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What changed in SPRUCE POWER HOLDING CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of SPRUCE POWER HOLDING CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+205 added−242 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-31)

Top changes in SPRUCE POWER HOLDING CORP's 2025 10-K

205 paragraphs added · 242 removed · 148 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

81 edited+27 added−42 removed227 unchanged
Biggest changeOur Certificate of Incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders 29 Table of Contents Our Certificate of Incorporation provides, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any action arising under the Securities Act, as to which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction.
Biggest changeOur Certificate of Incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders 29 Table of Contents Our Certificate of Incorporation provides, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any our current or former director, officer, employee or agent to us or our stockholders, (c) any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law, our Certificate of Incorporation or our Bylaws, (d) any action or proceeding to interpret, apply, enforce or determine the validity of our Certificate of Incorporation or our Bylaws (including any right, obligation, or remedy thereunder), or (e) any action asserting a claim against us that is governed by the internal affairs doctrine, except for any suit brought to enforce any liability or duty created by the Securities Act of 1933, as amended (the “Securities Act”), the Exchange Act or any other claim as to which the federal courts have exclusive jurisdiction.
Such risks include, but are not limited to: Risks Related to the Solar Energy Industry • The solar energy industry may not develop to the size or at the rate we expect, which could cause an adverse effect on our business, and we face competition from traditional energy companies and solar and other renewable energy companies. • Improvements in distributed solar energy generation and related technologies or components may materially adversely affect our ability to retain customers. • Our solar energy systems depend heavily on suitable solar and meteorological conditions, so seasonality fluctuations and effects of climate change could adversely affect our results of operations. • We typically bear the risk of loss and cost of maintenance, repair, and removal on solar energy systems owned by our subsidiaries, and warranty or product liability claims or accidents could adversely affect our business. • Our solar energy systems’ value at the end of the Customer Agreement term may be lower than projected, which may adversely affect our financial performance, results of operation, and valuation. • Increases in cost or reduction in supply of solar energy system components due to tariffs or trade restrictions could have an adverse effect on our business, financial condition, and results of operations. • A material reduction in the retail price of traditional utility generated electricity or electricity from other sources could harm our business, financial condition, and results of operations.
Such risks include, but are not limited to: Risks Related to the Solar Energy Industry • The solar energy industry may not develop to the size or at the rate we expect, which could cause an adverse effect on our business. • We face competition from traditional energy companies and solar and other renewable energy companies. • Improvements in distributed solar energy generation and related technologies or components may materially adversely affect our ability to retain customers. • Our solar energy systems depend heavily on suitable solar and meteorological conditions, so seasonality fluctuations and effects of climate change could adversely affect our results of operations. • We typically bear the risk of loss and cost of maintenance, repair, and removal on solar energy systems owned by our subsidiaries, and warranty or product liability claims or accidents could adversely affect our business. • Our solar energy systems’ value at the end of the Customer Agreement term may be lower than projected, which may adversely affect our financial performance, results of operation, and valuation. • Increases in cost or reduction in supply of solar energy system components due to tariffs or trade restrictions could have an adverse effect on our business, financial condition, and results of operations. • A material reduction in the retail price of traditional utility generated electricity or electricity from other sources could harm our business, financial condition, and results of operations.
Risks Related to Regulation • Our business depends in part on the regulatory treatment of third-party owned solar energy systems. • We become subject to new regulations for our solar service offerings. 10 Table of Contents • Compliance with applicable laws and requirements can be costly, and noncompliance with such requirements may result in potentially significant monetary penalties, operational delays, negative publicity, investigations, litigation, or otherwise adversely affect our business. • Electric utility policies and regulations may present barriers to the purchase and use of solar energy systems, which could adversely impact our business. • We have received subpoenas from states attorneys general requesting information about our business.
Risks Related to Regulation • Our business depends in part on the regulatory treatment of third-party owned solar energy systems. • We may become subject to new regulations for our solar service offerings. 10 Table of Contents • Compliance with applicable laws and requirements can be costly, and noncompliance with such requirements may result in potentially significant monetary penalties, operational delays, negative publicity, investigations, litigation, or otherwise adversely affect our business. • Electric utility policies and regulations may present barriers to the purchase and use of solar energy systems, which could adversely impact our business. • We have received subpoenas from states attorneys general requesting information about our business.
Seasonality fluctuations and effects of climate change could adversely affect our results of operations The energy produced and the revenue and cash receipts generated by a solar energy system depend on suitable solar, atmospheric and weather conditions, all of which are beyond our control.
Seasonality fluctuations and the effects of climate change could adversely affect our results of operations The energy produced and the revenue and cash receipts generated by a solar energy system depend on suitable solar, atmospheric and weather conditions, all of which are beyond our control.
These risks include the following, among others: • failure to satisfy the required conditions and otherwise complete a planned acquisition or other strategic transaction on a timely basis or at all; • legal or regulatory proceedings, if any, relating to a planned acquisition or other strategic transaction and the outcome of such legal proceedings; • difficulty in assimilating the operations, systems and personnel of the acquired company; • difficulty in effectively integrating the acquired technologies or products with our current products and technologies; • difficulty in maintaining controls, procedures and policies during the transition and integration; • disruption of our ongoing business and distraction of our Management and employees from other opportunities and challenges due to integration issues; • difficulty integrating the acquired company’s accounting, management information and other administrative systems; 16 Table of Contents • inability to retain key technical and managerial personnel of the acquired business; • inability to retain key customers, vendors and other business partners of the acquired business; • inability to achieve the financial and strategic goals for the acquired and combined businesses; • incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our results of operations; • significant post-acquisition investments which may lower the actual benefits realized through the acquisition; • potential failure of the due diligence processes to identify significant issues with product quality, legal and financial liabilities, among other things; • moderating and anticipating the impacts of inherent or emerging seasonality in acquired customer agreements; and • potential inability to obtain, or obtain in a timely manner, approvals from governmental authorities, which could delay or prevent such acquisitions.
These risks include the following, among others: • failure to satisfy the required conditions and otherwise complete a planned acquisition or other strategic transaction on a timely basis or at all; • legal or regulatory proceedings, if any, relating to a planned acquisition or other strategic transaction and the outcome of such legal proceedings; • difficulty in assimilating the operations, systems and personnel of the acquired company; • difficulty in effectively integrating the acquired technologies or products with our current products and technologies; • difficulty in maintaining controls, procedures and policies during the transition and integration; • disruption of our ongoing business and distraction of our Management and employees from other opportunities and challenges due to integration issues; 16 Table of Contents • difficulty integrating the acquired company’s accounting, management information and other administrative systems; • inability to retain key technical and managerial personnel of the acquired business; • inability to retain key customers, vendors and other business partners of the acquired business; • inability to achieve the financial and strategic goals for the acquired and combined businesses; • incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our results of operations; • significant post-acquisition investments which may lower the actual benefits realized through the acquisition; • potential failure of the due diligence processes to identify significant issues with product quality, legal and financial liabilities, among other things; • moderating and anticipating the impacts of inherent or emerging seasonality in acquired customer agreements; and • potential inability to obtain, or obtain in a timely manner, approvals from governmental authorities, which could delay or prevent such acquisitions.
In addition, we believe there has been and may continue to be substantial trading in derivatives of our common stock, including short selling activity or related similar activities, which are beyond our control, and which may be beyond the full control of the SEC and Financial Institutions Regulatory Authority or “FINRA”.
In addition, we believe there has been and may continue to be substantial trading in derivatives of our common stock, including short selling activity or related similar activities, which are beyond our control, and which may be beyond the full control of the SEC and Financial Institutions Regulatory Authority (“FINRA”).
Our primary customers are homeowners and our core solar service offerings to these customers generate revenues primarily through (i) the sale of electricity generated by our home solar energy systems to homeowners pursuant to long-term Customer Agreements (as defined below) which require the homeowners to make recurring monthly payments, (ii) third party contracts to sell solar renewable energy credits (“SRECs”) generated by our home solar energy systems for contracted prices, and (iii) the servicing of third party-owned solar energy systems through our Spruce Pro servicing platform, which is contracted to offer portfolio managed services to over 60,000 systems owned by third parties, as well as to our portfolio of home solar energy systems (the “Portfolio”).
Our primary customers are homeowners and our core solar service offerings to these customers generate revenues primarily through (i) the lease of, and the sale of electricity generated by, our home solar energy systems to homeowners pursuant to long-term Customer Agreements (as defined below) which require the homeowners to make recurring monthly payments, (ii) third party contracts to sell solar renewable energy credits (“SRECs”) generated by our home solar energy systems for contracted prices, and (iii) the servicing of third party-owned solar energy systems through our Spruce Pro servicing platform, which is contracted to offer portfolio managed services to over 60,000 systems owned by third parties, as well as to our portfolio of home solar energy systems (the “Portfolio”).
Any unauthorized disclosure of such proprietary, confidential or sensitive data, including personal information, whether through a breach of our systems or those of our third-party service providers or suppliers by an unauthorized party, including, but not limited to hackers, threat actors, sophisticated nation-states or nation-state-supported actors, or through the personnel theft, or misuse of information, or otherwise, could harm our business.
Any unauthorized disclosure of such proprietary, confidential or sensitive data, including personal information, whether through a breach of our systems or those of our third-party service providers or suppliers by an unauthorized party, including, but not limited to hackers, threat actors, sophisticated nation-states or nation-state-supported actors, or through the theft, or misuse of information, or otherwise, could harm our business.
While the SEC and FINRA rules prohibit some forms of short selling and other activities that may result in stock price manipulation, such activity may nonetheless occur without detection or enforcement. There can be no assurance that should there be any illegal manipulation in the trading of our stock, it will be detected, prosecuted or successfully eradicated.
While the SEC and FINRA rules prohibit some forms of short selling and other activities that may result in stock price manipulation, such activity may nonetheless occur without detection or enforcement. There can be no assurance that should there be any illegal manipulation in the trading of our common stock, it will be detected, prosecuted or successfully eradicated.
A proxy contest or related activities on the part of activist stockholders could adversely affect our business for a number of reasons, including, without limitation, the following: • responding to proxy contests and other actions by activist stockholders can be costly and time-consuming, disrupting our operations and diverting the attention of our Board of Directors, management and our employees; • perceived uncertainties as to our future direction may result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel, business partners, customers and others important to our success, any of which could negatively affect our business and our results of operations and financial condition; • actions by activist stockholders may be exploited by our competitors, cause concern to our current or potential customers and make it more difficult to attract and retain qualified personnel; 30 Table of Contents • 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.
A proxy contest or related activities on the part of activist stockholders could adversely affect our business for a number of reasons, including, without limitation, the following: • responding to proxy contests and other actions by activist stockholders can be costly and time-consuming, disrupting our operations and diverting the attention of our Board of Directors, management and our employees; • perceived uncertainties as to our future direction may result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel, business partners, customers and others important to our success, any of which could negatively affect our business and our results of operations and financial condition; • actions by activist stockholders may be exploited by our competitors, cause concern to our current or potential customers and make it more difficult to attract and retain qualified personnel; • 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.
If our common stock is delisted, this would, among other things, substantially impair our ability to raise additional funds and could result in a loss of institutional investor interest and fewer development opportunities for us.
If our common stock is delisted, this would, among other things, substantially impair our ability to raise additional funds and could result in a loss of institutional investor interest and fewer corporate development opportunities for us.
Finally, any perceived or actual unauthorized disclosure of such information, unauthorized intrusion, or other cyberthreat could harm our reputation, substantially impair our ability to attract and retain customers, interrupt our operations and have an adverse impact on our business.
Any perceived or actual unauthorized disclosure of such information, unauthorized intrusion, or other cyberthreat could harm our reputation, substantially impair our ability to attract and retain customers, interrupt our operations and have an adverse impact on our business.
We hold 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 our Portfolio, which may qualify for subsidies, renewable energy credits and other incentives as provided by various states and local agencies.
