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 MARCH 31, 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 May 13, 2024, 18,394,829 shares of the registrant’s common stock, $0.0001 par value, were outstanding.

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TABLE OF CONTENTS


		PAGE
PART I – FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements	1
	Condensed Consolidated Balance Sheets as of March 31 , 202 4 (unaudited) and December 31, 202 3 (unaudited)	1
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31 , 202 4 and 202 3 (unaudited)	3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31 , 202 4 and 202 3 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31 , 202 4 and 202 3 (unaudited)	5
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3	Defaults Upon Senior Securities	38
Item 4	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39
SIGNATURES		40

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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)	March 31, 2024		December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	120,581	$	141,354
Restricted cash	29,087		31,587
Accounts receivable, net of allowance of $1.4 million and $1.7 million as of March 31, 2024 and December 31, 2023, respectively	10,961		9,188
Interest rate swap assets, current	12,232		11,333
Prepaid expenses and other current assets	5,377		9,879
Total current assets	178,238		203,341
Investment related to SEMTH master lease agreement	142,993		143,095
Property and equipment, net	477,834		484,406
Interest rate swap assets, non-current	21,489		16,550
Intangible assets, net	9,886		10,196
Deferred rent assets	2,809		2,454
Right-of-use assets, net	5,626		5,933
Goodwill	28,757		28,757
Other assets	255		257
Long-term assets of discontinued operations	1		32
Total assets	$	867,888	$	895,021

Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	769	$	1,120
Non-recourse debt, current, net	28,181		27,914
Accrued expenses and other current liabilities	22,006		40,634
Deferred revenue, current	1,149		878
Lease liability, current	1,140		1,166
Total current liabilities	53,245		71,712
Non-recourse debt, non-current, net	585,355		590,866
Deferred revenue, non-current	2,038		1,858
Lease liability, non-current	5,472		5,731
Warrant liabilities	8		17
Unfavorable solar renewable energy agreements, net	5,242		6,108
Interest rate swap liabilities, non-current	270		843
Other long-term liabilities	3,107		3,047
Long-term liabilities of discontinued operations	187		170
Total liabilities	654,924		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 March 31, 2024 and December 31, 2023; 19,098,246 and 18,297,596 shares issued and outstanding at March 31, 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	476,475		475,654
Accumulated deficit	(260,342)		(257,888)
Treasury stock at cost, 800,650 shares at March 31, 2024 and December 31, 2023, respectively	(5,424)		(5,424)
Noncontrolling interests	2,253		2,325
Total stockholders’ equity	212,964		214,669
Total liabilities and stockholders’ equity	$	867,888	$	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 March 31,
(In thousands, except per share and share amounts)	2024		2023

Revenues	$	18,287	$	18,095
Operating expenses:
Cost of revenues	8,868		7,853
Selling, general and administrative expenses	13,469		15,717
Gain on asset disposal	(453)		(2,658)
Total operating expenses	21,884		20,912
Loss from operations	(3,597)		(2,817)
Other (income) expense:
Interest income	(5,386)		(2,351)
Interest expense, net	10,942		9,167
Change in fair value of warrant liabilities	(9)		(115)
Change in fair value of interest rate swaps	(6,409)		5,588
Other income, net	(286)		(128)
Net loss from continuing operations	(2,449)		(14,978)
Net loss from discontinued operations (including loss on disposal of $3,083 for the three months ended March 31, 2023)	(1)		(3,866)
Net loss	(2,450)		(18,844)
Less: Net income attributable to redeemable noncontrolling interests and noncontrolling interests	4		551
Net loss attributable to stockholders	$	(2,454)	$	(19,395)
Net loss from continuing operations per share, basic and diluted	$	(0.13)	$	(0.82)
Net loss from discontinued operations per share, basic and diluted	$	—	$	(0.21)
Net loss attributable to stockholders per share, basic and diluted	$	(0.13)	$	(1.06)


Weighted-average shares outstanding, basic and diluted	19,098,246		18,275,958

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 Months Ended March 31, 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	—	—		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


			Three Months Ended March 31, 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	—		—	—		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

See notes to unaudited condensed consolidated financial statements.

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Spruce Power Holding Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)


	Three Months Ended March 31,
(In thousands)	2024		2023

Operating activities:
Net loss	$	(2,450)	$	(18,844)
Add back: Net loss from discontinued operations	1		3,866
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	821		796
Bad debt expense	517		174
Amortization of deferred revenue	(37)		—
Depreciation and amortization expense	5,234		6,004
Accretion expense	59		—
Change in fair value of interest rate swaps	(6,409)		5,588
Change in fair value of warrant liabilities	(9)		(115)
Interest income related to SEMTH master lease agreement	(3,748)		(213)
Gain on disposal of assets	(453)		(2,585)
Change in operating right-of-use assets	22		15
Amortization of debt discount and deferred financing costs	1,457		1,455
Changes in operating assets and liabilities:
Accounts receivable, net	(2,290)		(1,948)
Deferred rent assets	(355)		(335)
Prepaid expenses and other current assets	4,532		432
Other assets	2		126
Accounts payable	(351)		(698)
Accrued expenses and other current liabilities	(19,278)		(769)
Other long-term liabilities	1		—
Deferred revenue	532		290
Net cash used in continuing operating activities	(22,202)		(6,761)
Net cash provided by (used in) discontinued operating activities	15		(1,490)
Net cash used in operating activities	(22,187)		(8,251)
Investing activities:
Proceeds from sale of solar energy systems	1,257		1,763
Proceeds from investment related to SEMTH master lease agreement	4,501		1,011
Cash paid for acquisitions, net of cash acquired	—		(23,139)
Purchases of other property and equipment	(67)		(12)
Net cash provided by (used in) continuing investing activities	5,691		(20,377)
Net cash provided by discontinued investing activities	—		325
Net cash provided by (used in) investing activities	5,691		(20,052)
Financing activities:
Repayments of long-term non-recourse debt	(6,701)		(6,141)
Repayments under financing leases	—		(12)
Proceeds from issuance of common stock	—		150
Proceeds from exercise of stock options	—		283

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Capital distributions to redeemable noncontrolling interests and noncontrolling interests	(76)		(196)
Net cash used in continuing financing activities	(6,777)		(5,916)
Net cash used in financing activities	(6,777)		(5,916)
Net change in cash and cash equivalents and restricted cash:	(23,273)		(34,219)
Cash and cash equivalents and restricted cash, beginning of period	172,941		240,144
Cash and cash equivalents and restricted cash, end of period	$	149,668	$	205,925
Supplemental disclosure of cash flow information:
Cash paid for interest	$	6,329	$	4,050

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 demand for power, 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 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 March 31, 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 March 31, 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 months ended March 31, 2024 and 2023, the Company had no customers that represented at least 10% of the Company’s revenues. As of March 31, 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 March 31, 2024 and December 31, 2023 of $29.1 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)	March 31, 2024		December 31, 2023
Cash and cash equivalents	$	120,581	$	141,354
Restricted cash	29,087		31,587
Total cash, cash equivalents and restricted cash	$	149,668	$	172,941

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)	March 31, 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	(813)		(11,447)
Provision recognized upon valuation of assets acquired	—		420
Provision for current expected credit losses	517		1,841
Balance at the end of the period	$	1,397	$	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 months ended March 31, 2024 and 2023.

Impairment of goodwill

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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 net tangible and identifiable intangible assets 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 during the three months ended March 31, 2024 and 2023.

Contingencies

The Company is unable to anticipate the ultimate outcome of all pending legal proceedings. 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.

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, 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 months ended March 31, 2024 and 2023:


	Three Months Ended March 31,
(Amounts in thousands)	2024		2023
PPA revenues	$	7,519	$	7,127
SLA revenues	7,291		7,922
Solar renewable energy credit revenues	1,837		1,535
Government incentives	77		24
Servicing revenues	—		113
Intangibles amortization, unfavorable solar renewable energy agreements	746		443
Other revenue	817		931
Total	$	18,287	$	18,095

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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 with no costs incurred to obtain them 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 March 31, 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 March 31, 2024 and December 31, 2023 was $3.2 million and $2.7 million, respectively. During the three months ended March 31, 2024, the Company recognized revenues of less than $0.1 million related to deferred revenue as of December 31, 2023. During the three months ended March 31, 2023, the Company recognized revenues of less than $0.1 million related to deferred revenue as of December 31, 2022.

