Summer Energy (SUME) 10-Q 15 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 12, 2017
Details
Registrant Name	SUMMER ENERGY HOLDINGS INC
Registrant CIK	1,396,633
SEC Form	10-Q
Period End date	Mar. 31, 2017
Fiscal Year End	--12-31
Trading Symbol	sume
Tax Identification Number (TIN)	202,722,022
Number of common stock shares outstanding		22,463,424
Filer Category	Smaller Reporting Company
Current with reporting	Yes
Voluntary filer	No
Well-known Seasoned Issuer	No
Amendment Flag	false
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Contained File Information, File Number	001-35496
Entity Incorporation, State Country Name	Nevada
Entity Address, Address Line One	800 Bering Drive, Suite 260, Houston, Texas
Entity Address, Postal Zip Code	77,057
City Area Code	(713) 375-2790

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Current Assets
Cash	$ 784,464	$ 1,523,008
Restricted cash	1,910,162	1,904,898
Accounts receivable, net	16,722,796	15,655,886
Prepaid and other current assets	376,560	325,640
Total current assets	19,793,982	19,409,432
Property and Equipment, net	190,684	238,793
Deferred financing, net	112,430	134,916
Total assets	20,097,096	19,783,141
Current Liabilities
Accounts payable	470,631	407,602
Accrued wholesale power purchased	6,276,471	5,636,942
Accrued expenses	4,839,368	5,256,595
Total current liabilities	11,586,470	11,301,139
Long-Term Liabilities
Long-term debt, net of debt discount and current portion	2,500,000	2,500,000
Total long-term liabilities	2,500,000	2,500,000
Stockholders' Equity
Common Stock - $.001 par value, 100,000,000 shares authorized, 22,463,424 and 22,463,424 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively	22,463	22,463
Subscription receivable	(52,000)	(52,000)
Additional paid in capital	14,692,179	14,615,555
Accumulated deficit	(8,652,016)	(8,604,016)
Total stockholders' equity	6,010,626	5,982,002
Total liabilities and stockholders' equity	20,097,096	19,783,141
Total liabilities	$ 14,086,470	$ 13,801,139

CONSOLIDATED BALANCE SHEETS - P

CONSOLIDATED BALANCE SHEETS - Parenthetical - $ / shares	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Details
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized		100,000,000	100,000,000
Common Stock, Shares, Issued	22,463,424	22,463,424
Common Stock, Shares, Outstanding	22,463,424	22,463,424

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Details
Electricity Revenue	$ 23,331,522	$ 19,656,709
Cost of Goods Sold
Power purchases and balancing/ancillary	9,947,289	7,880,444
Transportation and distribution providers charge	9,628,981	7,375,825
Total cost of goods sold	19,576,270	15,256,269
Gross Profit	3,755,252	4,400,440
General and Administrative	3,659,572	2,910,856
Operating Income/(Loss)	95,680	1,489,584
Other Income (Expense)
Financing costs	(22,486)	(298,006)
Interest expense	(121,349)	(151,006)
Interest income	155	61
Total other income (expense)	(143,680)	(448,951)
Net Income/(Loss) Before Income Taxes	(48,000)	1,040,633
Income Taxes	0	0
Net Income/(Loss)	(48,000)	1,040,633
Series B Preferred shares dividend	0	(56,847)
Net Income/(Loss) applicable to common shareholders	$ (48,000)	$ 983,786
Net income(Loss) per common share:
Basic	$ 0	$ 0.06
Dilutive	$ 0	$ 0.06
Weighted average number of shares:
Basic	22,463,424	16,332,573
Dilutive	22,463,424	16,477,333

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash Flows from Operating Activities
Net Income/(Loss)	$ (48,000)	$ 1,040,633
Adjustments to reconcile net income/(loss) to net cash provided by (used in) operating activities:
Stock Compensation expense	76,624	7,500
Non-cash financing costs	22,486	298,006
Depreciation of property and equipment	50,672	65,995
Bad debt expense	501,261	433,134
Changes in operating assets and liabilities:
Prepaid and other current assets	(50,920)	(32,346)
Accounts payable	63,029	(10,377)
Accrued wholesale power purchases	639,529	274,209
Accrued expenses	(417,227)	(548,059)
Accounts receivable	(1,568,171)	(1,150,275)
Net cash provided by (used in) operating activities	(730,717)	378,420
Cash Flows from Investing Activities
Sale (Purchase) of restricted cash	11,463	(88,420)
Cash collateral (deposited) refunded with the utilities	(16,727)	5,737
Purchase of property and equipment	(2,563)	(50,612)
Net cash provided by (used in) investing activities	(7,827)	(133,295)
Cash Flows from Financing
Repayment on note payable	0	(111,057)
Dividends on Series B preferred stock	0	(44,879)
Net cash provided by (used in) financing activities	0	(155,936)
Net Change in Cash	(738,544)	89,189
Cash at Beginning of Period	1,523,008	382,490
Cash at End of Period	784,464	471,679
Supplemental Disclosure of Cash Flow Information:
Income taxes paid	0	0
Interest paid	121,349	151,006
Non-Cash Transactions:
Issuance of common stock for dividend payable on Series B preferred stock	$ 0	$ 11,968

