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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 10, 2025 (November 22, 2024)
Spruce Power Holding Corporation
(Exact name of registrant as specified in its charter)
Delaware001-3897183-4109918
(State or other jurisdiction
of incorporation)
(Commission File Number)
(I.R.S. Employer
Identification No.)
2000 S Colorado Blvd, Suite 2-825,
Denver, Colorado
80222
(Address of principal executive offices)(Zip Code)
(866) 777-8235
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)
Name of each exchange
on which registered
Common Stock, par value $0.0001 per shareSPRUNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Introductory Note
On November 26, 2024, Spruce Power Holding Corporation (the “Company”) filed a Current Report on Form 8-K (the “Original Form 8-K”) to report that Spruce Power 5, LLC (“SP5”), a wholly-owned subsidiary of the Company, entered into an Asset Purchase Agreement (the “APA”) to acquire a residential solar portfolio (the “Acquired Assets”) from NJR Clean Energy Ventures II Corporation (“CEV”), a subsidiary of New Jersey Resources Corporation (“NJR”), pursuant to the APA by and between CEV and SP5, dated as of November 22, 2024.
Amendment No. 2 to Current Report on Form 8-K/A (this “Amendment No. 2”) amends the Original Form 8-K solely to include the financial statements required to be filed under Item 9.01(a) of the Original Form 8-K and the pro forma financial information required to be filed under Item 9.01(b) of the Original Form 8-K. Except for filing information pursuant to Items 9.01(a), 9.01(b) and 9.01(d) of Form 8-K, this Amendment No. 2 does not otherwise modify or update the Original Form 8-K.
Item 9.01 Financial Statements and Exhibits.

(a)    Financial statements of businesses acquired

The audited abbreviated financial statements of the Acquired Assets and accompanying notes related thereto as of and for the years ended September 30, 2024 and 2023 are filed herewith as Exhibit 99.1 to this Amendment No. 2, which is incorporated by reference herein. The related consent of the independent auditor is attached hereto as Exhibit 23.1.

(b)    Pro forma financial information

The unaudited pro forma condensed combined financial statements and accompanying notes relating to the Company’s acquisition of the Acquired Assets, as of September 30, 2024, for the nine months ended September 30, 2024, and for the year ended December 31, 2023 are included as Exhibit 99.2 hereto and are incorporated by reference herein.

(d)    Exhibits.

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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SPRUCE POWER HOLDING CORPORATION
Date: February 10, 2025
By:/s/ Jonathan M. Norling
Name:Jonathan M. Norling
Title:Chief Legal Officer
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Exhibit 23.1


CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in Registration Statement No. 333-252089 on Form S-3 and Registration Statement No. 333-261393 on Form S-8 of Spruce Power Holding Corporation of our report dated February 10, 2025, relating to the abbreviated financial statements of the Residential Solar Portfolio of New Jersey Resources Corporation appearing in this Current Report on Form 8-K/A dated February 10, 2025.

/s/ Deloitte & Touche LLP

Morristown, New Jersey February 10, 2025







RESIDENTIAL SOLAR PORTFOLIO OF NEW JERSEY RESOURCES CORPORATION

ABBREVIATED FINANCIAL STATEMENTS

AS OF AND FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2024 AND 2023

INDEX
Glossary of Key Terms
Independent Auditor’s Report
Statements of Assets Acquired and Liabilities Assumed as of September 30, 2024 and 2023
Statements of Revenues and Direct Expenses for the Fiscal Years Ended September 30, 2024 and 2023
Notes to the Abbreviated Financial Statements













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Residential Solar Portfolio of New Jersey Resources Corporation



GLOSSARY OF KEY TERMS                                                                                                      
AROAsset Retirement Obligations
BPUNew Jersey Board of Public Utilities
The PortfolioResidential Solar Asset Portfolio
GAAPGenerally Accepted Accounting Principles in the United States
MWMegawatt
MWhMegawatt Hour
NJRNew Jersey Resources Corporation
O&MOperations and maintenance expense
RECRenewable Energy Certificate
SpruceSpruce Power Holdings Corporation
SRECSolar Renewable Energy Certificate
TRECTransition Renewable Energy Certificate
U.S.The United States of America

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INDEPENDENT AUDITOR'S REPORT

To the Board of Directors of Spruce Power Holding Corporation

Opinion

We have audited the abbreviated financial statements of the Residential Solar Portfolio of New Jersey Resources Corporation (the “Portfolio”), which comprise the Statements of Assets Acquired and Liabilities Assumed as of September 30, 2024 and 2023, and the related Statements of Revenues and Direct Expenses for the years then ended, and the related notes to the abbreviated financial statements (collectively referred to as the "financial statements").

