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v3.20.1
Document and Entity Information - USD ($)
 12 Months Ended
Dec. 31, 2019
Mar. 24, 2020
Jun. 30, 2019
Document and Entity Information:      
Entity Registrant Name SUMMER ENERGY HOLDINGS INC    
Document Type 10-K    
Document Period End Date Dec. 31, 2019    
Amendment Flag false    
Entity Central Index Key 0001396633    
Current Fiscal Year End Date --12-31    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Filer Category Non-accelerated Filer    
Entity Emerging Growth Company false    
Entity Small Business true    
Entity Interactive Data Current Yes    
Entity Shell Company false    
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
Entity Public Float     $ 33,420,316
Entity Common Stock, Shares Outstanding   31,562,486  
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    
v3.20.1
CONSOLIDATED BALANCE SHEETS - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Current assets:    
Cash $ 814,360 $ 451,995
Restricted cash 3,197,708 3,402,890
Accounts receivable, net 41,847,949 34,270,548
Prepaid and other current assets 3,612,607 4,014,194
Total current assets 49,472,624 42,139,627
Property and equipment, net 58,418 82,209
Deferred financing cost, net 3,125 9,375
Operating lease right-of use assets, net 979,185 0
Intangible asset, net 984,420 2,165,724
Total assets 51,497,772 44,396,935
Current liabilities:    
Accounts payable 1,496,461 3,208,088
Accrued wholesale power purchased 17,538,120 12,202,099
Accrued transportation and distribution charges 5,320,851 4,151,678
Accrued expenses 4,809,533 4,636,911
Related party loans 1,850,000 0
Current-portion operating lease obligation 144,902 0
Current-portion of obligations 5,038,397 0
Total current liabilities 36,198,264 24,198,776
Long-term liabilities:    
Long-term obligations, net of current portion 10,265,289 11,956,006
Total liabilities 46,463,553 36,154,782
Commitments and Contingencies 0 0
Stockholders' Equity    
Common stock - $.001 par value, 100,000,000 shares authorized, 31,532,486 and 27,480,833 shares issued and outstanding at December 31, 2019 and 2018, respectively 31,531 27,480
Subscription receivable (52,000) (52,000)
Additional paid in capital 30,879,055 23,357,951
Accumulated deficit (25,824,367) (15,091,278)
Total stockholders' equity 5,034,219 8,242,153
Total liabilities and stockholders' equity $ 51,497,772 $ 44,396,935
v3.20.1
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares
Dec. 31, 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 31,532,486 27,480,833
Common Stock, shares outstanding 31,532,486 27,480,833
v3.20.1
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Income Statement [Abstract]    
Revenue $ 166,315,793 $ 151,903,328
Cost of goods sold    
Power purchases and balancing/ancillary 90,407,407 81,273,173
Transportation and distribution providers charge 62,276,104 57,054,879
Total cost of goods sold 152,683,511 138,328,052
Gross Profit 13,632,282 13,575,276
Operating expenses 22,441,190 19,913,508
Operating loss (8,808,908) (6,338,232)
Other Expense    
Financing costs (6,250) (48,097)
Interest expense, net (1,842,983) (1,272,009)
Total other expense (1,849,233) (1,320,106)
Net loss before income tax (10,658,141) (7,658,338)
Income tax expense 74,948 95,532
Net loss $ (10,733,089) $ (7,753,870)
Net loss per common share:    
Basic $ (0.35) $ (0.29)
Dilutive $ (0.35) $ (0.29)
Weighted average number of shares:    
Basic 30,832,119 26,727,477
Dilutive 30,832,119 26,727,477
v3.20.1
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - 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 206,748 206,748
Vesting of stock options and restricted shares associated with the 2018 Stock Option and Award Plan 624,876 624,876
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 (7,753,870) (7,753,870)
Stockholders' Equity, end of period, Value at Dec. 31, 2018 $ 27,480 (52,000) 23,357,951 (15,091,278) 8,242,153
Stockholders' Equity, end 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 157,645 157,645
Vesting of stock options and restricted shares associated with the 2018 Stock Option and Award Plan 1,009,303 1,009,303
Vesting of stock options and restricted shares outside of stock option and award plans 191,126 191,126
Issuance of common stock as interest payment for personal guaranty, Value $ 125 188,274 188,399
Issuance of common stock as interest payment for personal guaranty, Shares 125,600        
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 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 (10,733,089) (10,733,089)
Stockholders' Equity, end of period, Value at Dec. 31, 2019 $ 31,531 $ (52,000) $ 30,879,055 $ (25,824,367) $ 5,034,219
Stockholders' Equity, end of period, Shares at Dec. 31, 2019 31,532,486        
v3.20.1
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Cash Flows from Operating Activities    
Net loss $ (10,733,089) $ (7,753,870)
Adjustments to reconcile net income (loss) to net cash used in operating activities:    
Non-cash deferred financing costs 6,250 48,097
Broker referral warrant compensation expense 104,951 0
Consulting warrant compensation expense 143,731 0
Stock compensation expense 1,358,074 831,624
Interest payments in common stock for personal guaranty 188,399 0
Depreciation of property and equipment 36,738 106,718
Non-cash lease costs 286,378 0
Amortization of intangible asset 1,181,304 1,181,304
Bad debt expense 1,010,549 1,121,396
Changes in operating assets and liabilities:    
Accounts receivable (8,587,950) (8,261,108)
Prepaid and other current assets 529,576 (3,098,832)
Accounts payable (1,711,627) 2,602,970
Accrued wholesale power purchased 5,336,021 3,257,824
Accrued transportation and distribution charges 1,169,173 (1,790,779)
Accrued expenses and other (113,756) 1,376,737
Net cash used in operating activities (9,795,278) (10,377,919)
Cash Flows from Investing Activities    
Purchase of property and equipment (12,947) (32,561)
Net cash (used in) provided by investing activities (12,947) (32,561)
Cash Flows from Financing Activity    
Advances from Blue Water Capital Funding, LLC 0 2,420,000
Advances from wholesale provider 963,000 4,136,006
Payments to wholesale provider (588,000) 0
Proceeds from Comerica Bank note 4,300,000 2,900,000
Payments on Comerica Bank note (2,200,000) 0
Payment on financing of directors and officer's insurance policy (89,592) 0
Payment on master revolver note 0 (40,000)
Deferred financing costs 0 (12,500)
Proceeds from related party loans 2,938,000 0
Repayment of related party loans (1,088,000) (767,677)
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 9,965,408 12,273,329
Net Increase (Decrease) in Cash and Restricted Cash 157,183 1,862,849
Cash and Restricted Cash at Beginning of Period 3,854,885 1,992,036
Cash and Restricted Cash at End of Period 4,012,068 3,854,885
Supplemental Disclosure of Cash Flow Information:    
Income taxes paid 95,500 128,500
Interest paid 1,416,039 1,285,321
Non-Cash Investing and Financing Activities    
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
Financing of directors and officer insurance policy $ 127,989 $ 0
v3.20.1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical)
 12 Months Ended
Dec. 31, 2019
shares
Statement of Cash Flows [Abstract]  
Number of warrant exercises 106,053
v3.20.1
Note 1 - Organization
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 1 - Organization

