SPRU 10-K & 10-Q changes, risk factors and insider trading

Furthermore, marketMarket prices of retail electricity generated by utilities or other energy sources could decline for a variety of reasons, as discussed further below. Any such declines in macroeconomic conditions, changes in retail prices of electricity or changes in customer preferences would adversely impact our business.

Our solar energy systems depend heavily on suitable solar and meteorological conditions, which may be impacted by the effects of climate change.conditions. Seasonality fluctuations and the effects of climate change could adversely affect our results of operations

We typically bear the risk of loss and are generally obligated to cover the cost of maintenance, repair and removal for any of our solar energy systems. Under our Customer Agreements, we agree to operate and maintain the solar energy system for a fixed fee calculated to cover our future expected maintenance costs. If our solar energy systems require an above-average amount of repairs or if the cost of repairing the solar energy systems is higher than our estimate, we would need to perform such repairs without additional compensation. If our solar energy systems are damaged as the result of a natural disaster beyond our control, losses could exceed or be excluded from our insurance policy limits and we could incur unforeseen costs that could harm our business and financial condition. We may also incur significant costs for taking other actions in preparation for, or in reaction to, such events. We purchase property insurance with industry standard coverage and limits to protect against such risk, but such coverage may not be adequate to cover our losses.

We depreciate the costs of our solar energy systems over their estimated useful life of 30 years. At the end of the initial term of the Customer Agreement, we may choose to remove the solar energy systems at no cost to the customer, or customers may choose to purchase their solar energy systems, ask to remove the system at our cost, or renew their Customer Agreements. Customers may choose not to renew or purchase for any reason, including pricing, decreased energy consumption, relocation of residence, or switching to a competitorcompetitor’s product. Furthermore, it is difficult to predict how future environmental regulations may affect the costs associated with the removal, disposal or recycling of our solar energy systems. If the residual value of the solar energy systems is less than we expect at the end of the Customer Agreement, we may be required to accelerate the recognition of all or some of the remaining unamortized costs. This could materially impair our results of operations.

We have in the past and may in the future, acquire solar portfolios, companies, products or technologies or enter into other strategic transactions. For example, in March 2023, we completed the SEMTH Acquisition acquiring approximately 22,500 customer contracts; in August 2023, we completed the Tredegar Acquisition acquiring 2,400 home solar assets and contracts; and in November 2024, we completed the NJR Acquisition acquiring approximately 9,800 solar energy systems at that time and subsequently acquired an additional 200 energy systems. During 2025, we acquired 200 additional systems pursuant to the NJR Acquisition. We may not realize the anticipated benefits of past or future investments, strategic transactions or acquisitions, and these transactions involve numerous risks that are not within our control. These risks include the following, among others:

We may require additional capital investmentfinancing in the future to fund operations and support strategic initiatives. There can be no assurance that we will have access to the capitalfinancing we need on favorable terms when required or at all. Additional financing may not be available on terms acceptable to us. If we are unable to obtain needed financing on acceptable terms, we may not be able to implement our business plan, which could have a material adverse effect on our business, financial condition, results of operations and prospects. If we raise additional funds through the sale of equity, convertible debt or other equity-linked securities, our shareholders’ ownership will be diluted. We may issue securities that have rights, preferences and privileges senior to our common stock. Any future debt financing into which we enter may impose covenants upon us that restrict our operations or may otherwise contain terms that are not favorable to us or our stockholders.

Our growth and performance depend in part on the success of our relationships with third parties, including our servicingthird partnersparty service providers

Our growth depends in part on developing or expanding our relationships with third parties. Among other things, our business depends on attracting and retaining new and existing servicingthird partners.party service providers. Negotiating relationships with our servicingthird partners,party service providers, investing in due diligence efforts with potential servicingthird partners,party service providers, training such servicingthird partnersparty service providers and monitoring them for compliance with our standards require significant time and resources and may present greater risks and challenges than expanding our internal servicing teams. If we are unsuccessful in establishing or maintaining our relationships with these third parties, our ability to grow our business and address our market opportunity could be impaired. Even if we are able to establish and maintain these relationships, we may not be able to execute on our goal of leveraging these relationships to meaningfully expand our business, brand recognition, and customer base, which could limit our growth potential and our opportunities to generate significant additional revenue or cash flows. In the event that any of our third-party servicers fails to perform its servicing duties, or experiences a termination or cancellation event under the applicable servicing agreement, or we otherwise experience an interruption in that third party servicer’s performance, we may incur additional costs associated with obtaining a replacement servicer and seeking recovery of amounts owed to us. In such an event, there can be no assurance that a replacement servicer could be retained in a timely manner or at comparable cost to us, and any servicing transfer can result in data input errors, misdirected notices, and other issues.