We hold 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 our Portfolio, which may qualify for subsidies, renewable energy credits and other incentives as provided by the federal government and various states and local agencies.
These investigations could result in fines, penalties or damages and may divert Management’s time and attention from our business We have received subpoenas from certain state attorneys general requesting information about our business. These investigations could result in fines, penalties, or damages and may divert Management’s time and attention from our business.
We have received subpoenas from states attorneys general requesting information about our business. These investigations could result in fines, penalties or damages and may divert Management’s time and attention from our business We have received subpoenas from certain state attorneys general requesting information about our business.
Geographic and resource diversification With the SEMTH, Tredegar and NJR Acquisitions, our Portfolio of approximately 85,000 home solar systems and customer contracts is geographically diverse across 18 states in the U.S., which reduces exposure to localized weather events, natural disasters, regional underperformance, and adverse regulatory actions and provides a more stable stream of cash flows over the long term when compared to a non-diversified portfolio.
Geographic and resource diversification With the SEMTH, Tredegar and NJR Acquisitions, our Portfolio of approximately 84,000 home solar systems and customer contracts is geographically diverse across 18 states in the U.S., which reduces exposure to localized weather events, natural disasters, regional underperformance, and adverse regulatory actions and provides a more stable stream of cash flows over the long term when compared to a non-diversified portfolio.
There can be no assurance that we will have access to the capital we need on favorable terms when required or at all. Additional financing may not be available on terms acceptable to us.
There can be no assurance that we will have access to the financing we need on favorable terms when required or at all. Additional financing may not be available on terms acceptable to us.
In addition to the other risks described in this “Risk Factors” section, the following factors could cause our operating results to fluctuate: • significant fluctuations in customer demand for our services; • expiration, reduction, or initiation of any governmental rebates or incentives; • our ability to continue to expand our operations and the amount and timing of expenditures related to this expansion; • announcements by us or our competitors of significant acquisitions, strategic partnerships, join ventures or capital-raising activities, or commitments; • changes in our pricing policies or terms or those of our competitors, including centralized electric utilities; • actual or anticipated developments in our competitors’ businesses, technology, or the competitive landscape; and • natural disasters or other weather or meteorological conditions.
In addition to the other risks described in this “Risk Factors” section, the following factors could cause our operating results to fluctuate: • significant fluctuations in customer demand for our services; • expiration, reduction, or initiation of any governmental rebates or incentives; • our ability to continue to expand our operations and the amount and timing of expenditures related to this expansion; • announcements by us or our competitors of significant acquisitions, strategic partnerships, join ventures or capital-raising activities, or commitments; • changes in our pricing policies or terms or those of our competitors, including centralized electric utilities; 18 Table of Contents • actual or anticipated developments in our competitors’ businesses, technology, or the competitive landscape; and • natural disasters or other weather or meteorological conditions.
The SEMTH related asset includes a 20-year use rights to customer payment streams of approximately 22,500 customer contracts (the “SEMTH Master Lease”). Subsequently on August 18, 2023, we acquired approximately 2,400 home solar assets and customer contracts, with an average remaining contract life of approximately 11 years, from a publicly traded, regulated utility company (the “Tredegar Acquisition”).
The SEMTH related asset includes a 20-year use right to customer payment streams of approximately 22,500 customer contracts (the “SEMTH Master Lease”). Subsequently on August 18, 2023, we acquired approximately 2,400 home solar assets and customer contracts, with an average remaining contract life of approximately 11 years, from a publicly traded, regulated utility company (the “Tredegar Acquisition”).
Item 1. Business Company Overview Spruce Power Holding Corporation and its subsidiaries (“Spruce Power”) is a leading owner and operator of distributed solar energy assets across the United States (the “U.S.”), offering subscription-based services to approximately 85,000 home solar assets and customer contracts, making renewable energy more accessible to everyone.
Item 1. Business Company Overview Spruce Power Holding Corporation and its subsidiaries (“Spruce Power”) is a leading owner and operator of distributed solar energy assets across the United States (the “U.S.”), offering subscription-based services to approximately 84,000 home solar assets and customer contracts, making renewable energy more accessible to everyone.
Any security breach, unauthorized access or disclosure, or theft of data, including personal information, we, our third party service providers, or our suppliers gather, store, transmit or use, or other hacking, cyber-attack, phishing attack, and unauthorized intrusions into or through our systems or those of our third-party service providers could harm our reputation, subject us to claims, litigation, and financial harm and have an adverse impact on our business 20 Table of Contents In the ordinary course of business, we, our third-party service providers and our suppliers receive, store, transmit and use proprietary, confidential and sensitive data, including the personal information of customers, such as names, addresses, email addresses, credit information and other housing and energy use data, as well as the personal information of our employees.
Any security breach, unauthorized access or disclosure, or theft of data, including personal information, we, our third party service providers, or our suppliers gather, store, transmit or use, or other hacking, cyber-attack, phishing attack, and unauthorized intrusions into or through our systems or those of our third-party service providers could harm our reputation, subject us to claims, litigation, and financial harm and have an adverse impact on our business In the ordinary course of business, we, our third-party service providers and our suppliers receive, store, transmit and use proprietary, confidential and sensitive data, including the personal information of customers, such as names, addresses, email addresses, credit information and other housing and energy use data, as well as the personal information of our employees.
Furthermore, market prices of retail electricity generated by utilities or other energy sources could decline for a variety of reasons, as discussed further below.
Market prices of retail electricity generated by utilities or other energy sources could decline for a variety of reasons, as discussed further below.
There is substantial risk of serious injury or death if proper safety procedures are not followed. Certain of our operations are subject to regulation under OSHA and Wage and Hour Division, DOT regulations, the U.S. Environmental Protection Agency and equivalent state and local laws that protect and regulate employee health and safety and the environment.
There is substantial risk of serious injury or death if proper safety procedures are not followed. Certain of our operations are subject to regulation under OSHA and Wage and Hour Division , the U.S. Environmental Protection Agency and equivalent state and local laws that protect and regulate employee health and safety and the environment.
Customers may choose not to renew or purchase for any reason, including pricing, decreased energy consumption, relocation of residence, or switching to a competitor product. Furthermore, it is difficult to predict how future environmental regulations may affect the costs associated with the removal, disposal or recycling of our solar energy systems.
Customers may choose not to renew or purchase for any reason, including pricing, decreased energy consumption, relocation of residence, or switching to a competitor’s product. Furthermore, it is difficult to predict how future environmental regulations may affect the costs associated with the removal, disposal or recycling of our solar energy systems.
We do this by implementation of several training programs, which includes our internally developed educational platform, Spruce University, to nurture an environment of learning, employee development, and talent retention. Bi-annually, we are committed to enhancing our senior leadership with curriculums to promote and develop teamwork and accountability.
We do this by implementation of several training programs, which includes our internally developed educational platform, Spruce University, to nurture an environment of learning, employee development, and talent retention. Bi-annually, we are committed to enhancing our senior leadership with curricula to promote and develop teamwork and accountability.
As of December 31, 2024, no employees were covered by collective bargaining agreements, and we have not experienced any work stoppages. To develop, attract, and retain personnel, we establish an environment of learning, purpose, inclusion, and opportunity and our leadership continually looks for ways to improve.
As of December 31, 2025, no employees were covered by collective bargaining agreements, and we have not experienced any work stoppages. To develop, attract, and retain personnel, we establish an environment of learning, purpose, inclusion, and opportunity and our leadership continually looks for ways to improve.
Any adverse changes in solar-related policies could have a negative impact on our business, financial condition, and results of operations. 24 Table of Contents We are subject to U.S. and foreign anti-corruption and anti-money laundering laws and regulations. We could face criminal liability and other serious consequences for violations, which could harm our business We are subject to the U.S.
Any adverse changes in solar-related policies could have a negative impact on our business, financial condition, and results of operations. We are subject to U.S. and foreign anti-corruption and anti-money laundering laws and regulations. We could face criminal liability and other serious consequences for violations, which could harm our business We are subject to the U.S.
We are a “smaller reporting company” and will be able to avail ourselves of reduced disclosure requirements applicable to smaller reporting companies, which could make our common stock less attractive to investors We are a “smaller reporting company,” as defined in the Exchange Act, and we currently take, and in the future, intend to continue to take, advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “smaller reporting companies,” including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
We are a “smaller reporting company” and will be able to avail ourselves of reduced disclosure requirements applicable to smaller reporting companies, which could make our common stock less attractive to investors We are a “smaller reporting company,” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we currently take, and in the future, intend to continue to take, advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “smaller reporting companies,” including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
A failure to comply with laws and regulations relating to interactions by us with current or prospective customers, including consumer protection laws, could result in negative publicity, claims, investigations, and litigation and adversely affect our business Our business substantially focuses on Customer Agreements and transactions with residential customers.
A failure to comply with laws and regulations relating to interactions by us with current or prospective customers, including consumer protection laws, could result in negative publicity, claims, investigations, and litigation and adversely affect our business 23 Table of Contents Our business substantially focuses on Customer Agreements and transactions with residential customers.
We may not have sufficient cash flow to service our debt, and we may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful We have $730.6 million of long-term debt outstanding as of December 31, 2024, as discussed in more detail in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, both included in this Annual Report on Form 10-K.
We may not have sufficient cash flow to service our debt, and we may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful We have $695.5 million of long-term debt outstanding as of December 31, 2025, as discussed in more detail in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, both included in this Annual Report on Form 10-K.
Any failure by us to adopt or have access to new or enhanced technologies or processes, or to react to changes in existing technologies, could result in product obsolescence or the loss of competitiveness of and decreased consumer retention for our solar energy services, which could have a material adverse effect on our business, financial condition and results of operations. 13 Table of Contents Our solar energy systems depend heavily on suitable solar and meteorological conditions, which may be impacted by the effects of climate change.
Any failure by us to adopt or have access to new or enhanced technologies or processes, or to react to changes in existing technologies, could result in product obsolescence or the loss of competitiveness of and decreased consumer retention for our solar energy services, which could have a material adverse effect on our business, financial condition and results of operations. 13 Table of Contents Our solar energy systems depend heavily on suitable solar and meteorological conditions.
As previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, management identified several material weaknesses in internal control over financial reporting.
As previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, management identified material weaknesses in internal control over financial reporting.
Risks Related to Our Business Operations • We may not realize the anticipated benefits of past or future investments, strategic transactions, or acquisitions, and integration of these acquisitions may disrupt our business and management. • If we fail to manage our recent and future growth effectively, we may be unable to execute our business plan, maintain high levels of customer service, adequately address competitive challenges, or develop, produce, or sell our products or services successfully. • We may be unsuccessful in introducing or executing on new service offerings or in penetrating new markets, which could adversely affect our business. • If financing is not available on acceptable terms, it could materially adversely affect our business growth. • We do not directly control certain costs related to our business, which could put us at a disadvantage. • Our growth and performance depend in part on the success of our relationships with third parties, including our servicing partners. • Our operating results and ability to grow may fluctuate, which could make our future performance difficult to predict and cause our operating results to fall below expectations. • The loss or transition of key employees or senior management, such as our recent Chief Executive Officer transition, or our inability to attract and retain qualified personnel, could adversely affect our business. • Rising interest rates could adversely affect our financial condition, and our use of hedging strategies to mitigate interest rate risk may not be effective. • We are exposed to the credit risk of our customers and payment delinquencies on our accounts receivable. • Our employees and independent contractors may engage in improper activities, which could have an adverse effect on our business and operating results. • Any unauthorized intrusions into or through our systems or those of our third-party service providers could harm our reputation, subject us to litigation and financial harm, and adversely impact our business. • If we fail to timely and responsibly implement, adopt, and innovate in response to technological developments, it could adversely impact our ability to compete, financial condition, and operating results. • Unfavorable publicity could adversely affect our business. • We are subject to legal proceedings and litigation and have been, and may in the future be, named as a defendant in legal proceedings, which like many litigation matters, could result in substantial damages and other related costs and require management-level attention.
