What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-31 compared with 2025-03-31 · 313 added, 403 removed, 1006 unchanged (42% of the section changed)

2 unchanged sentences

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm for Cohn Reznick LLP (PCAOB ID No .

Report of Independent Registered Public Accounting Firm for Deloitte & Touche LLP (PCAOB ID No .

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Spruce Power Holding Corporation (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in stockholders' equity, and cash flows, for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheet of Spruce Power Holding Corporation (the “Company”) as of December 31, 2025, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as o December 31, 2025, and the results of their operations and their cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We also have audited the adjustments to the 2024 consolidated financial statements to retrospectively adjust the prior year segment information to conform with the current year segment information as described in Notes 2 and Note 20.

In our opinion, such adjustments are appropriate and have been properly applied.

We were not engaged to audit, review, or apply any procedures to the 2024 consolidated financial statements of the Company other than with respect to such adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2024 consolidated financial statements taken as a whole.

Substantial Doubt about the Company's Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, (i) the Company has debt with a maturity date of less than one year from the date these consolidated financial statements are issued and has determined that it is unlikely to have sufficient cash on hand or proceeds from currently available liquidity sources to repay the debt and (ii) the Company has experienced recurring net losses and negative cash flows from operations for the year ended December 31, 2025.

These conditions raise substantial doubt about the Company's ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) related to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We have determined that there are no critical audit matters.

/s/ CohnReznick, LLP

New York, New York

March 31, 2025

We have served as the Company’s auditor since 2025.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Spruce Power Holding Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Spruce Power Holding Corporation (the "Company") as of December 31, 2024, the related consolidated statements of operations, changes in stockholders' equity, and cash flows, for the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue – Refer to Note 2 to the Financial Statements

Critical Audit Matter Description

The Company’s revenue is primarily derived from the sale of solar energy to residential homeowners pursuant to long-term agreements, the rental of solar equipment to residential homeowners pursuant to long-term agreements, and the sale of solar renewable energy credits to third parties.

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers.

We identified revenue as a critical audit matter as it required an increased extent of effort, including the need to involve senior members of the engagement team.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures to evaluate revenue included the following, among others:

• We obtained the Company’s assessment regarding the application of ASC 606 for contracts related to energy generation, both the sale of solar energy and the rental of solar equipment, and solar renewable energy credits.

◦ We evaluated the Company’s assessment of the application of ASC 606 for contracts related to energy generation, both the sale of solar energy and the rental of solar equipment, and solar renewable energy credits.

◦ For certain types of revenue, we obtained management representations regarding the conclusion of when control transfers under ASC 606.

• We obtained the Company’s assessment of whether there have been significant changes in facts or circumstances that require a reassessment of the accounting treatment under ASC 606.

◦ We evaluated the Company’s assessment of any significant changes in facts or circumstances, including the Company’s policy related to the collectability of consideration, under ASC 606.

◦ We tested the mathematical accuracy of the impact to revenue of any significant changes under ASC 606.

• We performed procedures, including test of details and substantive analytical procedures, to test revenue recorded for energy generation, both the sale of solar energy and the rental of solar equipment, and solar renewable energy credits.

/s/ Deloitte & Touche LLP

/s/ Deloitte and Touche, LLP

March 31, 2025

We have served as the Company's auditor since 2023.

We began serving as the Company's auditor in 2023.

In 2025 we became the predecessor auditor.

Spruce Power Holding Corporation

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Restricted cash 38,303 36,346

Accounts receivable, net of allowance of $ 0.8 million and $ 1.7 million as of December 31, 2024 and 2023, respectively

Accounts receivable, net of allowance of $ 0.8 million and $ 0.8 million as of

December 31, 2025 and 2024, respectively

15,748 15,010

Interest rate swap assets, current 3,791 6,258

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Right-of-use assets, net 4,208 4,750

Goodwill — 28,757

Other assets 269 255

Long-term assets of discontinued operations — 32

Total assets 1

Liabilities, noncontrolling interests and stockholders’ equity

$ 837,273 $ 898,479

Liabilities, stockholders’ equity and noncontrolling interests

Current liabilities

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Lease liability, current 945 892

Interest rate swap liabilities, current 545 —

Current liabilities of discontinued operations 12 61

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Lease liability, non-current 4,181 4,848

Warrant liabilities — 17

Unfavorable solar renewable energy agreements, net 779 4,134

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Total liabilities 2

716,021 752,327

Commitments and contingencies (Note 14)

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Noncontrolling interests 2,422 2,438

Total stockholders’ equity 146,152 214,669

Total liabilities, noncontrolling interests and stockholders’ equity $ 898,479 $ 895,021

Total equity 121,252 146,152

Total liabilities, stockholders’ equity and noncontrolling interests $ 837,273 $ 898,479

See Notes to Consolidated Financial Statements.

(1) The company’s consolidated assets include $ 35.1 million of assets from consolidated variable interest entities (“VIEs”) as of December 31, 2025 that can only be used to settle obligations of VIEs, see Note 13 Noncontrolling Interests.

(2) The company’s consolidated liabilities include $ 2.0 million of liabilities from consolidated variable interest entities (“VIEs”) as of December 31, 2025, for which creditors do not have recourse to the general credit of the Company, see Note 13 Noncontrolling Interests .

Spruce Power Holding Corporation

Consolidated Statements of Operations

Years Ended December 31,

(In thousands, except per share and share amounts) 2025 2024

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Selling, general and administrative expenses 55,113 58,889

Litigation settlements, net 7,384 27,465

Gain on asset disposal ( 2,504 ) ( 4,724 )

Litigation settlements 1,711 7,384

Gain on asset disposal, net ( 1,855 ) ( 2,504 )

Impairment of goodwill — 28,757

Total operating expenses 93,872 132,500

Loss from operations ( 50,393 ) ( 36,817 )

Income (loss) from operations 17,940 ( 50,393 )

Other (income) expense:

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Change in fair value of interest rate swaps 12,684 2,753

Other income, net ( 525 ) ( 1,309 )

Other expense (income) 699 ( 525 )

Net loss from continuing operations ( 25,643 ) ( 70,078 )

Net income (loss) from discontinued operations

(including loss on disposal of $ 3,083 for the year ended December 31, 2023)

Net loss ( 25,707 ) ( 70,053 )

Net income (loss) attributable to redeemable noncontrolling interests and noncontrolling interests 436 ( 779 )

Net income attributable to noncontrolling interests 320 436

Net loss attributable to stockholders $ ( 26,027 ) $ ( 70,489 )

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Consolidated Statements of Changes in Stockholders’ Equity

Year Ended December 31, 2024

December 31, 2025

Common Stock Additional

Capital Accumulated

Deficit Treasury Stock Non controlling Interests Total Stockholders’

Deficit Treasury Stock Noncontrolling Interests Total Equity

(In thousands, except share data) Shares Amount Shares Amount

Balance at December 31, 2024 19,403,262 $ 2 $ 478,366 $ ( 328,377 ) 1,092,208 $ ( 6,277 ) $ 2,438 $ 146,152

Exercise of stock options — — — — — — — —

Issuance of restricted stock 637,990 — — — — — — —

Issuance of common stock — — — — — — — —

Share repurchases — — — — 778,619 ( 1,818 ) — ( 1,818 )

Stock-based compensation expense, net — — 2,961 — — — — 2,961

— — — ( 70,489 ) — — 436 ( 70,053 )

Net income (loss) — — — ( 26,027 ) — — 320 ( 25,707 )

Capital distributions to noncontrolling interests — — — — — — ( 336 ) ( 336 )

Balance at December 31, 2025 20,041,252 $ 2 $ 481,327 $ ( 354,404 ) 1,870,827 $ ( 8,095 ) $ 2,422 $ 121,252

Year Ended December 31, 2023

Redeemable Noncontrolling Interests Common Stock Additional

December 31, 2024

Common Stock Additional

Capital Accumulated

Deficit Treasury Stock Non controlling Interests Total Stockholders’

Deficit Treasury Stock Noncontrolling Interests Total Equity

(In thousands, except share data) Shares Amount Shares Amount

Balance at December 31, 2023 19,093,186 $ 2 $ 475,654 $ ( 257,888 ) 800,650 $ ( 5,424 ) $ 2,325 $ 214,669

Exercise of stock options — 489,436 — 1,004 — — — — 1,004

Purchase accounting measurement period adjustments 240 — — ( 1,813 ) — — — ( 5,490 ) ( 7,303 )

Issuance of restricted stock 310,076 — — — — — — —

Issuance of common stock — 25,818 — 150 — — — — 150

Share repurchases — — — — 291,558 ( 853 ) — ( 853 )

Cumulative-effect adjustment of ASC 326 adoption — — — — 1,285 — — — 1,285

Stock-based compensation expense, net — — 2,712 — — — — 2,712

Buyout of redeemable noncontrolling interests ( 55 ) — — — — — — — —

Capital distributions to noncontrolling interests ( 134 ) — — — — — — ( 345 ) ( 345 )

Equity related to buyout of redeemable noncontrolling interest ( 139 ) — — 139 — — — — 139

Net income (loss) — — — ( 70,489 ) — — 436 ( 70,053 )

Capital distributions to noncontrolling interests — — — — — — ( 323 ) ( 323 )

Balance at December 31, 2024 19,403,262 $ 2 $ 478,366 $ ( 328,377 ) 1,092,208 $ ( 6,277 ) $ 2,438 $ 146,152

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Consolidated Statements of Cash Flows

Years Ended December 31,

(In thousands) 2025 2024

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Net loss $ ( 25,707 ) $ ( 70,053 )

Net (income) loss from discontinued operations ( 25 ) 4,123

Net loss (income) from discontinued operations 64 ( 25 )

Adjustments to reconcile net loss to net cash used in operating activities:

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Depreciation and amortization expense 30,191 24,381

Amortization related to unfavorable solar renewable energy agreements ( 2,993 ) ( 3,097 )

Impairment of goodwill — 28,757

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Gain on disposal of assets ( 1,855 ) ( 2,504 )

Change in operating right-of-use assets 26 120

Change in operating right-of-use assets and lease liability ( 72 ) 26

Amortization of debt discount and deferred financing costs 6,536 6,026

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Proceeds from investment related to SEMTH master lease agreement 24,726 25,614

Cash paid for acquisitions, net of cash acquired ( 132,763 ) ( 43,097 )

Cash paid for acquisitions ( 5,334 ) ( 132,763 )

Purchases of other property and equipment ( 221 ) ( 354 )

Net cash used in continuing investing activities ( 101,412 ) ( 17,060 )

Net cash provided by discontinued investing activities — 325

Net cash used in investing activities

( 101,412 ) ( 16,735 )

Net cash provided by (used in) continuing investing activities 24,780 ( 101,412 )

Financing activities:

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Repayments of non-recourse debt ( 35,099 ) ( 155,943 )

Repayments under financing leases — ( 165 )

Proceeds from issuance of common stock — 150

Proceeds from exercise of stock options — 1,004

Share repurchases ( 1,818 ) ( 853 )

Capital distributions to redeemable noncontrolling interests and noncontrolling interests ( 323 ) ( 479 )

Buyout of redeemable non-controlling interest — ( 55 )

Capital distributions to noncontrolling interests ( 336 ) ( 323 )

Net cash provided by (used in) continuing financing activities ( 37,253 ) 79,349

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Cash paid for interest $ 42,978 $ 35,060

Supplemental disclosures of noncash investing and financing information:

Right-of-use assets obtained in exchange for lease liability $ — $ 933

Settlement of operating lease liability $ — $ 436

Settlement of finance lease liability $ — $ 43

Supplemental disclosure of noncash investing and financing information:

Right-of-use asset obtained in exchange for lease liability $ 307 $ —

See Notes to Consolidated Financial Statements.