Our success depends, in part, on our ability to retain our key personnel. The loss of any of our key personnel could have an adverse effect on our business. MostThere recently,have been, and from time to time there may continue to be, changes in our management team resulting from the hiring or departure of executives and key employees, or the transition of executives within our business, which could disrupt our business. For example, during 2024 and 2025, we had turnover in key positions, including our former CEO and our former CFO. In April 2024, we completed a Chief Executive Officer (“CEO”) transition inwith Aprilthe 2024.appointment of Christopher Hayes as our President and CEO. In addition, effective May 14, 2025, our former CFO resigned, and effective June 5, 2025, we appointed Thomas James Cimino as the Company’s Interim CFO. Effective December 1, 2025, Mr. Cimino was appointed as our CFO. Management transitions may create uncertainty and involve a diversion of resources and management attention, be disruptive to our daily operations or impact public or market perception, any of which could negatively impact our ability to operate effectively or execute our strategies and result in a material adverse impact on our business, financial condition, results of operations or cash flows.

In the ordinary course of business, we, our third-party service providers and our suppliers receive, store, transmit and use proprietary, confidential and sensitive data, including the personal information of customers, such as names, addresses, email addresses, credit information and other housing and energy use data, as well as the personal information of our employees. Any unauthorized disclosure of such proprietary, confidential or sensitive data, including personal information, whether through a breach of our systems or those of our third-party service providers or suppliers by an unauthorized party, including, but not limited to hackers, threat actors, sophisticated nation-states or nation-state-supported actors, or through the personnel theft, or misuse of information, or otherwise, could harm our business. In addition, we, our third party service providers and our suppliers may be subject to a variety of evolving threats, such as computer malware (including as a result of advanced persistent threat intrusions), ransomware, malicious code (such as viruses or worms), social engineering (including spear phishing and smishing attacks), telecommunications failures, natural disasters and extreme weather events, general hacking, and other similar threats.

Cybersecurity incidents have become more prevalent and could occur on our systems andor those of our thirdthird-party partiesservice providers or suppliers in the future. Our team members who work remotely pose increased risks to our information technology systems and data, since many of them utilize less secure network connections outside our premises.

Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators and investors, of security incidents. Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences. Inadvertent disclosure of confidential data or unauthorized access by a third party could result in future claims or litigation arising from damages suffered by those affected, government enforcement actions (for example, investigations, fines, penalties, audits and inspections), additional reporting requirements and/or oversight, indemnification obligations, reputational harm, interruptions in our operations, financial loss and other similar harms. In addition, we could incur significant costs in complying with the multitude of federal, state, and local laws, and applicable independent security control frameworks, regarding the unauthorized disclosure of personal information. Although we have not experienced a material information security breach in the past and have developed systems and processes to prevent or detect security breaches and protect the confidential information we receive, store, transmit, and use, we cannot assure that such measures will provide adequate security. Finally, anyAny perceived or actual unauthorized disclosure of such information, unauthorized intrusion, or other cyberthreat could harm our reputation, substantially impair our ability to attract and retain customers, interrupt our operations and have an adverse impact on our business.

WeMaterial areadverse subjector tounforeseen legal proceedings and litigation and have been, and may in the future be, named as a defendant in legal proceedings, including certain stockholder class actions, whichjudgments, likefines, manypenalties, litigationor matters,settlements could result in substantial damages and other related costs and may require management-level attention

TheseAny legal proceedingsproceedings, and any other similar or related legal proceedingsclaims, or investigations are subject to inherent uncertainties, and the actual costs to be incurred relating to these matters will depend upon many unknown factors. The outcome of these legal proceedingsproceedings, claims, or investigations is uncertain, and we could be forced to expend significant resources in the defense of these actions, and we may not prevail. Monitoring and defending against legal actions is time-consuming for our Management and staff, and may detract from our ability to fully focus our internal resources on our business activities. We are also generally obligated, to the extent permitted by law, to indemnify our current and former directors and officers who are named as defendants in these and similarlegal actions. We currently cannot estimate the possible costs stemming from these matters, and we also cannot be certain how long it may take to resolve them or the possible amount of any potential sanctions, penalties, or damages that we may incur. It is possible that we could, in the future, incur judgments or enter into settlements of claims for monetary damages. An adverse outcome in theseany matterslegal proceedings, claims, or investigations that results in significant sanctions could have a material adverse effect on our cash flow, results of operations, financial position, or our stock price.

Retail sales of electricity by third parties such as us face regulatory challenges in some states and jurisdictions, including states and jurisdictions we intend to enter where the laws and regulatory policies have not historically embraced competition to the serviceservices provided by the vertically integrated centralized electric utility.utilities. Some of the principal challenges pertain to whether third-party owned solar energy systems qualify for the same levels of rebates or other non-tax incentives available for customer owned solar energy systems, whether third-party owned solar energy systems are eligible at all for these incentives and whether third-party owned solar energy systems are eligible for net metering and the associated significant cost savings. Furthermore, in some states and utility territories third parties are limited in the way they may deliver solar energy to their customers. These regulatory constraints may, for example, give rise to various property tax issues.