Note 1 - Organization

Note 1 - Organization	3 Months Ended
	Mar. 31, 2017
Notes
Note 1 - Organization	NOTE 1 – ORGANIZATION The unaudited consolidated financial statements include the accounts of Summer Energy Holdings, Inc. and its wholly-owned subsidiaries Summer Energy, LLC (“Summer LLC”), Summer EM Marketing, LLC (“Marketing LLC”) and Summer Energy of Ohio, LLC (“Summer Ohio”) (collectively referred to as the “Company,” “we,” “us,” or “our”). All significant intercompany transactions and balances have been eliminated in these consolidated financial statements. Summer LLC is a retail electric provider in the State of Texas under a license with the Public Utility Commission of Texas (“PUCT”). Summer LLC procures wholesale energy and resells it to commercial and residential customers. Summer LLC was organized on April 6, 2011, under the laws of the state of Texas. The operations of Summer LLC are the Company’s sole line of business. Marketing LLC was formed in the State of Texas on November 6, 2012, to provide certain marketing services to Summer LLC. Summer Ohio was formed in the State of Ohio on December 16, 2013 to procure and sell electricity in the state of Ohio. The Public Utilities Commission of Ohio (“PUCO”) issued a certificate as a Retail Electric Service Provider to Summer Ohio on June 16, 2015. At this time, there is no business activity in the State of Ohio.

Note 2 - Basis of Presentation

Note 2 - Basis of Presentation	3 Months Ended
	Mar. 31, 2017
Notes
Note 2 - Basis of Presentation	NOTE 2 - BASIS OF PRESENTATION The accompanying financial statements have been prepared in accordance with generally accepted accounting principles of the United States of America (“GAAP”) for interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2017, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the Securities and Exchange Commission (“SEC”) on March 30, 2017. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amount of revenues and expenses during the reporting period. Actual results may differ from these estimates.

Note 3 - Significant Accounting

Note 3 - Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Notes
Note 3 - Significant Accounting Policies	NOTE 3 SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition Our electricity revenue is recognized by our Company upon delivery of electricity to a customer’s meter. This method of revenue recognition is commonly referred to as the flow method. The flow method of revenue relies upon Electric Reliability Council of Texas (“ERCOT”) settlement statements to determine the estimated revenue for a given month. Supply delivered to customers for the month, measured on a daily basis, provides the basis for revenues. Electricity revenue consists of proceeds from energy sales, including, pass through charges from the Transmission and Distribution Providers (“TDSPs”) billed to the customer at cost. Unbilled Revenue and Accounts Receivable Electric services not billed by month-end are accrued based upon estimated deliveries to customers as tracked and recorded by ERCOT multiplied by our average billing rate per kilowatt hour (“kWh”) in effect at the time. At the end of each calendar month, revenue is accrued to unbilled receivables based on the estimated amount of power delivered to customers using the flow technique. Unbilled revenue also includes accruals for estimated TDSP charges and monthly service charges applicable to the estimated electricity usage for the period. All charges that were physically billed to customers in the calendar month are recorded from the unbilled account to the customer receivable account. Unbilled accounts as of March 31, 2017 and December 31,2016 were estimated at $12,630,394 and $10,922,288, respectively. Accounts receivable are customer obligations billed at the customer’s monthly meter read date for that period’s electricity usage and due within 16 days of the date of the invoice. Balances past due are subject to a late fee that is assessed on that billing. The Company determines the allowance based upon a review of outstanding receivables, historical write-off experience and existing economic conditions. Receivables past due over 90 days are considered delinquent and reviewed individually for collectability. After all means of collection have been exhausted, delinquent receivables are written off. Management has determined that the allowance for doubtful accounts as of March 31, 2017, and December 31, 2016 is $1,497,780 and $999,046 respectively. Bad debt expense for the three months ended March 31, 2017 and 2016 is $501,261 and $433,134, respectively. Cost Recognition Direct energy costs are recorded when the electricity is delivered to the customer’s meter. Cost of Goods Sold (“COGS”) include electric power purchased and pass through charges from the TDSP’s in the areas serviced by the Company. TDSP charges are costs for metering services and maintenance of the electric grid. TDSP charges are established by regulation of the PUCT. The energy portion of our COGS is comprised of two components: bilateral wholesale costs and balancing/ancillary costs. These two cost components are incurred and recognized differently as follows: Bilateral wholesale costs are incurred through contractual arrangements with wholesale power suppliers for firm delivery of power at a fixed volume and fixed price. We are invoiced for these wholesale volumes at the end of each calendar month for the volumes purchased for delivery during the month, with payment due 20 days after the end of the month. Balancing/ancillary costs are based on the customer load and are determined by ERCOT through a multiple step settlement process. Balancing costs/revenues are related to the differential between supply that we provided through our bilateral wholesale supply and the supply required to serve our customer load. The Company endeavors to minimize the amount of balancing/ancillary costs through our load forecasting and forward purchasing programs.

