at any time, including but not limited to, prior to entry of a final judgment, if any, by the court, and must be paid within thirty (30) days after demand or else such amounts shall be subject to the accrual of interest at a rate equal to the maximum statutory rate.

(4)Administrative Relief. Employee understands that nothing in this Agreement prohibits Employee from pursuing an administrative claim with a local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, including but not limited to, the Equal Employment Opportunity Commission, the National Labor Relations Board, or the Workers’ Compensation Board. This Agreement does, however, preclude Employee from pursuing court action regarding any such claim, except as permitted by law.

B.Class Action Waiver. The Parties agree that there will be no right or authority for any dispute to be brought, heard, or arbitrated as a class action and/or as a collective action (“Class Action Waiver”), and that the Arbitrator shall not have any authority to hear or arbitrate any such dispute. The interpretation, applicability, enforceability, or formation of this Class Action Waiver, including but not limited to any claim that all or part of this Class Action Waiver is void or voidable, may be determined only by a court and not by an arbitrator. Notwithstanding this Class Action Waiver, the Company and Employee agree that Employee is not waiving Employee’s rights under Section 7 of the National Labor Relations Act.

C.Procedure. The arbitration shall be administered by Judicial Arbitration & Mediation Services, Inc. (“JAMS”), and except as provided in this Agreement, shall be in accordance with the Employment Arbitration Rules & Procedures (the “JAMS Rules”) in effect at the time the arbitration is commenced, provided, however, that the JAMS Rules shall not contradict or otherwise alter the terms of this Agreement, including but not limited to the below cost-sharing provision.

(1)The arbitration shall be before a single arbitrator selected in accordance with the applicable JAMS Rules, and the Arbitrator shall be a former federal or state court judge. Unless the Parties agree otherwise, the arbitration shall take place in Harris County, Texas.

(2)Discovery in any arbitration proceeding shall be conducted in accordance with the JAMS Rules. The Arbitrator shall have exclusive authority to consider and enter orders concerning any issue arising related to the conduct of discovery. Each Party to this Agreement can petition and/or request that the Arbitrator allow additional discovery, and additional discovery may be conducted pursuant to the Parties’ mutual stipulation or as ordered by the Arbitrator. The Federal Rules of Evidence shall also apply to any arbitration proceeding.

(3)Employee understands that the Parties shall each pay an equal share of the costs and expenses of such arbitration (“Arbitration Costs”), except as prohibited by law, and understands that each Party shall separately pay its respective attorneys’ fees and costs. In the event that JAMS fails, refuses, or otherwise does not enforce the aforementioned arbitration costs-sharing provision, either Party may commence an action to recover such amounts against the non-paying Party in court and

the non-paying Party shall reimburse the moving Party for the attorneys’ fees and costs incurred in connection with such action.

(4)The Arbitrator shall have the authority to consider and decide any motions brought by any Party, including motions to dismiss and/or motions for summary judgment, prior to the arbitration hearing, and shall apply the standards governing such motions under the Federal Rules of Civil Procedure.

(5)The Arbitrator shall issue a written decision on the merits stating the essential findings and conclusions on which the Arbitrator’s award is based. Any arbitral award shall be final and binding upon the Parties. Judicial review shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 9-

11. The decision of the Arbitrator may be entered and enforced as a final and binding judgment in any court of competent jurisdiction.

(6)The Arbitrator may award any Party any remedy to which that Party is entitled under applicable law, but such remedies shall be limited to those that would be available to a party in a court of law for the claims presented to and decided by the Arbitrator. The Arbitrator shall apply the substantive law, including but not limited to applicable statutes of limitations, of Texas, or federal law, or both, as applicable to the claim(s) asserted. The Arbitrator is without jurisdiction to apply any different substantive law or law of remedies.

D.WAIVER OF TRIAL BY JURY. THE PARTIES UNDERSTAND AND FULLY AGREE THAT BY ENTERING INTO THIS AGREEMENT, THEY ARE GIVING UP THEIR RIGHT TO A JURY TRIAL AND THAT PURSUANT TO THE TERMS OF THIS AGREEMENT, THEY ARE AGREEING TO ARBITRATE CLAIMS COVERED BY THIS AGREEMENT.

E.Voluntary Nature of Agreement. EMPLOYEE ACKNOWLEDGES AND AGREES THAT EMPLOYEE IS EXECUTING THIS AGREEMENT VOLUNTARILY AND WITHOUT ANY DURESS OR UNDUE INFLUENCE BY THE COMPANY OR ANYONE ELSE. EMPLOYEE FURTHER ACKNOWLEDGES AND AGREES THAT EMPLOYEE HAS CAREFULLY READ THIS AGREEMENT AND ASKED ANY QUESTIONS NEEDED FOR EMPLOYEE TO UNDERSTAND THE TERMS, CONSEQUENCES, AND BINDING EFFECT OF THIS AGREEMENT AND FULLY UNDERSTAND IT, INCLUDING THAT EMPLOYEE IS WAIVING THE RIGHT TO A JURY TRIAL. FINALLY, EMPLOYEE AGREES THAT EMPLOYEE HAS BEEN PROVIDED AN OPPORTUNITY TO SEEK THE ADVICE OF AN ATTORNEY OF EMPLOYEE’S CHOICE BEFORE SIGNING THIS AGREEMENT.

8.Miscellaneous

A.Governing Law; Consent to Personal Jurisdiction. This Agreement will be governed by the laws of the state of Texas, without regard to any conflicts-of-law principles. Any action or proceeding by either of the Parties seeking injunctive relief in aid of arbitration or seeking to enforce an arbitration award shall be brought only in a state or federal court located in Harris County, Texas.

B.Assignability. This Agreement shall not be assigned without the prior written consent of the other party hereto Notwithstanding anything to the contrary herein, Energy Service Experts may assign this Agreement and its rights and obligations under this Agreement to any successor to all or substantially all of Energy Service Experts’s relevant assets, whether by merger, consolidation, reorganization, reincorporation, sale of assets or stock, or otherwise. There are no intended third-party beneficiaries to this Agreement, except as may be expressly otherwise stated. For avoidance of doubt, the Company’s successors and assigns are authorized to enforce the Company’s rights under this Agreement.

C.Entire Agreement. This Agreement, together with the Exhibits hereto, sets forth the entire agreement and understanding between the Company and Employee with respect to Employee’s employment with the Company and the other subject matters herein, and supersedes all prior written and

oral agreements, discussions, or representations between the Parties, including, but not limited to, any representations made during Employee’s interview(s) or relocation negotiations. Employee represents and warrants that Employee is not relying on any statement or representation not contained in this Agreement.

Any subsequent change or changes in Employee’s duties, salary, compensation, conditions, or any other terms of Employee’s employment will not affect the validity or scope of this Agreement. This Agreement shall survive the termination of Employee’s assignment/employment and the expiration of any benefit.

D.Headings. Headings are used in this Agreement for reference only and shall not be considered when interpreting this Agreement.

E.Severability. If any provision of this Agreement is adjudged to be void or voidable or otherwise unenforceable, in whole or in part, such provision shall be severed from this Agreement, and the adjudication shall not affect the validity of the remainder of the Agreement.

F.Modification, Waiver. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in a writing signed by the President or CEO of Energy Service Experts and Employee. A waiver of one or more provisions of this Agreement by any Party shall not be a waiver of the entire Agreement, and waiver by Energy Service Experts of a breach of any provision of this Agreement will not operate as a waiver of any other or subsequent breach.

G.Survivorship. The rights and obligations of the parties to this Agreement will survive termination of Employee’s employment with the Company.

9.Protected Activity Not Prohibited

Employee understands that nothing in this Agreement shall in any way limit or prohibit Employee from engaging for a lawful purpose in any Protected Activity. For purposes of this Agreement, “Protected Activity” shall mean filing a charge or complaint, or otherwise communicating, cooperating, or participating with, any state, federal, or other governmental agency, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, and the National Labor Relations Board. Notwithstanding any restrictions set forth in this Agreement, Employee understands that Employee is not required to obtain authorization from the Company prior to disclosing information to, or communicating with, such agencies, nor is Employee obligated to advise the Company as to any such disclosures or communications. Notwithstanding the foregoing, in making any such disclosures or communications, Employee agrees to take all reasonable precautions to prevent any unauthorized use or disclosure of any information that may constitute Company Confidential Information to any parties other than the relevant government agencies. Employee further understands that “Protected Activity” does not include the disclosure of any of the Company Parties’ attorney-client privileged communications, and that any such disclosure without the Company’s written consent shall constitute a material breach of this Agreement.

[SIGNATURE PAGE TO ESE AT-WILL EMPLOYMENT, CONFIDENTIAL INFORMATION, INVENTION ASSIGNMENT, AND ARBITRATION AGREEMENT]

EMPLOYEE:

Date:

1/1/22

Jonathan M. Norling

/s/ Jonathan M. Norling_____

Signature

SOLAR SERVICE EXPERTS, LLC, d/b/a Energy Service Experts:

Date: 1/1/22

Christian Fong

/s/ Christian Fong______

Signature

EXHIBIT A

LIST OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP


Title			Date			Identifying Number or Brief Description

1/1/22

No inventions or improvements

Additional Sheets Attached

Date:

Jonathan M. Norling

/s/ Jonathan M. Norling

Signature

EXHIBIT B

ENERGY SERVICE EXPERTS CONFLICT OF INTEREST GUIDELINES

It is the policy of Energy Service Experts to conduct its affairs in strict compliance with the letter and spirit of the law and to adhere to the highest principles of business ethics. Accordingly, all officers, employees, and independent contractors must avoid activities that are in conflict, or give the appearance of being in conflict, with these principles and with the interests of the Company. The following are potentially compromising situations that must be avoided:

1.Revealing confidential information to outsiders or misusing confidential information in violation of the At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement. Unauthorized divulging of information in violation of the At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement is a violation of this policy whether or not for personal gain and whether or not harm to the Company is intended. (The At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement elaborates on this principle and is a binding agreement.)

2.Accepting or offering substantial gifts, excessive entertainment, favors, or payments that may be deemed to constitute undue influence or otherwise be improper or embarrassing to the Company.

3.Participating in civic or professional organizations that might involve divulging confidential information of the Company.

4.Initiating or approving personnel actions affecting reward or punishment of employees or applicants where there is a family relationship or is or appears to be a personal or social involvement.

5.Initiating or approving any form of personal or social harassment of employees.

6.Investing or holding outside directorship in suppliers, customers, or competing companies, including financial speculations, where such investment or directorship might influence in any manner a decision or course of action of the Company.

7.Borrowing from or lending to employees, customers, or suppliers.

8.Acquiring real estate of interest to the Company.

9.Improperly using or disclosing to the Company any proprietary information or trade secrets of any former or concurrent employer or other person or entity with whom obligations of confidentiality exist.

10.Unlawfully discussing prices, costs, customers, sales, or markets with competing companies or their employees.

11.Making any unlawful agreement with distributors with respect to prices.

12.Improperly using or authorizing the use of any inventions that are the subject of patent claims of any other person or entity.

Each officer, employee, and independent contractor must take every necessary action to ensure compliance with these guidelines and to bring problem areas to the attention of higher management for review. Violations of this conflict of interest policy may result in discharge without warning. Employee understands that nothing in this Agreement is intended to limit employees’ rights to discuss the terms, wages, and working conditions of their employment, as protected by applicable law.

Protected Activity Not Prohibited. Nothing in these guidelines shall in any way limit or prohibit an employee from engaging for a lawful purpose in any Protected Activity. For purposes of these guidelines, “Protected Activity” shall mean filing a charge or complaint, or otherwise communicating, cooperating, or participating with, any state, federal, or other governmental agency, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, and the National Labor Relations Board. Notwithstanding any restrictions set forth in these guidelines, an employee is not required to obtain

authori1z/a1t/i2on2 from the Company prior to disclosing information to, or communicating with, such agencies, nor is an employee obligated to advise the Company as to any such disclosures or communications.

Notwithstanding the foregoing, in making any such disclosures or communications, each employee agrees to take all reasonable precautions to prevent any unauthorized use or disclosure of any information that may constitute Company confidential information to any parties other than the relevant government agencies. Each employee further understands that “Protected Activity” does not include the disclosure of any of the Company Parties’ attorney-client privileged communications, and that any such disclosure without the Company’s written consent shall constitute a violation of these guidelines.

EXHIBIT C

GENERAL RELEASE AGREEMENT

1.I acknowledge that my employment with Solar Service Experts, LLC, dba Energy Service Experts

(the “C1o/1mpany”) ended on [Separation Date] and that I have received all wages to which I am entitled. I understand that I am eligible to receive from the Company a gross lump-sum payment of $ (the

“Termination Payment”), which is subject to all withholdings and payroll deductions required by law. I understand that as a condition of receiving the Termination Payment to which I am not otherwise entitled, I will be required to sign this General Release Agreement (the “Agreement”) and not revoke my acceptance.

2.I understand that the terms of this Agreement will become effective and enforceable eight days after I sign it, unless before then I revoke my acceptance in writing and deliver my written revocation to the Company, in which case I will not be entitled to receive the Termination Payment. I further understand that the Company or one of the other Company Parties will pay the Termination Payment to me no later than 5 business days after this Agreement becomes effective and enforceable. I acknowledge and agree that the Company has no legal obligation to provide the Termination Payment offered to me. Signing this Agreement constitutes my agreement to all terms and conditions set forth in it and is in consideration of the Company’s agreement to provide the Termination Payment.

3.In consideration of the Termination Payment, I also agree that I will not disclose the fact or terms of this Agreement to any persons other than my spouse, attorneys, and accountant or tax-return preparer, if any, if those persons have agreed to keep such information confidential.

4.I acknowledge and agree that I forever waive the right to participate in any class or collective action against the Company or any of the other Company Parties with respect to any claim or cause of action arising from my employment or the ending of my employment with the Company or any of the other Company Parties. I further acknowledge and agree that I forever waive any right to recover, and I will not request or accept, anything of value from the Company or any of the other Company Parties arising out of or connected in any way with my employment or the ending of my employment with the Company or any of the other Company Parties, the employment practices of the Company or any of the other Company Parties, or with any other act, conduct, or omission of the Company or any of the other Company Parties, other than the Termination Payment, whether sought directly by me or by any government agency, individuals, or group of individuals on my behalf. Notwithstanding the foregoing, I understand that this Agreement does not limit my right to receive an award for information I provide to a government agency nor does this provision prevent me from participating in or assisting any governmental entity in investigating any matters relating to the Company Parties.

5.In further consideration of the Termination Payment, I agree not to make to any other person or entity any statement (whether oral, written, electronic, anonymous, on the Internet, or otherwise) that directly or indirectly impugns the quality or integrity of the Company’s or any of the other Company Parties’ business or employment practices, or any other disparaging or derogatory remarks about the Company or any of the other Company Parties. Company and Company Parties likewise agree to not to make to any other person or entity any statement (whether oral, written, electronic, anonymous, on the Internet, or otherwise) that directly or indirectly impugns the quality or integrity of the undersigned. Nothing in this provision restricts my right to discuss or report claims of sexual harassment or misconduct in the workplace as provided by law.

6.In further consideration of the Termination Payment, and without further consideration, I agree to cooperate fully and completely with the Company and any of the other Company Parties with respect to matters on which I worked during my employment and to assist with pending or future investigations, proceedings, or litigation, public or private, involving the Company or any of the other Company Parties on matters about which I have personal knowledge. This obligation includes my promptly meeting with representatives of the Company or the other Company Parties, either personally or by telephone, at reasonable times upon their request and without unreasonable interference with my employment or personal activities, and providing information and, when applicable, testimony, that is truthful, accurate, and complete, according to information known to me.

7.In further consideration of the Termination Payment, I agree that the Company and the other Company Parties have no obligation to employ, hire, or rehire me, to consider me for employment, or to deal with me with regard to employment or potential employment. In exchange for the Company’s promises set forth in this Agreement, I agree that (a) I will never apply for or otherwise seek employment by the Company or any of the other Company Parties at any location, and (b) my agreement not to seek employment with the Company or any of the other Company Parties is voluntary, contractual, and not the result of unlawful discrimination or retaliation.

8.I acknowledge that I have returned to the Company all of its or any of the other Company Parties’ property and further agree to deliver immediately to the Company any such additional items that I may discover in my possession, and acknowledge that Company has returned to me any property I may have left on the Company’s premises. I further acknowledge that I have been paid all wages and compensation to which I was otherwise entitled during my employment (including being paid for all hours worked, if applicable). [insert here if individual signing document has equity interest: I have [equity interest] in the Company [insert equity interest details here]]

9.I acknowledge that all of the documents and information to which I had access during my employment, including but not limited to all trade secrets, information pertaining to employees of the Company or any of the other Company Parties, or specific transactions in which the Company or any of the other Company Parties was, is, or may be involved, all information concerning the matters on which I worked while employed by the Company or any of the other Company Parties, and in general all other information concerning the business and operations of the Company or any of the other Company Parties, are confidential and may not be disseminated or disclosed by me to any other parties, except as may be authorized in writing by the Company or as required by law or valid subpoena. In the event I am served with a subpoena or it appears that I will be compelled by law or judicial process to disclose such confidential information, I agree to immediately notify the Company’s General Counsel. Notwithstanding the foregoing, I understand that I am not required to notify the Company or any of the other Company Parties that I have been served a subpoena, or otherwise compelled by law or judicial process, to disclose confidential information as part of any governmental investigation.

10.I understand that nothing in this Agreement precludes me from (i) voluntarily filing a charge or complaint with, providing truthful information to, or cooperating with an investigation conducted by a government agency, (ii) providing information to my attorney (if any), (iii) making statements under oath or giving truthful testimony in a legal proceeding or as required by law or valid legal process, such as by a subpoena or court order, (iv) disclosing a trade secret in confidence to a governmental official, directly or indirectly, or to an attorney, if the disclosure is made solely for the purpose of reporting or investigating a suspected violation of law, or in a document filed under seal in a lawsuit or other proceeding, and I cannot be held criminally or civilly liable under any federal or state trade secret law for such a disclosure, or

(v) engaging in any other legally protected activity. I further understand that I am not required to notify the Company or any of the other Company Parties before or if I engage in any such permitted activities.

11.I acknowledge that offering me the Termination Payment is not an admission by the Company or the other Company Parties of any wrongdoing on the part of the Company or me, and in fact the Company and the other Company Parties specifically deny any wrongdoing.

12.I acknowledge that: (i) I have read this Agreement; (ii) by this paragraph, the Company specifically has advised me to consult an attorney and I have had the opportunity to consult an attorney; (iii) I received this Agreement on [DATE AGREEMENT WAS PROVIDED], and have had at least 21 days to consider and fully understand the meaning and effect of my action in signing this Agreement; (iv) my signing of this Agreement is knowing, voluntary, and based solely on my own judgment in consultation with my attorney, if any; and (v) I am not relying on any written or oral statement or promise other than as set out in this Agreement. I acknowledge that the Termination Payment is not otherwise due or owing to me under any separate document, policy or oral agreement.

13.I understand that I may rescind my assent to this Agreement if, within seven (7) days after I sign this Agreement, I deliver by hand or send by mail (certified, return receipt and postmarked within such 7- day period) a notice of rescission to the undersigned. The eighth day following my signing of this Agreement without rescission is the “Effective Date” of this Agreement.

14.This Agreement contains and constitutes the entire understanding and agreement between the Company and me with respect to its subject matter, and may not be released, discharged, abandoned, supplemented, changed, or modified in any manner except by a writing of concurrent or subsequent date signed by both an authorized Company official and me. This Agreement is governed by and construed in accordance with the laws of the State of Texas without regard to its rules regarding conflict of laws. Exclusive venue for purposes of any dispute, controversy, claim, or cause of action between the parties concerning, arising out of, or related to this Agreement or my employment with the Company or any of the other Company Parties is in any state or federal court of competent jurisdiction presiding over Harris County, Texas. Nothing in this Agreement, however, precludes either party from seeking to remove a civil action from any state court to federal court.

