10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number 001-35496

Summer Energy Holdings, Inc.
(Exact name of registrant as specified in charter)
Nevada	20-2722022
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5847 San Felipe Street, Suite 3700, Houston, Texas	77057
(Address of principal executive offices)	(Zip Code)
(713) 375-2790
(Issuer’s telephone number, including area code)
N/A
(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(g) of the Act:

Title of each class	Trading Symbol(s)	Principal U.S. Market for Securities
Common Stock, $0.001 par value	SUME	OTCQB

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ  No o.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes þ No o.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer                   o
Non-accelerated filer   þ	Smaller reporting company  þ
Emerging growth company o

Indicate by check mark whether the registrant is a shell company (as defined by Section 12b-2 of the Exchange Act). Yes oNo þ.  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act.           ¨

The number of shares of the issuer’s common stock, $0.001 par value, outstanding as of November 14, 2019, was 31,502,310.

1

Summer Energy Holdings, Inc.

FORM 10-Q

2

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SUMMER ENERGY HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

		September 30, 2019		December 31, 2018
ASSETS
Current assets:
Cash	$	1,701,380	$	451,995
Restricted cash		3,696,652		3,402,890
Accounts receivable, net		49,468,018		34,270,548
Prepaid and other current assets		3,662,759		4,014,194
Total current assets		58,528,809		42,139,627
Property and equipment, net		53,726		82,209
Deferred financing cost, net		4,688		9,375
Operating lease right-of use assets, net		1,032,832		-
Intangible asset, net		1,279,746		2,165,724
Total assets	$	60,899,801	$	44,396,935
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,496,440	$	3,208,088
Accrued wholesale power purchased		28,495,248		12,202,099
Accrued transportation and distribution charges		6,461,340		4,151,678
Accrued expenses		3,778,641		4,636,911
Current-portion operating lease obligation		162,623		-
Current-portion of obligations		5,696,793		-
Total current liabilities		46,091,085		24,198,776
Long-term liabilities:
Long-term obligations, net of current portion		5,381,215		11,956,006
Total liabilities		51,472,300		36,154,782
Commitments and contingencies
Stockholders’ equity
Common stock - $.001 par value, 100,000,000 shares authorized,
31,502,310 and 27,480,833 shares issued and outstanding at
September 30, 2019 and December 31, 2018, respectively		31,501		27,480
Subscription receivable		(52,000)		(52,000)
Additional paid-in capital		30,158,576		23,357,951
Accumulated deficit		(20,710,576)		(15,091,278)
Total stockholders’ equity		9,427,501		8,242,153
Total liabilities and stockholders’ equity	$	60,899,801	$	44,396,935

See accompanying notes to the condensed consolidated financial statements.

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SUMMER ENERGY HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Revenue	$	54,696,761	$	46,236,106	$	130,021,217	$	119,504,955
Cost of goods sold
Power purchases and balancing/ancillary		34,554,826		29,100,071		71,953,021		65,307,971
Transportation and distribution providers charge		17,415,238		15,819,398		46,180,570		44,038,213
Total cost of goods sold		51,970,064		44,919,469		118,133,591		109,346,184
Gross profit		2,726,697		1,316,637		11,887,626		10,158,771
Operating expenses		5,634,108		5,262,090		16,267,591		14,965,311
Operating loss		(2,907,411)		(3,945,453)		(4,379,965)		(4,806,540)
Other expense
Financing costs		(1,563)		(1,563)		(4,688)		(46,535)
Interest expense, net		(455,107)		(363,705)		(1,234,645)		(929,877)
Disputed power settlement		-		(1,040,361)		-		(1,040,361)
Total other expense		(456,670)		(1,405,629)		(1,239,333)		(2,016,773)
Net loss		(3,364,081)		(5,351,082)		(5,619,298)		(6,823,313)
Income tax expense		-		-		-		-
Net loss	$	(3,364,081)	$	(5,351,082)	$	(5,619,298)	$	(6,823,313)
Net loss per common share:
Basic	$	(0.11)	$	(0.19)	$	(0.18)	$	(0.26)
Dilutive	$	(0.11)	$	(0.19)	$	(0.18)	$	(0.26)
Weighted average number of shares
Basic		31,490,176		27,480,833		30,606,157		26,473,599
Dilutive		31,490,176		27,480,833		30,606,157		26,473,599

See accompanying notes to the condensed consolidated financial statements.

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SUMMER ENERGY HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

							Additional
	Common Stock				Subscription		paid in		Accumulated
	Shares		Amount		Receivable		capital		Deficit		Total
Balance at June 30, 2018	27,480,833	$	27,480	$	(52,000)	$	23,042,493	$	(8,809,639)	$	$14,208,334
Vesting of stock options and restricted shares associated with the 2015 Stock Option and Award Plan	-		-		-		27,445		-		27,445
Vesting of stock options and restricted shares associated with the 2018 Stock Option and Award Plan	-		-		-		132,421		-		132,421
Net loss	-		-		-		-		(5,351,082)		(5,351,082)
Balance at September 30, 2018	27,480,833	$	27,480	$	(52,000)	$	23,202,359	$	(14,160,721)	$	9,017,118
							Additional
	Common Stock				Subscription		paid in		Accumulated
	Shares		Amount		Receivable		capital		Deficit		Total
Balance at June 30, 2019	31,487,998	$	31,487	$	(52,000)	$	29,909,883	$	(17,346,495)	$	12,542,875
Issuance of warrants	-		-		-		4		-		4
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	-		-		-		107,672		-		107,672
Vesting of stock options and restricted shares Outside of Plan	-		-		-		103,132		-		103,132
Issuance of common stock as interest payment for personal guaranty	14,312		14		-		21,452		-		21,466
Net loss	-		-		-		-		(3,364,081)		(3,364,081)
Balance at September 30, 2019	31,502,310	$	31,501	$	(52,000)	$	30,158,576	$	(20,710,576)	$	9,427,501

See accompanying notes to the condensed consolidated financial statements.

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SUMMER ENERGY HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED) – CONTINUED

							Additional
	Common Stock				Subscription		paid in		Accumulated
	Shares		Amount		Receivable		capital		Deficit		Total
Balance at December 31, 2017	25,055,833	$	25,055	$	(52,000)	$	18,891,252	$	(7,337,408)	$	$11,526,899
Vesting of stock options and restricted shares associated with the 2015 Stock Option and Award Plan	-		-		-		186,923		-		186,923
Vesting of stock options and restricted shares associated with the 2018 Stock Option and Award Plan	-		-		-		489,109		-		489,109
Issuance of common stock associated with a private placement offering	2,425,000		2,425		-		3,635,075		-		3,637,500
Net loss	-		-		-		-		(6,823,313)		(6,823,313)
Balance at September 30, 2018	27,480,833	$	27,480	$	(52,000)	$	23,202,359	$	(14,160,721)	$	9,017,118
							Additional
	Common Stock				Subscription		paid in		Accumulated
	Shares		Amount		Receivable		capital		Deficit		Total
Balance at December 31, 2018	27,480,833	$	27,480	$	(52,000)	$	23,357,951	$	(15,091,278)	$	8,242,153
Issuance of warrants	-		-		-		248,682		-		248,682
Vesting of stock options and restricted shares associated with the 2015 Stock Option and Award Plan	-		-		-		49,299		-		49,299
Vesting of stock options and restricted shares associated with the 2018 Stock Option and Award Plan	-		-		-		530,400		-		530,400
Vesting of stock options and restricted shares Outside of Plan	-		-		-		103,132		-		103,132
Issuance of common stock associated with a private placement offering	3,820,000		3,820		-		5,726,180		-		5,730,000
Issuance of common stock as interest payment for personal guaranty	95,424		95		-		143,038		-		143,133
Issuance of common stock associated with the cashless exercise of warrants	106,053		106		-		(106)		-		-
Net loss	-		-		-		-		(5,619,298)		(5,619,298)
Balance at September 30, 2019	31,502,310	$	31,501	$	(52,000)	$	30,158,576	$	(20,710,576)	$	9,427,501

See accompanying notes to the condensed consolidated financial statements.

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SUMMER ENERGY HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

		For the Nine Months Ended September 30,
		2019		2018
Cash Flows from Operating Activities
Net loss	$	(5,619,298)	$	(6,823,313)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash financing costs		4,687		46,535
Broker referral warrant compensation expense		104,951		-
Consulting warrant compensation expense		143,731		-
Stock compensation expense		682,831		676,032
Interest payment in common stock for personal guaranty		143,133		-
Depreciation of property and equipment		28,483		90,405
Amortization of intangible asset		885,978		885,978
Bad debt expense		626,047		674,541
Changes in operating assets and liabilities:
Accounts receivable		(15,823,517)		(13,409,913)
Prepaid and other current assets		351,435		(1,768,150)
Accounts payable		(1,711,648)		1,706,961
Accrued wholesale power purchased		16,293,149		10,326,227
Accrued transportation and distribution charges		2,309,662		683,522
Accrued expense		(858,270)		2,349,249
Net cash used in operating activities		(2,438,646)		(4,561,926)
Cash Flows from Investing Activities
Purchase of property and equipment		-		(27,741)
Net cash used in investing activities		-		(27,741)
Cash Flows from Financing Activities
Advances from wholesale provider		963,000		3,836,006
Payments to wholesale provider		(588,000)		-
Payments on Comerica Bank note		(2,200,000)		-
Payment on master revolver note		-		(40,000)
Financing of directors and officer insurance policy		127,989		-
Payment on financing of directors and officer's insurance policy		(51,196)		-
Deferred financing costs		-		(12,500)
Proceeds from related party debt		498,000		-
Repayment of related party debt		(498,000)		(767,677)
Advance from short-term loan		-		2,420,000
Proceeds from issuance of common shares in a private placement, net of fees		5,730,000		3,637,500
Net cash provided by financing activities		3,981,793		9,073,329
Net Increase in Cash and Restricted Cash		1,543,147		4,483,662
Cash and Restricted Cash at Beginning of Period		3,854,885		1,992,036
Cash and Restricted Cash at End of Period	$	5,398,032	$	6,475,698
Supplemental Disclosure of Cash Flow Information:
Income taxes paid	$	-	$	-
Interest paid	$	1,186,512	$	929,877
Non-Cash Investing and Financing Activities
Operating lease right of use assumed through operating lease obligation	$	1,265,563	$	-
Cashless exercise of warrant for 106,053 shares of common stock	$	106	$	-

See accompanying notes to the condensed consolidated financial statements.

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SUMMER ENERGY HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - ORGANIZATION

The condensed consolidated financial statements include the accounts of Summer Energy Holdings, Inc. and its wholly-owned subsidiaries Summer Energy, LLC (“Summer LLC”), Summer Energy Midwest, LLC (“Summer Midwest”), Summer EM Marketing, LLC (“Marketing LLC”) and Summer Energy Northeast, LLC (“Summer Northeast”) (collectively referred to as the “Company,” “we,” “us,” or “our”).  All significant intercompany transactions and balances have been eliminated in these consolidated financial statements.

Summer LLC is a retail electric provider in the state of Texas under a license with the Public Utility Commission of Texas (“PUCT”).  Summer LLC procures wholesale energy and resells to commercial and residential customers.  Summer LLC was organized on April 6, 2011 under the laws of the state of Texas.

Summer Midwest (formerly Summer Energy of Ohio, LLC) was formed in the state of Ohio on December 16, 2013 to procure and sell electricity in the state of Ohio.   The Public Utilities Commission of Ohio issued a certificate as a Retail Electric Service Provider to Summer Midwest on June 16, 2015.   On May 2, 2019, the Illinois Commerce Commission approved Summer Midwest as a Retail Electric Service Provider in the state of Illinois.

Marketing LLC was formed in the state of Texas on November 6, 2012 to provide marketing services to Summer LLC.   Marketing LLC is currently inactive and there is no business activity.

Summer Northeast, a Texas limited liability company formerly named REP Energy, LLC, was acquired on November 1, 2017 and became a wholly-owned subsidiary of Summer Energy Holdings, Inc.   Summer Northeast is a retail electric provider serving electric load to both residential and commercial customers in the Northeastern U.S. and holds licenses in Massachusetts, New Hampshire, Connecticut and Rhode Island.  

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 nine-month period ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019.  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, 2018, as filed with the Securities and Exchange Commission (“SEC”) on April 11, 2019.

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.

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, 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.

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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”) and ISO New England 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 September 30, 2019 or December 31, 2018.

Restricted cash in the amount of $3,696,652 as of September 30, 2019 and $3,402,890 as of December 31, 2018 represents funds held in escrow for customer deposits, funds in a lockbox account in which EDF Trading North America, LLC (“EDFTNA”) has a security interest and funds securing two irrevocable stand-by letters of credit.  The letters of credit were issued for the benefit of the following parties: Connecticut Department of Public Utility Control, in the amount of $250,000, which was set to expire on May 26, 2019 and was automatically extended to May 26, 2020; and the State of New Hampshire Public Utilities Committee in the amount of $500,000, which is set to expire on May 1, 2020.  

		September 30, 2019		December 31, 2018
Cash	$	1,701,380	$	451,995
Restricted cash		3,696,652		3,402,890
Total cash and restricted cash	$	5,398,032	$	3,854,885

Basic and Diluted (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 nine months ended September 30, 2019 and 2018, the weighted average number of shares outstanding excludes share equivalents, because their inclusion would be anti-dilutive.  The Company had potentially dilutive securities totaling approximately 4,741,434 and 4,278,730, respectively, as of September 30, 2019 and 2018. 

 Accounting Standards Recently Adopted 

The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), as of January 1, 2018, using the modified retrospective approach.  The modified retrospective approach provides a method for recording existing leases at the application date.  In addition, the Company elected the available practical expedients permitted under the transaction guidance within the new standard.  The most significant impact from the adoption of the new standard was the recognition of operating lease right-of-use assets and operating lease liabilities.  Adoption of the new standard resulted in the recording of  assets and liabilities of $1,265,562 as of January 1, 2019.  The standard did not materially impact the consolidated net income and had no impact on cash flows.

Recently Issued Accounting Standards Not Yet Adopted

The Company has reviewed all 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.

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NOTE 3 - REVENUE

The table below represents the Company’s reportable revenues for the three-month and nine-month periods ended September 30, 2019 and 2018, respectively, from customers, net of respective provisions for refund:

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Electricity Revenues from Contracts with Customers
ERCOT Market	$	49,708,164	$	40,449,035	$	116,805,669	$	104,690,986
ERCOT Pre-paid Market		1,956,958		1,666,542		4,557,895		3,673,328
Northeast Market		1,998,663		3,254,044		5,829,930		8,755,948
Midwest Market		2,540		-		2,540		-
Total Electricity Revenues from Contracts with Customers		53,666,325		45,369,621		127,196,034		117,120,262
Other Revenues:
Fees Revenue		1,030,436		866,485		2,825,183		2,384,693
Total Revenues:	$	54,696,761	$	46,236,106	$	130,021,217	$	119,504,955

Presented in the following table are the components of accounts receivable and accrued revenue:

		September 30, 2019		December 31, 2018
Accounts receivable from customers
ERCOT Market	$	12,505,795	$	7,729,016
ISO New England Market		363,821		544,454
PJM Market		1,502		-
Total accounts receivable from customers		12,871,118		8,273,470
Accrued revenue from customers
ERCOT Market		36,573,761		25,811,607
ISO New England Market		1,022,553		1,006,895
Total accrued revenue with customers		37,596,314		26,818,502
Allowance for doubtful accounts		(999,414)		(821,424)
Total accounts receivable and accrued revenue	$	49,468,018	$	34,270,548

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 and ISO New England markets. Summer Midwest began flowing electricity in the state of Ohio in the PJM market in July 2019 and the anticipated customer base as this market grows will consist of residential and commercial customers. 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.

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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

Account receivables 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 September 30, 2019 and December 31, 2018 were estimated at $36,573,761 and $25,811,607, 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 kilowatt hour (“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 September 30, 2019 and December 31, 2018 were estimated at $1,022,553and $1,006,895, respectively.

The Company began serving customers in the PJM market during the month of July 2019.   As of September 30, 2019, the Company had billed customers $2,540 and the outstanding billed accounts receivable balance was $1,502.

The Company, in the Texas market, determines an allowance for doubtful accounts based upon a review of outstanding receivables, historical write-off experience and existing economic conditions. Receivables past due over 90 days are considered delinquent and reviewed individually for collectability. After all means of collection have been exhausted, delinquent receivables are written off. Billed receivables over 90 days and 2% of unbilled receivables are reserved by the Company.  Management has determined that the allowance for doubtful accounts as of September 30, 2019 and December 31, 2018 was $999,414 and $821,424, respectively.  

Bad debt expense, write-offs and recoveries were as follows:  

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Bad Debt Expense	$	328,496	$	293,428	$	626,047	$	674,541
Net Write Offs/Recoveries	$	112,020	$	131,643	$	448,057	$	1,119,937

Within the ISO New England market, the local utility companies in the state of Massachusetts purchase the Company’s billed receivables at a statutory published discounted rate without recourse; therefore, no allowance for doubtful accounts was recorded as of September 30, 2019 or December 31, 2018.

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NOTE 4 - LETTERS OF CREDIT

As of September 30, 2019, Summer Northeast secured two irrevocable stand-by letters of credit totaling $750,000.  The letters of credit were issued for the benefit of the following parties: Connecticut Department of Public Utility Control in the amount of $250,000 which was set to expire on May 26, 2019 and was extended to May 26, 2020; and the State of New Hampshire Public Utilities Committee in the amount of $500,000 which is set to expire on May 1, 2020.  

As of September 30, 2019, none of the letters of credit issued on behalf of the Company were drawn upon.

NOTE 5 - SURETY BONDS

As of September 30, 2019, Summer Midwest had a surety bond in the amount of $300,000 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 $300,000 in cash held by the surety bond company.

NOTE 6 - FINANCING FROM FIRST INSURANCE FUNDING

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 6.450%.

At September 30, 2019, the outstanding balance was $76,793.