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The Company is engaged in the ownership and maintenance of home solar energy systems for homeowners in the U.S.

The Company’s primary customers are homeowners and its core solar service offerings to these customers generate revenues primarily through (i) the sale of electricity generated by its 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 the Company’s home solar energy systems for contracted prices, and (iii) the servicing of third-party owned solar energy systems through the Company’s Spruce Pro servicing platform, which is contracted to offer portfolio managed services to third party owners, as well as to the Company’s portfolio of home solar energy systems (the “Portfolio”).

These portfolio managed services include (a) billing and collections/asset recovery, (b) account support services, (c) financial asset management, (d) homeowner support and servicing technology, (e) asset operations, and (f) transaction and execution services related to SRECs.

The Company’s primary customers are homeowners and its core solar service offerings to these customers generate revenues primarily through (i) both the lease of, and the sale of electricity generated by its 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 the Company’s home solar energy systems for contracted prices, and (iii) the servicing of third-party owned solar energy systems through the Company’s Spruce Pro servicing platform, which is contracted to offer portfolio managed services to third party owners, as well as to the Company’s portfolio of home solar energy systems (the “Portfolio”).

These portfolio managed services offered include (a) billing and collections/asset recovery, (b) account support services, (c) financial asset management, (d) homeowner support and servicing technology, (e) asset operations, and (f) transaction and execution services related to SRECs.

In addition to the Company’s core solar service offerings, the Company generates cash flows and earns interest income from customer contracts related to the SEMTH Master Lease, defined below.

The Company holds subsidiary fund companies, defined below as the Funds, that own and operate the Company’s portfolio of home solar energy systems, which are subject to solar lease agreements (“SLAs”) and power purchase agreements (“PPAs”, together with the SLAs, “Customer Agreements”) with residential customers who benefit from the production of electricity generated by the Company’s Portfolio, which may qualify for subsidies, renewable energy credits and other incentives as provided by various states and local agencies.

These benefits have generally been retained by the Company's subsidiaries that own the systems, with the exception of the investment tax credit (“ITCs”) under Section 48 of the Internal Revenue Code, as amended, (the “IRC”), which were generally passed through to the various financing partners of the solar energy systems.

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Subsequently on August 18, 2023, the Company 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”).

In the fourth quarter of 2024, the Company completed the acquisition of a residential solar portfolio consisting of approximately 9,800 home solar assets and customer contracts, 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, the Company completed the acquisition of a residential solar portfolio consisting of approximately 9,800 home solar assets and customer contracts, with an average remaining contract life of approximately 10 years, from a publicly traded energy services company (the “NJR Acquisition”).

Durin g 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.

With the completion of the NJR Acquisition, the Company has, in the aggregate, 14 portfolios of rooftop solar Customer Agreements.

In the aggregate, as of December 31, 2025, the Company offered subscription-based services and owned the cash flows from approximately 84,000 home solar assets and customer contracts.

Going Concern

These consolidated financial statements have been prepared in accordance with U.S.

generally accepted accounting principles (GAAP) assuming the Company will continue as a going concern.

The Company’s debt obligations under the SP1 Facility are non-recourse to the Company (see Note 7.

Non-Recourse Debt included within the accompanying audited consolidated financial statements).

On March 27, 2026 , the Company entered into the SP1 Facility Amendment to extend the maturity of this facility 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 extended maturity date will be January 30, 2027, see Note 7.

Because (i) the Amended SP1 Maturity Date is within twelve months from the date the accompanying audited consolidated financial statements are issued, (ii) the Company has not yet entered into a commitment to refinance the SP1 Facility, (iii) the Company has determined that it is unlikely to have sufficient cash on hand or proceeds from currently available liquidity sources to satisfy the SP1 Facility at the Amended SP1 Maturity Date (iv) the Company had negative working capital of $ 122.9 million as of December 31, 2025 solely due to the current maturity of the SP1 Facility at that date, and (v) the Company has experienced recurring net losses and negative cash flows from operations for the year ended December 31, 2025, these conditions raise substantial doubt about the Company’s ability to continue as a going concern .

Our consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty.

The Company plans to refinance the SP1 Facility prior to the Amended SP1 Maturity Date consistent with the Company’s historical financing strategy for investing in solar assets on a leveraged basis.

The Company has commenced preliminary discussions with potential lenders, which are currently being reviewed by management.

The Company’s management believes that such refinancing will be completed prior to the Amended SP1 Maturity Date.

However, the Company can offer no assurances it will be able to obtain financing at acceptable terms or at all.

Therefore, the Company has concluded that there is substantial doubt about its ability to continue as a going concern.

Should the Company be unsuccessful in refinancing the SP1 Facility, this could result in a foreclosure of collateral and negatively impact operations.

Further, an event of default on the SP1 Facility, if not cured in the permittable time allowed under the agreement, would result in a cross default on the Second Key Bank Credit Agreement, which is also non-recourse.

Summary of Significant Accounting Policies

Basis of consolidated financial statement presentation

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.

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Certain prior year amounts have been reclassified to conform to the Company’s presentation as of and for the year ended December 31, 2025 and such reclassifications had no effect on the Company’s previously reported financial position, results of operations, or cash flows.

On March 28, 2023, the Company was notified by the New York Stock Exchange (the “NYSE”) that it was not in compliance with certain listing requirements since the average closing price of its common stock was less than $1.00 over a consecutive 30 day trading period.

Subsequently, on October 6, 2023, the Company effected a 1-for-8 reverse stock split with respect to its issued and outstanding shares of common stock (the “Reverse Stock Split”).

Excluding the par value and the number of authorized shares of the Company’s common stock, all share, per share amounts, and the values of the common stock outstanding and related effect on additional paid in capital included in this Form 10-K have been retrospectively presented as if the Reverse Stock Split had been effective from the beginning of the earliest period presented.

Use of estimates

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GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of income and expenses during the reporting period.

The Company’s most significant estimates and judgments involve (i) deferred income taxes, (ii) warranty reserves, (iii) valuation of stock-based compensation, (iv) valuation of warrant liability, (v) the useful lives of certain assets and liabilities, (vi) the allowance for current expected credit losses, (vii) valuation of business combinations, including the fair values and useful lives of acquired assets and assumed liabilities, and the fair value of purchase consideration of asset acquisitions, and (viii) valuation of goodwill.

The Company’s most significant estimates and judgments involve (i) valuation allowance on deferred income taxes, (ii) valuation of stock-based compensation, (iii) the useful lives of certain assets and liabilities, including property and equipment, and intangible assets, (iv) the allowance for credit losses, (v) asset retirement obligations, (vi) relative fair value of asset acquisitions,

(vii) the fair value estimates of long-lived assets in impairment analysis, (viii) valuation models used in determining future principal debt amortization on certain credit facilities, (ix) future cash flows for the SEMTH master lease agreement, and (x) fair value of interest rate swaps.

Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Actual results could differ from those estimates, and such differences could be material to the Company’s financial statements.

Further description of these estimates is included within the remainder of Note 2.

Variable interest entities

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

The Company consolidates any variable interest entity (“VIE”) of which it is the primary beneficiary.

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The Company evaluates its relationships with the VIEs on an ongoing basis to determine if it is the primary beneficiary.

The Company’s initial investment in Level Solar Fund IV LLC (“Level Solar Fund IV”) and similar investments in the Funds as defined below (collectively, the “Prior Funds”) were each determined to be a VIE upon investment.

During 2023, the Company purchased 100 % of the membership interests in Level Solar Fund IV and it ceased being a VIE upon purchase and as of December 31, 2023.

The Company’s initial investments in Volta Solar Owner II, LLC and ORE F4 HoldCo, LLC (collectively, the “Funds”) were determined to be VIEs and remained as such as of December 31, 2025 and 2024.

Redeemable Noncontrolling Interests and Noncontrolling Interests.

The Company considered the provisions within the contractual arrangements that grant it 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.

The Company considers the rights granted to the other investors under the contractual arrangements to be more protective in nature rather than substantive participating rights.

As such, the Company was determined to be the primary beneficiary and the assets, liabilities and activities of the Funds and Prior Funds were consolidated by the Company.

Redeemable noncontrolling interests and noncontrolling interests

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.

As a result, the Company allocates 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 such, the Company was determined to be the primary beneficiary and the assets, liabilities and activities of the Funds were consolidated by the Company.

Noncontrolling interests

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.

As a result, the Company allocates 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.

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.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

The HLBV method is a balance sheet-focused approach.

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Changes in these factors could have a significant impact on the amounts that investors would receive upon a hypothetical liquidation.

The Company classifies certain noncontrolling interests with redemption features that are not solely within the Company’s control outside of permanent equity in the consolidated balance sheets.

Redeemable noncontrolling interests are reported using the greater of the carrying value at each reporting date as determined by the HLBV method or the estimated redemption value at the end of each reporting period.

Estimating the redemption value of the redeemable noncontrolling interests requires the use of significant assumptions and estimates, such as projected future cash flows.

Subsequent to the purchase of 100 % of the membership interests in Level Solar Fund IV in 2023, the Company had no redeemable noncontrolling interest as of December 31, 2023.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents.

Cash and cash equivalents include cash held in banks, money market accounts and U.S.

Treasury securities.

Cash and cash equivalents include cash held in banks, and money market accounts.

Cash equivalents are carried at cost, which approximates fair value due to their short-term nature.

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The Company believes it is not exposed to any significant credit risk on cash and cash equivalents as most of the balances are invested in treasury bills, which are government backed securities.

As of and for the year ended December 31, 2024 and 2023, the Company had no customers that represented at least 10% of the Company’s revenues or its accounts receivable balances.

As of and for the year ended December 31, 2025, the Company had one customer receivable balance related to solar renewable energy credits that represented 41 % of the Company’s accounts receivable balances and 11 % of total revenue.

As of and for the year ended December 31, 2024, the Company had no customers that represented at least 10% of the Company’s revenues or its accounts receivable balances.