In our opinion, the accompanying financial statements present fairly, in all material respects, the assets acquired and liabilities assumed of the Portfolio as of September 30, 2024 and 2023, and its revenues and direct expenses for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Portfolio and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis of Accounting

As discussed in Note 1 to the financial statements, the financial statements have been prepared for the purposes of complying with the rules and regulations of the U.S. Securities and Exchange Commission and are not intended to be a complete presentation of the Portfolio’s assets, liabilities, revenues and expenses. Our opinion is not modified with respect to this matter.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

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In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Portfolio’s ability to continue as a going concern for one year after the date that the financial statements are issued.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

•Exercise professional judgment and maintain professional skepticism throughout the audit.
•Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolio’s internal control. Accordingly, no such opinion is expressed.
•Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
•Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Portfolio’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ Deloitte & Touche LLP

Morristown, New Jersey
February 10, 2025
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Residential Solar Portfolio of New Jersey Resources Corporation
STATEMENTS OF ASSETS ACQUIRED AND LIABILITIES ASSUMED                         

(Thousands)
September 30,20242023
ASSETS ACQUIRED
Property, plant and equipment, net
$    70,441    
$    79,995    
Total assets acquired
$    70,441    
$    79,995    
LIABILITIES ASSUMED
Asset retirement obligations
    1,027    
    955    
Total liabilities assumed
$    1,027    
$    955    
Commitments and contingent liabilities (Note 2)
ASSETS ACQUIRED AND LIABILITIES ASSUMED, NET
$    69,414    
$    79,040    

See Notes to Abbreviated Financial Statements

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Residential Solar Portfolio of New Jersey Resources Corporation


STATEMENTS OF REVENUES AND DIRECT EXPENSES                                                   
(Thousands)
Fiscal Years Ended September 30,20242023
REVENUES
$    31,924    
$    30,296    
DIRECT EXPENSES
Operation and maintenance
    4,981    
    3,848    
Compensation and benefits
    1,115    
    1,088    
Depreciation
    6,860    
    6,896    
Total direct expenses
    12,956    
    11,832    
REVENUES LESS DIRECT EXPENSES
$    18,968    
$    18,464    

See Notes to Abbreviated Financial Statements

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Residential Solar Portfolio of New Jersey Resources Corporation

NOTES TO THE ABBREVIATED FINANCIAL STATEMENTS                                           

1.DESCRIPTION OF THE PORTFOLIO AND THE RELATED TRANSACTION

The Residential Solar Asset Portfolio consists primarily of operating residential solar systems and related host customer contracts and provides qualifying homeowners the opportunity to have a net-metered solar system installed at their home without significant upfront investment or ongoing maintenance costs. The systems are owned, operated and maintained independently over the life of the host customer contract with the homeowner, and the homeowner receives distributed energy in exchange for monthly payments over a specified term.

On November 22, 2024, Spruce completed the acquisition of the Portfolio from NJR Clean Energy Ventures II Corporation, a subsidiary of NJR, for $132.5 million. The Portfolio consists of approximately 9,800 residential solar systems and related host customer contracts with homeowners located in New Jersey.

In connection with the sale, NJR Clean Energy Ventures II Corporation entered into an agreement with Spruce to leaseback certain residential solar energy systems that have not yet passed the fifth anniversary of their placed-in-service dates. The assets are subject to leaseback until the fifth anniversary of the applicable placed-in-service date of the project.

Also, in connection with the sale, Spruce entered into an arrangement with a subsidiary of NJR for the sale of SRECs generated by residential solar projects acquired for the period from October 1, 2024 through May 31, 2026.

The agreement also includes the economic activity associated with accounts receivable, accounts payable and RECs to the extent they are generated and arise from transactions related to the period subsequent to September 30, 2024.

Subsequent to November 22, 2024, Spruce may acquire approximately 200 additional residential solar assets in process of being developed, subject to those projects having achieved operational milestones. On January 29, 2025, 41 of these assets were acquired by Spruce.

Basis of Presentation

The accompanying abbreviated financial statements present the Statements of Assets Acquired and Liabilities Assumed and Statements of Revenues and Direct Expenses for the Portfolio in conformity with GAAP. The Statements of Assets Acquired and Liabilities Assumed and Statements of Revenues and Direct Expenses are prepared for the sole purpose of complying with the rules and regulations of Rule 3-05 of Regulation S-X of the U.S. Securities and Exchange Commission and are not intended to be a complete presentation of the Portfolio’s assets, liabilities, revenues and expenses.

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Residential Solar Portfolio of New Jersey Resources Corporation

NOTES TO THE ABBREVIATED FINANCIAL STATEMENTS (Continued)                      
The Statements of Assets Acquired and Liabilities Assumed and the Statements of Revenues and Direct Expenses are derived from the accounting records of NJR in accordance with the Asset Purchase Agreement dated November 22, 2024, and consist primarily of the balances and activity related to residential solar systems installed at customer locations and their related AROs.