NOTE 7 - FINANCING FROM BLUE WATER CAPITAL FUNDING LLC

On June 29, 2016, Summer LLC 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 Summer LLC, and Summer LLC agreed to borrow and repay funds loaned by Blue Water. Further, in connection with the Agreement, Summer LLC granted to Blue Water a second position security interest in and to Summer LLC’s collateral, which includes receivables, equipment, inventory, personal property, other intangibles, and proceeds from any of these, to secure Summer LLC’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 is 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 plus 475 basis points.   As of September 30, 2019, the interest rate was 9.75%.  The amount of credit available pursuant to the Agreement, as amended by the Amendment, continues to be $5,000,000.  The Note continues to include a minimum monthly financing fee of $22,500 per month.  Interest is payable on the tenth day of each month and on the maturity date of the Note. Summer LLC and Blue Water agreed that the security interest granted pursuant to the Agreement remains in effect, and the Company reaffirmed its obligations under the Guaranty.

Further, under the Agreement, Summer LLC is subject to certain restrictive covenants that, among other things, may limit our ability to obtain additional financing for working capital requirements, product development activities, debt service requirements, and general corporate or other purposes. These restrictive covenants include, without limitation, restrictions on Summer LLC’s ability to: (1) incur additional indebtedness; (2) incur liens; (3) make certain dispositions of assets; (4) merge, dissolve, consolidate or sell all or substantially all of its assets; and (5) enter into certain transactions with affiliates during the term of the Agreement.  If Summer LLC breaches any of these restrictive covenants or is unable to pay the indebtedness under the Agreement when due, this could result in a default under the Agreement. In such event, the Lender may elect (after the expiration of any applicable notice or grace periods) to declare all outstanding borrowings, together with accrued and unpaid interest and other amounts payable under the Agreement, to be immediately due and payable.  As of September 30, 2019, Summer LLC was in compliance with the covenants of the Agreement.

At September 30, 2019 and December 31, 2018, the outstanding balance of financing from Blue Water Capital was $4,920,000.

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Interest was accrued by the Company for the Blue Water Capital funding as follows:

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Blue Water Interest	$	126,383	$	122,727	$	379,934	$	332,924

 NOTE 8 - COMERICA BANK LOAN 

On December 18, 2018, the Company signed a single payment note (the “Comerica Note”) with Comerica Bank (the “Bank”) in the amount of $2,900,000.   The Comerica 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 Referenced Rate” be less than the sum of the Daily Adjusting London InterBank Offered Rate (“LIBOR”) rate for such day plus two and one-half percent (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.

As of September 30, 2019, the interest rate was 5.5% payable to Comerica Bank, and the outstanding balance of financing from Comerica Bank was $700,000.  Interest accrued on the Comerica Bank loan was as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	10,203	$	-	$	62,481	$	-

NOTE 9 - 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.

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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. On July 18, 2019, the Company repaid EDF for credit support in the amount of $588,000 related to the decreased TDSP collateral requirements of the local utility company.   As of September 30, 2019, EDF has provided credit support in the amount of $4,511,006 for cash collateral as well as to secure letters of credit (Note 4) for the benefit of the Company.

The Company accrued interest to EDF as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	311,441	$	247,817	$	703,440	$	357,817

 NOTE 10 - LEASE LIABILITY 

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 2018 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.

As of September 30, 2019, the operating lease right-of-use assets and operating lease liabilities were $1,032,832, respectively.  The long-term portion of the operating lease liabilities, $870,209, is included in long-term obligations (see Note 11).  

Operating lease expense related to right-of-use assets above was included as part of operating expenses as follows:

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	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	78,837	$	-	$	232,731	$	-

As of September 30, 2019, the weighted-average remaining lease term for operating leases was 5.6 years.  As of September 30, 2019, the weighted-average discount rate for operating leases was 6.5%.

Operating lease future minimum payments together with their present values as of September 30, 2019 are summarized as follows:

		Operating Leases
2019	$	70,071
2020		204,156
2021		199,494
2022		199,494
2023		197,294
Thereafter		381,387
Total future minimum lease payments		1,251,896
Less amounts representing interest		(219,064)
Present value of lease liability	$	1,032,832
Current-portion operating lease liability		(162,623)
Long-term portion operating lease liability	$	870,209

NOTE 11 – LONG-TERM OBLIGATIONS

Long-term obligations of the Company are comprised as follows:

	Maturity Date		September 30, 2019		December 31, 2018
Note payable to First Insurance Funding (Note 6)	March 1, 2020	$	76,793	$	-
Financing from Blue Water Capital Funding, LLC (Note 7)	June 30, 2020		4,920,000		4,920,000
Comerica Bank Loan (Note 8)	June 11, 2020		700,000		2,900,000
Collateral credit support from EDF (Note 9)	May 1, 2021⁽¹⁾		4,511,006		4,136,006
	⁽¹⁾ Automatically renews for successive one-year periods unless either party provides written notice of termination 180 days prior to renewal date.
Operating lease obligations	October 31, 2019 through December 31, 2025		1,032,832		-
Total obligations		$	11,240,631	$	11,956,006
Less current portion of notes payable			(5,696,793)		-
Less current portion operating lease obligations			(162,623)		-
Long-term portion of obligations		$	5,381,215	$	11,956,006

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Interest expense consists of the following components for the periods indicated:

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Note payable to First Insurance Funding (Note 6)	$	1,365	$	655	$	1,820	$	1,527
Financing from Blue Water Capital Funding, LLC (Note 7)		126,383		122,727		379,934		332,924
Comerica Bank Loan (Note 8)		10,203		-		62,481		-
Credit support from EDF (Note 9)		311,441		247,817		703,440		357,817
Master Revolver Note (Note 18)		-		-		-		3,225
Debt to Related Party Assumed (Note 19)		-		-		-		35,057
Related Party Loans (Note 20)		-		-		2,115		9,545
Related Party Guarantors (Note 21)		21,466		-		130,567		-
Other interest		101		44		232		204,006
Total	$	470,959	$	371,243	$	1,280,589	$	944,101

  NOTE 12 - 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 (10) 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 nine-months ended September 30, 2019 and 2018, 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 September 30, 2019, 2,000 shares remain available for issuance under the 2012 Plan.

NOTE 13 - 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 quarters ended September 30, 2019 and 2018, the Company issued no stock options under the 2015 Plan. 

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During the three and nine-month periods ended September 30, 2019 and 2018, the Company recognized total stock compensation expenses for vesting options issued from the 2015 Plan as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	16,433	$	27,445	$	49,299	$	186,923

As of September 30, 2019, the unrecognized expense for vesting of options issued from the 2015 Plan is $147,899 relating to 235,000 of unvested shares expected to be recognized over a weighted average period of approximately 7.22 years.

 As of September 30, 2019, 19,000 shares remain available for issuance under the 2015 Plan. 

NOTE 14 - 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 quarter ended September 30, 2019, the Company granted under the 2018 Plan a total of 620,000 stock options with an exercise price of $2.00 to four officers of the Company as compensation.  The total 620,000 stock options granted during the quarter ended September 30, 2019 had an approximate fair value of $1,192,515 determined using the Black Scholes option pricing model. The weighted average assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.69% (ii) estimated volatility of 144.51% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging eight years.

During the quarter ended June 30, 2019, the Company granted under the 2018 Plan a total of 53,750 stock options with an exercise price of $2.25 to non-employee members of the Company’s Board of Directors, and a total of 100,000 stock options with an exercise price of $1.50 to a key employee as compensation.  The options granted to the non-employee members of the Company’s Board of Directors as well as to the key employee vested immediately on the date of grant.   The total 153,750 stock options granted during the quarter ended June 30, 2019 had an approximate fair value of $249,198 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 2.16% (ii) estimated volatility of 149.76% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging eight years.

During the quarter ended March 31, 2019, the Company granted under the 2018 Plan a total of 53,750 stock options with an exercise price of $2.25 to non-employee members of the Company’s Board of Directors, and a total of 2,500 stock options with an exercise price of $2.50 to a key employee as compensation.   The options granted to the non-employee members of the Company’s Board of Directors vested immediately on the date of grant, and the 2,500 options granted to the key employee vest one-year from the date of grant.   The total 56,250 stock options granted during the quarter ended March 31, 2019 had an approximate fair value of $107,960 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 2.21% (ii) estimated volatility of 147.94% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging eight years.

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During the three and nine-month periods ended September 30, 2019 and 2018, the Company recognized total stock compensation expense for the vesting of options issued from the 2018 Plan as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	107,672	$	132,421	$	530,400	$	489,109

As of September 30, 2019, the unrecognized expense for vesting of options issued from the 2018 Plan is $1,480,289 relating to 861,500 of unvested shares expected to be recognized over a weighted average period of approximately 7.52 years.

As of September 30, 2019, the Company had outstanding granted stock options under the 2018 Plan, net of forfeitures to purchase 1,331,250, and 168,750 shares remaining available for issuance.

NOTE 15 – NONQUALIFIED STOCK OPTIONS GRANTED TO BOARD OF DIRECTORS  

In September 2019, the Company entered into stock option grant agreements to the six non-employee members of the Company’s Board of Directors whereby the Company would grant non-qualified stock options 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 quarter ended September 30, 2019, pursuant to the aforementioned grant agreements, the Company granted a total of 53,750 nonqualified stock options with an exercise price of $2.25 to six non-employee board members of the Company as compensation.  The total 53,750 stock options granted during the quarter ended September 30, 2019 had an approximate fair value of $103,132 determined using the Black Scholes option pricing model. The weighted average assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.69% (ii) estimated volatility of 144.51% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging eight years.

 NOTE 16 - PRIVATE PLACEMENT OFFERINGS

During the nine-months ended September 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.

As of September 30, 2019, the 2019 Offering to accredited investors to purchase shares of the Company’s common stock at a purchase price of $1.50 per share had resulted in the issuance of 3,820,000 shares of common stock in exchange for proceeds in the amount of $5,730,000.

 NOTE 17 - 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 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 price of $1.50 per share. The fair value of the 43,772 warrants was $80,307 determined using the Black-Scholes option-pricing model and was expensed during the quarter ended March 31, 2019.  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 exercise price of $1.50 per share.  The fair value of the 13,430 warrants was $24,640 determined using the Black-Scholes option-pricing model and expensed during the quarter ended March 31, 2019.  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 May 22, 2019, the Company issued a warrant for 80,000 shares of common stock under a Consulting Agreement (Note 26). The five-year warrant has an exercise price of $1.50 per share.  The fair value of the 80,000 warrant was $143,731 determined using the Black-Scholes option-pricing model and was expensed during the quarter ended June 30, 2019. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.19%, (ii) estimated volatility of 149.28%, (iii) dividend yield of 0.00%, and (iv) expected life of the warrant of 5 years.

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On June 11, 2019, the Company issued 106,053 shares of common stock to Black Ink Energy, LLC (“Black Ink”) pursuant to the cashless exercise of a warrant dated March 2, 2015 issued by the Company to Black Ink to purchase up to 536,000 shares of common stock of the Company at $1.50 per share.   The Black Ink warrant was terminated and cancelled upon the issuance of the 106,053 shares of common stock.  There was no warrant expense associated with the cashless exercise of this warrant.

On July 19, 2019, the Company issued a warrant to purchase up to two (2) shares of the Company’s common stock under a Referral Agreement whereby the sales broker introduces the Company to potential sales leads.  The five-year warrant has an exercise price of $1.50 per share.  The fair value of the warrant is $4 determined using the Black-Scholes option pricing model and expensed during the quarter ended September 30, 2019.  The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.76%, (ii) estimated volatility of 149.46%, (iii) dividend yield of 0.00%, and (iv) expected life of the warrant of 5 years.

Total warrant expense of the Company for the nine months ended September 30, 2019 is summarized as follows:

		For the Three Months Ended
		March 31, 2019		June 30, 2019		September 30, 2019		For the Nine Months Ended September 30, 2019
Broker warrant compensation expense	$	104,947	$	-	$	4	$	104,951
Consulting warrant compensation expense		-		143,731		-		143,731
	$	104,947	$	143,731	$	4	$	248,682

As of September 30, 2019, the Company had 941,204 outstanding warrants of which 675,967 are fully vested.

 NOTE 18 - MASTER REVOLVER NOTE 

The Company assumed a Master Revolver Note (“Master Note”) held by Summer Northeast pursuant to the terms of the Purchase Agreement (defined below) during 2017.

The amount of available credit under the Master Note was $800,000 issued by Comerica Bank. The Master Note was dated July 25, 2017 and had a maturity date of July 25, 2018.  Each advance under the Master Note bore 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  for such day plus two and one-half percent (2.5%) per annum.   “Prime Rate” means the per annum rate established by Comerica Bank as its prime rate for its borrowers at any such time.  “Applicable Margin” means one percent (1%) per annum.  Accrued and unpaid interest on the unpaid principal balance outstanding was payable monthly, in arrears, on the first business day of each month.

On February 22, 2018, the Company paid $40,000 to Comerica Bank to pay off the balance of the Master Note.

Guaranty of the Master Note at origination on July 25, 2017 was made by two members of Summer Northeast (Neil Leibman and Tom O’Leary) who are also members of the Company’s Board (Mr. Leibman is also an executive officer).  In accordance with the provisions of purchase agreement relating to the acquisition of Summer Northeast (the “Purchase Agreement”), the Company paid the guarantors monthly interest at the lowest applicable federal rate published by the Internal Revenue Service, on the outstanding balance of such credit facility until the credit facilities secured by the Master Note were replaced by the Company.

The Company paid the following interest related to the Master Note during the three and nine months ended September 30, 2019 and 2018:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	-	$	-	$	-	$	3,225

  NOTE 19 - DEBT TO RELATED PARTIES ASSUMED 

On November 1, 2017, the Company assumed $767,677 of related party debt owed by Summer Northeast to members Tom O’Leary and Neil Leibman pursuant to the terms of the purchase agreement relating to the acquisition of Summer Northeast during 2017. Messrs. O’Leary and Leibman are directors of the Company (Mr. Leibman is also an executive officer).

In accordance with the Amended and Restated Limited Liability Company Agreement of Summer Northeast, the amount of any loan or advance by a member shall not be treated as a contribution to the capital of the lending member but shall be considered a

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debt.   The loan bears interest at the rate of the greater of (i) 12% per annum or (ii) the Prime Rate plus 5%, payable monthly with a maturity date of October 31, 2018.

The related party debt in the amount of $767,677 was paid in full by the Company to the related parties Messrs. O’Leary and Leibman on June 1, 2018.

During the three and nine months ended September 30, 2019 and 2018, the Company paid the following interest on such related party debt assumed:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	-	$	-	$	-	$	35,057

NOTE 20 - RELATED PARTY LOANS

On January 3, 2018, the Company entered into two separate promissory notes in the amount of $125,000 each for an advance of $250,000 by Tom O’Leary and Neil Leibman for purposes of short-term financing.  Messrs. Leibman and O’Leary are directors of the Company (Mr. Leibman is also an executive officer).  The promissory notes accrued interest at the rate of 5% per annum based upon 365 days a year with a maturity date of July 3, 2018.   The loans from Mr. O’Leary and Mr. Leibman were paid in full on June 1, 2018. For the three months ended September 30, 2019 and 2018, the Company paid $0 and $0 to Messrs. O’Leary and Leibman. During the nine months ended September 30, 2019 and 2018, the Company paid $0 and $5,103 to Messrs. O’Leary and Leibman.  

On January 8, 2018, the Company entered into a promissory note in the amount of $373,000 for 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 July 8, 2018.  On March 6, 2018, $200,000 was paid back to Mr. Leibman and on April 16, 2018, the remaining balance of $173,000 was paid. For the three months ended September 30, 2019 and 2018, the Company paid $0 and $0 in interest to Mr. Leibman.  During the nine months ended September 30, 2019 and 2018, the Company paid $0 and $3,884 in interest to Mr. Leibman.  

On January 8, 2018, the Company entered into a promissory note to document a loan from Pinnacle Power, LLC (“Pinnacle”), in the amount of $80,000 for purposes of short-term financing.  Mr. O’Leary and Mr. Leibman hold membership interests in Pinnacle.  The promissory note accrued interest at a rate of 5% per annum based upon 365 days a year and had a maturity date of July 8, 2019.  On February 22, 2018, $40,000 was repaid to Pinnacle and on March 6, 2018, $40,000 was repaid to Pinnacle. For the three months ended September 30, 2019 and 2018, the Company paid $0 and $0 to Messrs. O’Leary and Leibman.  During the nine months ended September 30, 2019 and 2018, the Company paid $0 and $558 to Messrs. O’Leary and Leibman.  

On January 7, 2019, the Company entered into a promissory note in the amount of $473,000 for an advance by Mr. O’Leary 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.  For the three months ended September 30, 2019 and 2018, the Company paid $0 and $0 in interest to Mr. O’Leary.  During the nine months ended September 30, 2019 and 2018, the Company paid $2,009 and $0 in interest to Mr. O’Leary.  

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.  For the three months ended September 30, 2019 and 2018, the Company paid $0 and $0 to Messrs. O’Leary and Leibman. During the nine months ended September 30, 2019 and 2018, the Company paid $106 and $0 to Messrs. O’Leary and Leibman.

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The following table summarizes interest paid to related parties for the three and nine months ended September 30, 2019 and 2018:

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Related party interest for $250,000 loan	$	-	$	-	$	-	$	5,103
Related party interest for $373,000 loan		-		-		-		3,884
Related party interest for $80,000 loan		-		-		-		558
Related party interest for $473,000 loan		-		-		2,009		-
Related party interest for $25,000 loan		-		-		106		-
Total	$	-	$	-	$	2,115	$	9,545

NOTE 21 - 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) (collectively, the “Guarantors”) guaranteed a single payment note with Comerica Bank (See Note 8) in the amount of $2,900,000. The Company agreed to pay interest at a rate of 12% for the guarantee and such interest is to be paid with the issuance of the Company’s common stock.

The Company accrued interest expense as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	21,466	$	-	$	130,567	$	-

On September 16, 2019, the Company issued 14,312 shares of common stock to the Guarantors as payment for interest.

As of September 30, 2019, the Company has issued 95,424 shares of common stock to the Guarantors as payment for interest accrued in the amount of $143,133.

NOTE 22 - OTHER RELATED PARTY TRANSACTIONS

On October 31, 2017, Summer Northeast entered into a sublease agreement with PDS Management Group, LLL (“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 as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	6,993	$	10,291	$	20,979	$	34,590

In January 2018, Mr. Leibman provided aviation transportation and the Company paid $4,000 in fuel costs for purposes of a company off-site management meeting.  

On June 28, 2018, the Company entered into individual Securities Purchase Agreements and Registration Rights Agreements with four investors for such investors to purchase from the Company a total of 125,000 shares of common stock at a purchase price of $1.50 per share for a total purchase price of $187,500.  A member of the Company’s Board of Directors, Andrew Bursten, purchased 85,100 of such shares and his family members purchased 39,900 of such shares.

