Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 13, 2020 | |
Document and Entity Information: | ||
Entity Registrant Name | SUMMER ENERGY HOLDINGS INC | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Amendment Flag | false | |
Entity Central Index Key | 0001396633 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Common Stock, Shares Outstanding | 31,764,710 | |
Entity File Number | 001-35496 | |
Entity Incorporation, State Country Code | NV | |
Entity Address, Address Line One | 5847 San Felipe Street | |
Entity Address, Address Line Two | Suite 3700, Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77057 | |
City Area Code | 713 | |
Local Phone Number | 375-2790 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 3,533,068 | $ 814,360 |
Restricted cash | 2,026,023 | 3,197,708 |
Accounts receivable, net | 47,794,975 | 41,847,949 |
Prepaid and other current assets | 4,111,808 | 3,612,607 |
Total current assets | 57,465,874 | 49,472,624 |
Property and equipment, net | 63,339 | 58,418 |
Deferred financing cost, net | 464,246 | 3,125 |
Operating lease right-of use assets, net | 905,558 | 979,185 |
Intangible asset, net | 393,768 | 984,420 |
Total assets | 59,292,785 | 51,497,772 |
Current liabilities: | ||
Accounts payable | 1,327,194 | 1,496,461 |
Accrued wholesale power purchased | 20,276,581 | 17,538,120 |
Accrued transportation and distribution charges | 6,514,082 | 5,320,851 |
Accrued expenses | 5,456,943 | 4,809,533 |
Related party loans | 0 | 1,850,000 |
Current-portion operating lease obligation | 144,899 | 144,902 |
Current-portion of obligations | 5,094,761 | 5,038,397 |
Total current liabilities | 38,814,460 | 36,198,264 |
Long-term liabilities: | ||
Long-term obligations, net of current portion | 16,913,965 | 10,265,289 |
Total liabilities | 55,728,425 | 46,463,553 |
Stockholders' Equity | ||
Common stock - $.001 par value, 100,000,000 shares authorized, 31,663,598 and 31,532,486 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 31,663 | 31,531 |
Subscription receivable | (52,000) | (52,000) |
Additional paid in capital | 32,200,230 | 30,879,055 |
Accumulated deficit | (28,615,533) | (25,824,367) |
Total stockholders' equity | 3,564,360 | 5,034,219 |
Total liabilities and stockholders' equity | $ 59,292,785 | $ 51,497,772 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (PARENTHETICAL) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common Stock, par or stated value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 31,663,598 | 31,532,486 |
Common Stock, shares outstanding | 31,663,598 | 31,532,486 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue | $ 42,522,436 | $ 40,498,587 | $ 81,389,426 | $ 75,324,456 |
Cost of goods sold | ||||
Power purchases and balancing/ancillary | 21,977,158 | 22,027,541 | 39,079,786 | 37,398,195 |
Transportation and distribution providers charge | 15,958,473 | 15,116,171 | 32,144,193 | 28,765,332 |
Total cost of goods sold | 37,935,631 | 37,143,712 | 71,223,979 | 66,163,527 |
Gross Profit | 4,586,805 | 3,354,875 | 10,165,447 | 9,160,929 |
Operating expenses | 5,603,791 | 5,359,717 | 11,438,832 | 10,633,483 |
Operating loss | (1,016,986) | (2,004,842) | (1,273,385) | (1,472,554) |
Other expense | ||||
Financing costs | (43,522) | (1,563) | (61,155) | (3,125) |
Interest expense, net | (722,628) | (361,066) | (1,448,310) | (779,538) |
Total other expense | (766,150) | (362,629) | (1,509,465) | (782,663) |
Net income (loss) before income taxes | (1,783,136) | (2,367,471) | (2,782,850) | (2,255,217) |
Income tax expense | 8,316 | 0 | 8,316 | 0 |
Net loss | $ (1,791,452) | $ (2,367,471) | $ (2,791,166) | $ (2,255,217) |
Net loss per common share: | ||||
Basic | $ (0.06) | $ (0.08) | $ (0.09) | $ (0.07) |
Dilutive | $ (0.06) | $ (0.08) | $ (0.09) | $ (0.07) |
Weighted average number of shares | ||||
Basic | 31,653,598 | 31,081,975 | 31,608,037 | 30,156,821 |
Dilutive | 31,653,598 | 31,081,975 | 31,608,037 | 30,156,821 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED) - USD ($) | Common Stock | Subscription Receivable | Additional Paid-In Capital | Accumulated Deficit | Total |
Stockholders' Equity, beginning of period, Value at Dec. 31, 2018 | $ 27,480 | $ (52,000) | $ 23,357,951 | $ (15,091,278) | $ 8,242,153 |
Stockholders' Equity, beginning of period, Shares at Dec. 31, 2018 | 27,480,833 | ||||
Issuance of warrants | 248,678 | 248,678 | |||
Vesting of Stock Options and restricted shares associated with the 2015 Stock Option and Award Plan | 32,866 | 32,866 | |||
Vesting of stock options and restricted shares associated with the 2018 Stock Option and Award Plan | 422,728 | 422,728 | |||
Issuance of Common Stock associated with a Private Placement Offering, Value | $ 3,820 | 5,726,180 | 5,730,000 | ||
Issuance of Common Stock associated with a Private Placement Offering, Shares | 3,820,000 | ||||
Issuance of common stock as interest payment for personal guaranty, Value | $ 81 | 121,586 | 121,667 | ||
Issuance of common stock as interest payment for personal guaranty, shares | 81,112 | ||||
Issuance of common stock associated with the cashless exercise of warrants, value | $ 106 | (106) | |||
Issuance of common stock associated with the cashless exercise of warrants, shares | 106,053 | ||||
Net loss | (2,255,217) | (2,255,217) | |||
Stockholders' Equity, end of period, Value at Jun. 30, 2019 | $ 31,487 | (52,000) | 29,909,883 | (17,346,495) | 12,542,875 |
Stockholders' Equity, end of period, Shares at Jun. 30, 2019 | 31,487,998 | ||||
Stockholders' Equity, beginning of period, Value at Mar. 31, 2019 | $ 30,660 | (52,000) | 28,384,102 | (14,979,024) | 13,383,738 |
Stockholders' Equity, beginning of period, Shares at Mar. 31, 2019 | 30,660,833 | ||||
Issuance of warrants | 143,731 | 143,731 | |||
Vesting of Stock Options and restricted shares associated with the 2015 Stock Option and Award Plan | 16,433 | 16,433 | |||
Vesting of stock options and restricted shares associated with the 2018 Stock Option and Award Plan | 284,777 | 284,777 | |||
Issuance of Common Stock associated with a Private Placement Offering, Value | $ 640 | 959,360 | 960,000 | ||
Issuance of Common Stock associated with a Private Placement Offering, Shares | 640,000 | ||||
Issuance of common stock as interest payment for personal guaranty, Value | $ 81 | 121,586 | 121,667 | ||
Issuance of common stock as interest payment for personal guaranty, shares | 81,112 | ||||
Issuance of common stock associated with the cashless exercise of warrants, value | $ 106 | (106) | |||
Issuance of common stock associated with the cashless exercise of warrants, shares | 106,053 | ||||
Net loss | (2,367,471) | (2,367,471) | |||
Stockholders' Equity, end of period, Value at Jun. 30, 2019 | $ 31,487 | (52,000) | 29,909,883 | (17,346,495) | 12,542,875 |
Stockholders' Equity, end of period, Shares at Jun. 30, 2019 | 31,487,998 | ||||
Stockholders' Equity, beginning of period, Value at Dec. 31, 2019 | $ 31,531 | (52,000) | 30,879,055 | (25,824,367) | 5,034,219 |
Stockholders' Equity, beginning of period, Shares at Dec. 31, 2019 | 31,532,486 | ||||
Issuance of warrants | 245,352 | 245,352 | |||
Vesting of Stock Options and restricted shares associated with the 2015 Stock Option and Award Plan | 90,592 | 90,592 | |||
Vesting of stock options and restricted shares associated with the 2018 Stock Option and Award Plan | 678,284 | 678,284 | |||
Vesting of stock options and restricted shares outside of stock option and award plans | 110,411 | 110,411 | |||
Issuance of Common Stock associated with a Private Placement Offering, Value | $ 31 | 44,969 | 45,000 | ||
Issuance of Common Stock associated with a Private Placement Offering, Shares | 30,000 | ||||
Issuance of common stock as interest payment for personal guaranty, Value | $ 101 | 151,567 | 151,668 | ||
Issuance of common stock as interest payment for personal guaranty, shares | 101,112 | ||||
Net loss | (2,791,166) | (2,791,166) | |||
Stockholders' Equity, end of period, Value at Jun. 30, 2020 | $ 31,663 | (52,000) | 32,200,230 | (28,615,533) | 3,564,360 |
Stockholders' Equity, end of period, Shares at Jun. 30, 2020 | 31,663,598 | ||||
Stockholders' Equity, beginning of period, Value at Mar. 31, 2020 | $ 31,562 | (52,000) | 31,475,796 | (26,824,081) | 4,631,277 |
Stockholders' Equity, beginning of period, Shares at Mar. 31, 2020 | 31,562,486 | ||||
Vesting of Stock Options and restricted shares associated with the 2015 Stock Option and Award Plan | 80,102 | 80,102 | |||
Vesting of stock options and restricted shares associated with the 2018 Stock Option and Award Plan | 440,114 | 440,114 | |||
Vesting of stock options and restricted shares outside of stock option and award plans | 52,651 | 52,651 | |||
Issuance of common stock as interest payment for personal guaranty, Value | $ 101 | 151,567 | 151,668 | ||
Issuance of common stock as interest payment for personal guaranty, shares | 101,112 | ||||
Net loss | (1,791,452) | (1,791,452) | |||
Stockholders' Equity, end of period, Value at Jun. 30, 2020 | $ 31,663 | $ (52,000) | $ 32,200,230 | $ (28,615,533) | $ 3,564,360 |
Stockholders' Equity, end of period, Shares at Jun. 30, 2020 | 31,663,598 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash Flows from Operating Activities | ||
Net loss | $ (2,791,166) | $ (2,255,217) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Non-cash financing costs | 61,155 | 3,125 |
Broker referral warrant compensation expense | 15 | 104,947 |
Consulting compensation expense | 0 | 143,731 |
Stock compensation expense | 879,287 | 455,594 |
Interest payment in common stock for personal guaranty | 151,668 | 121,667 |
Depreciation of property and equipment | 17,740 | 20,423 |
Amortization of non-cash lease costs | 73,627 | 153,894 |
Amortization of intangible asset | 590,652 | 590,652 |
Bad debt expense | 204,053 | 297,550 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (6,151,079) | (7,271,990) |
Prepaid and other current assets | (357,849) | 126,521 |
Accounts payable | (169,267) | (1,836,571) |
Accrued wholesale power purchased | 2,738,461 | 5,276,539 |
Accrued transportation and distribution charges | 1,193,231 | 1,631,460 |
Accrued expenses and other | 573,783 | (673,092) |
Net cash used in operating activities | (2,985,689) | (3,110,767) |
Cash Flows from Investing Activities | ||
Purchase of property and equipment | (22,661) | 0 |
Net cash used in investing activities | (22,661) | 0 |
Cash Flows from Financing Activities | ||
Deferred financing costs | (276,939) | 0 |
Repayment of Blue Water Capital Funding, LLC | (4,920,000) | 0 |
Advances from wholesale provider for collateral support | 850,000 | 963,000 |
Repayments to wholesale provider for collateral support | (550,000) | 0 |
Proceeds from Digital Lending Services US Corp. | 9,000,000 | 0 |
Payments on Comerica Bank note | 0 | (2,200,000) |
Payment on financing of directors and officer's insurance policy | (84,988) | (35,385) |
Proceeds from related party lines of credit | 1,000,000 | 0 |
Repayment of related party lines of credit | (1,000,000) | 0 |
Proceeds from related party debt | 600,000 | 498,000 |
Repayment of related party debt | (2,450,000) | (498,000) |
Proceeds from issuance of common shares in a private placement | 45,000 | 5,730,000 |
Proceeds from Paycheck Protection Program Loan | 2,342,300 | 0 |
Net cash provided by financing activities | 4,555,373 | 4,457,615 |
Net Increase in Cash and Restricted Cash | 1,547,023 | 1,346,848 |
Cash and Restricted Cash at Beginning of Period | 4,012,068 | 3,854,885 |
Cash and Restricted Cash at End of Period | 5,559,091 | 5,201,733 |
Supplemental Disclosure of Cash Flow Information: | ||
Income taxes paid | 0 | 0 |
Interest paid | 1,219,870 | 739,946 |
Non-Cash Investing and Financing Activity | ||
Operating lease right of use assumed through operating lease obligation | 0 | 1,265,563 |
Cashless exercise of warrant for 106,053 shares of common stock | 0 | 106 |
Deferred financing cost associated with issuance of warrant | 245,337 | 0 |
Financing of directors and officer's insurance policy | $ 141,352 | $ 150,575 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Statement of Cash Flows [Abstract] | |
Proceeds from Warrant Exercises | $ 106,053 |
Note 1 - Organization
Note 1 - Organization | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Note 1 - Organization |
Note 2 - Significant Accounting
Note 2 - Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Note 2 - Significant Accounting Policies | NOTE 2 SIGNIFICANT ACCOUNTING POLICIES The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in 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 GAAP 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 six month period ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. These condensed consolidated 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, 2019, as filed with the Securities and Exchange Commission (“SEC”) on March 27, 2020. 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. Uses and Sources of Liquidity The condensed consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern within one year from the date of issuance of these condensed consolidated financial statements. For the six months ended June 30, 2020 and 2019, the Company incurred net losses of $2,791,166 and $2,255,217, respectively, and used cash in continuing operations of $2,985,689 and $3,110,767, respectively. The Company’s operations have been financed principally from electricity revenues, net proceeds from outside debt and equity financing of $4,080,000, funding from the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) totaling $2,342,300 established pursuant to the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) as well as from capital raised under private placement offerings totaling $45,000 and $5,730,000 during the six months ended June 30, 2020 and 2019, respectively. The Company’s liquidity requirements are to finance current operations, meet financial commitments, fund organic growth and/or acquisitions, and service debt. The liquidity requirements fluctuate with the level of customer acquisition costs, collateral posting requirements, the effects of the timing between the settlement of payables and receivables, including the effect of weather conditions, and our general working capital needs for ongoing operations. Estimating liquidity requirements is highly dependent on then-current market conditions, including impacts of the COVID-19 pandemic, weather events, forward prices for electricity, market volatility and our then existing capital structure and requirements. The Company’s continuation as a going concern is dependent upon its ability to increase sales, and/or raise additional funds through the capital markets as well as outside lending. During the six months ended June 30, 2020, the Company secured additional financing for a revolving loan in the amount of $10,000,000 with a maturity date of March 2023 and proceeds from the PPP loan. In addition, commitments for additional lending up to $2,000,000 may be provided by members of the Board of Directors of the Company, if necessary. Management has concluded that its existing capital resources and availability, proceeds from a 2020 offering and outside lending will be sufficient to fund operations through the third quarter of 2021. Revenue and Cost Recognition Our revenues are primarily derived from the sale of electricity to residential and small commercial customers. Revenues for sales of electricity are recognized under the accrual method of accounting. Direct energy costs are recorded when the electricity is delivered to the customer’s meter. Cost of goods sold (“COGS”) within the Texas market include electric power purchased and pass through charges from the transmission and distribution service providers (“TDSPs”) 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. COGS within the Independent System Operator (“ISO”) for the New England market is comprised of wholesale costs based upon the wholesale power tariff rate for volumes purchased during the delivery month and scheduling fees. Summer Midwest began flowing electricity within the Pennsylvania, New Jersey, Maryland Power Pool (“PJM”) market in July 2019, and the COGS for the PJM market is comprised of wholesale costs based upon the wholesale power tariff for volumes purchased during the delivery month as well as scheduling fees. 