Risks Related to Our Business Operations • We may not realize the anticipated benefits of past or future investments, strategic transactions, or acquisitions, and integration of these acquisitions may disrupt our business and management. • If we fail to manage our recent and future growth effectively, we may be unable to execute our business plan, maintain high levels of customer service, adequately address competitive challenges, or develop, produce, or sell our products or services successfully. • We may be unsuccessful in introducing or executing on new service offerings or in penetrating new markets, which could adversely affect our business. • If financing is not available on acceptable terms, it could materially adversely affect our business growth. • We do not directly control certain costs related to our business, which could put us at a disadvantage. • Our growth and performance depend in part on the success of our relationships with third parties, including our third party servicing providers. • Our operating results and ability to grow may fluctuate, which could make our future performance difficult to predict and cause our operating results to fall below expectations. • The loss or transition of key employees or senior management, or our inability to attract and retain qualified personnel, could adversely affect our business. • Rising interest rates could adversely affect our financial condition, and our use of hedging strategies to mitigate interest rate risk may not be effective. • We are exposed to the credit risk of our customers and payment delinquencies on our accounts receivable. • Our employees and independent contractors may engage in improper activities, which could have an adverse effect on our business and operating results. • Any unauthorized intrusions into or through our systems or those of our third-party service providers could harm our reputation, subject us to litigation and financial harm, and adversely impact our business. • If we fail to timely and responsibly implement, adopt, and innovate in response to technological developments, it could adversely impact our ability to compete, financial condition, and operating results. • Unfavorable publicity could adversely affect our business. • Material adverse or unforeseen legal actions, judgments, fines, penalties, or settlements could result in substantial damages and other related costs and may require management-level attention.
We aim to attract top talent by building a culture upon our values of coordination, purpose-driven and results oriented. We make investments in talent management and employee engagement initiatives, in order to foster a culture of belonging and inclusion. As of December 31, 2024, we had 165 full time employees primarily located in Colorado, Texas, and New Jersey.
We aim to attract top talent by building a culture upon our values of coordination, purpose-driven and results oriented. We make investments in talent management and employee engagement initiatives, in order to foster a culture of belonging and inclusion. As of December 31, 2025, we had 159 full time employees primarily located in Texas, New Jersey, and California.
Negotiating relationships with our servicing partners, investing in due diligence efforts with potential servicing partners, training such servicing partners and monitoring them for compliance with our standards require significant time and resources and may present greater risks and challenges than expanding our internal servicing teams.
Negotiating relationships with our third party service providers, investing in due diligence efforts with potential third party service providers, training such third party service providers and monitoring them for compliance with our standards require significant time and resources and may present greater risks and challenges than expanding our internal servicing teams.
Rising interest rates could raise our cost of capital and may adversely affect our financial condition We have $730.6 million of long-term debt outstanding as of December 31, 2024, which are secured by our solar assets, and the majority of which is variable rate debt.
Rising interest rates could raise our cost of capital and may adversely affect our financial condition We have $695.5 million of long-term debt outstanding as of December 31, 2025, which are secured by our solar assets, and the majority of which is variable rate debt.
With the completion of the NJR Acquisition, we have, in the aggregate, 14 portfolios of home solar assets and customer contracts with a combined capacity of approximately 514 MWdc. In the aggregate, as of December 31, 2024, we offered subscription-based services and owned the cash flows from approximately 85,000 home solar assets and customer contracts.
With the completion of the NJR Acquisition, we have, in the aggregate, 14 portfolios of home solar assets and customer contracts with a combined capacity of approximately 509 MWdc. In the aggregate, as of December 31, 2025, we offered subscription-based services and owned the cash flows from approximately 84,000 home solar assets and customer contracts.
We have a history of losses, and we expect to incur significant expenses and continuing losses We incurred net losses of $70.5 million and $65.8 million for the years ended December 31, 2024 and 2023, respectively. We believe that we will continue to incur operating and net losses through the near future.
We have a history of losses, and we expect to incur significant expenses and continuing losses We incurred net losses of $26.0 million and $70.5 million for the years ended December 31, 2025 and 2024, respectively. We believe that we will continue to incur operating and net losses through the near future.
Our growth and performance depend in part on the success of our relationships with third parties, including our servicing partners Our growth depends in part on developing or expanding our relationships with third parties. Among other things, our business depends on attracting and retaining new and existing servicing partners.
Our growth and performance depend in part on the success of our relationships with third parties, including our third party service providers Our growth depends in part on developing or expanding our relationships with third parties. Among other things, our business depends on attracting and retaining new and existing third party service providers.
Our home solar asset portfolios have a total weighted average remaining contract term of approximately 11 years as of December 31, 2024.
Our home solar asset portfolios have a total weighted average remaining contract term of approximately 10 years as of December 31, 2025.
In the fourth quarter of 2024, we completed the acquisition of a residential solar portfolio consisting of approximately 9,800 home solar assets and long-term Customer Agreements, with an average remaining contract life of over 11 years, from a publicly traded energy services company (the “NJR Acquisition”).
In the fourth quarter of 2024, we completed the acquisition of a residential solar portfolio consisting of approximately 9,800 home solar assets and long-term Customer Agreements, with an average remaining contract life of over 11 years, from a publicly traded energy services company (the “NJR Acquisition”). During 2025, the Company acquired 200 additional systems pursuant to the NJR Acquisition.
If we fail to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal control in the future, we may not be able to accurately or timely report our financial condition or results of operations and the trading price of our common stock may decline 25 Table of Contents A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected on a timely basis.
Although we have remediated these material weaknesses, we may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal control in the future, and as a result we may not be able to accurately or timely report our financial condition or results of operations and the trading price of our common stock may decline SEC rules define a material weakness as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected on a timely basis.
We may also incur significant costs for taking other actions in preparation for, or in reaction to, such events. We purchase property insurance with industry standard coverage and limits to protect against such risk, but such coverage may not cover our losses.
We may also incur significant costs for taking other actions in preparation for, or in reaction to, such events. We purchase property insurance to protect against such risk, but such coverage may not be adequate to cover our losses.
For example, in March 2023, we completed the SEMTH Acquisition acquiring approximately 22,500 customer contracts; in August 2023, we completed the Tredegar Acquisition acquiring 2,400 home solar assets and contracts; and in November 2024, we completed the NJR Acquisition acquiring 9,800 solar energy systems.
For example, in March 2023, we completed the SEMTH Acquisition acquiring approximately 22,500 customer contracts; in August 2023, we completed the Tredegar Acquisition acquiring 2,400 home solar assets and contracts; and in November 2024, we completed the NJR Acquisition acquiring approximately 9,800 solar energy systems at that time and subsequently acquired an additional 200 energy systems.
We must comply with numerous federal, state and local laws and regulations that govern matters relating to interactions with residential consumers, including those pertaining to consumer protection, marketing and sales, privacy and data security, consumer financial and credit transactions, mortgages and refinancings, home improvement contracts, warranties, and various means of customer solicitation.
As a result, we must comply with numerous federal, state and local laws and regulations that govern matters relating to interactions with residential consumers, including those pertaining to consumer protection, marketing and sales, privacy and data security, consumer financial and credit transactions, mortgages and refinancing, home improvement contracts, and warranties.
For example, we are subject to the requirements of the federal Occupational Safety and Health Act, as amended (“OSHA”), the U.S. Department of Transportation (“DOT”), and comparable state laws that protect and regulate employee health and safety. We endeavor to maintain compliance with applicable DOT, OSHA, and other comparable government regulations.
For example, we are subject to the requirements of the federal Occupational Safety and Health Act, as amended (“OSHA”), and state laws that protect and regulate employee health and safety. We endeavor to maintain compliance with applicable state and federal government regulations.
An adverse outcome in these matters that results in significant sanctions could have a material adverse effect on our cash flow, results of operations, financial position, or our stock price. 22 Table of Contents We may need to defend ourselves against patent, copyright or trademark infringement claims or trade secret misappropriation claims, which may be time-consuming and cause us to incur substantial costs and could materially adversely affect our business, prospects, financial condition and operating results Companies, organizations, or individuals, including our competitors, may own or obtain patents, trademarks or other proprietary rights that would prevent or limit our ability to make, use, develop or sell our home solar and other products and services, which could make it more difficult for us to operate our business.
We may need to defend ourselves against patent, copyright or trademark infringement claims or trade secret misappropriation claims, which may be time-consuming and cause us to incur substantial costs and could materially adversely affect our business, prospects, financial condition and operating results Companies, organizations, or individuals, including our competitors, may own or obtain patents, trademarks or other proprietary rights that would prevent or limit our ability to make, use, develop or sell our home solar and other products and services, which could make it more difficult for us to operate our business.
GAAP”) to reflect changes in fair value and the related adjustments will impact our earnings, shareholders’ equity, and book value; • the credit quality of the counterparty owing money on the derivative financial instrument may be downgraded to such an extent that it impairs our ability to sell, assign, or otherwise modify our side of the transaction; and • the counterparty owing money in the transaction may default on its obligation to pay.
GAAP”) to reflect changes in fair value and the related adjustments will impact our earnings, shareholders’ equity, and book value; • the credit quality of the counterparty owing money on the derivative financial instrument may be downgraded to such an extent that it impairs our ability to sell, assign, or otherwise modify our side of the transaction; and • the counterparty owing money in the transaction may default on its obligation to pay. 19 Table of Contents Derivative financial instruments can be traded on an exchange or administered through a clearing house or under bilateral agreements between us and a counterparty.
Intellectual Property 7 Table of Contents Generally, the solar generation business is not dependent on intellectual property. Within our residential business, we utilize licensed software, which enables our organization to efficiently manage our Portfolio.
Solar technology is improving as solar cell efficiencies improve and installation costs are declining. 7 Table of Contents Intellectual Property Generally, the solar generation business is not dependent on intellectual property. Within our residential business, we utilize licensed software, which enables our organization to efficiently manage our Portfolio.
Risks Related to Regulation Our business depends in part on the regulatory treatment of third-party owned solar energy systems Retail sales of electricity by third parties such as us face regulatory challenges in some states and jurisdictions, including states and jurisdictions we intend to enter where the laws and regulatory policies have not historically embraced competition to the service provided by the vertically integrated centralized electric utility.
Any litigation or claims, whether valid or invalid, could result in substantial costs and diversion of resources. 22 Table of Contents Risks Related to Regulation Our business depends in part on the regulatory treatment of third-party owned solar energy systems Retail sales of electricity by third parties such as us face regulatory challenges in some states and jurisdictions, including states and jurisdictions we intend to enter where the laws and regulatory policies have not historically embraced competition to the services provided by vertically integrated centralized electric utilities.
Risks Related to Our Financial Performance We previously identified material weaknesses in our internal control over financial reporting that continue to exist, and our management has concluded that our disclosure controls and procedures were not effective as of December 31, 2024.
Risks Related to Our Financial Performance We previously had identified material weaknesses in our internal control over financial reporting, and determined that it resulted in our internal control over financial reporting and disclosure controls and procedures not being effective as of December 31, 2024.
We may not realize the anticipated benefits of past or future investments, strategic transactions or acquisitions, and these transactions involve numerous risks that are not within our control.
During 2025, we acquired 200 additional systems pursuant to the NJR Acquisition. We may not realize the anticipated benefits of past or future investments, strategic transactions or acquisitions, and these transactions involve numerous risks that are not within our control.
As of December 31, 2024, we had options, restricted stock units (“RSUs”), and warrants outstanding that would require us to issue up to an aggregate of 3,251,368 shares of our common stock. We also have the ability to issue up to 324,696,266 shares of common stock under the 2020 Plan.