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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 and liabilities 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 months ended March 31, 2024 and 2023, there were no uncertain tax position 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 months ended March 31, 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 months ended March 31, 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, 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 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 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 as of the period ending March 31, 2024:


(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 March 31, 2024 and December 31, 2023:


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

Solar energy systems	$	512,788	$	513,526
Less: Accumulated depreciation	(35,438)		(29,594)
Solar energy systems, net	$	477,350	$	483,932

Equipment	$	157	$	157
Furniture and fixtures	462		461
Computers and related equipment	284		218
Software	2		8
Leasehold improvements	59		59
Gross other property and equipment	964		903
Less: Accumulated depreciation	(480)		(429)
Other property and equipment, net	$	484	$	474

Property and equipment, net	$	477,834	$	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 months ended March 31, 2024 and 2023 was $5.7 million and $6.0 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 the three months ended March 31, 2024 and 2023 was $0.1 million and $0.06 million, respectively.

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Notes to Unaudited Condensed Consolidated Financial Statements

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)	March 31, 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	(2,094)		(1,784)

Intangible assets, net	$	9,886	$	10,196

Amortization of intangible assets for the three months ended March 31, 2024 and 2023 was $0.3 million and $0.06 million, respectively. As of March 31, 2024, expected amortization of intangible assets for each of the five succeeding fiscal years and thereafter is as follows:


	March 31, 2024
(Amounts in thousands)	2023
Remainder of 2024	$	930
2025	1,126
2026	1,122
2027	978
2028	878
Thereafter	4,852
Total	$	9,886

Note 7. Accrued Expenses and Other Current Liabilities

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


	As of
(Amounts in thousands)	March 31, 2024		December 31, 2023
Accrued interest	$	11,595	$	8,587
Professional fees	2,400		2,386
Accrued contingencies (See Note 13. Commitments and Contingencies)	1,800		21,300
Accrued compensation and related benefits	1,845		3,237
Accrued expenses, other	3,605		4,372
Accrued taxes, stock-based compensation	761		752
Accrued expenses and other current liabilities	$	22,006	$	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 March 31, 2024 and December 31, 2023:


		As of
(Amounts in thousands)	Due	March 31, 2024		December 31, 2023
SVB Credit Agreement, SP1 Facility (1)	April 2026	$	211,122	$	214,803
Second SVB Credit Agreement, SP2 Facility (1)	May 2027	83,416		85,231
KeyBank Credit Agreement, SP3 Facility (1)	November 2027	57,756		58,962
Second KeyBank Credit Agreement (1)	April 2030	162,725		162,725
Deutsche Bank Credit Agreement, SP4 Facility	August 2025	125,000		125,000
Less: Unamortized fair value adjustment (1)		(26,172)		(27,600)
Less: Unamortized deferred financing costs		(311)		(341)
Total Non-recourse debt		613,536		618,780
Less: Non-recourse debt, current		(28,181)		(27,914)
Non-recourse debt, non-current		$	585,355	$	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 months ended March 31, 2024 and 2023 were $1.5 million and $1.5 million, respectively.

Note 9. Interest Rate Swaps

The purpose of the swap agreements is to convert the floating interest rate on the Company's Credit Agreements to a fixed rate. As of March 31, 2024, the notional amount of the interest rate swaps covers approximately 95% of the balance of the Company’s floating rate term loans.

During the three months ended March 31, 2024 and 2023, the change in the fair value of the interest rate swaps were ($6.4 million) and $5.6 million, respectively, which are reflected as a component of other income (expense) within the unaudited condensed consolidated statements of operations. The Company also recognized $3.7 million and $2.5 million of realized gains for the three months ended March 31, 2024 and 2023, respectively, reflected within interest expense, net.

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

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Notes to Unaudited Condensed Consolidated Financial Statements

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	March 31, 2024			December 31, 2023
Risk-free rate	4.71		%	4.24		%
Remaining term in years	1.73			1.98
Expected volatility	73.0		%	82.0		%
Exercise price	$	92.00		$	92.00
Fair value of common stock	$	3.97		$	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 March 31, 2024 and December 31, 2023 was $625.7 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 March 31, 2024
(Amounts in thousands)	Level I		Level II		Level III		Total
Asset:
Interest rate swaps	$	—	$	33,721	$	—	$	33,721
Money market accounts	4,337		—		—		4,337
U.S. Treasury securities	114,068		—		—		114,068
Total	$	118,405	$	33,721	$	—	$	152,126

Liabilities:
Private warrants	$	—	$	—	$	8	$	8
Total	$	—	$	—	$	8	$	8

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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 March 31, 2024		Three Months Ended March 31, 2023
(Amounts in thousands)

Balance at the beginning of the period	$	17	$	407
Fair value adjustments – warrant liability	(9)		(114)
Share settlement of World Energy liability	—		(151)
Balance at the end of the period	$	8	$	142

Note 11. Stock-Based Compensation Expense

Stock-based compensation expense related to stock options and restricted stock units for the three months ended March 31, 2024 and 2023 was $0.8 million for each period. As of March 31, 2024, there was $6.2 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 2.6 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 three months ended March 31, 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	—	—
Exercised	—	—
Cancelled or forfeited	—	—
Outstanding at March 31, 2024	193,156	$	17.89	5.5
Exercisable at March 31, 2024	191,931	$	17.58	5.5

The aggregate intrinsic value of stock options outstanding as of March 31, 2024 was $0.2 million. There were no stock options issued for the three months ended March 31, 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 three months ended March 31, 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	(135,210)	2.00
Cancelled or forfeited	(66,022)	55.52
Outstanding at March 31, 2023	560,176	$	8.16	2.6
Exercisable at March 31, 2023	539,866	$	7.60	2.6

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 three months ended March 31, 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	—	—
Vested	(5,060)	9.36
Cancelled or forfeited	(813)	6.64
Non-vested, at March 31, 2024	1,096,222	$	7.74

Restricted stock units activity during the three months ended March 31, 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	—	—
Vested	(341,490)	16.24
Cancelled or forfeited	(95,852)	10.88
Non-vested, at March 31, 2023	791,747	$	10.24

Former Chief Executive Officer'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 Chief Executive Officer (“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 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, which is presently accounted for as a liability. 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

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 11. Stock-Based Compensation Expense, continued

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 $0.1 million for the three months ended March 31, 2024 and 2023, respectively. Upon separation of the Former CEO from the Company in April 2024, the Ladder RSUs terminated (See Note 16. Subsequent Events).

Note 12. Noncontrolling Interests

The following table summarizes the Company’s noncontrolling interests as of March 31, 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 March 31, 2024 and December 31, 2023.

Total assets on the unaudited condensed consolidated balance sheets includes $37.1 million as of March 31, 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.

Total liabilities on the unaudited condensed consolidated balance sheets includes $0.5 million as of March 31, 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

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 13. Commitments and Contingencies, continued

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

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 13. Commitments and Contingencies, continued

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. Plaintiffs also intend to submit a petition for attorneys’ fees, which defendants intend on opposing. 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 scheduled a hearing for July 31, 2024, to, among other things, consider whether to approve the proposed settlement.

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

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 13. Commitments and Contingencies, continued

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 March 31, 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 March 31, 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. Historically, the Company has not been obligated to make significant payments for such obligations, does not anticipate future payments, and as such, no liabilities have been recorded for these indemnities and guarantees as of March 31, 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 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 due to limited access to the area. No material loss claims have been reported to date or recognized within the unaudited condensed consolidated financial statements as of March 31, 2024. In addition, the Company has not recorded any related insurance recoveries as of March 31, 2024. The Company does not expect this event to have a material impact on its financial position, operating results or cash flows.

Note 14. Net 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 March 31, 2024 and 2023:


	Three Months Ended March 31,
(Amounts in thousands, except share data)	2024		2023
Numerator:
Net loss attributable to stockholders	$	(2,454)	$	(19,395)

Denominator:
Weighted average shares outstanding, basic and diluted	19,098,246		18,275,958

Dilutive effect of stock options and restricted stock units	—		—

Weighted average shares outstanding, diluted	19,098,246		18,275,958

Net loss attributable to stockholders per share, basic and diluted	$	(0.13)	$	(1.06)

For the periods presented, 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 the periods presented. 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 each period presented.

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 months ended March 31, 2024 and 2023.