The ongoing operations and maintenance of solar energy systems requires individuals hired by us or third-party contractors, potentially including our employees, to work at heights with complicated and potentially dangerous electrical systems. There is substantial risk of serious injury or death if proper safety procedures are not followed. Certain of our operations are subject to regulation under OSHA and Wage and Hour Division, DOT regulations, the U.S. Environmental Protection Agency and equivalent state and local laws that protect and regulate employee health and safety and the environment. Changes to these requirements, or stricter interpretation or enforcement of existing laws or regulations, could result in increased costs. If we fail to comply with applicable occupational safety and health and environmental regulations, we may be subject to civil or criminal enforcement and be required to pay substantial penalties, incur significant capital expenditures, or suspend or limit operations. Since individuals hired by us or on our behalf to perform ongoing operations and maintenance of our solar energy systems, including third-party contractors, are compensated on a per project basis, they are incentivized to work more quickly than servicers compensated on an hourly basis. While we have not experienced a high level of injuries to date, this incentive structure may result in higher injury rates than others in the industry and could accordingly expose us to increased liability. Individuals hired by or on behalf of us may have workplace accidents and receive citations from OSHA regulators for alleged safety violations, resulting in fines. Any such accidents, citations, violations, injuries or failure to comply with industry best practices may subject us to adverse publicity, damage our reputation and competitive position and adversely affect our business.

Our business substantially focuses on Customer Agreements and transactions with residential customers. WeAs offera leases,result, loans and other products and services to consumers by contractors in our networks, who utilize sales people employed by or engaged as third-party service providers of such contractors. Wewe must comply with numerous federal, state and local laws and regulations that govern matters relating to interactions with residential consumers, including those pertaining to consumer protection, marketing and sales, privacy and data security, consumer financial and credit transactions, mortgages and refinancings,refinancing, home improvement contracts, warranties, and various means of customer solicitation.warranties. These laws and regulations are subject to change and to potentially differing interpretations. Additionally, various federal, state and local legislative and regulatory bodies may initiate investigations, which can lead to enforcement actions, expand current laws or regulations, or enact new laws and regulations regarding these matters. Changes in these laws or regulations or their interpretation could dramatically affect how we do business, acquire customers, manage and use information collected from and about current and prospective customers and the costs associated therewith. As a result, we are subject to a constantly evolving consumer protection environment that is difficult to predict and may affect our business. While we have developed policies and procedures designed to assist in compliance with these laws and regulations, no assurance is given that our compliance policies and procedures will be effective. Failure to comply with these laws and with regulatory requirements applicable to our business could subject us to, among other things, damages, class action lawsuits, enforcement actions, civil and criminal liability, settlements, changes in business practices, increased compliance costs, and reputational damage that may harm our business, results of operations, and financial condition.

We previously had identified material weaknesses in our internal control over financial reportingreporting, and determined that continueit toresulted exist, andin our managementinternal hascontrol concludedover thatfinancial ourreporting and disclosure controls and procedures werenot notbeing effective as of December 31, 2024. IfAlthough we failhave to remediateremediated these material weaknesses, orwe if wemay identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal control in the future, and as a result we may not be able to accurately or timely report our financial condition or results of operations and the trading price of our common stock may decline

ASEC rules define a material weakness isas a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected on a timely basis. As previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023,2024, management identified several material weaknesses in internal control over financial reporting. Further,We have successfully completed the testing necessary to conclude that these material weaknesses have been remediated and, as a result, we have concluded that our internal control over financial reporting was not effective as of December 31, 2024 due to the existence of material weaknesses, including certain material weaknesses that were previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and we have also concluded that our disclosure controls and procedures were not effective as of December 31, 2024 due to material weaknesses in our internal control over financial reporting, all as described in Part II, Item 9A. “Controls and Procedures.”2025.

We have generated significant net operating loss carryforwards (or “NOLs”) as a result of the losses that we have historically incurred which, for U.S. federal income tax purposes, can be used to offset future taxable income subject to certain limitations under the Internal Revenue Code and related regulations of the U.S. Treasury. Our ability to use our NOLs will depend on the amount of taxable income generated in future periods. In addition, the use of NOLs and other carryforwards to offset taxable income is subject to various limitations if we undergo an “ownership change” as defined in Section 382 of the Internal Revenue Code. [As of December 31, 2024,2025, we have recorded a full valuation allowance against our NOLs and we can offer no assurance when, or if, we may be able to use our NOLs to offset taxable income.]

We are a “smaller reporting company,” as defined in the Securities Exchange Act,Act of 1934, as amended (the “Exchange Act”), and we currently take, and in the future, intend to continue to take, advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “smaller reporting companies,” including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer a “smaller reporting company.” We will remain a “smaller reporting company” until (a) the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day of our most recently completed second fiscal quarter is $75 million or more and we reported annual net revenues as of our most recently completed fiscal year is $100 million or more, or (b) the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day of our most recently completed second fiscal quarter is $700 million or more, regardless of annual revenue.