AGREED:

_________________________ __________________________

[Name] Date

April 12, 2024 Christopher Hayes

Re: CEO Offer Letter

Dear Christopher:

This offer letter (this “Offer Letter”) memorializes the agreement between you and Spruce Power Holding Corporation (the “Company”) regarding your appointment as President and Chief Executive Officer of the Company.

1.Start Date. Your employment with the Company will commence on April 12, 2024.

2.Position. You shall serve as the Company’s President and Chief Executive Officer, reporting to the Company’s Board of Directors (the “Board”). You shall perform those services customary to this office and such other lawful duties that the Board may reasonably assign. You shall comply with the Company’s policies, practices and procedures and all codes of ethics or business conduct applicable to your position, as in effect from time to time. This is a full-time position. During your employment, you shall devote all of your business time and energies to the business and affairs of the Company. Notwithstanding the foregoing, nothing herein shall preclude you from (i) performing services for such other companies as the Company may designate or permit; (ii) serving on boards, committees or similar bodies of charitable or nonprofit organizations; (iii) fulfilling limited teaching, speaking and writing engagements; and (iv) managing your personal investments and affairs; provided, however, that the activities set out in clauses (i), (ii), (iii) and (iv) shall be limited by you to not individually or in the aggregate materially interfere or conflict with the performance of your duties and responsibilities to the Company or contravene any restrictive covenants or codes of conduct; provided, that with respect to the activities in clauses (ii) and/or (iii), you shall notify the Board of such activities.

3.Base Salary. Your annual base salary will be $650,000 per year (the “Initial Base Salary”), payable in accordance with the Company’s normal payroll procedures, less all applicable withholdings and deductions.

4.Bonus. You will be eligible to participate in the Company’s annual bonus program (the “Annual Bonus”), with a target bonus opportunity equal to 100% of your then-current annualized base salary, prorated in the year containing your Start Date. The actual amount of any Annual Bonus, if any, shall be based on achievement of corporate-based and/or individual-based performance metrics, as determined by the Board for each applicable performance year. You must be employed by the Company on the date of payment to earn and receive any Annual Bonus.

5.Equity. Subject to any applicable approvals as required under the Equity Plan, you shall be granted initial equity awards (collectively, the “Equity”) valued at 170% of your Initial Base Salary allocated as follows: (a) 70% in the form of stock options (“Options”); and (b) 30% in the form of restricted stock units (“RSUs”). The Equity shall be issued under and pursuant to the terms of the Company’s 2020 Equity Incentive Plan (the “Equity Plan”) and accompanying award agreements. The Equity shall be subject to and be governed by the terms of the Equity Plan and the applicable award agreement to be provided by the Company.

(a)Options. The Options shall be valued using a Black-Scholes valuation on the date of grant and will be at an exercise price equal to the greater of (a) the VWAP per share of the Company’s common stock over the 20 business days preceding the date of grant or (b) the closing price of the Company’s common stock on the date of grant. Subject to your continued service through each applicable vesting date, the Options will vest in equal annual installments on the first four (4) anniversaries of the Start Date.

(b)RSUs. The RSUs shall be valued based on the VWAP per share of the common stock over the 20 business days preceding the date of grant. Subject to your continued service through each applicable vesting date, the RSUs will vest in equal annual installments on the first four (4) anniversaries of the Start Date.

6.Severance. The Company intends to adopt an executive severance plan (the “Severance Plan”). Upon adoption of the Severance Plan (or the failure to adopt a Severance Plan), you will be named a participant with severance benefits that are no less favorable, in all material respects, than the severance benefits of the Company’s former Chief Executive Officer (as set forth in his Executive Employment Agreement dated as of September 9, 2022). Receipt of any benefits under the Severance Plan will be conditioned upon your signing, non-revocation, and compliance with a customary separation agreement in a form to be provided by the Company, such separation agreement to include, without limitation, a general release of claims in favor of the Company and its affiliates.

7.Benefits. You will be eligible to participate in the employee benefits offered by the Company in accordance with the applicable terms of the benefit program, plan, or arrangement. Please note that benefits may be modified or terminated at the Company’s sole discretion, and the provision of such benefits does not change your status as an at-will employee.

8.Expenses. The Company will pay or reimburse you for reasonable and customary business expenses incurred by you during employment with the Company, subject to all terms and conditions of the Company’s expense policies in effect from time to time.

9.Other Policies. You shall be subject to any forfeiture and/or clawback policy established by the Company and any other such policy required by applicable law. You will also be subject to any applicable stock ownership requirements as may be established by the Company.

10.Restrictive Covenants. Your employment with the Company is contingent upon your execution and compliance with the Employee Covenants Agreement attached to this Offer Letter as Exhibit A.

11.Representations. By signing this Offer Letter, you certify to the Company that: (a) you are free to enter into and fully perform the duties of this position and that you are not subject to any employment, confidentiality, non-competition or other agreement that would restrict your employment by the Company; and (b) no trade secret or proprietary information belonging to any previous employer will be disclosed by you to the Company and that no such information will be retained by you or brought with you to the Company.

12.At-Will Employment. By signing below, you expressly acknowledge and agree that your employment with the Company will be “at will.” This means that nothing in this Offer Letter guarantees employment for any definite or specific term or duration and either you or the Company may terminate your employment at any time and for any reason with or without notice.


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13.Governing Law. This Offer Letter shall be governed by and construed in accordance with the laws of the State of Idaho (without regard to any conflicts of laws principles thereof that would give effect to the laws of another jurisdiction).

14.General. This Offer Letter reflects the entire agreement regarding the terms and conditions of your employment. Accordingly, it supersedes and completely replaces any prior oral or written communication on this subject. This Offer Letter may not be modified, amended or waived unless in writing signed by both parties. This Offer Letter shall inure to the benefit of the successors or general assigns of the Company. This Offer Letter is non-assignable except as provided herein.

[Signature Page Below]


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Please sign the enclosed copy of this Offer Letter to indicate your acceptance.

Sincerely,

/s/John Miller

John Miller Lead Director

Agreed to and Accepted:

/s/Christopher Hayes

Christopher Hayes


[Signature Page to CEO Offer Letter]

EXHIBIT A

EMPLOYEE COVENANTS AGREEMENT

SPRUCE POWER HOLDING CORPORATION EMPLOYEE COVENANTS AGREEMENT

In consideration of my employment and/or continued employment with Spruce Power Holding Corporation, its subsidiaries, affiliates, successors, or assigns (collectively, the “Company”), and my receipt of any compensation now and/or hereafter paid to me by the Company, I have executed this Employee Covenants Agreement (this “Agreement”). I recognize and acknowledge that the Company is engaged in activities that involve, and continue to involve, the use of proprietary business plans, methods, and technologies developed through the expenditure of substantial amounts of skill, time, and money. As a result of such investments, the Company has developed certain Trade Secrets and Confidential Information (defined herein) which give the Company significant advantages over its competitors. Due to the nature of my employment with the Company, I may have frequent direct and indirect contact with various customers of the Company and may be presented with, have access to, and/or participate in the development of Trade Secrets and Confidential Information. These constitute valuable, special, and unique assets of the Company, the misuse, misapplication, or disclosure of which contrary to the terms of this Agreement may cause substantial loss of competitive advantage and substantial and possibly irreparable damage to the business and asset value of the Company.

1.DEFINITIONS. The following capitalized terms are select definitions used in this Agreement:

(a)“Trade Secrets” shall have the definition provided under applicable law as modified from time to time. The current definition includes, but is not limited to, anything tangible or intangible or electronically kept or stored, which constitutes, represents, evidences, or records a secret, whether scientific, technical, merchandising, production, or management information, design, process, procedure, formula, invention, or improvement. Trade Secrets may also consist of: (i) any formula, pattern, device, or compilation of information that is used in the Company’s business, and which gives it an opportunity to obtain an advantage over competitors who do not know or use it; (ii) a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers; or (iii) a process or device for continuous use in the operation of the business, and generally relates to the production of goods or services. To the extent otherwise protectable as a Trade Secret, the Company’s Trade Secrets include, but are not limited to, all of the Company’s knowledge regarding the research, development, manufacture, processing, marketing, distribution, operation, and sale of any product or service offered by the Company during my employment with the Company. Trade Secrets also include anything described in this Section that the Company obtains from a third party and which it treats as proprietary or designates as trade secret, whether or not owned or developed by the Company.

(b)“Confidential Information” shall mean any data or information, other than Trade Secrets, which is of value to the Company, and is not generally known to competitors of the Company, whether written, fixed in other tangible form, or committed to memory. To the extent consistent with the foregoing, Confidential Information includes, but is not limited to, all information about the Company’s business and affairs, such as its executives, employees, and contractors, product specifications, designs, processes, data, concepts, ideas, product descriptions, price lists, pricing policies, business methods, contracts and contractual relationships with customers and suppliers, customer and supplier lists, current and anticipated customer requirements, current and planned distribution methods and processes, business plans, marketing plans and techniques, finances and financial projections, market studies, computer software and programs (including without limitation object and source code), systems, structures and architectures, proprietary intellectual property (including without limitation, know-how, inventions, discoveries, patents, patent applications, and patentable subject matter, and copyrighted materials). Confidential Information shall include, but not be limited to, all of the Company’s knowledge regarding the research, development, manufacture, processing, marketing, distribution, operation, and any knowledge related to any product or service offered by the Company during my employment with the Company. Confidential Information also

includes anything described in this Section that the Company obtains from a third party and which it treats as proprietary or designates as confidential information, whether or not owned or developed by the Company.

(c)The terms “Confidential Information” and “Trade Secrets” shall not include any materials or information to the extent that it: (i) is or becomes publicly known or generally utilized by others engaged in the same business or activities in which the Company utilized, developed, or otherwise acquired such information, other than as the result of a breach of this Agreement; or (ii) is known to me prior to my employment with the Company, having been lawfully received from parties other than the Company.

(d)“Inventions” shall mean all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, including, but not limited to, software, code, websites, algorithms, methods, content, packaging, surveys, reports, contributions to Company’s proprietary business methods, marketing plans, and work product, whether or not patentable or registrable under copyright or similar laws, that I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during my employment with the Company.

1.NON-DISCLOSURE.

(a)Trade Secrets. During the term of my employment with the Company and after the termination thereof, whether such termination is at the instance of the Company or me, I will not, except as expressly authorized or directed by the Company, use, copy, duplicate, transfer, transmit, disclose, or permit any unauthorized person access to any Trade Secrets of the Company or of the Company’s customers, business partners or subcontractors, or any related third- party, so long as they remain Trade Secrets as described in this Agreement.

(b)Confidential Information. During the term of employment with the Company and after my termination therefrom, whether such termination is at the instance of the Company or me, I will not, except as expressly authorized or directed by the Company, use, copy, duplicate, transfer, transmit, disclose, or permit any unauthorized person access to any Confidential Information of the Company, any of Company’s customers, any of Company’s business partners or subcontractors, or any related third-party

(c)Return. Upon request of the Company and in any event upon the termination of employment with Company, I will deliver to the Company all memoranda, notes, records, tapes, documentation, disks, manuals, files or other documents, and all copies thereof in any form, concerning or containing Trade Secrets, Confidential Information, or Inventions that are in my possession, whether made or compiled by me, furnished to me, or otherwise obtained by me.

2.ASSIGNMENT AND RELATED COVENANTS.

(a)Prior Inventions.

(i)On Schedule A, I have provided a list describing all inventions, original works of authorship, developments, improvements, and trade secrets that were made by me prior to my employment with the Company (collectively, the “Prior Inventions”), that belong to me, and which relate to the Company’s proposed business, products or research and development; or, if no such list is attached, I represent that there are no such Prior Inventions. Under the heading “Assigned” on Schedule A, I have listed those Prior Inventions that are being assigned to the Company hereunder, if any (collectively, the


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“Assigned Prior Inventions”). If applicable, under the heading “Not Assigned” on Schedule A, I have listed those Prior Inventions that are not being assigned to the Company hereunder, if any (collectively, the “Not Assigned Prior Inventions”). I hereby assign to the Company, or its designee, all my right, title, and interest in and to any and all Assigned Prior Inventions, if any, without any further consideration therefor. I agree that I will not incorporate, or permit to be incorporated, any Not Assigned Prior Inventions owned by me or in which I have an interest into a Company product, process, or machine without the Company’s prior written consent. Notwithstanding the foregoing sentence, if, in the course of my employment with the Company, I incorporate into a Company product, process, or machine a Not Assigned Prior Invention owned by me or in which I have an interest, the Company is hereby granted and shall have a non-exclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use, and sell such Prior Invention as part of or in connection with such product, process, or machine.

(b)Inventions. I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right, title, and interest in and to any and all Inventions, without any further consideration therefor. I further acknowledge that all original works of authorship that are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company and that are protectable by copyright are “works made for hire”, as that term is defined in the United States Copyright Act. I understand and agree that the decision whether or not to commercialize or market any Invention developed by me solely or jointly with others is within the Company’s sole discretion and for the Company’s sole benefit and that no royalty will be due to me as a result of the Company’s efforts to commercialize or market any such Invention.

(c)Government Contracting. I agree to assign to the United States government all my right, title, and interest in and to any and all Assigned Prior Inventions and Inventions whenever such full title is required to be in the United States by a contract between the Company and the United States or any of its agencies.

(d)Exceptions. I further understand that the foregoing assignment obligations do not apply to any Invention that I have developed entirely on my own time without using the Company’s equipment, supplies, facilities, resources, trade Secrets, or Confidential Information except for those Inventions that either: (A) relate at the time of conception or reduction to practice of the invention to the Company’s business, or actual or demonstrably anticipated research or development of the Company; or (B) result from any work that I performed for the Company. I will advise the Company promptly in writing of any inventions that I believe meet the foregoing criteria and not otherwise disclosed on Schedule A.

(e)Maintenance of Records. I agree to keep and maintain adequate and current written records of the Assigned Prior Inventions and all Inventions made by me (solely or jointly with others) during the term of my employment with the Company. The records will be in the form of notes, sketches, drawings, and any other format that may be specified by the Company. The records will be available to and remain the sole property of the Company at all times.

(f)Patent and Copyright Registrations. I agree to assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Assigned Prior Inventions and Inventions, and any copyrights, patents, mask work rights, or other intellectual property rights relating thereto in any and all countries, including, but not limited to, the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, and all other instruments that the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title, and interest in and to such Inventions, and any copyrights,


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patents, mask work rights, or other intellectual property rights relating thereto. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement. If the Company is unable because of my mental or physical incapacity or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Assigned Prior Inventions or any Inventions, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney-in-fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by me.

3.NON-COMPETITION.

(a)In order to protect the Company’s Trade Secrets, Confidential Information, property rights, goodwill and legitimate business interests, during the term of my employment with the Company, and for the one (1) year period following the termination of my employment with the Company (the “Restricted Period”) for any reason, I will not directly or indirectly, whether as owner, partner, shareholder, director, manager, consultant, agent, employee, co-venturer or otherwise, engage, participate or invest in the same or substantially similar activities as were performed by or for the Company (whether in connection with the business activities of the Company or any of its affiliated entities) within the continental United States of America (each a “Restricted Activity”); provided that the ownership restriction shall not prohibit an investment in publicly or privately traded stock of a company representing less than three percent of the stock of such company, provided that I comply with the provisions of my employment agreement and/or offer letter with the Company and this Agreement other than such ownership restriction.

(b)The Company, in its sole discretion, may elect to waive the restrictions set forth in Section

4(a). Such waiver shall be provided in writing to me by the Company. Such waiver shall have no effect on my obligations under the remainder of this Agreement, which shall continue in full force and effect in all respects. I acknowledge and agree that nothing in this Section 4(b) gives me an election as to compliance with Section 4(a).

(c)In the event that I am considering a post- employment professional opportunity (including, but not limited to, in the role of employee, consultant, contractor, owner, partner, or otherwise), that may commence during the Restricted Period, whether or not such opportunity represents a potential violation of Section 4 (a) or not, I shall notify the General Counsel at the Company in writing of such opportunity.

4.NON-SOLICITATION.

(a)During the Restricted Period (as defined in Section 4), I will not, directly or indirectly, in any manner, other than for the benefit of the Company:

(i)call upon, solicit, divert, take away, accept or conduct any business from or with any of the current or prospective customers, clients, vendors or suppliers of the Company, to the extent in competition with, or to the detriment of, the Company; or

(ii)solicit, entice, or attempt to persuade any employee or consultant of the Company to leave the Company for any reason, or otherwise participate in or facilitate the hire, directly or through another entity, of any person who is employed or engaged by the Company or who was employed or engaged by the Company within six (6) months of any attempt to hire such person, reduced to three (3) months if the decision to terminate the person’s employment was made after I have ceased to be employed by the Company.


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5.REASONABLENESS OF RESTRICTIONS; TOLLING.

I acknowledge and agree that the provisions of Sections 4 and 5 of this Agreement are necessary and reasonable to protect the Company’s Trade Secrets, Confidential Information, property rights, goodwill and business interests. I further acknowledge and agree that the limitations and the types of employment which are prohibited by Sections 4 and 5, including but not limited to Section 4(a), are narrow and reasonable in relation to the skills which represent my principal salable asset both to the Company and to my other prospective employers, and that the specific but broad temporal and geographical scope is reasonable and fair in light of the Company’s need to market its services and sell its products in a large geographic area in order to maintain a sufficient customer base. I acknowledge and agree that the Restricted Period shall be tolled, and shall not run during any period in which I am in violation of the terms of Section 4 and 5, to such extent as permitted under applicable law.

6.SCOPE OF NONDISCLOSURE RESTRICTIONS.

Nothing in this Agreement or elsewhere prohibits me from communicating with government agencies about possible violations of federal, state, or local laws or otherwise providing information to government agencies, filing a complaint with government agencies, or participating in government agency investigations or proceedings. I acknowledge that I am not required to notify the Company of any such communications; provided, however, that nothing herein authorizes the disclosure of information I obtained through a communication that was subject to the attorney-client privilege. In addition, notwithstanding any provisions in this Agreement, pursuant to the federal Defend Trade Secrets Act, I cannot be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made:

(a) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (b) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, if I file a lawsuit against the Company alleging retaliation for reporting a suspected violation of law, I may disclose the trade secret to my attorney and use the trade secret information in the court proceeding, provided I file any document containing the trade secret under seal and do not disclose the trade secret except pursuant to court order.

7.REPRESENTATIONS AND WARRANTIES.

(a)No Violation. I am not subject to any employment, non-disclosure, confidentiality, non- compete, employee covenants, or other agreement with any third party (including, but not limited to, any former employer) that would prevent or prohibit me from fulfilling my duties for the Company. If am the subject of any such agreement, and have any doubt as to its applicability, I will provide a copy of such agreement to the Company so that the Company can make a determination as to its effect on my ability to work for the Company.

(b)Third-Party IP. I agree not to use or include in any of my Inventions any copyrighted, restricted, or protected code, specifications, concepts, trade secrets, or confidential information of any third party, or any other information which I would be prohibited from using by any employment, non- disclosure, confidentiality, non-compete, employee covenants, or other agreement with any third party. If I am unsure whether I may use or incorporate any third-party product or code or other work of any third party in any of my Inventions, I will check with the Company’s management and experts prior to such use or incorporation.


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8.GENERAL.

(a)Further Assurances. I agree to execute any proper oath or verify any proper document required to carry out the terms of this Agreement. I have not entered into and agree not to enter into any oral or written agreement in conflict with this Agreement.

