Spruce Power Announces Actions to Exit Legacy XL Fleet Drivetrain Business

Spruce Power (NYSE: SPRU) (“Spruce” or the “Company”; formerly known as XL Fleet), a leading owner and operator of distributed solar energy assets across the United States, today announced completion of its strategic transformation to a pure play clean energy solutions business:

• Spruce Power will cease operations of its hybrid and drivetrain-related business lines, including all product development and commercial activities.
  

• The Company entered into a definitive agreement whereby The Shyft Group USA, Inc. (“Shyft”), a wholly owned subsidiary of The Shyft Group, Inc. (NASDAQ: SHYF), will assume completion of a pilot development agreement with the Department of Defense related to vehicle hybridization (“DOD program”). Spruce will retain rights to potential future royalties from the program.
  
  Related to the development opportunity, Shyft will acquire from XL Fleet certain technical equipment and assume a lease in Wixom, Michigan related to the initiative. Shyft is also expected to offer employment to engineers and others currently employed by XL Fleet.
  

• In a separate transaction, Spruce has sold certain battery inventory and its legacy hybrid technology to RMA Group, a leading automotive and equipment supplier in Southeast Asia.

The Company anticipates that these actions will be completed by January 1, 2023 and should significantly reduce future operating cash use. Additionally, Spruce believes that the previously disclosed warranty reserve is sufficient to meet probable claims covering those vehicles currently under warranty.

“These actions transform our business into a pure-play provider of clean energy solutions to residences and small businesses,” said Eric Tech, Chief Executive Officer of Spruce Power. “We are excited that our former colleagues will have a new opportunity with Shyft to bring EV solutions to specialty commercial vehicle manufacturing, assembly, and upfit. We wish them well in the transition.”

Tech continued, “With these steps, our business transformation is complete, and we enter 2023 in a strong position, able to unlock the value of Spruce Power as a streamlined and refocused company. As a pure play renewable energy provider, we can soon transition the Chief Executive Officer role from me to our President Christian Fong. We expect to announce that transition in the weeks ahead.”

About Spruce Power

Spruce Power is a leading owner and operator of distributed solar energy assets across the United States. We provide subscription-based services that make it easy for homeowners and small businesses to own and maintain rooftop solar and battery storage. Our as-a-service model allows consumers to access new technology without making a significant upfront investment or incurring maintenance costs. Our company has more than 51,000 subscribers across the United States. For additional information, please visit www.sprucepower.com.