Restricted cash

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Accounts receivable is recorded net of allowance for expected credit losses in accordance with the current expected credit losses standard, which is determined by the Company’s assessment of the collectability of customer accounts based on the best available data at the time of the assessment.

As of December 31, 2023 , the accounts receivable, net balance was $ 9.2 million .

Management reviews the allowance by considering factors such as historical experience, contractual term, aging category and current economic conditions that may affect customers.

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Balance at the beginning of the period $ 757 $ 1,693

Impact of ASC 326 adoption — ( 1,285 )

Write-off of uncollectible accounts ( 1,268 ) ( 2,322 )

Provision recognized upon valuation of assets acquired

Provision for current expected credit losses 1,301 1,386

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Prepaid expenses and other current assets

Prepaid expenses and other current assets include prepaid insurance, prepaid rent, and supplies, which are expected to be recognized or realized within the next 12 months.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Prepaid expenses and other current assets include prepaid insurance and supplies, which are expected to be recognized or realized within the next 12 months.

Investment related to SEMTH master lease agreement and interest income

The Company accounts for its investment related to the SEMTH, as defined below, master lease agreement in accordance with Accounting Standards Codification (“ASC”) 325-40, Investments—Other—Beneficial Interests in Securitized Financial Assets .

The Company accounts for its 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 .

The SEMTH master lease agreement includes 20 year use rights to customer payment streams of approximately 22,500 home SLAs and PPAs.

The Company recognizes accretable yield as interest income over the life of the related beneficial interest using the effective yield method, which is reflected within interest income in the consolidated statements of operations in the amount of $ 18.1 million and $ 16.8 million for the years ended December 31, 2025 and 2024, respectively.

On a recurring basis, the Company evaluates changes in the cash flows expected to be collected from the cash flows previously projected, and when favorable or adverse changes are deemed other than temporary, the Company prospectively updates its expectation of cash flows to be collected and recalculates the amount of accretable yield for the related beneficial interest.

Favorable or adverse changes deemed other than temporary are accounted for as a change in estimate in conformity with ASC 250, Accounting Changes and Error Corrections , with the amount of periodic accretion adjusted over the remaining life of the master lease agreement.

During the year ended December 31, 2024, the Company revised its estimated cash flows expected to be collected related to the SEMTH master lease agreement, and as a result, recognized additional accretable yield of $ 1.8 million within interest income in the consolidated statements of operations.

The Company estimates approximately $ 3.0 million of additional interest income per year over the life of the related beneficial interest.

On a recurring basis, the Company evaluates changes in the cash flows expected to be collected from the cash flows previously projected, and when favorable or adverse changes are deemed other than temporary, the Company prospectively updates its expectation of cash flows to be collected, which may impact the allowance for credit losses if the cash flow change is unfavorable , and recalculates the amount of accretable yield for the related beneficial interest.

Assumptions used in the development of the expected cash flows include expected cash inflows related to the market utility rates in the states where these solar assets are located and expected cash outflows associated with operating and maintenance of these solar assets.

Property and equipment, net

Property and equipment, net consists of solar energy systems and other property and equipment.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Solar energy systems , net

Solar energy systems, net consists of home solar energy systems which are subject to long-term Customer Agreements and asset retirement costs (“ARC”).

Solar energy systems are recorded at their fair value upon acquisition, while ARCs are capitalized as part of the carrying amount of the solar energy systems and depreciated over the remaining useful life.

Solar energy systems are recorded at their relative fair value upon acquisition, while ARCs are capitalized as part of the carrying amount of the solar energy systems and depreciated over the remaining useful life.

Subsequently, any impairment charges that may arise are recognized and the impairment loss reduces the carrying amount of the asset to its recoverable amount.

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Intangible assets, net

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

The Company’s intangible assets include solar renewable energy credit agreements, performance based incentive agreements, and a trade name.

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There were no long-lived asset impairment charges during the years ended December 31, 2025 and 2024.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

The Company determines if an arrangement is a lease, or contains a lease, at the inception of the arrangement and evaluates whether the lease is an operating lease or a finance lease at the commencement date.

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The ROU assets for all leases are recognized based on the present value of fixed lease payments over the lease term at the lease commencement date.

The lease liabilities of all leases are calculated as the present value of fixed payments not yet paid at the measurement date, however subsequent to the measurement date, the finance lease liabilities are presented at amortized cost using the effective interest method.

The lease liabilities of all leases are calculated as the present value of fixed payments not yet paid at the measurement date, however subsequent to the measurement date, the lease liabilities are presented at amortized cost using the effective interest method.

The Company generally uses its incremental borrowing rate as the discount rate for leases unless an interest rate is implicitly stated in the leases.

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Lease expense for operating leases consists of the lease payments plus any initial direct costs and is recognized on a straight-line basis over the lease term.

Lease expense for finance leases consists of the amortization of the asset on a straight-line basis over the shorter of the lease term or its useful life and interest expense determined on an amortized cost basis, with the lease payments allocated between a reduction of the lease liability and interest expense.

Variable lease payments that are not based on an index or a rate, such as common area maintenance fees, taxes and insurance, are expensed as incurred.

Asset retirement obligations

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Asset retirement obligations (“ARO”) can arise from contractual or regulatory requirements to perform certain asset retirement activities at the time the solar energy systems are to be disposed.

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If there are changes in estimated future costs, those changes will be recorded as either a reduction or addition in the carrying amount of the remaining unamortized ARC and the ARO will either increase or decrease in depreciation and accretion expense amounts prospectively.

Inherent in the calculation of the fair value of AROs are numerous assumptions and judgments, including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, and timing of settlement.

Inherent in the calculation of the fair value of AROs are numerous assumptions and judgments, including the ultimate probability-weighted settlement amounts, inflation factors, credit adjusted discount rates, and timing of settlement.

The following is a roll forward of the Company’s ARO:

Years Ended December 31,

(Amounts in thousands) 2025 2024

2 unchanged sentences

Balance at the end of the period $ 3,864 $ 3,536

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Asset acquisitions

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Goodwill is not recognized in an asset acquisition.

Business combinations

The Company accounts for the acquisition of a business using the acquisition method of accounting.

Amounts paid to acquire a business are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition.

The Company engages third-party appraisal firms to assist in the fair value determination, which management uses to determine the fair value.

The Company determines the fair value of purchase price consideration, including contingent consideration, and acquired intangible assets based on valuations received from the appraisal firm that used information and assumptions provided by Management.

The Company allocates any excess purchase price over the fair value of the net tangible and intangible assets acquired to goodwill.

The results of operations of acquired businesses are included in the Company's financial statements from the date of acquisition forward.

Acquisition-related costs are expensed in periods in which the costs are incurred.

Impairment of goodwill

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The Company has historically recorded goodwill in connection with its business combinations.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

The Company performs its annual goodwill impairment assessment on October 1 of each fiscal year, or more frequently if events or circumstances arise which indicate that goodwill may be impaired.

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During the year ended December 31, 2024, the Company recorded a charge of $ 28.8 million to fully impair its goodwill within the consolidated statements of operations.

There was no goodwill impairment charge during the year ended December 31, 2023.

Goodwill for further information on the Company’s determination relating to impairment of goodwill.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Customers who purchased the Company's Drivetrain systems were provided limited-assurance-type warranties for equipment and work performed under the contracts.

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Warranty expense is recorded as a component of discontinued operations in the consolidated statements of operations.

With the Company’s exit from the Drivetrain business and the subsequent sale of World Energy, the Company will not enter into any additional warranty obligations and expects the existing warranty obligation to expire in 2025.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

With the Company’s exit from the Drivetrain business and the subsequent sale of World Energy, the Company will not enter into any additional warranty obligations and the existing warranty obligation expired in 2025.

The following is a roll forward of the Company’s accrued warranty liability:

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Balance at the beginning of the period $ 216 $ 602

Transfer of inventory to servicers — ( 498 )

Accrual related to World Energy — ( 25 )

Warranty fulfillment charges ( 216 ) ( 386 )

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The Company’s warranty liability is included in accrued expenses and other current liabilities on the consolidated balance sheets.

Warrant liabilities

As of December 31, 2024, the Company had outstanding private warrants, which are related to the December 2020 merger and organization of legacy XL Hybrids Inc.

to become XL Fleet.

With the merger, the Company assumed private placement warrants to purchase 529,167 shares of common stock, with an exercise price of $ 92.00 per share (the “Private Warrants”).

The Private Warrants do not meet the criteria for equity classification and must be recorded as liabilities.

As the Private Warrants met the definition of a derivative, they were measured at fair value at inception and at each reporting date with changes in fair value recognized in the consolidated statements of operations.

The Private Warrants were valued using a Black-Scholes model, with significant inputs consisting of risk-free interest rate, remaining term, expected volatility, exercise price, and the Company’s stock price (See Note 11.

Fair Value Measurements).

Unfavorable solar renewable energy agreements

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In certain cases, the Company may be covered by one or more corporate insurance policies, resulting in insurance loss recoveries.

When such recoveries are in excess of a loss recognized in the Company’s financial statements, the Company recognizes a gain contingency at the earlier of when the gain has been realized or when it is realizable, however when the Company expects recovery of proceeds up to the amount of the loss recognized, a receivable, which offsets the related loss contingency, is recognized when realization of the claim for recovery is determined to be probable.

The Company records proceeds up to the amount of the loss recognized as receivable when realization of the claim for recovery is determined to be probable.

Spruce Power Holding Corporation

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The following table presents the detail of the Company’s revenues as reflected within the consolidated statements of operations for the years ended December 31, 2025 and 2024:

Years Ended December 31,

(Amounts in thousands) 2025 2024

2 unchanged sentences

Solar renewable energy credit revenues 21,358 7,205

Government incentives 425 254

Performance-based incentives 2,145 425

Servicing revenues 3,803 778

Intangibles amortization, unfavorable solar renewable energy agreements 3,097 3,593

Intangibles amortization, unfavorable solar renewable energy revenue agreements 2,993 3,097

Other revenue 3,629 3,233

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The differences between revenue recognition and cash payments received are reflected as deferred rent assets on the consolidated balance sheets.

As of December 31, 2023, the deferred rent assets balance was $ 2.5 million.

Certain SLAs contain provisions to provide customers a performance guarantee that each solar energy system will achieve certain specified minimum solar energy production output.

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As the Company did not incur costs to obtain these governmental incentives, the inventory carrying value for the SRECs was $ 0 as of December 31, 2025 and 2024.

Government incentives

Performance-based incentives

The Company participates in residential solar investment programs, which offer a performance-based incentive (“PBI”) for certain of its solar energy systems that are associated with the programs (“eligible systems”).

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The Company earns operating and maintenance revenue from third-party solar fund customers at pre-determined rates for various operating and maintenance and asset management services as specified in Maintenance Service Agreements (“MSAs”).