In February 2019, Mr. Leibman provided aviation transportation for business purposes, and the Company paid $23,469 in fuel costs.

NOTE 23 - 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 $19,000 in 2019 or elects not to defer under the Plan. There is no Company match to the Plan.

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NOTE 24 - 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 is follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	760	$	1,085	$	2,346	$	4,084

NOTE 25 - EMPLOYMENT AGREEMENTS

On June 20, 2019, the Company approved a new employment agreement with Angela Hanley (the “Hanley Employment Agreement”) pursuant to which Ms. Hanley will continue to serve as the President of the Company.  Ms. Hanley will continue to report to the Board and will have the duties and responsibilities assigned by the Board.  Ms. Hanley was originally appointed to the position of President in February 2014.  The Hanley Employment Agreement provides for a semi-monthly salary of $4,231.   Ms. Hanley will also receive the customary employee benefits paid by Company and will be eligible to receive equity grants from time to time as determined by the Board and the Compensation Committee of the Board.   The foregoing is a summary of the Hanley Employment Agreement and is qualified in its entirety by the actual terms of such agreement, a copy of which was included as Exhibit 10.5 to our Quarterly Report on Form 10-Q filed with the SEC on August 14, 2019.

Effective August 1, 2019, the Company entered into an employment agreement with Kelli Mitchell (the “Mitchell Employment Agreement”) pursuant to which Ms. Mitchell will serve as the Chief Operating Officer of the Company. The Mitchell Employment Agreement provides for an annual base salary of $250,000 and for Ms. Mitchell to be granted an option to purchase 150,000 shares of the Company’s common stock with a strike price equal to $1.50 per share which shall vest in equal fifty percent (50%) portions on the first (1^st) and second (2^nd) anniversary of the effective date of the Mitchell Employment Agreement.   Ms. Mitchell will be eligible to receive equity grants from time to time based on metrics determined by the Board.  The foregoing is a summary of the Mitchell Employment Agreement and is qualified in its entirety by the actual terms of such agreement, a copy of which was included as Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on August 6, 2019.

On August 27, 2019, the Company entered into a First Amendment to Employment Agreement with Travis Andrews, Chief Supply Officer (the “Andrews Amendment”).  The Andrews Amendment amended Section 1(a) of Mr. Andrews’ original employment agreement (the “Andrews Employment Agreement”) by extending the term thereof for an additional term of two years, with the new two-year term commencing effective July 1, 2019. The Andrews Amendment provides that Mr. Andrews’ annual base salary will be $300,000. Pursuant to the Andrews Amendment, the Company agreed to grant Mr. Andrews an option to purchase 150,000 shares of the Company’s common stock at an exercise price equal to the greater of (i) $1.50 per share and (ii) the price per share of common stock as reported on the OTC Markets on the date such option is granted, with 75,000 shares vesting on July 1, 2020 and the remaining 75,000 shares vesting on June 30, 2021. The foregoing is a summary of the Andrews Employment Agreement and Andrews Amendment and is qualified in its entirety by the actual terms of such agreements, copies of which are included as Exhibits 10.1 and 10.2, respectively, hereto.

On September 5, 2019, the Company entered into a Second Amendment to Employment Agreement with each of Jaleea George, Secretary and Chief Financial Officer (the “George Amendment”), and Neil Leibman, Chief Executive Officer (the “Leibman Amendment”; together with the George Amendment, the “Amendments”) (Ms. George and Mr. Leibman, together, the “Executives”). The Amendments amended Section 1(a) of each Executives’ respective employment agreements by extending the terms thereof for an additional term of two years, with the new two-year term commencing effective January 1, 2019. The George Amendment provides that Ms. George’s annual base salary will be increased to $200,000.  The Amendments also amended Exhibit A to each of the employment agreements pursuant to which the Executives were granted additional equity incentives in the form of options to purchase common stock of the Company. Pursuant to the Leibman Amendment, the Company agreed to grant Mr. Leibman an option to purchase 150,000 shares of the Company’s common stock at an exercise price equal to the greater of (i) $1.50 per share and (ii) the price per share of common stock as reported on the OTC Markets on the date such option is granted, with 75,000 shares vesting on January 1, 2020 and the remaining 75,000 shares vesting on January 1, 2021. Pursuant to the George Amendment, the Company agreed to grant Ms. George an option to purchase 170,000 shares of the Company’s common stock at an exercise price equal to the greater of (i) $1.50 per share and (ii) the price per share of common stock as reported on the OTC Markets on the date such option is granted, with 85,000 shares vesting on January 1, 2020 and the remaining 85,000 shares vesting on January 1, 2021. Pursuant to the Amendments, the Executives are also entitled to additional equity compensation in the form of options to purchase common stock of the Company in the event the Company achieves certain performance benchmarks.  All other material provisions of the employment agreements remain in full force and effect. 

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The foregoing are summaries of the George Amendment and the Leibman Amendment and are qualified in their entirety by the actual terms of such agreements, copies of which are included as Exhibits 10.3 and 10.4, respectively, hereto.  

NOTE 26 - CONSULTING AGREEMENT

On May 20, 2019, the Company entered into a two-year consulting agreement whereby the consultant agreed to provide certain corporate and strategic business consulting services to the Company and its Board of Directors.

As compensation for these consulting services, the Company agreed to pay the consultant a fee of $200,000 and grant a five-year warrant to purchase up to 80,000 shares of the Company’s common stock at an exercise price of $1.50 per share. The fair value of the warrant to purchase 80,000 shares was $143,731 determined using the Black-Scholes option-pricing model (Note 17).  The total consulting fee of $343,731 for this agreement is included in operating expenses on the consolidated statement of operations.

NOTE 27 - SUBSEQUENT EVENTS

On November 8, 2019, the Company entered into a promissory note in the amount of $850,000 to document a loan from Neil Leibman for purposes of short-term financing.    The promissory note accrues interest at a rate of 5% per annum based upon 365 days in a year and has a maturity date of February 6, 2020.  At the election of the lender, interest payments may be made in cash or shares of the Company’s common stock, based on a per share price as quoted by OTC Markets during the 10-day prior to the date of the note.  Mr. Leibman is a director and executive officer of the Company.  

On November 8, 2019, the Company entered into a promissory note in the amount of $1,000,000 to document a loan from LaRose Holdings, LLLP for the purposes of short-term financing.    The promissory note accrues interest at a rate of 5% per annum based upon 365 days in a year and has a maturity date of February 6, 2020.  At the election of the lender, interest payments may be made in cash or shares of the Company’s common stock, based on a per share price as quoted by OTC Markets during the 10-day prior to the date of the note.  LaRose Holdings, LLLP is an entity controlled by Al LaRose, a director of the Company.  

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act, and is subject to the safe harbors created by those sections.  Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will” and variations of these words or similar expressions are intended to identify forward-looking statements.  In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.  These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict.  Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors.  We undertake no obligation to revise or publicly release the results of any revisions to these forward-looking statements.

Due to possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this Quarterly Report, which speak only as of the date of this Quarterly Report, or to make predictions about future performance based solely on historical financial performance.  We disclaim any obligation to update forward-looking statements contained in this Quarterly Report.

Readers should carefully review the risk factors described below under the heading “Risk Factors” and in other documents we file from time to time with the SEC, including our Form 10-K for the fiscal year ended December 31, 2018.  Our filings with the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those filings, pursuant to Sections 13(a) and 15(d) of the Exchange Act, are available free of charge at www.summerenergy.com, when such reports are available via the EDGAR system maintained by the SEC at www.sec.gov.

Recent Developments

The condensed consolidated financial statements above include the accounts of Summer Energy Holdings, Inc. and its wholly-owned subsidiaries Summer Energy, LLC (“Summer LLC”), Summer Energy Midwest, LLC (“Summer Midwest”), Summer EM Marketing, LLC (“Marketing LLC”) and Summer Energy Northeast, LLC (“Summer Northeast”) (collectively referred to as the “Company,” “we,” “us,” or “our”).  All significant intercompany transactions and balances have been eliminated in these consolidated financial statements.

On March 27, 2012, Summer LLC became a wholly-owned subsidiary of Summer Energy Holdings, Inc. (previously known as Castwell Precast Corporation) through a reverse acquisition transaction, which resulted in the former members of Summer LLC owning approximately 92.3% of Summer Energy Holdings, Inc.’s outstanding common stock.  The transaction was treated as a recapitalization of Summer LLC, and Summer LLC (and its historical financial statements) is the continuing entity for financial reporting purposes.

Summer LLC is a Retail Electricity Provider (“REP”) in the state of Texas under a license with the Public Utility Commission of Texas (“PUCT”).  Summer LLC procures wholesale energy and resells to commercial and residential customers.  Summer LLC was organized on April 6, 2011, under the laws of the state of Texas.

Marketing, LLC was formed in the state of Texas on November 6, 2012 to provide marketing services to Summer LLC.

Summer Midwest was formed in the state of Ohio on December 16, 2013 to procure and sell electricity in the state of Ohio.   The Public Utilities Commission of Ohio issued a certificate as a Retail Electric Service Provider to Summer Midwest on June 16, 2015.   On May 2, 2019, the Illinois Commerce Commission approved Summer Midwest as a Retail Electric Service Provider in the state of Illinois.

Summer Northeast, a Texas limited liability company, was acquired on November 1, 2017 and became a wholly-owned subsidiary of Summer Energy Holdings, Inc.   Summer Northeast is a REP serving electric load to both residential and commercial customers in New Hampshire and Massachusetts and holds licenses in Massachusetts, Rhode Island, New Hampshire and Connecticut.

Plan of Operation

Our wholly-owned subsidiary, Summer LLC, is a licensed REP in the state of Texas.  In general, Texas regulatory structure permits REPs, such as Summer LLC, to procure and sell electricity at unregulated prices.  REPs pay the local transmission and distribution utilities a regulated tariff rate for delivering electricity to their customers.  As a REP, Summer LLC sells electricity and provides the related billing, customer service, collections and remittance services to residential and commercial customers.  Summer LLC offers retail electricity to commercial and residential customers in designated target markets within the state of Texas.  In the commercial market, the primary target is small to medium-sized customers (less than one megawatt of peak usage), but we also selectively pursue larger commercial customers through Management’s existing, historical relationships.  Residential

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customers are a secondary target market.  We anticipate that a majority of Summer LLC’s customers will be located in the Houston and Dallas-Fort Worth metropolitan areas; although, we anticipate a growing number will be located in a variety of other metropolitan and rural areas within Texas.   We began delivering electricity to customers in the Texas market mid-February 2012.

Our wholly-owned subsidiary, Summer Northeast, is a licensed REP in the states of Massachusetts, New Hampshire, Rhode Island and Connecticut.  In general, the regulatory structure in these states permits REPs, such as Summer Northeast, to procure and sell electricity at unregulated prices.  As a REP, Summer Northeast sells electricity to residential and commercial customers.  In the commercial market, the primary target is small to medium-sized customers (less than one megawatt of peak usage), but we will also selectively pursue larger commercial customers through Management’s existing, historical relationships.  Residential customers are a secondary target market.  As of the date of this Report, Summer Northeast sold electricity in Massachusetts and New Hampshire.   There were no sales activity in the states of Connecticut and Rhode Island.

Our wholly-owned subsidiary, Summer Midwest, is a licensed REP in the states of Ohio and Illinois.  In general, the regulatory structure in these states permits REPs, such as Summer Midwest, to procure and sell electricity at unregulated prices.  As a REP, Summer Midwest sells electricity to residential and commercial customers.  In the commercial market, the primary target is small to medium-sized customers (less than one megawatt of peak usage), but we will also selectively pursue larger commercial customers through Management’s existing, historical relationships.  Residential customers are a secondary target market.  Summer Midwest began flowing electricity in the state of Ohio which is in the Pennsylvania, Jersey, Maryland Power Pool (“PJM”) market during the month of July 2019. As of the date of this Quarterly Report, there were no sales activities in the state of Illinois.

Results of Operations

Three Months Ended September 30, 2019, compared to the Three Months Ended September 30, 2018

Revenue –For the quarter ended September 30, 2019, we generated $53,666,325 in electricity revenue primarily from commercial customers, and from various long and short-term residential customers.  The majority of our revenue comes from the flow of electricity to customers and includes revenues from contract cancellation fees, disconnection fees and late fees of $1,030,436.  

Revenues for the quarter ended September 30, 2018, were $45,369,621 from electricity revenue and includes $866,485 from cancellation and disconnection and late fees.

	For the Three Months Ended September 30,
	2019			2018			Variance
	Delivered Volume after Line Loss (Mwh)		$$	Delivered Volume after Line Loss (Mwh)		$$		$$	$$             Variance Percentage
Electricity Revenues from Contracts with Customers
ERCOT Market	558,274	$	49,708,164	480,558	$	40,449,035	$	9,259,129	22.89%
ERCOT Pre-Paid Market	16,599		1,956,958	13,237		1,666,542		290,416	17.43%
Northeast Market	20,374		1,998,663	28,915		3,254,044		(1,255,381)	-38.58%
Midwest Market	46		2,540	-		-		2,540	100.00%
Total	595,293		53,666,325	522,710		45,369,621		8,296,704	18.29%
Other Revenues:
Fees Revenue			1,030,436			866,485		163,951	18.92%
Total Revenues:		$	54,696,761		$	46,236,106	$	8,460,655	18.30%

Total revenues for the quarter ended September 30, 2019 compared to September 30, 2018 increased by approximately 18.30%.  In the ERCOT Pre-Paid Market, the revenue increased by 17.43% due to customer growth.  The Northeast market had a 38.58% decrease in revenue related to the decrease in the customer base in 2019 compared to 2018. The Company began flowing electricity in the PJM market in July 2019 and the anticipated customer base as this market grows will consist of residential and commercial customers. 

Management plans to continue to execute on its sales and marketing program to solicit individual commercial and residential customers and to realign key sales personnel to focus on building the customer base in the Northeast market.  In addition, management also plans to continue to acquire portfolios of commercial and residential customers when offered at reasonable prices.

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Cost of Goods Sold and Gross Margin – For the three months ended September 30, 2019, cost of goods sold and gross profit totaled $51,970,064 and $2,726,697, respectively. Cost of goods sold and gross profit recorded in the three months ended September 30, 2018 were $44,919,469 and $1,316,637, respectively.

		For the Three Months Ended September 30,
		2019		2018		Increase (Decrease) in Costs	Percentage Increase (Decrease)
ERCOT Market	$	49,851,403	$	41,712,716	$	8,138,687	19.51%
Northeast Market		2,110,370		3,206,753		(1,096,383)	-34.19%
Midwest Market		8,291		-		8,291	100.00%
	$	51,970,064	$	44,919,469	$	7,050,595	15.70%

Cost of goods sold for the quarter ended September 30, 2019, compared to September 30, 2018, increased in total by approximately 15.70% due to the increased volumes delivered during the summer months as well as an increase in the electricity unit cost per MWh.  The gross profit margin increased for the quarter ended September 30, 2019 compared to September 30, 2018 primarily due to a 16.42% increase in the volume of Mwh’s of electricity delivered in the ERCOT market. The Northeast market decreased by 34.19% due to the compression of the customer base during 2019 compared to 2018.

Cost of power purchases increased during the third quarter September 2019 compared to the third quarter ended September 2018 due to declining reserve margins in the ERCOT marketplace.  Furthermore, due to extreme unpredictable weather during July 2018, the Company experienced higher than normal power costs for the quarter ended September 2018 resulting in a larger than anticipated gross margin loss for the quarter ended September 2018 compared to the quarter ended September 2019.   Although the 2019 summer months in the ERCOT market proved to be one of the hottest in recent years, the Company had positioned itself so that the weather did not significantly impact the earnings for the quarter ended September 2019.

Operating Expenses – Operating expenses for the quarter ended September 30, 2019, totaled $5,634,108, consisting primarily of general and administrative expenses of $3,225,323, stock compensation of $227,237, bank service fees of $374,742, professional fees of $109,853, outside commissions of $1,445,530, collection fees/sales verification fees $23,070 and $228,353 of billing fees.  Billing fees are primarily costs paid to a third-party Electronic Data Inter-Chain (EDI) provider to handle transactions between us, ERCOT and the TDSPs in order to produce customer bills.

Operating expenses for the quarter ended September 30, 2018, totaled $5,262,090, consisting primarily of general and administrative expenses of $2,907,499, stock compensation of $159,866, bank service fees of $349,075, professional fees of $115,785, outside commissions of $1,486,092, collection fees/sales verification fees $20,218 and $223,555 of billing fees.

		For the Three Months Ended September 30,
		2019		2018		Increase (Decrease)	Percentage Change
General and Administrative	$	3,225,323	$	2,907,499	$	317,824	10.93%
Stock Compensation		227,237		159,866		67,371	42.14%
Bank service fees		374,742		349,075		25,667	7.35%
Professional fees		109,853		115,785		(5,932)	-5.12%
Outside commission expense		1,445,530		1,486,092		(40,562)	-2.73%
Collection fees/sales verification fees		23,070		20,218		2,852	14.11%
Billing fees		228,353		223,555		4,798	2.15%
	$	5,634,108	$	5,262,090	$	372,018	7.07%

Operating expenses for the three months ended September 30, 2019 reflects an increase of approximately $372,018, or 7.07%, as compared to the three months ended September 30, 2018.  This increase was primarily attributable to increase in stock compensation in the second quarter of 2019 related to the issuance of stock options under employment agreements.

Net Loss – Net loss for the three months ended September, 2019 and 2018, totaled ($3,364,081) and ($5,351,082), respectively.

Nine Months Ended September 30, 2019, compared to the Nine Months Ended September 30, 2018

Revenue – For the nine months ended September 30, 2019, we generated $127,196,034 in electricity revenue primarily from commercial customers, and from the addition of various long and short-term residential customers.   The majority of our revenue comes from the flow of electricity to customers.  However, we also generated revenues from contract cancellation fees, disconnection fees and late fees of $2,825,183.  For the nine months ended September 30, 2018, the Company generated $117,120,262 in electricity revenue and $2,384,693 from contract cancellation, disconnection fees and late fees.