If the average closing price of our common stock is less than $1.00 per share for 30 consecutive trading days, we may receive a letter from the staff of the NYSE stating that our common stock will be delisted unless we are able to regain compliance with the NYSE listing criteria requiring that we maintain an average closing price for our common stock of at least $1.00 per share. The average closing price of our common stock was below $1.00 per share for 30 consecutive trading days in 2022 and 2023, toas a result of which we received notices of non-compliance from the NYSE on October 20, 2022 and March 28, 2023. On October 6, 2023, following stockholder approval, we filed thean Amendedamendment to our Certificate of Incorporation to effect a 1-for-8 reverse stock split of the Reverseissued Stockand Split.outstanding shares of our common stock. Although, subsequent to the Reversereverse Stockstock Split,split, we were able to regain compliance because the average closing price for our common stock was subsequently at least $1.00 per share for 30 consecutive trading days, we cannot guarantee that our stock price will continue to trade above $1.00 per share or otherwise meet the NYSE listing requirements and therefore our common stock may in the future be subject to delisting. The continuing effect of the Reverse Stock Split on the market price of our common stock cannot be predicted with any certainty, and the history of similar reverse stock splits for companies in like circumstances is varied. If our common stock is delisted, this would, among other things, substantially impair our ability to raise additional funds and could result in a loss of institutional investor interest and fewer corporate development opportunities for us.

These market and industry factors may materially reduce the market price of our common stock, regardless of our operating performance. In addition, we believe there has been and may continue to be substantial trading in derivatives of our common stock, including short selling activity or related similar activities, which are beyond our control, and which may be beyond the full control of the SEC and Financial Institutions Regulatory Authority or (“FINRA”). While the SEC and FINRA rules prohibit some forms of short selling and other activities that may result in stock price manipulation, such activity may nonetheless occur without detection or enforcement. There can be no assurance that should there be any illegal manipulation in the trading of our common stock, it will be detected, prosecuted or successfully eradicated. Significant short selling market manipulation could cause our common stock trading price to decline, to become more volatile, or both.

We may issue a substantial number of additional shares of common stock, preferred stock, or other equity securities, including under our 2020 Equity Incentive Plan (the “2020 Plan”), without stockholder approval. As of December 31, 2024,2025, we had options,options and restricted stock units (“RSUs”), and warrants outstanding that would require us to issue up to an aggregate of 3,251,3684,159,272 shares of our common stock. We also have the ability to issue up to 324,696,266additional shares of common stock under the 2020 Plan. Pursuant to the 2020 Plan, the number of shares available for issuance automatically increases annually on the first day of each fiscal year during the period beginning with the fiscal year immediately following the fiscal year during which the 2020 Plan is first approved by our stockholders, and ending on the second day of fiscal year 2030, in an amount equal to the lesser of: (a) 5% of the number of outstanding shares of common stock on such date; and (b) an amount determined by the plan administrator. Any such issuance of additional shares of common stock, preferred stock, or other equity securities:

For the years ended December 31, 20242025 and 2023,2024, our revenues totaled $82.1$111.8 million and $79.9$82.1 million, respectively, while our net loss attributable to stockholders was $70.5$26.0 million and $65.8$70.5 million, respectively. Our 20242025 financial performance was significantly impacted by fluctuations inreflects the valuefull of our hedging portfolio, impairment of our goodwill, variations in our operations and maintenance costs, and legal settlements during fiscal year 2024 and, due to the completionimpact of the NJR Acquisition in November 2024, resulting in increased revenues from energy generation and SRECs. 2025 results were also impacted by fluctuations of our fiscalinterest yearrate swaps and variations in our operations and maintenance costs. Our 2024 financial performance doeswas notimpacted reflectby the full incremental impactimpairment of this acquisition on our financialgoodwill results.and legal settlements during fiscal year 2024. See the section titled “Results of Operations” in this Annual Report on Form 10-K for more information on our operating results for the years ended December 31, 20242025 and 2023.2024.

We are a leading owner and operator of distributed solar energy assets across the U.S., offering subscription-based services to owners of home solar assets and customer contracts. Additionally, we provide servicing functions for our assets and customers, as well as for other institutional owners of home solar energy systems. Our operating results and ability to grow our business over time could be impacted by certain factors and trends that affect our industry, as well as elements of our strategy, including the following factors, as well as the risk factors and other factors set forth under “Risk Factors” or elsewhere in this Annual Report on Form 10-K:10-K.

Revenues increased by $2.2$29.7 million, or 3%,36%, to $82.1$111.8 million in 20242025 as compared to 2023.2024. The increase was primarily due to increasedi) PPAan revenuesincrease in SREC revenue of $2.4$17.0 million related to the NJR Acquisition, ii) $10.4 million of incremental SLA revenue related to the NJR Acquisition, and (iii) $3.1 million increase due to aincremental fullservicing year in 2024 reflecting the Tredegar Acquisition, which was completed in August 2023. Revenuesrevenues related to ourcontracted Drivetrainservices andon XLthird-party Gridowned operationssolar areenergy includedsystems in net loss from discontinued operations.2025.