The MSAs contain multiple performance obligations, including routine maintenance, nonroutine maintenance, renewable energy certificate management, inventory management, delinquent account collections and customer account management.

Other revenue

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Deferred revenue, in the aggregate, as of December 31, 2025 and 2024 was $ 5.0 million and $ 4.0 million, respectively.

As of December 31, 2023 , the Deferred Revenue balance was $ 2.7 million.

During the years ended December 31, 2025 and 2024, the Company recognized revenues of $ 0.3 million and $ 0.2 million related to deferred revenue as of December 31, 2024 and 2023, respectively.

Cost of revenues - solar energy systems depreciation

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Cost of revenues - solar energy systems depreciation

Cost of revenues - solar energy systems depreciation consists of the depreciation expense relating to the solar energy systems.

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As a result, the Company's effective income tax rate was 0 % for the years ended December 31, 2025 and 2024.

On July 4, 2025, the One Big Beautiful Bill was enacted (“OBBBA”), introducing significant and wide-ranging changes to the U.S.

federal tax system.

Significant components include permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, the restoration of favorable tax treatment for certain business provisions, and accelerated phase outs to the Inflation Reduction Act energy tax credits.

We continue to assess any potential impact to our Consolidated Financial Statements but for fiscal year 2025, OBBBA did not have a material impact.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Net income (loss) per share

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Segment reporting

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Segment reporting is based on the management approach, following the method that management organizes the Company’s reportable segments for which separate financial information is made available to, and evaluated regularly by, the Company’s chief operating decision maker (“CODM”) in allocating resources and in assessing performance.

The Company is organized and managed as a single operating and reportable segment, on a consolidated basis, which engages in the sole business of providing solar energy and related services to its customers, and as of December 31, 2025 and 2024, the Company had one operating and reportable segment.

The CEO is provided on a quarterly basis with the Company’s consolidated segment expenses for the year ended 2024, which the CEO utilizes to assess the Company’s performance and for making decisions about resource allocation.

For the year ended December 31, 2025, the information being provided to the CEO is at a lower level of aggregation as a result the Company has recast the prior period.

Segment Information for further information.

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Court of Appeals for the Eighth Circuit not schedule the case for oral argument in order to allow time for the SEC to determine next steps in light of certain changes.

The Company is evaluating the impact of the final rules on its consolidated financial statements and related disclosures.

In March 2025, the SEC voted to end its defense of the rules requiring disclosure of climate-related risks and greenhouse gas emissions.

As such, the Company is no longer evaluating the impact of the final rules on its consolidated financial statements and disclosures.

Recent Accounting Pronouncements Adopted

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Recent Accounting Pronouncements Adopted

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

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Segment Information.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, (“ASU 2023-09”).

The ASU enhances the transparency and decision usefulness of income tax disclosures by requiring additional disaggregation of information related to the effective tax rate reconciliation, income taxes paid, and income tax expense and pretax income by jurisdiction.

The Company adopted ASU 2023 09 on a prospective basis effective January 1, 2025.

Accordingly, the enhanced income tax disclosures are presented beginning in fiscal year 2025, and prior period disclosures have not been recast.

The adoption of this guidance did not have an impact on the Company’s consolidated results of operations, financial position, or cash flows, as the amendments relate solely to disclosure requirements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets , (“ASU 2025-05”), to address challenges encountered by entities when estimating expected credit losses on current accounts receivable or current contract assets resulting from transactions accounted for under ASC 606.

ASU 2025-05 introduces a practical expedient for entities which, if elected, assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.

ASU 2025-05 is effective for annual reporting periods, including interim reporting periods within those annual reporting periods, beginning after December 15, 2025, with early adoption permitted.

The Company evaluated the practical expedient and determined that it will not adopt the practical expedient in its annual consolidated financial statements for the year ending December 31, 2025.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”), which requires enhanced detailed disclosures about the types of expenses in commonly presented expense line items of entities.

Subsequent to issuance of ASU 2024-03, the FASB issued ASU 2025-01 of the same topic to clarify the effective date of ASU 2024-03, stating that all public entities are required to adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.

The Company will adopt this ASU as of December 31, 2027 and will prospectively apply its requirements to expense disclosures presented in the notes to the consolidated financial statements in the period of adoption.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, (“ASU 2023-09”), which requires enhancements regarding the transparency and decision usefulness of income tax disclosures.

ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024.

The Company will adopt this ASU as of December 31, 2025 and will prospectively apply its requirements to income tax disclosures presented in the notes to the consolidated financial statements in the period of adoption.

Business Combination

Legacy Spruce Power

On September 9, 2022 (the “Acquisition Date”), the Company acquired Legacy Spruce Power for $ 32.6 million, which consisted of cash payments of $ 61.8 million less cash and restricted cash acquired of $ 29.2 million.

Management evaluated which entity should be considered the accounting acquirer in the transaction by giving consideration to the form of consideration transferred, the composition of the equity holders, the composition of voting rights of the Board of Directors, continuity of management structure, and size of the respective organizations.

Based on the evaluation of the applicable factors, Management noted that all factors, with the exception of the relative size of organization, were indicators that the Company was the acquiring entity resulting in Management’s conclusion that for accounting purposes, the Company acquired Legacy Spruce Power.

The acquisition was accounted for as a business combination.

The Company allocated the Legacy Spruce Power purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the Acquisition Date.

The excess of the purchase price over those fair values was recorded as goodwill.

The Company’s evaluations of the facts and circumstances available as of the Acquisition Date, to assign fair values to assets acquired and liabilities assumed, remained ongoing subsequent to the Acquisition Date.

As the Company completed further analysis of assets including solar systems, intangible assets, as well as noncontrolling interests and debt, additional information on the assets acquired and liabilities assumed became available.

Changes in information related to the value of net assets acquired changed the amount of the purchase price initially assigned to goodwill, and as a result, the fair values set forth below were subject to adjustments as additional information was obtained and valuations completed.

These provisional adjustments were recognized during the reporting period in which the adjustments were determined.

The Company finalized its purchase price allocation as of September 8, 2023.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Accounting for business combinations requires management to make significant estimates and assumptions, especially at the Acquisition Date, including the Company’s estimates of the fair value of solar systems, production based incentives, solar renewable energy agreements, non-controlling interest, trade name and debt, where applicable.

The Company believes the assumptions and estimates are based on information obtained from the management of the acquired companies and are inherently uncertain.

Critical estimates in valuing solar systems under the income approach include future expected cash flows and discount rate.

Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.

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

(Amounts in thousands) Initial Purchase Price Allocation Measurement Period Adjustments Updated Purchase Price Allocation

Total purchase consideration:

Cash, net of cash acquired, and restricted cash $ 32,585 $ — $ 32,585

Allocation of consideration to assets acquired and liabilities assumed:

Accounts receivable, net 10,995 — 10,995

Prepaid expenses and other current assets 6,768 ( 2,405 ) 4,363

Solar energy systems 406,298 89,268 495,566

Other property and equipment 337 — 337

Intangible assets — 11,980 11,980

Interest rate swap assets 26,698 — 26,698

Right-of-use asset 3,279 ( 328 ) 2,951

Other assets 358 ( 102 ) 256

Goodwill 158,636 ( 129,879 ) 28,757

Accounts payable ( 2,620 ) ( 22 ) ( 2,642 )

Unfavorable solar renewable energy agreements — ( 10,500 ) ( 10,500 )

Accrued expenses ( 13,061 ) ( 241 ) ( 13,302 )

Lease liability ( 3,382 ) 42 ( 3,340 )

Long-term debt ( 510,002 ) 2,772 ( 507,230 )

Other liabilities ( 335 ) 292 ( 43 )

Redeemable noncontrolling interests and noncontrolling interests ( 51,384 ) 39,123 ( 12,261 )

Total assets acquired and liabilities assumed $ 32,585 $ — $ 32,585

As reflected in the preceding table, as a result of third party valuation reports received in the first quarter of 2023, the Company adjusted solar energy systems and intangible assets with corresponding changes to goodwill.

In the first quarter of 2023, due to a change in the provisional amounts assigned to intangible assets and solar energy systems, the Company recognized $ 0.4 million of revenue, $ 1.9 million of depreciation expense and $ 0.4 million of trade name amortization, of which $ 0.5 million of revenue, $ 0.9 million of depreciation expense and $ 0.3 million of trade name amortization related to the previous year.

During the first quarter of 2023, the Company adjusted the fair value of its noncontrolling interest and its redeemable noncontrolling interest in the Company's financials, which resulted in related downward revision of $ 5.5 million and upward revision of $ 0.2 million, respectively.

Additional paid in capital was also downward revised by $ 1.8 million, which included the fair value adjustment associated with the purchase of 100 % of the membership interests in Ampere Solar Owner IV, LLC, ORE F5A HoldCo, LLC, ORE F6 HoldCo, LLC, RPV Fund 11 LLC and RPV Fund 13 LLC, Sunserve Residential Solar I, LLC's and Level Solar Fund III, LLC in 2022.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

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

(Amounts in thousands) Asset Liability Estimated Life (in years)

Solar renewable energy agreements $ 340 $ 10,500 3 to 6

Performance based incentives agreements 3,240 — 13

Trade name 8,400 — 30

Total intangibles acquired $ 11,980 $ 10,500

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

Goodwill represents the excess of the purchase consideration over the estimated fair value of the net assets acquired.

Goodwill is primarily attributable to the Company's ability to leverage and use its existing capital and access to capital markets along with Legacy Spruce Power's established operations and M&A capabilities to grow the Spruce Power business.

Goodwill for further information on the Company’s determination relating to the Company’s impairment of goodwill.

SEMTH Master Lease Agreement

In furtherance of its growth strategy, on March 23, 2023, the Company completed the acquisition of all the issued and outstanding interests in SEMTH from certain funds, pursuant to a membership interest purchase and sale agreement dated March 23, 2023 (the “SEMTH Acquisition”).

The SEMTH related asset includes 20 -year use rights to customer payment streams of approximately 22,500 home SLAs and PPAs (the “SEMTH Master Lease”).

The Company acquired SEMTH for approximately $ 23.0 million of cash, net of cash received, and assumed $ 125.0 million of outstanding senior indebtedness (See Note 8.

Non-Recourse Debt) and interest rate swaps with Deutsche Bank AG, New York Bank (See Note 9.

Interest Rate Swaps) held by SEMTH and its subsidiaries at the close of the acquisition.

The Company concluded that SEMTH does not meet the definition of a business or VIE.

The purchase of SEMTH's future revenue has been accounted for as an acquisition of financial assets.

Under the acquisition method, the purchase price was allocated to the assets acquired and liabilities assumed based on their relative fair value.

All fair value measurements of assets acquired and liabilities assumed were based on significant estimates and assumptions, including Level 3 (unobservable) inputs, which require judgment.