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Notes to Unaudited Condensed Consolidated Financial Statements

Note 15. Discontinued Operations, continued


	Three Months Ended March 31,
(Amounts in thousands)	2024		2023
Net loss from discontinued operations:
XL Grid	$	—	$	(3,975)
Drivetrain	(1)		109
Total	$	(1)	$	(3,866)

XL Grid

The following table presents financial results of XL Grid operations:


	Three Months Ended March 31,
(Amounts in thousands)	2024		2023

Revenues	$	—	$	149
Operating expenses:
Cost of revenues - inventory and other direct costs	—		148
Selling, general, and administrative expenses	—		743
Loss on asset disposal	—		3,233

Total operating expenses	—		4,124
Net loss from discontinued operations	$	—	$	(3,975)

Drivetrain

The following table presents financial results of Drivetrain operations:


	Three Months Ended March 31,
(Amounts in thousands)	2024		2023

Revenues	$	21	$	9
Operating expenses:
Cost of revenues - inventory and other direct costs	22		(138)
Other income	—		38
Total operating expenses	22		(100)
Net income (loss) from discontinued operations	$	(1)	$	109

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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)	March 31, 2024		December 31, 2023
Assets from discontinued operations:
Drivetrain	$	1	$	32
XL Grid	—		—

Total assets from discontinued operations	$	1	$	32

Liabilities from discontinued operations:
Drivetrain	$	187	$	170
XL Grid	—		—
Total liabilities from discontinued operations	$	187	$	170

Note 16. Subsequent Events

Effective April 12, 2024, Christian Fong is no longer the President and CEO and has resigned from the Board of Directors. In conjunction with Mr. Fong’s separation, the Board of Directors announced that the Company’s Chairman, Christopher Hayes, had been named President and Chief Executive Officer of the Company. Mr. Hayes has served as a director of the Company since December 2020 and Chair of the Board of Directors since January 2023.

Management has reviewed events subsequent to March 31, 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 its 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 its 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 its 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.

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Results of Operations

Comparison of the Three Months Ended March 31, 2024 and 2023

Information with respect to our unaudited condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023 are presented below:


	Three Months Ended March 31,
(In thousands, except per share and share amounts)	2024		2023		$ Change		% Change
Revenues	$	18,287	$	18,095	$	192	1	%
Operating expenses:
Cost of revenues	8,868		7,853		1,015		13
Selling, general and administrative expenses	13,469		15,717		(2,248)		(14)
Gain on asset disposal	(453)		(2,658)		2,205		(83)
Loss from operations	(3,597)		(2,817)		(780)		28
Other (income) expense:
Interest income	(5,386)		(2,351)		(3,035)		129
Interest expense, net	10,942		9,167		1,775		19
Other (income) expense, net	(6,704)		5,345		(12,049)		(225)
Net loss from continuing operations	(2,449)		(14,978)		12,529		(84)
Net loss from discontinued operations	(1)		(3,866)		3,865		(100)
Net loss	(2,450)		(18,844)		16,394		(87)
Less: Net income attributable to redeemable noncontrolling interests and noncontrolling interests	4		551		(547)		(99)
Net loss attributable to stockholders	$	(2,454)	$	(19,395)	$	16,941	(87)

Net loss per common share:
Basic and diluted	$	(0.13)	$	(1.06)	$	0.93	(88)

Revenues and Cost of Revenues

Revenues increased by $0.2 million, or 1.1%, to $18.3 million in the three months ended March 31, 2024 from $18.1 million for the three months ended March 31, 2023. The increase was primarily due to incremental revenues associated with the Tredegar acquisition completed in August 2023.

Cost of revenues increased by $1.0 million, or 12.9%, to $8.9 million in the three months ended March 31, 2024 from $7.9 million for the three months ended March 31, 2023. The increase was attributed to certain operation and maintenance costs, including an increase in meter upgrade spend. Cost of revenues related to our Drivetrain and XL Grid operations are included in net loss from discontinued operations.

Selling, General and Administrative

Selling, general and administrative expenses decreased by $2.2 million, or 14.3%, to $13.5 million in the three months ended March 31, 2024 from $15.7 million for the three months ended March 31, 2023. The decrease is primarily due to higher legal expenses related to Legacy XL legal matters, higher compensation and severance charges and related expenses resulting from Legacy XL restructuring actions for the three months ended March 31, 2023. Selling, general and

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administrative expenses related to the Drivetrain and XL Grid operations are included in net loss from discontinued operations.

Gain on Asset Disposal

Gain on asset disposal decreased by $2.2 million, or 83.0%, to $0.5 million in the three months ended March 31, 2024 from $2.7 million for the three months ended March 31, 2023. The decrease is primarily the result of updated valuation reports and adjustments to provisional amounts assigned to gain on asset disposal recognized during the three months ended March 31, 2023.

Interest Income

Interest income increased by $3.0 million, or 129.1%, to $5.4 million in the three months ended March 31, 2024 from $2.4 million for the three months ended March 31, 2023. The increase is primarily due to interest income of $3.5 million associated with the SEMTH acquisition completed in March 2023, slightly offset by a $0.5 million decrease in interest income earned on investments in U.S. Treasury securities.

Interest Expense, net

Interest expense, net increased by $1.8 million, or 19.4%, to $10.9 million in the three months ended March 31, 2024, from $9.2 million for the three months ended March 31, 2023. The increase is primarily the result of a full quarter of SEMTH interest expense recognized in the current period and the SP2 Facility amendment completed concurrently in August 2023 with the Tredegar acquisition.

Other (Income) Expense, Net

Other income, net was $6.7 million for the three months ended March 31, 2024, an increase of $12.0 million from an expense of $5.3 million for the three months ended March 31, 2023. The increase is primarily the result of change in fair value of our interest rate swap agreements.

Liquidity and Capital Resources

Our cash requirements depend on many factors, including the execution of its business strategy. We remains 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 in its business. Working capital is impacted by the timing and extent of the business needs. As of March 31, 2024, we had net working capital of $125.0 million, including cash and cash equivalents and restricted cash of $149.7 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. In addition, 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. As of March 31, 2024, we had $613.5 million of 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 March 31, 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 evaluates 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:


	Three Months Ended
(Amounts in thousands)	March 31, 2024		March 31, 2023
Net cash provided by (used in)
Continuing operating activities	$	(22,202)	$	(6,761)
Discontinued operating activities	15		(1,490)
Continuing investing activities	5,691		(20,377)
Discontinued investing activities	—		325
Continuing financing activities	(6,777)		(5,916)
Net change in cash and cash equivalents and restricted cash	$	(23,273)	$	(34,219)

Cash Flows Used in Operating Activities

The net cash used in continuing operations for the three months ended March 31, 2024 consists of the operations of Legacy Spruce Power, Tredegar assets acquired, 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 three months ended March 31, 2024 primarily includes $4.5 million of proceeds from the SEMTH investment and $1.3 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 three months ended March 31, 2024 primarily includes $6.7 million for the repayment of non-recourse debt.

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 is 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 March 31, 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

•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, is taking comprehensive actions to remediate the above material weaknesses. The remediation plan includes the following:

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

•hired and are continuing to hire 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;

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

•enhancing system controls to address and enforce Segregation of Duties Framework.

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

There were no changes in the Company's internal control over financial reporting during the quarter ended March 31, 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, even with the existing retention program in place, 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 have 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 allegedly 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 April 17, 2024, Clayton filed a preliminary proxy statement with the SEC in connection with its director nominations. Another stockholder, Shawn Kravetz, the President and Chief Investment Officer of Esplanade Capital LLC (“Esplanade”), had also delivered a notice of his intent to nominate two directors on January 26, 2024, and on April 26, 2024, Esplanade filed a notice of exempt solicitation referencing Clayton’s preliminary proxy statement and encouraging stockholders to consider Esplanade’s communications regarding the Company when voting for directors at the 2024 Annual Meeting of Stockholders. The Company values input from all stockholders, including Clayton, and remains open to ongoing engagement with Clayton. However, if the Company and Clayton cannot reach an agreement in connection with its director nominations, there will be a contested election at the Company’s 2024 Annual Meeting of Stockholders. A proxy contest or related activities on the part of activist stockholders, including, among others, Clayton, 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.

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

There were no share repurchases during the three months ended March 31, 2024.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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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

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.