Cost of revenues - solar energy systems depreciation decreasedincreased by $0.4$5.8 million, or 2%,25%, to $23.4$29.1 million in 20242025 as compared to 2023.2024. The decreaseincrease in cost of revenue - solar energy systems depreciation was primarily due to the finalization of purchase price accounting in 2023, offset by incremental depreciation related to the NJR Acquisition in November 2024.

Litigation settlements, net decreased by $20.1$5.7 million, or 73%,77%, to $7.4$1.7 million in 2024.2025. The decrease related to 2024 costs incurred in 2023 associated with settlements of the SEC inquiry, shareholder lawsuits, and othervarious Legacy XL legal matters, partially offset by additional settlement costs, net of related insurance recoveries from third parties, associated with various settled and ongoing legal proceedings in 2024.matters. See Note 16.14. Commitments and Contingencies in Part II, Item 8. Financial Statements and Supplementary Data for a description of our material pending legal proceedings.

Impairment of goodwill increased by $28.8 million, or 100%, to $28.8 million in 2024 due to the full impairment of our goodwill duringDuring the third quarter of 20242024, we recorded a full impairment of goodwill totaling $28.8 million resulting from a continuous decline in our stock price and market capitalization.

Interest expense, net of $40.2$50.9 million for 20242025 primarily relates to (i) $52.2$44.4 million of interest expenseexpense, related to the principal amounts of our outstanding non-recourse debtdebt, net of swaps and (ii) $6.0$6.5 million related to the amortization of debt discount and deferred financing costs, both partially offset by $18.0 million of net realized gains from settlements of our interest rate swaps.costs.

In comparison, interest expense, net of $41.9$40.2 million for 20232024 primarily related to (i) $49.6$34.2 million of interest expense related to the principal amounts of our debtoutstanding instrumentsnon-recourse debt, net of swaps and (ii) $5.9$6.0 million related to the amortization of debt discount and deferred financing costs, both partially offset by $13.7 million of net realized gains from settlements of our interest rate swaps.costs.

Interest expense related to the principal amounts of our outstanding non-recourse debt increased in 2024 as compared to 2023 primarily due to new debt entered into as part of the NJR Acquisition in November 2024. See Note 8. Non-Recourse Debt in Part II, Item 8. Financial Statements and Supplementary Data for further information on our debt. Interest expense, net iswas alsonegatively impacted by the fluctuations in the settlements of our interest rate swaps, which we use to convert variable rates on our non-recourse debt into fixed recourse obligations and are subject to interest-rate risk. See Note 9.8. Interest Rate Swaps in Part II, Item 8. Financial Statements and Supplementary Data for further information on our interest rate swaps.

As of December 31, 2024,2025, we had negative working capital of $76.9$122.9 million,million. includingOur working capital included cash and cash equivalents and restricted cash of $109.1$93.1 million. We had net losses attributable to stockholders of $70.5$26.0 million and $65.8$70.5 million for the years ended December 31, 20242025 and 2023,2024, respectively.

Our principal sources of liquidity include cash and cash equivalents and cash flows from operations.operations as well as cash received from investment related to SEMTH Master Lease. We receive cash from certain of our wholly-owned subsidiaries specifically related to the portfolio servicing fees provided for under the relevant servicing agreements between us and the subsidiaries, as well as reimbursement for any expenses we pay on behalf of those subsidiaries, which are allowed under certain agreements related to those subsidiaries. Our cash requirements depend on many factors, including the execution of our business strategy. We may be required to utilize our cash to support certain current and future operations of our wholly owned subsidiaries. We remain focused on carefully managing costs, including capital expenditures, maintaining a strong balance sheet, and ensuring adequate liquidity. Our primary cash needs are debt servicing, acquisition of solar energy portfolios, operating expenses, and working capital to support the growth in our business. Working capital is impacted by the timing and extent of our business needs. See below discussions under “Cash Flows Summary” for the impact of our operations and M&A transactions on our cash balances during the years ended December 31, 20242025 and 2023.2024.

As of December 31, 2024,2025, our debt balance was $705.3$676.8 million, net of $21.9$16.5 million of unamortized fair value adjustment and $3.3$2.3 million of unamortized deferred financing costs, all of which is non-recourse project-level debt. See Note 7. Non-Recourse Debt. Our debt consists of four senior debt facilities and two subordinate facilities, of which the earliest maturity date is AprilOctober 30, 2026. For additional information on our debt, refer to Note 8.7. Non-Recourse Debt included within the accompanying audited consolidated financial statements.

Operating cash inflows include cash from the sale of solar energy power generated by our home solar energy systems and the servicing of long-term agreements for other institutional owners of home solar energy systems. These operating cash inflows are primarily offset by operating expenses, operating lease paymentsexpenses and interest payments on our outstanding debt. The related cash flows for Drivetrain and XL Grid businesses are reflected as discontinued operating activities for the years presented.