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	For the Nine Months Ended September 30,
	2019			2018			Variance
	Delivered Volume after Line Loss (Mwh)		$$	Delivered Volume after Line Loss (Mwh)		$$		$$	$$ Variance Percentage
Electricity Revenues from Contracts with Customers
ERCOT Market	1,339,967	$	116,805,669	1,229,094	$	104,690,986	$	12,114,683	11.57%
ERCOT Pre-Paid Market	38,858		4,557,895	32,122		3,673,328		884,567	24.08%
Northeast Market	64,991		5,829,930	76,985		8,755,948		(2,926,018)	-33.42%
Midwest Market	46		2,540	-		-		2,540	100.00%
Total	1,443,862		127,196,034	1,338,201		117,120,262		10,075,772	8.60%
Other Revenues:
Fees Revenue			2,825,183			2,384,693		440,490	18.47%
Total Revenues:		$	130,021,217		$	119,504,955	$	10,516,262	8.80%

Total revenues for the nine months ended September 30, 2019 compared to September 30, 2018, increased by approximately 8.80%.  In the ERCOT Pre-Paid Market, revenues increased by 24.08% due to customer growth.  The Northeast Market had a 33.42% decrease in revenue related to the decrease in the customer base in 2019 compared to 2018.

Cost of Goods Sold and Gross Margin – For the nine months ended September 30, 2019, cost of goods sold and gross profit totaled $118,133,591 and $11,887,626, respectively. Cost of goods sold and gross profit in the nine months ended September 30, 2018 totaled $109,346,184 and $10,158,771.

		For the Nine Months Ended September 30,
		2019		2018		Increase (Decrease) in Costs	Percentage Increase (Decrease)
ERCOT Market	$	111,652,342	$	101,481,794	$	10,170,548	10.02%
Northeast Market		6,472,958		7,864,390		(1,391,432)	-17.69%
Midwest Market		8,291		-		8,291	100.00%
	$	118,133,591	$	109,346,184	$	8,787,407	8.04%

Cost of goods sold for the nine months ended September 30, 2019 increased in total by approximately 8.04% due to the increased in volumes delivered during the summer months as well as an increase in the supply of the electricity unit cost per MWh.  

The gross profit increase for the nine months ended September 30, 2019 compared to nine months ended September 30, 2018 primarily due to the increase of 9.33% in volume of Mwh’s of electricity delivered in the ERCOT market. The Northeast Market decreased by 17.69% for the nine months ended September 2019 due to the compression of the customer base during 2019 compared to 2018.

Cost of power purchases increased for the nine months ended September 2019 compared to the nine months September 2018.  The increase in power purchases was due to declining reserve margins in the ERCOT marketplace.  However, these higher market costs were reflected in all new retail transactions resulting in a higher revenue stream, and as a result, the gross profit increased during the nine months ended September 2019 compared to the nine months ending September 2018.  Furthermore, significant weather events occurred during January 2018 and July 2018 which negatively impacted the gross margin for the nine months ended September 2018.  Although the 2019 summer months in the ERCOT market have proved to be one of the hottest in recent years, the Company positioned itself so that weather had less of an impact on its earnings.

Operating Expenses – Operating expenses for the nine months ended September 30, 2019 totaled $16,267,591, consisting primarily of general and administrative expenses of $9,183,365, stock compensation expense of $682,831, bank service fees of $966,690, commission expense of $3,738,082, collection fees/sales and verification fees of $60,644, professional fees of $901,405, and $734,574 of billing fees.  Billing fees are primarily costs paid to third party Electronic Data Inter-Chain (EDI) provider to handle transactions between us, ERCOT and the TDSPs in order to produce customer bills.

Operating expenses for the nine months ended September 30, 2018 totaled $14,965,311, consisting primarily of general and administrative expenses of $8,307,871, stock compensation expense of $676,032, bank service fees of $883,022 commission

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expense of $3,919,853, collection fees/sales and verification fees of $51,834, professional fees of $517,268, and $609,431 of billing fees.

		For the Nine Months Ended September 30,
		2019		2018		Increase (Decrease)	Percentage Change
General and Administrative	$	9,183,365		8,307,871	$	875,494	10.54%
Stock Compensation		682,831		676,032		6,799	1.01%
Bank service fees		966,690		883,022		83,668	9.48%
Outside commission expense		3,738,082		3,919,853		(181,771)	-4.64%
Collection fees/sales verification fees		60,644		51,834		8,810	17.00%
Professional fees		901,405		517,268		384,137	74.26%
Billing fees		734,574		609,431		125,143	20.53%
	$	16,267,591	$	14,965,311	$	1,302,280	8.70%

Operating expenses for the nine months ended September 30, 2019 reflects an increase of approximately $1,302,280, or 8.70%, as compared to the nine months ended September 30, 2018. This increase was primarily attributable to an increase in professional fees as well as billing fees from the Company’s EDI provider.

Net loss – Net loss for the nine months ended September 30, 2019 and 2018, totaled ($5,619,298) and ($6,823,313), respectively.

Liquidity and Capital Resources

At September 30, 2019 and December 31, 2018, our cash totaled $1,701,380 and $451,995, respectively.  Our principal cash requirements for the quarter ended September 30, 2019, were for operating expenses and cost of goods sold (including power purchases, employee cost, and customer acquisition), collateral for TDSPs and capital expenditures.  During the nine months ended September 30, 2019, the primary source of cash was from electricity revenues and from the proceeds of a private placement offering in the amount of $5,730,000.  During the nine months ended September 30, 2018, the primary source of cash was from electricity revenues, proceeds in a private placement offering in the amount of $3,637,500 and proceeds in the amount of $2,420,000 from a short-term loan advance.

General – The Company’s increase in net cash flow during the first nine months of 2019 is attributable to $2,438,646 cash used in operating activities, $0 cash used in investing activities, and $3,981,793 provided by financing activities, which includes $5,730,000 from proceeds received in private placement. The Company’s decrease in net cash flow during the nine months ended September 30, 2018 is attributable to $4,561,926 cash used in operating activities, $27,741 used in investing activities for the purchase of property and equipment, and $9,073,329 provided by financing activities of which $3,637,500 were from private placement proceeds and $2,420,000 from a short-term loan advance.

The Company has no present agreements or commitments with respect to any material acquisitions of other businesses, products, product rights or technologies. However, we will continue to evaluate acquisitions of and/or investments in products, technologies, or companies that complement our business and may make such acquisitions and/or investments in the future. Accordingly, we may need to obtain additional sources of capital in the future to finance any such acquisitions and/or investments. We may not be able to obtain such financing on commercially reasonable terms, if at all.  If we are able to obtain additional financing, such financing may result in restrictions on our operations, in the case of debt financing, or substantial dilution for stockholders, in the case of equity financing.

Cash Outflows for Capital Assets, Customer Acquisition and Deposits

We expect to expend funds for capital assets, customer acquisition and deposits in connection with the expansion of our business during the remainder of the current fiscal year.  The anticipated source of funds will be cash on hand and the capital raised through the year ended December 31, 2019.

Future Financing Needs

Management believes that we have adequate liquidity to support operations, but this belief is based upon many assumptions and is subject to numerous risks.

While we believe in the viability of our plan of operations and strategy to generate revenues and in our ability to raise additional funds, there can be no assurances that our plan of operations or ability to raise capital will be successful.  The ability to grow is dependent upon our ability to further implement our business plan, generate revenues, and obtain additional financing, if and as needed.

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Off-Balance Sheet Arrangements

Our existing wholesale power purchase agreement provides that we will provide additional credit support to cover mark-to-market risk in connection with the purchase of long-term power.  A mark-to-market credit risk occurs when the price of previously purchased long term power is greater than the current market price for power purchased for the same term.  While we believe that the current environment of historically low power prices limits our exposure to risk, a collateral call, should it occur, could limit our working capital and, if we fail to meet the collateral call, could cause liquidation of power positions.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “small reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide this information.

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of the end of the period covered by this Quarterly Report, were effective at the reasonable assurance level to ensure that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Changes in Internal Control over Financial Reporting

There has been no change in internal control over financial reporting during the period of time covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Our process for evaluating controls and procedures is continuous and encompasses constant improvement of the design and effectiveness of established controls and procedures and the remediation of any deficiencies which may be identified during this process.

PART II – OTHER INFORMATION

ITEM 1A.  RISK FACTORS

As of the date of this filing, there have been no material changes to the Risk Factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on April 11, 2019 (the “2018 Form 10-K”).  The Risk Factors set forth in the 2018 Form 10-K should be read carefully in connection with evaluating our business and in connection with the forward-looking statements contained in this Quarterly Report on Form 10-Q.  Any of the risks described in the 2018 Form 10-K could materially adversely affect our business, financial condition or future results and the actual outcome of matters as to which forward-looking statements are made.  These are not the only risks we face.  Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On September 16, 2019, the Company granted nonqualified options to purchase a total of up to 53,750 shares of the Company’s common stock to six non-employee directors as compensation.  The options have a term of ten years and an exercise price of $2.25 per share. The options to purchase shares of common stock were issued in reliance upon an exemption from registration under Section 4(a)(2) of the Securities Act.

On September 16, 2019, the Company issued 14,789 shares of the Company’s common stock in lieu of cash to four individuals in consideration for acting as guarantors of a loan to the Company from Comerica Bank.The Company agreed to pay interest at a rate of 12% of the outstanding balance of such loan for the guarantee and such interest is to be paid with the issuance of shares of the Company’s common stock.   The four individuals are also members of the Company’s Board of Directors:  Neil Leibman, Tom O’Leary, Andrew Bursten and Stuart Gaylor. The shares of common stock were issued in reliance upon an exemption from registration under Section 4(a)(2) of the Securities Act.

Our reliance upon Section 4(a)(2) of the Securities Act was based in part upon the following factors: (a) the issuance of the securities was in connection with isolated private transactions which did not involve any public offering; (b) there were a limited

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number of offerees; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the purchasers made certain representations to the Company relating to their investment intent, that they were acquiring the securities for their own accounts and not for the accounts of others; and (e) the negotiations for the sale of the securities took place directly between the offerees and the Company.

ITEM 5.   OTHER INFORMATION

On November 8, 2019, the Company entered into a promissory note in the amount of $850,000 to document a loan from Neil Leibman for purposes of short-term financing.    The promissory note accrues interest at a rate of 5% per annum based upon 365 days in a year and has a maturity date of February 6, 2020.  At the election of the lender, interest payments may be made in cash or shares of the Company’s common stock, based on a per share price as quoted by OTC Markets during the 10-day prior to the date of the note.  Mr. Leibman is a director and executive officer of the Company.  The promissory note has customary events of default and, upon an event of default, and after any applicable notice period, at the option of lender, the entire principal amount of the promissory note, together with all accrued interest thereon, if any, without demand or notice, shall immediately become due and payable.

On November 8, 2019, the Company entered into a promissory note in the amount of $1,000,000 to document a loan from LaRose Holdings, LLLP for the purposes of short-term financing.    The promissory note accrues interest at a rate of 5% per annum based upon 365 days in a year and has a maturity date of February 6, 2020.  At the election of the lender, interest payments may be made in cash or shares of the Company’s common stock, based on a per share price as quoted by OTC Markets during the 10-day prior to the date of the note.  LaRose Holdings, LLLP is an entity controlled by Al LaRose, a director of the Company. The promissory note has customary events of default and, upon an event of default, and after any applicable notice period, at the option of lender, the entire principal amount of the promissory note, together with all accrued interest thereon, if any, without demand or notice, shall immediately become due and payable.   

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ITEM 6.  EXHIBITS

10.1	Employment Agreement between Summer Energy Holdings, Inc. and Travis Andrews dated as of July 1, 2017
10.2	First Amendment to Employment Agreement between Summer Energy Holdings, Inc. and Travis Andrews dated as of August 27, 2019.
10.3	Second Amendment to Employment Agreement between Summer Energy Holdings, Inc. and Jaleea George dated as of September 5, 2019.
10.4	Second Amendment to Employment Agreement between Summer Energy Holdings, Inc. and Neil Leibman dated as of September 5, 2019.
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1*	Certification of the CEO and CFO pursuant to Rule 13a-14(b) and Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

* In accordance with Item 601(b)(32)(ii) of Regulation S-K, this exhibit shall not be deemed “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934 or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

** Pursuant to Rule 406T of Regulation S-T, this XBRL information will not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section, nor will it be deemed filed or made a part of a registration statement or prospectus for purposes of Sections 11 and 12 of the Securities Act of 1933, or otherwise subject to liability under those sections.

*** Portions of this exhibit have been redacted pursuant to Item 601(b)(10) of Regulation S-K.  The Company agrees to furnish supplementally an unredacted copy of the exhibit to the SEC upon request.

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.

SUMMER ENERGY HOLDINGS, INC.

Date:	November 14, 2019	By:	/s/ Neil Leibman
			Neil Leibman
			Chief Executive Officer
			(Principal Executive Officer)

Date:	November 14, 2019	/s/ Jaleea P. George
		Jaleea P. George
		Chief Financial Officer
		(Principal Accounting Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Neil Leibman, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Summer Energy Holdings, Inc. (the “Registrant”); 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 

4.The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

(c)Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

(d)Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and 

5.The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. 

Dated: November 14, 2019

/s/ Neil Leibman

Neil Leibman, 

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Jaleea P. George, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Summer Energy Holdings, Inc. (the “Registrant”); 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 

4.The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

(c)Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

(d)Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and 

5.The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. 

Date:  November 14, 2019

/s/ Jaleea P. George

Jaleea P. George,

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14(B) AND RULE 15D-14(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Summer Energy Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2019 as filed with the Securities and Exchange Commission (the “Report”), we, Neil M. Leibman, Chief Executive Officer and Jaleea P. George, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 

(2)The information contained in the Report fairly presents, in all material respects, the financial condition of the Company as of the dates presented and the results of operations of the Company for the periods presented. 

Date: November 14, 2019

By:	/s/ Neil Leibman
	Neil Leibman, Chief Executive Officer

By:	/s/ Jaleea P. George
	Jaleea P. George, Chief Financial Officer

A signed original of this written statement required by section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Quarterly Report pursuant to Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934.

XML

Note 12 - 2012 Stock Option and Stock Award Plan

9 Months Ended

Sep. 30, 2019

2012 Stock Option and Stock Award Plan

Note 12 - 2012 Stock Option and Stock Award Plan

NOTE 12 - 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 (10) 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 nine-months ended September 30, 2019 and 2018, 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 September 30, 2019, 2,000 shares remain available for issuance under the 2012 Plan.

XML

Note 4 - Letters of Credit

9 Months Ended

Sep. 30, 2019

Disclosure Text Block [Abstract]

Note 4 - Letters of Credit

NOTE 4 - LETTERS OF CREDIT

As of September 30, 2019, Summer Northeast secured two irrevocable stand-by letters of credit totaling $750,000.  The letters of credit were issued for the benefit of the following parties: Connecticut Department of Public Utility Control in the amount of $250,000 which was set to expire on May 26, 2019 and was extended to May 26, 2020; and the State of New Hampshire Public Utilities Committee in the amount of $500,000 which is set to expire on May 1, 2020.  

As of September 30, 2019, none of the letters of credit issued on behalf of the Company were drawn upon.

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Note 8 - Comerica Bank Loan

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Note 8 - Comerica Bank Loan

NOTE 8 - COMERICA BANK LOAN

On December 18, 2018, the Company signed a single payment note (the “Comerica Note”) with Comerica Bank (the “Bank”) in the amount of $2,900,000.   The Comerica 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 Referenced Rate” be less than the sum of the Daily Adjusting London InterBank Offered Rate (“LIBOR”) rate for such day plus two and one-half percent (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.

As of September 30, 2019, the interest rate was 5.5% payable to Comerica Bank, and the outstanding balance of financing from Comerica Bank was $700,000. Interest accrued on the Comerica Bank loan was as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	10,203	$	-	$	62,481	$	-

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Note 2 - Significant Accounting Policies (Table)

9 Months Ended

Sep. 30, 2019

Disclosure Text Block [Abstract]

Schedule of cash and restricted cash

		September 30, 2019		December 31, 2018
Cash	$	1,701,380	$	451,995
Restricted cash		3,696,652		3,402,890
Total cash and restricted cash	$	5,398,032	$	3,854,885

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Note 25 - Employment Agreements

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Note 25 - Employment Agreements

NOTE 25 - EMPLOYMENT AGREEMENTS

On June 20, 2019, the Company approved a new employment agreement with Angela Hanley (the “Hanley Employment Agreement”) pursuant to which Ms. Hanley will continue to serve as the President of the Company.  Ms. Hanley will continue to report to the Board and will have the duties and responsibilities assigned by the Board.  Ms. Hanley was originally appointed to the position of President in February 2014.  The Hanley Employment Agreement provides for a semi-monthly salary of $4,231.   Ms. Hanley will also receive the customary employee benefits paid by Company and will be eligible to receive equity grants from time to time as determined by the Board and the Compensation Committee of the Board. The foregoing is a summary of the Hanley Employment Agreement and is qualified in its entirety by the actual terms of such agreement, a copy of which was included as Exhibit 10.5 to our Quarterly Report on Form 10-Q filed with the SEC on August 14, 2019.

Effective August 1, 2019, the Company entered into an employment agreement with Kelli Mitchell (the “Mitchell Employment Agreement”) pursuant to which Ms. Mitchell will serve as the Chief Operating Officer of the Company. The Mitchell Employment Agreement provides for an annual base salary of $250,000 and for Ms. Mitchell to be granted an option to purchase 150,000 shares of the Company’s common stock with a strike price equal to $1.50 per share which shall vest in equal fifty percent (50%) portions on the first (1^st) and second (2^nd) anniversary of the effective date of the Mitchell Employment Agreement. Ms. Mitchell will be eligible to receive equity grants from time to time based on metrics determined by the Board. The foregoing is a summary of the Mitchell Employment Agreement and is qualified in its entirety by the actual terms of such agreement, a copy of which was included as Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on August 6, 2019.

On August 27, 2019, the Company entered into a First Amendment to Employment Agreement with Travis Andrews, Chief Supply Officer (the “Andrews Amendment”). The Andrews Amendment amended Section 1(a) of Mr. Andrews’ original employment agreement (the “Andrews Employment Agreement”) by extending the term thereof for an additional term of two years, with the new two-year term commencing effective July 1, 2019. The Andrews Amendment provides that Mr. Andrews’ annual base salary will be $300,000. Pursuant to the Andrews Amendment, the Company agreed to grant Mr. Andrews an option to purchase 150,000 shares of the Company’s common stock at an exercise price equal to the greater of (i) $1.50 per share and (ii) the price per share of common stock as reported on the OTC Markets on the date such option is granted, with 75,000 shares vesting on July 1, 2020 and the remaining 75,000 shares vesting on June 30, 2021. The foregoing is a summary of the Andrews Employment Agreement and Andrews Amendment and is qualified in its entirety by the actual terms of such agreements, copies of which are included as Exhibits 10.1 and 10.2, respectively, hereto.