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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: May 15, 2024	By:	/s/ Christopher Hayes
	Name:	Christopher Hayes
	Title:	Chief Executive Officer (Principal Executive Officer)

Date: May 15, 2024	By:	/s/ Sarah Weber Wells
	Name:	Sarah Weber Wells
	Title:	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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: May 15, 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: May 15, 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 March 31, 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: May 15, 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 March 31, 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: May 15, 2024	By:	/s/ Sarah Weber Wells
		Sarah Weber Wells, Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer )

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2024	May 13, 2024
Cover [Abstract]
Document type	10-Q
Document quarterly report	true
Document period end date	Mar. 31, 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		18,394,829
Entity central index key	0001772720
Current fiscal year end date	--12-31
Document fiscal period focus	Q1
Document fiscal year focus	2024
Amendment flag	false

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current assets
Cash and cash equivalents	$ 120,581	$ 141,354
Restricted cash	29,087	31,587
Accounts receivable, net of allowance of $1.4 million and $1.7 million as of March 31, 2024 and December 31, 2023, respectively	10,961	9,188
Interest rate swap assets, current	12,232	11,333
Prepaid expenses and other current assets	5,377	9,879
Total current assets	178,238	203,341
Investment related to SEMTH master lease agreement	142,993	143,095
Property and equipment, net	477,834	484,406
Interest rate swap assets, non-current	21,489	16,550
Intangible assets, net	9,886	10,196
Deferred rent assets	2,809	2,454
Right-of-use assets, net	5,626	5,933
Goodwill	28,757	28,757
Other assets	255	257
Long-term assets of discontinued operations	1	32
Total assets	867,888	895,021
Current liabilities
Accounts payable	769	1,120
Non-recourse debt, current, net	28,181	27,914
Accrued expenses and other current liabilities	22,006	40,634
Deferred revenue, current	1,149	878
Lease liability, current	1,140	1,166
Total current liabilities	53,245	71,712
Non-recourse debt, non-current, net	585,355	590,866
Deferred revenue, non-current	2,038	1,858
Lease liability, non-current	5,472	5,731
Warrant liabilities	8	17
Unfavorable solar renewable energy agreements, net	5,242	6,108
Interest rate swap liabilities, non-current	270	843
Other long-term liabilities	3,107	3,047
Long-term liabilities of discontinued operations	187	170
Total liabilities	654,924	680,352
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock, $0.0001 par value; 350,000,000 shares authorized at March 31, 2024 and December 31, 2023; 19,098,246 and 18,297,596 shares issued and outstanding at March 31, 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	476,475	475,654
Accumulated deficit	(260,342)	(257,888)
Treasury stock at cost, 800,650 shares at March 31, 2024 and December 31, 2023, respectively	(5,424)	(5,424)
Noncontrolling interests	2,253	2,325
Total stockholders’ equity	212,964	214,669
Total liabilities and stockholders’ equity	$ 867,888	$ 895,021
Treasury stock, common, (in shares)	800,650	800,650
Common stock, issued (in shares)	19,098,246	19,093,186
Common stock, outstanding (in shares)	18,297,596	18,292,536

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Allowance for doubtful accounts, current	$ 1.4	$ 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)	19,098,246	19,093,186
Common stock, outstanding (in shares)	18,297,596	18,292,536
Treasury stock, common, (in shares)	800,650	800,650

Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Statement [Abstract]
Revenues	$ 18,287	$ 18,095
Operating expenses:
Cost of revenues	8,868	7,853
Selling, general and administrative expenses	13,469	15,717
Gain on asset disposal	(453)	(2,658)
Total operating expenses	21,884	20,912
Loss from operations	(3,597)	(2,817)
Other (income) expense:
Interest income	(5,386)	(2,351)
Interest expense, net	10,942	9,167
Change in fair value of warrant liabilities	(9)	(115)
Change in fair value of interest rate swaps	(6,409)	5,588
Other income, net	(286)	(128)
Net loss from continuing operations	(2,449)	(14,978)
Net loss from discontinued operations (including loss on disposal of $3,083 for the three months ended March 31, 2023)	(1)	(3,866)
Net loss	(2,450)	(18,844)
Less: Net income attributable to redeemable noncontrolling interests and noncontrolling interests	4	551
Net loss attributable to stockholders	$ (2,454)	$ (19,395)
Net loss from continuing operations per share, basic (in dollars per share)	$ (0.13)	$ (0.82)
Net loss from continuing operations per share, diluted (in dollars per share)	(0.13)	(0.82)
Net loss from discontinued operations - basic (in dollars per share)	0	(0.21)
Net loss from discontinued operations - diluted (in dollars per share)	0	(0.21)
Net loss attributable to stockholders per share, basic (in dollars per share)	(0.13)	(1.06)
Net loss attributable to stockholders per share, diluted (in dollars per share)	$ (0.13)	$ (1.06)
Weighted-average shares outstanding, basic (in shares)	19,098,246	18,275,958
Weighted-average shares outstanding, diluted (in shares)	19,098,246	18,275,958

Unaudited Condensed Consolidated Statements of Operations (Parentheticals) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Income Statement [Abstract]
Net loss from discontinued operation	$ 3,083

Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Total	Revision of Prior Period, Adjustment	Impact of ASC 326 adoption Revision of Prior Period, Adjustment	Common Stock	Additional Paid-In Capital	Non controlling Interests	Accumulated Deficit	Accumulated Deficit Impact of ASC 326 adoption	Treasury Stock
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
Balance (in shares) at Dec. 31, 2022				18,046,903
Balance at Dec. 31, 2022	288,891		$ 1,285	$ 2	$ 473,289	$ 8,942	$ (193,342)	$ 1,285	$ 0
Treasury stock, 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
Capital distributions to noncontrolling interests	(88)					(88)
Stock-based compensation expense	796				796
Net income (loss)	(18,805)					590	(19,395)
Balance (in shares) at Mar. 31, 2023				18,549,421
Balance at Mar. 31, 2023	265,209			$ 2	472,705	3,954	(211,452)		$ 0
Treasury stock, ending balance (in shares) at Mar. 31, 2023									0
Balance (in shares) at Dec. 31, 2023				19,093,186
Balance at Dec. 31, 2023	$ 214,669			$ 2	475,654	2,325	(257,888)		$ (5,424)
Treasury stock, 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
Capital distributions to noncontrolling interests	$ (76)					(76)
Stock-based compensation expense	821				821
Net income (loss)	(2,450)					4	(2,454)
Balance (in shares) at Mar. 31, 2024				19,098,246
Balance at Mar. 31, 2024	$ 212,964			$ 2	$ 476,475	$ 2,253	$ (260,342)		$ (5,424)
Treasury stock, ending balance (in shares) at Mar. 31, 2024	800,650								800,650

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Operating activities:
Net income (loss)	$ (2,450)	$ (18,844)
Add back: Net loss from discontinued operations	1	3,866
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	821	796
Bad debt expense	517	174
Amortization of deferred revenue	(37)	0
Depreciation and amortization expense	5,234	6,004
Accretion expense	59	0
Change in fair value of interest rate swaps	(6,409)	5,588
Change in fair value of warrant liabilities	(9)	(115)
Interest income related to SEMTH master lease agreement	(3,748)	(213)
Gain on disposal of assets	(453)	(2,585)
Change in operating right-of-use assets	22	15
Amortization of debt discount and deferred financing costs	1,457	1,455
Changes in operating assets and liabilities:
Accounts receivable, net	(2,290)	(1,948)
Deferred rent assets	(355)	(335)
Prepaid expenses and other current assets	4,532	432
Other assets	2	126
Accounts payable	(351)	(698)
Accrued expenses and other current liabilities	(19,278)	(769)
Other long-term liabilities	1	0
Deferred revenue	532	290
Net cash used in continuing operating activities	(22,202)	(6,761)
Net cash provided by (used in) discontinued operating activities	15	(1,490)
Net cash used in operating activities	(22,187)	(8,251)
Investing activities:
Proceeds from sale of solar energy systems	1,257	1,763
Proceeds from investment related to SEMTH master lease agreement	4,501	1,011
Cash paid for acquisitions, net of cash acquired	0	(23,139)
Purchases of other property and equipment	(67)	(12)
Net cash provided by (used in) continuing investing activities	5,691	(20,377)
Net cash provided by discontinued investing activities	0	325
Net cash provided by (used in) investing activities	5,691	(20,052)
Financing activities:
Repayments of long-term non-recourse debt	(6,701)	(6,141)
Repayments under financing leases	0	(12)
Proceeds from issuance of common stock	0	150
Proceeds from exercise of stock options	0	283
Capital distributions to redeemable noncontrolling interests and noncontrolling interests	(76)	(196)
Net cash used in continuing financing activities	(6,777)	(5,916)
Net cash used in financing activities	(6,777)	(5,916)
Net change in cash and cash equivalents and restricted cash:	(23,273)	(34,219)
Cash and cash equivalents and restricted cash, beginning of period	172,941	240,144
Cash and cash equivalents and restricted cash, end of period	149,668	205,925
Supplemental disclosure of cash flow information:
Cash paid for interest	$ 6,329	$ 4,050