As of December 31, 2025, we had options and restricted stock units (“RSUs”) outstanding that would require us to issue up to an aggregate of 4,159,272 shares of our common stock. We also have the ability to issue additional shares of common stock under the 2020 Plan.
The average closing price of our common stock was below $1.00 per share for 30 consecutive trading days in 2022 and 2023, to which we received notices of non-compliance from the NYSE on October 20, 2022 and March 28, 2023. On October 6, 2023, following stockholder approval, we filed the Amended Certificate of Incorporation to effect the Reverse Stock Split.
The average closing price of our common stock was below $1.00 per share for 30 consecutive trading days in 2022 and 2023, as a result of which we received notices of non-compliance from the NYSE on October 20, 2022 and March 28, 2023.
We may require additional financing to support the development of our business and implementation of our growth strategy, and if financing is not available to us on acceptable terms when needed, our ability to continue to grow our business could be materially adversely affected 17 Table of Contents We may require additional capital investment in the future to fund operations and support strategic initiatives.
If we fail to introduce new service offerings that meet the demands of our customers or target markets or do not achieve market acceptance, or if we fail to penetrate new markets, our business could be adversely affected. 17 Table of Contents We may require additional financing to support the development of our business and implementation of our growth strategy, and if financing is not available to us on acceptable terms when needed, our ability to continue to grow our business could be materially adversely affected We may require additional financing in the future to fund operations and support strategic initiatives.
In November 2022, following the acquisition of Legacy Spruce Power, we changed our corporate name from “XL Fleet Corp.” to “Spruce Power Holding Corporation.” Additionally, we changed our ticker symbol from “XL” to “SPRU.” On October 6, 2023, we filed an Amendment to our Second Amended and Restated Certificate of Incorporation (the “Amended Certificate of Incorporation”) to effect a 1-for-8 reverse stock split of our issued and outstanding shares of common stock, par value $0.0001 per share (the “Reverse Stock Split”). 5 Table of Contents In the first quarter of 2023, we completed the acquisition of all issued and outstanding interests in SS Holdings 2017, LLC and its subsidiaries (“SEMTH”) from certain funds managed by HPS Investment Partners, LLC, pursuant to a membership interest purchase and sale agreement as of that date (the “SEMTH Acquisition”).
In November 2022, following the acquisition of Legacy Spruce Power, we changed our corporate name from “XL Fleet Corp.” to “Spruce Power Holding Corporation.” Additionally, we changed our ticker symbol from “XL” to “SPRU.” 5 Table of Contents In the first quarter of 2023, we completed the acquisition of all issued and outstanding interests in SS Holdings 2017, LLC and its subsidiaries (“SEMTH”) from certain funds managed by HPS Investment Partners, LLC, pursuant to a membership interest purchase and sale agreement as of that date (the “SEMTH Acquisition”).
Solar energy generation is becoming one of the lowest cost energy generation technologies in many regions in the U.S., which is expected to lead to significant growth in the renewable energy industry. Solar technology is improving as solar cell efficiencies improve and installation costs are declining.
Solar energy generation is becoming one of the lowest cost energy generation technologies in many regions in the U.S., which is expected to lead to significant growth in the renewable energy industry.
New and emerging technologies present a number of risks and incorporating them into our information technology infrastructure and services responsibly is important to maintaining and strengthening our competitive position in the market. 21 Table of Contents Unfavorable publicity could adversely affect our business Recent negative publicity has adversely affected, and may in the future affect, our industry, brand, reputation, and stock price, which may make it difficult for us to attract and retain employees, partners and customers, reduce confidence in our services, harm investor confidence and the market price of our securities, and invite legislative and regulatory scrutiny, litigation and government investigations.
Unfavorable publicity could adversely affect our business Recent negative publicity has adversely affected, and may in the future affect, our industry, brand, reputation, and stock price, which may make it difficult for us to attract and retain employees, partners and customers, reduce confidence in our services, harm investor confidence and the market price of our securities, and invite legislative and regulatory scrutiny, litigation and government investigations.
In addition, the use of NOLs and other carryforwards to offset taxable income is subject to various limitations if we undergo an “ownership change” as defined in Section 382 of the Internal Revenue Code. [As of December 31, 2024, we have recorded a full valuation allowance against our NOLs and we can offer no assurance when, or if, we may be able to use our NOLs to offset taxable income.] 26 Table of Contents Servicing our existing debt requires a significant amount of cash to satisfy payment obligations.
As of December 31, 2025 , we have recorded a full valuation allowance against our NOLs and we can offer no assurance when, or if, we may be able to use our NOLs to offset taxable income. 26 Table of Contents Servicing our existing debt requires a significant amount of cash to satisfy payment obligations.
We are responding to the subpoenas and otherwise are cooperating with these state investigations and intend to continue to do so until they are resolved. 8 Table of Contents Government Incentives Federal, state, and local government bodies provide incentives to owners, distributors, system integrators, and manufacturers of solar energy systems to promote solar energy in the form of rebates, tax credits, payments for renewable energy credits associated with renewable energy generation, and exclusion of solar energy systems from property tax assessments.
Government Incentives Federal, state, and local government bodies provide incentives to owners, distributors, system integrators, and manufacturers of solar energy systems to promote solar energy in the form of rebates, tax credits, payments for renewable energy credits associated with renewable energy generation, and exclusion of solar energy systems from property tax assessments.
On September 9, 2022, we acquired 100% of the membership interests of Legacy Spruce Power, which was one of the largest privately held owner and operator of home solar energy systems in the U.S. at the time of the transaction.
On September 9, 2022, we acquired 100% of the membership interests of 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”), which was one of the largest privately held owner and operator of home solar energy systems in the U.S. at the time of the transaction.
Corporate Development 6 Table of Contents Our corporate growth strategy provides a unique differential from our competitors. While our competitors lose future long-term value creation for short-term cash flow by selling new solar systems outright directly to consumers, we focus on long-term positive cash flow.
While our competitors may lose future long-term value creation for short-term cash flow by selling new solar systems outright directly to consumers, we focus on long-term positive cash flow.
Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and policies that are applicable to our business may limit the use and adoption of, and reduce the overall demand for, our services. If we are not able to adjust to changing laws, regulations, and standards related to privacy or security, our business may be harmed.
Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and 24 Table of Contents policies that are applicable to our business may limit the use and adoption of, and reduce the overall demand for, our services.
Specifically, we have received subpoenas from the attorneys general offices for the states of Connecticut, New Jersey, New York, and Texas regarding, among other things, certain sales, marketing, billing, and operations practices.
These investigations could result in fines, penalties, or damages and may divert Management’s time and attention from our business. Specifically, we have received subpoenas from the attorneys general offices for the states of Connecticut, New Jersey, New York, and Texas regarding, among other things, certain sales, marketing, billing, and operations practices.
Although we use interest rate swap contracts to mitigate the market risk associated with rising interest rates, including on our existing variable-rate debt, significant increases in interest rates or continued higher interest rates may still increase our cost of capital and may make it more difficult for us to finance our business. 19 Table of Contents Our use of hedging strategies to mitigate our interest rate risk may not be effective and may adversely affect our net income, comprehensive income, liquidity, and book value per common share We use interest rate swap contracts to help mitigate increased financing costs due to adverse changes in interest rates on our syndicated term loans, which are recognized on the balance sheet at their fair values.
Our use of hedging strategies to mitigate our interest rate risk may not be effective and may adversely affect our net income, comprehensive income, liquidity, and book value per common share We use interest rate swap contracts to help mitigate increased financing costs due to adverse changes in interest rates on our syndicated term loans, which are recognized on the balance sheet at their fair values.
A successful claim of infringement or misappropriation against us could materially adversely affect our business, prospects, financial condition and operating results. Any litigation or claims, whether valid or invalid, could result in substantial costs and diversion of resources.
A successful claim of infringement or misappropriation against us could materially adversely affect our business, prospects, financial condition and operating results.
If we become subject to the same regulatory authorities as utilities in other states or if new regulatory bodies are established to oversee our business, our operating costs could materially increase and we may not be able to execute on our business plans. 23 Table of Contents Compliance with occupational safety and health and environmental requirements can be costly and noncompliance with such requirements may result in potentially significant monetary penalties, operational delays and adverse publicity The ongoing operations and maintenance of solar energy systems requires individuals hired by us or third-party contractors, potentially including our employees, to work at heights with complicated and potentially dangerous electrical systems.
Compliance with occupational safety and health and environmental requirements can be costly and noncompliance with such requirements may result in potentially significant monetary penalties, operational delays and adverse publicity The ongoing operations and maintenance of solar energy systems requires individuals hired by us or third-party contractors, potentially including our employees, to work at heights with complicated and potentially dangerous electrical systems.
Additionally, if a counterparty fails to perform under the hedging agreements, our operating liquidity and financial performance could be materially and adversely affected. We are exposed to the credit risk of our customers and payment delinquencies on our accounts receivable We have long-term, contractual relationships with our customers, which require them to make payments throughout the term of their contract.
We are exposed to the credit risk of our customers and payment delinquencies on our accounts receivable We have long-term, contractual relationships with our customers, which require them to make payments throughout the term of their contract.
As noted in the Risk Factors section below, we also have received subpoenas from the state attorneys general offices for the states of Connecticut, New Jersey, New York, and Texas regarding, among other things, certain sales, marketing, billing, and operations protocols.
As such, we maintain collection agency licenses in the states in which we operate, as required by law, and we are subject to regulatory examination of such collection activities on a regular basis. 8 Table of Contents As noted in the Risk Factors section below, we also have received subpoenas from the state attorneys general offices for the states of Connecticut, New Jersey, New York, and Texas regarding, among other things, certain sales, marketing, billing, and operations protocols.
Derivative financial instruments can be traded on an exchange or administered through a clearing house or under bilateral agreements between us and a counterparty. Our bilateral hedging agreements expose us to increased counterparty risk, and we may be at risk of loss of any collateral held by a hedging counterparty if the counterparty becomes insolvent or files for bankruptcy.
Our bilateral hedging agreements expose us to increased counterparty risk, and we may be at risk of loss of any collateral held by a hedging counterparty if the counterparty becomes insolvent or files for bankruptcy. Additionally, if a counterparty fails to perform under the hedging agreements, our operating liquidity and financial performance could be materially and adversely affected.
Our website address is www.sprucepower.com and the information contained in, or that can be accessed through our website, is not, and should not be considered, part of this Annual Report on Form 10-K. Information Available on the Internet Our website address is www.sprucepower.com, to which we regularly post copies of our press releases as well as additional information about us.
Information Available on the Internet Our website address is www.sprucepower.com, to which we regularly post copies of our press releases as well as additional information about us.
These legal proceedings and any other similar or related legal proceedings or investigations are subject to inherent uncertainties, and the actual costs to be incurred relating to these matters will depend upon many unknown factors.
Any legal proceedings, claims, or investigations are subject to inherent uncertainties, and the actual costs to be incurred relating to these matters will depend upon many unknown factors. The outcome of legal proceedings, claims, or investigations is uncertain, and we could be forced to expend significant resources in the defense of these actions, and we may not prevail.
For these or other reasons, the results of any prior quarterly or annual periods should not be relied upon as indications of our future performance. 18 Table of Contents The loss or transition of key members of senior management or key employees, or our inability to attract and retain qualified personnel, could adversely affect our business Our success depends, in part, on our ability to retain our key personnel.
The loss or transition of key members of senior management or key employees, or our inability to attract and retain qualified personnel, could adversely affect our business Our success depends, in part, on our ability to retain our key personnel. The loss of any of our key personnel could have an adverse effect on our business.
Moreover, as noted above, we are also subject to the possibility of security breaches, some of which may result in a violation of these laws. We have received subpoenas from states attorneys general requesting information about our business.
If we are not able to adjust to changing laws, regulations, and standards related to privacy or security, our business may be harmed. Moreover, as noted above, we are also subject to the possibility of security breaches, some of which may result in a violation of these laws.