On September 5, 2019, the Company entered into a Second Amendment to Employment Agreement with each of Jaleea George, Secretary and Chief Financial Officer (the “George Amendment”), and Neil Leibman, Chief Executive Officer (the “Leibman Amendment”; together with the George Amendment, the “Amendments”) (Ms. George and Mr. Leibman, together, the “Executives”). The Amendments amended Section 1(a) of each Executives’ respective employment agreements by extending the terms thereof for an additional term of two years, with the new two-year term commencing effective January 1, 2019. The George Amendment provides that Ms. George’s annual base salary will be increased to $200,000.  The Amendments also amended Exhibit A to each of the employment agreements pursuant to which the Executives were granted additional equity incentives in the form of options to purchase common stock of the Company. Pursuant to the Leibman Amendment, the Company agreed to grant Mr. Leibman an option to purchase 150,000 shares of the Company’s common stock at an exercise price equal to the greater of (i) $1.50 per share and (ii) the price per share of common stock as reported on the OTC Markets on the date such option is granted, with 75,000 shares vesting on January 1, 2020 and the remaining 75,000 shares vesting on January 1, 2021. Pursuant to the George Amendment, the Company agreed to grant Ms. George an option to purchase 170,000 shares of the Company’s common stock at an exercise price equal to the greater of (i) $1.50 per share and (ii) the price per share of common stock as reported on the OTC Markets on the date such option is granted, with 85,000 shares vesting on January 1, 2020 and the remaining 85,000 shares vesting on January 1, 2021. Pursuant to the Amendments, the Executives are also entitled to additional equity compensation in the form of options to purchase common stock of the Company in the event the Company achieves certain performance benchmarks.  All other material provisions of the employment agreements remain in full force and effect. 

The foregoing are summaries of the George Amendment and the Leibman Amendment and are qualified in their entirety by the actual terms of such agreements, copies of which are included as Exhibits 10.3 and 10.4, respectively, hereto.

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Note 2 - Significant Accounting Policies: Cash and Restricted Cash (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Text Block [Abstract]
Restricted cash	$ 3,696,652	$ 3,402,890
Investments	$ 0	$ 0
Letters of credit description	Connecticut Department of Public Utility Control, in the amount of $250,000, which was set to expire on May 26, 2019 and was automatically extended to May 26, 2020; and the State of New Hampshire Public Utilities Committee in the amount of $500,000, which is set to expire on May 1, 2020.

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Note 3 - Revenue (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Allowance for doubtful accounts	$ 999,414	$ 821,424
Texas Market
Unbilled accounts	36,573,761	25,811,607
ISO New England Market
Unbilled accounts	1,022,553	1,006,895
Allowance for doubtful accounts	0	$ 0
PJM Market
Billed customers	2,540
Unbilled accounts	$ 1,502

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Note 11 - Long Term Obligations: Interest expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Interest expense	$ 470,959	$ 371,243	$ 1,280,589	$ 944,101
EDF
Interest expense	311,441	247,817	703,440	357,817
Master Note
Interest expense	0	0	0	3,225
Summer Northeast
Interest expense	0	0	0	35,057
Related Party Loans
Interest expense	0	0	2,115	9,545
Guarantors
Interest expense	21,466	0	130,567	0
Others
Interest expense	101	44	232	204,006
Comerica Bank
Interest expense	10,203	0	62,481	0
First Insurance Funding
Interest expense	1,365	655	1,820	1,527
Blue Water Capital Funding
Interest expense	$ 126,383	$ 122,727	$ 379,934	$ 332,924

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Note 18 - Master Revolver Note (Details) - Comerica Bank - USD ($)		9 Months Ended
	Dec. 18, 2018	Sep. 30, 2019	Feb. 22, 2018
Maturity date	Jun. 11, 2020
Interest rate	12.00%
Advance			$ 40,000
Master Note
Amount available for credit		$ 800,000
Maturity date		Jul. 25, 2018
Interest rate		2.50%

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Note 15 - Nonqualified Stock Options Granted to Board of Directors (Details) - Nonqualified stock options	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares shares
Option granted | shares	53,750
Stock options exercise price | $ / shares	$ 2.25
Fair value of option vested | $	$ 103,132
Fair Value Assumptions, Method Used	Black Scholes option pricing model
Risk-free interest rate	1.69%
Estimated volatility	144.51%
Dividend yield	0.00%
Expected life of the options	8 years

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Note 10 - Lease Liability (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Notes to Financial Statements
Operating lease right-of-use assets	$ 1,032,832	$ 0
Operating lease liabilities	1,032,832	$ 0
Long-term portion operating lease liability	$ 870,209
Weighted-average remaining lease term for operating leases	5 years 7 months 6 days
Weighted-average discount rate for operating leases	6.50%

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Note 20 - Related Party Loans (Details) - USD ($)						1 Months Ended		3 Months Ended		9 Months Ended
	Feb. 07, 2019	Jan. 07, 2019	Mar. 06, 2018	Jan. 08, 2018	Jan. 03, 2018	Apr. 16, 2018	Feb. 22, 2018	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Related Party Loans										$ 498,000	$ 0
Repayment of related party loan										498,000	767,677
Promissory notes
Related Party Loans		$ 25,000			$ 250,000
Repayment of related party loan	$ 25,000
Interest rate		5.00%		5.00%	5.00%
Term		365 days		365 days	365 days
Maturity date		Jul. 07, 2019		Jul. 08, 2018	Jul. 03, 2018
Promissory notes | Pinnacle
Related Party Loans				$ 80,000
Repayment of related party loan			$ 40,000				$ 40,000
Interest rate				5.00%
Term				365 days
Maturity date				Jul. 08, 2019
Promissory notes | OLeary and Leibman
Interest								$ 0	$ 0	0	5,103
Promissory notes | Tom O Leary
Related Party Loans					$ 125,000
Repayment of related party loan	$ 473,000
Promissory notes | Neil Leibman
Related Party Loans				$ 373,000	$ 125,000	$ 173,000
Repayment of related party loan			$ 200,000
Interest								0	355	0	3,884
Promissory notes | OLeary and Leibman
Interest								0	0	0	558
Promissory note | Tom O Leary
Related Party Loans		$ 473,000
Interest rate		5.00%
Term		365 days
Maturity date		Jul. 07, 2019
Interest								0	0	2,009	0
Promissory note | OLeary and Leibman
Interest								$ 0	$ 0	$ 106	$ 0

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Note 14 - 2018 Stock Option and Stock Award Plan (Details) - 2018 Stock Option and Stock Award Plan - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2019
Number of Shares Authorized	1,500,000			1,500,000
Shares available for issuance	168,750			168,750
Option net of forfeitures				1,331,250
Option vested	620,000	153,750	56,250
Fair value of option vested	$ 1,192,515	$ 249,198	$ 107,960
Fair Value Assumptions, Method Used	Black Scholes option pricing model	Black-Scholes option-pricing model	Black-Scholes option-pricing model
Risk-free interest rate	1.69%	2.16%	2.21%
Estimated volatility	144.51%	149.76%	147.94%
Dividend yield	0.00%	0.00%	0.00%
Expected life of the options	8 years	8 years	8 years
Unrecognized expense for unvested options	$ 1,480,289			$ 1,480,289
Non-vested shares	861,500			861,500
Deferred Compensation Arrangement with Individual, Requisite Service Period				7 years 6 months 7 days
Employee Stock Option
Option vested			2,500
Stock options exercise price		$ 2.50	$ 2.50
NonEmployee Stock Option
Option vested		53,750	53,750
Stock options exercise price	$ 2.00	$ 2.25		$ 2.00

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Note 18 - Master Revolver Note (Tables)

9 Months Ended

Sep. 30, 2019

Master Note

Schedule of interest paid

The Company paid the following interest related to the Master Note during the three and nine months ended September 30, 2019 and 2018:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	-	$	-	$	-	$	3,225

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Note 11 - Long Term Obligations (Tables)

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Schedule of Long-term debt

Long-term obligations of the Company are comprised as follows:

	Maturity Date		September 30, 2019		December 31, 2018
Note payable to First Insurance Funding (Note 6)	March 1, 2020	$	76,793	$	-
Financing from Blue Water Capital Funding, LLC (Note 7)	June 30, 2020		4,920,000		4,920,000
Comerica Bank Loan (Note 8)	June 11, 2020		700,000		2,900,000
Collateral credit support from EDF (Note 9)	May 1, 2021⁽¹⁾		4,511,006		4,136,006
	⁽¹⁾ Automatically renews for successive one-year periods unless either party provides written notice of termination 180 days prior to renewal date.
Operating lease obligations	October 31, 2019 through December 31, 2025		1,032,832		-
Total obligations		$	11,240,631	$	11,956,006
Less current portion of notes payable			(5,696,793)		-
Less current portion operating lease obligations			(162,623)		-
Long-term portion of obligations		$	5,381,215	$	11,956,006

Schedule of accrued interest

Interest expense consists of the following components for the periods indicated:

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Note payable to First Insurance Funding (Note 6)	$	1,365	$	655	$	1,820	$	1,527
Financing from Blue Water Capital Funding, LLC (Note 7)		126,383		122,727		379,934		332,924
Comerica Bank Loan (Note 8)		10,203		-		62,481		-
Credit support from EDF (Note 9)		311,441		247,817		703,440		357,817
Master Revolver Note (Note 18)		-		-		-		3,225
Debt to Related Party Assumed (Note 19)		-		-		-		35,057
Related Party Loans (Note 20)		-		-		2,115		9,545
Related Party Guarantors (Note 21)		21,466		-		130,567		-
Other interest		101		44		232		204,006
Total	$	470,959	$	371,243	$	1,280,589	$	944,101

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Note 9 - Wholesale Power Purchase Agreement with EDF: Interest accrued (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Interest accrued	$ 470,959	$ 371,243	$ 1,280,589	$ 944,101
EDF
Interest accrued	$ 311,441	$ 247,817	$ 703,440	$ 357,817

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Note 27 - Subsequent Events (Details) - USD ($)		9 Months Ended
	Nov. 08, 2019	Sep. 30, 2019	Sep. 30, 2018
Related Party Loans		$ 498,000	$ 0
Subsequent Event [Member] | Promissory note | Neil Leibman
Related Party Loans	$ 850,000
Interest rate	5.00%
Term	365 days
Maturity date	Feb. 06, 2020
Subsequent Event [Member] | Promissory note | LaRose Holdings
Related Party Loans	$ 1,000,000
Interest rate	5.00%
Term	365 days
Maturity date	Feb. 06, 2020

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Note 4 - Letter of Credit (Details) - Letter of Credit - USD ($)	12 Months Ended
	Dec. 31, 2018	Sep. 30, 2019
Letters of Credit Outstanding, Amount		$ 0
Letters of credit facility		750,000
Connecticut Department
Letters of credit facility		250,000
Letters of credit facility, expiration period	May 26, 2020
State of New Hampshire
Letters of credit facility		$ 500,000
Letters of credit facility, expiration period	May 01, 2020

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Note 21 - Related Party Guarantors : Accrued interest expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Interest accrued	$ 470,959	$ 371,243	$ 1,280,589	$ 944,101
Guarantors
Interest accrued	$ 21,466	$ 0	$ 130,567	$ 0

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Note 24 - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan	9 Months Ended
	Sep. 30, 2019 USD ($)
Maximum Annual Contributions Per Employee, Amount	$ 25,000
Employers Matching Contribution, Annual Vesting Percentage	10.00%
Maximum Contributions for All Employees	$ 24,000

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Note 7 - Financing From Blue Water Capital Funding LLC: Interest accrued (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Interest accrued	$ 470,959	$ 371,243	$ 1,280,589	$ 944,101
Blue Water Capital Funding
Interest accrued	$ 126,383	$ 122,727	$ 379,934	$ 332,924

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (PARENTHETICAL) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
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	31,502,310	27,480,833
Common Stock, shares outstanding	31,502,310	27,480,833

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical)	9 Months Ended
	Sep. 30, 2019 USD ($)
Statement of Cash Flows [Abstract]
Proceeds from Warrant Exercises	$ 106,053

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Note 16 - Private Placement Offering

9 Months Ended

Sep. 30, 2019

Disclosure Text Block [Abstract]

Note 16 - Private Placement Offering

NOTE 16 - PRIVATE PLACEMENT OFFERINGS

During the nine-months ended September 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.

As of September 30, 2019, the 2019 Offering to accredited investors to purchase shares of the Company’s common stock at a purchase price of $1.50 per share had resulted in the issuance of 3,820,000 shares of common stock in exchange for proceeds in the amount of $5,730,000.

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Note 20 - Related Party Loans

9 Months Ended

Sep. 30, 2019

Note 20 - Related Party Loans

Note 20 - Related Party Loans

NOTE 20 - RELATED PARTY LOANS

On January 3, 2018, the Company entered into two separate promissory notes in the amount of $125,000 each for an advance of $250,000 by Tom O’Leary and Neil Leibman for purposes of short-term financing.  Messrs. Leibman and O’Leary are directors of the Company (Mr. Leibman is also an executive officer). The promissory notes accrued interest at the rate of 5% per annum based upon 365 days a year with a maturity date of July 3, 2018.   The loans from Mr. O’Leary and Mr. Leibman were paid in full on June 1, 2018. For the three months ended September 30, 2019 and 2018, the Company paid $0 and $0 to Messrs. O’Leary and Leibman. During the nine months ended September 30, 2019 and 2018, the Company paid $0 and $5,103 to Messrs. O’Leary and Leibman.

On January 8, 2018, the Company entered into a promissory note in the amount of $373,000 for 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 July 8, 2018.  On March 6, 2018, $200,000 was paid back to Mr. Leibman and on April 16, 2018, the remaining balance of $173,000 was paid. For the three months ended September 30, 2019 and 2018, the Company paid $0 and $0 in interest to Mr. Leibman. During the nine months ended September 30, 2019 and 2018, the Company paid $0 and $3,884 in interest to Mr. Leibman.

On January 8, 2018, the Company entered into a promissory note to document a loan from Pinnacle Power, LLC (“Pinnacle”), in the amount of $80,000 for purposes of short-term financing.  Mr. O’Leary and Mr. Leibman hold membership interests in Pinnacle.  The promissory note accrued interest at a rate of 5% per annum based upon 365 days a year and had a maturity date of July 8, 2019.  On February 22, 2018, $40,000 was repaid to Pinnacle and on March 6, 2018, $40,000 was repaid to Pinnacle. For the three months ended September 30, 2019 and 2018, the Company paid $0 and $0 to Messrs. O’Leary and Leibman. During the nine months ended September 30, 2019 and 2018, the Company paid $0 and $558 to Messrs. O’Leary and Leibman.

On January 7, 2019, the Company entered into a promissory note in the amount of $473,000 for an advance by Mr. O’Leary 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. For the three months ended September 30, 2019 and 2018, the Company paid $0 and $0 in interest to Mr. O’Leary. During the nine months ended September 30, 2019 and 2018, the Company paid $2,009 and $0 in interest to Mr. O’Leary.

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. For the three months ended September 30, 2019 and 2018, the Company paid $0 and $0 to Messrs. O’Leary and Leibman. During the nine months ended September 30, 2019 and 2018, the Company paid $106 and $0 to Messrs. O’Leary and Leibman.

The following table summarizes interest paid to related parties for the three and nine months ended September 30, 2019 and 2018:

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Related party interest for $250,000 loan	$	-	$	-	$	-	$	5,103
Related party interest for $373,000 loan		-		-		-		3,884
Related party interest for $80,000 loan		-		-		-		558
Related party interest for $473,000 loan		-		-		2,009		-
Related party interest for $25,000 loan		-		-		106		-
Total	$	-	$	-	$	2,115	$	9,545

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Note 19 - Debt To Related Parties Assumed (Tables)

9 Months Ended

Sep. 30, 2019

Summer Northeast

Schedule of interest paid

During the three and nine months ended September 30, 2019 and 2018, the Company paid the following interest on such related party debt assumed:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	-	$	-	$	-	$	35,057

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Note 13 - 2015 Stock Option and Stock Award Plan (Tables)

9 Months Ended

Sep. 30, 2019

2015 Stock Option and Stock Award Plan

Schedule of stock compensation expenses

During the three and nine-month periods ended September 30, 2019 and 2018, the Company recognized total stock compensation expenses for vesting options issued from the 2015 Plan as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	16,433	$	27,445	$	49,299	$	186,923

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Note 3 - Revenue: Bad debt expense, write-offs and recoveries (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenue from Contract with Customer [Abstract]
Bad debt expense	$ 328,496	$ 293,428	$ 626,047	$ 674,541
Net write offs and recoveries	$ 112,020	$ 131,643	$ 448,057	$ 1,119,937

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Note 21 - Related Party Guarantors (Details) - USD ($)		1 Months Ended	9 Months Ended
	Dec. 18, 2018	Sep. 16, 2019	Sep. 30, 2019	Sep. 30, 2018
Payment of interest accrued			$ 1,186,512	$ 929,877
Guarantors
Number of common stock issued for payment of interest accrued		14,312	95,424
Payment of interest accrued			$ 143,133
Comerica Bank
Proceeds from Comerica Bank note	$ 2,900,000
Interest rate	12.00%

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Note 23- Summer Energy 401(K) Plan (Details)	9 Months Ended
	Sep. 30, 2019
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 $19,000 in 2019 or elects not to defer under the Plan. There is no Company match to the Plan.

