Solar energy services provider Spruce Power Holding Corp. was assessed an $11 million penalty by the Securities and Exchange Commission (SEC) as part of a settlement addressing its predecessor’s alleged misleading of investors regarding its electric vehicle sales pipeline.

Spruce Power, based in Denver, was formerly known as XL Fleet, which provided hybrid electric vehicle systems for commercial fleet vehicles. The timing of XL Fleet’s alleged misconduct coincided with its going public through a September 2020 merger with a special purpose acquisition company (SPAC), the SEC said in a press release Thursday.

Spruce Power’s penalty total took into consideration its cooperation and remedial efforts, the agency noted.

The details: From the time of the SPAC merger to January 2021, XL Fleet made public statements highlighting it had a sales pipeline of more than $220 million, according to the SEC’s order. The company forecasted revenue growth projections from $21 million in 2020 to $75 million for 2021 to $1.4 billion by 2024.

The statements regarding XL Fleet’s sales pipeline were materially misleading, the SEC alleged, as more than 90 percent of the $220 million figure consisted of speculative sales opportunities. The company’s projected growth was also claimed to be based on a historical conversion rate, but the agency found no such rate was utilized to provide support to the projections.

The alleged misleading figures were published in current reports, offering registration statements, and proxy materials filed with the SEC, the agency noted.

Compliance considerations: The SEC’s order did not specify the cooperation and remediation put forward by Spruce Power. The company sold or ceased all its business operations under XL Fleet by December.

Company response: “We are pleased to resolve these items that are unrelated to Spruce’s current management team or business plan,” said Spruce Power Chief Legal Officer Jonathan Norling in a statement. “Having these matters resolved will better allow Spruce to look forward.”

Spruce Power neither admitted nor denied the SEC’s findings.