We have made progress in elevating our customer service and continue to invest resources in our goal of becoming best-in-class customer experience. Our in-house capabilities and operations infrastructure has established a scalable platform where we are able to continually improve profitability through growth while reducing incremental operational costs.
Our in-house capabilities and operations infrastructure has established a scalable platform where we are able to continually improve profitability through growth while reducing incremental operational costs. 6 Table of Contents Corporate Development We believe our corporate growth strategy provides a unique differential from our competitors.
We are also generally obligated, to the extent permitted by law, to indemnify our current and former directors and officers who are named as defendants in these and similar actions.
Monitoring and defending against legal actions is time-consuming for our Management and staff, and may detract from our ability to fully focus our internal resources on our business activities. We are also generally obligated, to the extent permitted by law, to indemnify our current and former directors and officers who are named as defendants in legal actions.
Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators and investors, of security incidents. Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.
Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.
Cybersecurity incidents have become more prevalent and could occur on our systems and those of our third parties in the future. Our team members who work remotely pose increased risks to our information technology systems and data, since many of them utilize less secure network connections outside our premises.
Our team members who work remotely pose increased risks to our information technology systems and data, since many of them utilize less secure network connections outside our premises. 20 Table of Contents Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators and investors, of security incidents.
Risks Related to Our Financial Performance • Failure to remediate any of our previously identified material weaknesses in our internal control over financial reporting, the identification of additional material weaknesses, or failure to maintain an effective system of internal control may cause our common stock’s trading price to decline. • We have a history of losses, and we expect to incur significant expenses and continuing losses. • Servicing our existing debt requires a significant amount of cash to satisfy payment obligations.
These investigations could result in fines, penalties, or damages and may divert Management’s time and attention from our business. Risks Related to Our Financial Performance • We have a history of losses, and we expect to incur significant expenses and continuing losses. • Servicing our existing debt requires a significant amount of cash to satisfy payment obligations.
Our ability to use our NOLs will depend on the amount of taxable income generated in future periods.
Our ability to use our NOLs will depend on the amount of taxable income generated in future periods. In addition, the use of NOLs and other carryforwards to offset taxable income is subject to various limitations if we undergo an “ownership change” as defined in Section 382 of the Internal Revenue Code.
We may issue securities that have rights, preferences and privileges senior to our common stock.
We may issue securities that have rights, preferences and privileges senior to our common stock. Any future debt financing into which we enter may impose covenants upon us that restrict our operations or may otherwise contain terms that are not favorable to us or our stockholders.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAlthough we do not believe such risks have materially affected us, including our business strategy, results of operations or financial condition, to date, we have, from time to time, experienced threats to and breaches of our data and systems, including malware and computer virus attacks.
Biggest changeAlthough we do not believe such risks have materially affected us, including our business strategy, results of operations or financial condition, to date, we have, from time to time, experienced threats to and breaches of our data and systems, including malware and computer virus attacks. 32 Table of Contents Notwithstanding the extensive approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us.
Incident Management Plan Our cybersecurity policy includes an incident management plan (“IMP”), which consists of the following processes: • The development, documentation, review and testing of security procedures and incident management procedures, which are regularly re-assessed, updated and tested; • The FRS Committee reviews any identified matters by assessment, verification and classification of incidents to determine affected stakeholders and appropriate parties for contact; • The FRS Committee notifies the Board of Directors and the Audit Committee; • The FRS Committee consults with outside experts, if determined that the incident rises to a significant level; • The FRS Committee initiates containment by making tactical changes to the computing environment to mitigate active threats based on currently known information; • The FRS Committee establishes the root cause of incidents, identification and evidence collection from all affected machines and logs sources, threat intelligence and other information sources; • IT personnel recovers and restores normal business functionality, which includes the reversal of any damage caused by the incident and responding as needed; and • The FRS Committee reviews the closure of each incident and conducts a “lessons learned” analysis to improve prevention and ensure the IMP and cybersecurity plans are more efficient and effective. 32 Table of Contents We have faced and continue to face cybersecurity risks in connection with the conduct of our business.
Incident Management Plan Our cybersecurity policy includes an incident management plan (“IMP”), which consists of the following processes: • The development, documentation, review and testing of security procedures and incident management procedures, which are regularly re-assessed, updated and tested; • The FRS Committee reviews any identified matters by assessment, verification and classification of incidents to determine affected stakeholders and appropriate parties for contact; • The FRS Committee notifies the Board of Directors and the Audit Committee; • The FRS Committee consults with outside experts, if determined that the incident rises to a significant level; • The FRS Committee initiates containment by making tactical changes to the computing environment to mitigate active threats based on currently known information; • The FRS Committee establishes the root cause of incidents, identification and evidence collection from all affected machines and logs sources, threat intelligence and other information sources; • IT personnel recovers and restores normal business functionality, which includes the reversal of any damage caused by the incident and responding as needed; and • The FRS Committee reviews the closure of each incident and conducts a “lessons learned” analysis to improve prevention and ensure the IMP and cybersecurity plans are more efficient and effective.
Our Audit Committee also receives regular updates on our cybersecurity posture throughout the year, as appropriate. 31 Table of Contents Monitoring In accordance with our cybersecurity policy, we have established a monitoring strategy and program which includes: • Defined security metrics to be monitored; • Performance of security control assessments on an ongoing basis; • Engaging third party security consultants to, among other things, conduct periodic reviews of our cybersecurity program, which is overseen by the FRS Committee, for identifying any cybersecurity threats; • Addressing results of both internal and third-party cybersecurity analyses and reporting security status to the executive team; • Monitoring information systems to detect attacks and indicators of potential attacks; and • Identification of unauthorized use of information system resources.
Monitoring In accordance with our cybersecurity policy, we have established a monitoring strategy and program which includes: • Defined security metrics to be monitored; • Performance of security control assessments on an ongoing basis; • Engaging third party security consultants to, among other things, conduct periodic reviews of our cybersecurity program, which is overseen by the FRS Committee, for identifying any cybersecurity threats; 31 Table of Contents • Addressing results of both internal and third-party cybersecurity analyses and reporting security status to the executive team; • Monitoring information systems to detect attacks and indicators of potential attacks; and • Identification of unauthorized use of information system resources.
Notwithstanding the extensive approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured.
While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured.
Added
Our Audit Committee also receives regular updates on our cybersecurity posture throughout the year, as appropriate.
Added
We have faced and continue to face cybersecurity risks in connection with the conduct of our business.
Added
Risk Factors. Item 2. Properties Our corporate headquarters is located in leased office space in Houston, Texas.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

3 edited+3 added−4 removed2 unchanged
Biggest changeNorling 56 Chief Legal Officer of the Company since February 2023; prior thereto General Counsel of Spruce Power from January 2019 to February 2023, Deputy General Counsel of Spruce Power from January 2018 to January 2019, and Interim General Counsel of Spruce Power from July 2017 to January 2018. 1.
Biggest changeNorling 57 Chief Legal Officer of the Company since February 2023; prior thereto General Counsel of Spruce Power from January 2019 to February 2023, Deputy General Counsel of Spruce Power from January 2018 to January 2019, and Interim General Counsel of Spruce Power from July 2017 to January 2018. 34 Table of Contents Part II
Mine Safety Disclosures Not Applicable. 33 Table of Contents Information About Our Executive Officers The executive officers of the Company as of the date of this filing are as follows: Name Age Principal Occupation During the Past Five Years Christopher Hayes (1) 51 Chief Executive Officer and President of the Company since April 2024, and a director of the Company since December 2020.
Mine Safety Disclosures Not Applicable. 33 Table of Contents Information About Our Executive Officers The executive officers of the Company as of the date of this filing are as follows: Name Age Principal Occupation During the Past Five Years Christopher Hayes 51 Chief Executive Officer and President of the Company since April 2024, and a director of the Company since December 2020.
Hayes served as managing partner and director of Alturus, a sustainable infrastructure investment company he co-founded in 2018. The Board believes that Mr. Hayes’ knowledge of our business as its CEO allows him to provide important insights to the Board on the Company, its business, and its potential strategic priorities.
Hayes served as managing partner and director of Alturus, a sustainable infrastructure investment company he co-founded in 2018. The Board believes that Mr. Hayes’ knowledge of our business as its CEO allows him to provide important insights to the Board on the Company, its business, and its potential strategic priorities. Thomas J.
Removed
Sarah Weber Wells 47 Chief Financial Officer and Head of Sustainability of the Company since May 2023.
Added
Cimino 57 Chief Financial Officer of the Company since December 2025. Prior thereto, Interim Chief Financial Officer of the Company since June 2025. Prior to joining Spruce Power, Mr. Cimino was an independent consultant and provided interim chief financial officer and advisory services across a variety of sectors from April 2024 to June 2025.
Removed
Prior thereto, Senior Vice President, Finance and Accounting of the Company since February 2022; prior thereto Chief Financial Officer of Spruce Holding Company 1 LLC, Spruce Holding Company 2 LLC and Spruce Holding Company 3 LLC, which were acquired by the Company on September 9, 2022 (collectively, “Spruce Power”).
Added
Prior thereto, Chief Financial Officer – Executive Vice President Finance and Administration of EnfraGen, an international owner, operator and developer of power assets, from January 2021 to January 2024, Chief Financial Officer of Vantage Drilling Company, an international offshore drilling company, from September 2016 to June 2020, and Chief Financial Officer and Controller of AEI Services, an international power infrastructure company from May 2007 to August 2016.
Removed
Prior to joining Spruce Power, Finance Manager of Cornerstone Building Brands, a building products manufacturer, from November 2013 to November 2018. Jonathan M.
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Prior to AEI, Mr. Cimino worked at PricewaterhouseCoopers and started his career with KPMG. Jonathan M.
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Christopher Hayes, who served as Chair of the Board in fiscal year 2023 became President and Chief Executive Officer as of April 12, 2024, replacing Christian Fong who served as Chief Executive Officer from February 1, 2023 until April 12, 2024. 34 Table of Contents Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+2 added−1 removed8 unchanged
Biggest changeIssuer Purchases of Equity Securities In May 2023, our Board of Directors approved a share repurchase program for the repurchase of up to $50.0 million of our outstanding common stock through May 15, 2025 (the “Repurchase Program”).
Biggest changeIssuer Purchases of Equity Securities In May 2023, our Board of Directors approved a share repurchase program for the repurchase of up to $50.0 million of our outstanding common stock through May 15, 2025 (the “Repurchase Program”). In May 2025, the Board authorized the extension of the Repurchase Program to expire on May 15, 2027.
The IRA introduced a 1% excise tax on all stock repurchases effective January 2023. In relation to the Repurchase Program, this excise tax had no material impact on our financial position, results of operations or cash flows as of and for the years ended December 31, 2024 and 2023.
The IRA introduced a 1% excise tax on all stock repurchases effective January 2023. In relation to the Repurchase Program, this excise tax had no material impact on our financial position, results of operations or cash flows as of and for the years ended December 31, 2025 and 2024.
As of December 31, 2024, we had approximately $43.8 million available under the Repurchase Program. Refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within this Annual Report on Form 10-K for additional information on our share repurchases. Item 6. [Reserved] 36 Table of Contents
As of December 31, 2025, we had approximately $42 million available under the Repurchase Program. Refer to Item 7, 35 Table of Contents “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within this Annual Report on Form 10-K for additional information on our share repurchases. Item 6. [Reserved]
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is currently listed on the NYSE under the symbol “SPRU.” Holders As of March 24, 2025, there were approximately 49 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is currently listed on the NYSE under the symbol “SPRU.” Holders As of March 19, 2026, there were approximately 44 holders of record of our common stock.