Historically, the Statements of Revenues and Direct Expenses have not been prepared and do not purport to reflect all of the costs and expenses that would have been associated with the Portfolio had the Portfolio been operated as a stand-alone, separate entity. The Statements of Revenues and Direct Expenses exclude the cost of general corporate activities, corporate-level overhead, interest expense, and income taxes as these costs are not directly associated with the revenue-generating activities of the Portfolio.

The Statements of Revenues and Direct Expenses include the revenues of the Portfolio and the expenses directly attributable to the generation of those revenues. O&M consists primarily of maintenance costs related to residential solar systems, information technology costs, and compensation costs for employees directly involved in the administration and operation of the Portfolio. Depreciation expense is recognized for the residential solar assets used in production of distributed energy. The employees related to the compensation and benefit expense included in the Statements of Revenue and Direct Expenses did not transfer to Spruce as part of the transaction.

Statements of Cash Flows are not presented as such data was not maintained by NJR for the Portfolio as it did not operate as a stand-alone business, division, or subsidiary.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of the abbreviated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts in the accompanying abbreviated financial statements and in the related disclosures. These estimates are based on information available as of the date of the abbreviated financial statements. While management makes its best judgment, actual amounts or results could differ from those estimates.

Commitments and Contingencies

The Portfolio has legal, regulatory and environmental proceedings during the normal course of business that can result in loss contingencies. When evaluating the potential for a loss, the Portfolio may establish a reserve if a loss is probable and can be reasonably estimated, in which
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Residential Solar Portfolio of New Jersey Resources Corporation

NOTES TO THE ABBREVIATED FINANCIAL STATEMENTS (Continued)                      
case it is the Portfolio’s policy to accrue the full amount of such estimates. Where the information is sufficient only to establish a range of probable liability, and no point within the range is more likely than any other, it is the Portfolio’s policy to accrue the lower end of the range. In the normal course of business, estimated amounts are subsequently adjusted to actual results that may differ from estimates.

Revenues

The Portfolio has contracts with residential homeowners throughout the state of New Jersey by which the Portfolio installs and operates solar generation systems at the premises of a residential host customer. The host customer pays the Portfolio a fee for the access to solar-generated electricity output over time. Revenues from these contracts are recognized when invoiced as per the contract.

The Portfolio also recognizes revenue through the generation and/or delivery of RECs.

Certain residential solar systems are registered and certified with the BPU Office of Clean Energy to produce SRECs. One SREC is created for every MWh of electricity produced by a solar generation asset. Expected production of SRECs are hedged through a related party using forward and futures contracts. All contracts require the Portfolio to physically deliver SRECs through the transfer of certificates as per contractual settlement schedules. Upon settlement of the contract, the related revenue is recognized when the SREC is transferred to the counterparty, including electric load-serving entities that serve electric customers in New Jersey and are required to comply with the solar carve-out of the Renewable Business Standard, a regulation that requires the increased production of energy from renewable energy sources. The SREC program officially closed to new qualified solar projects in April 2020.

In December 2019, the BPU established the TREC as the interim program successor to the SREC program. TRECs provide a fixed compensation base multiplied by an assigned project factor in order to determine their value. The project factor is determined by the type and location of the project, as defined by the BPU.

In July 2021, the BPU approved the first portion of the solar successor program for net-metered projects under 5 MWs. The program opened to new applications in August 2021. Incentives are structured as a 15-year fixed incentive ranging from $85 to $130/MWh depending on market segment, project type, location and size. RECs generated through the production of electricity under this program are known as SREC IIs.

TRECs and SREC IIs generated are required to be purchased monthly by a REC program administrator as appointed by the BPU. Revenue for TRECs and SREC IIs are recognized upon generation and are transferred monthly based upon metered solar electricity activity.
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Residential Solar Portfolio of New Jersey Resources Corporation

NOTES TO THE ABBREVIATED FINANCIAL STATEMENTS (Continued)                      

Property, Plant and Equipment, net

Property, plant and equipment, net consists of residential solar systems and is stated at original cost. Costs include direct labor, materials and third-party construction contractor costs. Investment tax credits for eligible projects are accounted for under the deferral method and are reflected as a reduction in the cost basis of the related asset when placed in service.

Depreciation is computed on a straight-line basis over the useful life of the assets. The Portfolio recorded $6.9M in depreciation expense during both fiscal 2024 and 2023.