Note 4 - Private Placement of S

Note 4 - Private Placement of Series B Preferred Shares	3 Months Ended
	Mar. 31, 2017
Notes
Note 4 - Private Placement of Series B Preferred Shares	NOTE 4 – PRIVATE PLACEMENT OF SERIES B PREFERRED SHARES On February 19, 2014, the Company filed a Certificate of Designation of Rights, Preferences, Privileges and Restrictions (the “Series B Designation”) with respect to a class of preferred stock designated as Series B Preferred Stock (the “Series B Preferred”). The Series B Preferred is convertible into common stock at the election of the holder, with an initial conversion price of $1.00 per share. The Certificate of Designation provides certain adjustments to the conversion price to adjust for stock splits, adjustments, and issuance of additional shares of stock. Mandatory Conversion On June 24, 2016, the holders of Series B Preferred shares affirmatively elected to convert all outstanding shares of Series B Preferred into shares of the Company’s common stock. During the three months ended March 31, 2017 and 2016, the Company had paid $0 and $56,847 of cumulative monthly dividends on Series B Preferred Stock, respectively.

Note 5 - Letters of Credit

Note 5 - Letters of Credit	3 Months Ended
	Mar. 31, 2017
Notes
Note 5 - Letters of Credit	NOTE 5 - LETTERS OF CREDIT As of March 31, 2017, the Company secured nine irrevocable stand-by letters of credit totaling $1,188,200 with a financial institution for the benefit of the Transmission and Distribution Providers ("TDSPs") that provide transition services to the Company. The nine letters of credit will expire during the second quarter of 2017 and are subject to automatic extension and renewal provisions. The nine letters of credit are secured by restricted cash held by the financial institution who issued the irrevocable stand-by letters of credit. As of March 31, 2017, none of the letters of credit issued on behalf of the Company were drawn upon.

Note 6 - Advance To Loan Amount

Note 6 - Advance To Loan Amount Note	3 Months Ended
	Mar. 31, 2017
Notes
Note 6 - Advance To Loan Amount Note	NOTE 6 - ADVANCE TO LOAN AMOUNT NOTE On April 18, 2014, the Company signed an Advance to Loan Amount Note with Comerica Bank in the amount of $1,500,000. The Note had an original maturity date of December 22, 2014, which was extended through February 22, 2015. On February 22, 2015, the Advance to Loan Amount Note was increased from $1,500,000 to $1,700,000 and extended again to November 4, 2016, with interest thereon at a per annum rate equal to the "Prime Referenced Rate" plus the "Applicable Margin." The "Prime Referenced Rate" means, for any day, a per annum interest rate which is equal to the "Prime Rate" in effect on such day, but in no event and at no time shall the "Prime Reference Rate" be less than the sum of the Daily Adjusting LIBOR Rate for such day plus two and one-half percent (2.5%) per annum. "Prime Rate" means the per annum rate established by Comerica Bank as its prime rate for its borrowers at any such time. "Applicable Margin" means 2% per annum. Accrued and unpaid interest on the unpaid principal balance outstanding shall be payable monthly, in arrears, on the first business day of each month. Guaranty of the Advance to Loan Amount Note was made by four members of the Company's board of directors ("Guarantors"). The Company agreed to issue the four Guarantors a total of 120,000 shares of the Company's common stock per month (30,000 shares of common stock per month per Guarantor) reduced accordingly as the loan is reduced for agreeing to act as a Guarantor of the Advance to Loan Amount. In May 2016, the Company released the Guarantors from the obligation to guaranty the Advance to Loan Amount Note and stock payments for such guaranty were discontinued as of May 31, 2016. During the quarter ended March 31, 2017 and 2016, the Company issued 0 shares and 298,004 shares of common stock, respectively to the Guarantors and the Company recognized $0 and $298,006, respectively in financing cost.