(b)Equitable Relief. I agree that it would be impossible or inadequate to measure and calculate the Company’s damages from any breach or threatened breach of the covenants set forth in this Agreement. Accordingly, I agree that if I breach or threaten to breach this Agreement, the Company will have available, in addition to any other right or remedy available, the right to obtain an injunction from a court of competent jurisdiction restraining such breach or threatened breach and to specific performance of any such provision of this Agreement. I further agree that no bond or other security shall be required in obtaining such equitable relief and I hereby consent to the issuance of such injunction and to the ordering of specific performance.

(c)Governing Law; Consent to Personal Jurisdiction. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD FOR CONFLICTS OF LAWS PRINCIPLES. I HEREBY EXPRESSLY CONSENT TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF DELAWARE FOR ANY LAWSUIT FILED THERE AGAINST ME BY THE COMPANY ARISING FROM OR RELATING TO THIS AGREEMENT.

(d)Effect. This Agreement shall be deemed effective at the earlier to occur of the commencement of my employment relationship with the Company or upon my initial possession, knowledge, or acquisition of the Company’s Trade Secrets or Confidential Information.

(e)Entire Agreement. This Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and supersedes all prior discussions between us. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing signed by the party to be charged.

(f)Severability. If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

(g)Successors and Assigns. This Agreement will be binding upon my heirs, executors, administrators, and other legal representatives, and will be for the benefit of the Company, its successors, and its assigns.

(h)Construction. The language used in this Agreement will be deemed the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against either party.

(i)Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable, and all of which together shall constitute one agreement.

2.EXPRESS ACKNOWLEDGEMENTS. I acknowledge and agree to each of the following items:

(a)I understand that this Agreement is not intended to change my status as an employee-at- will, and I understand that either the Company or I may terminate my employment at any time with or without cause.


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(b)I am executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else.

(c)I have carefully read this Agreement. I have asked any questions needed for me to understand the terms, consequences and binding effect of this Agreement and fully understand such terms, consequences, and binding effect.

(d)I sought the advice of an attorney of my choice if I wanted to before signing this Agreement.

(e)I understand that any acquirer, purchaser of all or substantially all of the assets of the Company, or other successor or assign to the Company or its business will be relying on my covenants and representations warranties in this Agreement in agreeing to acquire or purchase the Company or its assets, and agree that this Agreement shall be enforceable by such successor or assign.

(f)I acknowledge that I have been afforded sufficient opportunity to review the terms of this Agreement.

I have executed this Agreement on the date set forth below, to be deemed effective at the earlier to occur of the commencement of my employment relationship with the Company or upon my initial possession, knowledge, or acquisition of any of the Company’s Trade Secrets or Confidential Information; provided, however, that if the latter date is vague or indeterminable, this Agreement shall be deemed effective as of the commencement of my employment relationship with the Company.

SPRUCE POWER HOLDING CORPORATION

By: /s/John Miller


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Name: Title:

John Miller

Lead Director

AGREED AND ACCEPTED:

By: /s/Christopher Hayes___________

Name: Christopher Hayes


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SCHEDULE A PRIOR INVENTIONS

Assigned

Not Assigned

April 12, 2024

Mr. Christian Fong

Re: Separation from Employment Dear Christian:

As we have discussed, your employment with Spruce Power, Inc. (the “Company”) has ended effective April 12, 2024 (the “Separation Date”). The purpose of this letter agreement (the “Separation Agreement”) is to set forth the terms of your separation from the Company. Provision of the Separation Benefits referenced in Section 2 of this Agreement is contingent on your agreement to and compliance with the terms of this Agreement, as set forth below. You have twenty-one (21) calendar days to review this Agreement and sign it if you wish. This Agreement shall become effective on the eighth (8th) day following the date on which you sign it (the “Effective Date”).

1.Separation Date. Your employment with the Company will end on the Separation Date, as described above. You will receive the Accrued Obligations as defined in your employment agreement with the Company dated September 9, 2022 (the “Employment Agreement”). In addition to the Accrued Obligations, and in lieu of notice contemplated by Section 2(b)(ii)(C) of the Employment Agreement, the Company shall provide you with payment in the total gross amount of $54,166.67 equivalent to one (1) month of your Base Salary as defined in the Employment Agreement, less all applicable federal, state, local and other employment-related deductions (the “Notice Pay”). The Notice Pay shall be paid in accordance with the Company’s normal payroll practices. Other than as provided herein, any entitlement you may have under a Company-provided benefit plan or program shall terminate as of the Separation Date, except as required by law and/or in accordance with plan or program terms. As of the Separation Date: (a) your employment with the Company shall conclude; (b) you no longer shall be entitled to payment of base salary, bonus or other form of compensation by virtue of your employment, except as set forth in this Agreement; (c) you shall not represent yourself as an employee or agent of the Company; and (d) to the extent that you hold any position with the Company or its affiliates including but not limited to a position on the Company’s Board of Directors, you have resigned from such positions.

2.Separation Benefits. If you: (a) execute and do not revoke this Agreement during the seven (7) calendar day release revocation period as described in Section 8 below (the “Release Revocation Period”) and (b) fully comply with the terms and conditions set forth in this Agreement, the Company agrees to provide you with the separation benefits specified in Section 4(e) of the Employment Agreement (together, the “Separation Benefits”), subject to any delays required under Section 8(a)(i) of the Employment Agreement. For the avoidance of doubt, as of the Separation Date, subject to your execution and non-revocation of this Agreement during the Release Revocation Period and your full compliance with the terms and conditions set forth in this Agreement, your equity-based awards relating to the common stock of the Company shall be treated as follows:


Grant	Total Awards Granted (# Units)	Portion Previously Vested Prior to Separation Date (# Units)	Portion Vesting as of Separation Date (# Units)	Total Vested as of Separation Date (# United	Portion Forfeited as of Separation Date (# Units)
113,636 Time- Vesting Restricted Stock Units Granted September 9, 2022	113,636	49,715	28,409	78,124	35,512
208,333 Performance- Based Restricted Stock Units	208,333	-	-	-	208,333


Granted September 9, 2022
278,340 Time- Vesting Restricted Stock United Granted April 1, 2024	278,340	-	69,585	69,585	208,755

3.Acknowledgements and Affirmations by Both Parties. You acknowledge and agree that the Separation Benefits are not intended to and do not constitute a severance plan or confer a benefit on anyone other than the parties. You further acknowledge that except for the Separation Benefits and the Accrued Obligations, you are not now and shall not in the future be entitled to any other compensation from the Company including, without limitation, other wages, commissions, bonuses, incentive compensation, vacation pay, holiday pay, paid time off, stock, stock options, equity, or any other form of compensation or benefit. You further understand and agree that you would not receive the Separation Benefits except for your execution of this Agreement, and the fulfillment of the promises contained therein. You further affirm as follows: (a) you have not filed, caused to be filed, or presently are a party to any claim against the Company; (b) you have been paid and/or have received all compensation, wages, bonuses, commissions and/or benefits to which you may be entitled; (c) you have been granted any leave to which you were entitled under the Family and Medical Leave Act or related state or local leave or disability accommodation laws; (d) that all of the Company’s decisions regarding your pay and benefits through the Effective Date of this Agreement were not discriminatory based on age, disability, race, color, sex, religion, national origin or any other classification protected by law; (e) you have no known workplace injuries or occupational diseases; (f) you have not divulged any proprietary or confidential information of the Company and will continue to maintain the confidentiality of such information consistent with Company policies and your agreement(s) with the Company and/or common law; (g) you have not been retaliated against for reporting any allegations of wrongdoing by the Company or its officers, including any allegations of corporate fraud; (h) you are not a Medicare or Medicaid beneficiary as of the date of this Agreement and, therefore, no conditional payments have been made by Medicare or Medicaid.

4.No Contest of Unemployment. By virtue of your separation of employment, you shall be entitled to apply for unemployment benefits. The determination of your eligibility for such benefits (and the amount of benefits to which you may be entitled) shall be made by the appropriate state agency pursuant to applicable state law. Notwithstanding the foregoing, the Company agrees that it shall not contest any claim for unemployment benefits by you (please note that the Company shall not be required to falsify any information).

5.Covenants & Warranties. You expressly acknowledge and agree to the following:

(a)Return of Property and Records. Within three (3) business days following the Separation Date, you shall: (a) return to the Company all tangible business information and copies thereof (regardless how such confidential information or copies are maintained), and (b) deliver to the Company any property of the Company that may be in your possession, including, but not limited to, devices, smart phones, laptops, cell phones (the foregoing, “electronic devices”), products, materials, memoranda, notes, records, reports or other documents or photocopies of the same. In the event that you are then using your personal devices (whether computers, mobile phones or otherwise) in the service of Company business activities, you agree to tender such devices to the Company to enable the Company to recover and retrieve any Company information stored therein. The Company shall return such devices to you after such retrieval. You may retain copies of any exclusively personal data contained in or on the Company-owned electronic devices returned to the Company pursuant to the foregoing. The foregoing notwithstanding, you understand and agree that the Company property belongs exclusively to the Company, it should be used only for Company business, and you have no reasonable expectation of privacy on any Company property or with respect to any information stored thereon.

(b)Cooperation. You shall use all reasonable efforts to cooperate fully with the Company to the extent reasonable in connection with any matter or event relating to your employment or events that occurred during your employment, including assisting with: (i) the transition of your responsibilities and duties to other

personnel of the Company; (ii) the defense or prosecution of any claims or actions now in existence or which may be brought or threatened in the future against or on behalf of the Company which relate to events or occurrences that

transpired while you were employed by the Company; and (iii) any investigation or review of any federal, state or local regulatory authority. Your cooperation in connection with such matters, actions and claims shall include being reasonably available to provide information to, and if requested to meet with, the Company or its counsel at a mutually convenient time during normal working hours to prepare for, attend and participate in any proceeding (including, without limitation, depositions, consultation, discovery or trial); to provide affidavits; to assist with any audit, inspection, proceeding or other inquiry; and to act as a witness in connection with any litigation or other legal proceeding affecting the Company which relates to events or occurrences that transpired while you were employed by the Company. You further agree that should you be contacted (directly or indirectly) by any person or entity (for example, by any party representing an individual or entity) adverse to the Company following the Separation Date, you shall notify the Company within three (3) business days. The Company agrees to provide you reasonable compensation for your time provided pursuant to this paragraph if the Company requests your cooperation after the Separation Date. The Company also agrees to reimburse you for any out-of-pocket expenses approved in advance by the Company and incurred in connection with providing such cooperation under this Section. All requests for cooperation by the Company pursuant to this paragraph must be reasonable and must not unreasonably disrupt any employment position that you hold in the future. The Company also agrees to provide reasonable advance notice when requesting your cooperation pursuant to this paragraph. Notwithstanding the foregoing, you shall have no obligation to sign any filings made with the Securities and Exchange Commission following the Separation Date, nor shall you have any obligation to sign any documents on behalf of the Company.

(c)Non-Disparagement. You shall not make any oral or written communication to any person or entity that has the effect of professionally or personally disparaging, damaging the reputation of, or otherwise working in any way to the detriment or adverse to the interests of, the Company or any of its respective directors, officers, shareholders, employees, or agents (in each case known to you), and that you shall not engage in any conduct that is intended to harm professionally or personally the reputation of the Company; provided that nothing in this Section shall restrict you from making any disclosures mandated by state or federal law or from participating in an investigation with a state or federal agency if requested by the agency to do so or as provided in Section 7 of the Employment Agreement. In addition, nothing in this letter agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.

(d)No Further Actions. As of the Effective Date, you have not: (i) filed any action, complaint, charge, grievance or arbitration against the Company; (ii) contacted any local, state or federal governmental agency regarding the Company; (iii) encouraged any individual to file any action, complaint, charge, grievance or arbitration against the Company; (iv) received information from any individual that such individual intends to file or threaten to file an action, complaint, charge, grievance or arbitration against the Company; or (v) provided any information to any individual to aid such individual in filing or threatening to file an action, complaint, charge, grievance or arbitration against the Company. You understand that by signing this Agreement, you waive your right to any monetary recovery in connection with a local, state or federal governmental agency proceeding and you waive your right to file a claim seeking monetary damages in any court, except as provided herein.

(e)Material Breach. A breach of any of the above subsections shall constitute a material breach of this Agreement and, in addition to any other legal or equitable remedy available to the Company, shall permit and entitle the Company to cease any additional payment or provision of the Separation Benefits. In addition to any other penalties or restrictions that may apply under this or any other applicable agreement, applicable law or otherwise, in the event of a breach of any of the above subsections, you acknowledge and agree that: (a) you shall forfeit any vested unexercised options and/or any shares held by you that were received in respect of your stock options or restricted stock unit awards effective as of the date of such breach; and (b) this provision constitutes an amendment of each of those award agreements.

(f)No Wrongdoing. You represent and understand that neither the benefits set forth in this Agreement nor the Company’s entering into this Agreement shall constitute an admission by the Company of wrongdoing, and further, that as of the Separation Date, you have not reported any practice of the Company that you believe to be in violation of any law, and further that if you were aware of a legitimate claim against the Company you informed the Company of same or the Company was aware of same. Additionally, as of the Separation Date, to

the best of your knowledge and based on the information that was provided to you, you reaffirm the accuracy of the certifications that you signed during the course of your employment pursuant to Sections 302 and 906 of the Sarbanes- Oxley Act of 2002.

1.Release of Claims.

(a)Release. You hereby agree and acknowledge that by signing this Agreement and accepting the consideration described herein, and for other good and valuable consideration provided for in this Agreement, you are waiving and releasing your right to assert any form of legal claim against the Company1 whatsoever for any alleged action, inaction or circumstance existing or arising from the beginning of time through the Effective Date. Your waiver and release herein is intended to bar any form of legal claim, charge, complaint or any other form of action (jointly referred to as “Claims”) against the Company seeking any form of relief including, without limitation, equitable relief (whether declaratory, injunctive or otherwise), the recovery of any damages or any other form of monetary recovery whatsoever (including, without limitation, back pay, front pay, compensatory damages, emotional distress damages, punitive damages, attorneys’ fees and any other costs) against the Company, for any alleged action, inaction or circumstance existing or arising through the Effective Date. Without limiting the generality of the foregoing, you specifically waive and release the Company from any waivable claim arising from or related to your employment relationship with the Company and the separation therefrom through the Effective Date including, without limitation:

i.Claims under any Colorado, Delaware, or other state or federal statute, regulation or executive order (as amended) relating to employment, discrimination, harassment, retaliation, fair employment practices, wages, hours, or other terms and conditions of employment, including but not limited to the Title VII of the Civil Rights Act of 1964 and the Civil Rights Act of 1991, the Americans With Disabilities Act, the Family and Medical Leave Act, the Equal Pay Act, the Employee Retirement Income Security Act of 1974, Section 1981 of U.S.C. Title 42, the Worker Adjustment and Retraining Notification Act, the National Labor Relations Act, the Immigration Reform and Control Act, the Uniformed Services Employment and Reemployment Rights Act of 1994, Age Discrimination in Employment Act and Older Workers Benefit Protection Act, the Civil Rights Acts of 1866 and 1871, the Genetic Information Non-Discrimination Act, the Lilly Ledbetter Fair Pay Act, the Consolidated Omnibus Budget Reconciliation Act of 1985, Colo. Rev. Stat. § 24-34-401 et seq. (Colorado anti-discrimination and anti- retaliation law), the Colorado Family Care Act, 8-13.3-201 et seq., Colo. Rev. Stat. § 19-5-211 (Colorado adoption leave law), Colo. Rev. Stat. § 24-34-402.7 (Colorado domestic violence and crime victim leave law), Colo. Rev. Stat.

§ 8-5-101 et seq. (Colorado equal pay law), and Colo. Rev. Stat. § 28-3-609 (Colorado military leave law), the Discrimination in Employment Act; the Delaware Persons With Disabilities Employment Protections Act; the Delaware Whistleblowers' Protection Act; the Delaware Wage Payment and Collection; the Delaware Fair Employment Practices Act; the Delaware Volunteer Emergency Responders Job Protection Act; the Delaware social media law; all as amended and any similar Colorado, Delaware, or other state, local, or federal statute, ordinance, regulation or executive order (as amended) relating to or other terms and conditions of employment; however, the identification of specific statutes is for purposes of example only, and the omission of any specific statute, ordinance, or law shall not limit the scope of this general release in any manner.

ii.Any and all claims for compensation, including but not limited to salary, wages, overtime, bonuses, commissions, incentive compensation, vacation, holiday pay, sick leave pay, and severance that may be legally waived and released.

iii.Claims under any Colorado, Delaware, or other state or federal common law theory including, without limitation, wrongful discharge, breach of express or implied contract, promissory estoppel, unjust enrichment, breach of a covenant of good faith and fair dealing, violation of public policy, defamation, interference with contractual relations, intentional or negligent infliction of emotional distress, invasion of privacy, misrepresentation, deceit, fraud or negligence or any claim to attorneys’ fees under any applicable statute or common law theory of recovery.

iv.Claims under any Colorado, Delaware, or other state or federal statute, regulation or executive order (as amended) relating to violation of whistleblower protections, public policy or any other form of

1 For purposes of this Section, the “Company” means Spruce Power, Inc. and its divisions, affiliates, parents, subsidiaries and related entities, and its and their owners, shareholders, partners, directors, officers, employees, trustees, agents, successors and assigns retaliation or wrongful termination under Colorado, Delaware, or other state or federal statute, including the Sarbanes- Oxley Act of 2002.

v.Any other Claim arising under Colorado, Delaware, or other state or federal law

(b)Release Limitations; Participation in Agency Proceedings. Notwithstanding the foregoing, this Section does not:

i.Release the Company from any obligation expressly set forth in this Agreement.

ii.Waive or release any legal claims, which you may not waive or release by law, including claims under any workers compensation or unemployment insurance laws, or under your indemnification agreement with the Company dated September 9, 2022.

iii.Prohibit you from challenging the validity of this release under federal law.

iv.Prohibit you from filing a charge or complaint of employment-related discrimination with the Equal Employment Opportunity Commission (“EEOC”) or similar state agency, or from participating in any investigation or proceeding conducted by the EEOC or similar state agency, or from responding to a request for information or documents (or providing information or documents) to the EEOC or similar state agency.

Your waiver and release, however, are intended to be a complete bar to any recovery or personal benefit by or to you with respect to any claim (except those which cannot be released under law), including those raised through a charge with the EEOC. Accordingly, nothing in this Section shall be deemed to limit the Company’s right to seek immediate dismissal of such charge or complaint on the basis that your signing of this Agreement constitutes a full release of any individual rights under the federal discrimination laws, or to seek restitution to the extent permitted by law of the economic benefits provided to you under this Agreement in the event you successfully challenge the validity of this release and prevail in any claim under the federal discrimination laws.

(c)Consideration Acknowledgement. You acknowledge and agree that, but for providing this waiver and release, you would not be receiving the consideration provided to you under the terms of this Agreement.

6.Covenant Not to Sue. Subject to Section 6 above, you covenant and agree that you will not now or at any time in the future commence, maintain, prosecute, or participate in as a party, or permit to be filed by any other person on your behalf or as a member of any alleged class of persons, any action, suit, proceeding, claim, or complaint of any kind against the Company with respect to any matter which arises from or relates to your employment with the Company or the termination thereof or which is encompassed in the release set forth above. Nothing in this Agreement prevents you from: (i) filing a claim to enforce the terms of this Agreement; (ii) asserting a claim arising after the Effective Date of this Agreement; or (iii) filing a charge with the EEOC or participating in any EEOC investigation or proceeding. You promise, however, never to seek or accept any damages, remedies or other relief for you personally with respect to any claim released by this Agreement. You acknowledge that this Agreement does not limit your ability to communicate with any governmental agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agencies, including providing documents or other information, without notice to the Company.