Property, plant and equipment was comprised of the following as of September 30:
(Thousands)
Property ClassificationsEstimated Useful Lives20242023
Solar property20 to 25 years
$    131,416    
$    133,707    
Construction work in progress
    —    
    1,021    
Total property, plant and equipment
    131,416    
    134,728    
Accumulated depreciation
    (60,975)
    (54,733)
Property, plant and equipment, net
$    70,441    
$    79,995    

Long-lived Assets

The Portfolio reviews the recoverability of long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable, such as significant adverse changes in regulation, business climate or market conditions. If there are changes indicating that the carrying value of such assets may not be recoverable, an undiscounted cash flows test is performed. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recognized by reducing the recorded value of the asset to its fair value.

Factors that the Portfolio analyzes in determining whether an impairment in its long-lived assets exists include: a significant decrease in the market price of a long-lived asset; a significant adverse change in the extent in which a long-lived asset is being used in its physical condition; legal proceedings or other contributing factors; significant business climate changes; accumulations of costs in significant excess of the amounts expected; a current-period operating or cash flow loss combined with a history of such events; and current expectations that more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its estimated useful life. During fiscal 2024 and 2023, there were no events or circumstances that indicated that the carrying value of long-lived assets was not recoverable.
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Residential Solar Portfolio of New Jersey Resources Corporation

NOTES TO THE ABBREVIATED FINANCIAL STATEMENTS (Continued)                      

Asset Retirement Obligations

The Portfolio recognizes AROs associated with residential solar assets when there are decommissioning provisions in lease agreements that require removal of the asset at the end of the lease term.

AROs are initially recognized when the legal obligation to retire an asset has been incurred and a reasonable estimate of fair value can be made. The discounted fair value is recognized as an ARO liability with a corresponding amount capitalized as part of the carrying cost of the underlying asset. The obligation is subsequently accreted to the future value of the expected retirement cost, and the corresponding asset retirement cost is depreciated over the life of the related asset. Accretion expense is recognized as a component of O&M on the Statements of Revenues and Direct Expenses.

Estimating future removal costs requires management to make significant judgments because most of the removal obligations span long time frames and removal may be conditioned upon future events. Asset removal technologies are also constantly changing, which makes it difficult to estimate removal costs. Accordingly, inherent in the estimate of AROs are various assumptions including the ultimate settlement date, expected cash outflows, inflation rates, credit-adjusted risk-free rates and consideration of potential outcomes where settlement of the AROs can be conditioned upon events. In the latter case, the Portfolio develops possible retirement scenarios and assigns probabilities based on management’s reasonable judgment, experience to date and knowledge of industry practice. Accordingly, AROs are subject to change.

The following is an analysis of the change in the Portfolio’s ARO for the fiscal years ended September 30:
(Thousands)Balance at October 1,AccretionAdditionsBalance at period end
2024
$    955    
    55    
    17    
$    1,027    
2023
$    897    
    47    
    11    
$    955    

Accretion for the next five years will be approximately $59,000 per year totaling $295,000.

3.REVENUE

Revenue is recognized when a performance obligation is satisfied by transferring control of a product or service to a customer and collectability of consideration is probable. Collectability of revenues is based primarily on the creditworthiness of the customer as determined by credit
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Residential Solar Portfolio of New Jersey Resources Corporation

NOTES TO THE ABBREVIATED FINANCIAL STATEMENTS (Continued)                      
checks and analysis, as well as the customer's payment history and their intention to pay the consideration. Revenue is measured based on consideration specified in a contract with a customer using the output method of progress. For revenue generated from its host customer contracts, the Portfolio elected to apply the invoice practical expedient for recognizing revenue, whereby the amounts invoiced to customers represent the value to the customer and the completion of the performance obligation as of the invoice date. Therefore, the Portfolio does not disclose related unsatisfied performance obligations.

Expected production of SRECs are hedged through a related party using forward and futures contracts. All contracts require the Portfolio to physically deliver SRECs through the transfer of certificates as per contractual settlement schedules. Upon settlement of the contract, the related revenue is recognized when the SREC is transferred to the counterparty.

Below is a listing of performance obligations that arise from contracts with customers, along with details on the satisfaction of each performance obligation, the significant payment terms and the nature of the goods and services being transferred:
Performance ObligationDescription
Revenue Recognized Over Time:
Host customer contracts
The Portfolio provides access to residential rooftop and ground-mount solar equipment to customers who then pay the Portfolio a monthly fee. The performance obligation is to provide electricity to the customer based on generation from the underlying residential solar asset and is satisfied upon transfer of electricity generated.

Revenue is derived from the contract terms and recognized as invoiced, with the payment due each month for the previous month's services.
Renewable energy certificates
Certain projects generate TRECs and SREC IIs under certain established programs. A TREC or SREC II is created for every MWh of electricity produced by a solar generation asset. The performance obligation of the Portfolio is to generate electricity. TRECs and SREC IIs are purchased monthly by a REC Administrator as appointed by the BPU.

