Company Operations and Portfolio - Spruce Power operates approximately 75,000 home solar assets and customer contracts, providing subscription-based services across the U.S.[30] - The company completed the acquisition of SS Holdings 2017, LLC, gaining rights to customer payment streams from approximately 22,500 home solar leases and power purchase agreements[39] - Following the SEMTH and Tredegar acquisitions, Spruce Power's portfolio now includes 12 portfolios of rooftop solar customer agreements with a combined capacity of approximately 426 MWdc[40] - The average remaining contract life for the newly acquired solar assets is approximately 11 years, enhancing the company's long-term revenue stability[39] - As of December 31, 2023, the weighted average remaining contract term for home solar assets in Spruce Power's portfolio is approximately 12 years[50] - The company has a diversified portfolio across 18 states, reducing exposure to localized risks and providing a stable cash flow stream[52] - Spruce Power's in-house capabilities include customer billing, account management, and maintenance monitoring, supporting efficient operations for approximately 75,000 home solar systems[45] - The company aims to leverage its platform to grow revenues by providing subscription-based solutions for rooftop solar and energy storage[42] Financial Performance - Revenues increased by $56.7 million, or 244%, to $79.9 million in 2023 compared to 2022, driven by a full year of PPA and SLA revenues from Legacy Spruce Power assets and incremental revenues from the Tredegar Acquisition[167] - Cost of revenues rose by $27.9 million, or 280.1%, to $37.8 million in 2023, correlating with the revenue increase and higher depreciation and operation costs[168] - Selling, general and administrative expenses decreased by $17.0 million, or 23.2%, to $56.1 million in 2023, primarily due to reduced bonus expenses and restructuring costs[169] - The company reported net losses attributable to stockholders of $65.8 million in 2023, compared to $93.9 million in 2022[175] - As of December 31, 2023, the company reported a net loss of $66.6 million, a decrease of 28% compared to the previous year[166] - Net interest expense for 2023 was $41.9 million, up from $11.4 million in 2022, primarily due to new debt from the SEMTH Acquisition and term loans from the SP2 Facility Amendment[172] Debt and Capital Structure - The company has $646.7 million of long-term debt outstanding as of December 31, 2023, primarily consisting of variable rate debt[87] - The company may require additional capital investment in the future to fund operations and support strategic initiatives, with no assurance of favorable terms[82] - Total debt as of December 31, 2023, was $618.8 million, an increase from $542.5 million at the time of the Legacy Spruce Power acquisition in September 2022[176] - The company believes no additional capital will be needed to execute its current business plan over the next 12 months[177] Legal and Regulatory Risks - The company has been named as a defendant in stockholder class actions, which could result in substantial damages and management-level attention[99] - The company has received a civil money penalty of $11.0 million from the SEC related to violations of federal securities laws[101] - The company is currently facing legal proceedings that could result in significant costs and resource diversion, impacting its business activities[102] - The company has received subpoenas from state attorneys general related to customer complaints, which could result in legal fees and divert management's attention from core business operations[112] - Regulatory challenges in various states may limit the company's ability to operate third-party owned solar energy systems, potentially reducing acquisition opportunities and access to capital[107] Management and Governance - The company’s management has limited experience in operating a public company, which could adversely affect its growth and operations[85] - The company is highly dependent on its CEO, Christian Fong, and the loss of his services could significantly disadvantage the company[83] - The Audit Committee of the Board of Directors is responsible for overseeing cybersecurity policies and receives regular updates on cybersecurity matters[133] Cybersecurity and Risk Management - The company recognizes the importance of cybersecurity and has established a comprehensive risk management program integrated into its overall enterprise risk management framework[130] - The company has implemented a continuous monitoring strategy for cybersecurity, including risk assessments and training personnel on security risks[135] - The company maintains cybersecurity insurance, but costs related to cybersecurity threats may not be fully covered[137] Market and Industry Risks - The solar energy market is still developing, and demand for home solar systems may decline or take longer to develop than expected, impacting the company's growth[68] - The performance of solar energy systems is heavily dependent on suitable solar and meteorological conditions, with potential adverse effects from climate change[77] - The company faces risks from technological advancements that may affect demand for its offerings and could lead to product obsolescence[75] Future Outlook and Strategic Initiatives - The company expects to continue incurring operating and net losses in the near future due to costs associated with implementing its business strategy and general administrative functions[79] - The company completed the acquisition of Legacy Spruce Power and discontinued legacy businesses, with future net income dependent on the success of its new solar power strategy[79] - The company may recognize further goodwill impairment losses in the future if there is a decline in overall financial performance, such as cash flows or revenues[204]

Spruce Power Holding Corporation (NYSE:SPRU) Q4 2023 Results Conference Call March 14, 2024 4:30 PM ET Company Participants Bronson Fleig - Head, IR Christian Fong - CEO Sarah Wells - CFO Conference Call Participants Joseph Osha - Guggenheim Partners Operator Good afternoon, and welcome to Spruce Power's Fourth Quarter 2023 Conference Call. As a reminder, today's call is being recorded. All participants are in a listen-only mode. After the speakers' remarks, there will be a question-and-answer session. [Ope ...