7.ADEA/OWBPA Review and Revocation Period. You and the Company acknowledge that you are over the age of 40 and that you, therefore, have specific rights under the Age Discrimination in Employment Act (“ADEA”) and the Older Workers Benefit Protection Act (the “OWBPA”), which prohibit discrimination on the basis of age. It is the Company’s desire and intent to make certain that you fully understand the provisions and effects of this Agreement, which includes a release of claims under the ADEA and OWBPA. To that end, you have been encouraged and given the opportunity to consult with legal counsel for the purpose of reviewing the terms of this Agreement. Consistent with the provisions of the ADEA and OWBPA, the Company is providing you with

twenty- one (21) days in which to consider and accept the terms of this Agreement by signing below and returning it to Jonathan Norling, Chief Legal Officer, Spruce Power, Inc., jnorling@sprucepower.com. You may rescind your assent to this Agreement if, within seven (7) days after you sign this Agreement, you deliver by hand, electronic mail or certified mail (certified, return receipt and postmarked within such 7-day period) a notice of rescission to Jonathan Norling, Chief Legal Officer, Spruce Power, Inc., jnorling@sprucepower.com. You agree that any modifications, material or otherwise, made to this Agreement do not restart or affect in any manner the original twenty-one (21) day consideration period.

8.Company Affiliation. You agree that, following the Separation Date, you will not hold yourself out as an officer, employee, or otherwise as a representative of the Company, and you agree to update any directory information that indicates you are currently affiliated with the Company. Without limiting the foregoing, you confirm that, within five days following the Separation Date, you will update (or have updated) any and all social media accounts (including, but not limited to, LinkedIn, Facebook, and Twitter) to reflect that you are no longer employed by or associated with the Company.

9.Taxes. The Company does not guarantee the tax treatment or tax consequences associated with any payment or benefit arising under this Agreement including, but not limited to, consequences related to Section 409A of the Internal Revenue Code of 1986, as amended.

10.Entire Agreement; Modification; Waiver; Choice of Law; Enforceability. You acknowledge and agree that this Agreement, as well as the applicable Company equity plan, equity award agreements, and Employee Covenants Agreement, constitutes the entire agreement between you and the Company, and supersedes any and all prior oral contemporaneous oral and/or written agreements between you and the Company. No variations or modifications hereof shall be deemed valid unless reduced to writing and signed by the parties hereto. The failure of the Company to seek enforcement of any provision of this Agreement in any instance or for any period of time shall not be construed as a waiver of such provision or of the Company’s right to seek enforcement of such provision in the future. This Agreement shall be deemed to have been made in Delaware and shall be governed by and construed in accordance with the laws of Delaware, without giving effect to conflict of law principles. You agree that any action, demand, claim or counterclaim relating to the terms and provisions of this Agreement, or to its breach, shall be commenced in Delaware in a court of competent jurisdiction, and you further acknowledge that venue for such actions shall lie exclusively in Delaware. Both parties hereby waive and renounce in advance any right to a trial by jury in connection with such legal action. The provisions of this Agreement are severable, and if for any reason any part hereof shall be found to be unenforceable, the remaining provisions shall be enforced in full.

11.Competency; Knowing and Voluntary Agreement. By executing this Agreement, you are acknowledging that: (a) you are competent to execute this Agreement; (b) you have been afforded sufficient time to understand the terms and effects of this Agreement; (c) your agreements and obligations hereunder are made voluntarily, knowingly and without duress; (d) that neither the Company nor its agents or representatives have made any representations inconsistent with the provisions of this Agreement; (e) that at the time of considering or executing this Agreement, you were not affected or impaired by illness, use of alcohol, drugs or other substances or otherwise impaired; and (f) you certify that you are not a party to any bankruptcy, lien, creditor- debtor or other proceedings which would impair your right or ability to waive all claims you may have against the Company.

[SIGNATURE PAGE FOLLOWS]

This Agreement may be signed on one or more copies, each of which when signed shall be deemed to be an original, and all of which together shall constitute one and the same Agreement. If the foregoing correctly sets forth our understanding, please sign, date and return the enclosed copy of this Agreement to Jonathan Norling, Chief Legal Officer Spruce Power, Inc., jnorling@sprucepower.com. Please return this Agreement no later than twenty-one (21) calendar days following the date of this Agreement. If the Company does not receive your acceptance within the twenty-one (21) day timeframe, the Agreement shall terminate and be of no further force or effect.

Sincerely,

SPRUCE POWER, INC.

/s/ Jonathan Norling

By: Jonathan Norling, Esq. Its: Chief Legal Officer

Date:

5/2/2024

Acknowledged and Agreed:

/s/ Christian Fong

Christian Fong

Date: May 2, 2024

June 13, 2024

Sarah Wells Via Email

Dear Sarah:

We value your continued support of, and service to, Spruce Power (the “Company”). In recognition of your continued commitment to the Company, I am pleased to provide you with this letter (this “Letter”) amending your offer letter, and any previous letter, with the Company to provide for the below separation benefits.

1.Separation Benefits

In the event that the Company terminates your employment without Cause (not including any termination of employment due to your death or disability), and provided that such termination is a “separation from service” under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), then subject to the conditions of this Letter (including your execution and non-revocation of the Separation Agreement), the Company will make a lump sum separation payment to you equal to 12 months of your current base salary and a prorated Target Bonus (if separation is after October 1st of the current year, full Target bonus is paid) (the “Separation Payment”), less applicable withholdings.

2.Termination by the Company without Cause or by Executive for Good Reason in Connection with a Change of Control

In the event that a Change of Control of the Company (as defined below) occurs and

(a) within a period of twenty-four (24) months following the Change of Control, or (b) within a period of ninety (90) days preceding the Change of Control if the termination is related to the Change of Control, Executive’s employment is terminated without Cause, or Executive terminates Executive’s employment for Good Reason (as defined below), then, in addition to normal wages, Executive shall receive the following, subject to the terms and conditions described in Section 409A (including Executive’s execution of the Release):

i.Separation Payments. Payments in an amount equal to the sum of eighteen (18) months of the then current Base Salary and a prorated Target Bonus (if CIC is after October 1st of the current year, full Target bonus is paid), with the sum payable ratably over a eighteen (18) month period, less all customary and required taxes and employment-related deductions, in accordance with the Company’s normal payroll practices (provided such payments shall be made at least monthly).

ii.Equity Acceleration. Full vesting of any and all equity awards outstanding as of the date of Executive’s termination, provided that no vesting shall occur after the date of termination until such date as the Release becomes effective against Executive (at which time, subject to the paragraph following Section 2(iv), vesting will occur),

Spruce Power | 820 Gessner Rd. Ste. 500 | Houston, TX 77024

sprucepower.com

and the portion subject to acceleration shall not be forfeited, subject to the provisions of the paragraph following Section 2(iv) until the earlier of (i) sixty (60) days after the date of termination without the Release’s becoming effective or (ii) Executive’s notification to the Company that he will not execute or will revoke the Release.

iii.COBRA Payment. Sum payable ratably over a twelve (12) month period (and Executive shall have a duty to inform Company of subsequent medical coverage to which he is entitled, with repayment to Company of COBRA premiums for unused months of coverage).

If the termination without Cause or termination for Good Reason precedes the Change of Control, no enhanced severance will be paid or extra vesting will occur unless and until such time as the Change of Control closes, but the equity awards, if any, that would vest will remain forfeited until the earliest of the closing of the Change of Control, the cancellation of the Change of Control, or ninety (90) days after employment ends (to determine if a Change of Control will occur). If the closing of the Change of Control occurs on the timing contemplated by this section, the first payment of severance will include any enhanced severance not paid pending the completion of the Change of Control. Any enhanced payment or vesting will be further conditioned on the Release’s becoming effective within sixty (60) days following the termination of employment.

Payment of the above described severance payments and benefits are expressly conditioned on Executive’s execution without revocation of the Release and return of Company property. The Company will commence the severance payments and make the COBRA Payment on the first payroll date whose cutoff date follows the date on which the Release required by execution of a severance agreement and release of claims becomes effective and non-revocable, provided, that if the time period during which the Release is required to become enforceable and irrevocable crosses a tax year, then the payments will delayed until such subsequent calendar year; provided further that if such payments are delayed until such subsequent year, the first such payment shall be a lump sum in an amount equal to the payments that would have come due since Executive’s separation from service.

3.Definitions

As used herein, a “Change of Control” shall mean the occurrence of any of the following events: (i) Any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) or group of Persons (other than the Company or its affiliates) becomes the “Beneficial Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities (the “Outstanding Company Voting Securities”) (excluding for this purpose any such voting securities held by the Company, or any affiliate, parent or subsidiary of the Company, or by any employee benefit plan of the Company) pursuant to a transaction or a series of related transactions (but excluding any bona fide financing event in which securities are acquired directly from the Company); (ii) the consummation of a merger or consolidation of the Company with any other entity, other than a merger or consolidation (i) that results in the Outstanding Company Voting Securities immediately

prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the combined voting power of the Outstanding Company Voting Securities (or such surviving entity or, if the Company or the entity surviving such merger is then a subsidiary, the ultimate parent thereof) outstanding immediately after such merger or consolidation, or

(ii) immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors (or other managing body) of the entity surviving such merger or consolidation or, if the Company or the entity surviving such merger is then a subsidiary, the ultimate parent thereof; or (iii) the sale or disposition by the Company of all or substantially all of the Company’s assets, other than

(i) a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned directly or indirectly by stockholders of the Company following the completion of such transaction in substantially the same proportions as their ownership of the Company immediately prior to such sale or (ii) a sale or disposition of all or substantially all of the Company’s assets immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors (or other managing body) of the entity to which such assets are sold or disposed or, if such entity is a subsidiary, the ultimate parent thereof; provided that, in each case, a transaction will not be deemed a Change of Control unless the transaction qualifies as a change in control event within the meaning of Code Section 409A.

As used herein, “Good Reason” shall mean: (i) material reduction in duties or responsibilities, (ii) material reduction in pay levels or programs, and (iii) relocation more than 50 miles from current working location.

For purposes of this Letter, “Cause” means (i) your material breach of any agreement between you and the Company, (ii) your continued failure to perform any material duty or responsibility specified in the description of your duties set forth in any agreement between you and the Company, reasonably assigned to you by the Company, or otherwise owed to the Company, (iii) your conviction of, or your plea of “guilty” or “no contest” to, a felony under the laws of the United States or any State or your conviction of, or your plea of “guilty” or “no contest” to, any other crime involving moral turpitude or fraud, (iv) your gross misconduct, commission of an act of moral turpitude, embezzlement, gross negligence, willful malfeasance, or willful violation of any law, rule, regulation, written agreement or final cease-and-desist order applicable to the Company or its business which causes or could be expected to cause harm to the Company, (v) your failure to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers or employees, if the Company has requested your cooperation, (vi) your material failure to comply with the Company’s written policies or rules, as they may be in effect from time to time. For avoidance of doubt, your termination of employment due to your death or disability will not be deemed termination without Cause, nor will the acceleration of your resignation from the Company.

4.Execution of Separation Agreement and Release of Claims

The Company shall not be obligated to pay Executive any of the severance payments or benefits described in this letter unless and until Executive has executed (without revocation) a Separation Agreement and release of claims. The Release must be provided to Executive not later than fifteen (15) days following the effective date of termination of Executive’s employment by the Company and executed by Executive and returned to the Company within sixty (60) days after such effective date. If Executive fails or refuses to return the Release within such 60-day period, Executive’s severance payments and benefits to be paid hereunder shall be forfeited. In no event will Separation Payment be made or provided until the Separation Agreement becomes effective and irrevocable. Except as provided below, any cash amounts due to you will be paid, less applicable withholdings, as soon as practicable following the effectiveness of the Separation Agreement (and in all cases, within 60 days following your separation from service, except as required by the Section 409A provisions below).

5.No Other Payments or Benefits Owing

Except as expressly set forth herein, the payments and benefits set forth in this letter: (a) shall be the sole amounts owing to Executive upon termination of Executive’s employment for the reasons set forth above, and Executive shall not be eligible for any other payments or other forms of compensation or benefits; (b) shall be the sole remedy, if any, available to Executive in the event that Executive brings any claim against the Company relating to the termination of Executive’s employment under their Employee Agreement; and (c) shall not be subject to set-off by the Company or any obligation on the part of Executive to mitigate or to offset compensation earned by Executive in other pursuits after termination of employment, other than as specified herein with respect medical benefits provided by another employer.

6.Section 409A

This Letter and all payments and benefits thereunder are intended to be exempt from or otherwise comply with Section 409A so that none of the payments and benefits to be provided thereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will be interpreted in that manner. References to your “termination of employment” will refer to your “separation from service” as defined in Section 409A.

In the event that your separation from service occurs at a time during the calendar year where the Separation Agreement Deadline is in the calendar year following the calendar year in which your separation from service occurs, all cash severance payments to which you may be entitled will be paid on the first payroll date to occur during the calendar year following the calendar year in which such separation from service occurs (the “Payroll Date”), or, if later: (x) the Separation Agreement Deadline, (y) such time as required by the payment schedule applicable to each severance benefit, or (z) such time as required by the following paragraph. Except as required by the below paragraph, any payments that would have been made to you prior to the later of the Payroll Date or Separation Agreement Deadline but for the payment requirements of the preceding sentence will be paid to you on the later of the Payroll Date or the Separation Agreement Deadline following your separation from service and

the remaining payments will be made as provided in this Letter. In no event will you have discretion to determine the taxable year of payment of any severance payments.

Further, if and to the extent necessary to avoid subjecting you to an additional tax under Section 409A, payment of all or a portion of the payments that constitute deferred compensation under Section 409A (the “Deferred Payments”), if any, that otherwise would be payable to you within the first 6 months following your termination of employment will instead be delayed until the date that is 6 months and 1 day following your termination of employment (except where your termination of employment is due to your death). All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under this Letter is intended to constitute a separate payment for purposes of the Section 409A-related regulations.

You and the Company agree to work together to consider amendments to this Letter and to take such reasonable actions to avoid imposition of any additional tax or income recognition under Section 409A prior to actual payment to you. In no event will the Company reimburse you for any taxes that may be imposed on you as a result of Section 409A.

7.Miscellaneous

This Letter will be construed and interpreted in accordance with the laws of the State of Texas. All determinations under this Letter shall be made by the Company’s board of directors in good faith, and all such determinations shall be final and binding on all parties, and given the maximum deference permitted under law. Your employment with the Company continues to be “at-will” and this Letter does not guarantee or imply any right to your continued employment for any period whatsoever with the Company. This Letter supersedes any prior representations, understandings, or discussions, whether expressed orally or in writing, relating to the terms and subject matter of this Letter, including the terms of any offer letter or agreement between you and the Company providing for separation benefits. This Letter is the full and complete agreement between you and the Company regarding the subject matter hereof. This Letter may be modified only in a signed written agreement between you and the CEO of the Company.

To indicate your acceptance of the terms of this Letter, please sign in the space indicated below.

Sincerely,

SPRUCE POWER

/s/ Christopher Hayes

Chris Hayes

President & CEO

AGREED AND ACCEPTED:

/s/ Sarah Wells

Sarah Wells

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14(a) and 15d-14(a) AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Chris Hayes, certify that:

1.I have reviewed this Form 10-Q of Spruce Power Holding Corporation;

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(s) 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 13-a-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 my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me 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 my 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: August 14, 2024	By:	/s/ Chris Hayes
		Chris Hayes
		Chief Executive Officer (Principal Executive Officer)

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14(a) and 15d-14(a) AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Sarah Weber Wells, certify that:

1.I have reviewed this Form 10-Q of Spruce Power Holding Corporation.;

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: August 14, 2024	By:	/s/ Sarah Weber Wells
		Sarah Weber Wells
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer )

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Spruce Power Holding Corporation (the “Corporation”) on Form 10-Q for the fiscal quarter ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Chris Hayes, as Chief Executive Officer of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to 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 Corporation.


Date: August 14, 2024	By:	/s/ Chris Hayes
		Chris Hayes Chief Executive Officer (Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. This certification shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of Section 18 of the Exchange Act. Such certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Spruce Power Holding Corporation (the “Corporation”) on Form 10-Q for the fiscal quarter ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sarah Weber Wells, as Chief Financial Officer of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to 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 Corporation.


Date: August 14, 2024	By:	/s/ Sarah Weber Wells
		Sarah Weber Wells, Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer )

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2024	Aug. 13, 2024
Cover [Abstract]
Document type	10-Q
Document quarterly report	true
Document period end date	Jun. 30, 2024
Document transition report	false
Entity file number	001-38971
Entity registrant name	Spruce Power Holding Corporation
Entity incorporation, state or country code	DE
Entity tax identification number	83-4109918
Entity address, address line one	2000 S Colorado Blvd, Suite 2-825
Entity address, city or town	Denver
Entity address, state or province	CO
Entity address, postal zip code	80222
City area code	(866)
Local phone number	777-8235
Title of 12(b) security	Shares of common stock, $0.0001 par value
Trading symbol	SPRU
Security exchange name	NYSE
Entity current reporting status	Yes
Entity interactive data current	Yes
Entity filer category	Non-accelerated Filer
Entity small business	true
Entity emerging growth company	false
Entity shell company	false
Entity common stock, shares outstanding		18,557,200
Entity central index key	0001772720
Current fiscal year end date	--12-31
Document fiscal period focus	Q2
Document fiscal year focus	2024
Amendment flag	false

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets
Cash and cash equivalents	$ 116,588	$ 141,354
Restricted cash	33,621	31,587
Accounts receivable, net of allowance of $1.1 million and $1.7 million as of June 30, 2024 and December 31, 2023, respectively	13,252	9,188
Interest rate swap assets, current	10,273	11,333
Prepaid expenses and other current assets	5,136	9,879
Total current assets	178,870	203,341
Investment related to SEMTH master lease agreement	141,078	143,095
Property and equipment, net	471,302	484,406
Interest rate swap assets, non-current	20,116	16,550
Intangible assets, net	9,577	10,196
Deferred rent assets	3,155	2,454
Right-of-use assets, net	5,324	5,933
Goodwill	28,757	28,757
Other assets	255	257
Long-term assets of discontinued operations	0	32
Total assets	858,434	895,021
Current liabilities
Accounts payable	1,417	1,120
Non-recourse debt, current, net	28,374	27,914
Accrued expenses and other current liabilities	20,811	40,634
Deferred revenue, current	2,101	878
Lease liability, current	1,042	1,166
Current liabilities of discontinued operations	65	0
Total current liabilities	53,810	71,712
Non-recourse debt, non-current, net	584,478	590,866
Deferred revenue, non-current	2,537	1,858
Lease liability, non-current	5,269	5,731
Warrant liabilities	2	17
Unfavorable solar renewable energy agreements, net	4,376	6,108
Interest rate swap liabilities, non-current	174	843
Other long-term liabilities	3,157	3,047
Long-term liabilities of discontinued operations	68	170
Total liabilities	653,871	680,352
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock, $0.0001 par value; 350,000,000 shares authorized at June 30, 2024 and December 31, 2023; 19,357,850 and 18,557,200 shares issued and outstanding at June 30, 2024, respectively, and 19,093,186 and $18,292,536 shares issued and outstanding at December 31, 2023, respectively	2	2
Additional paid-in capital	476,711	475,654
Accumulated deficit	(268,920)	(257,888)
Treasury stock at cost, 800,650 shares at June 30, 2024 and December 31, 2023, respectively	(5,424)	(5,424)
Noncontrolling interests	2,194	2,325
Total stockholders’ equity	204,563	214,669
Total liabilities and stockholders’ equity	$ 858,434	$ 895,021
Treasury stock, common, (in shares)	800,650	800,650
Common stock, issued (in shares)	19,357,850	19,093,186
Common stock, outstanding (in shares)	18,557,200	18,292,536