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 the Electric Reliability Council of Texas (“ERCOT”), ISO New England and PJM 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. Cash and Restricted Cash The Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. There were no such investments at June 30, 2020 or December 31, 2019. Restricted cash in the amount of $2,026,023 as of June 30, 2020 and $3,197,708 as of December 31, 2019 represents funds held in escrow for customer deposits, funds held in a controlled account by the wholesale provider (Note 12) and funds securing irrevocable stand-by letters of credit (Note 4). June 30, 2020 December 31, 2019 Cash $ 3,533,068 $ 814,360 Restricted cash: Escrow for customer deposits 510,749 511,461 Funds securing letters of credit 750,000 750,000 Funds controlled by wholesale provider 765,274 1,936,247 Total restricted cash 2,026,023 3,197,708 Total cash and restricted cash $ 5,559,091 $ 4,012,068 Basic and Diluted Income (Loss) Per Share Basic income/(loss) per share are computed by dividing net income/(loss) applicable to the weighted-average number of shares outstanding during the period. Diluted income per share is determined using the weighted-average number of shares outstanding during the period, adjusted for the dilutive effect of share equivalents, using the treasury method, consisting of shares that might be issued upon exercise of share equivalents. In periods where losses are reported, the weighted average number of shares excludes share equivalents, because their inclusion would be anti-dilutive. For the six months ended June 30, 2020 and 2019, the weighted average number of outstanding excludes share equivalents due to dilutive stock options and stock warrants because their inclusion would be anti-dilutive. The Company had potentially dilutive securities totaling approximately 5,022,692 and 4,067,682 as of June 30, 2020 and 2019, respectively. Recent Pronouncements New Accounting Standards Recently Adopted In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 requires entities to use a current expected credit loss ("CECL") model, which is a new impairment model based on expected losses rather than incurred losses on financial assets, including trade accounts receivables. The model requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We adopted ASU 2016-13 and the related amendments effective January 1, 2020, and there was no material impact to our condensed consolidated financial statements. Standards Not Yet Adopted In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, which reduces the complexity of FASB ASC Topic 740, “Income Taxes” as part of the FASB’s Simplification Initiative. The amendments in this guidance simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for annual reporting periods ending after December 15, 2020, with early adoption permitted, and should be applied on either a retrospective basis for all periods presented or a modified retrospective basis. Management is still assessing the impact this might have on the Company’s consolidated financial statements. The Company has reviewed all other recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that no other pronouncements will have a significant effect on its financial statements. |
Note 3 - Revenue
Note 3 - Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Note 3 - Revenue | NOTE 3 - REVENUE The table below represents the Company’s reportable revenues for the three and six month periods ended June 30, 2020 and 2019, respectively, from customers, net of respective provisions for refund: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Electricity Revenues from Contracts with Customers ERCOT Market $ 38,599,697 $ 36,294,807 $ 73,860,940 $ 67,097,505 ERCOT Pre-paid Market 1,843,514 1,387,147 3,290,291 2,600,937 ISO New England Market 861,350 1,906,856 1,968,628 3,831,267 PJM Market 298,328 - 487,763 - Total Electricity Revenues from Contracts with Customers 41,602,889 39,588,810 79,607,622 73,529,709 Other Revenues: Fees Revenue 919,547 909,777 1,781,804 1,794,747 Total Revenues: $ 42,522,436 $ 40,498,587 $ 81,389,426 $ 75,324,456 Presented in the following table are the components of accounts receivable and accrued revenue: June 30, 2020 December 31, 2019 Accounts receivable from customers ERCOT Market $ 10,874,702 $ 9,041,871 ISO New England Market 148,453 257,942 PJM Market 104,312 11,244 Total accounts receivable from customers 11,127,467 9,311,057 Accrued revenue from customers ERCOT Market 36,850,685 32,916,970 ISO New England Market 626,461 788,395 PJM Market 85,307 15,088 Total accrued revenue with customers 37,562,453 33,720,453 Allowance for credit losses (894,945) (1,183,561) Total accounts receivable and accrued revenue $ 47,794,975 $ 41,847,949 The Company recognizes revenue from the sale of electricity to consumers and is recognized upon the performance obligation to deliver electricity to the customer’s meter. This method of revenue recognition is commonly referred to as the flow method. The Company’s customer base consists of a mix of residential and commercial customers in the ERCOT, ISO New England and PJM markets. Also, the Company recognizes revenues from contract cancellation fees, disconnection fees and late fees. The invoice practical expedient within the accounting guidance allows for the recognition of revenue from performance obligations in the amount of consideration to which there is a right to invoice the customer and when the amount for which there is a right to invoice corresponds directly to the value transferred to the customer. The purpose of the invoice practical expedient is to depict an entity’s measure of progress toward completion of the performance obligation within a contract and can only be applied to performance obligations that are satisfied over time and when the invoice is representative of services provided to date. The Company elected to apply the invoice practical expedient to recognize revenue for performance obligations satisfied over time as the invoices from the respective revenue streams are representative of services or goods provided to date to the customer. Performance Obligations Residential and Commercial – The Company has performance obligations for the service to deliver electricity to its customers and it satisfies these performance obligations over time as electricity is provided continuously to the customer who simultaneously receives and consumes the benefits provided. The Company recognizes revenue at a fixed base amount and a price per kilowatt hour as it provides these services on a fixed term contract. Contracts generally have fixed terms of 3-month increments not to exceed a 24-month fixed term. For customers whose fixed contracts have expired, the Company recognizes revenue at the market price per kilowatt hour as the service is provided. Residential pre-paid – The Company has performance obligations for the service to deliver electricity to its customers and these performance obligations are satisfied over time as electricity is provided continuously to the customer who simultaneously receives and consumes the benefits provided. Revenues in the pre-paid market are variable at the market rate per kilowatt hour as the service is provided. Accounts Receivable and Unbilled Revenue Accounts receivable are comprised of trade receivables and unbilled receivables (accrued revenue). Customers are billed monthly in cycles having billing dates that do not generally coincide with the end of a calendar month. This results in customers having received electricity that they have not been billed for as of month-end. Therefore, 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 in the calendar month are recorded from the unbilled account to the customer’s receivable account. In the Texas market, electricity revenues 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 in the calendar month are recorded from the unbilled account to the customer’s receivable account. 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. The past due customer balances are subject to a late fee that is assessed on that billing. Unbilled accounts in the Texas market as of June 30, 2020 and December 31, 2019 were estimated at $36,850,685 and $32,916,970, respectively. In the ISO New England market, electricity services not billed by month-end are accrued based upon estimated deliveries to customers as tracked and recorded by ISO New England multiplied by our average billing rate per kWh in effect at the time. The customer billing in the ISO New England market is performed by the local utility company. Unbilled accounts in the ISO New England market as of June 30, 2020 and December 31, 2019 were estimated at $626,461 and $788,395, respectively. The Company began service in the PJM market during the third quarter of 2019. In the PJM market, electricity services not billed by month end are accrued based upon estimated deliveries to customers as tracked and recorded by PJM multiplied by our average billing rate per kWh in effect at the time. The customer billing in the PJM market is performed by the local utility company. Unbilled accounts in the PJM market as of June 30, 2020 and December 31, 2019 were estimated at $85,307 and $15,088, respectively. Prior to January 1, 2020, accounts receivables were recorded at cost less an allowance for doubtful accounts. The Company, in the Texas market, maintained an allowance for uncollectible accounts receivable for estimated losses resulting from the failure or inability of our customers to make required payments. Within the ISO New England and the PJM markets, the local utility companies within the state of operation, purchase the Company’s billed receivables at a statutory published discount rate without recourse; therefore, no allowance for doubtful accounts was recorded for these markets. The allowance for doubtful accounts was $1,183,561 at December 31, 2019. Subsequent to January 1, 2020, the Company’s accounts receivables are recorded at cost less an allowance for credit losses. We estimate losses on receivables at the reporting date based on expected losses resulting from the inability of our customers to make required payments, including our historical experience of actual losses and the aging of such receivables. These receivables have been pooled by market including the Texas market, the ISO New England market, and PJM market, because the receivables from each market share risk characteristics. Based on known information we may also establish specific reserves for customers in an adverse financial condition or adjust our expectations of changes in conditions that may impact the collectability of outstanding receivables. Receivables past due over 90 days are considered delinquent and are reviewed individually for collectability. After all means of collection have been exhausted, delinquent receivables are written-off. The allowance for credit losses at June 30, 2020 was $894,945. |
Note 5 - Surety Bonds
Note 5 - Surety Bonds | 6 Months Ended |
Jun. 30, 2020 | |
Shares to be issued to each Guarantor per month | |
Note 5 - Surety Bonds | NOTE 5 - SURETY BONDS As of June 30, 2020, Summer Midwest had a surety bond in the amount of $500,000 issued to the Illinois Commerce Commission and a surety bond in the amount of $250,000 issued to the Pennsylvania Public Utility Commission. Both bonds are secured with $375,000 in deposits held by the surety bond company. |
Note 6 - Financing From First I
Note 6 - Financing From First Insurance Funding | 6 Months Ended |
Jun. 30, 2020 | |
Shares to be issued to each Guarantor per month | |
Note 6 - Financing From First Insurance Funding | NOTE 6 - FINANCING FROM FIRST INSURANCE FUNDING In May 2020, the Company entered into a finance agreement with First Insurance Funding to finance the Company’s Director’s and Officer’s insurance policy premium for the period of May 1, 2020 through May 1, 2021. The amount for the premiums, taxes and fees totaled $141,352. A cash down payment in the amount of $34,349 was made by the Company in May 2020 leaving a remaining balance of $107,003 to be paid in 10 installments from June 1, 2020 through March 1, 2021. The annual percentage interest rate of the financing is 5.85%. In May 2019, the Company entered into a finance agreement with First Insurance Funding to finance the Company’s Director’s and Officer’s insurance policy premium for the period of May 1, 2019 through May 1, 2020. The amount for the premiums, taxes and fees totaled $150,575. A cash down payment in the amount of $22,586 was made by the Company in May 2019 leaving a remaining balance of $127,989 to be paid in 10 installments from June 1, 2019 through March 1, 2020. The annual percentage interest rate of the financing is 6.45%. The Company paid in full the balance of the finance agreement during March 2020. At June 30, 2020 and December 31, 2019, the outstanding balance due to First Insurance Funding was $94,761 and $38,397, respectively. Interest expense accrued to First Insurance Funding was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 First Insurance Funding interest expense $ - $ 455 $ 1,365 $ 455 |
Note 7 - Financing From Digital
Note 7 - Financing From Digital Lending Services Us Corp. | 6 Months Ended |
Jun. 30, 2020 | |
Shares to be issued to each Guarantor per month | |
Note 7 - Financing From Digital Lending Services Us Corp. | NOTE 7 – FINANCING FROM DIGITAL LENDING SERVICES US CORP. On March 12, 2020, Summer LLC (the “Borrower”) entered into a Loan Agreement (the “Agreement”) with Digital Lending Services US Corp., a Delaware corporation (“Digital Lending”). Pursuant to the Agreement, Digital Lending agreed to provide a revolving loan (the “Loan”) to the Borrower, and the Borrower agreed to borrow and repay funds loaned by Digital Lending. The amount of available credit under the Loan is $10,000,000. The Loan is revolving in nature and is evidenced by a Revolving Promissory Note (the “Note”). The maturity date of the Loan is March 11, 2023. The Loan bears interest at a rate of 12.75% per annum, with monthly installment payments of accrued interest only. The principal balance of the Loan may be prepaid at any time at the option of the Borrower, subject to certain prepayment charges. The Loan was used by the Company to repay indebtedness owed to Blue Water (Note 8) and additional indebtedness, as well as for working capital and other general corporate purposes. 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. Also, in connection with the Agreement, the Borrower made certain affirmative and negative covenants, and agreed to designate a representative of Digital Lending to attend the Company’s board of directors’ meetings in a non-voting, observer capacity. As of June 30, 2020, Summer LLC was in compliance with the covenants of the Agreement. In connection with the Agreement, the Borrower and Digital Lending also entered into a Security Agreement (the “Security Agreement”), and Summer Energy Holdings, Inc. executed a Guaranty (the “Guaranty”) and issued a Common Stock Purchase Warrant (“Warrant”) in favor of Digital Lending. Security Agreement Pursuant to the Security Agreement, the Borrower granted to Digital Lending 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 Digital Lending is subordinate to a security interest granted to EDF Energy Services, LLC (“EDF”) pursuant to an Amended and Restated Energy Services Agreement dated June 19, 2019, as amended (Note 12). Guaranty Pursuant to the Guaranty, the Company agreed to guaranty the Borrower’s obligations under the Agreement and Note. Warrant In connection with the Agreement and the Loan, the Company agreed to issue to Digital Lending a Warrant (Note 20). Pursuant to the Warrant, Digital Lending may purchase up to 250,000 shares of the Company’s common stock. The Warrant has a term of five years, has an exercise price of $1.50 per share, and is subject to adjustment as set forth in the Warrant. The Warrant also contains a cashless or net exercise provision, pursuant to which the holder of the Warrant may elect to convert all or a portion of the Warrant without the payment of additional consideration, by receiving a net number of shares calculated pursuant to a formula set forth in the Warrant. As of June 30, 2020, the outstanding balance of the Digital Lending loan was $9,000,000 and the interest expense was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Digital Lending interest expense $ 286,875 $ - $ 350,625 $ - The foregoing summaries of the terms and conditions of the Agreement, the Note, the Security Agreement, and the Guaranty do not purport to be complete, and are qualified in their entirety by reference to the full text of the Agreement, the Note, the Security Agreement and the Guaranty, each of which is attached as an exhibit to our Current Report on Form 8-K, filed with the SEC on March 18, 2020. |