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Note 7 - Financing From Blue Water Capital Funding LLC (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Long-term debt	$ 5,381,215	$ 11,956,006
Blue Water Capital Funding
Debt Instrument, Face Amount	$ 5,000,000
Debt Instrument, Maturity Date	Jun. 30, 2020
Debt Instrument, Interest Rate, Stated Percentage	9.75%
Financing fee	$ 22,500
Long-term debt	$ 4,920,000	$ 4,920,000

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Note 9 - Wholesale Power Purchase Agreement with EDF (Details) - USD ($)	1 Months Ended
	Jul. 18, 2019	Sep. 30, 2019	Dec. 31, 2018
Long-term debt		$ 5,381,215	$ 11,956,006
EDF
Long-term debt		$ 4,511,006
Repayment of credit support	$ 588,000

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Note 26 - Consulting Agreement (Details) - Consulting Agreement	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares shares
One time consultant fees	$ 200,000
Warrants issued | shares	80,000
Exercise price of warrants | $ / shares	$ 1.50
Warrants Term	5 years
Fair value of warrants	$ 143,731
Consulting fees	$ 343,731

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash	$ 1,701,380	$ 451,995
Restricted cash	3,696,652	3,402,890
Accounts receivable, net	49,468,018	34,270,548
Prepaid and other current assets	3,662,759	4,014,194
Total current assets	58,528,809	42,139,627
Property and equipment, net	53,726	82,209
Deferred financing cost, net	4,688	9,375
Operating lease right-of use assets, net	1,032,832	0
Intangible asset, net	1,279,746	2,165,724
Total assets	60,899,801	44,396,935
Current liabilities:
Accounts payable	1,496,440	3,208,088
Accrued wholesale power purchased	28,495,248	12,202,099
Accrued transportation and distribution charges	6,461,340	4,151,678
Accrued expenses	3,778,641	4,636,911
Current-portion operating lease obligation	162,623	0
Current-portion of obligations	5,696,793	0
Total current liabilities	46,091,085	24,198,776
Long-term liabilities:
Long-term obligations, net of current portion	5,381,215	11,956,006
Total liabilities	51,472,300	36,154,782
Stockholders' Equity
Common stock - $.001 par value, 100,000,000 shares authorized, 31,502,310 and 27,480,833 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively	31,501	27,480
Subscription receivable	(52,000)	(52,000)
Additional paid in capital	30,158,576	23,357,951
Accumulated deficit	(20,710,576)	(15,091,278)
Total stockholders' equity	9,427,501	8,242,153
Total liabilities and stockholders' equity	$ 60,899,801	$ 44,396,935

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash Flows from Operating Activities
Net loss	$ (5,619,298)	$ (6,823,313)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash financing costs	4,687	46,535
Broker referral warrant compensation expense	104,951	0
Consulting warrant compensation expense	143,731	0
Stock compensation expense	682,831	676,032
Interest payments in common stock for personal guaranty	143,133	0
Depreciation of property and equipment	28,483	90,405
Amortization of intangible asset	885,978	885,978
Bad debt expense	626,047	674,541
Changes in operating assets and liabilities:
Accounts receivable	(15,823,517)	(13,409,913)
Prepaid and other current assets	351,435	(1,768,150)
Accounts payable	(1,711,648)	1,706,961
Accrued wholesale power purchased	16,293,149	10,326,227
Accrued transportation and distribution charges	2,309,662	683,522
Accrued expenses	(858,270)	2,349,249
Net cash used in operating activities	(2,438,646)	(4,561,926)
Cash Flows from Investing Activities
Purchase of property and equipment	0	(27,741)
Net cash used in investing activities	0	(27,741)
Cash Flows from Financing Activities
Advances from wholesale provider	963,000	3,836,006
Payments to wholesale provider	(588,000)	0
Payments on Comerica Bank note	(2,200,000)	0
Payment on master revolver note	0	(40,000)
Financing of directors and officer insurance policy	127,989	0
Payment on financing of directors and officer's insurance policy	(51,196)	0
Deferred financing costs	0	(12,500)
Proceeds from related party debt	498,000	0
Repayment of related party debt	(498,000)	(767,677)
Advance from short-term loan	0	2,420,000
Proceeds from issuance of common shares in a private placement, net of fees	5,730,000	3,637,500
Net cash provided by financing activities	3,981,793	9,073,329
Net Increase in Cash and Restricted Cash	1,543,147	4,483,662
Cash and Restricted Cash at Beginning of Period	3,854,885	1,992,036
Cash and Restricted Cash at End of Period	5,398,032	6,475,698
Supplemental Disclosure of Cash Flow Information:
Income taxes paid	0	0
Interest paid	1,186,512	929,877
Non-Cash Investing and Financing Activity
Operating lease right of use assumed through operating lease obligation	1,265,563	0
Cashless exercise of warrant for 106,053 shares of common stock	$ 106	$ 0

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Note 15 - Nonqualified Stock Options Granted to Board of Directors

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Nonqualified Stock Options Granted to Board of Directors

NOTE 15 – NONQUALIFIED STOCK OPTIONS GRANTED TO BOARD OF DIRECTORS

In September 2019, the Company entered into stock option grant agreements to the six non-employee members of the Company’s Board of Directors whereby the Company would grant non-qualified stock options 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 quarter ended September 30, 2019, pursuant to the aforementioned grant agreements, the Company granted a total of 53,750 nonqualified stock options with an exercise price of $2.25 to six non-employee board members of the Company as compensation. The total 53,750 stock options granted during the quarter ended September 30, 2019 had an approximate fair value of $103,132 determined using the Black Scholes option pricing model. The weighted average assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.69% (ii) estimated volatility of 144.51% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging eight years.

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Note 19 - Debt To Related Parties Assumed

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Note 19 - Debt To Related Parties Assumed

NOTE 19 - DEBT TO RELATED PARTIES ASSUMED

On November 1, 2017, the Company assumed $767,677 of related party debt owed by Summer Northeast to members Tom O’Leary and Neil Leibman pursuant to the terms of the purchase agreement relating to the acquisition of Summer Northeast during 2017. Messrs. O’Leary and Leibman are directors of the Company (Mr. Leibman is also an executive officer).

In accordance with the Amended and Restated Limited Liability Company Agreement of Summer Northeast, the amount of any loan or advance by a member shall not be treated as a contribution to the capital of the lending member but shall be considered a debt.   The loan bears interest at the rate of the greater of (i) 12% per annum or (ii) the Prime Rate plus 5%, payable monthly with a maturity date of October 31, 2018.

The related party debt in the amount of $767,677 was paid in full by the Company to the related parties Messrs. O’Leary and Leibman on June 1, 2018.

During the three and nine months ended September 30, 2019 and 2018, the Company paid the following interest on such related party debt assumed:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	-	$	-	$	-	$	35,057

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Note 3 - Revenue

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Note 3 - Revenue

NOTE 3 - REVENUE

The table below represents the Company’s reportable revenues for the three-month and nine-month periods ended September 30, 2019 and 2018, respectively, from customers, net of respective provisions for refund:

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Electricity Revenues from Contracts with Customers
ERCOT Market	$	49,708,164	$	40,449,035	$	116,805,669	$	104,690,986
ERCOT Pre-paid Market		1,956,958		1,666,542		4,557,895		3,673,328
Northeast Market		1,998,663		3,254,044		5,829,930		8,755,948
Midwest Market		2,540		-		2,540		-
Total Electricity Revenues from Contracts with Customers		53,666,325		45,369,621		127,196,034		117,120,262
Other Revenues:
Fees Revenue		1,030,436		866,485		2,825,183		2,384,693
Total Revenues:	$	54,696,761	$	46,236,106	$	130,021,217	$	119,504,955

Presented in the following table are the components of accounts receivable and accrued revenue:

		September 30, 2019		December 31, 2018
Accounts receivable from customers
ERCOT Market	$	12,505,795	$	7,729,016
ISO New England Market		363,821		544,454
PJM Market		1,502		-
Total accounts receivable from customers		12,871,118		8,273,470
Accrued revenue from customers
ERCOT Market		36,573,761		25,811,607
ISO New England Market		1,022,553		1,006,895
Total accrued revenue with customers		37,596,314		26,818,502
Allowance for doubtful accounts		(999,414)		(821,424)
Total accounts receivable and accrued revenue	$	49,468,018	$	34,270,548

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 and ISO New England markets. Summer Midwest began flowing electricity in the state of Ohio in the PJM market in July 2019 and the anticipated customer base as this market grows will consist of residential and commercial customers. 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

Account receivables 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 September 30, 2019 and December 31, 2018 were estimated at $36,573,761 and $25,811,607, 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 kilowatt hour (“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 September 30, 2019 and December 31, 2018 were estimated at $1,022,553 and $1,006,895, respectively.

The Company began serving customers in the PJM market during the month of July 2019. As of September 30, 2019, the Company had billed customers $2,540 and the outstanding billed accounts receivable balance was $1,502.

The Company, in the Texas market, determines an allowance for doubtful accounts based upon a review of outstanding receivables, historical write-off experience and existing economic conditions. Receivables past due over 90 days are considered delinquent and reviewed individually for collectability. After all means of collection have been exhausted, delinquent receivables are written off. Billed receivables over 90 days and 2% of unbilled receivables are reserved by the Company.  Management has determined that the allowance for doubtful accounts as of September 30, 2019 and December 31, 2018 was $999,414 and $821,424, respectively.  

Bad debt expense, write-offs and recoveries were as follows:

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Bad Debt Expense	$	328,496	$	293,428	$	626,047	$	674,541
Net Write Offs/Recoveries	$	112,020	$	131,643	$	448,057	$	1,119,937

Within the ISO New England market, the local utility companies in the state of Massachusetts purchase the Company’s billed receivables at a statutory published discounted rate without recourse; therefore, no allowance for doubtful accounts was recorded as of September 30, 2019 or December 31, 2018.

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Note 7 - Financing From Blue Water Capital Funding LLC

9 Months Ended

Sep. 30, 2019

Disclosure Text Block [Abstract]

Note 7 - Financing From Blue Water Capital Funding LLC

NOTE 7 - FINANCING FROM BLUE WATER CAPITAL FUNDING LLC

On June 29, 2016, Summer LLC 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 Summer LLC, and Summer LLC agreed to borrow and repay funds loaned by Blue Water. Further, in connection with the Agreement, Summer LLC granted to Blue Water a second position security interest in and to Summer LLC’s collateral, which includes receivables, equipment, inventory, personal property, other intangibles, and proceeds from any of these, to secure Summer LLC’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 is 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 plus 475 basis points.   As of September 30, 2019, the interest rate was 9.75%.  The amount of credit available pursuant to the Agreement, as amended by the Amendment, continues to be $5,000,000.  The Note continues to include a minimum monthly financing fee of $22,500 per month.  Interest is payable on the tenth day of each month and on the maturity date of the Note. Summer LLC and Blue Water agreed that the security interest granted pursuant to the Agreement remains in effect, and the Company reaffirmed its obligations under the Guaranty.

Further, under the Agreement, Summer LLC is subject to certain restrictive covenants that, among other things, may limit our ability to obtain additional financing for working capital requirements, product development activities, debt service requirements, and general corporate or other purposes. These restrictive covenants include, without limitation, restrictions on Summer LLC’s ability to: (1) incur additional indebtedness; (2) incur liens; (3) make certain dispositions of assets; (4) merge, dissolve, consolidate or sell all or substantially all of its assets; and (5) enter into certain transactions with affiliates during the term of the Agreement.  If Summer LLC breaches any of these restrictive covenants or is unable to pay the indebtedness under the Agreement when due, this could result in a default under the Agreement. In such event, the Lender may elect (after the expiration of any applicable notice or grace periods) to declare all outstanding borrowings, together with accrued and unpaid interest and other amounts payable under the Agreement, to be immediately due and payable.  As of September 30, 2019, Summer LLC was in compliance with the covenants of the Agreement.

At September 30, 2019 and December 31, 2018, the outstanding balance of financing from Blue Water Capital was $4,920,000.

Interest was accrued by the Company for the Blue Water Capital funding as follows:

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Blue Water Interest	$	126,383	$	122,727	$	379,934	$	332,924

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Note 11 - Long Term Obligations

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Note 11 - Long Term Obligations

NOTE 11 – LONG-TERM OBLIGATIONS

Long-term obligations of the Company are comprised as follows:

	Maturity Date		September 30, 2019		December 31, 2018
Note payable to First Insurance Funding (Note 6)	March 1, 2020	$	76,793	$	-
Financing from Blue Water Capital Funding, LLC (Note 7)	June 30, 2020		4,920,000		4,920,000
Comerica Bank Loan (Note 8)	June 11, 2020		700,000		2,900,000
Collateral credit support from EDF (Note 9)	May 1, 2021⁽¹⁾		4,511,006		4,136,006
	⁽¹⁾ Automatically renews for successive one-year periods unless either party provides written notice of termination 180 days prior to renewal date.
Operating lease obligations	October 31, 2019 through December 31, 2025		1,032,832		-
Total obligations		$	11,240,631	$	11,956,006
Less current portion of notes payable			(5,696,793)		-
Less current portion operating lease obligations			(162,623)		-
Long-term portion of obligations		$	5,381,215	$	11,956,006

Interest expense consists of the following components for the periods indicated:

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Note payable to First Insurance Funding (Note 6)	$	1,365	$	655	$	1,820	$	1,527
Financing from Blue Water Capital Funding, LLC (Note 7)		126,383		122,727		379,934		332,924
Comerica Bank Loan (Note 8)		10,203		-		62,481		-
Credit support from EDF (Note 9)		311,441		247,817		703,440		357,817
Master Revolver Note (Note 18)		-		-		-		3,225
Debt to Related Party Assumed (Note 19)		-		-		-		35,057
Related Party Loans (Note 20)		-		-		2,115		9,545
Related Party Guarantors (Note 21)		21,466		-		130,567		-
Other interest		101		44		232		204,006
Total	$	470,959	$	371,243	$	1,280,589	$	944,101

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Note 3 - Revenue (Tables)

9 Months Ended

Sep. 30, 2019

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-month and nine-month periods ended September 30, 2019 and 2018, respectively, from customers, net of respective provisions for refund:

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Electricity Revenues from Contracts with Customers
ERCOT Market	$	49,708,164	$	40,449,035	$	116,805,669	$	104,690,986
ERCOT Pre-paid Market		1,956,958		1,666,542		4,557,895		3,673,328
Northeast Market		1,998,663		3,254,044		5,829,930		8,755,948
Midwest Market		2,540		-		2,540		-
Total Electricity Revenues from Contracts with Customers		53,666,325		45,369,621		127,196,034		117,120,262
Other Revenues:
Fees Revenue		1,030,436		866,485		2,825,183		2,384,693
Total Revenues:	$	54,696,761	$	46,236,106	$	130,021,217	$	119,504,955

Components of accounts receivable and accrued revenue

Presented in the following table are the components of accounts receivable and accrued revenue:

		September 30, 2019		December 31, 2018
Accounts receivable from customers
ERCOT Market	$	12,505,795	$	7,729,016
ISO New England Market		363,821		544,454
PJM Market		1,502		-
Total accounts receivable from customers		12,871,118		8,273,470
Accrued revenue from customers
ERCOT Market		36,573,761		25,811,607
ISO New England Market		1,022,553		1,006,895
Total accrued revenue with customers		37,596,314		26,818,502
Allowance for doubtful accounts		(999,414)		(821,424)
Total accounts receivable and accrued revenue	$	49,468,018	$	34,270,548

Schedule of Bad debt expense, write-offs and recoveries

Bad debt expense, write-offs and recoveries were as follows:

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Bad Debt Expense	$	328,496	$	293,428	$	626,047	$	674,541
Net Write Offs/Recoveries	$	112,020	$	131,643	$	448,057	$	1,119,937

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Note 26 - Consulting Agreement

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Note 26 - Consulting Agreement

NOTE 26 - CONSULTING AGREEMENT

On May 20, 2019, the Company entered into a two-year consulting agreement whereby the consultant agreed to provide certain corporate and strategic business consulting services to the Company and its Board of Directors.

As compensation for these consulting services, the Company agreed to pay the consultant a fee of $200,000 and grant a five-year warrant to purchase up to 80,000 shares of the Company’s common stock at an exercise price of $1.50 per share. The fair value of the warrant to purchase 80,000 shares was $143,731 determined using the Black-Scholes option-pricing model (Note 17). The total consulting fee of $343,731 for this agreement is included in operating expenses on the consolidated statement of operations.