Spruce Power Reports Fourth Quarter and Full-Year 2023 Results DENVER, COLORADO (March 14, 2024) – Spruce Power Holding Corporation (NYSE: SPRU) ("Spruce" or the "Company"), a leading owner and operator of distributed solar energy assets across the United States, today reported financial results for the fourth quarter and year ended December 31, 2023. Business Highlights Management Commentary and Outlook "Spruce's strategy is to be the dominant owner and operator of distributed solar assets. We entered 2024 ...

Table of Contents 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 SEPTEMBER 30, 2023 OR 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 o ...

Spruce Power Holding Corporation (NYSE:SPRU) Q3 2023 Earnings Conference Call November 9, 2023 4:30 PM ET Company Participants Bronson Fleig - Head, IR Christian Fong - CEO Sarah Wells - CFO Conference Call Participants Tristan Richardson - Scotiabank Joseph Osha - Guggenheim Mo Chen - Truist Securities Operator Thank you for standing by. My name is Eric and I will be your conference operator today. At this time, I would like to welcome everyone to the Spruce Power Third Quarter 2023 Earnings Conference Cal ...

Spruce Power Holding Corporation (NYSE:SPRU) Q2 2023 Earnings Conference Call August 10, 2023 4:30 PM ET Company Participants Bronson Fleig - Head, Investor Relations Christian Fong - Chief Executive Officer Sarah Wells - Chief Financial Officer Conference Call Participants Hilary Cauley - Guggenheim Operator Good afternoon, and welcome to the Spruce Power’s Second Quarter 2023 Conference Call. As a reminder, today’s call is being recorded. [Operator Instructions] For opening remarks and introductions, I wo ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q ___________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023 OR 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 ...