Note 8 - Financing From Blue Wa
Note 8 - Financing From Blue Water Capital Funding LLC | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Note 8 - Financing From Blue Water Capital Funding LLC | NOTE 8 - FINANCING FROM BLUE WATER CAPITAL FUNDING LLC On June 29, 2016, Summer LLC (the “Borrower”) entered into a Loan Agreement (the “Agreement”) with Blue Water Capital Funding, LLC (“Blue Water”) and guaranteed by the Company (the “Guaranty”). 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. Further, in connection with the Agreement, the Borrower granted to Blue Water a second position security interest in and to the Borrower’s collateral, which includes receivables, equipment, inventory, personal property, other intangibles, and proceeds from any of these, to secure the Borrower’s payment of its obligation under the Loan. The amount of available credit under the Loan was $5,000,000. The Loan was revolving in nature and was evidenced by a Revolving Promissory Note (the “Note”). The maturity date of the Loan was June 30, 2018. On June 27, 2018, Summer LLC entered into an amendment to the agreement (the “Amendment”) with Blue Water with respect to the Agreement. Pursuant to the Amendment, the maturity date of the Note was extended through June 30, 2020, and the interest rate on the Note was changed from 11% per annum to a variable rate equal to the Prime Rate published by the Wall Street Journal On March 12, 2020, simultaneous with the closing of the loan from Digital Lending (Note 7), the outstanding debt due and owing to Blue Water was paid in full and the Agreement, as amended by the Amendment, was terminated. As of June 30, 2020 and December 31, 2019, the outstanding balance of financing from Blue Water Capital was $0 and $4,920,000, respectively. Interest expense to Blue Water was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Blue Water interest expense $ - $ 127,476 $ 167,900 $ 253,550 |
Note 9 - Comerica Bank Master R
Note 9 - Comerica Bank Master Revolving Note | 6 Months Ended |
Jun. 30, 2020 | |
Shares to be issued to each Guarantor per month | |
Note 9 - Comerica Bank Master Revolving Note | NOTE 9 - COMERICA BANK MASTER REVOLVING NOTE On December 18, 2018, the Company signed a single payment note (the “Note”) with Comerica Bank (the “Bank”) in the amount of $2,900,000. The Note has a maturity date of June 11, 2020, 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 2.5% per annum. “Prime Rate” means the per annum rate established by the Bank as its prime rate for its borrowers at any such time. “Applicable Rate” means 0.25% per annum. Accrued and unpaid interest on the unpaid principal balance outstanding on the Note is payable monthly on the first day of each month, commencing on February 1, 2019. On December 9, 2019, the Note was converted from a single payment note to a master revolving note (the “Revolver Note”), which is payable in full on demand from the Bank. The Revolver Note provides for advances, repayments and re-advances from time to time. 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 2.5% per annum. “Prime Rate” means the per annum rate established by the Bank as its prime rate for its borrowers at any such time. “Applicable Rate” means 0.25% per annum. Unless sooner demanded, accrued and unpaid interest on the unpaid principal balance of each outstanding advance shall be payable monthly, in arrears on the first business day of each month, from the date made until the same is paid in full. As of June 30, 2020, the interest rate was 3.5%. Guaranty of the Revolver Note has been made by four members of the Company’s board of directors (“Guarantors”). The Company agreed to issue the four Guarantors shares of the Company’s common stock on a monthly basis depending on the outstanding balance due and owing under the Revolver Note for agreeing to act as a Guarantor. As of June 30, 2020 and December 31, 2019, the outstanding balance of financing on the Comerica Revolver Note was $2,900,000. Interest expense related to the Comerica Revolver Note was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Comerica Revolver Note interest expense $ 24,822 $ 15,781 $ 59,058 $ 52,277 |
Note 10 - Comerica Bank Single
Note 10 - Comerica Bank Single Payment Note | 6 Months Ended |
Jun. 30, 2020 | |
Note 10 - Comerica Bank Single Payment Note | |
Note 10 - Comerica Bank Single Payment Note | NOTE 10 – COMERICA BANK SINGLE PAYMENT NOTE On December 20, 2019, the Company signed a Single Payment Note (the “Single Note”) with Comerica Bank in the amount of $2,100,000. The Note has a maturity date of June 20, 2020, 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 Referenced Rate” be less than the sum of the Daily Adjusting LIBOR Rate for such day plus 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 0.25% per annum. Accrued and unpaid interest on the unpaid principal balance outstanding on the Note shall be payable monthly on the twentieth day of each month, commencing on January 20, 2020. On June 20, 2020, the Single Note was amended to reflect a due date of June 20, 2021 and the Application Margin was amended to mean 0.35% per annum. As of June 30, 2020, the interest rate was 3.5% Guaranty of the Single Note has been made by four members of the Company’s board of directors (“Guarantors”). The Company agreed to issue the four Guarantors shares of the Company’s common stock on a monthly basis depending on the outstanding balance due and owing under the Note for agreeing to act as a Guarantor of the Single Note. As of June 30, 2020 and December 31, 2019, the outstanding balance of financing on the Comerica Single Note was $2,100,000. Interest expense related to the Comerica Single Note was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Comerica Single Note interest expense $ 18,849 $ - $ 43,641 $ - |
Note 11 - Paycheck Protection P
Note 11 - Paycheck Protection Program Loan | 6 Months Ended |
Jun. 30, 2020 | |
Shares to be issued to each Guarantor per month | |
Note 11 - Paycheck Protection Program Loan | NOTE 12 - WHOLESALE POWER PURCHASE AGREEMENT WITH EDF On May 1, 2018, Summer Energy Holdings, Inc. (for purposes of this Note, “SEH”), together with its subsidiaries Summer LLC and Summer Northeast (collectively the “Company”) closed a transaction with EDF Energy Services, LLC and EDF Trading North America, LLC (collectively, “EDF”). As part of the transaction, Summer LLC, Summer Northeast and EDF entered into an Energy Services Agreement (the “Energy Services Agreement”) pursuant to which Summer LLC and Summer Northeast agreed to purchase their electric power and associated services requirements from EDF, and EDF agreed to provide Summer LLC and Summer Northeast with certain credit facilities to assist Summer LLC and Summer Northeast in the purchase of their electric power and associated service requirements (such transaction with EDF, the “Original Transaction”). The terms of the Energy Services Agreement are governed by the ISDA Master Agreement, as well as a Schedule and Power Annex thereto and the Credit Support Annex thereto. In conjunction therewith, the Company and EDF also entered into a Security Agreement (the “Security Agreement”), a Pledge Agreement (the “Pledge Agreement”) and a Guaranty (the “Guaranty”) in favor of EDF. The Energy Services Agreement has a term of three years, and automatically renews for successive one-year periods unless either party provides written notice of termination 180 days prior to the renewal date. In addition to the market-based commodity price charged by EDF for each underlying commodity transaction, the Company will pay a “Commodity Fee” for each megawatt hour (“MWh”) of power that the Company requests for delivery from EDF during the term of the Energy Services Agreement. In addition, the Company is responsible for other mutually agreed upon fees incurred by EDF on its behalf. The Company is also responsible for any reasonable transmission or transportation costs incurred in connection with power transactions. Monthly supply obligations will accrue interest at a rate equal to three-month LIBOR plus 6% per annum. Any additional credit support will bear interest at the per annum rate equal to the lesser of (i) a rate per annum equal to three-month LIBOR rate plus 3% per annum, and (ii) the maximum rate of interest permitted by applicable law. In consideration of the services and credit support provided by EDF to Summer LLC and Summer Northeast, and pursuant to the Security Agreement, Summer LLC and Summer Northeast agreed to, among other things (i) grant a priority security interest to EDF in all of their assets, equipment and inventory; (ii) require their customers to remit monthly payments into a lockbox account over which EDF has a security interest; and (iii) deliver monthly and annual forecasted and audited statements to EDF. Pursuant to the Pledge Agreement, SEH pledged to EDF, and granted to EDF a security interest in, all of the membership interests of Summer LLC and Summer Northeast owned by SEH as well as all additional membership interests of such subsidiaries from time to time acquired by SEH. Pursuant to the Guaranty, SEH agreed to guaranty the obligations of Summer LLC and Summer Northeast under the Energy Services Agreement. The foregoing is only a brief description of the material terms of the transaction with EDF and does not purport to be a complete description of the rights and obligations of the parties thereunder and such descriptions are qualified in their entirety by reference to the text of the Energy Services Agreement, the ISDA Master Agreement, the Security Agreement, the Pledge Agreement and the Guaranty, which are filed as Exhibits 10.1 through 10.5, respectively, to our quarterly report on Form 10-Q filed with the SEC on August 14, 2018. On June 19, 2019, the Company closed a transaction (the “Amendment Transaction”) with EDF Trading North America, LLC (“EDFTNA”) in order to amend and/or restate certain of the agreements with EDF entered into in the Original Transaction. Pursuant to the Amendment Transaction, the Company and EDFTNA entered into an Amended and Restated Energy Services Agreement, which amended and restated the Energy Services Agreement (the “Amended Energy Services Agreement”), an amendment to ISDA Master Agreement which amends the ISDA Agreement (the “Amended ISDA Agreement”), an Omnibus Amendment to Pledge Agreement and Security Agreement and Joinder, which amends both the Security Agreement and the Pledge Agreement (the “Omnibus Amendment”) and an Amended and Restated Guaranty, which amends and restates the Guaranty (the “Amended Guaranty”). In general, the Amended Energy Services Agreement, the Amended ISDA Agreement, the Omnibus Amendment and the Amended Guaranty amend and/or restate the documents from the Original Transaction to (i) remove EDF Energy Services, LLC as a party to the agreements and (ii) add an additional subsidiary of SEH, Summer Midwest, as a party to the agreements, such that Summer Midwest is able to purchase its electric power and associated services requirements from EDFTNA and also utilize EDFTNA’s credit support. The term, pricing and interest payable under the Amended Energy Services Agreement are unchanged from the original Energy Services Agreement. Pursuant to the Omnibus Amendment, in consideration of the services and credit support provided by EDFTNA to the Company, Summer Midwest agreed to, among other things (i) grant a priority security interest to EDFTNA in all of its assets, equipment and inventory; and (ii) require its customers to remit monthly payments into a lockbox account over which EDFTNA has a security interest. The security interest previously granted by Summer LLC and Summer Northeast is unchanged, except that EDFTNA is now the sole secured party. Also pursuant to the Omnibus Amendment, SEH pledged to EDFTNA, and granted to EDFTNA a security interest in, all of SEH’s membership interest in Summer Midwest. The previous pledge by SEH of its membership interest in Summer LLC and Summer Northeast is unchanged, except that EDFTNA is now the sole secured party. Pursuant to the Guaranty, SEH agreed to guaranty the obligations of Summer LLC, Summer Northeast and Summer Midwest under the Amended Energy Services Agreement. The foregoing is only a brief description of the material terms of the Amendment Transaction and does not purport to be a complete description of the rights and obligations of the parties thereunder and such descriptions are qualified in their entirety by reference to the text of the Amended Energy Services Agreement, the Amended ISDA Master Agreement, the Omnibus Amendment and the Amended Guaranty, which are filed as Exhibits 10.1 through 10.4, respectively, to our Quarterly Report on Form 10-Q filed with the SEC on August 14, 2019. As of June 30, 2020 and December 31, 2019, EDF has provided collateral credit support in the amount of $4,811,006 and $4,511,006, respectively, to secure letters of credit (Note 4) and surety bonds (Note 5) for the benefit of the Company. The Company incurred interest expense to EDF for the three and six months ended June 30, 2020 and 2019 as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 EDF Interest $ 240,517 $ 199,234 $ 504,781 $ 391,998 |
Note 12 - Wholesale Power Purch
Note 12 - Wholesale Power Purchase Agreement with EDF | 6 Months Ended |
Jun. 30, 2020 | |
Shares to be issued to each Guarantor per month | |