Note 7 - Financing From Black I

Note 7 - Financing From Black Ink Energy LLC	3 Months Ended
	Mar. 31, 2017
Notes
Note 7 - Financing From Black Ink Energy LLC	NOTE 7 - FINANCING FROM BLACK INK ENERGY LLC On March 2, 2015, Summer Energy, LLC (the “Borrower”), a wholly owned subsidiary of Summer Energy Holdings, Inc. (“SEH”), entered into a Second Lien Term Loan Agreement (the “Agreement”) with Black Ink Energy, LLC (“BIE”). Pursuant to the Agreement, BIE agreed to provide a term loan (the “Term Loan”) to the Borrower, and the Borrower agreed to borrow and repay funds loaned by BIE. The amount of the Term Loan was Three Million Dollars $3,000,000, and the loan was not revolving in nature. Pursuant to the Agreement, any amounts prepaid or repaid may not be re-borrowed by the Borrower. The maturity date of the loan was September 2, 2016. The Term Loan bears interest at a rate of 15% per annum, except in the occurrence of an event of default, at which point the default interest rate will be 18%. Interest is payable in arrears on the last day of each month and on the maturity date of the loan. The Term Loan was not evidenced by a promissory note. The Term Loan to BIE in the amount $3,000,000 was paid in full during the second quarter of 2016 and the agreements between the Company and BIE were terminated. During the quarter ended March 31, 2017 and 2016, the Company paid interest expense in the amount of $0 and $113,750, respectively to BIE.

Note 8 - Warrants

Note 8 - Warrants	3 Months Ended
	Mar. 31, 2017
Notes
Note 8 - Warrants	NOTE 8 – WARRANTS The Company has issued warrants to purchase shares of the Company’s common stock associated with certain agreements and has vested warrants from a previously terminated Master Marketing Agreement. No new warrants were issued or vested during the quarter ended March 31, 2017. As of March 31, 2017, the outstanding number of warrants to purchase the Company’s common stock was 1,891,000

Note 9 - Wholesale Power Purcha

Note 9 - Wholesale Power Purchase Agreement	3 Months Ended
	Mar. 31, 2017
Notes
Note 9 - Wholesale Power Purchase Agreement	NOTE 9 - WHOLESALE POWER PURCHASE AGREEMENT On April 25, 2014, the Company closed a transaction with DTE Energy Trading, Inc. (“DTE”), with an effective date of April 1, 2014. As part of the transaction, the Company and DTE entered into an Energy Marketing Agreement for Electric Power (the “Energy Marketing Agreement”). Pursuant to the terms of the Energy Marketing Agreement, the Company agreed to purchase its electric power and associated services requirements from DTE, and DTE agreed to provide the Company with certain credit facilities to assist the Company in the purchase of its electric power and associated service requirements. The Company also agreed to pay DTE a fixed monthly fee, as well as certain fees based on megawatt hours purchased. The terms of the Energy Marketing Agreement are governed by the ISDA 2002 Master Agreement, as well as a Schedule and Power Annex thereto (the “2002 Master Agreement”). In conjunction therewith, the Company and DTE also entered into a Credit Agreement, a Security Agreement and a Membership Interest Pledge Agreement. Pursuant to the Credit Agreement, among other things DTE agreed to (i) provide a guaranty (a “Credit Guaranty”) to the Electric Reliability Council of Texas (“ERCOT”) for the benefit of the Company, and (ii) provide commodity loans for the purchase of electricity (“Commodity Loans”). Each Commodity Loan and any Credit Guaranty shall bear interest on the outstanding principal amount thereof, from the date such Commodity Loan or Credit Guaranty is issued until it becomes due or is revoked, respectively, at a rate per annum equal to the Prime Rate (as reported by the Wall Street Journal) plus two percent (2%). The Company covenanted not to, among other things, (a) merge or consolidate with any other person, (b) acquire all or substantially all of the capital stock or property of another person, (c) create, assume or suffer to exist any lien on any property now owned or hereafter acquired by the Company except for permitted liens (as set forth in the Credit Agreement) or (d) become liable for any indebtedness (other than permitted indebtedness, as set forth in the Credit Agreement). In consideration of the services and credit support provided by DTE to the Company, and pursuant to the Security Agreement, the Company is required to, among other things (i) grant a priority security interest to DTE in all of its assets, equipment and inventory; (ii) require its customers to remit monthly payments into a lockbox account over which DTE has a security interest; and (iii) deliver monthly and annual forecasted and audited statements to DTE. Pursuant to the Membership Interest Pledge Agreement, the Company pledged to DTE, and granted to DTE a security interest in all of the membership interests of Summer Energy, LLC owned by the Company, as well as all additional membership interests of Summer Energy, LLC from time to time acquired by the Company.