Revenue is recognized upon generation.

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Residential Solar Portfolio of New Jersey Resources Corporation

NOTES TO THE ABBREVIATED FINANCIAL STATEMENTS (Continued)                      
Disaggregated revenues from contracts with customers by product line during the fiscal years ended September 30, are as follows:

(Thousands)20242023
Host customer contracts
$    11,535    
$    11,052    
Renewable energy certificates
    1,981    
    1,304    
Revenues from contracts with customers
    13,516    
    12,356    
SRECs
    18,408    
    17,940    
Revenues out of scope
    18,408    
    17,940    
Total revenues
$    31,924    
$    30,296    

4.SUBSEQUENT EVENTS

The Portfolio evaluated subsequent events and transactions that occurred after the balance sheet date through February 10, 2025, the date the abbreviated financial statements were available to be issued that require consideration as adjustments to or disclosures in the aforementioned abbreviated financial statements.

On November 22, 2024, Spruce Power 5, LLC, a wholly owned subsidiary of Spruce, entered into a non-recourse credit agreement with Banco Santander, S.A., New York, which provided for a 3-year term loan facility in an aggregate principal amount of approximately $109.8 million. Spruce’s obligations under the above-mentioned credit facility are secured by assets Spruce purchased from NJR.
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Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
On November 22, 2024, Spruce Power 5, LLC (“SP5”), a wholly owned subsidiary of Spruce Power Holding Corporation (“Spruce” or the “Company”), entered into an Asset Purchase Agreement (“APA”) with NJR Clean Energy Ventures II Corporation (“CEV”), a subsidiary of New Jersey Resources Corporation (“NJR”), pursuant to which, on the date thereof, SP5 acquired a residential solar portfolio consisting of approximately 9,800 solar energy systems (the “Acquired Assets”) from CEV for approximately $132.5 million in cash, subject to the terms and conditions set forth therein (the “Transaction”). The Company financed the Transaction with (i) approximately $22.2 million of cash on hand and (ii) proceeds from the concurrent issuance of a term loan facility in an aggregate principal amount of approximately $109.8 million.
The following unaudited pro forma financial information reflect the Transaction and the financing of the Transaction as described above and have been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786, “Amendments to Financial Disclosures about Acquired and Disposed Businesses.”
The Company and NJR have different fiscal years. The Company’s fiscal year ends on December 31, whereas NJR’s fiscal year ends on September 30. The unaudited condensed combined pro forma financial information has been prepared utilizing period ends that differ by one fiscal quarter or less, as permitted by Rule 11-02 of Regulation S-X of the Exchange Act.
The unaudited pro forma financial information has been prepared by the Company using the acquisition method of accounting in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"), with Spruce as the acquiring entity for accounting purposes, and reflects estimates and assumptions deemed appropriate by Company’s management to give effect to the Transaction and the financing of the Transaction as if they had been completed on September 30, 2024, with respect to the unaudited pro forma condensed combined balance sheet, and on January 1, 2023, with respect to the unaudited pro forma condensed combined statements of operations.
The unaudited pro forma condensed combined financial statements include adjustments that reflect the accounting for the Transaction in accordance with U.S. GAAP. Refer to the notes to the unaudited pro forma financial information for additional information regarding the basis of presentation and pro forma adjustments.
The unaudited pro forma condensed combined financial information are based on and should be read in conjunction with the following:
•The accompanying notes to the unaudited pro forma condensed combined financial information;
•The historical unaudited condensed consolidated financial statements of Spruce as of and for the nine months ended September 30, 2024 and the related notes included in Spruce’s Quarterly Report on Form 10-Q for such period filed on November 14, 2024;
•The historical audited consolidated financial statements of Spruce as of and for the year ended December 31, 2023 and the related notes included in Spruce’s Annual Report on Form 10-K for such fiscal year filed on April 9, 2024;
•And the audited abbreviated financial statements of the Acquired Assets and accompanying notes related thereto as of and for the years ended September 30, 2024 and 2023.
The unaudited pro forma condensed combined financial information has been prepared for illustrative purposes only and is not necessarily indicative of what the combined Company’s financial position or results of operations actually would have been had the Transaction occurred as of the dates indicated. The unaudited pro forma condensed combined financial information also should not be considered indicative of the future results of operations or financial position of Spruce following the completion of the Transaction, which could differ materially from those shown in this information. The unaudited pro forma adjustments represent the Company’s management’s estimates based on information available as of the date of this unaudited pro forma condensed combined financial information and are subject to change as additional information becomes available and analyses are performed.