Note 12 - Wholesale Power Purchase Agreement with EDF | NOTE 12 - WHOLESALE POWER PURCHASE AGREEMENT WITH EDF On May 1, 2018, Summer Energy Holdings, Inc. (for purposes of this Note, “SEH”), together with its subsidiaries Summer LLC and Summer Northeast (collectively the “Company”) closed a transaction with EDF Energy Services, LLC and EDF Trading North America, LLC (collectively, “EDF”). As part of the transaction, Summer LLC, Summer Northeast and EDF entered into an Energy Services Agreement (the “Energy Services Agreement”) pursuant to which Summer LLC and Summer Northeast agreed to purchase their electric power and associated services requirements from EDF, and EDF agreed to provide Summer LLC and Summer Northeast with certain credit facilities to assist Summer LLC and Summer Northeast in the purchase of their electric power and associated service requirements (such transaction with EDF, the “Original Transaction”). The terms of the Energy Services Agreement are governed by the ISDA Master Agreement, as well as a Schedule and Power Annex thereto and the Credit Support Annex thereto. In conjunction therewith, the Company and EDF also entered into a Security Agreement (the “Security Agreement”), a Pledge Agreement (the “Pledge Agreement”) and a Guaranty (the “Guaranty”) in favor of EDF. The Energy Services Agreement has a term of three years, and automatically renews for successive one-year periods unless either party provides written notice of termination 180 days prior to the renewal date. In addition to the market-based commodity price charged by EDF for each underlying commodity transaction, the Company will pay a “Commodity Fee” for each megawatt hour (“MWh”) of power that the Company requests for delivery from EDF during the term of the Energy Services Agreement. In addition, the Company is responsible for other mutually agreed upon fees incurred by EDF on its behalf. The Company is also responsible for any reasonable transmission or transportation costs incurred in connection with power transactions. Monthly supply obligations will accrue interest at a rate equal to three-month LIBOR plus 6% per annum. Any additional credit support will bear interest at the per annum rate equal to the lesser of (i) a rate per annum equal to three-month LIBOR rate plus 3% per annum, and (ii) the maximum rate of interest permitted by applicable law. In consideration of the services and credit support provided by EDF to Summer LLC and Summer Northeast, and pursuant to the Security Agreement, Summer LLC and Summer Northeast agreed to, among other things (i) grant a priority security interest to EDF in all of their assets, equipment and inventory; (ii) require their customers to remit monthly payments into a lockbox account over which EDF has a security interest; and (iii) deliver monthly and annual forecasted and audited statements to EDF. Pursuant to the Pledge Agreement, SEH pledged to EDF, and granted to EDF a security interest in, all of the membership interests of Summer LLC and Summer Northeast owned by SEH as well as all additional membership interests of such subsidiaries from time to time acquired by SEH. Pursuant to the Guaranty, SEH agreed to guaranty the obligations of Summer LLC and Summer Northeast under the Energy Services Agreement. The foregoing is only a brief description of the material terms of the transaction with EDF and does not purport to be a complete description of the rights and obligations of the parties thereunder and such descriptions are qualified in their entirety by reference to the text of the Energy Services Agreement, the ISDA Master Agreement, the Security Agreement, the Pledge Agreement and the Guaranty, which are filed as Exhibits 10.1 through 10.5, respectively, to our quarterly report on Form 10-Q filed with the SEC on August 14, 2018. On June 19, 2019, the Company closed a transaction (the “Amendment Transaction”) with EDF Trading North America, LLC (“EDFTNA”) in order to amend and/or restate certain of the agreements with EDF entered into in the Original Transaction. Pursuant to the Amendment Transaction, the Company and EDFTNA entered into an Amended and Restated Energy Services Agreement, which amended and restated the Energy Services Agreement (the “Amended Energy Services Agreement”), an amendment to ISDA Master Agreement which amends the ISDA Agreement (the “Amended ISDA Agreement”), an Omnibus Amendment to Pledge Agreement and Security Agreement and Joinder, which amends both the Security Agreement and the Pledge Agreement (the “Omnibus Amendment”) and an Amended and Restated Guaranty, which amends and restates the Guaranty (the “Amended Guaranty”). In general, the Amended Energy Services Agreement, the Amended ISDA Agreement, the Omnibus Amendment and the Amended Guaranty amend and/or restate the documents from the Original Transaction to (i) remove EDF Energy Services, LLC as a party to the agreements and (ii) add an additional subsidiary of SEH, Summer Midwest, as a party to the agreements, such that Summer Midwest is able to purchase its electric power and associated services requirements from EDFTNA and also utilize EDFTNA’s credit support. The term, pricing and interest payable under the Amended Energy Services Agreement are unchanged from the original Energy Services Agreement. Pursuant to the Omnibus Amendment, in consideration of the services and credit support provided by EDFTNA to the Company, Summer Midwest agreed to, among other things (i) grant a priority security interest to EDFTNA in all of its assets, equipment and inventory; and (ii) require its customers to remit monthly payments into a lockbox account over which EDFTNA has a security interest. The security interest previously granted by Summer LLC and Summer Northeast is unchanged, except that EDFTNA is now the sole secured party. Also pursuant to the Omnibus Amendment, SEH pledged to EDFTNA, and granted to EDFTNA a security interest in, all of SEH’s membership interest in Summer Midwest. The previous pledge by SEH of its membership interest in Summer LLC and Summer Northeast is unchanged, except that EDFTNA is now the sole secured party. Pursuant to the Guaranty, SEH agreed to guaranty the obligations of Summer LLC, Summer Northeast and Summer Midwest under the Amended Energy Services Agreement. The foregoing is only a brief description of the material terms of the Amendment Transaction and does not purport to be a complete description of the rights and obligations of the parties thereunder and such descriptions are qualified in their entirety by reference to the text of the Amended Energy Services Agreement, the Amended ISDA Master Agreement, the Omnibus Amendment and the Amended Guaranty, which are filed as Exhibits 10.1 through 10.4, respectively, to our Quarterly Report on Form 10-Q filed with the SEC on August 14, 2019. As of June 30, 2020 and December 31, 2019, EDF has provided collateral credit support in the amount of $4,811,006 and $4,511,006, respectively, to secure letters of credit (Note 4) and surety bonds (Note 5) for the benefit of the Company. The Company incurred interest expense to EDF for the three and six months ended June 30, 2020 and 2019 as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 EDF Interest $ 240,517 $ 199,234 $ 504,781 $ 391,998 |
Note 13 - Lease Liabilities, Co
Note 13 - Lease Liabilities, Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Shares to be issued to each Guarantor per month | |
Note 13 - Lease Liabilities, Commitments and Contingencies | NOTE 13 - LEASE LIABILITIES, COMMITMENTS AND CONTINGENCIES Office Space The Company leases office space and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense is recognized on a straight-line basis over the term of the lease. For leases beginning in 2019 and later, the Company accounts for lease components separately from the non-lease components. Most leases include one or more options to renew. The exercise of the lease renewal options is at the sole discretion of the Company. Certain leases also include options to purchase the leased property. The depreciable life of the assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Beginning December 1, 2017, the Company procured approximately 20,073 square feet of office space on the 37 th Summer LLC assumed an operating lease for office space on November 1, 2011 at 800 Bering Drive, Suite 260, Houston, Texas, under a non-cancellable lease obligation that expired on August 31, 2016. The Sixth Amendment to the office space lease extended the obligation to October 31, 2019. Summer Northeast entered into a sublease agreement with PDS Management Group, LLC (“PDS”) on October 31, 2017 at 800 Bering Drive, Suite 250, Houston, Texas, under a non-cancellable lease obligation that expired on February 28, 2020. On September 1, 2018, PDS subleased 800 Bering Drive, Suite 250, Houston, Texas to an outside party, and Summer Northeast receives a monthly credit in the amount of $1,698 until the end of the lease obligation on February 28, 2020. The monthly base rent, net of credit, is $2,255. As of June 30, 2020 and December 31, 2019, the operating lease right-of-use assets and operating lease liabilities were $905,558 and $979,185, respectively. The long-term portion of the operating lease liabilities as of June 30, 2020 and December 31, 2019 in the amounts of $760,659 and $834,283, respectively, was included in long-term obligations. As of June 30, 2020, the weighted-average remaining lease term for operating leases was 5.44 years. As of June 30, 2020, the weighted-average discount rate for operating leases was 6.5%. Operating lease future minimum payments together with their present values as of June 30, 2020 are summarized as follows: Operating Leases 2020 $ 99,748 2021 199,494 2022 199,494 2023 197,294 2024 190,693 Thereafter 190,693 Total future minimum lease payments 1,077,416 Less amounts representing interest (171,858) Present value of lease liability $ 905,558 Current-portion operating lease liability (144,899) Long-term portion operating lease liability $ 760,659 Lease expense for the office space for the three and six months ended June 30, 2020 and 2019, respectively, was included in operating expenses on the consolidated statements of operations as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Operating Lease expense $ 34,781 $ 77,571 $ 73,627 $ 153,893 |
Note 14 - Long Term Obligations
Note 14 - Long Term Obligations | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Note 14 - Long Term Obligations | NOTE 14 – LONG-TERM OBLIGATIONS Long-term obligations of the Company are comprised as follows: June 30, 2020 December 31, 2019 Financing from First Insurance Funding (Note 6) $ 94,761 $ 38,397 Financing from Digital Lending Services US Corp. (Note 7) 9,000,000 - Financing from Blue Water Capital Funding, LLC (Note 8) - 4,920,000 Comerica Bank Master Revolving Note (Note 9) 2,900,000 2,900,000 Comerica Bank Single Payment Note (Note 10) 2,100,000 2,100,000 Financing from Paycheck Protection Program Loan (Note 11) 2,342,300 - Wholesale Power Purchase Agreement with EDF collateral credit support (Note 12) 4,811,006 4,511,006 Operating lease obligations (Note 13) 905,558 979,185 Total obligations $ 22,153,625 $ 15,448,588 Less current portion of obligations (5,094,761) (5,038,397) Less current portion operating lease obligations (Note 13) (144,899) (144,902) Long-term portion of obligations $ 16,913,965 $ 10,265,289 For the three and six months ended June 30, 2020 and 2019, respectively, interest expense consists of the following on obligations: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Financing from First Insurance Funding (Note 6) $ - $ 455 $ 1,365 $ 455 Financing from Digital Lending Services US Corp. (Note 7) 286,875 - 350,625 - Financing from Blue Water Capital Funding, LLC (Note 8) - 127,476 167,900 253,550 Comerica Master Revolving Note (Note 9) 24,822 15,781 59,058 52,277 Comerica Bank Single Payment Note (Note 10) 18,849 - 43,641 - Financing from Paycheck Protection Program Loan (Note 11) 4,813 - 4,813 - Wholesale Power Purchase Agreement with EDF (Note 12) 240,517 199,234 504,781 391,998 Related Party Line of Credit (Note 21) 2,877 - 2,877 - Related Party Promissory Loans (Note 22) - - 23,233 2,115 Related Party Guarantors (Note 23) 151,668 32,934 303,334 109,101 Other interest 96 45 409 130 Total interest expense $ 730,517 $ 375,925 $ 1,462,036 $ 809,626 Interest income (7,889) (14,859) (13,726) (30,088) Interest expense, net $ 722,628 $ 361,066 $ 1,448,310 $ 779,538 |
Note 15 - 2012 Stock Option and
Note 15 - 2012 Stock Option and Stock Award Plan | 6 Months Ended |
Jun. 30, 2020 | |
2012 Stock Option and Stock Award Plan | |
Note 15 - 2012 Stock Option and Stock Award Plan | NOTE 15 - 2012 STOCK OPTION AND STOCK AWARD PLAN During 2012, the Company approved the 2012 Stock Option and Stock Award Plan (“2012 Plan”) 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 2012 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 2012 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 2012 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 2012 Plan have been issued and all restrictions on such shares under the terms on the 2012 Plan and the agreement evidencing awards granted under the 2012 Plan have lapsed. However, all awards shall be granted, if at all, within ten years from the earlier of the date the 2012 Plan is adopted by the Board or the date the 2012 Plan is duly approved by the stockholders of the Company. During the six months ended June 30, 2020 and 2019, the Company granted no stock options under the 2012 Plan and recognized no stock compensation expense relating to the vesting of stock options issued from the 2012 Plan. As of June 30, 2020, there are 2,000 shares that remain available for issuance under the 2012 Plan. |
Note 16 - 2015 Stock Option and
Note 16 - 2015 Stock Option and Stock Award Plan | 6 Months Ended |
Jun. 30, 2020 | |
2015 Stock Option and Stock Award Plan | |
Note 16 - 2015 Stock Option and Stock Award Plan | NOTE 16 - 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 (“2015 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 2015 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 2015 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 2015 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 2015 Plan have been issued and all restrictions on such shares under the terms on the 2015 Plan and the agreements evidencing awards granted under the 2015 Plan have lapsed. However, all awards shall be granted, if at all, within ten years from the earlier of the date the 2015 Plan is adopted by the Board or the date the 2015 Plan is duly approved by the stockholders of the Company. During the six months ended June 30, 2020, the Company granted under the 2015 Plan a total of 3,000 stock options to a key employee. The stock options had an exercise price of $2.50, vested immediately and had an approximate fair value of $6,678 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 2.05% (ii) estimated volatility of 99.01% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging eight years. The Company issued no stock options under the 2015 Plan during the six months ended June 30, 2019. During the three and six months ended June 30, 2020 and 2019, respectively, the Company recognized total stock compensation expenses for vesting options issued from the 2015 Plan as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 2015 Stock Plan $ 80,102 $ 16,433 $ 90,592 $ 32,866 As of June 30, 2020, there are 16,000 shares that remain available for issuance under the 2015 Plan and the number of unvested shares in the 2015 Plan is zero. |
Note 17 - 2018 Stock Option and
Note 17 - 2018 Stock Option and Stock Award Plan | 6 Months Ended |
Jun. 30, 2020 | |
2018 Stock Option and Stock Award Plan | |
Note 17 - 2018 Stock Option and Stock Award Plan | NOTE 17 - 2018 STOCK OPTION AND STOCK AWARD PLAN Effective February 12, 2018, the Board of Directors of the Company approved and adopted the Summer Energy Holdings, Inc. 2018 Stock Option and Stock Award Plan (“2018 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 Company’s named executive officers are eligible for grants or awards under the 2018 Plan. The Company’s stockholders approved the 2018 Plan on June 8, 2018. The maximum aggregate number of (i) shares of stock that may be issued under the 2018 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 2018 Plan pursuant to incentive stock options, non-statutory stock options, restricted stock grants, restricted stock units, 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 2018 Plan or any increase in the maximum aggregate number of shares of stock issuable thereunder shall be approved by the stockholders of the Company within twelve months of the date of adoption by the Board. Awards granted prior to stockholder approval of the 2018 Plan shall become exercisable no earlier than the date of stockholder approval of the 2018 Plan. The 2018 Plan continues in effect until the earlier of its termination by the Board or the date on which all shares of stock available for issuance under the 2018 Plan have been issued and all restrictions on such shares under the terms on the 2018 Plan and the agreement evidencing awards granted under the 2018 Plan have lapsed. However, all awards shall be granted, if at all, within ten years from the earlier of the date the 2018 Plan is adopted by the Board or the date the 2018 Plan is duly approved by the stockholders of the Company. During the six months ended June 30, 2020, the Company granted under the 2018 Plan a total of 85,000 stock options to key employees. The stock options had a weighted average exercise price of $2.18 and had an approximate fair value of $87,161 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 0.51% (ii) estimated volatility of 110.33% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging eight years. During the six months ended June 30, 2019, the Company granted under the 2018 Plan a total of 210,000 stock options to key employees and members of the Company’s board of directors. The stock options had a weighted average exercise price of $1.90 and had an approximate fair value of $357,158 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 2.18% (ii) estimated volatility of 149.27% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging eight years. During the three and six month periods ended June 30, 2020 and 2019, respectively, the Company recognized total stock compensation expense for the vesting of options issued from the 2018 Plan as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 2018 Stock Plan $ 440,114 $ 284,777 $ 678,284 $ 422,728 As of June 30, 2020, the unrecognized expense for vesting of options issued from the 2018 Plan is $378,497 relating to 600,000 of unvested shares expected to be recognized over a weighted average period of approximately 7.03 years. As of June 30, 2020, the Company had outstanding granted stock options under the 2018 Plan, net of forfeitures to purchase 1,416,250, and 83,750 shares remaining available for issuance. |