Note 10 - 2012 Stock Option and

Note 10 - 2012 Stock Option and Stock Award Plan	3 Months Ended
	Mar. 31, 2017
Notes
Note 10 - 2012 Stock Option and Stock Award Plan	NOTE 10 – 2012 STOCK OPTION AND STOCK AWARD PLAN During 2012, the Company approved the 2012 Stock Option and Stock Award Plan ("Plan") established to advance the interest of the Company and its shareholders by providing an incentive to attract, retain and reward persons performing services for the Company and by motivating such persons to contribute to the growth and profitability of the Company. The maximum aggregate number of (i) shares of stock that may be issued under the Plan, and (ii) shares of stock with respect to which stock appreciation rights may be granted, is 785,000 and consists of authorized but unissued or reacquired shares of stock or any combination thereof. Such number of shares of stock may be issued under the Plan pursuant to Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock Grants, Stock Appreciation Right Grants or any combination thereof, so long as the aggregate number of shares so issued does not exceed such number of shares, as adjusted. The Plan continues in effect until the earlier of its termination by the Board or the date on which all the shares of stock available for issuance under the Plan have been issued and all restrictions on such shares under the terms on the Plan and the agreement evidencing awards granted under the Plan have lapsed. However, all awards shall be granted, if at all, within ten (10) years from the earlier of the date the Plan is adopted by the Board or the date the Plan is duly approved by the Shareholders of the Company. As of March 31, 2017, 2,000 shares remain available for issuance. No new securities have been awarded during the quarter ended March 31, 2017. As of March 31, 2017, there were 632,000 options outstanding and 629,500 options exercisable. During the quarters ended March 31, 2017 and 2016, the Company recorded stock compensation expense of $1,335 and $21, respectively, for vesting of prior year issued options. At March 31, 2017, there remains approximately $1,779 to be expensed.

Note 11 - 2015 Stock Option and

Note 11 - 2015 Stock Option and Stock Award Plan	3 Months Ended
	Mar. 31, 2017
Notes
Note 11 - 2015 Stock Option and Stock Award Plan	NOTE 11 – 2015 STOCK OPTION AND STOCK AWARD PLAN During the year ended December 31, 2015, the Company's stockholders approved the 2015 Stock Option and Stock Award Plan ("Plan"), which was established to advance the interest of the Company and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Company and by motivating such persons to contribute to the growth and profitability of the Company. The maximum aggregate number of (i) shares of stock that may be issued under the Plan, and (ii) shares of stock with respect to which stock appreciation rights may be granted, is 1,500,000 and consists of authorized but unissued or reacquired shares of stock or any combination thereof. Such number of shares of stock may be issued under the Plan pursuant to Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock Grants, Stock Appreciation Right Grants or any combination thereof, so long as the aggregate number of shares so issued does not exceed such number of shares, as adjusted. The Plan continues in effect until the earlier of its termination by the Board or the date on which all the shares of stock available for issuance under the Plan have been issued and all restrictions on such shares under the terms on the Plan and the agreement evidencing awards granted under the Plan have lapsed. However, all awards shall be granted, if at all, within ten (10) years from the earlier of the date the Plan is adopted by the Board or the date the Plan is duly approved by the Shareholders of the Company. As of March 31, 2017, 307,000 shares remain available for issuance. During the quarter ended March 31, 2016, the Company granted a total of 31,250 stock options from the 2015 Plan with a fair value of approximately $6,533. The fair value of approximately $6,533 was determined using the Black Scholes option pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 0.87% (ii) estimated volatility of 17% (iii) dividend yield of 0.00% and (iv) expected life of the options of ten years. During the quarter ended March 31, 2017, the Company granted a total of 293,500 stock options from the 2015 Plan with a fair value of approximately $399,526 on the date of grant. The fair value of the options in the amount of $399,526 was determined using the Black Scholes option pricing model. The weighted average assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.93% (ii) estimated volatility of 157.91 (iii) dividend yield of 0.00% and (iv) expected life of all options averaging ten years. As of March 31, 2017, there were 1,193,000 options outstanding and 797,500 options exercisable. During the quarters ended March 31, 2017 and 2016, the Company recorded stock compensation expense of $75,289 and $946, respectively, for vesting options issued from the 2015 plan. At March 31, 2017, there remains $338,427 to be expensed.