Estimates and assumptions include the projected timing and amount of future cash flows, discount rates reflecting risk inherent in future cash flows and future utility prices.

For the purposes of establishing the fair value of the Company's investment in the SEMTH Master Lease, its analysis considered cash flows beginning in March 2023 (the effective date of the transaction).

The Company estimated the fair value of its investment in the SEMTH Master Lease to be approximately $ 146.9 million on the transaction date.

Tredegar Acquisition

On August 18, 2023, the Company acquired approximately 2,400 home solar assets and contracts from a publicly traded, regulated utility company for $ 20.9 million (the “Tredegar Acquisition”).

The home solar assets acquired have an average remaining contract life of approximately 11 years.

The Tredegar Acquisition was funded by term loans from the concurrent amendment of the Company’s existing debt facility as of the acquisition date (See Note 8.

Non-Recourse Debt ) .

Subsequent to the issuance of ASU 2024-03, the FASB issued ASU 2025-01 of the same topic to clarify the effective date of ASU 2024-03, stating that all public entities are required to adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.

The Company plans to adopt this ASU in its annual financial statements for the year ending December 31, 2027 and in its interim financial statements in the subsequent year ending December 31, 2028, and is currently assessing the impact of this ASU on its consolidated financial statements.

In September 2025, the FASB issued ASU No.

2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract.

The ASU amends derivative scope exceptions for specific non-exchange traded contracts and clarifies the application of ASC 606 to share-based noncash consideration from customers.

The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026.

An entity is permitted to apply the amendments either (1) prospectively to new contracts entered into on or after the date of adoption or (2) on a modified retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption for contracts existing as of the beginning of the annual reporting period of adoption.

Early adoption is permitted.

The Company is currently evaluating the provisions of this ASU and does not expect this ASU to have a material impact on our consolidated financial statements.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

The Tredegar Acquisition has been accounted for as an acquisition of assets, wherein the total consideration paid was allocated to the assets acquired and liabilities assumed based on their relative fair value.

The Company’s determination of the fair value of assets acquired and liabilities assumed was based on an independent third-party valuation, which involved significant estimates and assumptions, including Level 3 (unobservable) inputs, using the income method approach to value long-lived assets.

The Company engages third-party appraisal firms to assist in the fair value determination, however management is responsible for, and ultimately determines the fair value.

The Company estimated the fair value of the Tredegar Acquisition to be approximately $ 21.2 million, inclusive of transaction costs of $ 0.3 million, of which $ 19.6 million was allocated to the solar energy systems.

In December 2025, the FASB issued ASU No.

2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements .

The ASU clarifies interim disclosure requirements and the applicability of Topic 270.

The objective of the amendments is to provide further clarity about the current interim disclosure requirements.

The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

Adoption of this ASU can be applied either a prospective or a retrospective approach.

Early adoption is permitted.

The Company is currently evaluating the provisions of this ASU and does not expect this ASU to have a material impact on our consolidated financial statements.

In December 2025, the FASB issued ASU No.

2025-12, Codification Improvements .

The ASU addresses thirty-three items, representing the changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements.

Generally, the amendments in this Update are not intended to result in significant changes for most entities.

The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026.

The adoption method of this ASU may vary, on an issue-by-issue basis.

Early adoption is permitted.

The Company is currently evaluating the provisions of this ASU and does not expect this ASU to have a material impact on our consolidated financial statements.

NJR Acquisition

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Non-Recourse Debt ) and $ 22.7 million of the Company’s cash balances.

Under the APA, the Company may be obligated to acquire approximately 200 additional solar energy systems, subject to those systems having achieved operational milestones.

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, subject to adjustment thereof.

Subsequently in 2025, the Company has acquired 83 of these additional solar energy systems, in the aggregate, for approximately $ 1.5 million in cash.

The Company is unable to anticipate the ultimate outcome of these additional solar energy systems that it may be obligated to acquire.

The NJR Acquisition has been accounted for as an acquisition of assets, wherein the total consideration paid was allocated to the assets acquired and liabilities assumed based on their relative fair value.

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The Company estimated the fair value of the NJR Acquisition to be approximately $ 132.5 million, inclusive of transaction costs of $ 0.3 million, all of which was allocated to the solar energy systems.

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.

Spruce Power Holding Corporation

7 unchanged sentences

Solar energy systems, net $ 560,869 $ 588,428

Equipment $ — $ 157

Furniture and fixtures 529 551

18 unchanged sentences

Intangible assets, net $ 7,830 $ 8,957

Amortization of intangible assets for the year ended December 31, 2024 was $ 1.2 million, of which $ 0.5 million and $ 0.7 million were recorded within revenues and selling, general and administrative expenses, respectively.

Amortization of intangible assets for the year ended December 31, 2025 was $ 0.7 million recorded in selling, general and administrative expenses.

Amortization of unfavorable solar renewable energy revenue agreements for the years ended December 31, 2025 and 2024 was $ 3.0 million and $ 3.1 million, respectively, which is included within revenue on the statement of operations.

Spruce Power Holding Corporation

8 unchanged sentences

Accrued interest $ 7,682 $ 8,454

Professional fees 2,998 2,386

Accrued professional fees 2,314 2,998

Accrued contingencies (See Note 14 Commitments and Contingencies)

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April 2030 160,955 162,691

Deutsche Bank Credit Agreement, SP4 Facility August 2025 — 125,000

Barings GPSF Credit Agreement, SET Facility

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Amounts outstanding under the SP1 LC bear interest of 2.50 % per annum and unused amounts bear interest at 0.50 % per annum.

The term loans under the SP 1 Facility require quarterly principal payments, paid a month in arrears, with the remaining balance due in a single payment in April 2026 and bear interest at the Secured Overnight Financing Rate (the “SOFR”) plus the applicable margin.

The term loans under the SP1 Facility require quarterly interest and principal payments, paid a month in arrears, with the remaining principal balance due in a single payment in April 2026 and bear interest at the Secured Overnight Financing Rate (the “SOFR”) plus the applicable margin.

The applicable margin is 2.25 % per annum for the first three years, 2.375 % per annum from the third anniversary through the sixth anniversary and 2.5 % per annum starting on the sixth anniversary.

The effective interest rate on the SP1 Facility was 7.01 % and 7.16 % as of December 31, 2025 and 2024, respectively.

The SP1 Facility requires the Company to enter into and maintain Interest Rate Hedging Agreements on a pro rata basis to the extent necessary to provide interest rate protection of at least 75 % but in no event greater than 100 % of the aggregate principal amount outstanding.

The obligations of the Company under the SP1 Facility are secured by substantially all of the assets and equity interest in certain of the Company’s subsidiaries.

The SP1 Facility requires the Company to be in compliance with various covenants, including debt service coverage ratios and as of December 31, 2025, the Company was in compliance with the required covenants under the SP1 Facility.

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.

Under the terms of the SP1 Facility Amendment, the applicable margin is 2.75 % per annum from the effective date of the SP1 Facility Amendment to to October 30, 2026, and 3.25 % per annum thereafter.

The SP1 Facility Amendment includes a cross-default provision with the Second Key Bank Credit Agreement.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Second SVB Credit Agreement

1 unchanged sentence

Amounts outstanding under the SP2 LC bear interest of 2.30 % per annum and unused amounts bear interest at 0.50 % per annum.

The term loans under the SP 2 Facility require quarterly principal payments, mature in April 2027 and bear interest at the SOFR plus the applicable margin.

The term loans under the SP2 Facility require quarterly principal and interest payments, mature in April 2027 and bear interest at the SOFR plus the applicable margin.

The applicable margin is 2.30 % per annum for the first three years, 2.425 % per annum from the third anniversary through the sixth anniversary and 2.55 % per annum starting on the sixth anniversary.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

On August 18, 2023, the Company entered into a second amendment to the SP2 Facility with SVB, which provided the Company (i) incremental term loans with a principal amount of approximately $ 21.4 million, of which proceeds were primarily used to fund the Tredegar Acquisition (See Note 3.

Acquisition) and (ii) incremental letters of credit in the aggregate amount of approximately $ 2.7 million (collectively, the “SP2 Facility Amendment”).

Acquisitions) and (ii) incremental letters of credit in the aggregate amount of approximately $ 2.7 million (collectively, the “SP2 Facility Amendment”).

Excluding the aforementioned amounts, all other terms of the original SP2 Facility remain unchanged.

2 unchanged sentences

Related unamortized deferred financing costs were $ 0.5 million as of December 31, 2025.

Amounts outstanding under the SP 2 LC, as amended, were $ 6.0 million and $ 7.0 million as of December 31, 2024 and 2023, respectively.

The SP2 Facility requires the Company to enter into and maintain Interest Rate Hedging Agreements on a pro rata basis to the extent necessary to provide interest rate protection of at least 75 % but in no event greater than 100 % of the aggregate principal amount outstanding.

Amounts outstanding under the SP2 LC, as amended, was $ 6.0 million as of December 31, 2025 and 2024.

The effective interest rate on the SP2 Facility was 6.97 % and 7.25 % as of December 31, 2025 and 2024, respectively.

2 unchanged sentences

Key Bank Credit Agreement

The Key Bank Credit Agreement (the “SP 3 Facility”), executed with KeyBank National Association, includes a debt service reserve letter of credit (the “SP 3 LC”) with related amounts outstanding of $ 4.1 million and $ 4.1 million as of December 31, 2024 and 2023, respectively.

The Key Bank Credit Agreement (the “SP3 Facility”), executed with KeyBank National Association, includes a debt service reserve letter of credit (the “SP 3 LC”) with related amounts outstanding of $ 4.1 million as of December 31, 2025 and 2024.

Amounts outstanding under the SP3 LC bear interest of 3.00 % per annum.

The term loans under the SP 3 Facility require quarterly principal payments, mature in November 2027 and bear interest at the SOFR plus the applicable margin.

The term loans under the SP3 Facility require quarterly principal and interest payments, mature in November 2027 and bear interest at the SOFR plus the applicable margin.

The applicable margin is 3.00 % per annum for the first three years, 3.125 % per annum from the third anniversary through the fifth anniversary and 3.25 % per annum starting on the fifth anniversary.

The effective interest rate on the SP3 Facility was 7.58 % and 7.86 % as of December 31, 2025 and 2024, respectively.

The SP3 Facility requires the Company to enter into and maintain Interest Rate Hedging Agreements on a pro rata basis to the extent necessary to provide interest rate protection of at least 75 % but in no event greater than 100 % of the aggregate principal amount outstanding.

The obligations of the Company under the SP3 Facility are secured by substantially all of the assets and equity interest in certain of the Company’s subsidiaries.

1 unchanged sentence

Second Key Bank Credit Agreement

The Second Key Bank Credit Agreement, executed with Key Bank National Association as the administrative agent and certain third parties as the lenders, includes term loans which require quarterly interest payments, mature in April 2030 and bear interest at 8.25 % per annum.