Note 18 - Nonqualified Stock Op
Note 18 - Nonqualified Stock Options Granted Outside of a Stock Option or Stock Award Plan | 6 Months Ended |
Jun. 30, 2020 | |
Note 18 - Nonqualified Stock Options Granted Outside Of Stock Option Or Stock Award Plan | |
Note 18 - Nonqualified Stock Options Granted Outside Of A Stock Option Or Stock Award Plan | NOTE 18 - NONQUALIFIED STOCK OPTIONS GRANTED OUTSIDE OF A STOCK OPTION OR STOCK AWARD PLAN In September 2019, the Company entered into stock option grant agreements with six non-employee members of the Company’s Board of Directors whereby the Company agreed to grant non-qualified stock options outside of a stock option or a stock award plan during the months of September 2019, December 2019, March 2020 and June 2020 as compensation for services. The stock options granted pursuant to these agreements and the shares issuable upon the exercise thereof have not been registered under the Securities Act of 1933, as amended. During the six months ended June 30, 2020, pursuant to the aforementioned grant agreements, the Company granted a total of 107,500 nonqualified stock options with an exercise price of $2.25 to six non-employee board members of the Company as compensation. The stock options granted had an approximate fair value of $110,411 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 0.50% (ii) estimated volatility of 111.10% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging eight years. For the three and six months ended June 30, 2020 and 2019, the stock compensation expense associated with the non-qualified stock options issued outside of a stock option or stock award plan is as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Outside of Stock Option or Stock Award Plan $ 52,651 $ - $ 110,411 $ - |
Note 19 - Private Placement Off
Note 19 - Private Placement Offering | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Note 19 - Private Placement Offering | NOTE 19 - PRIVATE PLACEMENT OFFERINGS During the six months ended June 30, 2020, the Company accepted a subscription from an accredited investor to purchase 30,000 shares of common stock in exchange for cash proceeds in the amount of $45,000. During the six months ended June 30, 2019, the Company commenced a private placement offering (the “2019 Offering”) to certain investors with whom the Company, its management and/or agents have a pre-existing relationship during the year ended December 31, 2019. The 2019 Offering was to accredited investors to purchase shares of the Company’s common stock at a purchase price of $1.50 per share. The 2019 Offering resulted in the issuance of 3,820,000 shares of common stock in exchange for cash proceeds in the amount of $5,730,000. |
Note 20 - Warrants
Note 20 - Warrants | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Note 20 - Warrants | NOTE 20 - WARRANTS The Company has issued warrants to purchase shares of the Company’s common stock associated with various agreements and has vested warrants from a previously terminated Master Marketing Agreement. On March 12, 2020, the Company issued a warrant for 250,000 shares of the Company’s common stock under the agreement with Digital Lending (Note 7). The five-year warrant has an exercise price of $1.50 per share and is subject to adjustment as set for in the Warrant. The fair value of warrant was $245,337 determined using the Black-Scholes option-pricing model and was expensed during the quarter ended March 31, 2020. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 0.66%, (ii) estimated volatility of 123.91%, (iii) dividend yield of 0.00%, and (iv) expected life of the warrant of 5 years. On January 31, 2020, the Company issued a warrant to purchase up to eight shares of the Company’s common stock under a Referral Agreement whereby the sales broker introduces the Company to potential electricity sales leads. The five-year warrant has an exercise price of $1.50 per share. The fair value of the warrant is $15 determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair value are as follows: (i) risk-free interest rate of 1.62% (ii) estimated volatility of 136.59% (iii) dividend yield of 0.00%, and (iv) expected life of the warrant of 5 years. On June 11, 2019, the Company issued 106,053 shares of common stock to Black Ink Energy, LLC (“Black Ink”) pursuant to of the 106,053 shares of common stock. On May 22, 2019, the Company issued a warrant for 80,000 shares of common stock under a Consulting Agreement (Note determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as expected life of the warrant of 5 years. On January 25, 2019, the Company issued a warrant for 43,772 shares of the Company’s common stock under a Referral Agreement whereby the sales broker introduces the Company potential sales leads. The five-year warrant has an exercise model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.58%, (ii) estimated volatility of 148.70%, (iii) dividend yield of 0.00%, and (iv) expected life of the warrant of 5 years. On January 25, 2019, the Company issued two warrants, each for 6,715 shares, of the Company’s common stock under a Referral Agreement whereby the sales broker introduces the Company potential sales leads. The five-year warrants have an As of June 30, 2020, the Company had outstanding warrants to purchase up to 976,212 shares of the Company’s common stock, of which 710,975 are fully vested. |
Note 21 - Related Party Lines o
Note 21 - Related Party Lines of Credit | 6 Months Ended |
Jun. 30, 2020 | |
Shares to be issued to each Guarantor per month | |
Note 21- Related Party Lines of Credit | NOTE 21 - RELATED PARTY LINES OF CREDIT Effective March 12, 2020, the Company entered into two separate line of credit agreements with related parties, Mr. Neil Leibman and LaRose Holdings LLLP. Mr. Leibman is an officer of the Company and serves on the Company’s board of directors. LaRose Holdings LLLP is an entity controlled by Al LaRose, Jr. who serves on the Company’s board of directors. The Company entered into a line of credit agreement (the “Leibman Line”) with Mr. Leibman (“Lender Leibman”). The line of credit allows the Company to borrow a maximum principal amount of $1,000,000 to be used by the Company for working capital and other purposes determined by the board of directors of the Company. During the term of the Leibman Line, Lender Leibman may make periodic loans as requested by the Company so long as the aggregate principal amount outstanding at any time does not exceed the maximum amount of the Leibman Line. Simple interest shall accrue on the unpaid principal balance outstanding under the Leibman Lines at the rate of 5% per annum and interest will be calculated on the basis of a 365-day year. Any unpaid principal and all accrued but unpaid interest shall be due and payable in full by the Company no later than May 15, 2023. The Company entered into a line of credit agreement (the “LaRose Line”) with LaRose Holdings, LLLP (“Lender LaRose”). The line of credit allows the Company to borrow a maximum principal amount of $1,000,000 to be used by the Company for working capital and other purposes determined by the board of directors of the Company. During the term of the LaRose Line, Lender LaRose may make periodic loans as requested by the Company so long as the aggregate principal amount outstanding at any time does not exceed the maximum amount of the LaRose Line. Simple interest shall accrue on the unpaid principal balance outstanding under the LaRose Line at the rate of 5% per annum and interest will be calculated on the basis of a 365-day year. Any unpaid principal and all accrued but unpaid interest shall be due and payable in full by the Company no later than May 15, 2023. On April 8, 2020, the Company was advanced $1,000,000 by Mr. Leibman under the terms and conditions of the Leibman Line to be utilized as short-term working capital for the Company. On April 28, 2020, the Company paid in full the $1,000,000 of principal advanced from the Leibman Line and paid Mr. Leibman $2,877 of accrued interest. For the three and six months ended June 30, 2020 and 2019, the interest incurred on related party lines of credit is as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Leibman Line $ 2,877 $ - $ 2,877 $ - LaRose Line - - - - Total $ 2,877 $ - $ 2,877 $ - As of June 30, 2020, the outstanding balances of the Leibman Line and the LaRose Line were both $0. |
Note 22 - Related Party Promiss
Note 22 - Related Party Promissory Notes | 6 Months Ended |
Jun. 30, 2020 | |
Shares to be issued to each Guarantor per month | |
Note 22 - Related Party Promissory Notes | NOTE 22 - RELATED PARTY PROMISSORY NOTES On January 15, 2020, the Company executed a promissory note in the amount of $600,000 to evidence an advance by Mr. Leibman for purposes of short-term financing. The promissory note accrued interest at a rate of 5% per annum based upon 365 days in a year and had a maturity date of April 14, 2020. On March 13, 2020, the Company paid in full the outstanding balance of the loan from Mr. Leibman with interest in the amount of $4,849. As of June 30, 2020, the balance of the loan from Mr. Leibman was $0. On November 8, 2019, the Company executed a promissory note in the amount of $850,000 to evidence an advance by Mr. Leibman for purposes of short-term financing. The promissory note accrued interest at a rate of 5% per annum based upon 365 days in a year and had a maturity date of February 6, 2020. On February 6, 2020, the Company amended such promissory note to extend the maturity date of such note to May 7, 2020 with all other provisions of the original note remaining in full force and effect. On March 13, 2020, the Company paid Mr. Leibman in full the outstanding balance of the loan with interest in the amount of $8,384. As of June 30, 2020, the balance of the loan from Mr. Leibman was $0. On November 8, 2019, the Company executed a promissory note in the amount of $1,000,000 to evidence an advance by LaRose Holdings LLLP, an entity controlled by Al LaRose, for purposes of short-term financing. Mr. LaRose is a director of the Company. The promissory note accrued interest at a rate of 5% per annum based upon 365 days in a year and had a maturity date of February 6, 2020. On February 6, 2020, the Company amended such promissory note to extend the maturity date of such note to May 7, 2020 with all other provisions of the original note remain in full force and effect. On March 13, 2020, the Company paid LaRose Holdings in full the outstanding balance of the loan with interest in the amount of $10,000. As of June 30, 2020, the balance of the loan from LaRose Holdings LLLP was $0. On January 7, 2019, the Company entered into a promissory note in the amount of $473,000 for an advance by Mr. O’Leary, a member of the Company’s board of directors, for purposes of short-term financing. The promissory note accrued interest at a rate of 5% per annum based upon 365 days in a year and had a maturity date of July 7, 2019. On February 7, 2019, the Company paid back in full the loan from Mr. O’Leary with interest in the amount of $2,009. As of June 30, 2020 and 2019, the balance of the loan from Mr. O’Leary was $0, respectively. On January 7, 2019, the Company entered into a promissory note in the amount of $25,000 for an advance by Messrs. O’Leary and Leibman for purposes of short-term financing. The promissory note accrued interest at a rate of 5% per annum based upon 365 days in a year and had a maturity date of July 7, 2019. On February 7, 2019, the Company paid back in full the loan from Messrs. O’Leary and Leibman with interest in the amount of $106. As of June 30, 2020 and 2019, the balance of the loan from Messrs. O’Leary and Leibman was $0, respectively. The following table summarizes interest paid to related parties on promissory notes for the three and six months ended June 30, 2020 and 2019 is as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, Original Date of Loan 2020 2019 2020 2019 Related party interest expense for $600,000 loan 1/15/2020 $ - $ - $ 4,849 $ - Related party interest expense for $590,000 loan 11/8/2019 - - - - Related party interest expense for $850,000 loan 11/8/2019 - - 8,384 2,009 Related party interest expense for $1,000,000 loan 11/8/2019 - - 10,000 106 Related party interest expense for $473,000 loan 1/7/2019 - - - - Related party interest expense for $25,000 loan 1/7/2019 - - - - Total $ - $ - $ 23,233 $ 2,115 |
Note 23 - Related Party Guarant
Note 23 - Related Party Guarantors | 6 Months Ended |
Jun. 30, 2020 | |
Shares to be issued to each Guarantor per month | |
Note 23 - Related Party Guarantors | NOTE 23 - RELATED PARTY GUARANTORS On December 18, 2018, four members of the Company’s Board of Directors, Stuart Gaylor, Andrew Bursten, Tom O’Leary and Neil Leibman ( Mr. Leibman is also an executive officer) On December 20, 2019, four members of the Company’s Board of Directors, Stuart Gaylor, Andrew Bursten, Tom O’Leary and Neil Leibman ( Mr. Leibman is also an executive officer) The Company incurred interest expense to the Guarantors during the three and six months ended June 30, 2020 and 2019 as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Guarantor interest expense incurred on Comerica Revolver Note $ 87,968 $ 32,934 $ 175,935 $ 109,101 Guarantor interest expense incurred on Comerica Single Payment Note 63,700 - 127,400 - $ 151,668 $ 32,934 $ 303,335 $ 109,101 The Company paid interest by the issuance of the Company’s common stock for the three and six months ended June 30, 2020 and 2019 as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Number of Shares Issued Amount Number of Shares Issued Amount Number of Shares Issued Amount Number of Shares Issued Amount Guarantor Interest paid on Comerica Revolving Note 58,644 $ 87,968 81,112 $ 121,667 58,644 $ 87,968 81,112 $ 121,667 Guarantor interest paid on Comerica Single Payment Note 42,468 63,700 - - 42,468 63,700 - - 101,112 $ 151,668 81,112 $ 121,667 101,112 $ 151,668 81,112 $ 121,667 |
Note 24 - Other Related Party T
Note 24 - Other Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Note 24 - Other Related Party Transactions | NOTE 24 - OTHER RELATED PARTY TRANSACTIONS In February 2019, Mr. Leibman provided aviation transportation for business purposes, and the Company paid $23,469 in fuel costs. On October 31, 2017, Summer Northeast entered into a sublease agreement with PDS Management Group, LLC (“PDS”) for office space located at 800 Bering Drive, Suite 250, Houston, Texas. PDS is 100% owned by Tom O’Leary who is a member of the Company’s Board of Directors. The Company paid for lease expense related to the agreement with PDS for the three and six months ended June 30, 2020 and 2019 as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Summer Northeast sublease payments $ - $ 6,993 $ 4,662 $ 13,986 |
Note 25 - Summer Energy 401(K)
Note 25 - Summer Energy 401(K) Plan | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Note 25 - Summer Energy 401(k) Plan | NOTE 25 - SUMMER ENERGY 401(K) PLAN In January 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 $19,500 in 2020 or elects not to defer under the Plan. There is no Company match to the Plan. |
Note 26 - Employee Stock Purcha
Note 26 - Employee Stock Purchase Plan | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Note 26 - Employee Stock Purchase Plan | N OTE 26 - 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 ESPP participants (not each individual ESPP participant). The employer match for the three and six months ended June 30, 2020 and 2019 is follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Employee Stock Purchase Plan $ 1,038 $ 659 $ 1,728 $ 1,586 |
Note 27 - Coronavirus (Covid-19
Note 27 - Coronavirus (Covid-19) | 6 Months Ended |
Jun. 30, 2020 | |