Cash Flows Provided by (Used in) Investing Activities

The net cash used in continuing financing activities in 20232025 was $16.8$37.3 million, which primarily relatedrelates to $32.8$35.1 million for the repayment of non-recourse long-term debtdebt, and $5.4$1.8 million ofrelated to shares repurchased under our Repurchase Program, partially offset by $21.4 million of proceeds from the issuance of long-term debt under the SP2 Facility Amendment to fund the Tredegar Acquisition.Program.

Our consolidated financial statements are prepared in accordance with U.S. GAAP. Preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Our most critical accounting policies and estimates are those most important to the portrayal of its financial condition and results of operations and which require us to make itsour most difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. Although Management believes that its estimates and assumptions are reasonable, they are based on information available when they are made and, therefore, may differ from estimates made under different assumptions or conditions. We have identified the following as the most critical accounting policies and judgments.

Our revenue is derived from our home solar energy Portfolio and servicing platform, which primarily generates revenue through the sale to homeowners of power generated by the home solar energy systems pursuant to long-term agreements. Pursuant to Accounting Standards Codification (“ASC”) 606 defined below, we have elected the “right to invoice” practical expedient, and revenues for the performance obligations related to energy generation and servicing revenue are recognized as services are rendered based upon the underlying contractual arrangements. Previously, we also derived revenue from the Drivetrain operations which generated revenue from the sales of hybrid electric powertrain systems, and the XL Grid operations which generated revenues through turnkey energy efficiency, renewable technology and other energy solutions. As of and for the years ended December 31, 2024 and 2023, the Drivetrain business and XL Grid business are reported as discontinued operations.

We account for our investment related to the SEMTH master lease agreement in accordance with Accounting Standards Codification (“ASC”) 325-40, Investments—Other—Beneficial Interests in Securitized Financial Assets. We recognize 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 our consolidated statements of operations. On a recurring basis, we evaluate 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, we prospectively update our expected cash flows accordingly. 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, estimated production, and expected cash outflows associated with operating and maintenance of these solar assets.

The following discussion and analysis provides information which our management believes is relevant to an assessment and understanding of our financial condition and results of operations. This discussion and analysis should be read together with our results of operations and financial condition and the unaudited condensed consolidated financial statements and related notes that are included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 31, 2026 (as amendedamended, by the Annual Report on Form 10-K/A filed with the SEC on April 3, 2026 (the “Annual Report”). In addition to historical financial information, this discussion and analysis contains forward-looking statements based upon current expectations that involve risks, uncertainties, and assumptions. Refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements.” Actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” or elsewhere in this Quarterly Report on Form 10-Q and under “Risk Factors” in Item 1A of the Annual Report.

For the three months ended MarchJune 31,30, 2026 and 2025, our revenues totaled $23.4$30.3 million and $23.8$33.3 million, respectively, while our net income attributable to stockholders was $3.3 million for the three months ended June 30, 2026 and our net loss attributable to stockholders was $2.9$3.0 million for the three months ended June 30, 2025. For the six months ended June 30, 2026 and 2025, our revenues totaled $53.8 million and $15.3$57.1 million, respectively.respectively, while our net income attributable to stockholders was $0.4 million for the six months ended June 30, 2026 and net loss attributable to stockholders was $18.3 million for the six months ended June 30, 2025. Our financial performance during the three and six months ended MarchJune 31,30, 2026 was impacted by reductions in our operations and maintenance costs, reductions in our selling, general and administrative expenses, and fluctuations in the value of our interest rate swaps. See the section below titled “Results of Operations” in this Quarterly Report on Form 10-Q for more information on our operating results for the three and six months ended MarchJune 31,30, 2026 and 2025.

We focus on several core pillars in our operations and we strive to deliver operational excellence to our clean energy customers and the communities we serve. For the three months ended MarchJune 31,30, 2026, our portfolio generated approximately 105196 thousand MWh of power, compared to the 123187 thousand MWh of power for the three months ended MarchJune 31,30, 2025. We prioritize a high level of customer satisfaction through our in-house call centers and customer service support teams. For three months ended MarchJune 31,30, 2026, our customer satisfaction score was 81%.80%. We also concentrate our efforts on a growth strategy focusing on accretive acquisitions and a capital-light approach expanding our existing service offerings through our Sprue Pro services platform. As a result of fully integrating the NJR Acquisition and limited deployment of new growth capital in 2025, revenues remained relatively flat for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Certain information above constitutes key operating metrics, but do not constitute all of such metrics that we use to evaluate our operations, measure our performance and identify trends in our business. Some of our key operating metrics areinclude estimates that are based on our management’s beliefs and assumptions and on information currently available to management. Although we believe we have a reasonable basis for each of these estimates, we caution that these estimates are based on a combination of assumptions that may prove to be inaccurate over time, and any inaccuracies could be material to our actual results when compared to our calculations. See the section titled “Risk Factors” in Item 1A of our Annual Report for more information. Furthermore, other companies may calculate these operating metrics differently than we do now or in the future, which would reduce their usefulness as a comparative measure.