Note 12 - Financing From Blue W

Note 12 - Financing From Blue Water Capital Funding LLC	3 Months Ended
	Mar. 31, 2017
Notes
Note 12 - Financing From Blue Water Capital Funding LLC	NOTE 12 - FINANCING FROM BLUE WATER CAPITAL FUNDING LLC On June 29, 2016, Summer Energy, LLC (the "Borrower"), a wholly-owned subsidiary of Summer Energy Holdings, Inc. ("SEH"), entered into a Loan Agreement (the "Agreement") with Blue Water Capital Funding, LLC ("Blue Water"). Pursuant to the Agreement, Blue Water agreed to provide a revolving loan (the "Loan") to the Borrower, and the Borrower agreed to borrow and repay funds loaned by Blue Water. The amount of available credit under the Loan is Five Million Dollars ($5,000,000). The Loan is revolving in nature and is evidenced by a Revolving Promissory Note (the "Note"). The maturity date of the Loan is June 30, 2018. The Loan will bear interest at a rate of 11% per annum, with a minimum monthly financing fee of $22,500 per month. Interest is payable on the tenth day of each month and on the maturity date of the Note. The proceeds of the Loan may be used by the Borrower to repay indebtedness owed to Black Ink Energy, LLC ("Black Ink"), and for other corporate purposes. Simultaneous with the closing of the Loan, Borrower paid off all outstanding debt due and owing to Black Ink and Black Ink's security interest in and to the assets of the Borrower and to SEH's ownership interest in Borrower were terminated. In connection with the Agreement, the Borrower made certain customary representations and warranties, and agreed that while the Loan amount remains outstanding, it would not take certain actions, including that it will not incur certain debts (as defined in the Agreement); create, assume, or suffer to exist any lien on any property or asset of the Borrower, except those set forth in and allowed by the Agreement; consolidate or merge with any other entity; or sell, lease, or transfer all or substantially all of the assets of the Borrower. In connection with the Agreement, the Borrower and Blue Water also entered into a Security Agreement (the "Security Agreement"), and SEH executed a Guaranty (the "Guaranty") in favor of Blue Water. Security Agreement Pursuant to the Security Agreement, the Borrower granted to Blue Water a second position security interest in and to the Borrower's collateral, as more fully defined in the Security Agreement, and which includes receivables, equipment, inventory, personal property, other intangibles, and proceeds from any of these, to secure the Borrower's payment of its obligations under the Loan. The security interest granted to Blue Water is subordinate to a security interest granted to DTE Energy Trading, Inc. ("DTE") pursuant to a credit agreement between the Borrower and DTE dated April 1, 2014. The loan balance as of March 31, 2017 and December 31, 2016 is $2,500,000.

NOTE 13 - SUMMER ENERGY 401(K)

NOTE 13 - SUMMER ENERGY 401(K) PLAN	3 Months Ended
	Mar. 31, 2017
Notes
NOTE 13 - SUMMER ENERGY 401(K) PLAN	NOTE 13 – SUMMER ENERGY 401(K) PLAN In February 2017, the Company adopted a qualified 401(K) Retirement Plan (the “Plan”) whereby eligible employees may elect to save for retirement on a tax-advantaged basis. There are two types of salary deferrals: Pre-Tax 401(K) deferrals and Roth 401(K) deferrals. Eligible employee participants are automatically enrolled at 3% of compensation unless a participant elects an alternative deferral percentage limited to dollar amount of $18,000 in 2017 or elects not to defer under the Plan. There is no Company match to the Plan.

Note 14 - Subsequent Events

Note 14 - Subsequent Events	3 Months Ended
	Mar. 31, 2017
Notes
Note 14 - Subsequent Events	NOTE 14 – SUBSEQUENT EVENTS Summer Energy Holdings, Inc. Employee Stock Purchase Plan Effective May 2017, the Company began offering an Employee Stock Purchase Plan (the “ESPP”) whereby eligible employees may elect to purchase common stock of the Company through a registered broker/dealer. Eligible employees who so elect may authorize payroll deductions for contributions to the ESPP up to a maximum of $25,000 each calendar year. The Company will match 10% of eligible employee contributions up to an aggregate maximum of $24,000 for all