Shares to be issued to each Guarantor per month | |
Note 27 - Coronavirus (Covid-19) | NOTE 27 - CORONAVIRUS (COVID-19) On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. The Company is monitoring this closely, and the ultimate severity of the outbreak is uncertain. Operations of the Company are ongoing as the delivery of electricity to customers is considered an essential business. Further the uncertain nature of its spread globally may impact our business operations resulting from quarantines of employees, customers, and third-party service providers. At this time, the Company is unable to estimate the impact of this event on its operations. |
Note 28 - Subsequent Events
Note 28 - Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Note 28 - Subsequent Events | NOTE 28 SUBSEQUENT EVENTS On July 20, 2020 the Company issued 101,112 shares of the Company’s common stock as payment for the accrued interest for the personal guarantees of the Comerica Bank master revolving note (Note 9) and the Comerica Bank single payment note (Note 10). On July 24, 2020, the Company granted 30,000 stock options from the 2018 Stock Option and Stock Award Plan (Note 17) to purchase common stock of the Company to two officers for achieving certain performance benchmarks established by the employment agreements of the two officers. |
Note 2 - Significant Accounti_2
Note 2 - Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Policy Text Block [Abstract] | |
Uses and Sources of Liquidity | Uses and Sources of Liquidity The condensed consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern within one year from the date of issuance of these condensed consolidated financial statements. For the six months ended June 30, 2020 and 2019, the Company incurred net losses of $2,791,166 and $2,255,217, respectively, and used cash in continuing operations of $2,985,689 and $3,110,767, respectively. The Company’s operations have been financed principally from electricity revenues, net proceeds from outside debt and equity financing of $4,080,000, funding from the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) totaling $2,342,300 established pursuant to the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) as well as from capital raised under private placement offerings totaling $45,000 and $5,730,000 during the six months ended June 30, 2020 and 2019, respectively. The Company’s liquidity requirements are to finance current operations, meet financial commitments, fund organic growth and/or acquisitions, and service debt. The liquidity requirements fluctuate with the level of customer acquisition costs, collateral posting requirements, the effects of the timing between the settlement of payables and receivables, including the effect of weather conditions, and our general working capital needs for ongoing operations. Estimating liquidity requirements is highly dependent on then-current market conditions, including impacts of the COVID-19 pandemic, weather events, forward prices for electricity, market volatility and our then existing capital structure and requirements. The Company’s continuation as a going concern is dependent upon its ability to increase sales, and/or raise additional funds through the capital markets as well as outside lending. During the six months ended June 30, 2020, the Company secured additional financing for a revolving loan in the amount of $10,000,000 with a maturity date of March 2023 and proceeds from the PPP loan. In addition, commitments for additional lending up to $2,000,000 may be provided by members of the Board of Directors of the Company, if necessary. Management has concluded that its existing capital resources and availability, proceeds from a 2020 offering and outside lending will be sufficient to fund operations through the third quarter of 2021 |
Revenue and Cost Recognition | Revenue and Cost Recognition Our revenues are primarily derived from the sale of electricity to residential and small commercial customers. Revenues for sales of electricity are recognized under the accrual method of accounting. Direct energy costs are recorded when the electricity is delivered to the customer’s meter. Cost of goods sold (“COGS”) within the Texas market include electric power purchased and pass through charges from the transmission and distribution service providers (“TDSPs”) 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. COGS within the Independent System Operator (“ISO”) for the New England market is comprised of wholesale costs based upon the wholesale power tariff rate for volumes purchased during the delivery month and scheduling fees. Summer Midwest began flowing electricity within the Pennsylvania, New Jersey, Maryland Power Pool (“PJM”) market in July 2019, and the COGS for the PJM market is comprised of wholesale costs based upon the wholesale power tariff for volumes purchased during the delivery month as well as scheduling fees. 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 the Electric Reliability Council of Texas (“ERCOT”), ISO New England and PJM 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. |
Cash and Restricted Cash | Cash and Restricted Cash The Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. There were no such investments at June 30, 2020 or December 31, 2019. Restricted cash in the amount of $2,026,023 as of June 30, 2020 and $3,197,708 as of December 31, 2019 represents funds held in escrow for customer deposits, funds held in a controlled account by the wholesale provider (Note 12) and funds securing irrevocable stand-by letters of credit (Note 4). June 30, 2020 December 31, 2019 Cash $ 3,533,068 $ 814,360 Restricted cash: Escrow for customer deposits 510,749 511,461 Funds securing letters of credit 750,000 750,000 Funds controlled by wholesale provider 765,274 1,936,247 Total restricted cash 2,026,023 3,197,708 Total cash and restricted cash $ 5,559,091 $ 4,012,068 |
Basic and Diluted (Loss) Per Share | Basic and Diluted Income (Loss) Per Share Basic income/(loss) per share are computed by dividing net income/(loss) applicable to the weighted-average number of shares outstanding during the period. Diluted income per share is determined using the weighted-average number of shares outstanding during the period, adjusted for the dilutive effect of share equivalents, using the treasury method, consisting of shares that might be issued upon exercise of share equivalents. In periods where losses are reported, the weighted average number of shares excludes share equivalents, because their inclusion would be anti-dilutive. For the six months ended June 30, 2020 and 2019, the weighted average number of outstanding excludes share equivalents due to dilutive stock options and stock warrants because their inclusion would be anti-dilutive. The Company had potentially dilutive securities totaling approximately 5,022,692 and 4,067,682 as of June 30, 2020 and 2019, respectively. |
Recent Pronouncements | Recent Pronouncements New Accounting Standards Recently Adopted In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 requires entities to use a current expected credit loss ("CECL") model, which is a new impairment model based on expected losses rather than incurred losses on financial assets, including trade accounts receivables. The model requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We adopted ASU 2016-13 and the related amendments effective January 1, 2020, and there was no material impact to our condensed consolidated financial statements. Standards Not Yet Adopted In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, which reduces the complexity of FASB ASC Topic 740, “Income Taxes” as part of the FASB’s Simplification Initiative. The amendments in this guidance simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for annual reporting periods ending after December 15, 2020, with early adoption permitted, and should be applied on either a retrospective basis for all periods presented or a modified retrospective basis. Management is still assessing the impact this might have on the Company’s consolidated financial statements. The Company has reviewed all other recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that no other pronouncements will have a significant effect on its financial statements. |
Note 2 - Significant Accounti_3
Note 2 - Significant Accounting Policies (Table) | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Schedule of cash and restricted cash | June 30, 2020 December 31, 2019 Cash $ 3,533,068 $ 814,360 Restricted cash: Escrow for customer deposits 510,749 511,461 Funds securing letters of credit 750,000 750,000 Funds controlled by wholesale provider 765,274 1,936,247 Total restricted cash 2,026,023 3,197,708 Total cash and restricted cash $ 5,559,091 $ 4,012,068 |
Note 3 - Revenue (Tables)
Note 3 - Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of revenues from customers net of respective provisions for refund | The table below represents the Company’s reportable revenues for the three and six month periods ended June 30, 2020 and 2019, respectively, from customers, net of respective provisions for refund: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Electricity Revenues from Contracts with Customers ERCOT Market $ 38,599,697 $ 36,294,807 $ 73,860,940 $ 67,097,505 ERCOT Pre-paid Market 1,843,514 1,387,147 3,290,291 2,600,937 ISO New England Market 861,350 1,906,856 1,968,628 3,831,267 PJM Market 298,328 - 487,763 - Total Electricity Revenues from Contracts with Customers 41,602,889 39,588,810 79,607,622 73,529,709 Other Revenues: Fees Revenue 919,547 909,777 1,781,804 1,794,747 Total Revenues: $ 42,522,436 $ 40,498,587 $ 81,389,426 $ 75,324,456 |
Components of accounts receivable and accrued revenue | Presented in the following table are the components of accounts receivable and accrued revenue: June 30, 2020 December 31, 2019 Accounts receivable from customers ERCOT Market $ 10,874,702 $ 9,041,871 ISO New England Market 148,453 257,942 PJM Market 104,312 11,244 Total accounts receivable from customers 11,127,467 9,311,057 Accrued revenue from customers ERCOT Market 36,850,685 32,916,970 ISO New England Market 626,461 788,395 PJM Market 85,307 15,088 Total accrued revenue with customers 37,562,453 33,720,453 Allowance for credit losses (894,945) (1,183,561) Total accounts receivable and accrued revenue $ 47,794,975 $ 41,847,949 |
Note 6 - Financing From First_2
Note 6 - Financing From First Insurance Funding (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
First Insurance Funding | |
Schedule of interest expense | Interest expense accrued to First Insurance Funding was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 First Insurance Funding interest expense $ - $ 455 $ 1,365 $ 455 |
Note 7 - Financing From Digit_2
Note 7 - Financing From Digital Lending Services Us Corp. (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Digital Lending Services | |
Schedule of interest expense | As of June 30, 2020, the outstanding balance of the Digital Lending loan was $9,000,000 and the interest expense was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Digital Lending interest expense $ 286,875 $ - $ 350,625 $ - |
Note 8 - Financing From Blue _2
Note 8 - Financing From Blue Water Capital Funding LLC (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Blue Water Capital Funding | |
Schedule of accrued interest | Interest expense to Blue Water was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Blue Water interest expense $ - $ 127,476 $ 167,900 $ 253,550 |
Note 9 - Comerica Bank Master_2
Note 9 - Comerica Bank Master Revolving Note (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Comerica Bank | |
Schedule of accrued interest | Interest expense related to the Comerica Revolver Note was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Comerica Revolver Note interest expense $ 24,822 $ 15,781 $ 59,058 $ 52,277 |
Note 10 - Comerica Bank Singl_2
Note 10 - Comerica Bank Single Payment Note (Tables) - Comerica Bank | 6 Months Ended |
Jun. 30, 2020 | |
Schedule of accrued interest | Interest expense related to the Comerica Revolver Note was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Comerica Revolver Note interest expense $ 24,822 $ 15,781 $ 59,058 $ 52,277 |
Single Note | |
Schedule of accrued interest | Interest expense related to the Comerica Single Note was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Comerica Single Note interest expense $ 18,849 $ - $ 43,641 $ - |
Note 11 - Paycheck Protection_2
Note 11 - Paycheck Protection Program Loan (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
PPP Loan | |
Schedule of interest expenses | Interest expense related to the Loan was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 PPP Loan Interest $ 4,813 $ - $ 4,813 $ - |
Note 12 - Wholesale Power Pur_2
Note 12 - Wholesale Power Purchase Agreement with EDF (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
EDF | |
Schedule of accrued interest | The Company incurred interest expense to EDF for the three and six months ended June 30, 2020 and 2019 as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 EDF Interest $ 240,517 $ 199,234 $ 504,781 $ 391,998 |
Note 13 - Lease Liabilities, _2
Note 13 - Lease Liabilities, Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Shares to be issued to each Guarantor per month | |
Schedule of Future Minimum Rental Payments for Operating Leases | Operating lease future minimum payments together with their present values as of June 30, 2020 are summarized as follows: Operating Leases 2020 $ 99,748 2021 199,494 2022 199,494 2023 197,294 2024 190,693 Thereafter 190,693 Total future minimum lease payments 1,077,416 Less amounts representing interest (171,858) Present value of lease liability $ 905,558 Current-portion operating lease liability (144,899) Long-term portion operating lease liability $ 760,659 |
Schedule of Operating lease expense | Lease expense for the office space for the three and six months ended June 30, 2020 and 2019, respectively, was included in operating expenses on the consolidated statements of operations as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Operating Lease expense $ 34,781 $ 77,571 $ 73,627 $ 153,893 |
Note 14 - Long Term Obligatio_2
Note 14 - Long Term Obligations (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term debt | Long-term obligations of the Company are comprised as follows: June 30, 2020 December 31, 2019 Financing from First Insurance Funding (Note 6) $ 94,761 $ 38,397 Financing from Digital Lending Services US Corp. (Note 7) 9,000,000 - Financing from Blue Water Capital Funding, LLC (Note 8) - 4,920,000 Comerica Bank Master Revolving Note (Note 9) 2,900,000 2,900,000 Comerica Bank Single Payment Note (Note 10) 2,100,000 2,100,000 Financing from Paycheck Protection Program Loan (Note 11) 2,342,300 - Wholesale Power Purchase Agreement with EDF collateral credit support (Note 12) 4,811,006 4,511,006 Operating lease obligations (Note 13) 905,558 979,185 Total obligations $ 22,153,625 $ 15,448,588 Less current portion of obligations (5,094,761) (5,038,397) Less current portion operating lease obligations (Note 13) (144,899) (144,902) Long-term portion of obligations $ 16,913,965 $ 10,265,289 |
Schedule of accrued interest | For the three and six months ended June 30, 2020 and 2019, respectively, interest expense consists of the following on obligations: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Financing from First Insurance Funding (Note 6) $ - $ 455 $ 1,365 $ 455 Financing from Digital Lending Services US Corp. (Note 7) 286,875 - 350,625 - Financing from Blue Water Capital Funding, LLC (Note 8) - 127,476 167,900 253,550 Comerica Master Revolving Note (Note 9) 24,822 15,781 59,058 52,277 Comerica Bank Single Payment Note (Note 10) 18,849 - 43,641 - Financing from Paycheck Protection Program Loan (Note 11) 4,813 - 4,813 - Wholesale Power Purchase Agreement with EDF (Note 12) 240,517 199,234 504,781 391,998 Related Party Line of Credit (Note 21) 2,877 - 2,877 - Related Party Promissory Loans (Note 22) - - 23,233 2,115 Related Party Guarantors (Note 23) 151,668 32,934 303,334 109,101 Other interest 96 45 409 130 Total interest expense $ 730,517 $ 375,925 $ 1,462,036 $ 809,626 Interest income (7,889) (14,859) (13,726) (30,088) Interest expense, net $ 722,628 $ 361,066 $ 1,448,310 $ 779,538 |