PART I – FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The unaudited condensed consolidated financial statements for Q1 2023 reflect the company's transition to residential solar, showing increased assets, a net loss, and significant cash used in investing activities [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets increased to **$926.4 million** driven by the SEMTH acquisition, while total liabilities rose to **$661.0 million** due to increased long-term debt Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $172,797 | $220,321 | | Investment under SEMTH master lease agreement | $146,889 | $— | | Property and equipment, net | $482,328 | $396,168 | | Goodwill | $28,757 | $128,548 | | **Total Assets** | **$926,393** | **$826,552** | | **Liabilities & Equity** | | | | Total current liabilities | $52,078 | $59,697 | | Long-term debt, net of current portion | $594,395 | $474,441 | | **Total Liabilities** | **$661,006** | **$537,576** | | **Total Stockholders' Equity** | **$265,209** | **$288,891** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2023, the company reported **$18.1 million** in residential solar revenues, resulting in a **$19.4 million** net loss attributable to stockholders, including a **$3.9 million** loss from discontinued operations Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Revenues | $18,095 | $— | | Cost of revenues | $7,853 | $— | | Loss from operations | ($5,475) | ($7,734) | | Net loss from continuing operations | ($14,978) | ($134) | | Net loss from discontinued operations | ($3,866) | ($15,943) | | **Net loss attributable to stockholders** | **($19,395)** | **($16,077)** | | **Net loss per share, basic & diluted** | **($0.13)** | **($0.11)** | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2023, net cash used in continuing operating activities was **$3.7 million**, with **$20.4 million** used in investing activities primarily for the SEMTH acquisition, leading to a **$34.2 million** decrease in total cash Consolidated Statements of Cash Flows Summary (in thousands) | Cash Flow Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash used in continuing operating activities | ($3,678) | ($10,476) | | Net cash used in continuing investing activities | ($20,377) | $— | | Net cash (used in) provided by continuing financing activities | ($5,916) | $248 | | **Net change in cash, cash equivalents, and restricted cash** | **($34,219)** | **($18,215)** | - Cash paid to acquire SEMTH assets, net of cash acquired, was **$23.1 million**[23](index=23&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's transformation to a distributed solar energy owner, including the SEMTH acquisition, discontinued operations, **$620.1 million** in debt, legal proceedings, and a **$50 million** stock repurchase program - The company is now a leading owner and operator of distributed solar energy assets, serving approximately **72,000 customers**; its former Drivetrain and XL Grid segments are presented as discontinued operations[26](index=26&type=chunk)[37](index=37&type=chunk) - On March 23, 2023, the company acquired SEMTH for approximately **$23 million** in cash and assumed **$125 million** of senior debt, adding a master lease covering about **22,500 residential solar agreements**[116](index=116&type=chunk)[117](index=117&type=chunk) - The company is involved in several legal proceedings, including putative securities class actions and an SEC subpoena related to its 2020 merger and business practices[150](index=150&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) - Subsequent to the quarter end, the Board of Directors authorized a share repurchase program for up to **$50 million** of common stock, effective through May 15, 2025[166](index=166&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the strategic shift to distributed solar assets, highlighting **$18.1 million** in Q1 2023 residential solar revenue, increased SG&A, and **$182.7 million** in working capital, with sufficient liquidity for the next 12 months - The company's corporate strategy focuses on leveraging its platform for subscription-based distributed energy solutions, profitably growing assets through low customer acquisition cost channels, and increasing shareholder value via predictable revenues and cash flow[172](index=172&type=chunk) - In January 2023, the company completed the exit from its legacy XL Fleet (Drivetrain and XL Grid) operations, and in March 2023, it acquired SEMTH, adding approximately **22,500 solar contracts**[176](index=176&type=chunk)[177](index=177&type=chunk) Results of Operations Comparison (in thousands) | Metric | Q1 2023 | Q1 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $18,095 | $— | $18,095 | N.M. | | Selling, general and administrative expenses | $15,717 | $7,734 | $7,983 | 103% | | Loss from operations | ($5,475) | ($7,734) | $2,259 | (29)% | | Net loss attributable to stockholders | ($19,395) | ($16,077) | ($3,318) | 21% | - As of March 31, 2023, the company had **$620.1 million** of long-term debt and was in compliance with all debt covenants, with management believing current liquidity is sufficient for the next 12 months[191](index=191&type=chunk)[192](index=192&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Spruce Power is exempt from providing quantitative and qualitative disclosures about market risk[203](index=203&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of March 31, 2023, due to three material weaknesses in IT general controls, manual journal entry review, and complex transaction accounting, with remediation ongoing - Management concluded that disclosure controls and procedures were not effective as of March 31, 2023[205](index=205&type=chunk) - Material weaknesses were identified in three areas: Information Technology General Controls (ITGC) related to user access and segregation of duties, ineffective controls over review and approval of manual journal entries, and lack of sufficient resources to account for complex transactions[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk) - A remediation plan is in progress, focusing on integrating Legacy Spruce Power's controls and addressing identified deficiencies, but the material weaknesses will not be considered remediated until new controls are implemented and tested over a sufficient period[211](index=211&type=chunk)[212](index=212&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) Material pending legal proceedings are incorporated by reference from Note 15 of the unaudited condensed consolidated financial statements - Details on material pending legal proceedings are incorporated by reference from Note 15, which includes information on securities class action lawsuits and an SEC subpoena[219](index=219&type=chunk)[149](index=149&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors from the 2022 Form 10-K, except for a new risk concerning adverse developments in the financial services industry that could impact liquidity and access to capital - No material changes from the risk factors in the 2022 Form 10-K, except for one new addition[220](index=220&type=chunk) - A new risk factor was added concerning adverse developments in the financial services industry, such as liquidity issues or bank failures, which could impact the company's access to its cash and ability to fund growth[221](index=221&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[222](index=222&type=chunk) [Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[222](index=222&type=chunk) [Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[222](index=222&type=chunk) [Other Information](index=48&type=section&id=Item%205.%20Other%20Information) This item is not applicable - Not applicable[223](index=223&type=chunk) [Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act of 2002[224](index=224&type=chunk) - Inline XBRL data files are included as exhibits 101 and 104[224](index=224&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ___________________________ (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-38971 ___________________________ Spruce Power Holding Corporation (Exact name of Regis ...

Spruce Power Holding Corporation (NYSE:SPRU) Q4 2022 Earnings Conference Call March 23, 2023 4:30 PM ET Company Participants Bronson Fleig – Head-Investor Relations Christian Fong – Chief Executive Officer Donald Klein – Chief Financial Officer Conference Call Participants Joseph Osha – Guggenheim Jordan Levy – Truist Operator Good afternoon. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Spruce Power Fourth Quarter 2022 Earnings Conferen ...