The Second Key Bank Credit Agreement, executed with Key Bank National Association as the administrative agent and certain third parties as the lenders, includes term loans which require semi-annual principal and interest payments, mature in April 2030 and bear interest at 8.25 % per annum.

The effective interest rate on term loans under the Second Key Bank Agreement was 8.25 % as of December 31, 2025 and 2024, respectively.

The obligations of the Company under the Second Key Bank Agreement are secured by substantially all of the assets and equity interest in certain of the Company’s subsidiaries.

The Second Key Bank Credit Agreement requires the Company to be in compliance with various covenants, including debt service coverage ratios, and as of December 31, 2024, the Company was in compliance with those required covenants under the Second Key Bank Credit Agreement.

The obligations of the Company under the Second Key Bank Agreement are subordinate to the SP1, SP2, and SP3 Facilities and are secured by substantially all of the assets and equity interest in certain of the Company’s subsidiaries.

The Second Key Bank Credit Agreement requires the Company to be in compliance with various covenants, including debt service coverage ratios, and as of December 31, 2025, the Company was in compliance with those required covenants under the Second Key Bank Credit Agreemen t.

Spruce Power Holding Corporation

2 unchanged sentences

As part of the acquisition of SEMTH (See Note 3.

Acquisition) in March 2023, the Company assumed debt with Deutsche Bank AG, New York Bank (“Deutsche Bank”).

Acquisitions) in March 2023, the Company assumed debt with Deutsche Bank AG, New York Bank (“Deutsche Bank”).

Prior to the SEMTH Acquisition, SET Borrower 2022, LLC (“SET Borrower”), a wholly owned subsidiary of SEMTH, entered into a credit agreement effective June 10, 2022 (the “Closing Date”) with Deutsche Bank as the facility agent, which consisted of a term loan of $ 125.0 million (the “SP4 Facility”) and is collateralized by all of the assets and property of SET Borrower.

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The SET Borrower incurred approximately $ 2.1 million of deferred financing costs related to the SET Facility, which are being amortized on a straight-line basis over the anticipated debt servicing period.

The SET Facility matures on April 17, 2042 and requires quarterly interest payments at 6.89 % per annum beginning August 2024.

The effective interest rate on the SET Facility as of December 31, 2024 was 6.89 %.

The SET Facility matures on April 17, 2042 and requires quarterly principal and interest payments at 6.89 % per annum beginning August 2024.

The effective interest rate on the SET Facility as of December 31, 2025 and December 31, 2024 wa s 6.89 % and 6.89 %, respectively.

Effective December 26, 2027, the SET Facility requires additional interest to be accrued on any outstanding aggregate principal or unpaid accrued interest.

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On November 22, 2024, Spruce Power 5 Borrower 2024, LLC (the “SP5 Borrower”), a wholly owned subsidiary of the Company, entered into a non-recourse credit agreement with Banco Santander, S.A., New York, which provided for a 3-year term loan facility in the aggregate principal amount of approximately $ 109.8 million (the “SP5 Facility”), of which proceeds were used to fund the NJR Acquisition.

The SP5 Facility matures on November 22, 2027 and requires quarterly interest payments with the remaining balance due in a single payment on November 22, 2027.

The SP5 Facility matures on November 22, 2027 and requires quarterly principal and interest payments with the remaining balance due in a single payment on November 22, 2027.

Borrowings under the SP5 Facility bear interest at a variable rate equal to the SOFR as administered by the Federal Reserve Bank of New York plus a margin of 2.15 % from the original closing date through the end of the 24th month after the original closing date, and 2.75 % from the beginning of the 25th month after the original closing date until the date all principal and accrued and unpaid interest has been paid in full.

The effective interest rate on the SP5 Facility as of December 31, 2024 was 6.48 %.

The effective interest rate on the SP5 Facility as of December 31, 2025 and December 31, 2024 was 6.48 % and 6.48 %, respectively.

The SP5 Facility is collateralized by all of the assets and property of the SP5 Borrower.

The SP5 Facility requires the SP5 Borrower to be in compliance with various covenants, and the SP5 Borrower was in compliance with the required covenants under the SP5 Facility as of December 31, 2024.

The SP5 Facility requires a swap percentage of at least 80 % of the outstanding loan balance and to be in compliance with various covenants.

The Company obtained a waiver for the swap coverage at year-end and subsequently entered into an additional incremental swap contract.

As of the date these financials were issued, the SP5 Borrower is in compliance with all required covenants under the SP5 Facility.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

As of December 31, 2024, the principal maturities of the Company’s debt were as follows:

Certain of the Company’s credit agreements require the Company, on a quarterly basis, to consider loan to value ratios or estimated principal repayments based on the projected cash waterfall when determining current and future debt principal payments, which are subject to change.

As of December 31, 2025, the estimated principal maturities of the Company’s debt were as follows:

As of December 31,

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$ 367,365 $ 11,603

(1) The amount reflects the swap related to the SP2 Facility Amendment transacted concurrently with the Tredegar Acquisition to hedge the floating rate of the incremental term loan (See Note 8.

Non-Recourse Debt).

(2) The amount reflects the swap related to the SP5 Facility transacted concurrently with the NJR Acquisition to hedge the floating rate of the term loan (See Note 8.

Non-Recourse Debt).

During the year ended December 31, 2025, the aggregate impact of the Company’s interest rate swaps in the consolidated statements of operation was $ 4.8 million, of which $ 12.7 million related to unrealized losses and $ 7.9 million related to realized gains, which is recognized within interest expense, net in the consolidated statements of operation.

During the year ended December 31, 2024, the aggregate impact of the Company’s interest rate swaps in the consolidated statements of operation was $ 15.2 million, of which $ 2.8 million related to unrealized losses and $ 18.0 million related to realized gains, which is recognized within interest expense, net in the consolidated statements of operations.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

During the year ended December 31, 2023, the aggregate impact of the Company’s interest rate swaps in the consolidated statements of operation was $ 8.9 million, of which $ 4.8 million related to unrealized losses and $ 13.7 million related to realized gains, which is recognized within interest expense, net in the consolidated statements of operations.

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

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Sublease income 161 525

Operating cash flows from operating ROU assets 2,285 1,969

Initial recognition of operating ROU assets — 933

Remeasurement of operating ROU assets — 1,280

During the year ended December 31, 2023, the Company (i) recognized $ 0.9 million of operating ROU assets and lease liabilities due to a new lease for the relocation of its corporate office in September 2023, (ii) remeasured its operating ROU assets due to changes in the lease terms of certain underlying leases, resulting in an aggregate increase in the related ROU assets and lease liabilities of approximately $ 1.3 million, and (iii) settled certain operating leases, which were either terminated or assumed by a third party, in the amount of approximately $ 0.4 million (presented in the consolidated statements of cash flows) and a related net gain of less than $ 0.1 million included within gain on asset disposal in the consolidated statements of operations.

In addition, during the year ended December 31, 2023, the Company purchased the equipment related to its existing finance leases for approximately $ 0.1 million, thereby settling all outstanding finance lease liabilities as of December 31, 2023.

The Company also recognized a related loss of approximately $ 0.1 million included within gain on asset disposal in the consolidated statements of operations.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Operating cash outflows from operating ROU assets 1,992 2,285

As of December 31,

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(Amounts in thousands) 2025

Thereafter 593

Total future minimum lease payments, undiscounted 5,646

1 unchanged sentence

Present value of future minimum lease payments $ 5,126

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Fair Value Measurements

1 unchanged sentence

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Private Warrants were valued using a Black-Scholes model, pursuant to the inputs provided in the table below:

Private placement warrants to purchase 529,167 shares of common stock with an exercise price of $ 92.00 per share, which expired on December 21, 2025, were valued using a Black-Scholes model, pursuant to the inputs provided in the table below.

Assumptions for Assets and Liabilities Measured at Fair Value on a Recurring Basis

Input December 31, 2024 December 31, 2023

Input December 31, 2024

Risk-free rate 4.16 %

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The interest rate swap valuation is classified as Level 2 of the fair value hierarchy.

The fair value of the Company’s non-recourse debt as of December 31, 2024 and 2023 was $ 723.8 million and $ 628.2 million, respectively.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

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

7 unchanged sentences

Total $ — $ 2,178 $ — $ 2,178

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Fair Value Measurements as of

3 unchanged sentences

Money market accounts 72,142 — — 72,142

Treasury securities 108,964 — — 108,964

Total $ 72,142 $ 24,672 $ — $ 96,814

Private Warrants — — 17 17

Interest rate swaps — 385 — 385

Total $ — $ 385 $ — $ 385

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

Years Ended December 31,

Balance at the beginning of the period $ 17 $ 407

Fair value adjustments – Private Warrants

( 17 ) ( 239 )

Fair value adjustments and settlements of liability, net – World Energy (1)

Balance at the end of the period $ — $ 17

(1) Related to discontinued operations.

The fair value of the Company’s non-recourse debt as of December 31, 2025 and 2024 was $ 692.5 million and $ 723.8 million, respectively.

As of December 31, 2023 , the Goodwill balance was $ 28.8 million .

During the year ended December 31, 2024, the Company identified indicators that the carrying amount of goodwill may be impaired due to a continuous decline in the Company’s stock price and market capitalization.

1 unchanged sentence

As such, the Company recorded a charge of $ 28.8 million to fully impair the Company’s goodwill within the consolidated statements of operations for the year ended December 31, 2024.

There was no goodwill impairment charge during the year ended December 31, 2023.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Stock-Based Compensation Expense

4 unchanged sentences

A summary of stock option award activity for the years ended December 31, 2025 and 2024 was as follows:

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Options Shares

3 unchanged sentences

193,156 $ 17.89 5.8

Granted 295,229 3.75

Exercised — —

2 unchanged sentences

488,385 $ 9.34 7.5

Granted 295,229 3.75

Exercised ( 1,562 ) 1.92

5 unchanged sentences

The aggregate intrinsic value of stock options outstanding as of December 31, 2025 and 2024 was $ 0.8 million and $ 0.1 million, respectively.

Cash received from options exercised for the years ended December 31, 2024 and 2023 was approximately $ 0.0 million and $ 0.9 million, respectively.

Cash received from options exercised for the years ended December 31, 2025 and 2024 was less than $ 0.1 million and $ 0.0 million, respectively.

During the year ended December 31, 2024, the Company granted 295,229 stock options to its President and Chief Executive Officer (the “CEO”) upon his appointment to such positions effective April 12, 2024.

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Each tranche's fair value would have been amortized ratably over the respective derived service period.

The fair value and derived service period of each tranche was as follows:

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

The fair value and derived service period of each tranche was as follows:

Stock Price Tranche Fair Value Derived Service Period (in years)

9 unchanged sentences

179.60 6.80 5.10

The Company recognized no expense related to the Ladder RSUs for the year ended December 31, 2024, and recognized approximately $ 0.5 million related to the Ladder RSUs for the year ended December 31, 2023.