During the three months ended MarchJune 31,30, 2025, wethe Company acquired 83109 additional solar energy systems pursuant toof the Additional NJR Acquisition,Systems for approximately $1.6$2.9 million in cash, inclusive of transaction costs of less than $0.1 million. During the three months ended March 31, 2026, no additional systems were acquired.

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 extension to October 30, 2026, and 3.25% per annum until maturity. The SP1 Facility Amendment includes a cross-default provision with the Second Key BankKeyBank Credit Agreement.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

Information with respect to the unaudited condensed consolidated statements of operations for the three months ended MarchJune 31,30, 2026 and 2025 is presented below:

Revenues decreased by $0.4$2.9 million, or 2%,9%, to $23.4$30.3 million in the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025. The decrease was due primarily to a $0.6$1.4 million reduction in performance based revenues, a $1.1 million reduction in SRECs, and a $0.7 million reduction in non-cash amortization revenues related to capitalized intangible solar agreements as well as a $0.3 million decrease in PPA revenues due to buyouts and weather related impacts.agreements. This was partially offset by a modest $0.1$0.3 million increase in SLA revenues primarily related to the incremental NJR system acquisitions closed in the second half of 2025 and a $0.6 million net increase in SREC and performance based revenues.

Cost of revenues - solar energy systems depreciation was flat at $7.3 million in the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025. A modest increase from incremental depreciation related to the NJR incremental acquisitions was offset by a reduction from buyouts.

Selling, general and administrative (“SG&A”) expenses decreased by $3.1$4.0 million, or 21%,26%, to $11.6$11.3 million in the three months ended MarchJune 31,30, 2026 as compared to $14.7$15.2 million in the same period in 2025 primarily due to a decrease in compensation and benefits driven by a decrease in labor force, lower professional and audit related fees, and a marginal decrease in net legal fees including litigation settlements. This was partially offset by a marginal increase in bad debt expense and other expenses associated with the debt extension.

Interest income of $4.8 million in the three months ended MarchJune 31,30, 2026 related to $4.3 million of interest income from the SEMTH Master Lease and $0.5 million interest earned on investments. In comparison, interest income of $5.3$5.2 million for the three months ended MarchJune 31,30, 2025 related to $4.5$4.4 million of interest income from the SEMTH Master Lease and $0.8 million of interest earned on investments.

Interest expense, net in the three months ended MarchJune 31,30, 2026 of $12.3$12.9 million consisted of $12.1$12.0 million of interest expense, $1.6and $2.1 million related to the amortization deferred financing costs, partially offset by realized gains from settlements of our interest rate swaps of $1.4$1.3 million.

In comparison, interest expense, net in the three months ended MarchJune 31,30, 2025 consisted of $12.7$12.8 million $13.2consisted of $11.2 million of interest expenseexpense, relatednet toof therealized principalgains amountsfrom settlements of our outstandinginterest non-recourserate debtswaps, and $1.6 million related to the amortization of debt discount and deferred financing costs, both partially offset by $2.1 million of net realized gains from settlements of our interest rate swaps.costs.

Other (Income) Expense, net

Other expense,income, net of $0.8$1.7 million gain for the three months ended MarchJune 31,30, 2026 primarily related to the change in fair value of interest rate swaps due to changes in forecasted market interest rates, while other expense, net of $6.2$4.1 million lossgain for the three months ended MarchJune 31,30, 2025 primarily related to the change in fair value of interest rate swaps.

As of MarchJune 31,30, 2026, we had negative working capital of $119.7$175.0 million resulting from the presentation of the principal amounts outstanding under the SP1 Facility and SP2 Facility as current debt as of that date. Our negative working capital included cash and cash equivalents and restricted cash of $85.6$81.5 million. We had net lossesincome attributable to stockholders of $2.9 million and $15.3$0.4 million for the threesix months ended MarchJune 31,30, 2026 and 2025,net respectively.loss attributable to stockholders of $18.3 million for the six months ended June 30, 2025.

Our principal sources of liquidity include cash and cash equivalents and cash inflows from operations. We receive cash from certain of our wholly-owned subsidiaries specifically related to the portfolio servicing fees provided for under the relevant servicing agreements between us and the subsidiaries, as well as reimbursement for any expenses we pay on behalf of those subsidiaries, which are allowed under certain agreements related to those subsidiaries. Our cash requirements depend on many factors, including the execution of our business strategy. We may be required to utilize our cash to support certain current and future operations of our subsidiaries. We remain focused on managing costs, including capital expenditures, maintaining a strong balance sheet, and ensuring adequate liquidity. Our primary cash needs are debt servicing, acquisition of solar energy portfolios, operating expenses, and working capital to support the growth in our business. Working capital is impacted by the timing and extent of our business needs. See below discussions under “Cash Flows Summary” for the impact of our operations on our cash balances during the threesix months ended MarchJune 31,30, 2026 and 2025.