Removed
The following table provides information with respect to shares of our common stock we repurchased under the Repurchase Program during the three months ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in '000s) October 1 - October 31, 2024 — $ — — $ 44,694 November 1 - November 30, 2024 — $ — — $ 44,694 December 1 - December 31, 2024 291,558 $ 2.91 291,558 $ 43,847 291,558 291,558 35 Table of Contents (1) The Repurchase Program was approved by our Board of Directors in May 2023 and authorizes the repurchase of up to $50.0 million of our outstanding common stock through May 15, 2025.
Added
The Company did not repurchase any shares of its common stock during the quarter ended December 31, 2025.
Added
During the year ended December 31, 2025, the Company repurchased 778,619 shares of common stock under the Repurchase Program in open market transactions at a weighted-average price of $2.33 per share for an aggregate purchase price of $1.8 million, inclusive of transaction costs. As of December 31, 2025, $42.0 million remained available for future share repurchases under the Repurchase Program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeInformation with respect to the consolidated statements of operations for the years ended December 31, 2024 and 2023 are presented below: Years Ended December 31, 2024 2023 $ Change % Change (in thousands, except per share amounts) Revenues $ 82,107 $ 79,859 $ 2,248 3 % Operating expenses: Cost of revenues - solar energy systems depreciation 23,377 23,823 (446) (2) % Cost of revenues - operations and maintenance 16,597 13,990 2,607 19 % Selling, general and administrative expenses 58,889 56,122 2,767 5 % Litigation settlements, net 7,384 27,465 (20,081) (73) % Gain on asset disposal (2,504) (4,724) 2,220 (47) % Impairment of goodwill 28,757 — 28,757 100 % Total operating expenses 132,500 116,676 15,824 14 % Loss from operations (50,393) (36,817) (13,576) 37 % Other (income) expense: Interest income (22,758) (19,534) (3,224) 17 % Interest expense, net 40,232 41,936 (1,704) (4) % Other expense, net 2,211 3,268 (1,057) (32) % Net loss from continuing operations (70,078) (62,487) (7,591) 12 % Net income (loss) from discontinued operations 25 (4,123) 4,148 (101) % Net loss (70,053) (66,610) (3,443) 5 % Less: Net income (loss) attributable to redeemable noncontrolling interests and noncontrolling interests 436 (779) 1,215 (156) % Net loss attributable to stockholders $ (70,489) $ (65,831) $ (4,658) 7 % Revenues Revenues increased by $2.2 million, or 3%, to $82.1 million in 2024 as compared to 2023.
Biggest changeInformation with respect to the consolidated statements of operations for the years ended December 31, 2025 and 2024 are presented below: Years Ended December 31, 2025 2024 $ Change % Change (in thousands) Revenues $ 111,812 $ 82,107 $ 29,705 36 % Operating expenses: Cost of revenues - solar energy systems depreciation 29,139 23,377 5,762 25 % Cost of revenues - operations and maintenance 9,764 16,597 (6,833) (41) % Selling, general and administrative expenses 55,113 58,889 (3,776) (6) % Litigation settlements 1,711 7,384 (5,673) (77) % Gain on asset disposal (1,855) (2,504) 649 (26) % Impairment of goodwill — 28,757 (28,757) (100) % Total operating expenses 93,872 132,500 (38,628) (29) % Income (Loss) from operations 17,940 (50,393) 68,333 (136) % Other (income) expense: Interest income (20,718) (22,758) 2,040 (9) % Interest expense, net 50,918 40,232 10,686 27 % Other expense, net 13,383 2,211 11,172 505 % Net loss from continuing operations (25,643) (70,078) 44,435 (63) % Net (loss) income from discontinued operations (64) 25 (89) (356) % Net loss (25,707) (70,053) 44,346 (63) % Less: Net income attributable to noncontrolling interests 320 436 (116) (27) % Net loss attributable to stockholders $ (26,027) $ (70,489) $ 44,462 (63) % 38 Table of Contents Revenues Revenues increased by $29.7 million, or 36%, to $111.8 million in 2025 as compared to 2024.
Our most critical accounting policies and estimates are those most important to the portrayal of its financial condition and results of operations and which require us to make its most difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain.
Our most critical accounting policies and estimates are those most important to the portrayal of its financial condition and results of operations and which require us to make our most difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain.
Cash Flows Used in Investing Activities The net cash used in continuing investing activities in 2024 was $101.4 million, which primarily relates to $132.8 million of net cash paid for the NJR Acquisition in 2024, partially offset by $25.6 million of proceeds from our investments under the SEMTH Master Lease, and $6.1 million of proceeds from the sale of certain solar energy systems.
The net cash used in continuing investing activities in 2024 was $101.4 million, which primarily relates to $132.8 million of net cash paid for the NJR Acquisition in 2024, partially offset by $25.6 million of proceeds from our investments under the SEMTH Master Lease, and $6.1 million of proceeds from the sale of certain solar energy systems.
Although we believe that our approach to estimates and judgments as described herein is reasonable, actual results could differ and we may be exposed to increases or decreases in income taxes that could be material. Redeemable noncontrolling interests and noncontrolling interests Noncontrolling interests represent third-party interests in the net assets of certain consolidated subsidiaries.
Although we believe that our approach to estimates and judgments as described herein is reasonable, actual results could differ and we may be exposed to increases or decreases in income taxes that could be material. Noncontrolling interests Noncontrolling interests represent third-party interests in the net assets of certain consolidated subsidiaries.
We consider the rights granted to the other investors under the contractual arrangements to be more protective in nature rather than substantive participating rights. As such, we were determined to be the primary beneficiary, and the assets, liabilities and activities of the Funds and Prior Funds (before any ceased being a VIE) were consolidated by us.
We consider the rights granted to the other investors under the contractual arrangements to be more protective in nature rather than substantive participating rights. As such, we were determined to be the primary beneficiary, and the assets, liabilities and activities of the Funds (before any ceased being a VIE) were consolidated by us.
These operating cash inflows are primarily offset by operating expenses, operating lease payments and interest payments on our outstanding debt. The related cash flows for Drivetrain and XL Grid businesses are reflected as discontinued operating activities for the years presented.
These operating cash inflows are primarily offset by operating expenses and interest payments on our outstanding debt. The related cash flows for Drivetrain and XL Grid businesses are reflected as discontinued operating activities for the years presented.
The distribution rights and priorities for the Funds and Prior Funds (before any ceased being a VIE) as set forth in their respective operating agreements differ from the underlying percentage ownership interests of the members.
The distribution rights and priorities for the Funds (before any ceased being a VIE) as set forth in their respective operating agreements differ from the underlying percentage ownership interests of the members.
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 (“ASC 606”) issued by the Financial Accounting Standards Board , 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 - We have 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 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 (“ASC 606”) issued by the Financial Accounting Standards Board , 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. 42 Table of Contents • SLA revenues - We have 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.
As a result, we allocate income or loss to the noncontrolling interest holders of the Funds and Prior Funds (before any ceased being a VIE) utilizing the hypothetical liquidation of book value (“HLBV”) method, in which income or loss is allocated based on the change in each member's claim on the net assets at the end of each reporting period, adjusted for any distributions or contributions made during such periods.
As a result, we allocate income or loss to the noncontrolling interest holders of the Funds (before any ceased being a VIE) utilizing the hypothetical liquidation of book value (“HLBV”) method, in which income or loss is allocated based on the change in each member's claim on the net assets at the end of each reporting period, adjusted for any distributions or contributions made during such periods.
New and Recently Adopted Accounting Pronouncements Refer to Note 2. Summary of Significant Accounting Policies to the consolidated financial statements, included below in Item 8. Financial Statements and Supplementary Data. Item 7A.
New and Recently Adopted Accounting Pronouncements Refer to Note 2. Summary of Significant Accounting Policies to the consolidated financial statements, included below in Item 8. Financial Statements and Supplementary Data.
Our operating results and ability to grow our business over time could be impacted by certain factors and trends that affect our industry, as well as elements of our strategy, including the following factors, as well as the risk factors and other factors set forth under “Risk Factors” or elsewhere in this Annual Report on Form 10-K: Development of Distributed Energy Assets Our future growth depends significantly on our ability to acquire operating home solar energy systems “in-bulk” from other companies.
Our operating results and ability to grow our business over time could be impacted by certain factors and trends that affect our industry, as well as elements of our strategy, including the following factors, as well as the risk factors and other factors set forth under “Risk Factors” or elsewhere in this Annual Report on Form 10-K. 37 Table of Contents Development of Distributed Energy Assets Our future growth depends significantly on our ability to acquire operating home solar energy systems “in-bulk” from other companies.
As of December 31, 2024 and 2023, o ur investments in Volta Solar Owner II, LLC and ORE F4 HoldCo, LLC (collectively, the “Funds”) were each determined to be a VIE upon investment.
As of December 31, 2025 and 2024, o ur investments in Volta Solar Owner II, LLC and ORE F4 HoldCo, LLC (collectively, the “Funds”) were each determined to be a VIE upon investment.
Interest Income Interest income of $22.8 million in 2024 relates to $16.8 million of interest income from the SEMTH Master Lease and $6.0 million of interest earned on investments in U.S. Treasury securities.
In comparison, interest income of $22.8 million for 2024 relates to $16.8 million of interest income from the SEMTH Master Lease and $6.0 million of interest earned on investments in U.S. Treasury securities.
See below discussions under “ Cash Flows Summary” for the impact of our operations and M&A transactions on our cash balances during the years ended December 31, 2024 and 2023.
See below discussions under “ Cash Flows Summary” for the impact of our operations and M&A transactions on our cash balances during the years ended December 31, 2025 and 2024.
Solar renewable energy credit revenues 45 Table of Contents We enter into contracts with third parties to sell 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”).
Solar renewable energy credit revenues We enter into contracts with third parties to sell 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”).
Acquisitions All acquisitions, regardless of whether a business combination or asset acquisition, are evaluated to determine whether the acquired entity is a variable interest entity (“VIE”), including an evaluation of whether there is sufficient equity at risk. 44 Table of Contents Business combinations are accounted for using the acquisition method of accounting.
Acquisitions All acquisitions, regardless of whether a business combination or asset acquisition, are evaluated to determine whether the acquired entity is a variable interest entity (“VIE”), including an evaluation of whether there is sufficient equity at risk. Business combinations are accounted for using the acquisition method of accounting.
As we did not incur costs to obtain these governmental incentives, the inventory carrying value for the SRECs was $0 as of December 31, 2024 and December 31, 2023.
As we did not incur costs to obtain these governmental incentives, the inventory carrying value for the SRECs was $0 as of December 31, 2025 and December 31, 2024.
The HLBV method is commonly applied to investments where cash distribution percentages vary at different points in time and are not directly linked to an equity member's ownership percentage. The HLBV method is a balance sheet-focused approach.
The HLBV method is commonly applied to investments where cash distribution percentages vary at different points in time and are not directly linked to an equity member's ownership percentage. 44 Table of Contents The HLBV method is a balance sheet-focused approach.
We have provided valuation allowances as of December 31, 2024 and 2023 aggregating $100.0 million and $74.9 million, respectively, against such assets based on our assessment of past operating results, estimates of future taxable income and the feasibility of tax planning strategies.
We have provided valuation allowances as of December 31, 2025 and 2024 aggregating $96.7 million and $100.0 million, respectively, against such assets based on our assessment of past operating results, estimates of future taxable income and the feasibility of tax planning strategies.
Our CODM is our Chief Executive Officer. Our CODM does not evaluate operating segments using segment asset information. As of December 31, 2024, we have one reportable segment, which constitutes selling electricity to homeowners and providing related services to the homeowners, as well as to third-party owners.
Our CODM does not evaluate operating segments using segment asset information. As of December 31, 2025, we have one reportable segment, which constitutes selling electricity to homeowners and providing related services to the homeowners, as well as to third-party owners.
Investment related to SEMTH master lease agreement and interest income We account for our investment related to the SEMTH master lease agreement in accordance with Accounting Standards Codification (“ASC”) 325-40, Investments—Other—Beneficial Interests in Securitized Financial Assets .