Organization and Description of Business	3 Months Ended
Organization and Description of Business	Mar. 31, 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

3 Months Ended

Mar. 31, 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)	March 31, 2024		December 31, 2023
Cash and cash equivalents	$	120,581	$	141,354
Restricted cash	29,087		31,587
Total cash, cash equivalents and restricted cash	$	149,668	$	172,941

Accounts receivable, net


	As of
(Amounts in thousands)	March 31, 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	(813)		(11,447)
Provision recognized upon valuation of assets acquired	—		420
Provision for current expected credit losses	517		1,841
Balance at the end of the period	$	1,397	$	1,693

Impairment of long-lived assets

Impairment of goodwill

There were no goodwill impairment charges during the three months ended March 31, 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 March 31,
(Amounts in thousands)	2024		2023
PPA revenues	$	7,519	$	7,127
SLA revenues	7,291		7,922
Solar renewable energy credit revenues	1,837		1,535
Government incentives	77		24
Servicing revenues	—		113
Intangibles amortization, unfavorable solar renewable energy agreements	746		443
Other revenue	817		931
Total	$	18,287	$	18,095

Energy generation

Solar renewable energy credit revenues

Deferred revenue

Income taxes

Related parties

SEC Climate Disclosure Rule

Recent Accounting Pronouncements

Business Combinations

3 Months Ended

Mar. 31, 2024

Business Combination and Asset Acquisition [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 as of the period ending March 31, 2024:


(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	3 Months Ended
Acquisitions	Mar. 31, 2024
Business Combination and Asset Acquisition [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

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

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


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

Solar energy systems	$	512,788	$	513,526
Less: Accumulated depreciation	(35,438)		(29,594)
Solar energy systems, net	$	477,350	$	483,932

Equipment	$	157	$	157
Furniture and fixtures	462		461
Computers and related equipment	284		218
Software	2		8
Leasehold improvements	59		59
Gross other property and equipment	964		903
Less: Accumulated depreciation	(480)		(429)
Other property and equipment, net	$	484	$	474

Property and equipment, net	$	477,834	$	484,406

Intangible Assets, net

3 Months Ended

Mar. 31, 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)	March 31, 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	(2,094)		(1,784)

Intangible assets, net	$	9,886	$	10,196


	March 31, 2024
(Amounts in thousands)	2023
Remainder of 2024	$	930
2025	1,126
2026	1,122
2027	978
2028	878
Thereafter	4,852
Total	$	9,886

Accrued Expenses and Other Current Liabilities

3 Months Ended

Mar. 31, 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 March 31, 2024 and December 31, 2023:


	As of
(Amounts in thousands)	March 31, 2024		December 31, 2023
Accrued interest	$	11,595	$	8,587
Professional fees	2,400		2,386
Accrued contingencies (See Note 13. Commitments and Contingencies)	1,800		21,300
Accrued compensation and related benefits	1,845		3,237
Accrued expenses, other	3,605		4,372
Accrued taxes, stock-based compensation	761		752
Accrued expenses and other current liabilities	$	22,006	$	40,634

Non-Recourse Debt

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Non-Recourse Debt

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


		As of
(Amounts in thousands)	Due	March 31, 2024		December 31, 2023
SVB Credit Agreement, SP1 Facility (1)	April 2026	$	211,122	$	214,803
Second SVB Credit Agreement, SP2 Facility (1)	May 2027	83,416		85,231
KeyBank Credit Agreement, SP3 Facility (1)	November 2027	57,756		58,962
Second KeyBank Credit Agreement (1)	April 2030	162,725		162,725
Deutsche Bank Credit Agreement, SP4 Facility	August 2025	125,000		125,000
Less: Unamortized fair value adjustment (1)		(26,172)		(27,600)
Less: Unamortized deferred financing costs		(311)		(341)
Total Non-recourse debt		613,536		618,780
Less: Non-recourse debt, current		(28,181)		(27,914)
Non-recourse debt, non-current		$	585,355	$	590,866

Interest Rate Swaps	3 Months Ended
Interest Rate Swaps	Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Interest Rate Swaps	Interest Rate Swaps The purpose of the swap agreements is to convert the floating interest rate on the Company's Credit Agreements to a fixed rate. As of March 31, 2024, the notional amount of the interest rate swaps covers approximately 95% of the balance of the Company’s floating rate term loans. During the three months ended March 31, 2024 and 2023, the change in the fair value of the interest rate swaps were ($6.4 million) and $5.6 million, respectively, which are reflected as a component of other income (expense) within the unaudited condensed consolidated statements of operations. The Company also recognized $3.7 million and $2.5 million of realized gains for the three months ended March 31, 2024 and 2023, respectively, reflected within interest expense, net. 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

3 Months Ended

Mar. 31, 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	March 31, 2024			December 31, 2023
Risk-free rate	4.71		%	4.24		%
Remaining term in years	1.73			1.98
Expected volatility	73.0		%	82.0		%
Exercise price	$	92.00		$	92.00
Fair value of common stock	$	3.97		$	4.42

The fair value of the Company’s non-recourse debt as of March 31, 2024 and December 31, 2023 was $625.7 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 March 31, 2024
(Amounts in thousands)	Level I		Level II		Level III		Total
Asset:
Interest rate swaps	$	—	$	33,721	$	—	$	33,721
Money market accounts	4,337		—		—		4,337
U.S. Treasury securities	114,068		—		—		114,068
Total	$	118,405	$	33,721	$	—	$	152,126

Liabilities:
Private warrants	$	—	$	—	$	8	$	8
Total	$	—	$	—	$	8	$	8


	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 March 31, 2024		Three Months Ended March 31, 2023
(Amounts in thousands)

Balance at the beginning of the period	$	17	$	407
Fair value adjustments – warrant liability	(9)		(114)
Share settlement of World Energy liability	—		(151)
Balance at the end of the period	$	8	$	142

Share-Based Compensation Expense

3 Months Ended

Mar. 31, 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	—	—
Exercised	—	—
Cancelled or forfeited	—	—
Outstanding at March 31, 2024	193,156	$	17.89	5.5
Exercisable at March 31, 2024	191,931	$	17.58	5.5

The aggregate intrinsic value of stock options outstanding as of March 31, 2024 was $0.2 million. There were no stock options issued for the three months ended March 31, 2024.

A summary of stock option award activity for the three months ended March 31, 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	(135,210)	2.00
Cancelled or forfeited	(66,022)	55.52
Outstanding at March 31, 2023	560,176	$	8.16	2.6
Exercisable at March 31, 2023	539,866	$	7.60	2.6

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	—	—
Vested	(5,060)	9.36
Cancelled or forfeited	(813)	6.64
Non-vested, at March 31, 2024	1,096,222	$	7.74

Restricted stock units activity during the three months ended March 31, 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	—	—
Vested	(341,490)	16.24
Cancelled or forfeited	(95,852)	10.88
Non-vested, at March 31, 2023	791,747	$	10.24

Former Chief Executive Officer's Ladder Restricted Stock Unit Award

Noncontrolling Interests

3 Months Ended

Mar. 31, 2024

Noncontrolling Interest [Abstract]

Noncontrolling Interests

The following table summarizes the Company’s noncontrolling interests as of March 31, 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	3 Months Ended
Commitments and Contingencies	Mar. 31, 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. Plaintiffs also intend to submit a petition for attorneys’ fees, which defendants intend on opposing. 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 scheduled a hearing for July 31, 2024, to, among other things, consider whether to approve the proposed settlement. 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 March 31, 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 March 31, 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. Historically, the Company has not been obligated to make significant payments for such obligations, does not anticipate future payments, and as such, no liabilities have been recorded for these indemnities and guarantees as of March 31, 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 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 due to limited access to the area. No material loss claims have been reported to date or recognized within the unaudited condensed consolidated financial statements as of March 31, 2024. In addition, the Company has not recorded any related insurance recoveries as of March 31, 2024. The Company does not expect this event to have a material impact on its financial position, operating results or cash flows.