SPRUCE POWER HOLDING CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 2024

 Spruce's Historical
(as reported)
Acquired Assets
(as of September 30, 2024)
Pro Forma AdjustmentsPro Forma Combined
(In thousands)
Assets
Current assets:
Cash and cash equivalents$113,658 $— $(27,540)
(1)
$86,118 
Restricted cash36,323 — 3,351 
(2)
39,674 
Accounts receivable, net11,523 — — 11,523 
Interest rate swap assets, current6,723 — — 6,723 
Prepaid expenses and other current assets4,779 — — 4,779 
Total current assets173,006 — (24,189)148,817 
Investment related to SEMTH master lease agreement138,340 — — 138,340 
Property and equipment, net464,695 70,441 60,224 
(3)
595,360 
Interest rate swap assets, non-current12,812 — — 12,812 
Intangible assets, net9,267 — — 9,267 
Deferred rent assets3,370 — — 3,370 
Right-of-use asset, net5,029 — — 5,029 
Goodwill— — — — 
Other assets255 — — 255 
Long-term assets of discontinued operations— — — — 
Total assets$806,774 $70,441 $36,035 $913,250 
Liabilities and stockholders' equity — 
Current liabilities:— 
Non-recourse debt, current, net$28,351 $— $— $28,351 
Accounts payable858 — — 858 
Deferred revenue, current1,686 — — 1,686 
Lease liability, current956 — — 956 
Accrued expenses and other current liabilities30,892 — — 30,892 
Current liabilities of discontinued operations65 — — 65 
Total current liabilities62,808 — — 62,808 
Non-recourse debt, non-current, net577,005 — 108,576 
(4)
685,581 
Deferred revenue, non-current2,876 — — 2,876 
Lease liability, non-current5,061 — — 5,061 
Warrant liabilities— — — — 
Interest rate swap liabilities, non-current607 — — 607 
Other long-term liabilities3,219 1,027 (349)
(5)
3,897 
Unfavorable solar renewable energy agreements, net3,510 — 1,600 
(6)
5,110 
Long-term liabilities of discontinued operations52 — — 52 


Total liabilities655,138 1,027 109,827 765,992 
Stockholders' equity (deficit)
Common stock2 — — 2 
Treasury stock(5,424)— — (5,424)
Additional paid-in capital477,413 69,414 (69,414)
(7)
477,413 
Accumulated deficit(322,449)— (4,378)
(8)
(326,827)
Noncontrolling interests2,094 — — 2,094 
Total stockholders' equity151,636 69,414 (73,792)147,258 
Total liabilities, non-controlling interests and stockholders' equity $806,774 $70,441 $36,035 $913,250 

See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.


SPRUCE POWER HOLDING CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

Spruce's Historical
(as reported)
Acquired Assets
(for the nine months ended June 30, 2024)
Pro Forma AdjustmentsPro Forma Combined
(In thousands)
Revenues$61,881 $17,744 $592 
(9)
$80,217 
Operating expenses:
Cost of revenues28,500 9,614 (6,861)
(10)
31,253 
Selling, general, and administrative expenses43,426 — 236 
(11)
43,662 
Litigation settlements, net7,205 — — 7,205 
Gain on asset disposal(2,055)— — (2,055)
Impairment of goodwill28,757 — — 28,757 
Total operating expenses105,833 9,614 (6,625)108,822 
Loss from operations(43,952)8,130 7,217 (28,605)
Other (income) expense:— 
Interest income(16,908)— — (16,908)
Interest expense, net29,900 — 6,789 
(12)
36,689 
Change in fair value warrant liabilities(17)— — (17)
Change in fair value of interest rate swaps8,153 — — 8,153 
Other income, net(453)— — (453)
Net loss from continuing operations(64,627)8,130 428 (56,069)
Net income from discontinued operations50 — — 50 
Net loss(64,577)8,130 428 (56,019)
Net loss attributable to noncontrolling interests(16)— — (16)
Net loss attributable to stockholders$(64,561)$8,130 $428 $(56,003)
See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.


SPRUCE POWER HOLDING CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2023

Spruce’s Historical
(as reported)
Acquired Assets
(for the year ended September 30, 2023)
Pro Forma Adjustments
Pro Forma Combined
(In thousands)
Revenues$79,859 $30,296 $1,246 
(13)
$111,401 
Operating expenses:
Cost of revenues37,813 11,832 (8,721)
(14)
40,924 
Selling, general, and administrative expenses56,122 — 325 
(15)
56,447 
Litigation settlements, net27,465 — — 27,465 
Gain on asset disposal(4,724)— — (4,724)
Total operating expenses116,676 11,832 (8,396)120,112 
Loss from operations(36,817)18,464 9,642 (8,711)
Other (income) expense:
Interest income(19,534)— — (19,534)
Interest expense, net41,936 — 9,048 
(16)
50,984 
Change in fair value of warrant liabilities(239)— — (239)
Change in fair value of interest rate swaps4,816 — — 4,816 
Other income, net(1,309)— — (1,309)
Net loss from continuing operations(62,487)18,464 594 (43,429)
Net loss from discontinued operations(4,123)— — (4,123)
Net loss(66,610)18,464 594 (47,552)
Net loss attributable to redeemable noncontrolling interests and noncontrolling interests(779)— — (779)
Net loss attributable to stockholders$(65,831)$18,464 $594 $(46,773)
See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