Note 16 - 2015 Stock Option a_2
Note 16 - 2015 Stock Option and Stock Award Plan (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
2015 Stock Option and Stock Award Plan | |
Schedule of stock compensation expenses | During the three and six months ended June 30, 2020 and 2019, respectively, the Company recognized total stock compensation expenses for vesting options issued from the 2015 Plan as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 2015 Stock Plan $ 80,102 $ 16,433 $ 90,592 $ 32,866 |
Note 17 - 2018 Stock Option a_2
Note 17 - 2018 Stock Option and Stock Award Plan (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
2018 Stock Option and Stock Award Plan | |
Schedule of stock compensation expenses | During the three and six month periods ended June 30, 2020 and 2019, respectively, the Company recognized total stock compensation expense for the vesting of options issued from the 2018 Plan as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 2018 Stock Plan $ 440,114 $ 284,777 $ 678,284 $ 422,728 |
Note 18 - Nonqualified Stock _2
Note 18 - Nonqualified Stock Options Granted Outside of a Stock Option or Stock Award Plan (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Nonqualified stock options | |
Schedule of stock compensation expenses | For the three and six months ended June 30, 2020 and 2019, the stock compensation expense associated with the non-qualified stock options issued outside of a stock option or stock award plan is as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Outside of Stock Option or Stock Award Plan $ 52,651 $ - $ 110,411 $ - |
Note 21 - Related Party Lines_2
Note 21 - Related Party Lines of Credit (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Shares to be issued to each Guarantor per month | |
Summary interest incurred on related parties | For the three and six months ended June 30, 2020 and 2019, the interest incurred on related party lines of credit is as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Leibman Line $ 2,877 $ - $ 2,877 $ - LaRose Line - - - - Total $ 2,877 $ - $ 2,877 $ - |
Note 22 - Related Party Promi_2
Note 22 - Related Party Promissory Notes (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Note 24Related Party Loans Abstract | |
Summary interest paid to related parties | The following table summarizes interest paid to related parties on promissory notes for the three and six months ended June 30, 2020 and 2019 is as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, Original Date of Loan 2020 2019 2020 2019 Related party interest expense for $600,000 loan 1/15/2020 $ - $ - $ 4,849 $ - Related party interest expense for $590,000 loan 11/8/2019 - - - - Related party interest expense for $850,000 loan 11/8/2019 - - 8,384 2,009 Related party interest expense for $1,000,000 loan 11/8/2019 - - 10,000 106 Related party interest expense for $473,000 loan 1/7/2019 - - - - Related party interest expense for $25,000 loan 1/7/2019 - - - - Total $ - $ - $ 23,233 $ 2,115 |
Note 23 - Related Party Guara_2
Note 23 - Related Party Guarantors (Tables) - Guarantors | 6 Months Ended |
Jun. 30, 2020 | |
Schedule of accrued interest | The Company incurred interest expense to the Guarantors during the three and six months ended June 30, 2020 and 2019 as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Guarantor interest expense incurred on Comerica Revolver Note $ 87,968 $ 32,934 $ 175,935 $ 109,101 Guarantor interest expense incurred on Comerica Single Payment Note 63,700 - 127,400 - $ 151,668 $ 32,934 $ 303,335 $ 109,101 |
Schedule of interest paid by issuance of common stock | The Company paid interest by the issuance of the Company’s common stock for the three and six months ended June 30, 2020 and 2019 as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Number of Shares Issued Amount Number of Shares Issued Amount Number of Shares Issued Amount Number of Shares Issued Amount Guarantor Interest paid on Comerica Revolving Note 58,644 $ 87,968 81,112 $ 121,667 58,644 $ 87,968 81,112 $ 121,667 Guarantor interest paid on Comerica Single Payment Note 42,468 63,700 - - 42,468 63,700 - - 101,112 $ 151,668 81,112 $ 121,667 101,112 $ 151,668 81,112 $ 121,667 |
Note 24 - Other Related Party_2
Note 24 - Other Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
PDS | |
Schedule of lease expense | The Company paid for lease expense related to the agreement with PDS for the three and six months ended June 30, 2020 and 2019 as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Summer Northeast sublease payments $ - $ 6,993 $ 4,662 $ 13,986 |
Note 26 - Employee Stock Purc_2
Note 26 - Employee Stock Purchase Plan (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Schedule of employer match | The employer match for the three and six months ended June 30, 2020 and 2019 is follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Employee Stock Purchase Plan $ 1,038 $ 659 $ 1,728 $ 1,586 |
Note 1 - Organization (Details)
Note 1 - Organization (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Midwest | |
Entity Incorporation, Date of Incorporation | Dec. 16, 2013 |
Marketing LLC | |
Entity Incorporation, Date of Incorporation | Nov. 6, 2012 |
Summer LLC | |
Entity Incorporation, Date of Incorporation | Apr. 6, 2011 |
Note 2 - Significant Accounti_4
Note 2 - Significant Accounting Policies: (Uses and Sources of Liquidity) (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Net loss | $ (2,791,166) | $ (2,255,217) |
Net cash used in operating activities | (2,985,689) | (3,110,767) |
Private placement offerings | 45,000 | 5,730,000 |
Revolving loan in amount | 10,000,000 | |
Additional loan | 2,000,000 | |
Proceeds from loan | 2,342,300 | $ 0 |
Proceeds from outside financing | 4,080,000 | |
Small Business Administration | ||
Proceeds from loan | $ 2,342,300 |
Note 2 - Significant Accounti_5
Note 2 - Significant Accounting Policies: Cash and Restricted Cash (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Text Block [Abstract] | ||
Restricted cash | $ 2,026,023 | $ 3,197,708 |
Investments | $ 0 | $ 0 |
Note 2 - Significant Accounti_6
Note 2 - Significant Accounting Policies: Cash and Restricted Cash: Schedule of Cash and Restricted Cash (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Text Block [Abstract] | ||||
Cash | $ 3,533,068 | $ 814,360 | ||
Restricted cash: | ||||
Escrow for customer deposits | 510,749 | 511,461 | ||
Funds controlled by wholesale provider | 750,000 | 750,000 | ||
Funds securing letters of credit | 765,274 | 1,936,247 | ||
Total restricted cash | 2,026,023 | 3,197,708 | ||
Total cash and restricted cash | $ 5,559,091 | $ 4,012,068 | $ 5,201,733 | $ 3,854,885 |
Note 2 - Significant Accounti_7
Note 2 - Significant Accounting Policies: Basic and Diluted Loss Per Unit (Details) - shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Text Block [Abstract] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 5,022,692 | 4,067,682 |
Note 3 - Revenue (Details)
Note 3 - Revenue (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Allowance for doubtful accounts | $ 894,945 | $ 1,183,561 |
Allowance for credit losses | 894,945 | |
Texas Market | ||
Unbilled accounts | 36,850,685 | 32,916,970 |
ISO New England Market | ||
Unbilled accounts | 626,461 | 788,395 |
PJM Market | ||
Unbilled accounts | $ 85,307 | $ 15,088 |
Note 3 - Revenue_ Summary of re
Note 3 - Revenue: Summary of revenues from customers net of respective provisions for refund (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Total Electricity Revenues from Contracts with Customers | $ 41,602,889 | $ 39,588,810 | $ 79,607,622 | $ 73,529,709 |
Fees Revenue | 919,547 | 909,777 | 1,781,804 | 1,794,747 |
Total Revenues | 42,522,436 | 40,498,587 | 81,389,426 | 75,324,456 |
ERCOT Market | ||||
Total Electricity Revenues from Contracts with Customers | 38,599,697 | 36,294,807 | 73,860,940 | 67,097,505 |
ERCOT Pre-Paid Market | ||||
Total Electricity Revenues from Contracts with Customers | 1,843,514 | 1,387,147 | 3,290,291 | 2,600,937 |
ISO New England Market | ||||
Total Electricity Revenues from Contracts with Customers | 861,350 | 1,906,856 | 1,968,628 | 3,831,267 |
PJM Market | ||||
Total Electricity Revenues from Contracts with Customers | $ 298,328 | $ 0 | $ 487,763 | $ 0 |
Note 3 - Revenue_ Components of
Note 3 - Revenue: Components of accounts receivable and accrued revenue (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Total accounts receivable from customers | $ 11,127,467 | $ 9,311,057 |
Total accrued revenue with customers | 37,562,453 | 33,720,453 |
Allowance for doubtful accounts | (894,945) | (1,183,561) |
Total accounts receivable and accrued revenue | 47,794,975 | 41,847,949 |
ERCOT Market | ||
Total accounts receivable from customers | 10,874,702 | 9,041,871 |
Total accrued revenue with customers | 36,850,685 | 32,916,970 |
ISO New England Market | ||
Total accounts receivable from customers | 148,453 | 257,942 |
Total accrued revenue with customers | 626,461 | 788,395 |
PJM Market | ||
Total accounts receivable from customers | 104,312 | 11,244 |
Total accrued revenue with customers | $ 85,307 | $ 15,088 |
Note 4 - Letters of Credit and
Note 4 - Letters of Credit and Deposits (Details) - Letter of Credit - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 0 | |
Letters of Credit Outstanding, Amount | 0 | |
Letters of credit facility | 750,000 | $ 750,000 |
Summer Northeast | ||
Cash deposits | 896,299 | 1,387,181 |
Summer Midwest | ||
Line of Credit Facility, Maximum Borrowing Capacity | 0 | 50,000 |
Cash deposits | 1,488,000 | 713,000 |
Connecticut Department | ||
Letters of credit facility | 250,000 | |
State of New Hampshire | ||
Letters of credit facility | $ 500,000 | |
Letters of credit facility, expiration period | May 1, 2021 | |
ERCOT Market | ||
Cash deposits | $ 1,038,719 | $ 1,004,059 |
Note 5 - Surety Bonds (Details)
Note 5 - Surety Bonds (Details) | Jun. 30, 2020USD ($) |
Cash held by surety bond | $ 375,000 |
Illinois Commerce Commission | |
Surety Bonds | 500,000 |
Pennsylvania Public Utility Commission | |
Surety Bonds | $ 250,000 |
Note 6 - Financing From First_3
Note 6 - Financing From First Insurance Funding (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Shares to be issued to each Guarantor per month | |||
Premiums, taxes and fees | $ 141,352 | $ 150,575 | |
Periodic payment | $ 34,349 | $ 22,586 | |
Interest rate | 5.85% | 6.45% | |
Outstanding balance | $ 94,761 | $ 38,397 |
Note 6 - Financing From First_4
Note 6 - Financing From First Insurance Funding: Interest accrued (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest accrued | $ 730,517 | $ 375,925 | $ 1,462,036 | $ 809,626 |
First Insurance Funding | ||||
Interest accrued | $ 0 | $ 455 | $ 1,365 | $ 455 |
Note 7 - Financing From Digit_3
Note 7 - Financing From Digital Lending Services Us Corp. (Details) - USD ($) | Mar. 12, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Long-term debt | $ 16,913,965 | $ 10,265,289 | |
Digital Lending | |||
Long-term debt | $ 9,000,000 | ||
Agreement | Digital Lending | |||
Amount of available credit | $ 10,000,000 | ||
Interest rate | 12.75% | ||
Maturity date | Mar. 11, 2023 |
Note 7 - Financing From Digit_4
Note 7 - Financing From Digital Lending Services Us Corp. Interest accrued (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest accrued | $ 730,517 | $ 375,925 | $ 1,462,036 | $ 809,626 |
Digital Lending Services | ||||
Interest accrued | $ 286,875 | $ 0 | $ 350,625 | $ 0 |
Note 8 - Financing From Blue _3
Note 8 - Financing From Blue Water Capital Funding LLC (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Long-term debt | $ 16,913,965 | $ 10,265,289 |
Blue Water Capital Funding | ||
Debt Instrument, Face Amount | $ 5,000,000 | |
Debt Instrument, Maturity Date | Jun. 30, 2020 | |
Debt Instrument, Interest Rate, Stated Percentage | 11.00% | |
Financing fee | $ 22,500 | |
Long-term debt | $ 0 | $ 4,920,000 |
Note 8 - Financing From Blue _4
Note 8 - Financing From Blue Water Capital Funding LLC: Interest accrued (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest accrued | $ 730,517 | $ 375,925 | $ 1,462,036 | $ 809,626 |
Blue Water Capital Funding | ||||
Interest accrued | $ 0 | $ 127,476 | $ 167,900 | $ 253,550 |
Note 9 - Comerica Bank Master_3
Note 9 - Comerica Bank Master Revolving Note (Details) - Comerica Bank - USD ($) | Dec. 20, 2019 | Dec. 18, 2018 | Jun. 30, 2020 | Dec. 31, 2019 |
Proceeds from Comerica Bank note | $ 2,100,000 | $ 2,900,000 | ||
Note | ||||
Proceeds from Comerica Bank note | $ 2,900,000 | |||
Maturity Date | Jun. 11, 2020 | |||
Interest rate | 3.50% | |||
Comerica Bank Loan outstanding | $ 2,900,000 | $ 2,900,000 |
Note 9 - Comerica Bank Master_4
Note 9 - Comerica Bank Master Revolving Note: Interest accrued (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest accrued | $ 730,517 | $ 375,925 | $ 1,462,036 | $ 809,626 |
Comerica Bank | Note | ||||
Interest accrued | $ 24,822 | $ 15,781 | $ 59,058 | $ 52,277 |
Note 10 - Comerica Bank Singl_3
Note 10 - Comerica Bank Single Payment Note (Details) - Comerica Bank - USD ($) | Dec. 20, 2019 | Dec. 18, 2018 | Jun. 30, 2020 | Dec. 31, 2019 |
Proceeds from Comerica Bank note | $ 2,100,000 | $ 2,900,000 | ||
Single Note | ||||
Proceeds from Comerica Bank note | $ 2,100,000 | |||
Maturity Date | Jun. 20, 2020 | |||
Interest rate | 3.50% | |||
Comerica Bank Loan outstanding | $ 2,100,000 | $ 2,100,000 |
Note 10 - Comerica Bank Singl_4
Note 10 - Comerica Bank Single Payment Note: Interest accrued (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest accrued | $ 730,517 | $ 375,925 | $ 1,462,036 | $ 809,626 |
Comerica Bank | Single Note | ||||
Interest accrued | $ 18,849 | $ 0 | $ 43,641 | $ 0 |
Note 11 - Paycheck Protection_3
Note 11 - Paycheck Protection Program Loan (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||
Apr. 20, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Proceeds from loan | $ 2,342,300 | $ 0 | ||
Periodic payment | 34,349 | $ 22,586 | ||
PPP Loan | ||||
Loan payable | $ 2,342,300 | $ 0 | ||
Frost Bank | ||||
Proceeds from loan | $ 2,342,300 | |||
Interest rate | 1.00% | |||
Term | 2 years | |||
Periodic payment | $ 130,128 |
Note 11 - Paycheck Protection_4
Note 11 - Paycheck Protection Program Loan: Interest expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest expenses | $ 730,517 | $ 375,925 | $ 1,462,036 | $ 809,626 |
PPP Loan | ||||
Interest expenses | $ 4,813 | $ 0 | $ 4,813 | $ 0 |
Note 12 - Wholesale Power Pur_3
Note 12 - Wholesale Power Purchase Agreement with EDF (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Long-term debt | $ 16,913,965 | $ 10,265,289 |
EDF | ||
Long-term debt | $ 4,811,006 | $ 4,511,006 |
Note 12 - Wholesale Power Pur_4
Note 12 - Wholesale Power Purchase Agreement with EDF: Interest accrued (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest accrued | $ 730,517 | $ 375,925 | $ 1,462,036 | $ 809,626 |
EDF | ||||
Interest accrued | $ 240,517 | $ 199,234 | $ 504,781 | $ 391,998 |
Note 13 - Lease Liabilities, _3
Note 13 - Lease Liabilities, Commitments and Contingencies (Details) - USD ($) | Sep. 01, 2019 | Dec. 01, 2018 | Feb. 28, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Operating lease right-of-use assets | $ 905,558 | $ 979,185 | |||
Operating lease liabilities | 905,558 | 979,185 | |||
Long-term portion operating lease liability | $ 760,659 | $ 834,283 | |||
Weighted-average remaining lease term for operating leases | 5 years 5 months 9 days | ||||
Weighted-average discount rate for operating leases | 6.50% | ||||
Summer LLC | |||||
Rent payments | $ 15,900 | ||||
Termination Date | Dec. 31, 2025 | ||||
PDS Management Group, LLC | |||||
Rent payments | $ 1,698 | $ 2,255 | |||
Termination Date | Feb. 28, 2020 |
Note 13 - Lease Liabilities, _4
Note 13 - Lease Liabilities, Commitments and Contingencies : Operating lease future minimum payments (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Shares to be issued to each Guarantor per month | ||
2020 | $ 99,748 | |
2021 | 199,494 | |
2022 | 199,494 | |
2023 | 197,294 | |
2024 | 190,693 | |
Thereafter | 190,693 | |
Total future minimum lease payments | 1,077,416 | |
Less amounts representing interest | (171,858) | |
Present value of lease liability | 905,558 | $ 979,185 |