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Note 1 - Organization (Details)	9 Months Ended
	Sep. 30, 2019
Midwest
Entity Incorporation, Date of Incorporation	Dec. 16, 2013
Marketing LLC
Entity Incorporation, Date of Incorporation	Nov. 06, 2012
Summer LLC
Entity Incorporation, Date of Incorporation	Apr. 06, 2011

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Note 2 - Significant Accounting Policies: Accounting Standards Adopted (Details)	Jan. 02, 2019 USD ($)
Text Block [Abstract]
Additional lease assets and liabilities	$ 1,265,562

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Note 20 - Related Party Loans: Interest paid to related parties (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Interest paid to related parties	$ 0	$ 0	$ 2,115	$ 9,545
Promissory notes | OLeary and Leibman
Interest paid to related parties	0	0	0	5,103
Promissory notes | Neil Leibman
Interest paid to related parties	0	0	0	3,884
Promissory notes | OLeary and Leibman
Interest paid to related parties	0	0	0	558
Promissory note | Tom O Leary
Interest paid to related parties	0	0	2,009	0
Promissory note | OLeary and Leibman
Interest paid to related parties	$ 0	$ 0	$ 106	$ 0

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Note 14 - 2018 Stock Option and Stock Award Plan: Schedule of options granted to purchase common stock (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
2018 Stock Option and Stock Award Plan
Allocated Share-based Compensation Expense	$ 107,672	$ 132,421	$ 530,400	$ 489,109

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Note 12 - 2012 Stock Option and Stock Award Plan (Details) - 2012 Stock Option and Stock Award Plan - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
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

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Note 18 - Master Revolver Note: Interest Paid (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Master Note
Interest Paid	$ 0	$ 0	$ 0	$ 3,225

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Note 16 - Private Placement Offering (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Stock Issued During Period, Shares	$ 5,730,000	$ 3,637,500
Investor | Private Placement
Stock Issued During Period, Shares	$ 3,820,000
Stock Issued During Period, Value	5,730,000
Purchase price per share	$ 1.50

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Note 10 - Lease Liability: Operating lease expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Notes to Financial Statements
Operating lease expense	$ 78,837	$ 0	$ 232,731	$ 0

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Note 5 - Surety Bonds (Details)	Sep. 30, 2019 USD ($)
Cash held by surety bond	$ 300,000
Illinois Commerce Commission
Surety Bonds	300,000
Pennsylvania Public Utility Commission
Surety Bonds	$ 250,000

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Note 22 - Other Related Party Transactions (Details) - USD ($)		1 Months Ended		3 Months Ended		9 Months Ended
	Jun. 28, 2018	Feb. 28, 2019	Jan. 31, 2018	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Lease expense				$ 78,837	$ 0	$ 232,731	$ 0
PDS
Lease expense				$ 6,993	$ 10,291	$ 20,979	$ 34,590
Neil Leibman
Fuel costs		$ 23,469	$ 4,000
Four Investors | Securities Purchase Agreements and Registration Rights Agreements
Shares issued	125,000
Purchase price per share	$ 1.50
Purchase price	187,500
Andrew Bursten
Shares issued	85,100
Related Party
Shares issued	39,900

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Note 24 - Employee Stock Purchase Plan: Employer match (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disclosure Text Block [Abstract]
Employer match	$ 760	$ 1,085	$ 2,346	$ 4,084

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Note 8 - Comerica Bank Loan (Details) - USD ($)	Dec. 18, 2018	Sep. 30, 2019
Comerica Bank Loan outstanding		$ 700,000
Comerica Bank
Proceeds from Comerica Bank note	$ 2,900,000
Maturity Date	Jun. 11, 2020
Interest rate	5.50%

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Note 17 - Warrants (Tables)

9 Months Ended

Sep. 30, 2019

Disclosure Text Block [Abstract]

Schedule of warrant expense

Total warrant expense of the Company for the nine months ended September 30, 2019 is summarized as follows:

		For the Three Months Ended
		March 31, 2019		June 30, 2019		September 30, 2019		For the Nine Months Ended September 30, 2019
Broker warrant compensation expense	$	104,947	$	-	$	4	$	104,951
Consulting warrant compensation expense		-		143,731		-		143,731
	$	104,947	$	143,731	$	4	$	248,682

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Note 10 - Lease Liability (Tables)

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Schedule of Operating lease expense related to right-of-use assets

Operating lease expense related to right-of-use assets above was included as part of operating expenses as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	78,837	$	-	$	232,731	$	-

Schedule of Future Minimum Rental Payments for Operating Leases

Operating lease future minimum payments together with their present values as of September 30, 2019 are summarized as follows:

		Operating Leases
2019	$	70,071
2020		204,156
2021		199,494
2022		199,494
2023		197,294
Thereafter		381,387
Total future minimum lease payments		1,251,896
Less amounts representing interest		(219,064)
Present value of lease liability	$	1,032,832
Current-portion operating lease liability		(162,623)
Long-term portion operating lease liability	$	870,209

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Note 21 - Related Party Guarantors (Tables)

9 Months Ended

Sep. 30, 2019

Guarantors

Schedule of accrued interest

The Company accrued interest expense as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	21,466	$	-	$	130,567	$	-

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Note 21 - Related Party Guarantors

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Note 21 - Related Party Guarantors

NOTE 21 - 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) (collectively, the “Guarantors”) guaranteed a single payment note with Comerica Bank (See Note 8) in the amount of $2,900,000. The Company agreed to pay interest at a rate of 12% for the guarantee and such interest is to be paid with the issuance of the Company’s common stock.

The Company accrued interest expense as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	21,466	$	-	$	130,567	$	-

On September 16, 2019, the Company issued 14,312 shares of common stock to the Guarantors as payment for interest.

As of September 30, 2019, the Company has issued 95,424 shares of common stock to the Guarantors as payment for interest accrued in the amount of $143,133.

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Note 13 - 2015 Stock Option and Stock Award Plan

9 Months Ended

Sep. 30, 2019

2015 Stock Option and Stock Award Plan

Note 13 - 2015 Stock Option and Stock Award Plan

NOTE 13 - 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 quarters ended September 30, 2019 and 2018, the Company issued no stock options under the 2015 Plan. 

During the three and nine-month periods ended September 30, 2019 and 2018, the Company recognized total stock compensation expenses for vesting options issued from the 2015 Plan as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	16,433	$	27,445	$	49,299	$	186,923

As of September 30, 2019, the unrecognized expense for vesting of options issued from the 2015 Plan is $147,899 relating to 235,000 of unvested shares expected to be recognized over a weighted average period of approximately 7.22 years.

 As of September 30, 2019, 19,000 shares remain available for issuance under the 2015 Plan.

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Note 17 - Warrants

9 Months Ended

Sep. 30, 2019

Disclosure Text Block [Abstract]

Note 17 - Warrants

NOTE 17 - 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 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 price of $1.50 per share. The fair value of the 43,772 warrants was $80,307 determined using the Black-Scholes option-pricing model and was expensed during the quarter ended March 31, 2019.  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 exercise price of $1.50 per share. The fair value of the 13,430 warrants was $24,640 determined using the Black-Scholes option-pricing model and expensed during the quarter ended March 31, 2019.  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 May 22, 2019, the Company issued a warrant for 80,000 shares of common stock under a Consulting Agreement (Note 26). The five-year warrant has an exercise price of $1.50 per share. The fair value of the 80,000 warrant was $143,731 determined using the Black-Scholes option-pricing model and was expensed during the quarter ended June 30, 2019. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.19%, (ii) estimated volatility of 149.28%, (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 the cashless exercise of a warrant dated March 2, 2015 issued by the Company to Black Ink to purchase up to 536,000 shares of common stock of the Company at $1.50 per share. The Black Ink warrant was terminated and cancelled upon the issuance of the 106,053 shares of common stock. There was no warrant expense associated with the cashless exercise of this warrant.

On July 19, 2019, the Company issued a warrant to purchase up to two (2) shares of the Company’s common stock under a Referral Agreement whereby the sales broker introduces the Company to potential sales leads. The five-year warrant has an exercise price of $1.50 per share. The fair value of the warrant is $4 determined using the Black-Scholes option pricing model and expensed during the quarter ended September 30, 2019. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.76%, (ii) estimated volatility of 149.46%, (iii) dividend yield of 0.00%, and (iv) expected life of the warrant of 5 years.

Total warrant expense of the Company for the nine months ended September 30, 2019 is summarized as follows:

		For the Three Months Ended
		March 31, 2019		June 30, 2019		September 30, 2019		For the Nine Months Ended September 30, 2019
Broker warrant compensation expense	$	104,947	$	-	$	4	$	104,951
Consulting warrant compensation expense		-		143,731		-		143,731
	$	104,947	$	143,731	$	4	$	248,682

As of September 30, 2019, the Company had 941,204 outstanding warrants of which 675,967 are fully vested.

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Note 1 - Organization

9 Months Ended

Sep. 30, 2019

Disclosure Text Block [Abstract]

Note 1 - Organization

NOTE 1 - ORGANIZATION

The condensed consolidated financial statements include the accounts of Summer Energy Holdings, Inc. and its wholly-owned subsidiaries Summer Energy, LLC (“Summer LLC”), Summer Energy Midwest, LLC (“Summer Midwest”), Summer EM Marketing, LLC (“Marketing LLC”) and Summer Energy Northeast, LLC (“Summer Northeast”) (collectively referred to as the “Company,” “we,” “us,” or “our”).  All significant intercompany transactions and balances have been eliminated in these consolidated financial statements.

Summer LLC is a retail electric provider in the state of Texas under a license with the Public Utility Commission of Texas (“PUCT”).  Summer LLC procures wholesale energy and resells to commercial and residential customers.  Summer LLC was organized on April 6, 2011 under the laws of the state of Texas.

Summer Midwest (formerly Summer Energy of Ohio, LLC) was formed in the state of Ohio on December 16, 2013 to procure and sell electricity in the state of Ohio.   The Public Utilities Commission of Ohio issued a certificate as a Retail Electric Service Provider to Summer Midwest on June 16, 2015.  On May 2, 2019, the Illinois Commerce Commission approved Summer Midwest as a Retail Electric Service Provider in the state of Illinois.

Marketing LLC was formed in the state of Texas on November 6, 2012 to provide marketing services to Summer LLC.  Marketing LLC is currently inactive and there is no business activity.

Summer Northeast, a Texas limited liability company formerly named REP Energy, LLC, was acquired on November 1, 2017 and became a wholly-owned subsidiary of Summer Energy Holdings, Inc.   Summer Northeast is a retail electric provider serving electric load to both residential and commercial customers in the Northeastern U.S. and holds licenses in Massachusetts, New Hampshire, Connecticut and Rhode Island.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Revenue	$ 54,696,761	$ 46,236,106	$ 130,021,217	$ 119,504,955
Cost of goods sold
Power purchases and balancing/ancillary	34,554,826	29,100,071	71,953,021	65,307,971
Transportation and distribution providers charge	17,415,238	15,819,398	46,180,570	44,038,213
Total cost of goods sold	51,970,064	44,919,469	118,133,591	109,346,184
Gross Profit	2,726,697	1,316,637	11,887,626	10,158,771
Operating expenses	5,634,108	5,262,090	16,267,591	14,965,311
Operating loss	(2,907,411)	(3,945,453)	(4,379,965)	(4,806,540)
Other expense
Financing costs	(1,563)	(1,563)	(4,688)	(46,535)
Interest expense, net	(455,107)	(363,705)	(1,234,645)	(929,877)
Disputed power settlement	0	(1,040,361)	0	(1,040,361)
Total other expense	(456,670)	(1,405,629)	(1,239,333)	(2,016,773)
Net loss	(3,364,081)	(5,351,082)	(5,619,298)	(6,823,313)
Income tax expense	0	0	0	0
Net loss	$ (3,364,081)	$ (5,351,082)	$ (5,619,298)	$ (6,823,313)
Net loss per common share:
Basic	$ (0.11)	$ (0.19)	$ (0.18)	$ (0.26)
Dilutive	$ (0.11)	$ (0.19)	$ (0.18)	$ (0.26)
Weighted average number of shares
Basic	31,490,176	27,480,833	30,606,157	26,473,599
Dilutive	31,490,176	27,480,833	30,606,157	26,473,599

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Note 2 - Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Policy Text Block [Abstract]

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, 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”) and ISO New England 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 September 30, 2019 or December 31, 2018.

Restricted cash in the amount of $3,696,652 as of September 30, 2019 and $3,402,890 as of December 31, 2018 represents funds held in escrow for customer deposits, funds in a lockbox account in which EDF Trading North America, LLC (“EDFTNA”) has a security interest and funds securing two irrevocable stand-by letters of credit. The letters of credit were issued for the benefit of the following parties: Connecticut Department of Public Utility Control, in the amount of $250,000, which was set to expire on May 26, 2019 and was automatically extended to May 26, 2020; and the State of New Hampshire Public Utilities Committee in the amount of $500,000, which is set to expire on May 1, 2020.  

		September 30, 2019		December 31, 2018
Cash	$	1,701,380	$	451,995
Restricted cash		3,696,652		3,402,890
Total cash and restricted cash	$	5,398,032	$	3,854,885

Basic and Diluted (Loss) Per Share

Basic and Diluted (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 nine months ended September 30, 2019 and 2018, the weighted average number of shares outstanding excludes share equivalents, because their inclusion would be anti-dilutive. The Company had potentially dilutive securities totaling approximately 4,741,434 and 4,278,730, respectively, as of September 30, 2019 and 2018.

Accounting Standards Recently Adopted

Accounting Standards Recently Adopted

The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), as of January 1, 2018, using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at the application date. In addition, the Company elected the available practical expedients permitted under the transaction guidance within the new standard. The most significant impact from the adoption of the new standard was the recognition of operating lease right-of-use assets and operating lease liabilities. Adoption of the new standard resulted in the recording of assets and liabilities of $1,265,562 as of January 1, 2019. The standard did not materially impact the consolidated net income and had no impact on cash flows.

Recently Issued Accounting Standards Not Yet Adopted

Recently Issued Accounting Standards Not Yet Adopted

The Company has reviewed all 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.

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Note 24 - Employee Stock Purchase Plan

9 Months Ended

Sep. 30, 2019

Disclosure Text Block [Abstract]

Note 24 - Employee Stock Purchase Plan

NOTE 24 - 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 is follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	760	$	1,085	$	2,346	$	4,084

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Note 8 - Comerica Bank Loan (Tables)

9 Months Ended

Sep. 30, 2019

Comerica Bank

Schedule of accrued interest

Interest accrued on the Comerica Bank loan was as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	10,203	$	-	$	62,481	$	-

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Note 5 - Surety Bonds

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Note 5 - Surety Bonds

NOTE 5 - SURETY BONDS

As of September 30, 2019, Summer Midwest had a surety bond in the amount of $300,000 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 $300,000 in cash held by the surety bond company.

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Note 9 - Wholesale Power Purchase Agreement with EDF

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Note 9 - Wholesale Power Purchase Agreement with EDF

NOTE 9 - 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. On July 18, 2019, the Company repaid EDF for credit support in the amount of $588,000 related to the decreased TDSP collateral requirements of the local utility company. As of September 30, 2019, EDF has provided credit support in the amount of $4,511,006 for cash collateral as well as to secure letters of credit (Note 4) for the benefit of the Company.

The Company accrued interest to EDF as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	311,441	$	247,817	$	703,440	$	357,817

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Note 13 - 2015 Stock Option and Stock Award Plan: Stock compensation expenses (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
2015 Stock Option and Stock Award Plan
Allocated Share-based Compensation Expense	$ 16,433	$ 27,445	$ 49,299	$ 186,923

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Note 19 - Debt To Related Parties Assumed: Interest Paid (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Summer Northeast
Interest Paid	$ 0	$ 0	$ 0	$ 35,057

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Note 17 - Warrants - Schedule of warrant expense (Details) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2019
Warrant compensation expense	$ 4	$ 143,731	$ 104,947	$ 248,682
Broker
Warrant compensation expense	4	0	104,947	104,951
Consultant
Warrant compensation expense	$ 0	$ 143,731	$ 0	$ 143,731

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Note 11 - Long Term Obligations: Schedule of Long-term debt (Details) - USD ($)		9 Months Ended
		Sep. 30, 2019	Dec. 31, 2018
Operating lease obligations		$ 1,032,832	$ 0
Total obligations		11,240,631	11,956,006
Less current portion of obligations		(5,696,793)	0
Less current portion operating lease obligations		(162,623)	0
Long-term debt		$ 5,381,215	11,956,006
Operating lease obligations maturity date		October 31, 2019 through December 31, 2025
Comerica Bank Loan
Total obligations		$ 700,000	2,900,000
Maturity Date		Jun. 11, 2020
EDF
Total obligations		$ 4,511,006	4,136,006
Long-term debt		$ 4,511,006
Maturity Date	[1]	May 01, 2021
First Insurance Funding
Total obligations		$ 76,793
Maturity Date		Mar. 01, 2020
Blue Water Capital Funding
Total obligations		$ 4,920,000	4,920,000
Long-term debt		$ 4,920,000	$ 4,920,000
Maturity Date		Jun. 30, 2020

[1] Automatically renews for successive one-year periods unless either party provides written notice of termination 180 days prior to renewal date.

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Note 3 - Revenue: Summary of revenues from customers net of respective provisions for refund (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Total Electricity Revenues from Contracts with Customers	$ 53,666,325	$ 45,369,621	$ 127,196,034	$ 117,120,262
Fees Revenue	1,030,436	866,485	2,825,183	2,384,693
Total Revenues	54,696,761	46,236,106	130,021,217	119,504,955
ERCOT Market
Total Electricity Revenues from Contracts with Customers	49,708,164	40,449,035	116,805,669	104,690,986
ERCOT Pre-Paid Market
Total Electricity Revenues from Contracts with Customers	1,956,958	1,666,542	4,557,895	3,673,328
Northeast Market
Total Electricity Revenues from Contracts with Customers	1,998,663	3,254,044	5,829,930	8,755,948
MidwestMarket
Total Electricity Revenues from Contracts with Customers	$ 2,540	$ 0	$ 2,540	$ 0

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Note 22 - Other Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2019

PDS

Schedule of lease expense

The Company paid for lease expense related to the agreement with PDS as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	6,993	$	10,291	$	20,979	$	34,590

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Note 2 - Significant Accounting Policies: Cash and Restricted Cash: Schedule of Cash and Restricted Cash (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Text Block [Abstract]
Cash	$ 1,701,380	$ 451,995
Restricted cash	3,696,652	3,402,890
Total cash and restricted cash	$ 5,398,032	$ 3,854,885	$ 6,475,698	$ 1,992,036

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Note 7 - Financing From Blue Water Capital Funding LLC (Tables)

9 Months Ended

Sep. 30, 2019

Blue Water Capital Funding

Schedule of accrued interest

Interest was accrued by the Company for the Blue Water Capital funding as follows:

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Blue Water Interest	$	126,383	$	122,727	$	379,934	$	332,924

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Note 27 - Subsequent Events

9 Months Ended

Sep. 30, 2019

Disclosure Text Block [Abstract]

Note 27 - Subsequent Events

NOTE 27 - SUBSEQUENT EVENTS

On November 8, 2019, the Company entered into a promissory note in the amount of $850,000 to document a loan from Neil Leibman for purposes of short-term financing.    The promissory note accrues interest at a rate of 5% per annum based upon 365 days in a year and has a maturity date of February 6, 2020. At the election of the lender, interest payments may be made in cash or shares of the Company’s common stock, based on a per share price as quoted by OTC Markets during the 10-day prior to the date of the note. Mr. Leibman is a director and executive officer of the Company.  

On November 8, 2019, the Company entered into a promissory note in the amount of $1,000,000 to document a loan from LaRose Holdings, LLLP for the purposes of short-term financing. The promissory note accrues interest at a rate of 5% per annum based upon 365 days in a year and has a maturity date of February 6, 2020. At the election of the lender, interest payments may be made in cash or shares of the Company’s common stock, based on a per share price as quoted by OTC Markets during the 10-day prior to the date of the note. LaRose Holdings, LLLP is an entity controlled by Al LaRose, a director of the Company.

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Note 23 - Summer Energy 401(K) Plan

9 Months Ended

Sep. 30, 2019

Disclosure Text Block [Abstract]

Note 23 - Summer Energy 401(k) Plan

NOTE 23 - 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 $19,000 in 2019 or elects not to defer under the Plan. There is no Company match to the Plan.

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Note 6 - Financing From First Insurance Funding

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Note 6 - Financing From First Insurance Funding

NOTE 6 - FINANCING FROM FIRST INSURANCE FUNDING

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 6.450%.

At September 30, 2019, the outstanding balance was $76,793.

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Note 10 - Lease Liability

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Note 10 - Lease Liability

NOTE 10 - LEASE LIABILITY

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 2018 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.