Note 3 - Significant Accounti20

Note 3 - Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Policies
Revenue Recognition	Revenue Recognition Our electricity revenue is recognized by our Company upon delivery of electricity to a customer’s meter. This method of revenue recognition is commonly referred to as the flow method. The flow method of revenue relies upon Electric Reliability Council of Texas (“ERCOT”) settlement statements to determine the estimated revenue for a given month. Supply delivered to customers for the month, measured on a daily basis, provides the basis for revenues. Electricity revenue consists of proceeds from energy sales, including, pass through charges from the Transmission and Distribution Providers (“TDSPs”) billed to the customer at cost.
Unbilled Revenue and Accounts Receivable	Unbilled Revenue and Accounts Receivable Electric services not billed by month-end are accrued based upon estimated deliveries to customers as tracked and recorded by ERCOT multiplied by our average billing rate per kilowatt hour (“kWh”) in effect at the time. At the end of each calendar month, revenue is accrued to unbilled receivables based on the estimated amount of power delivered to customers using the flow technique. Unbilled revenue also includes accruals for estimated TDSP charges and monthly service charges applicable to the estimated electricity usage for the period. All charges that were physically billed to customers in the calendar month are recorded from the unbilled account to the customer receivable account. Unbilled accounts as of March 31, 2017 and December 31,2016 were estimated at $12,630,394 and $10,922,288, respectively. Accounts receivable are customer obligations billed at the customer’s monthly meter read date for that period’s electricity usage and due within 16 days of the date of the invoice. Balances past due are subject to a late fee that is assessed on that billing. The Company determines the allowance based upon a review of outstanding receivables, historical write-off experience and existing economic conditions. Receivables past due over 90 days are considered delinquent and reviewed individually for collectability. After all means of collection have been exhausted, delinquent receivables are written off. Management has determined that the allowance for doubtful accounts as of March 31, 2017, and December 31, 2016 is $1,497,780 and $999,046 respectively. Bad debt expense for the three months ended March 31, 2017 and 2016 is $501,261 and $433,134, respectively.
Cost Recognition	Cost Recognition Direct energy costs are recorded when the electricity is delivered to the customer’s meter. Cost of Goods Sold (“COGS”) include electric power purchased and pass through charges from the TDSP’s in the areas serviced by the Company. TDSP charges are costs for metering services and maintenance of the electric grid. TDSP charges are established by regulation of the PUCT. The energy portion of our COGS is comprised of two components: bilateral wholesale costs and balancing/ancillary costs. These two cost components are incurred and recognized differently as follows: Bilateral wholesale costs are incurred through contractual arrangements with wholesale power suppliers for firm delivery of power at a fixed volume and fixed price. We are invoiced for these wholesale volumes at the end of each calendar month for the volumes purchased for delivery during the month, with payment due 20 days after the end of the month. Balancing/ancillary costs are based on the customer load and are determined by ERCOT through a multiple step settlement process. Balancing costs/revenues are related to the differential between supply that we provided through our bilateral wholesale supply and the supply required to serve our customer load. The Company endeavors to minimize the amount of balancing/ancillary costs through our load forecasting and forward purchasing programs.

Note 1 - Organization (Details)

Note 1 - Organization (Details)	3 Months Ended
	Mar. 31, 2017
Summer Ohio
Entity Incorporation, Date of Incorporation	Dec. 16, 2013
Summer Llc
Entity Incorporation, Date of Incorporation	Apr. 6, 2011
Marketing Llc
Entity Incorporation, Date of Incorporation	Nov. 6, 2012

Note 3 - Significant Accounti22

Note 3 - Significant Accounting Policies: Unbilled Revenue and Accounts Receivable (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Details
Unbilled accounts	$ 12,630,394		$ 10,922,288
Allowance for Doubtful Accounts	1,497,780		$ 999,046
Bad debt expense	$ 501,261	$ 433,134

Note 4 - Private Placement of23

Note 4 - Private Placement of Series B Preferred Shares (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Series B Preferred Stock
Preferred Stock, Mandatory Conversion	the Series B Preferred will automatically be converted upon the earlier to occur of (A) the affirmative election of the holders of fifty percent (50%) of the outstanding shares of Series B Preferred, voting as a separate class, or (B) the affirmative vote of the board of directors upon the closing of a firmly underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, which values the Company at least $50 million and in which the gross proceeds to the Company (after underwriting discounts, commissions and fees) are at least $10 million.
Dividends, Preferred Stock	$ 0	$ 56,847
Preferred Stock | Preferred Class B
Preferred Stock Conversion Price	$ 1

Note 5 - Letters of Credit (Det

Note 5 - Letters of Credit (Details) - Letter of Credit	Mar. 31, 2017USD ($)
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,188,200
Letters of Credit Outstanding, Amount	$ 0