Current-portion operating lease liability | (144,899) | (144,902) |
Long-term portion operating lease liability | $ 760,659 | $ 834,283 |
Note 13 - Lease Liability_ Oper
Note 13 - Lease Liability: Operating lease expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Shares to be issued to each Guarantor per month | ||||
Operating lease expense | $ 34,781 | $ 77,571 | $ 73,627 | $ 153,893 |
Note 14 - Long Term Obligatio_3
Note 14 - Long Term Obligations: Schedule of Long-term debt (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Operating lease obligations | $ 905,558 | $ 979,185 |
Total obligations | 22,153,625 | 15,448,588 |
Less current portion of obligations | (5,094,761) | (5,038,397) |
Less current portion operating lease obligations | (144,899) | (144,902) |
Long-term debt | 16,913,965 | 10,265,289 |
EDF | ||
Total obligations | 4,811,006 | 4,511,006 |
Long-term debt | 4,811,006 | 4,511,006 |
PPP Loan | ||
Total obligations | 2,342,300 | 0 |
Comerica Bank | Note | ||
Total obligations | 2,900,000 | 2,900,000 |
Comerica Bank | Single Note | ||
Total obligations | 2,100,000 | 2,100,000 |
First Insurance Funding | ||
Total obligations | 94,761 | 38,397 |
Digital Lending Services | ||
Total obligations | 9,000,000 | 0 |
Blue Water Capital Funding | ||
Total obligations | 0 | 4,920,000 |
Long-term debt | $ 0 | $ 4,920,000 |
Note 14 - Long Term Obligatio_4
Note 14 - Long Term Obligations: Interest expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest expense | $ 730,517 | $ 375,925 | $ 1,462,036 | $ 809,626 |
Interest income | (7,889) | (14,859) | (13,726) | (30,088) |
Interest expense, net | 722,628 | 361,066 | 1,448,310 | 779,538 |
PPP Loan | ||||
Interest expense | 4,813 | 0 | 4,813 | 0 |
EDF | ||||
Interest expense | 240,517 | 199,234 | 504,781 | 391,998 |
DTE | ||||
Interest expense | 0 | 0 | 23,233 | 2,115 |
Guarantors | ||||
Interest expense | 151,668 | 32,934 | 303,335 | 109,101 |
Others | ||||
Interest expense | 96 | 45 | 409 | 130 |
Comerica Bank | Note | ||||
Interest expense | 24,822 | 15,781 | 59,058 | 52,277 |
Comerica Bank | Single Note | ||||
Interest expense | 18,849 | 0 | 43,641 | 0 |
Line of Credit [Member] | ||||
Interest expense | 2,877 | 0 | 2,877 | 0 |
First Insurance Funding | ||||
Interest expense | 0 | 455 | 1,365 | 455 |
Digital Lending Services | ||||
Interest expense | 286,875 | 0 | 350,625 | 0 |
Blue Water Capital Funding | ||||
Interest expense | $ 0 | $ 127,476 | $ 167,900 | $ 253,550 |
Note 15 - 2012 Stock Option a_2
Note 15 - 2012 Stock Option and Stock Award Plan (Details) - 2012 Stock Option and Stock Award Plan - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Number of Shares Authorized | 785,000 | |
Shares available for issuance | 2,000 | |
Expected life of the options | 10 years | |
Allocated Share-based Compensation Expense | $ 0 | $ 0 |
Note 16 - 2015 Stock Option a_3
Note 16 - 2015 Stock Option and Stock Award Plan (Details) - 2015 Stock Option and Stock Award Plan | 6 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Number of Shares Authorized | 1,500,000 |
Shares available for issuance | 16,000 |
Non-vested shares | 0 |
Employee Stock Option | |
Option vested | 3,000 |
Stock options exercise price | $ / shares | $ 2.50 |
Fair value of option vested | $ | $ 6,678 |
Fair Value Assumptions, Method Used | Black-Scholes option-pricing model |
Risk-free interest rate | 2.05% |
Estimated volatility | 99.01% |
Dividend yield | 0.00% |
Expected life of options | 8 years |
Note 16 - 2015 Stock Option a_4
Note 16 - 2015 Stock Option and Stock Award Plan: Stock compensation expenses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
2015 Stock Option and Stock Award Plan | ||||
Allocated Share-based Compensation Expense | $ 80,102 | $ 16,433 | $ 90,592 | $ 32,866 |
Note 17 - 2018 Stock Option a_3
Note 17 - 2018 Stock Option and Stock Award Plan (Details) - 2018 Stock Option and Stock Award Plan - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Number of Shares Authorized | 1,500,000 | |
Shares available for issuance | 83,750 | |
Option net of forfeitures | 1,416,250 | |
Unrecognized expense for unvested options | $ 378,497 | |
Non-vested shares | 600,000 | |
Deferred Compensation Arrangement with Individual, Requisite Service Period | 7 years 11 days | |
Employee Stock Option | ||
Option vested | 85,000 | |
Stock options exercise price | $ 2.18 | |
Fair value of option vested | $ 87,161 | |
Fair Value Assumptions, Method Used | Black-Scholes option-pricing model | |
Risk-free interest rate | 0.51% | |
Estimated volatility | 110.33% | |
Dividend yield | 0.00% | |
Expected life of options | 8 years | |
NonEmployee Stock Option | ||
Option vested | 210,000 | |
Stock options exercise price | $ 1.90 | |
Fair value of option vested | $ 357,158 | |
Fair Value Assumptions, Method Used | Black-Scholes option-pricing model | |
Risk-free interest rate | 2.18% | |
Estimated volatility | 149.27% | |
Dividend yield | 0.00% | |
Expected life of options | 8 years |
Note 17 - 2018 Stock Option a_4
Note 17 - 2018 Stock Option and Stock Award Plan: Schedule of options granted to purchase common stock (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
2018 Stock Option and Stock Award Plan | ||||
Allocated Share-based Compensation Expense | $ 440,114 | $ 284,777 | $ 678,284 | $ 422,728 |
Note 18 - Nonqualified Stock _3
Note 18 - Nonqualified Stock Options Granted Outside of a Stock Option or Stock Award Plan (Details) - Nonqualified stock options | 6 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Option granted | shares | 107,500 |
Stock options exercise price | $ / shares | $ 2.25 |
Fair value of option vested | $ | $ 110,411 |
Fair Value Assumptions, Method Used | Black Scholes option pricing model |
Risk-free interest rate | 0.50% |
Estimated volatility | 111.10% |
Dividend yield | 0.00% |
Expected life of the options | 8 years |
Note 18 - Nonqualified Stock _4
Note 18 - Nonqualified Stock Options Granted Outside of a Stock Option or Stock Award Plan : Options granted (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Nonqualified stock options | ||||
Allocated Share-based Compensation Expense | $ 52,651 | $ 0 | $ 110,411 | $ 0 |
Note 19 - Private Placement O_2
Note 19 - Private Placement Offering (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock Issued During Period, Shares | $ 960,000 | $ 45,000 | $ 5,730,000 |
Investor | Private Placement | |||
Stock Issued During Period, Shares | $ 30,000 | $ 3,820,000 | |
Stock Issued During Period, Value | 45,000 | 5,730,000 | |
Purchase price per share | $ 1.50 |
Note 20 - Warrants (Details)
Note 20 - Warrants (Details) - USD ($) | Mar. 12, 2020 | Jun. 11, 2019 | Jan. 31, 2020 | May 22, 2019 | Jan. 25, 2019 | Jun. 30, 2020 |
Warrants Outstanding | 710,975 | |||||
Warrants vested | 976,212 | |||||
Black Ink | ||||||
Warrants issued | 106,053 | |||||
Purchase of common stock | 536,000 | |||||
Share Price | $ 1.50 | |||||
Warrants cancelled | 106,053 | |||||
Consulting Agreement | Warrant [Member] | ||||||
Warrants issued | 8 | 80,000 | ||||
Exercise price of warrants | $ 1.50 | $ 1.50 | ||||
Warrants Term | 5 years | 5 years | ||||
Fair value of warrants | $ 15 | $ 143,731 | ||||
Fair Value Assumptions, Method Used | Black-Scholes option-pricing model | Black-Scholes option-pricing model | ||||
Risk-free interest rate | 1.62% | 2.19% | ||||
Estimated volatility | 136.59% | 149.28% | ||||
Dividend yield | 0.00% | 0.00% | ||||
Expected life of the options | 5 years | 5 years | ||||
Referral Agreement | Warrant [Member] | ||||||
Warrants issued | 250,000 | 43,772 | ||||
Exercise price of warrants | $ 1.50 | $ 1.50 | ||||
Warrants Term | 5 years | 5 years | ||||
Fair value of warrants | $ 245,337 | $ 80,307 | ||||
Fair Value Assumptions, Method Used | Black-Scholes option-pricing model | Black-Scholes option-pricing model | ||||
Risk-free interest rate | 0.66% | 2.58% | ||||
Estimated volatility | 123.91% | 148.70% | ||||
Dividend yield | 0.00% | 0.00% | ||||
Expected life of the options | 5 years | 5 years | ||||
Referral Agreement | Warrant 2[Member] | ||||||
Warrants issued | 13,430 | |||||
Exercise price of warrants | $ 1.50 | |||||
Warrants Term | 5 years | |||||
Fair value of warrants | $ 24,640 | |||||
Fair Value Assumptions, Method Used | Black-Scholes option-pricing model | |||||
Risk-free interest rate | 2.58% | |||||
Estimated volatility | 148.70% | |||||
Dividend yield | 0.00% | |||||
Expected life of the options | 5 years |
Note 21- Related Party Lines of
Note 21- Related Party Lines of Credit (Details) - USD ($) | Apr. 08, 2020 | Apr. 28, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 12, 2020 |
Related Party Loans | $ 600,000 | $ 498,000 | |||
Neil Leibman | Promissory note | |||||
Related Party Loans | $ 1,000,000 | $ 1,000,000 | |||
Accrued interest | $ 2,877 | ||||
Letter of Credit | Lender Leibman | |||||
Related Party Loans | $ 1,000,000 | ||||
Interest rate | 5.00% | ||||
Term | 365 days | ||||
Maturity date | May 15, 2023 | ||||
Line of credit | 0 | ||||
Letter of Credit | Lender LaRose | |||||
Related Party Loans | $ 1,000,000 | ||||
Interest rate | 5.00% | ||||
Term | 365 days | ||||
Maturity date | May 15, 2023 | ||||
Line of credit | $ 0 |
Note 21- Related Party Lines _2
Note 21- Related Party Lines of Credit: Interest incurred (Details) - Line of Credit [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest incured | $ 2,877 | $ 0 | $ 2,877 | $ 0 |
Lender Leibman | ||||
Interest incured | 2,877 | 0 | 2,877 | 0 |
Lender LaRose | ||||
Interest incured | $ 0 | $ 0 | $ 0 | $ 0 |
Note 22 - Related Party Promi_3
Note 22 - Related Party Promissory Notes (Details) - USD ($) | Apr. 08, 2020 | Jan. 15, 2020 | Nov. 08, 2019 | Feb. 07, 2019 | Jan. 07, 2019 | Apr. 28, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Related Party Loans | $ 600,000 | $ 498,000 | ||||||||
Repayment of related party loan | 2,450,000 | 498,000 | ||||||||
Loan | $ 2,000,000 | 2,000,000 | ||||||||
Promissory notes | Neil Leibman | ||||||||||
Related Party Loans | $ 600,000 | |||||||||
Interest rate | 5.00% | |||||||||
Term | 365 days | |||||||||
Maturity date | Apr. 14, 2020 | |||||||||
Loan | ||||||||||
Interest paid to related parties | 0 | $ 0 | 4,849 | 0 | ||||||
Promissory notes | Neil Leibman | ||||||||||
Loan | 0 | 0 | ||||||||
Promissory notes | LaRose Holdings | ||||||||||
Interest paid to related parties | 0 | 0 | 10,000 | 106 | ||||||
Promissory notes | OLeary and Leibman | ||||||||||
Related Party Loans | $ 25,000 | |||||||||
Repayment of related party loan | $ 25,000 | |||||||||
Interest rate | 5.00% | |||||||||
Term | 365 days | |||||||||
Maturity date | Jul. 7, 2019 | |||||||||
Loan | 0 | 0 | ||||||||
Interest paid to related parties | 0 | 0 | ||||||||
Promissory notes | Neil Leibman | ||||||||||
Interest paid to related parties | 0 | 0 | 8,384 | 2,009 | ||||||
Promissory note | ||||||||||
Interest paid to related parties | 0 | 0 | 23,233 | 2,115 | ||||||
Promissory note | Neil Leibman | ||||||||||
Related Party Loans | $ 1,000,000 | $ 1,000,000 | ||||||||
Promissory note | Neil Leibman | ||||||||||
Related Party Loans | $ 850,000 | |||||||||
Repayment of related party loan | $ 850,000 | |||||||||
Interest rate | 5.00% | |||||||||
Term | 365 days | |||||||||
Maturity date | May 7, 2020 | |||||||||
Interest paid to related parties | 0 | |||||||||
Promissory note | LaRose Holdings | ||||||||||
Related Party Loans | $ 1,000,000 | |||||||||
Repayment of related party loan | $ 1,000,000 | |||||||||
Interest rate | 5.00% | |||||||||
Term | 365 days | |||||||||
Maturity date | May 7, 2020 | |||||||||
Loan | 0 | 0 | ||||||||
Promissory note | Tom O Leary | ||||||||||
Related Party Loans | $ 473,000 | |||||||||
Repayment of related party loan | $ 473,000 | |||||||||
Interest rate | 5.00% | |||||||||
Term | 365 days | |||||||||
Maturity date | Jul. 7, 2019 | |||||||||
Loan | 0 | 0 | ||||||||
Interest paid to related parties | $ 0 | 0 | $ 0 | 0 | ||||||
Promissory note | OLeary and Leibman | ||||||||||
Interest paid to related parties | $ 0 | $ 0 |
Note 22 - Related Party Promi_4
Note 22 - Related Party Promissory Notes: Interest paid to related parties (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Promissory notes | Neil Leibman | ||||
Interest paid to related parties | $ 0 | $ 0 | $ 4,849 | $ 0 |
Promissory notes | Neil Leibman | ||||
Interest paid to related parties | 0 | 0 | 0 | 0 |
Promissory notes | Neil Leibman | ||||
Interest paid to related parties | 0 | 0 | 8,384 | 2,009 |
Promissory notes | LaRose Holdings | ||||
Interest paid to related parties | 0 | 0 | 10,000 | 106 |
Promissory notes | OLeary and Leibman | ||||
Interest paid to related parties | 0 | 0 | ||
Promissory note | ||||
Interest paid to related parties | 0 | 0 | 23,233 | 2,115 |
Promissory note | Tom O Leary | ||||
Interest paid to related parties | $ 0 | 0 | $ 0 | 0 |
Promissory note | OLeary and Leibman | ||||
Interest paid to related parties | $ 0 | $ 0 |
Note 23 - Related Party Guara_3
Note 23 - Related Party Guarantors (Details) - Comerica Bank - USD ($) | Dec. 20, 2019 | Dec. 18, 2018 |
Proceeds from Comerica Bank note | $ 2,100,000 | $ 2,900,000 |
Interest rate | 12.00% | 12.00% |
Note 23 - Related Party Guara_4
Note 23 - Related Party Guarantors : Accrued interest expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest accrued | $ 730,517 | $ 375,925 | $ 1,462,036 | $ 809,626 |
Comerica revolver note | ||||
Interest accrued | 87,968 | 32,934 | 175,935 | 109,101 |
Comerica Single note | ||||
Interest accrued | 63,700 | 0 | 127,400 | 0 |
Guarantors | ||||
Interest accrued | $ 151,668 | $ 32,934 | $ 303,335 | $ 109,101 |
Note 23 - Related Party Guara_5
Note 23 - Related Party Guarantors : Interest paid by issuance of common stock (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Amount | $ 960,000 | $ 45,000 | $ 5,730,000 | |
Comerica revolver note | ||||
Number of Shares Issued | 58,644 | 81,112 | 58,644 | 2 |
Amount | $ 87,968 | $ 121,667 | $ 87,968 | $ 121,667 |
Comerica Single note | ||||
Number of Shares Issued | 42,468 | 0 | 42,468 | 0 |
Amount | $ 63,700 | $ 0 | $ 63,700 | $ 0 |
Guarantors | ||||
Number of Shares Issued | 101,112 | 81,112 | 101,112 | 81,112 |
Amount | $ 151,668 | $ 121,667 | $ 151,668 | $ 121,667 |
Note 24 - Other Related Party_3
Note 24 - Other Related Party Transactions (Details) | 1 Months Ended |
Feb. 28, 2019USD ($) | |
Neil Leibman | |
Fuel costs | $ 23,469 |
Note 24 - Other Related Party_4
Note 24 - Other Related Party Transactions: Lease Expenses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Lease expense | $ 34,781 | $ 77,571 | $ 73,627 | $ 153,893 |
PDS | ||||
Lease expense | $ 0 | $ 6,993 | $ 4,662 | $ 13,986 |
Note 25 - Summer Energy 401(K_2
Note 25 - Summer Energy 401(K) Plan (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Text Block [Abstract] | |
401 (K) Plan | Eligible employee participants are automatically enrolled at 3% of compensation unless a participant elects an alternative deferral percentage limited to dollar amount of $19,500 in 2020 or elects not to defer under the Plan. There is no Company match to the Plan. |
Note 26 - Employee Stock Purc_3
Note 26 - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Maximum Annual Contributions Per Employee, Amount | $ 25,000 |
Employers Matching Contribution, Annual Vesting Percentage | 10.00% |
Maximum Contributions for All Employees | $ 24,000 |
Note 26 - Employee Stock Purc_4
Note 26 - Employee Stock Purchase Plan: Employer match (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disclosure Text Block [Abstract] | ||||
Employer match | $ 1,038 | $ 659 | $ 1,728 | $ 1,586 |
Note 28 - Subsequent Events (De
Note 28 - Subsequent Events (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |
Jul. 24, 2020 | Jul. 20, 2020 | Jun. 30, 2020 | |
2018 Stock Option and Stock Award Plan | |||
Option granted | 1,416,250 | ||
Subsequent Event [Member] | |||
Number of common stock issued | 101,112 | ||
Subsequent Event [Member] | 2018 Stock Option and Stock Award Plan | |||
Option granted | 30,000 | ||
Stock options exercise price | $ 2.50 | ||
Fair value of option vested | $ 35,719 | ||
Fair Value Assumptions, Method Used | Black Scholes option pricing model | ||
Risk-free interest rate | 0.27% | ||
Estimated volatility | 98.63% | ||
Dividend yield | 0.00% | ||
Expected life of options | 8 years |