Net Loss Per Share

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Net 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 March 31, 2024 and 2023:


	Three Months Ended March 31,
(Amounts in thousands, except share data)	2024		2023
Numerator:
Net loss attributable to stockholders	$	(2,454)	$	(19,395)

Denominator:
Weighted average shares outstanding, basic and diluted	19,098,246		18,275,958

Dilutive effect of stock options and restricted stock units	—		—

Weighted average shares outstanding, diluted	19,098,246		18,275,958

Net loss attributable to stockholders per share, basic and diluted	$	(0.13)	$	(1.06)

Discontinued Operations

3 Months Ended

Mar. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations


	Three Months Ended March 31,
(Amounts in thousands)	2024		2023
Net loss from discontinued operations:
XL Grid	$	—	$	(3,975)
Drivetrain	(1)		109
Total	$	(1)	$	(3,866)

XL Grid

The following table presents financial results of XL Grid operations:


	Three Months Ended March 31,
(Amounts in thousands)	2024		2023

Revenues	$	—	$	149
Operating expenses:
Cost of revenues - inventory and other direct costs	—		148
Selling, general, and administrative expenses	—		743
Loss on asset disposal	—		3,233

Total operating expenses	—		4,124
Net loss from discontinued operations	$	—	$	(3,975)

Drivetrain

The following table presents financial results of Drivetrain operations:


	Three Months Ended March 31,
(Amounts in thousands)	2024		2023

Revenues	$	21	$	9
Operating expenses:
Cost of revenues - inventory and other direct costs	22		(138)
Other income	—		38
Total operating expenses	22		(100)
Net income (loss) from discontinued operations	$	(1)	$	109

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)	March 31, 2024		December 31, 2023
Assets from discontinued operations:
Drivetrain	$	1	$	32
XL Grid	—		—

Total assets from discontinued operations	$	1	$	32

Liabilities from discontinued operations:
Drivetrain	$	187	$	170
XL Grid	—		—
Total liabilities from discontinued operations	$	187	$	170

Subsequent Events	3 Months Ended
Subsequent Events	Mar. 31, 2024
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events Effective April 12, 2024, Christian Fong is no longer the President and CEO and has resigned from the Board of Directors. In conjunction with Mr. Fong’s separation, the Board of Directors announced that the Company’s Chairman, Christopher Hayes, had been named President and Chief Executive Officer of the Company. Mr. Hayes has served as a director of the Company since December 2020 and Chair of the Board of Directors since January 2023. Management has reviewed events subsequent to March 31, 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)

3 Months Ended

Mar. 31, 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 March 31,
(Amounts in thousands)	2024		2023
PPA revenues	$	7,519	$	7,127
SLA revenues	7,291		7,922
Solar renewable energy credit revenues	1,837		1,535
Government incentives	77		24
Servicing revenues	—		113
Intangibles amortization, unfavorable solar renewable energy agreements	746		443
Other revenue	817		931
Total	$	18,287	$	18,095

Energy generation

Solar renewable energy credit revenues

Deferred revenue

Income taxes

Related parties

Recent Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

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


	As of
(Amounts in thousands)	March 31, 2024		December 31, 2023
Cash and cash equivalents	$	120,581	$	141,354
Restricted cash	29,087		31,587
Total cash, cash equivalents and restricted cash	$	149,668	$	172,941

Restrictions on cash and cash equivalents


	As of
(Amounts in thousands)	March 31, 2024		December 31, 2023
Cash and cash equivalents	$	120,581	$	141,354
Restricted cash	29,087		31,587
Total cash, cash equivalents and restricted cash	$	149,668	$	172,941

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)	March 31, 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	(813)		(11,447)
Provision recognized upon valuation of assets acquired	—		420
Provision for current expected credit losses	517		1,841
Balance at the end of the period	$	1,397	$	1,693

Disaggregation of revenue


	Three Months Ended March 31,
(Amounts in thousands)	2024		2023
PPA revenues	$	7,519	$	7,127
SLA revenues	7,291		7,922
Solar renewable energy credit revenues	1,837		1,535
Government incentives	77		24
Servicing revenues	—		113
Intangibles amortization, unfavorable solar renewable energy agreements	746		443
Other revenue	817		931
Total	$	18,287	$	18,095

Business Combinations (Tables)

3 Months Ended

Mar. 31, 2024

Business Combination and Asset Acquisition [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 as of the period ending March 31, 2024:


(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)

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

Property and equipment, schedule of useful lives

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


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

Solar energy systems	$	512,788	$	513,526
Less: Accumulated depreciation	(35,438)		(29,594)
Solar energy systems, net	$	477,350	$	483,932

Equipment	$	157	$	157
Furniture and fixtures	462		461
Computers and related equipment	284		218
Software	2		8
Leasehold improvements	59		59
Gross other property and equipment	964		903
Less: Accumulated depreciation	(480)		(429)
Other property and equipment, net	$	484	$	474

Property and equipment, net	$	477,834	$	484,406

Intangible Assets, net (Tables)

3 Months Ended

Mar. 31, 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)	March 31, 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	(2,094)		(1,784)

Intangible assets, net	$	9,886	$	10,196

Schedule of finite-lived intangible assets, future amortization expense

As of March 31, 2024, expected amortization of intangible assets for each of the five succeeding fiscal years and thereafter is as follows:


	March 31, 2024
(Amounts in thousands)	2023
Remainder of 2024	$	930
2025	1,126
2026	1,122
2027	978
2028	878
Thereafter	4,852
Total	$	9,886

Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Mar. 31, 2024

Accrued Liabilities and Other Liabilities [Abstract]

Schedule of accrued liabilities

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


	As of
(Amounts in thousands)	March 31, 2024		December 31, 2023
Accrued interest	$	11,595	$	8,587
Professional fees	2,400		2,386
Accrued contingencies (See Note 13. Commitments and Contingencies)	1,800		21,300
Accrued compensation and related benefits	1,845		3,237
Accrued expenses, other	3,605		4,372
Accrued taxes, stock-based compensation	761		752
Accrued expenses and other current liabilities	$	22,006	$	40,634

Other current liabilities

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


	As of
(Amounts in thousands)	March 31, 2024		December 31, 2023
Accrued interest	$	11,595	$	8,587
Professional fees	2,400		2,386
Accrued contingencies (See Note 13. Commitments and Contingencies)	1,800		21,300
Accrued compensation and related benefits	1,845		3,237
Accrued expenses, other	3,605		4,372
Accrued taxes, stock-based compensation	761		752
Accrued expenses and other current liabilities	$	22,006	$	40,634

Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Schedule of long-term debt

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


		As of
(Amounts in thousands)	Due	March 31, 2024		December 31, 2023
SVB Credit Agreement, SP1 Facility (1)	April 2026	$	211,122	$	214,803
Second SVB Credit Agreement, SP2 Facility (1)	May 2027	83,416		85,231
KeyBank Credit Agreement, SP3 Facility (1)	November 2027	57,756		58,962
Second KeyBank Credit Agreement (1)	April 2030	162,725		162,725
Deutsche Bank Credit Agreement, SP4 Facility	August 2025	125,000		125,000
Less: Unamortized fair value adjustment (1)		(26,172)		(27,600)
Less: Unamortized deferred financing costs		(311)		(341)
Total Non-recourse debt		613,536		618,780
Less: Non-recourse debt, current		(28,181)		(27,914)
Non-recourse debt, non-current		$	585,355	$	590,866

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 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	March 31, 2024			December 31, 2023
Risk-free rate	4.71		%	4.24		%
Remaining term in years	1.73			1.98
Expected volatility	73.0		%	82.0		%
Exercise price	$	92.00		$	92.00
Fair value of common stock	$	3.97		$	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 March 31, 2024
(Amounts in thousands)	Level I		Level II		Level III		Total
Asset:
Interest rate swaps	$	—	$	33,721	$	—	$	33,721
Money market accounts	4,337		—		—		4,337
U.S. Treasury securities	114,068		—		—		114,068
Total	$	118,405	$	33,721	$	—	$	152,126

Liabilities:
Private warrants	$	—	$	—	$	8	$	8
Total	$	—	$	—	$	8	$	8


	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 March 31, 2024		Three Months Ended March 31, 2023
(Amounts in thousands)

Balance at the beginning of the period	$	17	$	407
Fair value adjustments – warrant liability	(9)		(114)
Share settlement of World Energy liability	—		(151)
Balance at the end of the period	$	8	$	142

Share-Based Compensation Expense (Tables)

3 Months Ended

Mar. 31, 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	—	—
Exercised	—	—
Cancelled or forfeited	—	—
Outstanding at March 31, 2024	193,156	$	17.89	5.5
Exercisable at March 31, 2024	191,931	$	17.58	5.5

A summary of stock option award activity for the three months ended March 31, 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	(135,210)	2.00
Cancelled or forfeited	(66,022)	55.52
Outstanding at March 31, 2023	560,176	$	8.16	2.6
Exercisable at March 31, 2023	539,866	$	7.60	2.6