Note 6 - Advance To Loan Amou25

Note 6 - Advance To Loan Amount Note (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Feb. 22, 2015	Apr. 18, 2014
Financing costs	$ 22,486	$ 298,006
Common Stock
Shares to be issued to Guarantors per month	120,000
Shares to be issued to each Guarantor per month	30,000
Advance To Loan Amount Note
Debt Instrument, Face Amount					$ 1,700,000	$ 1,500,000
Debt Instrument, Maturity Date			Nov. 4, 2016	Feb. 22, 2015
Debt Instrument, Interest Rate Terms	The 'Prime Referenced Rate' means, for any day, a per annum interest rate which is equal to the 'Prime Rate' in effect on such day, but in no event and at no time shall the 'Prime Reference Rate' be less than the sum of the Daily Adjusting LIBOR Rate for such day plus two and one-half percent (2.5%) per annum. 'Prime Rate' means the per annum rate established by Comerica Bank as its prime rate for its borrowers at any such time. 'Applicable Margin' means 2% per annum.
Financing costs	$ 0	$ 298,006
Advance To Loan Amount Note | Common Stock
Stock Issued During Period, Shares, Issued for Services	0	298,004

Note 7 - Financing From Black26

Note 7 - Financing From Black Ink Energy LLC (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016	Mar. 02, 2015
Interest expense	$ 121,349		$ 151,006
Black Ink Energy Llc | Second Lien Term Loan Agreement
Debt Instrument, Face Amount				$ 3,000,000
Debt Instrument, Maturity Date	Sep. 2, 2016
Debt Instrument, Interest Rate, Stated Percentage				15.00%
Description of Terms in Event of Debt Default	the default interest rate will be 18%
Repayments of Long-term Debt		$ 3,000,000
Interest expense	$ 0		$ 113,750

Note 8 - Warrants (Details)

Note 8 - Warrants (Details)	Mar. 31, 2017shares
Details
Warrants, Outstanding, Ending Balance	1,891,000
Warrants, Exercisable	1,625,763

Note 10 - 2012 Stock Option a28

Note 10 - 2012 Stock Option and Stock Award Plan (Details) - 2012 Stock Option And Stock Award Plan - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Number of Shares Authorized	785,000
Shares available for issuance	2,000
Options outstanding	632,000
Options exercisable	629,500
Allocated Share-based Compensation Expense	$ 1,335	$ 21
Accrued Employee Benefits, Current	$ 1,779

Note 11 - 2015 Stock Option a29

Note 11 - 2015 Stock Option and Stock Award Plan (Details) - 2015 Stock Option And Stock Award Plan - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Number of Shares Authorized	1,500,000
Shares available for issuance	307,000
Options outstanding	1,193,000
Options exercisable	797,500
Allocated Share-based Compensation Expense	$ 75,289	$ 946
Accrued Employee Benefits, Current	$ 338,427
Employee Stock Option
Deferred Compensation Arrangement with Individual, Shares Issued	293,500	31,250
Deferred Compensation Arrangement with Individual, Fair Value of Shares Issued	$ 399,526	$ 6,533
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used		Black Scholes option pricing model
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	1.93%	0.87%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	157.91%	17.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%	0.00%

Note 12 - Financing From Blue30

Note 12 - Financing From Blue Water Capital Funding LLC (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Long-term debt, net of debt discount and current portion	$ 2,500,000	$ 2,500,000
Blue Water Capital Funding
Debt Instrument, Face Amount	$ 5,000,000
Debt Instrument, Maturity Date	Jun. 30, 2018
Debt Instrument, Interest Rate, Stated Percentage	11.00%
Monthly financing fee	$ 22,500

NOTE 13 - SUMMER ENERGY 401(K31

NOTE 13 - SUMMER ENERGY 401(K) PLAN (Details)	3 Months Ended
	Mar. 31, 2017
Details
401 (K) Plan	There are two types of salary deferrals: Pre-Tax 401(K) deferrals and Roth 401(K) deferrals. Eligible employee participants are automatically enrolled at 3% of compensation unless a participant elects an alternative deferral percentage limited to dollar amount of $18,000 in 2017 or elects not to defer under the Plan.

Note 14 - Subsequent Events (De

Note 14 - Subsequent Events (Details)	May 01, 2017
Subsequent Event
Employee Stock Purchase Plan	Eligible employees who so elect may authorize payroll deductions for contributions to the ESPP up to a maximum of $25,000 each calendar year. The Company will match 10% of eligible employee contributions up to an aggregate maximum of $24,000 for all ESPP participants (not each individual ESPP participant).