Investment related to SEMTH master lease agreement and interest income We account for our investment related to the SEMTH master lease agreement in accordance with ASC 325-40, Investments—Other—Beneficial Interests in Securitized Financial Assets .
In connection with the repayment of the SP4 Facility, we settled the related interest rate swap contracts. SP5 Facility In November 2024, we entered into a non-recourse credit agreement with Banco Santander, S.A., New York (the “SP5 Facility”), which provided a term loan of approximately $109.8 million, of which proceeds were used to partially fund the NJR Acquisition described above.
SP5 Facility In November 2024, we entered into a non-recourse credit agreement with Banco Santander, S.A., New York (the “SP5 Facility”), which provided a term loan of approximately $109.8 million, of which proceeds were used to partially fund the NJR Acquisition described above.
Cash Flows Summary Presented below is a summary of our operating, investing and financing cash flows: Years Ended December 31, (Amounts in thousands) 2024 2023 Net cash provided by (used in) Continuing operating activities $ (41,686) $ (31,714) Discontinued operating activities (125) (1,947) Continuing investing activities (101,412) (17,060) Discontinued investing activities — 325 Continuing financing activities 79,349 (16,807) Discontinued financing activities 81 — Net change in cash and cash equivalents and restricted cash $ (63,793) $ (67,203) 43 Table of Contents Cash Flows Used in Operating Activities Operating cash inflows include cash from the sale of solar energy power generated by our home solar energy systems and the servicing of long-term agreements for other institutional owners of home solar energy systems.
Cash Flows Summary Presented below is a summary of our operating, investing and financing cash flows: Years Ended December 31, (Amounts in thousands) 2025 2024 Net cash provided by (used in) Continuing operating activities $ (3,405) $ (41,686) Discontinued operating activities (125) (125) Continuing investing activities 24,780 (101,412) Continuing financing activities (37,253) 79,349 Discontinued financing activities — 81 Net change in cash and cash equivalents and restricted cash $ (16,003) $ (63,793) Cash Flows Used in Operating Activities Operating cash inflows include cash from the sale of solar energy power generated by our home solar energy systems and the servicing of long-term agreements for other institutional owners of home solar energy systems.
The Tredegar Acquisition was funded by proceeds from the concurrent issuance of the SP2 Facility Amendment (defined below). In November 2024, we completed the NJR Acquisition acquiring 9,800 solar energy systems for approximately $132.5 million, pursuant to an asset purchase agreement (the “APA”).
Capital Investments, Acquisitions and Divestitures In November 2024, we completed the NJR Acquisition acquiring approximately 9,800 solar energy systems for approximately $132.5 million, pursuant to an asset purchase agreement (the “APA”). The NJR Acquisition was funded by proceeds from the concurrent issuance of the SP5 Facility (defined below) and $22.7 million of our cash.
For this reason, percentage amounts in this section may vary slightly from those obtained by performing the same calculations using the figures in our consolidated financial statements or in the associated text.
For this reason, percentage amounts in this section may vary slightly from those obtained by performing the same calculations using the figures in our consolidated financial statements or in the associated text. Certain other amounts that appear in this section may similarly not sum due to rounding.
Previously, we also derived revenue from the Drivetrain operations which generated revenue from the sales of hybrid electric powertrain systems, and the XL Grid operations which generated revenues through turnkey energy efficiency, renewable technology and other energy solutions.
Previously, we also derived revenue from the Drivetrain operations which generated revenue from the sales of hybrid electric powertrain systems, and the XL Grid operations which generated revenues through turnkey energy efficiency, renewable technology and other energy solutions. Energy generation Customers purchase solar energy from us under PPAs or SLAs, both defined above.
Cash Flows Provided by (Used in) Financing Activities The net cash provided by continuing financing activities in 2024 was $79.3 million, which primarily relates to $155.9 million for the repayment of non-recourse long-term debt, including the full repayment of $125.0 million for the SP4 Facility, and $3.4 million of payments for related deferred financing costs, both offset by $239.8 million of proceeds from the issuance of non-recourse long-term debt under the SET and SP5 Facilities in 2024.
The net cash provided by continuing financing activities in 2024 was $79.3 million, which primarily relates to $239.8 million of proceeds from the issuance of non-recourse long-term debt under the SET and SP5 Facilities in 2024, partially offset by $155.9 million for the repayment of non-recourse long-term debt, including the full repayment of $125.0 million for the SP4 Facility, and $3.4 million of payments for related deferred financing costs. 41 Table of Contents Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with U.S.
Valuation of deferred tax assets We account 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.
There were no long-lived asset impairment charges during the years ended December 31, 2025 and 2024. 43 Table of Contents Valuation of deferred tax assets We account 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.
Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP. Preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
GAAP. Preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
Liquidity and Capital Resources As of December 31, 2024, we had working capital of $76.9 million, including cash and cash equivalents and restricted cash of $109.1 million. We had net losses attributable to stockholders of $70.5 million and $65.8 million for the years ended December 31, 2024 and 2023, respectively.
Liquidity and Capital Resources As of December 31, 2025, we had negative working capital of $122.9 million. Our working capital included cash and cash equivalents and restricted cash of $93.1 million. We had net losses attributable to stockholders of $26.0 million and $70.5 million for the years ended December 31, 2025 and 2024, respectively.
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 during the years ended December 31, 2024 and 2023.
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.
Certain other amounts that appear in this section may similarly not sum due to rounding. 37 Table of Contents Company Overview We are a leading owner and operator of distributed solar energy assets across the U.S., offering subscription-based services to approximately 85,000 home solar assets and customer contracts, making renewable energy more accessible to everyone.
Company Overview We are a leading owner and operator of distributed solar energy assets across the U.S., offering subscription-based services to approximately 84,000 home solar assets and customer contracts, making renewable energy more accessible to everyone.
Certain information above constitutes key operating metrics that we use to evaluate our operations, measure our performance and identify trends in our business. Some of our key operating metrics are estimates that are based on our management’s beliefs and assumptions and on information currently available to management.
Some of our key operating metrics are estimates that are based on our management’s beliefs and assumptions and on information currently available to management.
There were no severance costs associated with restructuring charges during the year ended December 31, 2024. Operating Highlights For the years ended December 31, 2024 and 2023, our revenues totaled $82.1 million and $79.9 million, respectively, while our net loss attributable to stockholders was $70.5 million and $65.8 million, respectively.
Operating Highlights For the years ended December 31, 2025 and 2024, our revenues totaled $111.8 million and $82.1 million, respectively, while our net loss attributable to stockholders was $26.0 million and $70.5 million, respectively.
The net cash used in continuing investing activities in 2023 was $17.1 million, which primarily related to $43.1 million of aggregate cash net cash paid for acquisitions during 2023, consisting of $23.0 million for the SEMTH Acquisition and $20.1 million, net for the Tredegar Acquisition, partially offset by $20.2 million of proceeds from our investments under the SEMTH Master Lease, and $6.3 million of proceeds from the sale of solar energy systems.
Cash Flows Provided by (Used in) Investing Activities The net cash provided by continuing investing activities in 2025 was $24.8 million, which primarily relates to $24.7 million of proceeds from our investments under the SEMTH Master Lease and $5.6 million of proceeds from the sale of certain solar energy systems, partially offset by $5.3 million of net cash paid for incremental tranches purchased in 2025 related to the NJR Acquisition.
Interest Expense, Net Interest expense, net of $40.2 million for 2024 primarily relates to (i) $52.2 million of interest expense related to the principal amounts of our outstanding non-recourse debt and (ii) $6.0 million related to the amortization of debt discount and deferred financing costs, both partially offset by $18.0 million of net realized gains from settlements of our interest rate swaps.
Interest Expense, Net Interest expense, net of $50.9 million for 2025 primarily relates to (i) $44.4 million of interest expense, related to the principal amounts of our outstanding non-recourse debt, net of swaps and (ii) $6.5 million related to the amortization of debt discount and deferred financing costs.
Our principal sources of liquidity include cash and cash equivalents and cash flows from operations.
Our principal sources of liquidity include cash and cash equivalents and cash flows from operations as well as cash received from investment related to SEMTH Master Lease.
Financial Statements and Supplementary Data for further information on our interest rate swaps. 42 Table of Contents Other Expense, Net Other expense, net of $2.2 million for 2024 consists of $2.7 million of unrealized losses from the change in fair value of interest rate swaps, partially offset by $0.5 million of other income, net, while other expense, net of $3.3 million for 2023 primarily consisted of $4.8 million of unrealized losses from the change in fair value of interest rate swaps, partially offset by $1.3 million of other income, net and $0.2 million of change in fair value of warrant liabilities.
Other Expense, Net Other expense, net of $13.4 million for 2025 consists of $12.6 million of unrealized losses from the change in fair value of interest rate swaps, in addition to $0.7 million of other expense, net, while other expense, net of $2.2 million for 2024 primarily consisted of $2.7 million of unrealized losses from the change in fair value of interest rate swaps, partially offset by $0.5 million of other income, net.
During 2023, we purchased 100% of the membership interests in Level Solar Fund IV LLC and it ceased being a VIE upon purchase. 47 Table of Contents We considered the provisions within the contractual arrangements that grant us power to manage and make decisions that affect the operation of the VIEs, including determining the solar energy systems contributed to the VIEs, and the operation and maintenance of the solar energy systems.
We considered the provisions within the contractual arrangements that grant us power to manage and make decisions that affect the operation of the VIEs, including determining the solar energy systems contributed to the VIEs, and the operation and maintenance of the solar energy systems.
Financial Statements and Supplementary Data for a description of our material pending legal proceedings. Impairment of Goodwill Impairment of goodwill increased by $28.8 million, or 100%, to $28.8 million in 2024 due to the full impairment of our goodwill during the third quarter of 2024 resulting from a continuous decline in our stock price and market capitalization.
Impairment of Goodwill During the third quarter of 2024, we recorded a full impairment of goodwill totaling $28.8 million resulting from a continuous decline in our stock price and market capitalization.
In late October 2023, certain stockholders entitled to fractional shares of our common stock, upon the Reverse Stock Split, received aggregate cash payments of approximately $0.01 million in lieu of receiving fractional shares. 39 Table of Contents Reportable Segments Segment reporting is based on the management approach, following the method Management organizes our reportable segments for which separate financial information is made available to and evaluated regularly by our chief operating decision maker (“CODM”) in allocating resources and in assessing performance.
Reportable Segments Segment reporting is based on the management approach, following the method Management organizes our reportable segments for which separate financial information is made available to and evaluated regularly by our chief operating decision maker (“CODM”) in allocating resources and in assessing performance. Our CODM is our Chief Executive Officer.
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 our business. 40 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The results of operations related to our Drivetrain and XL Grid businesses, which were determined to be discontinued operations in the fourth quarter of 2022, are presented as net loss from discontinued operations in our consolidated statements of operations.
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 our business.
The net cash used in continuing financing activities in 2023 was $16.8 million, which primarily related to $32.8 million for the repayment of long-term debt and $5.4 million of shares repurchased under our Repurchase Program, partially offset by $21.4 million of proceeds from the issuance of long-term debt under the SP2 Facility Amendment to fund the Tredegar Acquisition.
Cash Flows Provided by (Used in) Financing Activities The net cash used in continuing financing activities in 2025 was $37.3 million, which primarily relates to $35.1 million for the repayment of non-recourse long-term debt, and $1.8 million related to shares repurchased under our Repurchase Program.
As of December 31, 2024, our debt balance was $705.3 million, net of $21.9 million of unamortized fair value adjustment and $3.3 million of unamortized deferred financing costs, all of which is non-recourse project-level debt. Our debt consists of four senior debt facilities and two subordinate facilities, of which the earliest maturity date is April 2026.
As of December 31, 2025, our debt balance was $676.8 million, net of $16.5 million of unamortized fair value adjustment and $2.3 million of unamortized deferred financing costs, all of which is non-recourse project-level debt. See Note 7. Non-Recourse Debt.