Schedule of fair value of restricted stock awards

Restricted stock units activity during the three months ended March 31, 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	—	—
Vested	(5,060)	9.36
Cancelled or forfeited	(813)	6.64
Non-vested, at March 31, 2024	1,096,222	$	7.74

Restricted stock units activity during the three months ended March 31, 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	—	—
Vested	(341,490)	16.24
Cancelled or forfeited	(95,852)	10.88
Non-vested, at March 31, 2023	791,747	$	10.24

Noncontrolling Interests (Tables)

3 Months Ended

Mar. 31, 2024

Noncontrolling Interest [Abstract]

Summary of noncontrolling interests

The following table summarizes the Company’s noncontrolling interests as of March 31, 2024:


Tax Equity Entity						Date Class A Member Admitted




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

Net Loss Per Share (Tables)

3 Months Ended

Mar. 31, 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 March 31, 2024 and 2023:


	Three Months Ended March 31,
(Amounts in thousands, except share data)	2024		2023
Numerator:
Net loss attributable to stockholders	$	(2,454)	$	(19,395)

Denominator:
Weighted average shares outstanding, basic and diluted	19,098,246		18,275,958

Dilutive effect of stock options and restricted stock units	—		—

Weighted average shares outstanding, diluted	19,098,246		18,275,958

Net loss attributable to stockholders per share, basic and diluted	$	(0.13)	$	(1.06)

Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 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 months ended March 31, 2024 and 2023.


	Three Months Ended March 31,
(Amounts in thousands)	2024		2023
Net loss from discontinued operations:
XL Grid	$	—	$	(3,975)
Drivetrain	(1)		109
Total	$	(1)	$	(3,866)

XL Grid

The following table presents financial results of XL Grid operations:


	Three Months Ended March 31,
(Amounts in thousands)	2024		2023

Revenues	$	—	$	149
Operating expenses:
Cost of revenues - inventory and other direct costs	—		148
Selling, general, and administrative expenses	—		743
Loss on asset disposal	—		3,233

Total operating expenses	—		4,124
Net loss from discontinued operations	$	—	$	(3,975)

Drivetrain

The following table presents financial results of Drivetrain operations:


	Three Months Ended March 31,
(Amounts in thousands)	2024		2023

Revenues	$	21	$	9
Operating expenses:
Cost of revenues - inventory and other direct costs	22		(138)
Other income	—		38
Total operating expenses	22		(100)
Net income (loss) from discontinued operations	$	(1)	$	109

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)	March 31, 2024		December 31, 2023
Assets from discontinued operations:
Drivetrain	$	1	$	32
XL Grid	—		—

Total assets from discontinued operations	$	1	$	32

Liabilities from discontinued operations:
Drivetrain	$	187	$	170
XL Grid	—		—
Total liabilities from discontinued operations	$	187	$	170

Organization and Description of Business (Details) contract in Thousands	3 Months Ended
	Mar. 31, 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
	Jun. 30, 2023	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
Concentration Risk [Line Items]
Restricted cash		$ 29,087,000		$ 31,587,000
Impairment of long-lived assets		0	$ 0
Goodwill, impairment loss		0
Deferred revenue		3,200,000		2,700,000
Deferred revenue recognized		100,000	100,000
Unrecognized tax benefits		0	0
Income tax expense (benefit)		$ 0	$ 0
Effective income tax rate		0.00%	0.00%
Stock split, conversion ratio	0.125
Cash and cash equivalents		$ 120,581,000		141,354,000
Solar Renewable Energy Certificates
Concentration Risk [Line Items]
Inventory, net		$ 0		$ 0

Summary of Significant Accounting Policies - Schedule of reconciliation of cash, cash equivalents, and restricted cash (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Cash and cash equivalents	$ 120,581	$ 141,354
Restricted cash	29,087	31,587
Total cash, cash equivalents and restricted cash	$ 149,668	$ 172,941	$ 205,925	$ 240,144

Summary of Significant Accounting Policies - Changes in allowance for credit losses for accounting standards update (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance at the beginning of the period	$ 1,693	$ 12,164
Write-off of uncollectible accounts	(813)	(11,447)
Provision recognized upon valuation of assets acquired	0	420
Bad debt expense	517	1,841	$ 174
Balance at the end of the period	1,397	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)
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
	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue [Line Items]
Revenues	$ 18,287	$ 18,095
PPA revenues
Disaggregation of Revenue [Line Items]
Revenues	7,519	7,127
SLA revenues
Disaggregation of Revenue [Line Items]
Revenues	7,291	7,922
Solar renewable energy credit revenues
Disaggregation of Revenue [Line Items]
Revenues	1,837	1,535
Government incentives
Disaggregation of Revenue [Line Items]
Revenues	77	24
Servicing revenues
Disaggregation of Revenue [Line Items]
Revenues	0	113
Intangibles amortization, unfavorable solar renewable energy agreements
Disaggregation of Revenue [Line Items]
Revenues	746	443
Other revenue
Disaggregation of Revenue [Line Items]
Revenues	$ 817	$ 931

Business Combinations - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended
	Sep. 09, 2022	Mar. 31, 2024	Mar. 31, 2023
Business Combination, Separately Recognized Transactions [Line Items]
Cash paid for acquisitions, net of cash acquired		$ 0	$ 23,139
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 revenue
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		3 Months Ended		12 Months Ended
	Sep. 09, 2022	Mar. 31, 2024	Mar. 31, 2023	Sep. 08, 2023	Dec. 31, 2023
Total purchase consideration:
Cash, net of cash acquired, and restricted cash		$ 0	$ 23,139
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 ($) lease	Mar. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)
Asset Acquisition [Line Items]
Investments under SEMTH master lease agreement		$ 142,993	$ 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	Mar. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property and equipment, net	$ 477,834	$ 484,406
Gross other property and equipment	964	903
Less: Accumulated depreciation	(480)	(429)
Other property and equipment, net	484	474
Solar energy systems
Property, Plant and Equipment [Line Items]
Solar energy systems	512,788	513,526
Less: Accumulated depreciation	(35,438)	(29,594)
Property and equipment, net	477,350	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	462	461
Computers and related equipment
Property, Plant and Equipment [Line Items]
Gross other property and equipment	284	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 Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Energy Equipment
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 5,700	$ 6,000
Property and equipment, net
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 100	$ 60

Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets:	$ 11,980	$ 11,980
Less: Accumulated amortization	(2,094)	(1,784)
Intangible assets, net	9,886	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
	Mar. 31, 2024	Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 300	$ 60

Intangible Assets, Net - Schedule of Estimated Future Intangible Amortization Expense (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2024	$ 930
2025	1,126
2026	1,122
2027	978
2028	878
Thereafter	4,852
Intangible assets, net	$ 9,886	$ 10,196

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Accrued Liabilities and Other Liabilities [Abstract]
Accrued interest	$ 11,595	$ 8,587
Professional fees	2,400	2,386
Accrued contingencies (See Note 13. Commitments and Contingencies)	1,800	21,300
Accrued compensation and related benefits	1,845	3,237
Accrued expenses, other	3,605	4,372
Accrued taxes, stock-based compensation	761	752
Accrued expenses and other current liabilities	$ 22,006	$ 40,634

Non-Recourse Debt - (Details) - USD ($) $ in Thousands	3 Months Ended
Non-Recourse Debt - (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Sep. 09, 2022
Debt Instrument [Line Items]
Debt Instrument, Unamortized Discount (Premium), Net	$ (26,172)		$ (27,600)
Less: Unamortized deferred financing costs	(311)		(341)
Total Non-recourse debt	613,536		618,780
Less: Non-recourse debt, current	(28,181)		(27,914)
Non-recourse debt, non-current, net	585,355		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	1,500	$ 1,500
A&R SVB Credit Agreement
Debt Instrument [Line Items]
Long-term debt	211,122		214,803
Second SBV Credit Agreement
Debt Instrument [Line Items]
Long-term debt	83,416		85,231
KeyBank Credit Agreement
Debt Instrument [Line Items]
Long-term debt	57,756		58,962
A&R Second KeyBank Credit Agreement
Debt Instrument [Line Items]
Long-term debt	162,725		162,725
Deutsche Bank Credit Agreement, SP4 Facility
Debt Instrument [Line Items]
Long-term debt	$ 125,000		$ 125,000

Interest Rate Swaps - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Derivative [Line Items]
Percent of floating rate term loans covered	95.00%
Change in fair value of interest rate swaps	$ 6,409	$ (5,588)
Interest rate swaps \| Other Operating Income (Expense)
Derivative [Line Items]
Change in fair value of interest rate swaps	6,400	5,600
Interest rate swaps \| Interest Expense
Derivative [Line Items]
Change in fair value of interest rate swaps	$ 3,700	$ 2,500