As of MarchJune 31,30, 2026, our aggregate debt balance was $668.3$662.6 million, net of $15.1$14.1 million of unamortized fair value adjustment and $3.9$2.9 million of unamortized deferred financing costs, all of which is non-recourse project-level debt. Our debt consists of five senior debt facilities and one subordinated debt facility, of which the earliest maturity date is October 30, 2026, unless a signed term sheet for a long-term financing is obtained, in which case the earliest maturity date is January 30, 2027 and has been classified as current at MarchJune 31,30, 2026. The maturity date of the SP2 Facility is May 14, 2027 and has been classified as current as of June 30, 2026. For additional information on our debt, refer to Note 7. Non-Recourse Debt included within the accompanying unaudited condensed consolidated financial statements.

The Company’s debt obligations under the SP1 Facility and SP2 Facility are non-recourse to the Company (see Note 7. Non-Recourse Debt). With regards to the SP1 Facility, on March 27, 2026, the Company entered into the SP1 Facility Amendment, as defined below,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. WithThe regardsmaturity todate of the SP2 Facility, the maturity dateFacility is May 14, 2027 (the “SP2 Maturity Date”). Because (i) the Amended SP1 Maturity Date and the SP2 Maturity Date are within twelve months from the date the accompanying unaudited condensed consolidated financial statements are issued, (ii) the Company has not yet entered into a commitment to refinance the SP1 or SP2 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 or the SP2 Facility at the SP2 Maturity Dates,Date, (iv) the Company had negative working capital of $119.7$175.0 million as of MarchJune 31,30, 2026 solely due to the current maturity of the SP1 Facility atand thatSP2 date,Facility, and (v) the Company has experienced recurring net losses and negative cash flows from operations for the threesix months ended MarchJune 31,30, 2026 and 2025, these conditions raise substantial doubt about the Company’s ability to continue as a going concern. Our condensed consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty.

The Company plansis toworking refinancetowards obtaining a signed term sheet for the SP1 Facility prior to the Amended SP1 Maturity DateDate, refinancing the SP1 Facility before the extended maturity date of January 30, 2027, and refinancing the SP2 Facility byprior to the SP2 Maturity Date consistent with the Company’s historical financing strategy for investing in solar assets on a leveraged basis. The Company has commencedengaged preliminarya discussionsfinancial advisor to assist the Company with potential lenders with respect to refinancing the SP1 Facility,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 or the SP2 Facility, this could result in a foreclosure of collateral and negatively impact operations. Further, an event of default on the SP1 Facility, ifSP2 notFacility, curedor inSP3 the permittable time allowed under the agreement,Facility would result in a cross default on the Second Key BankKeyBank Credit Agreement, which is also non-recourse.Agreement.

Net cash used in operating activities improved by $6.4$5.5 million in the threesix months ended MarchJune 31,30, 2026 compared to the same period in 2025 primarily due to a decrease in the Netnet Lossloss primarily related to lower O&M and SG&A expenses during the threesix months ended MarchJune 31,30, 2026, discussed above. Net working capital changes remained consistent compared to the prior year quarter while accounts receivable increased primarily due to SREC receivables resulting in a negative impact on cash.

The net cash provided by investing activities in the threesix months ended MarchJune 31,30, 2026 was $5.3$12.3 million, which primarily related to $3.9$9.4 million of proceeds from our investments under the SEMTH Master Lease and $1.4$2.9 million of proceeds from the sale of solar energy systems. There were no payments related to the acquisition or purchases of property and equipment in 2026 compared to $1.6$4.5 million paidrelated forto incrementalthe acquisition of the Additional NJR solar systems and $0.1 million paid for equipmentSystems in 2025.

The net cash provided by investing activities in the threesix months ended MarchJune 31,30, 2025 primarily related to $4.5$10.5 million of proceeds from the SEMTH investment and $1.4$2.6 million of proceeds from the sale of solar energy systems, partially offset by $1.6$4.5 million of net payments related to the NJR Acquisition.

The net cash used in financing activities in the threesix months ended MarchJune 31,30, 2026 was $10.2$18.0 million, which primarily related to $8.2$16.1 million for repayments of our non-recourse debt, and $1.9 million related to deferred financing costs incurred as part of the SP1 extension.

The net cash used in financing activities in the threesix months ended MarchJune 31,30, 2025 primarily related to $6.8$13.6 million for repayments of our non-recourse debt and $0.8$1.8 million related to shares repurchased under our Repurchase Program.

Our unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP. Preparation of these unaudited condensed financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Our most critical accounting estimates are those most important to the portrayal of its financial condition and results of operations and which require us to make its most difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. Although management believes that its estimates and assumptions are reasonable, they are based on information available when they are made and, therefore, may differ from estimates made under different assumptions or conditions. Our critical accounting estimates are discussed within Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report. Other than the valuation models used in determining future principal debt amortization on certain of our credit facilities, there have been no other material changes to our critical accounting estimates during the threesix months ended MarchJune 31,30, 2026.