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Millions	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Allowance for doubtful accounts, current	$ 1.1	$ 1.7
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	350,000,000	350,000,000
Common stock, issued (in shares)	19,357,850	19,093,186
Common stock, outstanding (in shares)	18,557,200	18,292,536
Treasury stock, common, (in shares)	800,650	800,650

Unaudited Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Statement [Abstract]
Revenues	$ 22,481	$ 22,813	$ 40,768	$ 40,908
Operating expenses:
Cost of revenues	10,139	8,594	19,007	16,447
Selling, general and administrative expenses	16,701	15,985	30,170	31,702
Gain on asset disposal	(999)	(794)	(1,452)	(3,452)
Total operating expenses	25,841	23,785	47,725	44,697
Loss from operations	(3,360)	(972)	(6,957)	(3,789)
Other (income) expense:
Interest income	(5,257)	(3,240)	(10,643)	(5,591)
Interest expense, net	7,591	10,456	18,533	19,623
Change in fair value of warrant liabilities	(6)	(33)	(15)	(148)
Change in fair value of interest rate swaps	3,234	(9,190)	(3,175)	(3,602)
Other income, net	(130)	(752)	(416)	(880)
Net income (loss) from continuing operations	(8,792)	1,787	(11,241)	(13,191)
Net income (loss) from discontinued operations (including loss on disposal of $0 and $3,083 for the three and six months ended June 30, 2023, respectively)	219	(183)	218	(4,049)
Net income (loss)	(8,573)	1,604	(11,023)	(17,240)
Less: Net income (loss) attributable to redeemable noncontrolling interests and noncontrolling interests	5	(1,461)	9	(910)
Net income (loss) attributable to stockholders	$ (8,578)	$ 3,065	$ (11,032)	$ (16,330)
Net income (loss) from continuing operations per share, basic (in dollars per share)	$ (0.46)	$ 0.10	$ (0.59)	$ (0.71)
Net income (loss) from continuing operations per share, diluted (in dollars per share)	(0.46)	0.09	(0.59)	(0.71)
Net income (loss) from discontinued operations - basic (in dollars per share)	0.01	(0.01)	0.01	(0.22)
Net income (loss) from discontinued operations - diluted (in dollars per share)	0.01	(0.01)	0.01	(0.22)
Net income (loss) attributable to stockholders per share, basic (in dollars per share)	(0.45)	0.16	(0.57)	(0.88)
Net income (loss) attributable to stockholders per share, diluted (in dollars per share)	$ (0.45)	$ 0.15	$ (0.57)	$ (0.88)
Weighted average shares outstanding, basic (in shares)	19,271,954	18,611,757	19,187,364	18,460,947
Weighted-average shares outstanding, diluted (in shares)	19,271,954	20,200,832	19,187,364	18,460,947

Unaudited Condensed Consolidated Statements of Operations (Unaudited) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Income Statement [Abstract]
Net loss from discontinued operation	$ 0	$ 3,083

Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Impact of ASC 326 adoption	Common Stock	Additional Paid-In Capital	Non controlling Interests	Accumulated Deficit	Accumulated Deficit Impact of ASC 326 adoption	Treasury Stock
Accounting Standards Update [Extensible Enumeration]	Accounting Standards Update 2016-13 [Member]
Beginning balance at Dec. 31, 2022	$ 85
Redeemable Noncontrolling Interests
Purchase accounting measurement period adjustments	240
Capital distributions to noncontrolling interests	(108)
Net income (loss)	(39)
Ending balance at Mar. 31, 2023	178
Beginning balance (in shares) at Dec. 31, 2022			18,046,903
Beginning balance at Dec. 31, 2022	288,891	$ 1,285	$ 2	$ 473,289	$ 8,942	$ (193,342)	$ 1,285	$ 0
Beginning balance (in shares) at Dec. 31, 2022								0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Purchase accounting measurement period adjustments	(7,303)			(1,813)	(5,490)
Exercise of stock options (in shares)			135,210
Exercise of stock options	283			283
Issuance of restricted stock (in shares)			341,490
Issuance of common stock (in shares)			25,818
Issuance of common stock	150			150
Stock-based compensation expense, net	796			796
Capital distributions to noncontrolling interests	(88)				(88)
Net income (loss)	(18,805)				590	(19,395)
Ending balance (in shares) at Mar. 31, 2023			18,549,421
Ending balance at Mar. 31, 2023	265,209		$ 2	472,705	3,954	(211,452)		$ 0
Ending balance (in shares) at Mar. 31, 2023								0
Redeemable Noncontrolling Interests
Net income (loss)	21
Ending balance at Jun. 30, 2023	199
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)			111,637
Exercise of stock options	252			252
Issuance of restricted stock (in shares)			106,928
Share repurchases (in shares)								233,022
Share repurchases	(1,614)							$ (1,614)
Stock-based compensation expense, net	593			593
Capital distributions to noncontrolling interests	(57)				(57)
Net income (loss)	1,583				(1,482)	3,065
Ending balance (in shares) at Jun. 30, 2023			18,767,986
Ending balance at Jun. 30, 2023	265,966		$ 2	473,550	2,415	(208,387)		$ (1,614)
Ending balance (in shares) at Jun. 30, 2023								233,022
Beginning balance (in shares) at Dec. 31, 2023			19,093,186
Beginning balance at Dec. 31, 2023	$ 214,669		$ 2	475,654	2,325	(257,888)		$ (5,424)
Beginning balance (in shares) at Dec. 31, 2023	800,650							800,650
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of restricted stock (in shares)			5,060
Stock-based compensation expense, net	$ 821			821
Capital distributions to noncontrolling interests	(76)				(76)
Net income (loss)	(2,450)				4	(2,454)
Ending balance (in shares) at Mar. 31, 2024			19,098,246
Ending balance at Mar. 31, 2024	212,964		$ 2	476,475	2,253	(260,342)		$ (5,424)
Ending balance (in shares) at Mar. 31, 2024								800,650
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of restricted stock (in shares)			259,604
Stock-based compensation expense, net	236			236
Capital distributions to noncontrolling interests	(64)				(64)
Net income (loss)	(8,573)				5	(8,578)
Ending balance (in shares) at Jun. 30, 2024			19,357,850
Ending balance at Jun. 30, 2024	$ 204,563		$ 2	$ 476,711	$ 2,194	$ (268,920)		$ (5,424)
Ending balance (in shares) at Jun. 30, 2024	800,650							800,650

Unaudited Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Operating activities:
Net income (loss)	$ (8,573)	$ 1,604	$ (11,023)	$ (17,240)
Adjust for net (income) loss from discontinued operations	(219)	183	(218)	4,049
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense, net			1,057	1,389
Bad debt expense			819	1,104	$ 1,841
Amortization of deferred revenue			(77)	(35)
Depreciation and amortization expense			10,462	10,890
Accretion expense			119	0
Change in fair value of interest rate swaps	3,234	(9,190)	(3,175)	(3,602)
Change in fair value of warrant liabilities			(15)	(148)
Interest income related to SEMTH master lease agreement			(7,495)	(1,394)
Gain on disposal of assets			(1,452)	(3,379)
Change in operating right-of-use assets			23	(18)
Amortization of debt discount and deferred financing costs			2,930	2,914
Changes in operating assets and liabilities:
Accounts receivable, net			(4,649)	(5,240)
Deferred rent assets			(701)	41
Prepaid expenses and other current assets			4,775	(584)
Other assets			2	126
Accounts payable			297	387
Accrued expenses and other current liabilities			(21,095)	(5,898)
Other long-term liabilities			(9)	8
Deferred revenue			2,023	517
Net cash used in continuing operating activities			(27,402)	(16,113)
Net cash provided by (used in) discontinued operating activities			100	(2,158)
Net cash used in operating activities			(27,302)	(18,271)
Investing activities:
Proceeds from sale of solar energy systems			2,853	3,631
Proceeds from investment related to SEMTH master lease agreement			10,784	5,290
Cash paid for acquisitions, net of cash acquired			0	(23,360)
Purchases of other property and equipment			(150)	(124)
Net cash provided by (used in) continuing investing activities			13,487	(14,563)
Net cash provided by discontinued investing activities			0	325
Net cash provided by (used in) investing activities			13,487	(14,238)
Financing activities:
Repayments of long-term non-recourse debt			(136,750)	(14,305)
Proceeds from issuance of non-recourse debt			130,000	0
Repayments under financing leases			0	(21)
Payment of deferred financing costs			(2,108)	0
Proceeds from issuance of common stock			0	150
Proceeds from exercise of stock options			0	535
Remittance of statutory tax withholding on stock-based payment awards			0	(17)
Share repurchases			0	(1,614)
Capital distributions to redeemable noncontrolling interests and noncontrolling interests			(140)	(253)
Net cash used in continuing financing activities			(8,998)	(15,525)
Net cash provided by discontinued financing activities			81	0
Net cash used in financing activities			(8,917)	(15,525)
Net change in cash and cash equivalents and restricted cash:			(22,732)	(48,034)
Cash and cash equivalents and restricted cash, beginning of period			172,941	240,144	240,144
Cash and cash equivalents and restricted cash, end of period	$ 150,209	$ 192,110	150,209	192,110	$ 172,941
Supplemental disclosure of cash flow information:
Cash paid for interest			16,536	15,980
Supplemental disclosures of noncash investing and financing information:
Settlement of operating lease liability			$ 0	$ 1,170

Organization and Description of Business	6 Months Ended
Organization and Description of Business	Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Description of Business	Organization and Description of Business Description of Business Spruce Power Holding Corporation and its subsidiaries (“Spruce Power” or the “Company”) is a leading owner and operator of distributed solar energy assets across the United States (the “U.S.”), offering subscription-based services to approximately 75,000 home solar assets and customer contracts, making renewable energy more accessible to everyone. The Company is engaged in the ownership and maintenance of home solar energy systems for homeowners in the U.S. The Company provides clean, solar energy typically at savings compared to traditional utility energy. The Company’s primary customers are homeowners and the Company’s core solar service offerings generate revenues primarily through (i) the sale of electricity generated by its home solar energy systems to homeowners pursuant to long-term agreements, which requires the Company’s subscribers to make recurring monthly payments, (ii) third party contracts to sell solar renewable energy credits (“SRECs”) generated by the solar energy systems for fixed prices and (iii) the servicing of those agreements for other institutional owners of home solar energy systems. In addition, the Company generates cash flows and earns interest income from an investment through a master lease agreement described below. The Company holds subsidiary fund companies, defined below as the Funds, that own and operate portfolios of home solar energy systems, which are subject to solar lease agreements (“SLAs”) and power purchase agreements (“PPAs”, together with the SLAs, “Customer Agreements”) with residential customers who benefit from the production of electricity generated by the solar energy systems. The solar energy systems may qualify for subsidies, renewable energy credits and other incentives as provided by various states and local agencies. These benefits have generally been retained by the Company's subsidiaries that own the systems, with the exception of the investment tax credit (“ITCs”) under Section 48 of the Internal Revenue Code, as amended, which were generally passed through to the various financing partners of the solar energy systems. The Company also offers services which include asset management services and operating and maintenance services for home solar energy systems. Historically, the Company provided fleet electrification solutions for commercial vehicles in North America, offering its systems for vehicle electrification (the “Drivetrain” operations) and through its energy efficiency and infrastructure solutions business, offering and installing charging stations to enable customers develop the charging infrastructure required for their electrified vehicles (the “XL Grid” operations). The Company ceased the Drivetrain and XL Grid operations in late 2022, and both are presented as discontinued operations in the unaudited condensed consolidated financial statements (see Note 15. Discontinued Operations).

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Basis of unaudited condensed consolidated financial statement presentation

Use of estimates

Variable interest entities

Cash and cash equivalents

Concentration of credit and revenue risks

Restricted cash


	As of
(Amounts in thousands)	June 30, 2024		June 30, 2023
Cash and cash equivalents	$	116,588	$	162,749
Restricted cash	33,621		29,361
Total cash, cash equivalents and restricted cash	$	150,209	$	192,110

Accounts receivable, net


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023
Balance at the beginning of the period	$	1,693	$	12,164
Impact of ASC 326 adoption	—		(1,285)
Write-off of uncollectible accounts	(1,379)		(11,447)
Provision recognized upon valuation of assets acquired	—		420
Provision for current expected credit losses	819		1,841
Balance at the end of the period	$	1,133	$	1,693

Impairment of long-lived assets

Impairment of goodwill

There were no goodwill impairment charges for the three and six months ended June 30, 2024 and 2023.

Contingencies

Fair value measurements

•Level 1: Observable inputs that reflect unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.

•Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Revenues


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	2024		2023		2024		2023
PPA revenues	$	12,320	$	12,234	$	19,839	$	19,361
SLA revenues	6,846		7,025		14,137		14,947
Solar renewable energy credit revenues	1,337		1,662		3,174		3,196
Government incentives	146		72		223		96
Servicing revenues	356		112		356		225
Intangibles amortization, unfavorable solar renewable energy agreements	747		976		1,493		1,419
Other revenues	729		732		1,546		1,664
Total	$	22,481	$	22,813	$	40,768	$	40,908

Energy generation

Solar renewable energy credit revenues

Deferred revenue

Income taxes

Related parties

SEC Climate Disclosure Rule

Recent Accounting Pronouncements

Business Combinations

6 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Business Combinations

Legacy Spruce Power


(Amounts in thousands)	Initial Purchase Price Allocation		Measurement Period Adjustments		Updated Purchase Price Allocation
Total purchase consideration:
Cash, net of cash acquired, and restricted cash	$	32,585	$	—	$	32,585
Allocation of consideration to assets acquired and liabilities assumed:
Accounts receivable, net	10,995		—		10,995
Prepaid expenses and other current assets	6,768		(2,405)		4,363
Solar energy systems	406,298		89,268		495,566
Other property and equipment	337		—		337
Intangible assets	—		11,980		11,980
Interest rate swap assets	26,698		—		26,698
Right-of-use asset	3,279		(328)		2,951
Other assets	358		(102)		256
Goodwill	158,636		(129,879)		28,757
Accounts payable	(2,620)		(22)		(2,642)
Unfavorable solar renewable energy agreements	—		(10,500)		(10,500)
Accrued expenses	(13,061)		(241)		(13,302)
Lease liability	(3,382)		42		(3,340)
Long-term debt	(510,002)		2,772		(507,230)
Other liabilities	(335)		292		(43)
Redeemable noncontrolling interests and noncontrolling interests	(51,384)		39,123		(12,261)
Total assets acquired and liabilities assumed	$	32,585	$	—	$	32,585

The gross intangibles acquired are amortized over their respective estimated useful lives as follows:


(Amounts in thousands)	Asset		Liability		Estimated Life (in years)
Solar renewable energy agreements	$	340	$	10,500	3 to 6
Performance based incentives agreements	3,240		—		13
Trade name	8,400		—		30
Total intangibles acquired	$	11,980	$	10,500

The weighted-average useful life of the intangibles identified above is approximately 16 years, which approximates the period over which the Company expects to gain the estimated economic benefits.

Acquisitions	6 Months Ended
Acquisitions	Jun. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]
Acquisitions	Acquisitions SEMTH Master Lease Agreement In furtherance of its growth strategy, on March 23, 2023, the Company completed the acquisition of all the issued and outstanding interests in SS Holdings 2017, LLC and its subsidiaries (“SEMTH”) from certain funds, pursuant to a membership interest purchase and sale agreement dated March 23, 2023 (the “SEMTH Acquisition”). The SEMTH related asset includes 20-year use rights to customer payment streams of approximately 22,500 home SLAs and PPAs (the “SEMTH Master Lease”). The Company acquired SEMTH for approximately $23.0 million of cash, net of cash received, and assumed $125.0 million of outstanding senior indebtedness under the SP4 Facility (See Note 8. Non-Recourse Debt) and interest rate swaps with Deutsche Bank AG, New York Bank held by SEMTH and its subsidiaries at the close of the acquisition. The purchase of SEMTH's future revenue has been accounted for as an acquisition of financial assets. Under the acquisition method, the purchase price was allocated to the assets acquired and liabilities assumed based on their relative fair value. All fair value measurements of assets acquired and liabilities assumed were based on significant estimates and assumptions, including Level 3 (unobservable) inputs, which require judgment. Estimates and assumptions include the projected timing and amount of future cash flows, discount rates reflecting risk inherent in future cash flows and future utility prices. For the purposes of establishing the fair value of the Company's investment in the SEMTH Master Lease, its analysis considered cash flows beginning in March 2023 (the effective date of the transaction). The Company estimated the fair value of its investment in the SEMTH Master Lease to be approximately $146.9 million on the transaction date.

Property and Equipment, Net

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and equipment consisted of the following as of June 30, 2024 and December 31, 2023:


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023

Solar energy systems	$	511,887	$	513,526
Less: Accumulated depreciation	(41,094)		(29,594)
Solar energy systems, net	$	470,793	$	483,932

Equipment	$	157	$	157
Furniture and fixtures	494		461
Computers and related equipment	334		218
Software	2		8
Leasehold improvements	59		59
Gross other property and equipment	1,046		903
Less: Accumulated depreciation	(537)		(429)
Other property and equipment, net	$	509	$	474

Property and equipment, net	$	471,302	$	484,406

Intangible Assets, net

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets, net

Intangible Assets, Net

The following table presents the detail of intangible assets, net as recorded in the unaudited condensed consolidated balance sheets:


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023

Intangible assets:
Solar renewable energy agreements	$	340	$	340
Performance based incentives agreements	3,240		3,240
Trade name	8,400		8,400
Gross intangible assets	11,980		11,980
Less: Accumulated amortization	(2,403)		(1,784)

Intangible assets, net	$	9,577	$	10,196

June 30, 2024, expected amortization of intangible assets for each of the five succeeding fiscal years and thereafter is as follows:


	As of June 30,
(Amounts in thousands)	2024
Remainder of 2024	$	621
2025	1,126
2026	1,122
2027	978
2028	878
Thereafter	4,852
Total	$	9,577

Accrued Expenses and Other Current Liabilities

6 Months Ended

Jun. 30, 2024

Accrued Liabilities and Other Liabilities [Abstract]

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of June 30, 2024 and December 31, 2023:


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023
Accrued interest	$	7,273	$	8,587
Accrued professional fees	2,029		2,386
Accrued contingencies (See Note 13. Commitments and Contingencies)	1,882		21,300
Accrued compensation and related benefits	4,135		3,237
Accrued expenses, other	2,425		2,293
Accrued operating and maintenance expenses	1,993		2,079
Accrued taxes, stock-based compensation	1,074		752
Accrued expenses and other current liabilities	$	20,811	$	40,634

Non-Recourse Debt

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Non-Recourse Debt

The following table provides a summary of the Company’s debt as of June 30, 2024 and December 31, 2023:


		As of
(Amounts in thousands)	Due	June 30, 2024		December 31, 2023
SVB Credit Agreement, SP1 Facility (1)	April 2026	$	208,581	$	214,803
Second SVB Credit Agreement, SP2 Facility (1)	May 2027	82,070		85,231
KeyBank Credit Agreement, SP3 Facility (1)	November 2027	56,608		58,962
Second KeyBank Credit Agreement (1)	April 2030	162,712		162,725
Deutsche Bank Credit Agreement, SP4 Facility	August 2025	—		125,000
Barings GPSF Credit Agreement, SET Facility	April 2042	130,000		—
Less: Unamortized fair value adjustment (1)		(24,755)		(27,600)
Less: Unamortized deferred financing costs		(2,364)		(341)
Total Non-recourse debt		612,852		618,780
Less: Non-recourse debt, current		(28,374)		(27,914)
Non-recourse debt, non-current		$	584,478	$	590,866

Interest Rate Swaps	6 Months Ended
Interest Rate Swaps	Jun. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Interest Rate Swaps	Interest Rate Swaps The purpose of the Company’s swaps is to convert the floating interest rate on the Company's Credit Agreements to a fixed rate. As of June 30, 2024, the notional amount of the interest rate swaps covers approximately 98% of the balance of the Company’s floating rate term loans. During the three and six months ended June 30, 2024, the change in the fair value of the interest rate swaps was $(3.2) million and $3.2 million, respectively, and for the three and six months ended June 30, 2023 was $9.2 million and $3.6 million, respectively, which are reflected as a component of other income (expense) within the unaudited condensed consolidated statements of operations. The Company also recognized $7.0 million and $10.8 million of realized gains for the three and six months ended June 30, 2024, and for the three and six months ended June 30, 2023, realized gains of $3.5 million and $6.0 million, respectively, reflected within interest expense, net. In June 2024, interest rate swaps related to the SP4 Facility were settled concurrently with the full repayment of the SP4 Facility (see Note 8. Non-Recourse Debt), and as a result, the Company recorded a gain of approximately $3.6 million within interest expense, net during the three and six months ended June 30, 2024. See Note 10. Fair Value Measurements for further information on the Company’s determination of the fair value of its interest rate swaps.