Fair Value Measurements - Schedule of fair values private warrants were valued using a Black-Scholes model (Details)	3 Months Ended	6 Months Ended
	Mar. 31, 2024 $ / shares	Jun. 30, 2023	Dec. 31, 2023 $ / shares
Risk-free rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, risk-free interest rate, expected volatility	0.0471		0.0424
Remaining term in years
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Remaining term in years	1 year 8 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	0.730		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	3.97		4.42

Fair Value Measurements - Schedule of assets and liabilities which are measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Assets
Total	$ 152,126	$ 158,322
Liabilities:
Warrant liabilities	8	17
Total	8	17
Money Market Funds
Assets
Cash and cash equivalents, fair value disclosure	4,337	21,475
US Treasury Securities
Assets
Cash and cash equivalents, fair value disclosure	114,068	108,964
Interest rate swaps
Assets
Interest rate swaps	33,721	27,883
Level I
Assets
Total	118,405	130,439
Liabilities:
Warrant liabilities	0	0
Total	0	0
Level I \| Money Market Funds
Assets
Cash and cash equivalents, fair value disclosure	4,337	21,475
Level I \| US Treasury Securities
Assets
Cash and cash equivalents, fair value disclosure	114,068	108,964
Level I \| Interest rate swaps
Assets
Interest rate swaps	0	0
Level II
Assets
Total	33,721	27,883
Liabilities:
Warrant liabilities	0	0
Total	0	0
Level II \| Money Market Funds
Assets
Cash and cash equivalents, fair value disclosure	0	0
Level II \| US Treasury Securities
Assets
Cash and cash equivalents, fair value disclosure	0	0
Level II \| Interest rate swaps
Assets
Interest rate swaps	33,721	27,883
Level III
Assets
Total	0	0
Liabilities:
Warrant liabilities	8	17
Total	8	17
Level III \| Money Market Funds
Assets
Cash and cash equivalents, fair value disclosure	0	0
Level III \| US Treasury Securities
Assets
Cash and cash equivalents, fair value disclosure	0	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
	Mar. 31, 2024	Mar. 31, 2023
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 17	$ 407
Fair value adjustments – warrant liability	(9)	(114)
Share settlement of World Energy liability	0	(151)
Ending balance	$ 8	$ 142

Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Fair Value Disclosures [Abstract]
Long-term debt, fair value	$ 625,700	$ 628,200

Share-Based Compensation Expense - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
	Sep. 09, 2022	Mar. 31, 2024	Mar. 31, 2023
Share-Based Compensation Expense (Details) [Line Items]
Share-based compensation expense		$ 0.8	$ 0.8
Aggregate intrinsic value of stock options outstanding		$ 0.2
Stock issued during period stock options exercised (in shares)		0	135,210
Granted (in shares)		0	0
Share-Based Payment Arrangement, Option
Share-Based Compensation Expense (Details) [Line Items]
Unrecognized compensation cost		$ 6.2
Period of recognition for share-based compensation expense		2 years 7 months 6 days
Restricted Stock Units
Share-Based Compensation Expense (Details) [Line Items]
Granted (in shares)		0	0
Restricted Stock Units \| Director
Share-Based Compensation Expense (Details) [Line Items]
Vesting period		4 years
Ladder RSUs
Share-Based Compensation Expense (Details) [Line Items]
Share-based compensation expense		$ 0.1	$ 0.1
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]
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
	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023	Dec. 31, 2022
Shares
Outstanding, beginning balance (in shares)	193,156		761,408
Granted (in shares)	0		0
Exercised (in shares)	0		(135,210)
Cancelled or forfeited (in shares)	0		(66,022)
Outstanding, ending balance (in shares)	193,156	193,156	560,176	761,408
Exercisable (in shares)	191,931		539,866
Weighted Average Exercise Price
Outstanding, beginning balance (in usd per share)	$ 17.89		$ 11.12
Granted (in usd per share)	0		0
Exercised (in usd per share)	0		2.00
Cancelled or forfeited (in usd per share)	0		55.52
Outstanding, ending balance (in usd per share)	17.89	$ 17.89	8.16	$ 11.12
Exercisable (in usd per share)	$ 17.58		$ 7.60
Weighted Average Remaining Contractual Term
Outstanding	5 years 6 months	5 years 9 months 18 days	2 years 7 months 6 days	2 years 8 months 12 days
Exercisable	5 years 6 months		2 years 7 months 6 days

Share-Based Compensation Expense - Schedule of restricted stock awards and restricted stock units (Details) - Restricted Stock Units - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Number of Shares
Non-vested, beginning of period (in shares)	1,102,095	1,229,089
Granted (in shares)	0	0
Vested (in shares)	(5,060)	(341,490)
Cancelled or forfeited (in shares)	(813)	(95,852)
Non-vested, end of period (in shares)	1,096,222	791,747
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)	0	0
Vested (in dollars per share)	9.36	16.24
Cancelled or forfeited (in dollars per share)	6.64	10.88
Non-vested, ending of period (in dollars per share)	$ 7.74	$ 10.24

Noncontrolling Interests (Details) - USD ($) $ in Thousands	3 Months Ended
Noncontrolling Interests (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Noncontrolling Interest [Line Items]
Contingent obligation threshold period	3 months
Redeemable noncontrolling interest, equity, carrying amount	$ 0
Assets	867,888	$ 895,021
Liabilities	654,924	680,352
Variable Interest Entity, Not Primary Beneficiary
Noncontrolling Interest [Line Items]
Assets	37,100	38,000
Liabilities	$ 500	$ 800
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 ($)	Oct. 31, 2023 USD ($)	Mar. 31, 2024 USD ($)	Mar. 31, 2023 legalAction	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

Commitment and Contingencies - Master SREC purchase and sale agreement (Details)	3 Months Ended
	Mar. 31, 2024
Legacy Spruce Power \| Maximum
Other Commitments [Line Items]
Sale of SERCs, term of certificates (up to)	20 years

Net Loss Per Share (Details) - USD ($)	3 Months Ended
Net Loss Per Share (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Numerator:
Net loss attributable to stockholders	$ (2,454,000)	$ (19,395,000)
Denominator:
Weighted average shares outstanding, basic (in shares)	19,098,246	18,275,958
Dilutive effect of options, warrants, and restricted stock units (in shares)	$ 0	$ 0
Weighted average shares outstanding, diluted (in shares)	19,098,246	18,275,958
Net loss attributable to stockholders per share, basic (in dollars per share)	$ (0.13)	$ (1.06)
Net loss attributable to stockholders per share, diluted (in dollars per share)	$ (0.13)	$ (1.06)

Discontinued Operations - Summary of net loss from discontinued operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net loss from discontinued operations:	$ (1)	$ (3,866)
Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net loss from discontinued operations:	(1)	(3,866)
Discontinued Operations \| XL Grid
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net loss from discontinued operations:	0	(3,975)
Discontinued Operations \| Drivetrain
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net loss from discontinued operations:	$ (1)	$ 109

Discontinued Operations - Net income (loss) from discontinued operation by discontinued operation (Details) - Discontinued Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
XL Grid
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues	$ 0	$ 149
Operating expenses:
Cost of revenues - inventory and other direct costs	0	148
Selling, general, and administrative expenses	0	743
Loss on asset disposal	0	3,233
Total operating expenses	0	4,124
Net loss from discontinued operations	0	(3,975)
Drivetrain
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues	21	9
Operating expenses:
Cost of revenues - inventory and other direct costs	22	(138)
Other income	0	38
Total operating expenses	22	(100)
Net loss from discontinued operations	$ (1)	$ 109

Discontinued Operations - Schedule of Assets and Liabilities of Discontinued Operations (Details) - Discontinued Operations - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Assets from discontinued operations:
Total assets from discontinued operations	$ 1	$ 32
Liabilities from discontinued operations:
Total liabilities from discontinued operations	187	170
Drivetrain
Assets from discontinued operations:
Total assets from discontinued operations	1	32
Liabilities from discontinued operations:
Total liabilities from discontinued operations	187	170
XL Grid
Assets from discontinued operations:
Total assets from discontinued operations	0	0
Liabilities from discontinued operations:
Total liabilities from discontinued operations	$ 0	$ 0

Label	Element	Value
Accounting Standards Update [Extensible Enumeration]	us-gaap_AccountingStandardsUpdateExtensibleList	Accounting Standards Update 2016-13 [Member]

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