See the section titled “Results of Operations” in this Annual Report on Form 10-K for more information on our operating results for the years ended December 31, 2024 and 2023. We focus on three core pillars in our operations: • Ensure an industry leading customer experience.
Our 2024 financial performance was impacted by impairment of our goodwill and legal settlements during fiscal year 2024. See the section titled “Results of Operations” in this Annual Report on Form 10-K for more information on our operating results for the years ended December 31, 2025 and 2024.
Interest expense, net is also impacted by the fluctuations in the settlements of our interest rate swaps, which we use to convert variable rates on our non-recourse debt into fixed recourse obligations and are subject to interest-rate risk. See Note 9. Interest Rate Swaps in Part II, Item 8.
In comparison, interest expense, net of $40.2 million for 2024 primarily related to (i)$34.2 million of interest expense related to the principal amounts of our outstanding non-recourse debt, net of swaps and (ii) $6.0 million related to the amortization of debt discount and deferred financing costs. 39 Table of Contents Interest expense, net was negatively impacted by the fluctuations in the settlements of our interest rate swaps, which we use to convert variable rates on our non-recourse debt into fixed recourse obligations and are subject to interest-rate risk.
The decrease in cost of revenue - solar energy systems depreciation was primarily due to the finalization of purchase price accounting in 2023, offset by incremental depreciation related to the NJR Acquisition in 2024.
Cost of Revenues — Solar Energy Systems Depreciation Cost of revenues - solar energy systems depreciation increased by $5.8 million, or 25%, to $29.1 million in 2025 as compared to 2024. The increase in cost of revenue - solar energy systems depreciation was primarily due to incremental depreciation related to the NJR Acquisition in November 2024.
SET Facility and SP4 Facility In June 2024, we entered into a non-recourse credit agreement with Barings GPSF LLC (the “SET Facility”), which provided a fixed interest term loan of $130.0 million. We used the proceeds from the SET Facility to fully repay the outstanding balance on the SP4 Facility of $125.0 million.
Furthermore, other companies may calculate these operating metrics differently than we do now or in the future, which would reduce their usefulness as a comparative measure. 36 Table of Contents Recent Developments SET Facility and SP4 Facility In June 2024, we entered into a non-recourse credit agreement with Barings GPSF LLC (the “SET Facility”), which provided a fixed interest term loan of $130.0 million.
The decrease related to costs incurred in 2023 associated with settlements of the SEC inquiry, shareholder lawsuits, and other Legacy XL legal matters, partially offset by additional settlement costs, net of related insurance recoveries from third parties, associated with various settled and ongoing legal proceedings in 2024. See Note 16. Commitments and Contingencies in Part II, Item 8.
The decrease related to 2024 costs associated with settlements of various Legacy XL legal matters. See Note 14. Commitments and Contingencies in Part II, Item 8. Financial Statements and Supplementary Data for a description of our material pending legal proceedings.
For the year ended December 31, 2024, our customer satisfaction score improved to 83% compared to 74% for the year ended December 31, 2023. • Deliver operational excellence in our clean energy portfolio for customers and communities.
We focus on several core pillars in our operations and we strive to deliver operational excellence to our clean energy customers and the communities we serve. For the year ended December 31, 2025, our portfolio generated approximately 709 thousand MWh of power, compared to 515 thousand MWh for the year ended December 31, 2024.
In comparison, interest income of $19.5 million for 2023 relates to $11.5 million of interest income from the SEMTH Master Lease and $8.0 million of interest earned on investments in U.S. Treasury securities. The SEMTH assets were acquired in March 2023, and as such, earned interest income for a full year in 2024.
Interest Income Interest income of $20.7 million in 2025 relates to $18.1 million of interest income from the SEMTH Master Lease and $2.6 million of interest earned on investments in U.S. Treasury securities.
Cost of Revenues — Operations and Maintenance Cost of revenues - operations and maintenance increased by $2.6 million, or 19%, to $16.6 million in 2024 as compared to 2023. The increase in cost of revenue - operations and maintenance was primarily due to increased operations and maintenance costs related to third party services.
Cost of Revenues — Operations and Maintenance Cost of revenues - operations and maintenance decreased by $6.8 million, or 41%, to $9.8 million in 2025 as compared to 2024.
See the section titled “Risk Factors” in this Annual Report on Form 10-K for more information. Furthermore, other companies may calculate these operating metrics differently than we do now or in the future, which would reduce their usefulness as a comparative measure.
See the section titled “Risk Factors” in this Annual Report on Form 10-K for more information.
Interest expense related to the principal amounts of our outstanding non-recourse debt increased in 2024 as compared to 2023 primarily due to new debt entered into as part of the NJR Acquisition in November 2024. See Note 8. Non-Recourse Debt in Part II, Item 8. Financial Statements and Supplementary Data for further information on our debt.
See Note 8. Interest Rate Swaps in Part II, Item 8. Financial Statements and Supplementary Data for further information on our interest rate swaps.
Our 2024 financial performance was significantly impacted by fluctuations in the value of our hedging portfolio, impairment of our goodwill, variations in our operations and maintenance costs, and legal settlements during fiscal year 2024 and, due to the completion of the NJR Acquisition in November 2024, our fiscal year 2024 financial performance does not reflect the full incremental impact of this acquisition on our financial results.
Our 2025 financial performance reflects the full impact of the NJR Acquisition in November 2024, resulting in increased revenues from energy generation and SRECs. 2025 results were also impacted by fluctuations of our interest rate swaps and variations in our operations and maintenance costs.
For additional information on our debt, refer to Note 8. Non-Recourse Debt included within the accompanying audited consolidated financial statements. Based on our current liquidity, we believe that our current cash and cash equivalents, together with the future cash generated from our operations, will be sufficient to satisfy the cash requirements of our current operations for the next 12 months.
Our debt consists of four senior debt facilities and two subordinate facilities, of which the earliest maturity date is October 30, 2026. For additional information on our debt, refer to Note 7. Non-Recourse Debt included within the accompanying audited consolidated financial statements.
Removed
Subsequent to the acquisition of Legacy Spruce Power, we performed an evaluation of personnel and processes of various corporate functions to optimize our future corporate structure and implemented certain restructuring actions.
Added
We prioritize a high level of customer satisfaction through our in-house call centers and customer service support teams. For the year ended December 31, 2025, our customer satisfaction score was 81%. We also execute a growth strategy focused on accretive acquisitions and a capital-light approach, while expanding our existing service offerings through Spruce Pro services.
Removed
As a result of exiting the Drivetrain business and the restructuring actions, we recognized severance charges of approximately $0.7 million during the year ended December 31, 2023, all of which were paid in 2023. These severance charges are included in selling, general and administrative expenses within our consolidated statements of operations for the year ended December 31, 2023.
Added
As a result of this strategy, revenues increased 39% for the year ended December 31, 2025 from the year ended December 31, 2024. Certain information above constitutes key operating metrics that we use to evaluate our operations, measure our performance and identify trends in our business.
Removed
Combined portfolio generation was approximately 515 thousand MWh of power for the year ended December 31, 2024 compared to 417 thousand MWh of power for the year ended December 31, 2023. • Execute on our growth and capital strategies.
Added
We used the proceeds from the SET Facility to fully repay the outstanding balance on the SP4 Facility of $125.0 million. In connection with the repayment of the SP4 Facility, we settled the related interest rate swap contracts.
Removed
As of December 31, 2024, we owned cash flows from approximately 85,000 home solar assets and customer contracts across 18 U.S. states with an average remaining contract life of approximately 11 years compared to approximately 75,000 home solar assets and customer contracts with an average remaining contract life of approximately 12 years as of December 31, 2023.
Added
During the year ended December 31, 2025, the Company acquired 200 additional systems for approximately $5.3 million in cash, inclusive of transaction costs of approximately $0.1 million.
Removed
Recent Developments Capital Investments, Acquisitions and Divestitures In January 2023, we completed the sale of our legacy operations, including the Drivetrain and XL Grid businesses, each for an immaterial amount. Both businesses are presented as discontinued operations within our consolidated financial statements.
Added
SP1 Facility Amendment On March 27, 2026, the Company entered into an amendment (the “SP1 Facility Amendment”) to the SP1 Facility with Silicon Valley Bank (the “SP1 Facility”) which extends the maturity date to October 30, 2026 (the “Amended SP1 Maturity Date”), unless a signed term sheet for a long-term financing is obtained, in which case the Amended SP1 Maturity Date will be January 30, 2027 .
Removed
In March 2023, we completed the acquisition of all the issued and outstanding interests of SEMTH to acquire the rights of the SEMTH Master Lease.
Added
Under the terms of the SP1 Facility Amendment, the applicable margin is 2.75% per annum from the effective date of the extension to October 30, 2026 , and 3.25% per annum until maturity. The SP1 Facility Amendment includes a cross-default provision with the Second Key Bank Credit Agreement.
Removed
Total consideration for the SEMTH Acquisition included approximately $23.0 million of cash, net of cash received, and the assumption of $125.0 million of outstanding senior indebtedness (the “SP4 Facility”) held by SEMTH at the close of the acquisition. 38 Table of Contents In August 2023, we completed the Tredegar Acquisition acquiring 2,400 home solar assets and contracts for approximately $20.9 million.
Added
Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 The results of operations related to our Drivetrain and XL Grid businesses, which were determined to be discontinued operations in the fourth quarter of 2022, are presented as net loss from discontinued operations in our consolidated statements of operations.
Removed
The NJR Acquisition was funded by proceeds from the concurrent issuance of the SP5 Facility (defined below) and $22.7 million of our cash. Under the APA, we may be obligated to acquire approximately 200 additional solar energy systems, subject to those systems having achieved operational milestones.
Added
The increase was primarily due to i) an increase in SREC revenue of $17.0 million related to the NJR Acquisition, ii) $10.4 million of incremental SLA revenue related to the NJR Acquisition, and (iii) $3.1 million increase due to incremental servicing revenues related to contracted services on third-party owned solar energy systems in 2025.
Removed
Assuming those milestones are achieved, the aggregate purchase consideration payable with respect to these additional solar energy systems would be approximately $5.0 million pursuant to the APA. Subsequently, in 2025, the Company has acquired 83 of these additional solar energy systems, in the aggregate, for approximately $1.5 million in cash.
Added
The decrease in cost of revenue - operations and maintenance was primarily due to cost reductions resulting from certain O&M efficiencies implemented in the second half of 2025, including greater leverage of our asset management platform to streamline third-party vendor management and return material authorization (RMA) processing .
Removed
We are unable to anticipate the ultimate outcome of these additional solar energy systems that we may be obligated to acquire.
Added
In addition, we implemented processes to efficiently manage instances where we needed to initiate a truck roll to maintain or repair systems and managed customer contracts in a more cost-effective manner, both resulting in lower third-party contractor spend. Furthermore, our in-house servicing team is fully operational in New Jersey, where we have a heavy concentration of solar assets.
Removed
SP2 Facility Amendment In August 2023, we entered into a second amendment to our existing non-recourse credit agreement with SVB (the “SP2 Facility Amendment”), resulting in incremental term loans of approximately $21.4 million, of which proceeds were primarily used to fund the Tredegar Acquisition.
Added
This team is able to handle a majority of service calls in house, further driving down third-party contractor spend. Selling, General and Administrative Selling, general and administrative expenses decreased by $3.8 million, or 6%, to $55.1 million in 2025.
Removed
In addition, we entered into an interest rate swap agreement to hedge the floating rate of the incremental SP2 Facility term loans, which included a notional amount of $17.6 million, a fixed rate of 4.24%, and a maturity date of January 31, 2032.
Added
The decrease was primarily due to $3.1 million decrease in professional service costs due to fewer outstanding legal cases, better utilization of in-house resources, and a decrease in payments to third party consultants.

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