Fair Value Measurements

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

The Company uses various assumptions and methods in estimating the fair values of its financial instruments.

The Company’s private warrants are valued using a Black-Scholes model, pursuant to the inputs provided in the table below:


Input	June 30, 2024			December 31, 2023
Risk-free rate	4.9		%	4.2		%
Remaining term in years	1.48			1.98
Expected volatility	68.6		%	82.0		%
Exercise price	$	92.00		$	92.00
Fair value of common stock	$	3.65		$	4.42

The fair value of the Company’s non-recourse debt as of June 30, 2024 and December 31, 2023 was $626.1 million and $628.2 million, respectively.

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 Measurements as of June 30, 2024
(Amounts in thousands)	Level I		Level II		Level III		Total
Asset:
Interest rate swaps	$	—	$	30,389	$	—	$	30,389
Money market accounts	112,168		—		—		112,168
Total	$	112,168	$	30,389	$	—	$	142,557

Liabilities:
Private warrants	$	—	$	—	$	2	$	2
Total	$	—	$	—	$	2	$	2


	Fair Value Measurements as of December 31, 2023
(Amounts in thousands)	Level I		Level II		Level III		Total
Asset:
Interest rate swaps	$	—	$	27,883	$	—	$	27,883
Money market accounts	21,475		—		—		21,475
U.S. Treasury securities	108,964		—		—		108,964
Total	$	130,439	$	27,883	$	—	$	158,322

Liabilities:
Private warrants	$	—	$	—	$	17	$	17
Total	$	—	$	—	$	17	$	17

The following is a roll forward of the Company’s Level 3 liability instruments:


	Three Months Ended June 30, 2024		Six Months Ended June 30, 2024
(Amounts in thousands)

Balance at the beginning of the period	$	8	$	17
Fair value adjustments – warrant liability	(6)		(15)
Balance at the end of the period	$	2	$	2

Share-Based Compensation Expense

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation Expense

Stock-Based Compensation Expense

Stock Options


Options	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term

Outstanding at December 31, 2023	193,156	$	17.89	5.8
Granted	295,229	3.74
Exercised	—	—
Cancelled or forfeited	—	—
Outstanding at June 30, 2024	488,385	$	9.34	8.0
Exercisable at June 30, 2024	192,227	$	17.67	5.3

A summary of stock option award activity for the six months ended June 30, 2023 was as follows:


Options	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term

Outstanding at December 31, 2022	761,408	$	11.12	2.7
Granted	—	—
Exercised	(246,847)	1.92
Cancelled or forfeited	(79,797)	51.52
Outstanding at June 30, 2023	434,764	$	9.12	3.2
Exercisable at June 30, 2023	427,787	$	8.80	3.2

Restricted Stock Units


	Number of Shares	Weighted Average Grant Date Fair Value Per Share
Non-vested, at December 31, 2023	1,102,095	$	7.74
Granted	1,629,335	3.58
Vested	(264,664)	6.22
Cancelled or forfeited	(520,226)	5.08
Non-vested, at June 30, 2024	1,946,540	$	5.18

Restricted stock units activity during the six months ended June 30, 2023 was as follows:


	Number of Shares	Weighted Average Grant Date Fair Value Per Share
Non-vested, at December 31, 2022	1,229,089	$	10.40
Granted	653,425	6.48
Vested	(448,418)	12.56
Cancelled or forfeited	(203,116)	11.04
Non-vested, at June 30, 2023	1,230,980	$	8.00

Former CEO's Ladder Restricted Stock Unit Award

Noncontrolling Interests

6 Months Ended

Jun. 30, 2024

Noncontrolling Interest [Abstract]

Noncontrolling Interests

The following table summarizes the Company’s noncontrolling interests as of June 30, 2024:


Tax Equity Entity						Date Class A Member Admitted




ORE F4 Holdco, LLC						August 2014
Volta Solar Owner II, LLC						August 2017

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Legal Proceedings The Company is periodically involved in legal proceedings and claims arising in the normal course of business, including proceedings relating to intellectual property, employment and other matters. Management believes the outcome of these proceedings will not have a significant adverse effect on the Company’s financial position, operating results, or cash flow. Securities Class Action Proceedings On March 8, 2021, two putative securities class action complaints were filed against the Company, and certain of its current and former officers and directors in the federal district court for the Southern District of New York. Those cases were ultimately consolidated under C.A. No. 1:21-cv-2002, and a lead plaintiff was appointed in June 2021. On July 20, 2021, an amended complaint was filed alleging that certain public statements made by the defendants between October 2, 2020, and March 2, 2021, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Following negotiations with a mediator, in September 2023, the Company and the plaintiffs agreed on a settlement in principle in the aggregate amount of $19.5 million (the “Settlement Amount”), and on December 6, 2023, the lead plaintiff and the defendants entered into a stipulation and agreement of settlement requiring the Company to pay the Settlement Amount to resolve the class action litigation and the related legal fees and administration costs. On April 30, 2024, the New York Court approved a final settlement of the Class Action Litigation. The Settlement Amount was offset by approximately $4.5 million of related loss recoveries from the Company’s directors and officers liability insurance policy with third parties, which was paid out in February 2024. The Company paid the $15.0 million net settlement amount to the settlement claims administrator in February 2024. On September 20, 2021, and October 19, 2021, two class action complaints were filed in the Delaware Court of Chancery against certain of the Company’s current officers and directors, and the Company’s sponsor of its special purpose acquisition company merger, Pivotal Investment Holdings II LLC. These actions were consolidated as in re XL Fleet Corp. (Pivotal) Stockholder Litigation, C.A. No. 2021-0808, and an amended complaint was filed on January 31, 2022. The amended complaint alleges various breaches of fiduciary duty against the Company and/or its officers, several allegedly misleading statements made in connection with the merger, and aiding and abetting breaches of fiduciary duty in connection with the negotiation and approval of the December 21, 2020 merger and organization of XL Hybrids, Inc., a Delaware corporation (“Legacy XL”) to become XL Fleet Corp. The Company believes the allegations asserted in both class action complaints are without merit and is vigorously defending the lawsuit. At this time, the Company is unable to estimate potential losses, if any, related to the lawsuit. Shareholder Derivative Actions On June 23, 2022, the Company received a shareholder derivative complaint filed in the U.S. District Court for the District of Massachusetts, captioned Val Kay derivatively on behalf of nominal defendant XL Fleet Corp., against all current directors and former officers and directors, C.A. No. 1:22-cv-10977. The action was filed by a shareholder purportedly on XL Fleet Corp.’s behalf, and raises claims for contribution, as well as claims for breach of fiduciary duty, waste of corporate assets, unjust enrichment, and abuse of control. On December 8, 2023, the parties submitted a joint status report advising the court that they had reached a settlement-in-principle to settle this action, the Reali v. Griffin, et al. action, the Tucci v. Ledecky, et al. action, and a stockholder litigation demand (collectively, the “Derivative Matters”). Plaintiffs filed a motion for preliminary approval of the settlement on March 1, 2024, which is pending a decision from the court. The settlement provides for certain corporate governance enhancements and no monetary payments. There was no agreement as to attorneys’ fees for the Plaintiffs’ attorneys and Plaintiffs filed a petition for attorneys’ fees, which defendants have opposed. At this time, the Company is unable to estimate potential losses, if any, related to the potential fee petition. In March 2023, two shareholder derivative actions were filed in the U.S. District Court for the District of Delaware (the “Delaware Derivative Actions”). One action is captioned Reali v. Griffin, et al., C.A. No. 1:23-cv-00289 and the other action is captioned Tucci v. Ledecky, et al., C.A. 1:23-cv-00322. These actions were consolidated and captioned In re Spruce Power Holding Corporation Shareholder Derivative Litigation, C.A. No. 1:23-cv-00289. As noted above, the consolidated action is part of a settlement agreement that has been filed in the U.S. District Court for the District of Massachusetts. In August 2023, an additional derivative action was filed in the U.S. District Court for the Southern District of New York, captioned Boyce v. Ledecky, et al., C.A. No. 1:23-cv-8591. On March 11, 2024, all defendants filed motions to dismiss the complaint in its entirety, which are pending before the court. The settlement agreement for the Derivative Matters described above contains a release that would apply to claims in this action if the settlement agreement is approved by the U.S. District Court for the District of Massachusetts. On March 22, 2024, Boyce agreed to voluntarily dismiss the lawsuit. On May 1, 2024, the United States District Court for the District of Massachusetts, granted preliminary approval of the settlement of the following shareholder derivative actions: (i) Kay v. Frodl, et al., Case No. 22-cv-10977, pending in the Massachusetts Court; (ii) In re Spruce Power Holding Corp. S'holder Derivative Litig., Case No. 1:23-cv-00289-MN, pending in the United States District Court for the District of Delaware; and (iii) Sham Lakhani, shareholder to a shareholder litigation demand made on the Board of Directors of the Company. The District of Massachusetts approved the proposed settlement on August 8, 2024, but deferred the ruling over the amount of the plaintiffs’ attorneys’ fees until a later date. State Attorney Generals' Investigations The Company has been asked to provide information and documents in response to subpoenas and other requests for information from certain state attorney generals’ offices regarding, among other things, its sales and marketing protocols. The Company has been cooperating with these investigations and intends to continue to do so until they are resolved. At this time, the Company is unable to estimate potential losses, if any, related to these matters. Securities and Exchange Commission Civil Enforcement Action On January 6, 2022, the Company received a subpoena from the Division of Enforcement of the SEC requesting, among other things, information and documents concerning the XL Fleet Corp. business combination with Legacy XL, the Company’s sales pipeline and revenue projections, California Air Resources Board approvals, and other related matters. In June 2023, the SEC proposed an Offer of Settlement for the purpose of resolving the proposed SEC action against the Company. Following negotiations with the SEC staff, in September 2023, the Company reached a settlement with the SEC pursuant to which the Company did not admit or deny the SEC’s allegations regarding the above-referenced issues. In connection with the settlement, in October 2023, the Company (among other things) paid a civil monetary penalty of $11.0 million which, subject to the discretion of the SEC, will be made available to eligible legacy shareholders through a Fair Fund, termed and administered by the SEC. US Bank On February 9, 2023, US Bank, through its affiliate, Firstar Development, LLC (“Firstar”), filed a motion for summary judgment in lieu of a complaint in New York Supreme Court (the trial level in New York) alleging that the Company failed to fulfill its reimbursement obligations under a 2019 tax recapture guaranty agreement between the parties arising from the alleged recapture by the Internal Revenue Service of tax credits taken by Firstar as an investor in the Company’s subsidiary, Ampere Solar Owner I, LLC. On May 23, 2023, the Company reached a settlement agreement with Firstar, as the plaintiff, for $2.3 million whereby the plaintiff discharged all claims filed against the Company. BMZ USA, Inc. On February 11, 2022, BMZ USA Inc. (“BMZ”), a battery manufacturer, sued XL Hybrids for breach of contract, alleging that XL Hybrids failed to timely purchase the full allotment of batteries required under a certain master supply agreement between the parties. In January 2024, BMZ obtained a judgment for $3.9 million against XL Hybrids, Inc. The Company is appealing the ruling while simultaneously pursuing a settlement. The Company currently estimates the potential loss to be approximately $1.2 million, which has been accrued for as of June 30, 2024 (See Note 7. Accrued Expenses and Other Current Liabilities). ITC Recapture Provisions The IRS may disallow and recapture some, or all, of the Investment Tax Credits due to improperly calculated basis after a project was placed in service ("Recapture Event"). If a Recapture Event occurs, Spruce Power is obligated to pay the applicable Class A Member a recapture adjustment, which includes the amounts the Class A Members are required to repay the IRS, including interest and penalties, as well as any third-party legal and accounting fees incurred by the Class A Members in connection to the Recapture Event, as specified in the operating agreements. Such a payment by Spruce Power to the Class A Members are not to be considered a capital contribution to the fund per the operating agreements, nor would it be considered a distribution to the Class A Members. With the exception of the tax matter related to Ampere Solar Owner I noted above, a Recapture Event was not deemed to be probable by the Company, therefore no accrual has been recorded as of June 30, 2024. Plastic Omnium Plastic Omnium is the assignee of the contractual rights of Actia Corp. under a certain battery purchase order between XL Hybrids and Actia Corp. On March 17, 2023, Plastic Omnium sued Legacy XL and the Company for breach of contract, alleging that Legacy XL ordered a total of 1,000 batteries from Plastic Omnium, paid for 455 of those batteries, and then reneged on 545 of those products. While Plastic Omnium admits it never actually delivered the remaining 545 products, it claims it purchased materials to complete the order, and as a result, Legacy XL and the Company are liable for at least approximately $2.5 million. The Company believes the allegations asserted in this action lack substantial merit, and as a result, is vigorously defending the lawsuit. At this time, the Company is unable to estimate potential losses, if any, related to the lawsuit. Master SREC Purchase and Sale Agreement The Company has forward sales agreements, which are related to a certain number of SRECs, to be generated from the Company’s solar energy systems located in Maryland, Massachusetts, Delaware, and New Jersey to be sold at fixed prices over varying terms of up to 20 years. In the event the Company does not deliver such SRECs to the counterparty, the Company could be forced to pay additional penalties and fees as stipulated within the contracts. Guarantees In connection with the acquisition of RPV Holdco 1, LLC, a wholly owned subsidiary of the Company, guaranty agreements were established in May 2020 by and between Spruce Holding Company 1, LLC, Spruce Holding Company 2, LLC, and Spruce Holding Company 3, LLC (“Spruce Guarantors”) and the investor members in the Funds. The Spruce Guarantors entered into guarantees in favor of the tax equity investors wherein they guaranteed the payment and performance of Solar Service Experts, LLC, a wholly owned subsidiary of the Company, under the Spruce Power 2 Maintenance Services Agreement and the Class B Member under the Limited Liability Company Agreement (“LLCA”). These guaranties are subject to a maximum of the aggregate amount of capital contributions made by the Class A Member under the LLCA. Indemnities and Guarantees During the normal course of business, the Company has made certain indemnities and guarantees under which it may be required to make payments in relation to certain transactions. The duration of the Company’s indemnities and guarantees varies, however the majority of these indemnities and guarantees are limited in duration. No liabilities have been recorded for these indemnities and guarantees as of June 30, 2024. Insurance Claims and Recoveries related to Maui Fires In August 2023, a series of wildfires broke out in Hawaii, predominantly on the island of Maui, resulting in real and personal property and natural resource damage, personal injuries and loss of life and widespread power outages. The Company has recorded $0.2 million of receivables as of June 30, 2024 related to the insurance recoveries, with a corresponding entry to gain on asset disposal within the unaudited condensed statements of operations for the three and six months ended June 30, 2024.

Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

The following is a reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share for the three months ended June 30, 2024 and 2023:


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands, except share data)	2024		2023		2024		2023
Numerator:
Net income (loss) attributable to stockholders	$	(8,578)	$	3,065	$	(11,032)	$	(16,330)
Denominator:
Weighted average shares outstanding, basic	19,271,954		18,611,757		19,187,364		18,460,947
Dilutive effect of stock options and restricted stock units	—		1,589,075		—		—
Weighted average shares outstanding, diluted	19,271,954		20,200,832		19,187,364		18,460,947
Net income (loss) attributable to stockholders per share, basic	$	(0.45)	$	0.16	$	(0.57)	$	(0.88)
Net income (loss) attributable to stockholders per share, diluted	$	(0.45)	$	0.15	$	(0.57)	$	(0.88)

Discontinued Operations

6 Months Ended

Jun. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	2024		2023		2024		2023
Net income (loss) from discontinued operations:
Drivetrain	219		(183)		218		(4,049)
Total	$	219	$	(183)	$	218	$	(4,049)

XL Grid

The following table presents financial results of XL Grid operations:


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	2024		2023		2024		2023

Revenues	$	—	$	—	$	—	$	149
Operating expenses:
Cost of revenues - inventory and other direct costs	—		—		—		148
Selling, general, and administrative expenses	—		—		—		743
Gain on asset disposal	—		—		—		(742)

Total operating expenses	—		—		—		149
Net loss from discontinued operations	$	—	$	—	$	—	$	—

Drivetrain

The following table presents financial results of Drivetrain operations:


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	2024		2023		2024		2023

Revenues	$	16	$	12	$	37	$	20
Operating expenses:
Cost of revenues - inventory and other direct costs	(122)		168		(100)		29
Gain on asset disposal	(81)		—		(81)		—
Other	—		27		—		4,040
Total operating expenses	(203)		195		(181)		4,069
Net income (loss) from discontinued operations	$	219	$	(183)	$	218	$	(4,049)

The following table presents aggregate carrying amounts of assets and liabilities of discontinued operations contained within the unaudited condensed consolidated balance sheets:


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023
Assets from discontinued operations:
Drivetrain	$	—	$	32

Total assets from discontinued operations	$	—	$	32

Liabilities from discontinued operations:
Drivetrain	$	133	$	170
Total liabilities from discontinued operations	$	133	$	170

Subsequent Events	6 Months Ended
Subsequent Events	Jun. 30, 2024
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events In July 2024, a series of wildfires broke out across the state of California destroying thousands of acres of forest and causing real and personal property damage. The Company is currently assessing the impact of these wildfires on its home solar systems and customer contracts in the area; however, the Company has not been able to validate the extent of the related damages. Management has reviewed events subsequent to June 30, 2024 and prior to the filing of financial statements, and except as referenced within this Form 10-Q, the Company has determined there have been no other events that have occurred that would require adjustments or disclosures within the unaudited condensed consolidated financial statements.

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Basis of consolidated financial statement presentation

Basis of unaudited condensed consolidated financial statement presentation

Use of estimates

Variable interest entities

Cash and cash equivalents

Concentration of credit and revenue risk

Concentration of credit and revenue risks

Restricted cash

Accounts receivable, net

Impairment of long-lived assets

Impairment of goodwill

Contingencies

Fair value measurements

•Level 1: Observable inputs that reflect unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.

•Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Revenues


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	2024		2023		2024		2023
PPA revenues	$	12,320	$	12,234	$	19,839	$	19,361
SLA revenues	6,846		7,025		14,137		14,947
Solar renewable energy credit revenues	1,337		1,662		3,174		3,196
Government incentives	146		72		223		96
Servicing revenues	356		112		356		225
Intangibles amortization, unfavorable solar renewable energy agreements	747		976		1,493		1,419
Other revenues	729		732		1,546		1,664
Total	$	22,481	$	22,813	$	40,768	$	40,908

Energy generation

Solar renewable energy credit revenues

Deferred revenue

Income taxes

Related parties

Recent Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Schedule of reconciliation of cash, cash equivalents, and restricted cash


	As of
(Amounts in thousands)	June 30, 2024		June 30, 2023
Cash and cash equivalents	$	116,588	$	162,749
Restricted cash	33,621		29,361
Total cash, cash equivalents and restricted cash	$	150,209	$	192,110

Restrictions on cash and cash equivalents


	As of
(Amounts in thousands)	June 30, 2024		June 30, 2023
Cash and cash equivalents	$	116,588	$	162,749
Restricted cash	33,621		29,361
Total cash, cash equivalents and restricted cash	$	150,209	$	192,110

Changes in financing receivables for accounting standards update

The following table presents the changes in the allowance for credit losses recorded against accounts receivable, net on the unaudited condensed consolidated balance sheets:


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023
Balance at the beginning of the period	$	1,693	$	12,164
Impact of ASC 326 adoption	—		(1,285)
Write-off of uncollectible accounts	(1,379)		(11,447)
Provision recognized upon valuation of assets acquired	—		420
Provision for current expected credit losses	819		1,841
Balance at the end of the period	$	1,133	$	1,693

Disaggregation of revenue


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	2024		2023		2024		2023
PPA revenues	$	12,320	$	12,234	$	19,839	$	19,361
SLA revenues	6,846		7,025		14,137		14,947
Solar renewable energy credit revenues	1,337		1,662		3,174		3,196
Government incentives	146		72		223		96
Servicing revenues	356		112		356		225
Intangibles amortization, unfavorable solar renewable energy agreements	747		976		1,493		1,419
Other revenues	729		732		1,546		1,664
Total	$	22,481	$	22,813	$	40,768	$	40,908

Business Combinations (Tables)

6 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Schedule of fair values of the assets acquired and liabilities assumed by major class


(Amounts in thousands)	Initial Purchase Price Allocation		Measurement Period Adjustments		Updated Purchase Price Allocation
Total purchase consideration:
Cash, net of cash acquired, and restricted cash	$	32,585	$	—	$	32,585
Allocation of consideration to assets acquired and liabilities assumed:
Accounts receivable, net	10,995		—		10,995
Prepaid expenses and other current assets	6,768		(2,405)		4,363
Solar energy systems	406,298		89,268		495,566
Other property and equipment	337		—		337
Intangible assets	—		11,980		11,980
Interest rate swap assets	26,698		—		26,698
Right-of-use asset	3,279		(328)		2,951
Other assets	358		(102)		256
Goodwill	158,636		(129,879)		28,757
Accounts payable	(2,620)		(22)		(2,642)
Unfavorable solar renewable energy agreements	—		(10,500)		(10,500)
Accrued expenses	(13,061)		(241)		(13,302)
Lease liability	(3,382)		42		(3,340)
Long-term debt	(510,002)		2,772		(507,230)
Other liabilities	(335)		292		(43)
Redeemable noncontrolling interests and noncontrolling interests	(51,384)		39,123		(12,261)
Total assets acquired and liabilities assumed	$	32,585	$	—	$	32,585

Schedule of acquired finite-lived intangible assets

The gross intangibles acquired are amortized over their respective estimated useful lives as follows:


(Amounts in thousands)	Asset		Liability		Estimated Life (in years)
Solar renewable energy agreements	$	340	$	10,500	3 to 6
Performance based incentives agreements	3,240		—		13
Trade name	8,400		—		30
Total intangibles acquired	$	11,980	$	10,500

Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

Property and equipment, schedule of useful lives

Property and equipment consisted of the following as of June 30, 2024 and December 31, 2023:


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023

Solar energy systems	$	511,887	$	513,526
Less: Accumulated depreciation	(41,094)		(29,594)
Solar energy systems, net	$	470,793	$	483,932

Equipment	$	157	$	157
Furniture and fixtures	494		461
Computers and related equipment	334		218
Software	2		8
Leasehold improvements	59		59
Gross other property and equipment	1,046		903
Less: Accumulated depreciation	(537)		(429)
Other property and equipment, net	$	509	$	474

Property and equipment, net	$	471,302	$	484,406

Intangible Assets, net (Tables)

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of acquired finite-lived intangible assets by major class

The following table presents the detail of intangible assets, net as recorded in the unaudited condensed consolidated balance sheets:


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023

Intangible assets:
Solar renewable energy agreements	$	340	$	340
Performance based incentives agreements	3,240		3,240
Trade name	8,400		8,400
Gross intangible assets	11,980		11,980
Less: Accumulated amortization	(2,403)		(1,784)

Intangible assets, net	$	9,577	$	10,196

Schedule of finite-lived intangible assets, future amortization expense

As of

June 30, 2024, expected amortization of intangible assets for each of the five succeeding fiscal years and thereafter is as follows:


	As of June 30,
(Amounts in thousands)	2024
Remainder of 2024	$	621
2025	1,126
2026	1,122
2027	978
2028	878
Thereafter	4,852
Total	$	9,577

Accrued Expenses and Other Current Liabilities (Tables)

6 Months Ended

Jun. 30, 2024

Accrued Liabilities and Other Liabilities [Abstract]

Schedule of accrued liabilities

Accrued expenses and other current liabilities consisted of the following as of June 30, 2024 and December 31, 2023:


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023
Accrued interest	$	7,273	$	8,587
Accrued professional fees	2,029		2,386
Accrued contingencies (See Note 13. Commitments and Contingencies)	1,882		21,300
Accrued compensation and related benefits	4,135		3,237
Accrued expenses, other	2,425		2,293
Accrued operating and maintenance expenses	1,993		2,079
Accrued taxes, stock-based compensation	1,074		752
Accrued expenses and other current liabilities	$	20,811	$	40,634

Other current liabilities

Accrued expenses and other current liabilities consisted of the following as of June 30, 2024 and December 31, 2023:


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023
Accrued interest	$	7,273	$	8,587
Accrued professional fees	2,029		2,386
Accrued contingencies (See Note 13. Commitments and Contingencies)	1,882		21,300
Accrued compensation and related benefits	4,135		3,237
Accrued expenses, other	2,425		2,293
Accrued operating and maintenance expenses	1,993		2,079
Accrued taxes, stock-based compensation	1,074		752
Accrued expenses and other current liabilities	$	20,811	$	40,634

Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Schedule of long-term debt

The following table provides a summary of the Company’s debt as of June 30, 2024 and December 31, 2023:


		As of
(Amounts in thousands)	Due	June 30, 2024		December 31, 2023
SVB Credit Agreement, SP1 Facility (1)	April 2026	$	208,581	$	214,803
Second SVB Credit Agreement, SP2 Facility (1)	May 2027	82,070		85,231
KeyBank Credit Agreement, SP3 Facility (1)	November 2027	56,608		58,962
Second KeyBank Credit Agreement (1)	April 2030	162,712		162,725
Deutsche Bank Credit Agreement, SP4 Facility	August 2025	—		125,000
Barings GPSF Credit Agreement, SET Facility	April 2042	130,000		—
Less: Unamortized fair value adjustment (1)		(24,755)		(27,600)
Less: Unamortized deferred financing costs		(2,364)		(341)
Total Non-recourse debt		612,852		618,780
Less: Non-recourse debt, current		(28,374)		(27,914)
Non-recourse debt, non-current		$	584,478	$	590,866

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of fair values private warrants were valued using a black-scholes model

The Company’s private warrants are valued using a Black-Scholes model, pursuant to the inputs provided in the table below:


Input	June 30, 2024			December 31, 2023
Risk-free rate	4.9		%	4.2		%
Remaining term in years	1.48			1.98
Expected volatility	68.6		%	82.0		%
Exercise price	$	92.00		$	92.00
Fair value of common stock	$	3.65		$	4.42

Schedule of assets and liabilities which are measured at fair value on a recurring basis

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 Measurements as of June 30, 2024
(Amounts in thousands)	Level I		Level II		Level III		Total
Asset:
Interest rate swaps	$	—	$	30,389	$	—	$	30,389
Money market accounts	112,168		—		—		112,168
Total	$	112,168	$	30,389	$	—	$	142,557

Liabilities:
Private warrants	$	—	$	—	$	2	$	2
Total	$	—	$	—	$	2	$	2


	Fair Value Measurements as of December 31, 2023
(Amounts in thousands)	Level I		Level II		Level III		Total
Asset:
Interest rate swaps	$	—	$	27,883	$	—	$	27,883
Money market accounts	21,475		—		—		21,475
U.S. Treasury securities	108,964		—		—		108,964
Total	$	130,439	$	27,883	$	—	$	158,322

Liabilities:
Private warrants	$	—	$	—	$	17	$	17
Total	$	—	$	—	$	17	$	17

Schedule of roll forward of the company’s level 3 instruments

The following is a roll forward of the Company’s Level 3 liability instruments:


	Three Months Ended June 30, 2024		Six Months Ended June 30, 2024
(Amounts in thousands)

Balance at the beginning of the period	$	8	$	17
Fair value adjustments – warrant liability	(6)		(15)
Balance at the end of the period	$	2	$	2

Share-Based Compensation Expense (Tables)

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of stock option award activity


Options	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term

Outstanding at December 31, 2023	193,156	$	17.89	5.8
Granted	295,229	3.74
Exercised	—	—
Cancelled or forfeited	—	—
Outstanding at June 30, 2024	488,385	$	9.34	8.0
Exercisable at June 30, 2024	192,227	$	17.67	5.3

A summary of stock option award activity for the six months ended June 30, 2023 was as follows:


Options	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term

Outstanding at December 31, 2022	761,408	$	11.12	2.7
Granted	—	—
Exercised	(246,847)	1.92
Cancelled or forfeited	(79,797)	51.52
Outstanding at June 30, 2023	434,764	$	9.12	3.2
Exercisable at June 30, 2023	427,787	$	8.80	3.2

Schedule of fair value of restricted stock awards

Restricted stock units activity during the six months ended June 30, 2024 was as follows:


	Number of Shares	Weighted Average Grant Date Fair Value Per Share
Non-vested, at December 31, 2023	1,102,095	$	7.74
Granted	1,629,335	3.58
Vested	(264,664)	6.22
Cancelled or forfeited	(520,226)	5.08
Non-vested, at June 30, 2024	1,946,540	$	5.18

Restricted stock units activity during the six months ended June 30, 2023 was as follows:


	Number of Shares	Weighted Average Grant Date Fair Value Per Share
Non-vested, at December 31, 2022	1,229,089	$	10.40
Granted	653,425	6.48
Vested	(448,418)	12.56
Cancelled or forfeited	(203,116)	11.04
Non-vested, at June 30, 2023	1,230,980	$	8.00

Noncontrolling Interests (Tables)

6 Months Ended

Jun. 30, 2024

Noncontrolling Interest [Abstract]

Summary of noncontrolling interests

The following table summarizes the Company’s noncontrolling interests as of June 30, 2024:


Tax Equity Entity						Date Class A Member Admitted




ORE F4 Holdco, LLC						August 2014
Volta Solar Owner II, LLC						August 2017

Net Income (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Schedule of numerator and denominator used to calculate basic earnings per share and diluted earnings per share

The following is a reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share for the three months ended June 30, 2024 and 2023:


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands, except share data)	2024		2023		2024		2023
Numerator:
Net income (loss) attributable to stockholders	$	(8,578)	$	3,065	$	(11,032)	$	(16,330)
Denominator:
Weighted average shares outstanding, basic	19,271,954		18,611,757		19,187,364		18,460,947
Dilutive effect of stock options and restricted stock units	—		1,589,075		—		—
Weighted average shares outstanding, diluted	19,271,954		20,200,832		19,187,364		18,460,947
Net income (loss) attributable to stockholders per share, basic	$	(0.45)	$	0.16	$	(0.57)	$	(0.88)
Net income (loss) attributable to stockholders per share, diluted	$	(0.45)	$	0.15	$	(0.57)	$	(0.88)

Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

Schedule of financial information regarding discontinued operations

The following table provides supplemental detail of the Company’s discontinued operations contained within the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2024 and 2023:


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	2024		2023		2024		2023
Net income (loss) from discontinued operations:
Drivetrain	219		(183)		218		(4,049)
Total	$	219	$	(183)	$	218	$	(4,049)

XL Grid

The following table presents financial results of XL Grid operations:


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	2024		2023		2024		2023

Revenues	$	—	$	—	$	—	$	149
Operating expenses:
Cost of revenues - inventory and other direct costs	—		—		—		148
Selling, general, and administrative expenses	—		—		—		743
Gain on asset disposal	—		—		—		(742)

Total operating expenses	—		—		—		149
Net loss from discontinued operations	$	—	$	—	$	—	$	—

Drivetrain

The following table presents financial results of Drivetrain operations:


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	2024		2023		2024		2023

Revenues	$	16	$	12	$	37	$	20
Operating expenses:
Cost of revenues - inventory and other direct costs	(122)		168		(100)		29
Gain on asset disposal	(81)		—		(81)		—
Other	—		27		—		4,040
Total operating expenses	(203)		195		(181)		4,069
Net income (loss) from discontinued operations	$	219	$	(183)	$	218	$	(4,049)

The following table presents aggregate carrying amounts of assets and liabilities of discontinued operations contained within the unaudited condensed consolidated balance sheets:


	As of
(Amounts in thousands)	June 30, 2024		December 31, 2023
Assets from discontinued operations:
Drivetrain	$	—	$	32

Total assets from discontinued operations	$	—	$	32

Liabilities from discontinued operations:
Drivetrain	$	133	$	170
Total liabilities from discontinued operations	$	133	$	170

Organization and Description of Business (Details) contract in Thousands	6 Months Ended
	Jun. 30, 2024 contract
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of home solar assets and contracts	75

Summary of Significant Accounting Policies - Narrative (Details)		3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Concentration Risk [Line Items]
Restricted cash	$ 29,361,000	$ 33,621,000	$ 29,361,000	$ 33,621,000	$ 29,361,000	$ 31,600,000
Impairment of long-lived assets		0		0
Goodwill, impairment loss		0		0
Deferred revenue		4,600,000		4,600,000		2,700,000
Deferred revenue recognized (less than)		100,000	100,000	100,000	100,000
Income tax expense (benefit)		$ 0	$ 0	$ 0	$ 0
Effective income tax rate		0.00%	0.00%	0.00%	0.00%
Stock split, conversion ratio	0.125
Cash and cash equivalents	$ 162,749,000	$ 116,588,000	$ 162,749,000	$ 116,588,000	$ 162,749,000	141,354,000
Solar Renewable Energy Certificates
Concentration Risk [Line Items]
Inventory, net		$ 0		$ 0		$ 0

Summary of Significant Accounting Policies - Schedule of reconciliation of cash, cash equivalents, and restricted cash (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023
Accounting Policies [Abstract]
Cash and cash equivalents	$ 116,588	$ 141,354	$ 162,749
Restricted cash	33,621	$ 31,600	29,361
Total cash, cash equivalents and restricted cash	$ 150,209		$ 192,110

Summary of Significant Accounting Policies - Changes in allowance for credit losses for accounting standards update (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance at the beginning of the period	$ 1,693	$ 12,164	$ 12,164
Write-off of uncollectible accounts	(1,379)		(11,447)
Provision recognized upon valuation of assets acquired	0		420
Bad debt expense	819	1,104	1,841
Balance at the end of the period	1,133		1,693
Impact of ASC 326 adoption
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance at the beginning of the period	$ 0	$ (1,285)	(1,285)
Balance at the end of the period			$ 0

Summary of Significant Accounting Policies - Schedule of disaggregation of revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation of Revenue [Line Items]
Revenues	$ 22,481	$ 22,813	$ 40,768	$ 40,908
PPA revenues
Disaggregation of Revenue [Line Items]
Revenues	12,320	12,234	19,839	19,361
SLA revenues
Disaggregation of Revenue [Line Items]
Revenues	6,846	7,025	14,137	14,947
Solar renewable energy credit revenues
Disaggregation of Revenue [Line Items]
Revenues	1,337	1,662	3,174	3,196
Government incentives
Disaggregation of Revenue [Line Items]
Revenues	146	72	223	96
Servicing revenues
Disaggregation of Revenue [Line Items]
Revenues	356	112	356	225
Intangibles amortization, unfavorable solar renewable energy agreements
Disaggregation of Revenue [Line Items]
Revenues	747	976	1,493	1,419
Other revenues
Disaggregation of Revenue [Line Items]
Revenues	$ 729	$ 732	$ 1,546	$ 1,664

Business Combinations - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended	6 Months Ended
	Sep. 09, 2022	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Business Combination, Separately Recognized Transactions [Line Items]
Cash paid for acquisitions, net of cash acquired			$ 0	$ 23,360
Noncontrolling interest, fair value adjustment		$ (5,500)
Redeemable noncontrolling interest, fair value adjustment		200
Adjustment to additional paid in capital		$ (1,800)
Ampere Solar Owner IV, LLC, ORE F5A HoldCo, LLC, ORE F6 HoldCo, LLC, RPV Fund 11 LLC, RPV Fund 13 LLC, Sunserve Residential Solar I, LLC and Level Solar Fund III, LLC
Business Combination, Separately Recognized Transactions [Line Items]
Ownership interest, percentage		100.00%
Legacy Spruce Power
Business Combination, Separately Recognized Transactions [Line Items]
Cash paid for acquisitions, net of cash acquired	$ 32,600
Payment to acquire business, gross	61,800
Cash acquired from acquisition	29,200
Spruce Power
Business Combination, Separately Recognized Transactions [Line Items]
Cash paid for acquisitions, net of cash acquired	$ 32,585
Estimated Life (in years)	16 years
Spruce Power \| Sales
Business Combination, Separately Recognized Transactions [Line Items]
Effect of adjustments due to change in provisional amounts		$ 400
Effect of adjustments related to prior periods due to change in provisional amounts		500
Spruce Power \| Other revenues
Business Combination, Separately Recognized Transactions [Line Items]
Effect of adjustments due to change in provisional amounts		400
Effect of adjustments related to prior periods due to change in provisional amounts		300
Spruce Power \| Depreciation
Business Combination, Separately Recognized Transactions [Line Items]
Effect of adjustments due to change in provisional amounts		1,900
Effect of adjustments related to prior periods due to change in provisional amounts		$ 900