Spruce Power Holding Corporation
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
(Amounts in thousands, except share and per share data)
1.Description of the Transaction
On November 22, 2024, Spruce Power 5, LLC (“SP5”), a wholly owned subsidiary of Spruce Power Holding Corporation (“Spruce” or the “Company”), entered into an Asset Purchase Agreement (the “APA”) to acquire a residential solar portfolio consisting of approximately 9,800 solar energy systems (the “Acquired Assets”) from NJR Clean Energy Ventures II Corporation (“CEV”), a subsidiary of New Jersey Resources Corporation (“NJR”), for approximately $132.5 million in cash, pursuant to the APA by and between CEV and SP5, dated as of November 22, 2024 (the “Transaction”). The Company financed the Transaction with (i) approximately $22.2 million of cash on hand and (ii) proceeds from the concurrent issuance of a term loan facility in an aggregate principal amount of approximately $109.8 million (the “SP5 Facility”).
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 on January 29, 2025, the Company acquired 41 of these additional solar energy systems for approximately $0.5 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.

2. Basis of Pro Forma Presentation
The unaudited pro forma condensed combined financial information was prepared in accordance with Article 11 of Regulation S-X and presents the pro forma financial condition and results of operations of the Company based on the historical financial information of the Company and the Acquired Assets after giving effect to the Transaction and the financing of the Transaction, as described in Note 1. “Description of the Transaction.” The historical financial statements of the Company and the Acquired Assets were prepared in accordance with U.S. GAAP and are presented in U.S. dollars. The audited abbreviated financial statements of the Acquired Assets are as of and for the years ended September 30, 2024 and 2023. The Company’s unaudited consolidated financial statements are as of and for the nine months ended September 30, 2024 and audited consolidated financial statements are for the year ended December 31, 2023.
The unaudited pro forma condensed combined balance sheet is presented as if the Transaction and financing for the Transaction had occurred on September 30, 2024 and combines the Company’s unaudited consolidated balance sheet as of September 30, 2024 with the audited balance sheet for the Acquired Assets as of September 30, 2024.
The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2024 is presented as if the Transaction and financing for the Transaction had occurred on January 1, 2023, and combines the Company’s unaudited consolidated statement of operations for the nine months ended September 30, 2024 and the unaudited statement of operations for the Acquired Assets for the nine months ended June 30, 2024.
The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2023 is presented as if the Transaction and financing for the Transaction had occurred on January 1, 2023, and combines the Company’s audited consolidated statement of operations for the year ended December 31, 2023 and the audited statement of operations for the Acquired Assets for the fiscal year ended September 30, 2023.
The unaudited pro forma condensed combined financial statements include adjustments that reflect the accounting for the Transaction in accordance with U.S. GAAP.
The Transaction has been accounted for as an acquisition of assets in accordance with Accounting Standards Codification 805, Business Combinations, and the unaudited pro forma financial information was prepared accordingly. For purposes of developing the unaudited pro forma condensed combined balance sheet as of September 30, 2024, the acquired assets and liabilities assumed have been recorded at their relative provisional fair values. The Company’s evaluation of the facts and circumstances available as of the date of the Transaction and estimate of the fair value of the assets acquired and liabilities assumed are still ongoing. As the Company completes further analysis of the Transaction, additional information on the assets acquired and liabilities assumed may become available and as a result, the provisional fair values set forth below are subject to adjustments. The Company expects to complete its valuation of the Transaction as soon as practicable.

Spruce Power Holding Corporation
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
(Amounts in thousands, except share and per share data)
The unaudited pro forma financial information is based on the historical financial statements of the Company and the Acquired Assets after giving effect to the Transaction and the financing of the Transaction, as well as the assumptions and adjustments described in these Notes to Unaudited Pro Forma Condensed Combined Financial Statements. The unaudited pro forma financial information does not give effect to the costs of any integration activities or benefits that may result from the realization of future cost savings from operating efficiencies, or any other synergies that may result from the Transaction. The unaudited pro forma financial information is presented for illustrative purposes only and is not indicative of either the Company’s future results of operations or financial position following the completion of the Transaction or results of operations or financial position that might have been achieved if the Transaction was consummated as of the dates indicated. This information should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2023, the Company’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2024 and the historical abbreviated financial statements for the Acquired Assets and accompanying notes incorporated therein.
Acquisition accounting rules require evaluation of certain assumptions, estimates, or determination of financial statement classifications. The accounting policies of the Company may materially vary from those of CEV. During preparation of the unaudited pro forma financial information, the Company’s management identified material differences in accounting policies between the two companies, including the estimation of current expected credit losses (“CECL”), the useful life of the residential solar portfolio acquired and associated asset retirement cost, and the asset retirement obligations related to the Acquired Assets, and accordingly, the proforma adjustments (discussed below) reflects these material differences in accounting policies between the two companies.