The Company recognized no expense related to the Ladder RSUs for the years ended December 31, 2025 and December 31, 2024.

Upon separation of the Former CEO from the Company effective April 12, 2024, the Ladder RSUs were terminated and the Company recorded a gain of $ 0.7 million during the year ended December 31, 2024.

Redeemable Noncontrolling Interest and Noncontrolling Interests

In August 2023, the Company purchased the remaining membership interests in Level Solar Fund IV for approximately $ 0.1 million, thereby owning 100 % of the membership interests and eliminating its only remaining redeemable noncontrolling interest upon the purchase.

Noncontrolling Interests

The following table summarizes the Company’s noncontrolling interests as of December 31, 2025:

9 unchanged sentences

After the related flip date (or, if the tax equity investor has a deficit capital account, typically after such deficit has been eliminated), the Class A members' allocation of taxable income (loss) will typically decrease to 5 % (or, in some cases, a higher percentage if required by the tax equity investor) and the Class B members' allocation of taxable income (loss) will increase by an inverse amount.

Total assets on the consolidated balance sheets include $ 35.1 million, of which $ 33.2 million relate to Property and equipment, net as of December 31, 2025 of assets held by the company’s VIEs, which can only be used to settle obligations of the VIEs.

Total liabilities on the consolidated balance sheets include $ 2.0 million as of December 31, 2025 of liabilities that are the obligations of the Company's VIEs.

Total assets on the consolidated balance sheets include $ 36.0 million as of December 31, 2024 of assets held by the Company's VIEs, which can only be used to settle obligations of the VIEs.

Total liabilities on the consolidated balance sheets include $ 0.8 million as of December 31, 2024 of liabilities that are the obligations of the Company's VIEs.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

The historical redeemable noncontrolling interests and noncontrolling interests are comprised of Class A units, which represent the tax equity investors' interest in the tax equity entities.

Both the Class A members and Class B members may have call options to allow either member to redeem the other member's interest in the tax equity entities upon the occurrence of certain contingent events, such as bankruptcy, dissolution/liquidation and forced divestitures of the tax equity entities.

Additionally, the Class B members may have the option to purchase all Class A units, which is typically exercisable at any time during the periods specified under their respective governing documents, and, in regards to the tax equity entities historically classified as redeemable noncontrolling interests, they had the contingent obligation to purchase all Class A units if the Class A members exercise their right to withdraw, which is typically exercisable at any time during the three-month period commencing upon the applicable flip date.

The Company had no redeemable noncontrolling interests as of December 31, 2024 and 2023.

Total assets on the consolidated balance sheets include $ 36.0 million as of December 31, 2024 and $ 38.0 million as of December 31, 2023 of assets held by the Company's VIEs, which can only be used to settle obligations of the VIEs.

Total liabilities on the consolidated balance sheets include $ 0.8 million as of December 31, 2024 and $ 0.8 million as of December 31, 2023 of liabilities that are the obligations of the Company's VIEs.

Restructuring

As a result of exiting the Drivetrain business and related corporate restructuring actions, the Company recognized severance charges of approximately $ 0.7 million during the year ended December 31, 2023, all of which were paid in 2023.

The severance charges are included in selling, general and administrative expenses within the Company’s consolidated statements of operations for the year ended December 31, 2023, and the following table summarizes the activity during the period for the Company's restructuring liability:

Year Ended December 31,

(Amounts in thousands) 2023

Balance at the beginning of the period $ 3,428

Employee termination charges 719

Payments made during the period ( 4,147 )

Balance at the end of the period $ —

The Company recognized no severance charges during the year ended December 31, 2024.

Notes to Unaudited Condensed Consolidated Financial Statements

Commitments and Contingencies

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On July 20, 2021, an amended complaint was filed alleging that certain public statements made by the defendants between October 2,

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

2020, and March 2, 2021, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

13 unchanged sentences

Accrued Expenses and Other Current Liabilities).

On March 26, 2025, the court approved the stipulation and settlement agreement.

On March 26, 2025, the court approved the stipulation and settlement agreement, and in April 2025, the Company paid the settlement amount of $ 4.75 million.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Shareholder Derivative Actions

14 unchanged sentences

Ledecky, et al., C.A.

1:23-cv- 8591 (collectively, the “Derivative Matters”).

On December 8, 2023, the parties reached a settlement-in-principle to settle, the Derivative Matters.

1:23-cv- 8591 (collectively, the “Derivative Matters”).On December 8, 2023, the parties reached a settlement-in-principle to settle, the Derivative Matters.

The court granted preliminary approval of the settlement on May 1, 2024, and final approval in full on August 8, 2024.

2 unchanged sentences

State Attorney Generals’ Investigations

The Company has been asked to provide information and documents in response to subpoenas and other requests for information from certain state attorneys general offices regarding, among other things, its sales, marketing, billing, and operations practices.

Specifically, the Company has received subpoenas from the attorneys general for the states of Connecticut, New Jersey, New York and Texas.

In 2023, the Company received subpoenas from the attorneys general for the states of Connecticut, New Jersey, New York and Texas requesting information on the Company’s billing and operations practices.

The Company has been timely responding to the states’ information requests and otherwise cooperating with these investigations and intends to continue to do so until they are resolved.

At this time, the Company is unable to estimate potential losses, if any, related to these matters.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Securities and Exchange Commission Civil Enforcement Action

On January 6, 2022, the Company received a subpoena from the Division of Enforcement of the SEC requesting, among other things, information and documents concerning the XL Fleet Corp.

business combination with Legacy XL, the Company’s sales pipeline and revenue projections, California Air Resources Board approvals, and other related matters.

In June 2023, the SEC proposed an Offer of Settlement for the purpose of resolving the proposed SEC action against the Company.

Following negotiations with the SEC staff, in September 2023, the Company reached a settlement with the SEC pursuant to which the Company did not admit or deny the SEC’s allegations regarding the above-referenced issues.

In connection with the settlement, in October 2023, the Company (among other things) paid a civil monetary penalty of $ 11.0 million which, subject to the discretion of the SEC, will be made available to eligible legacy shareholders through a Fair Fund, termed and administered by the SEC.

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

On May 23, 2023, the Company reached a settlement agreement with Firstar, as the plaintiff, for $ 2.3 million whereby the plaintiff discharged all claims filed against the Company.

In March 2026, the Company resolved the matter with the Connecticut Attorney General pursuant to a Stipulation that required the Company’s subsidiary Spruce Power 3, LLC to adhere to certain billing practices and pay a nominal fee.

At this time, the Company estimates the potential loss to be approximately $ 0.1 million for the Connecticut matter, and has been accrued for as of December 31, 2025 (See Note 6.

Accrued Expenses and Other Current Liabilities).

At this time the Company is unable to estimate potential losses, if any, related to these matters in the remaining states.

BMZ USA, Inc .

3 unchanged sentences

In June 2024, BMZ sought to enforce the judgement against the Company in Massachusetts Trial Court and that enforcement action was dismissed in March 2025.

The Company believes it is probable that BMZ will seek to enforce the judgement in another jurisdiction and currently estimates the potential loss to be approximately $ 1.2 million, which has been accrued for as of December 31, 2024 (See Note 7.

In April 2025, BMZ sought to enforce the judgement against the Company in Colorado Superior Court, which was removed to Federal Court.

That enforcement action was dismissed in March 2026.

The Company believes it is probable that BMZ will either appeal the dismissal or seek to enforce the judgement in another jurisdiction and currently estimates the potential loss to be approximately $ 1.2 million, which has been accrued for as of December 31, 2025 (See Note 6.

Accrued Expenses and Other Current Liabilities).

3 unchanged sentences

Such a payment by Spruce Power to the Class A Members are not to be considered a capital contribution to the fund per the operating agreements, nor would it be considered a distribution to the Class A Members.

With the exception of the tax matter related to Ampere Solar Owner I noted above, a Recapture Event was not deemed to be probable by the Company, therefore no accrual has been recorded as of December 31, 2024 and 2023.

A Recapture Event was not deemed to be probable by the Company, therefore no accrual has been recorded as of December 31, 2025 and 2024.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Plastic Omnium

6 unchanged sentences

On March 11, 2024, the Company filed a lawsuit against Parker-Hannifin for a declaratory judgment, captioned

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

XL Hybrids, Inc.

14 unchanged sentences

In the event the Company does not deliver such SRECs to the counterparty, the Company could be forced to pay additional penalties and fees as stipulated within the contracts.

In connection with the acquisition of RPV Holdco 1, LLC, a wholly owned subsidiary of the Company, guaranty agreements were established in May 2020 by and between Spruce Holding Company 1, LLC, Spruce Holding Company 2, LLC, and Spruce Holding Company 3, LLC (“Spruce Guarantors”) and the investor members in certain of the Funds.

The Spruce Guarantors entered into guarantees in favor of the tax equity investors wherein they guaranteed the payment and performance of Solar Service Experts, LLC, a wholly owned subsidiary of the Company, under the Spruce Power 2 Maintenance Services Agreement and the Class B Member under the Limited Liability Company Agreement (“LLCA”).

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

Indemnities and Guarantees

Debt Guarantees

The Spruce Guarantor, Spruce Power Holding Corporation, entered into guarantees in favor of the SP5 Borrower and the SET Borrower wherein they guaranteed the payment and performance of Solar Service Experts, LLC, a wholly owned subsidiary of the Company, as servicer under servicing agreements with these borrowers.

Indemnities and Other Guarantees

During the normal course of business, the Company has made certain indemnities and guarantees under which it may be required to make payments in relation to certain transactions.

1 unchanged sentence

Historically, the Company has not been obligated to make significant payments for such obligations, does not anticipate future payments, and as such, no reserve has been established and no other liabilities have been recorded for these indemnities and guarantees as of December 31, 2025 and 2024.

Insurance Claims and Recoveries related to Maui Fires

In August 2023, a series of wildfires broke out in Hawaii, predominantly on the island of Maui, resulting in real and personal property and natural resource damage, personal injuries and loss of life and widespread power outages.

The Company assessed the impact of these wildfires on its home solar systems and customer contracts in the area and wrote off $ 0.1 million during the year ended December 31, 2023, which is reflected within gain on asset disposal within the consolidated statements of operations.

Subsequently, the Company received $ 0.2 million related to the insurance recoveries during the year ended December 31, 2024, which is also reflected within gain on asset disposal within the consolidated statements of operations.

Insurance Claims and Recoveries related to Los Angeles Fires

In January 2025, a series of wildfires broke out in the Los Angeles area of California, resulting in real and personal property and natural resource damage, personal injuries and loss of life.