Business Combinations - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands		6 Months Ended		12 Months Ended
	Sep. 09, 2022	Jun. 30, 2024	Jun. 30, 2023	Sep. 08, 2023	Dec. 31, 2023
Total purchase consideration:
Cash, net of cash acquired, and restricted cash		$ 0	$ 23,360
Allocation of consideration to assets acquired and liabilities assumed:
Goodwill		$ 28,757			$ 28,757
Spruce Power
Total purchase consideration:
Cash, net of cash acquired, and restricted cash	$ 32,585
Allocation of consideration to assets acquired and liabilities assumed:
Accounts receivable, net	10,995
Prepaid expenses and other current assets	4,363
Solar energy systems	495,566
Other property and equipment	337
Intangible assets	11,980
Interest rate swap assets	26,698
Right-of-use asset	2,951
Other assets	256
Goodwill	28,757
Accounts payable	(2,642)
Unfavorable solar renewable energy agreements	(10,500)
Accrued expenses	(13,302)
Lease liability	(3,340)
Long-term debt	(507,230)
Other liabilities	(43)
Redeemable noncontrolling interests and noncontrolling interests	(12,261)
Total assets acquired and liabilities assumed	32,585
Measurement Period Adjustments
Prepaid expenses and other current assets				$ (2,405)
Solar energy systems				89,268
Intangible assets				11,980
Right-of-use asset				(328)
Other assets				(102)
Goodwill				(129,879)
Accounts payable				(22)
Unfavorable solar renewable energy agreements				(10,500)
Accrued expenses				(241)
Lease liability				42
Long-term debt				2,772
Other liabilities				292
Redeemable noncontrolling interests and noncontrolling interests				39,123
Total assets acquired and liabilities assumed				$ 0
Spruce Power \| Previously Reported
Total purchase consideration:
Cash, net of cash acquired, and restricted cash	32,585
Allocation of consideration to assets acquired and liabilities assumed:
Accounts receivable, net	10,995
Prepaid expenses and other current assets	6,768
Solar energy systems	406,298
Other property and equipment	337
Intangible assets	0
Interest rate swap assets	26,698
Right-of-use asset	3,279
Other assets	358
Goodwill	158,636
Accounts payable	(2,620)
Unfavorable solar renewable energy agreements	0
Accrued expenses	(13,061)
Lease liability	(3,382)
Long-term debt	(510,002)
Other liabilities	(335)
Redeemable noncontrolling interests and noncontrolling interests	(51,384)
Total assets acquired and liabilities assumed	$ 32,585

Business Combinations - Schedule of Acquired Finite-Lived Intangible Assets (Details) $ in Thousands	Sep. 09, 2022 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Asset	$ 11,980
Liability	$ 10,500
Solar renewable energy agreements \| Minimum
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Life (in years)	3 years
Solar renewable energy agreements \| Maximum
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Life (in years)	6 years
Spruce Power
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Life (in years)	16 years
Spruce Power \| Solar renewable energy agreements
Acquired Finite-Lived Intangible Assets [Line Items]
Asset	$ 340
Liability	10,500
Spruce Power \| Performance based incentives agreements
Acquired Finite-Lived Intangible Assets [Line Items]
Asset	3,240
Liability	$ 0
Estimated Life (in years)	13 years
Spruce Power \| Trade name
Acquired Finite-Lived Intangible Assets [Line Items]
Asset	$ 8,400
Liability	$ 0
Estimated Life (in years)	30 years

Acquisitions (Details) $ in Thousands	Mar. 23, 2023 USD ($) lease	Jun. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)
Asset Acquisition [Line Items]
Investments under SEMTH master lease agreement		$ 141,078	$ 143,095
SS Holdings 2017 and subsidiaries (SMETH)
Asset Acquisition [Line Items]
Term of use rights to customer payment stream	20 years
Number of customers \| lease	22,500
Payment to acquire use rights	$ 23,000
Senior indebtedness assumed	125,000
Investments under SEMTH master lease agreement	$ 146,900

Property and Equipment, Net - Schedule of Property And Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property and equipment, net	$ 471,302	$ 484,406
Gross other property and equipment	1,046	903
Less: Accumulated depreciation	(537)	(429)
Other property and equipment, net	509	474
Solar energy systems
Property, Plant and Equipment [Line Items]
Solar energy systems	511,887	513,526
Less: Accumulated depreciation	(41,094)	(29,594)
Property and equipment, net	470,793	483,932
Equipment
Property, Plant and Equipment [Line Items]
Gross other property and equipment	157	157
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Gross other property and equipment	494	461
Computers and related equipment
Property, Plant and Equipment [Line Items]
Gross other property and equipment	334	218
Software
Property, Plant and Equipment [Line Items]
Gross other property and equipment	2	8
Leasehold improvements
Property, Plant and Equipment [Line Items]
Gross other property and equipment	$ 59	$ 59

Property and Equipment, Net - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Energy Equipment
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 5.7	$ 5.6	$ 11.4	$ 11.6
Property and equipment, net
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 0.1	$ 0.1	$ 0.1	$ 0.1

Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets:	$ 11,980	$ 11,980
Less: Accumulated amortization	(2,403)	(1,784)
Intangible assets, net	9,577	10,196
Solar renewable energy agreements
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets:	340	340
Performance based incentives agreements
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets:	3,240	3,240
Trade name
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets:	$ 8,400	$ 8,400

Intangible Assets, Net - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 300	$ 300	$ 600	$ 400

Intangible Assets, Net - Schedule of Estimated Future Intangible Amortization Expense (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2024	$ 621
2025	1,126
2026	1,122
2027	978
2028	878
Thereafter	4,852
Intangible assets, net	$ 9,577	$ 10,196

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Accrued Liabilities and Other Liabilities [Abstract]
Accrued interest	$ 7,273	$ 8,587
Accrued professional fees	2,029	2,386
Accrued contingencies (See Note 13. Commitments and Contingencies)	1,882	21,300
Accrued compensation and related benefits	4,135	3,237
Accrued expenses, other	2,425	2,293
Accrued operating and maintenance expenses	1,993	2,079
Accrued taxes, stock-based compensation	1,074	752
Accrued expenses and other current liabilities	$ 20,811	$ 40,634

Non-Recourse Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023	Sep. 09, 2022
Debt Instrument [Line Items]
Debt Instrument, Unamortized Discount (Premium), Net	$ (24,755)		$ (24,755)		$ (27,600)
Less: Unamortized deferred financing costs	(2,364)		(2,364)		(341)
Total Non-recourse debt	612,852		612,852		618,780
Less: Non-recourse debt, current	(28,374)		(28,374)		(27,914)
Non-recourse debt, non-current, net	584,478		584,478		590,866
Legacy Spruce Power
Debt Instrument [Line Items]
Long-term debt						$ 507,200
Fair value of long-term debt						$ 35,200
Fair value adjustment of amortization of long-term debt	1,400	$ 1,500	2,900	$ 2,900
A&R SVB Credit Agreement
Debt Instrument [Line Items]
Long-term debt	208,581		208,581		214,803
Second SBV Credit Agreement
Debt Instrument [Line Items]
Long-term debt	82,070		82,070		85,231
KeyBank Credit Agreement
Debt Instrument [Line Items]
Long-term debt	56,608		56,608		58,962
A&R Second KeyBank Credit Agreement
Debt Instrument [Line Items]
Long-term debt	162,712		162,712		162,725
Deutsche Bank Credit Agreement, SP4 Facility
Debt Instrument [Line Items]
Long-term debt	0		0		125,000
Barings GPSF LLC Credit Agreement
Debt Instrument [Line Items]
Long-term debt	$ 130,000		$ 130,000		$ 0

Non-Recourse Debt - Narrative (Details) $ in Millions	Jun. 26, 2024 USD ($)
Barings GPSF LLC Credit Agreement
Debt Instrument [Line Items]
Principal balance	$ 130.0
Debt issuance costs, gross	$ 2.1
Interest rate	6.889%
Deutsche Bank Credit Agreement, SP4 Facility
Debt Instrument [Line Items]
Extinguishment of debt, amount	$ 125.0

Interest Rate Swaps (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Interest Rate Swaps (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Derivative [Line Items]
Percent of floating rate term loans covered	98.00%		98.00%
Change in fair value of interest rate swaps	$ (3,234)	$ 9,190	$ 3,175	$ 3,602
Interest rate swaps \| Interest Expense
Derivative [Line Items]
Gain (loss) on sale of derivatives	3,600		3,600
Interest rate swaps \| Other Operating Income (Expense)
Derivative [Line Items]
Change in fair value of interest rate swaps	(3,200)	9,200	3,200	3,600
Interest rate swaps \| Interest Expense
Derivative [Line Items]
Change in fair value of interest rate swaps	$ 7,000	$ 3,500	$ 10,800	$ 6,000

Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2024	Dec. 31, 2023
Fair Value Disclosures [Abstract]
Long-term debt, fair value	$ 626.1	$ 628.2

Fair Value Measurements - Schedule of fair values private warrants were valued using a Black-Scholes model (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2024 $ / shares	Dec. 31, 2023 $ / shares
Risk-free rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, risk-free interest rate, expected volatility	0.049	0.042
Remaining term in years
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Remaining term in years	1 year 5 months 23 days	1 year 11 months 23 days
Expected volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, risk-free interest rate, expected volatility	0.686	0.820
Exercise price (in dollars per share)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, risk-free interest rate, expected volatility	92.00	92.00
Fair value of common stock (in dollars per share)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, risk-free interest rate, expected volatility	3.65	4.42

Fair Value Measurements - Schedule of assets and liabilities which are measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Assets
Total	$ 142,557	$ 158,322
Liabilities:
Warrant liabilities	2	17
Total	2	17
Money market accounts
Assets
Cash and cash equivalents, fair value disclosure	112,168	21,475
U.S. Treasury securities
Assets
Cash and cash equivalents, fair value disclosure		108,964
Interest rate swaps
Assets
Interest rate swaps	30,389	27,883
Level I
Assets
Total	112,168	130,439
Liabilities:
Warrant liabilities	0	0
Total	0	0
Level I \| Money market accounts
Assets
Cash and cash equivalents, fair value disclosure	112,168	21,475
Level I \| U.S. Treasury securities
Assets
Cash and cash equivalents, fair value disclosure		108,964
Level I \| Interest rate swaps
Assets
Interest rate swaps	0	0
Level II
Assets
Total	30,389	27,883
Liabilities:
Warrant liabilities	0	0
Total	0	0
Level II \| Money market accounts
Assets
Cash and cash equivalents, fair value disclosure	0	0
Level II \| U.S. Treasury securities
Assets
Cash and cash equivalents, fair value disclosure		0
Level II \| Interest rate swaps
Assets
Interest rate swaps	30,389	27,883
Level III
Assets
Total	0	0
Liabilities:
Warrant liabilities	2	17
Total	2	17
Level III \| Money market accounts
Assets
Cash and cash equivalents, fair value disclosure	0	0
Level III \| U.S. Treasury securities
Assets
Cash and cash equivalents, fair value disclosure		0
Level III \| Interest rate swaps
Assets
Interest rate swaps	$ 0	$ 0

Fair Value Measurements - Schedule of roll forward of the Company's Level 3 instruments (Details) - Level III - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2024
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 8	$ 17
Fair value adjustments – warrant liability	(6)	(15)
Ending balance	$ 2	$ 2

Share-Based Compensation Expense - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions			3 Months Ended		6 Months Ended
	Apr. 12, 2024	Sep. 09, 2022	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share-Based Compensation Expense (Details) [Line Items]
Share-based compensation expense (benefit)			$ 0.5	$ 0.8	$ 1.4	$ 1.6
Unrecognized compensation cost			$ 8.6		8.6
Period of recognition for share-based compensation expense			3 years 2 months 12 days
Aggregate intrinsic value of stock options outstanding			$ 0.4		$ 0.4
Granted (in shares)					295,229	0
Chief Executive Officer
Share-Based Compensation Expense (Details) [Line Items]
Share-based compensation expense (benefit)			$ 0.5		$ 0.5
Granted (in shares)			295,229		295,229
Restricted Stock Units
Share-Based Compensation Expense (Details) [Line Items]
Granted (in shares)					1,629,335	653,425
Vested (in shares)					264,664	448,418
Cancelled or forfeited (in shares)					520,226	203,116
Restricted Stock Units \| Director
Share-Based Compensation Expense (Details) [Line Items]
Vesting period					4 years
Restricted Stock Units \| Chief Executive Officer
Share-Based Compensation Expense (Details) [Line Items]
Granted (in shares)			88,636		88,636
Vested (in shares)	97,994
Cancelled or forfeited (in shares)	244,267
Ladder RSUs
Share-Based Compensation Expense (Details) [Line Items]
Share-based compensation expense (benefit)				$ 0.1		$ 0.2
Expiration period of grant		10 years
Grant date stock price (in dollars per share)		$ 9.36
Expected volatility		85.00%
Risk free interest rate		3.30%
Expected dividend rate		0.00%
Ladder RSUs \| Chief Executive Officer
Share-Based Compensation Expense (Details) [Line Items]
Share-based compensation expense (benefit)			$ (0.7)
Granted (in shares)		208,333
Percentage vesting in increments certified by Plan administrator		10.00%
Expiration period of grant		10 years
Minimum \| Share-Based Payment Arrangement, Option
Share-Based Compensation Expense (Details) [Line Items]
Vesting period					1 year
Maximum \| Share-Based Payment Arrangement, Option
Share-Based Compensation Expense (Details) [Line Items]
Vesting period					4 years

Share-Based Compensation Expense - Schedule of stock option award activity (Details) - $ / shares	3 Months Ended	6 Months Ended		12 Months Ended
	Dec. 31, 2022	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Shares
Outstanding, beginning balance (in shares)		193,156	761,408	761,408
Granted (in shares)		295,229	0
Exercised (in shares)		0	(246,847)
Cancelled or forfeited (in shares)		0	(79,797)
Outstanding, ending balance (in shares)	761,408	488,385	434,764	193,156
Exercisable (in shares)		192,227	427,787
Weighted Average Exercise Price
Outstanding, beginning balance (in usd per share)		$ 17.89	$ 11.12	$ 11.12
Granted (in usd per share)		3.74	0
Exercised (in usd per share)		0	1.92
Cancelled or forfeited (in usd per share)		0	51.52
Outstanding, ending balance (in usd per share)	$ 11.12	9.34	9.12	$ 17.89
Exercisable (in usd per share)		$ 17.67	$ 8.80
Weighted Average Remaining Contractual Term
Outstanding	2 years 8 months 12 days	8 years	3 years 2 months 12 days	5 years 9 months 18 days
Exercisable		5 years 3 months 18 days	3 years 2 months 12 days

Share-Based Compensation Expense - Schedule of restricted stock awards and restricted stock units (Details) - Restricted Stock Units - $ / shares	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Number of Shares
Non-vested, beginning of period (in shares)	1,102,095	1,229,089
Granted (in shares)	1,629,335	653,425
Vested (in shares)	264,664	448,418
Cancelled or forfeited (in shares)	520,226	203,116
Non-vested, end of period (in shares)	1,946,540	1,230,980
Weighted Average Grant Date Fair Value Per Share
Non-vested, beginning of period (in dollars per share)	$ 7.74	$ 10.40
Granted (in dollars per share)	3.58	6.48
Vested (in dollars per share)	6.22	12.56
Cancelled or forfeited (in dollars per share)	5.08	11.04
Non-vested, ending of period (in dollars per share)	$ 5.18	$ 8.00

Noncontrolling Interests (Details) - USD ($)	6 Months Ended
Noncontrolling Interests (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Noncontrolling Interest [Line Items]
Contingent obligation threshold period	3 months
Redeemable noncontrolling interest, equity, carrying amount	$ 0	$ 0
Assets	858,434,000	895,021,000
Liabilities	653,871,000	680,352,000
Variable Interest Entity, Not Primary Beneficiary
Noncontrolling Interest [Line Items]
Assets	37,400,000	38,000,000.0
Liabilities	$ 700,000	$ 800,000
Common Class A
Noncontrolling Interest [Line Items]
Allocation percentage of taxable income from inception to flip date	99.00%
Allocation percentage of taxable income after flip date	5.00%
Common Class B
Noncontrolling Interest [Line Items]
Allocation percentage of taxable income from inception to flip date	1.00%

Commitment and Contingencies - Legal proceedings (Details) $ in Millions				1 Months Ended
	Nov. 09, 2023 USD ($)	May 23, 2023 USD ($)	Mar. 17, 2023 USD ($) battery	Feb. 29, 2024 USD ($)	Jan. 31, 2024 USD ($)	Oct. 31, 2023 USD ($)	Jun. 30, 2024 USD ($)	Mar. 31, 2023 legalAction	Oct. 19, 2021 complaint	Mar. 08, 2021 complaint
Other Commitments [Line Items]
Gain (loss) related to litigation settlement		$ (2.3)
Damages paid, value						$ 11.0
Plastic Omnium
Other Commitments [Line Items]
Damages sought, value			$ 2.5
Batteries ordered \| battery			1,000
Batteries paid \| battery			455
Batteries reneged \| battery			545
Batteries never delivered \| battery			545
Shareholder Derivative Actions
Other Commitments [Line Items]
Number of class action complaints filed \| legalAction								2
BMZ USA INC.
Other Commitments [Line Items]
Damages sought, value					$ 3.9
Loss contingency accrual							$ 1.2
New York
Other Commitments [Line Items]
Number of class action complaints filed \| complaint										2
Gain (loss) related to litigation settlement	$ (19.5)
Estimated insurance recoveries	$ 4.5
Damages paid, value				$ 15.0
Delaware
Other Commitments [Line Items]
Number of class action complaints filed \| complaint									2

Commitment and Contingencies - Master SREC purchase and sale agreement (Details)	6 Months Ended
	Jun. 30, 2024
Legacy Spruce Power \| Maximum
Other Commitments [Line Items]
Sale of SERCs, term of certificates (up to)	20 years

Commitment and Contingencies - Insurance Claims and Recoveries related to Maui Fires (Details) - Fire $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2024 USD ($)	Jun. 30, 2024 USD ($)
Other Commitments [Line Items]
Insurance settlements receivable, current	$ 0.2	$ 0.2
Insured event, gain (loss)	$ 0.2	$ 0.2

Net Income (Loss) Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
Net Income (Loss) Per Share (Details) - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Numerator:
Net income (loss) attributable to stockholders	$ (8,578,000)	$ 3,065,000	$ (11,032,000)	$ (16,330,000)
Denominator:
Weighted average shares outstanding, basic (in shares)	19,271,954	18,611,757	19,187,364	18,460,947
Dilutive effect of options, and restricted stock units (in shares)	$ 0	$ 1,589,075	$ 0	$ 0
Weighted average shares outstanding, diluted (in shares)	19,271,954	20,200,832	19,187,364	18,460,947
Net income (loss) attributable to stockholders per share, basic (in dollars per share)	$ (0.45)	$ 0.16	$ (0.57)	$ (0.88)
Net income (loss) attributable to stockholders per share, diluted (in dollars per share)	$ (0.45)	$ 0.15	$ (0.57)	$ (0.88)

Discontinued Operations - Summary of net loss from discontinued operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net income (loss) from discontinued operations:	$ 219	$ (183)	$ 218	$ (4,049)
Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net income (loss) from discontinued operations:	219	(183)	218	(4,049)
Discontinued Operations \| Drivetrain
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net income (loss) from discontinued operations:	$ 219	$ (183)	$ 218	$ (4,049)

Discontinued Operations - Net income (loss) from discontinued operation by discontinued operation (Details) - Discontinued Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
XL Grid
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues	$ 0	$ 0	$ 0	$ 149
Operating expenses:
Cost of revenues - inventory and other direct costs	0	0	0	148
Selling, general, and administrative expenses	0	0	0	743
Gain on asset disposal	0	0	0	(742)
Total operating expenses	0	0	0	149
Net income (loss) from discontinued operations	0	0	0	0
Drivetrain
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues	16	12	37	20
Operating expenses:
Cost of revenues - inventory and other direct costs	(122)	168	(100)	29
Gain on asset disposal	(81)	0	(81)	0
Other	0	27	0	4,040
Total operating expenses	(203)	195	(181)	4,069
Net income (loss) from discontinued operations	$ 219	$ (183)	$ 218	$ (4,049)

Discontinued Operations - Schedule of Assets and Liabilities of Discontinued Operations (Details) - Discontinued Operations - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Assets from discontinued operations:
Total assets from discontinued operations	$ 0	$ 32
Liabilities from discontinued operations:
Total liabilities from discontinued operations	133	170
Drivetrain
Assets from discontinued operations:
Total assets from discontinued operations	0	32
Liabilities from discontinued operations:
Total liabilities from discontinued operations	$ 133	$ 170

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