3. Pro Forma Adjustments

The pro forma adjustments in the unaudited pro forma condensed combined balance sheet and statements of operations are as follows:

(1) Includes an adjustment to cash and cash equivalents of $27.5 million for the cash consideration paid to partially fund the Transaction, which includes the $22.2 million of cash paid for the Acquired Assets, $3.4 million for deposit into a liquidity reserve account (discussed below), and $1.9 million in transaction fees.

(2) Includes an adjustment to restricted cash for deposit into a liquidity reserve account of $3.4 million in relation to the SP5 Facility.

(3) Includes an adjustment of $60.2 million to reflect the provisional fair value of the residential solar portfolio acquired and associated asset retirement cost related to the Transaction.

(4) Includes adjustments for $109.8 million to reflect the proceeds from the concurrent issuance of the SP5 Facility to partially fund the Transaction, net of the deferred financing costs of $1.2 million incurred in connection with the SP5 Facility.

(5) Includes an adjustment of $0.3 million to reflect the provisional estimates of the asset retirement obligations related to the Acquired Assets.

(6) Includes an adjustment of $1.6 million to reflect the provisional fair value of the unfavorable solar renewable energy agreement entered into concurrently with the Transaction.

(7) Includes an adjustment to eliminate the historical equity balances of the Acquired Assets.

(8) Includes the cumulative effect of adjustments reflected within (1) - (7) above.

(9) Includes adjustments for $0.5 million of amortization of the provisional fair value of the unfavorable solar renewable energy agreement based on the pattern in which the economic benefit of the liability is relieved, and less than $0.1 million of revenue related to solar lease agreements recognition on a straight-line basis over the remaining contract term.

(10) Includes adjustments to reflect $6.9 million of depreciation on the acquired residential solar portfolio, asset retirement cost depreciation, and asset retirement obligation accretion related to the Acquired Assets, based on the provisional fair value and related estimates of the useful life of the Acquired Assets.

Spruce Power Holding Corporation
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
(Amounts in thousands, except share and per share data)

(11) Includes adjustments of $0.2 million to reflect expected credit losses related to the Acquired assets in accordance with the Company’s policy.

(12) Includes adjustments for $6.3 million of interest expense and $0.5 million in amortization of deferred financing costs related to the SP5 Facility. A sensitivity analysis to assess the effect of a 12.5 basis point change of the hypothetical interest expense related to the SP5 Facility was completed, which resulted in a change of less than $0.1 million.

(13) Includes adjustments for $1.1 million of amortization of the provisional fair value of the unfavorable solar renewable energy agreement based on the pattern in which the economic benefit of the liability is relieved, and $0.1 million of revenue related to solar lease agreements recognition on a straight-line basis over the remaining contract term.

(14) Includes adjustments to reflect $8.7 million of depreciation on the acquired residential solar portfolio, asset retirement cost depreciation, and asset retirement obligation accretion related to the Acquired assets, based on the provisional fair values and related estimates of the useful life of the Acquired Assets.

(15) Includes adjustments of $0.3 million to reflect expected credit losses related to the Acquired assets in accordance with the Company’s policy.

(16) Includes adjustments for $8.4 million of interest expense and $0.6 million in amortization of deferred financing costs related to the SP5 Facility. A sensitivity analysis to assess the effect of a 12.5 basis point change of the hypothetical interest expense related to the SP5 Facility was completed, which resulted in a change of less than $0.1 million.

4. Quarterly Financial Information

The following table presents the abbreviated financial information for the Acquired Assets for the three months ended September 30, 2024:

Acquired Assets
(for the three months ended September 30, 2024)
(In thousands)
Revenues$14,180 
Cost of revenues3,342 
Income from operations
$10,838 

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Nov. 22, 2024
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Entity Registrant Name Spruce Power Holding Corporation
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Entity File Number 001-38971
Entity Tax Identification Number 83-4109918
Entity Address, Address Line One 2000 S Colorado Blvd, Suite 2-825
Entity Address, City or Town Denver
Entity Address, State or Province CO
Entity Address, Postal Zip Code 80222
City Area Code (866)
Local Phone Number 777-8235
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Title of 12(b) Security Common Stock, par value $0.0001 per share
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