Based on the Company’s current assessment, the Company wrote off approximately $ 0.2 million of net book value associated with the damaged solar assets during the year ended December 31, 2025, which is reflected within gain on asset disposal, net in the unaudited condensed consolidated statements of operations.

No material loss claims have been reported or recognized within the consolidated financial statements as of December 31, 2025.

The Company received insurance proceeds of $ 0.3 million in October 2025 related to the Los Angeles wildfires.

Stockholders’ Equity

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024, the Company had 350,000,000 authorized shares of common stock.

1 unchanged sentence

Common stockholders are entitled to dividends when and if declared by the Board of Directors.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

The following shares of common stock are issued and outstanding or unvested as of December 31, 2025:

Warrants 529,167

Restricted stock units 3,674,502

1 unchanged sentence

Total 4,159,272

Reverse Stock Split

On October 6, 2023, the Company effected the Reverse Stock Split.

Prior to the effective time of the Reverse Stock Split, the Company had 151,441,768 and 145,595,792 shares of common stock issued and outstanding, respectively, and upon the Reverse Stock Split, the Company had approximately 18,930,196 and 18,199,449 shares of common stock issued and outstanding, respectively.

The par value and the number of authorized shares of the common stock were not adjusted in connection with the Reverse Stock Split.

The value of the Company’s common stock outstanding and the related effect on additional paid in capital, all references to stock options, restricted stock units, private warrants, per share data, and related information contained within these consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented.

Subsequent to the Reverse Stock Split, each stockholder’s percentage ownership interest in the Company and proportional voting power remained unchanged.

No fractional shares of the Company’s common stock were issued in connection with the Reverse Stock Split.

In late October 2023, certain stockholders entitled to fractional shares as a result of the Reverse Stock Split received aggregate cash payments of approximately $ 0.01 million in lieu of receiving fractional shares.

Share Repurchase Program

In May 2023, the Company's Board of Directors approved a share repurchase program for the repurchase of up to $ 50.0 million of the Company's 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 Repurchase Program authorizes the Company to effect repurchases through open market transactions, privately negotiated transactions, Rule 10b5-1 trading plans and/or Rule 10b-18 trading plans, and other means.

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As of December 31, 2025, $ 42.0 million remained available for future share repurchases under the Repurchase Program.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Net Loss Per Share

The following is a reconciliation of the numerator and denominator used to calculate basic and diluted earnings per share for the years ended December 31, 2025 and 2024:

Years Ended December 31,

(Amounts in thousands, except share data) 2025 2024

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As such, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share are the same for each year presented.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Net deferred income tax assets consist of the following components as of December 31, 2025 and 2024:

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Notes to Consolidated Financial Statements

A reconciliation of the provision for income taxes with the amounts computed by applying the statutory Federal income tax rate to income before provision for income taxes is as follows:

Years Ended December 31,

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, the reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December 31, 2025 was as follows:

December 31, 2025

(Amounts in thousands) Amount Percent

US federal statutory income tax rate $ ( 5,866 ) 21.0 %

State taxes, net of federal benefit — — %

Effects of changes in tax law or rates enacted in the current period — — %

Research and development tax credits 780 ( 2.8 ) %

Changes in valuation allowance ( 2,565 ) 9.2 %

Nondeductible/nontaxable items

Stock based compensation 16 ( 0.1 ) %

Fair market value adjustments 1,150 ( 4.1 ) %

Other 177 ( 0.6 ) %

Other adjustments

Return to accrual ( 355 ) 1.3 %

Net operating loss adjustments 5,638 ( 20.2 ) %

RSU forfeitures/cancellations 272 ( 1.0 ) %

Sec 163(j) adjustment 826 ( 3.0 ) %

Other ( 73 ) 0.3 %

Effective tax rate $ — — %

For the year ended December 31, 2025 , state taxes for California, New Jersey and New York made up the majority (greater than 50%) of the tax affect.

The reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December 31, 2024 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows:

December 31, 2024

federal statutory rate 21.0 %

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Effective tax rate — %

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes.

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Under the applicable accounting standards, Management has considered the Company’s history of losses and concluded that it is more likely than not that the Company will not recognize the benefits of federal and state deferred tax assets.

During the years ended December 31, 2024 and 2023, the Company increased its valuation allowance by $ 25.1 million and $ 5.5 million, respectively.

As of December 31, 2024, the Company had federal and state net operating loss (“NOL”) carryforwards of $ 523.3 million and $ 525.7 million, respectively, of which approximately $ 31.3 million of the federal NOL carryforward will expire at various dates commencing on 2029 and through 2037 and approximately $ 492.0 million were generated between the years ended December 31, 2018 and 2024 and have an indefinite life.

During the years ended December 31, 2025 and 2024, the Company decreased and increased its valuation allowance by $ 3.3 million and $ 25.1 million, respectively.

As of December 31, 2024, the Company had federal and state net operating loss (“NOL”) carryforwards of $ 523.3 million and $ 525.7 million, respectively.

As of December 31, 2025, the Company had federal and state net operating loss (“NOL”) carryforwards of $568.7 million and $574.0 million, respectively.

The federal NOL carryforwards were generated between the years ended December 31, 2018 and 2025 and have an indefinite life.

At December 31, 2025, the Company had federal tax credits of approximately $ 0.9 million.

These federal tax credits are available to reduce future taxable income and expire at various dates commencing 2038 through 2041.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

Utilization of the NOLs and tax credit carryforwards may be subject to a substantial annual limitation under Section 382 of the IRC due to ownership change limitations that have occurred previously or that could occur in the future.

These ownership changes may limit the amount of net operating loss and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively.

The Company has not determined whether an ownership change under section 382 has occurred or whether such limitation exists.

The Company files income tax returns in the U.S.

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federal, state and local income tax examinations by tax authorities for years before 2018.

The Company follows a comprehensive model for the recognition, measurement, presentation and disclosure in consolidated financial statements of uncertain tax positions that have been taken or expected to be taken on a tax return.

The Company follows the provisions of FASB Accounting Standards Codification 740-10 (ASC 740-10), Accounting for Uncertainty in Income Taxes.

ASC 740-10 prescribes a comprehensive model for the recognition, measurement, presentation and disclosure in consolidated financial statements of uncertain tax positions that have been taken or expected to be taken on a tax return.

No liability related to uncertain tax positions is recorded in the consolidated financial statements as of December 31, 2025 and 2024.

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Employee elective deferrals and safe harbor matching contributions are 100 % vested at all times.

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

In connection with the acquisition of Legacy Spruce Power, the Company adopted the Spruce Power 401(k) plan, which contains features similar to those of the XL Fleet Corp.

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Discontinued Operations

The following table provides supplemental details of the Company’s discontinued operations contained within the consolidated statements of operations for the years ended December 31, 2024 and 2023:

Years Ended December 31,

(Amounts in thousands) 2024 2023

Net income (loss) from discontinued operations:

Drivetrain $ 25 $ ( 4,123 )

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

XL Grid had no activity during the year ended December 31, 2024.

The following table presents financial results of XL Grid operations for the year ended December 31, 2023:

Year Ended December 31,

The following table provides supplemental details of the Company’s discontinued operations related to the Drivetrain business contained within the consolidated statements of operations for the years ended December 31, 2025 and 2024:

(Amounts in thousands) 2025 2024

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Cost of revenues - operations and maintenance 125 125

Selling, general, and administrative expenses 743

Gain on asset disposal — ( 81 )

Total operating expenses 125 44

Net loss from discontinued operations $ —

The following table presents financial results of Drivetrain operations:

Years Ended December 31,

(Amounts in thousands) 2024 2023

Revenues $ 69 $ 42

Operating expenses:

Cost of revenues - operations and maintenance 125 106

(Gain) loss on asset disposal ( 81 ) 4,071

Other (income) — ( 12 )

Total operating expenses 44 4,165

Net income (loss) from discontinued operations $ ( 64 ) $ 25

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

The following table presents aggregate carrying amounts of assets and liabilities of discontinued operations related to the Drivetrain business contained within the consolidated balance sheets:

As of December 31,

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Assets from discontinued operations $ — $ —

Drivetrain $ — $ 32

Total assets from discontinued operations $ — $ 32

Liabilities from discontinued operations $ 40 $ 40

Drivetrain $ 40 $ 170

Total liabilities from discontinued operations $ 40 $ 170

Segment Information

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024, the Company has one reportable segment, which sells electricity to homeowners and provides related services to the homeowners, as well as to third party owners.

The Company’s CODM is its CEO who is focused on strategic planning aimed at generating revenue and monetizing the Company’s home solar energy systems and its ability to provide top-tier related servicing solutions to its customers and third-parties.

The CEO is provided on a quarterly basis with the Company’s consolidated segment expenses as presented within the consolidated statements of operations for the years ended December 31, 2024 and 2023, which the CEO utilizes to assess the Company’s performance and for making decisions about resource allocation.

The following table presents the Company’s significant segment expenses for the years ended December 31, 2024 and 2023:

Years Ended December 31,

For the year ended December 31, 2025, the information being provided to the CEO is at a lower level of aggregation as a result the Company has recast the prior period.

The following tables presents the Company’s significant segment expenses for the years ended December 31, 2025 and 2024:

Spruce Power Holding Corporation

Notes to Consolidated Financial Statements

(Amounts in thousands) 2025 2024

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Cost of revenues - operations and maintenance 9,764 16,597

Selling, general and administrative expenses 58,889 56,122

Selling, general and administrative expenses - professional services 15,742 20,007

Selling, general and administrative expenses - compensation and benefits 27,189 26,713

Selling, general and administrative expenses - other 12,182 12,169

Interest expense, net 50,918 40,232

Litigation settlements, net 7,384 27,465

Litigation settlements 1,711 7,384

Impairment of goodwill — 28,757

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Subsequent Events

In January 2025, a series of wildfires broke out in the Los Angeles area of California, resulting in real and personal property and natural resource damage, personal injuries and loss of life.

The Company is currently assessing the impact of these wildfires on its home solar systems in the area;

however, the Company has not been able to validate the extent of the related damages due to limited access to the area.

The Company does not expect this event to have a material impact on its financial position, operating results or cash flows.

Management has reviewed all events subsequent to December 31, 2024 and prior to the filing of these consolidated financial statements, and except as referenced within the notes to the consolidated financial statements, the Company has determined there have been no events that have occurred that would require adjustments or disclosures within the consolidated financial statements.

Under the terms of the SP1 Facility Amendment, the applicable margin is 2.75 % per annum from the effective date of the SP1 Facility Amendment to October 30, 2026, and 3.25 % per annum thereafter.

The SP1 Facility Amendment includes a cross-default provision with the Second Key Bank Credit Agreement.

Management has reviewed all events subsequent to December 31, 2025 and prior to the issuance of these consolidated financial statements, and except as referenced above, the Company has determined there have been no events that have occurred that would require adjustments or disclosures within the consolidated financial statements.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data