As of September 30, 2019, the operating lease right-of-use assets and operating lease liabilities were $1,032,832, respectively. The long-term portion of the operating lease liabilities, $870,209, is included in long-term obligations (see Note 11).

Operating lease expense related to right-of-use assets above was included as part of operating expenses as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	78,837	$	-	$	232,731	$	-

As of September 30, 2019, the weighted-average remaining lease term for operating leases was 5.6 years. As of September 30, 2019, the weighted-average discount rate for operating leases was 6.5%.

Operating lease future minimum payments together with their present values as of September 30, 2019 are summarized as follows:

		Operating Leases
2019	$	70,071
2020		204,156
2021		199,494
2022		199,494
2023		197,294
Thereafter		381,387
Total future minimum lease payments		1,251,896
Less amounts representing interest		(219,064)
Present value of lease liability	$	1,032,832
Current-portion operating lease liability		(162,623)
Long-term portion operating lease liability	$	870,209

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Note 13 - 2015 Stock Option and Stock Award Plan (Details) - 2015 Stock Option and Stock Award Plan	9 Months Ended
	Sep. 30, 2019 USD ($) shares
Number of Shares Authorized	1,500,000
Shares available for issuance	19,000
Unrecognized expense for unvested options | $	$ 147,899
Non-vested shares	235,000
Employee Stock Option
Deferred Compensation Arrangement with Individual, Requisite Service Period	7 years 2 months 19 days

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Note 19 - Debt To Related Parties Assumed (Details) - USD ($)		9 Months Ended
	Jun. 01, 2018	Sep. 30, 2019	Sep. 30, 2018	Nov. 01, 2017
Interest rate		12.00%
Maturity date		Oct. 31, 2018
Payment of Related Party Debt		$ 498,000	$ 767,677
Summer Northeast
Related party debt				$ 767,677
Payment of Related Party Debt	$ 767,677

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Note 17 - Warrants (Details) - USD ($)		1 Months Ended			9 Months Ended
	Jun. 11, 2019	Jul. 19, 2019	May 22, 2019	Jan. 25, 2019	Sep. 30, 2019
Warrants Outstanding					941,204
Warrants vested					675,967
Consulting Agreement
Warrants issued					80,000
Exercise price of warrants					$ 1.50
Warrants Term					5 years
Fair value of warrants					$ 143,731
Consulting Agreement | Warrant [Member]
Warrants issued			80,000
Exercise price of warrants			$ 1.50
Warrants Term			5 years
Fair value of warrants			$ 143,731
Fair Value Assumptions, Method Used			Black-Scholes option-pricing model
Risk-free interest rate			2.19%
Estimated volatility			149.28%
Dividend yield			0.00%
Expected life of the options			5 years
Referral Agreement | Warrant [Member]
Warrants issued				43,772
Exercise price of warrants				$ 1.50
Warrants Term				5 years
Fair value of warrants				$ 80,307
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
Referral Agreement | Warrant Two [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
Referral Agreement | Warrant Three [Member]
Exercise price of warrants		$ 1.50
Warrants Term		5 years
Fair value of warrants		$ 4
Fair Value Assumptions, Method Used		Black-Scholes option-pricing model
Risk-free interest rate		1.76%
Estimated volatility		149.46%
Dividend yield		0.00%
Expected life of the options		5 years
Black Ink
Number of common stock issued	$ 106,053
Purchase of common stock	536,000
Share Price	$ 1.50
Cancellation of common stock	106,053

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Note 10 - Lease Liability: Operating lease future minimum payments (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Notes to Financial Statements
2019	$ 70,071
2020	204,156
2021	199,494
2022	199,494
2023	197,294
Thereafter	381,387
Total future minimum lease payments	1,251,896
Less amounts representing interest	(219,064)
Present value of lease liability	1,032,832	$ 0
Current-portion operating lease liability	(162,623)	$ 0
Long-term portion operating lease liability	$ 870,209

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Note 24 - Employee Stock Purchase Plan (Tables)

9 Months Ended

Sep. 30, 2019

Disclosure Text Block [Abstract]

Schedule of employer match

The employer match is follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	760	$	1,085	$	2,346	$	4,084

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Note 2 - Significant Accounting Policies: Basic and Diluted Loss Per Unit (Details) - shares	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Text Block [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	4,741,434	4,278,730

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Note 3 - Revenue: Components of accounts receivable and accrued revenue (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Total accounts receivable from customers	$ 12,871,118	$ 8,273,470
Total accrued revenue with customers	37,596,314	26,818,502
Allowance for doubtful accounts	(999,414)	(821,424)
Total accounts receivable and accrued revenue	49,468,018	34,270,548
ERCOT Market
Total accounts receivable from customers	12,505,795	7,729,016
Total accrued revenue with customers	36,573,761	25,811,607
ISO New England Market
Total accounts receivable from customers	363,821	544,454
Total accrued revenue with customers	1,022,553	1,006,895
Allowance for doubtful accounts	0	0
PJM Market
Total accounts receivable from customers	$ 1,502	$ 0

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Note 6 - Financing From First Insurance Funding (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	May 31, 2019
Notes to Financial Statements
Premiums, taxes and fees	$ 150,575
Periodic payment	$ 22,586
Interest rate	6.45%
Outstanding balance	$ 76,793	$ 127,989

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Note 22 - Other Related Party Transactions: Lease Expenses (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Lease expense	$ 78,837	$ 0	$ 232,731	$ 0
PDS
Lease expense	$ 6,993	$ 10,291	$ 20,979	$ 34,590

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Note 25 - Employment Agreements (Details) - USD ($)		1 Months Ended	9 Months Ended
	Aug. 01, 2019	Aug. 27, 2019	Sep. 30, 2019
Hanley Employment Agreement
Semi-monthly salary			$ 4,231
Employment Agreement | Kelli Mitchell
Annual base salary	$ 250,000
Number of option granted	150,000
Strike Price	$ 1.50
Employment Agreement | Travis Andrews
Annual base salary		$ 300,000
Number of option granted		150,000
Strike Price		$ 1.50
Option vested description		75,000 shares vesting on July 1, 2020 and the remaining 75,000 shares vesting on June 30, 2021.
Employment Agreement | Jaleea George
Annual base salary		$ 200,000
Number of option granted		150,000
Strike Price		$ 1.50
Option vested description		75,000 shares vesting on January 1, 2020 and the remaining 75,000 shares vesting on January 1, 2021. Pursuant to the George Amendment, the Company agreed to grant Ms. George an option to purchase 170,000 shares of the Company’s common stock at an exercise price equal to the greater of (i) $1.50 per share and (ii) the price per share of common stock as reported on the OTC Markets on the date such option is granted, with 85,000 shares vesting on January 1, 2020 and the remaining 85,000 shares vesting on January 1, 2021.

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Note 8 - Comerica Bank Loan: Interest accrued (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Interest accrued	$ 470,959	$ 371,243	$ 1,280,589	$ 944,101
Comerica Bank
Interest accrued	$ 10,203	$ 0	$ 62,481	$ 0

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Note 20 - Related Party Loans (Tables)

9 Months Ended

Sep. 30, 2019

Note 20 - Related Party Loans

Summary interest paid to related parties

The following table summarizes interest paid to related parties for the three and nine months ended September 30, 2019 and 2018:

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2019		2018		2019		2018
Related party interest for $250,000 loan	$	-	$	-	$	-	$	5,103
Related party interest for $373,000 loan		-		-		-		3,884
Related party interest for $80,000 loan		-		-		-		558
Related party interest for $473,000 loan		-		-		2,009		-
Related party interest for $25,000 loan		-		-		106		-
Total	$	-	$	-	$	2,115	$	9,545

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Note 14 - 2018 Stock Option and Stock Award Plan (Tables)

9 Months Ended

Sep. 30, 2019

2018 Stock Option and Stock Award Plan

Schedule of stock compensation expenses

During the three and nine-month periods ended September 30, 2019 and 2018, the Company recognized total stock compensation expense for the vesting of options issued from the 2018 Plan as follows: 

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	107,672	$	132,421	$	530,400	$	489,109

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Note 9 - Wholesale Power Purchase Agreement with EDF (Tables)

9 Months Ended

Sep. 30, 2019

EDF

Schedule of accrued interest

The Company accrued interest to EDF as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	311,441	$	247,817	$	703,440	$	357,817

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Note 14 - 2018 Stock Option and Stock Award Plan

9 Months Ended

Sep. 30, 2019

2018 Stock Option and Stock Award Plan

Note 14 - 2018 Stock Option and Stock Award Plan

NOTE 14 - 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 quarter ended September 30, 2019, the Company granted under the 2018 Plan a total of 620,000 stock options with an exercise price of $2.00 to four officers of the Company as compensation. The total 620,000 stock options granted during the quarter ended September 30, 2019 had an approximate fair value of $1,192,515 determined using the Black Scholes option pricing model. The weighted average assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.69% (ii) estimated volatility of 144.51% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging eight years.

During the quarter ended June 30, 2019, the Company granted under the 2018 Plan a total of 53,750 stock options with an exercise price of $2.25 to non-employee members of the Company’s Board of Directors, and a total of 100,000 stock options with an exercise price of $1.50 to a key employee as compensation. The options granted to the non-employee members of the Company’s Board of Directors as well as to the key employee vested immediately on the date of grant. The total 153,750 stock options granted during the quarter ended June 30, 2019 had an approximate fair value of $249,198 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 2.16% (ii) estimated volatility of 149.76% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging eight years.

During the quarter ended March 31, 2019, the Company granted under the 2018 Plan a total of 53,750 stock options with an exercise price of $2.25 to non-employee members of the Company’s Board of Directors, and a total of 2,500 stock options with an exercise price of $2.50 to a key employee as compensation. The options granted to the non-employee members of the Company’s Board of Directors vested immediately on the date of grant, and the 2,500 options granted to the key employee vest one-year from the date of grant. The total 56,250 stock options granted during the quarter ended March 31, 2019 had an approximate fair value of $107,960 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 2.21% (ii) estimated volatility of 147.94% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging eight years.

During the three and nine-month periods ended September 30, 2019 and 2018, the Company recognized total stock compensation expense for the vesting of options issued from the 2018 Plan as follows: 

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	107,672	$	132,421	$	530,400	$	489,109

As of September 30, 2019, the unrecognized expense for vesting of options issued from the 2018 Plan is $1,480,289 relating to 861,500 of unvested shares expected to be recognized over a weighted average period of approximately 7.52 years.

As of September 30, 2019, the Company had outstanding granted stock options under the 2018 Plan, net of forfeitures to purchase 1,331,250, and 168,750 shares remaining available for issuance.

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Note 18 - Master Revolver Note

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Note 18 - Master Revolver Note

NOTE 18 - MASTER REVOLVER NOTE

The Company assumed a Master Revolver Note (“Master Note”) held by Summer Northeast pursuant to the terms of the Purchase Agreement (defined below) during 2017.

The amount of available credit under the Master Note was $800,000 issued by Comerica Bank. The Master Note was dated July 25, 2017 and had a maturity date of July 25, 2018.  Each advance under the Master Note bore 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 for such day plus two and one-half percent (2.5%) per annum.   “Prime Rate” means the per annum rate established by Comerica Bank as its prime rate for its borrowers at any such time.  “Applicable Margin” means one percent (1%) per annum.  Accrued and unpaid interest on the unpaid principal balance outstanding was payable monthly, in arrears, on the first business day of each month.

On February 22, 2018, the Company paid $40,000 to Comerica Bank to pay off the balance of the Master Note.

Guaranty of the Master Note at origination on July 25, 2017 was made by two members of Summer Northeast (Neil Leibman and Tom O’Leary) who are also members of the Company’s Board (Mr. Leibman is also an executive officer).  In accordance with the provisions of purchase agreement relating to the acquisition of Summer Northeast (the “Purchase Agreement”), the Company paid the guarantors monthly interest at the lowest applicable federal rate published by the Internal Revenue Service, on the outstanding balance of such credit facility until the credit facilities secured by the Master Note were replaced by the Company.

The Company paid the following interest related to the Master Note during the three and nine months ended September 30, 2019 and 2018:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	-	$	-	$	-	$	3,225

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Note 22 - Other Related Party Transactions

9 Months Ended

Sep. 30, 2019

Disclosure Text Block [Abstract]

Note 22 - Other Related Party Transactions

NOTE 22 - OTHER RELATED PARTY TRANSACTIONS

On October 31, 2017, Summer Northeast entered into a sublease agreement with PDS Management Group, LLL (“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 as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
$	6,993	$	10,291	$	20,979	$	34,590

In January 2018, Mr. Leibman provided aviation transportation and the Company paid $4,000 in fuel costs for purposes of a company off-site management meeting.  

On June 28, 2018, the Company entered into individual Securities Purchase Agreements and Registration Rights Agreements with four investors for such investors to purchase from the Company a total of 125,000 shares of common stock at a purchase price of $1.50 per share for a total purchase price of $187,500.  A member of the Company’s Board of Directors, Andrew Bursten, purchased 85,100 of such shares and his family members purchased 39,900 of such shares.

In February 2019, Mr. Leibman provided aviation transportation for business purposes, and the Company paid $23,469 in fuel costs.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 14, 2019
Document and Entity Information:
Entity Registrant Name	SUMMER ENERGY HOLDINGS INC
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
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	2019
Document Fiscal Period Focus	Q3
Entity Common Stock, Shares Outstanding		31,502,310
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

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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, 2017	$ 25,055	$ (52,000)	$ 18,891,252	$ (7,337,408)	$ 11,526,899
Stockholders' Equity, beginning of period, Shares at Dec. 31, 2017	25,055,833
Vesting of Stock Options and restricted shares associated with the 2015 Stock Option and Award Plan			186,923		186,923
Vesting of stock Options and restricted shares associated with the 2018 Stock Option and Award Plan			489,109		489,109
Issuance of Common Stock associated with a Private Placement Offering, Value	$ 2,425		3,635,075		3,637,500
Issuance of Common Stock associated with a Private Placement Offering, Shares	2,425,000
Net loss				(6,823,313)	(6,823,313)
Stockholders' Equity, end of period, Value at Sep. 30, 2018	$ 27,480	(52,000)	23,202,359	(14,160,721)	9,017,118
Stockholders' Equity, end of period, Shares at Sep. 30, 2018	27,480,833
Stockholders' Equity, beginning of period, Value at Jun. 30, 2018	$ 27,480	(52,000)	23,042,493	(8,809,639)	14,208,334
Stockholders' Equity, beginning of period, Shares at Jun. 30, 2018	27,480,833
Vesting of Stock Options and restricted shares associated with the 2015 Stock Option and Award Plan			27,445		27,445
Vesting of stock Options and restricted shares associated with the 2018 Stock Option and Award Plan			132,421		132,421
Net loss				(5,351,082)	(5,351,082)
Stockholders' Equity, end of period, Value at Sep. 30, 2018	$ 27,480	(52,000)	23,202,359	(14,160,721)	9,017,118
Stockholders' Equity, end of period, Shares at Sep. 30, 2018	27,480,833
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			248,682		248,682
Vesting of Stock Options and restricted shares associated with the 2015 Stock Option and Award Plan			49,299		49,299
Vesting of stock Options and restricted shares associated with the 2018 Stock Option and Award Plan			530,400		530,400
Vesting of stock options and restricted shares Outside of Plan			103,132		103,132
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	$ 95		143,038		143,133
Issuance of common stock as interest payment for personal guaranty, Shares	95,424
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				(5,619,298)	(5,619,298)
Stockholders' Equity, end of period, Value at Sep. 30, 2019	$ 31,501	(52,000)	30,158,576	(20,710,576)	9,427,501
Stockholders' Equity, end of period, Shares at Sep. 30, 2019	31,502,310
Stockholders' Equity, beginning of period, Value at Jun. 30, 2019	$ 31,487	(52,000)	29,909,883	(17,346,495)	12,542,875
Stockholders' Equity, beginning of period, Shares at Jun. 30, 2019	31,487,998
Issuance of warrants			4		4
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			107,672		107,672
Vesting of stock options and restricted shares Outside of Plan			103,132		103,132
Issuance of common stock as interest payment for personal guaranty, Value	$ 14		21,452		21,466
Issuance of common stock as interest payment for personal guaranty, Shares	14,312
Net loss				(3,364,081)	(3,364,081)
Stockholders' Equity, end of period, Value at Sep. 30, 2019	$ 31,501	$ (52,000)	$ 30,158,576	$ (20,710,576)	$ 9,427,501
Stockholders' Equity, end of period, Shares at Sep. 30, 2019	31,502,310

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Note 2 - Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

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 nine-month period ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019.  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, 2018, as filed with the Securities and Exchange Commission (“SEC”) on April 11, 2019.

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.

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, 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”) and ISO New England 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 September 30, 2019 or December 31, 2018.

Restricted cash in the amount of $3,696,652 as of September 30, 2019 and $3,402,890 as of December 31, 2018 represents funds held in escrow for customer deposits, funds in a lockbox account in which EDF Trading North America, LLC (“EDFTNA”) has a security interest and funds securing two irrevocable stand-by letters of credit. The letters of credit were issued for the benefit of the following parties: Connecticut Department of Public Utility Control, in the amount of $250,000, which was set to expire on May 26, 2019 and was automatically extended to May 26, 2020; and the State of New Hampshire Public Utilities Committee in the amount of $500,000, which is set to expire on May 1, 2020.  

		September 30, 2019		December 31, 2018
Cash	$	1,701,380	$	451,995
Restricted cash		3,696,652		3,402,890
Total cash and restricted cash	$	5,398,032	$	3,854,885

Basic and Diluted (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 nine months ended September 30, 2019 and 2018, the weighted average number of shares outstanding excludes share equivalents, because their inclusion would be anti-dilutive. The Company had potentially dilutive securities totaling approximately 4,741,434 and 4,278,730, respectively, as of September 30, 2019 and 2018. 

 Accounting Standards Recently Adopted

The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), as of January 1, 2018, using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at the application date. In addition, the Company elected the available practical expedients permitted under the transaction guidance within the new standard. The most significant impact from the adoption of the new standard was the recognition of operating lease right-of-use assets and operating lease liabilities. Adoption of the new standard resulted in the recording of assets and liabilities of $1,265,562 as of January 1, 2019. The standard did not materially impact the consolidated net income and had no impact on cash flows.

Recently Issued Accounting Standards Not Yet Adopted

The Company has reviewed all 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.