NOTE 1 - ORGANIZATION

 

The 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. Summer Midwest began serving customers in Ohio in July 2019.

 

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.
v3.20.1
Note 2 - Significant Accounting Policies
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 2 - Significant Accounting Policies

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

 

These consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

 

Uses and Sources of Liquidity

 

The consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern within one year from the date of issuance of these consolidated financial statements.

 

For the years ended December 31, 2019 and 2018, the Company incurred a net loss of $10.7 million and $7.8 million, respectively, and used cash in continuing operations of $9.8 million and $10.4 million, respectively. The Company’s operations have been financed principally from electricity revenues and from capital raised under private placement offerings during the years ended December 31, 2019 and 2018 totaling $5.7 million and $3.6 million, respectively. The Company’s primary sources of liquidity are cash generated from operations, borrowings under credit facility agreements as well as capital raises. The Company’s liquidity requirements are to finance current operations, meet financial commitments, fund organic growth and/or acquisitions, and service debt. The liquidity requirements fluctuate with the level of customer acquisition costs, collateral posting requirements, the effects of the timing between the settlement of payables and receivables, including the effect of weather conditions, and our general working capital needs for ongoing operations. Estimating liquidity requirements is highly dependent on then-current market conditions, including weather events, forward prices for natural gas and electricity, market volatility and our then existing capital structure and requirements.

 

The Company’s continuation as a going concern is dependent upon its ability to increase sales, and/or raise additional funds through the capital markets as well as outside lending. In March 2020, the Company secured additional financing for a revolving loan in the amount of $10,000,000 with a maturity date of March 2023. In addition, commitments for additional lending up to $2,000,000 may be provided by members of the Board of Directors of the Company, if necessary. Management has concluded that its existing capital resources and availability, proceeds from a 2020 offering and outside lending will be sufficient to fund operations through the second quarter of 2021.

 

Revenue and Cost Recognition

 

Our revenues are primarily derived from the sale of electricity to residential and small commercial customers. Revenues for sales of electricity are recognized under the accrual method of accounting.

 

Direct energy costs are recorded when the electricity is delivered to the customer’s meter.

 

Cost of goods sold (“COGS”) within the Texas market include electric power purchased and pass through charges from the transmission and distribution service providers (“TDSPs”) in the areas serviced by the Company.  TDSP charges are costs for metering services and maintenance of the electric grid.  TDSP charges are established by regulation of the PUCT.   COGS within the Independent System Operator (“ISO”) for the New England market is comprised of wholesale costs based upon the wholesale power tariff rate for volumes purchased during the delivery month and scheduling fees.  Summer Midwest began flowing electricity within the Pennsylvania, Jersey, Maryland Power Pool (“PJM”) market in July 2019, and the COGS for the PJM market is comprised of wholesale costs based upon the wholesale power tariff for volumes purchased during the delivery month as well as scheduling fees.

 

The energy portion of our COGS is comprised of two components: bilateral wholesale costs and balancing/ancillary costs. These two cost components are incurred and recognized differently as follows:

 

Bilateral wholesale costs are incurred through contractual arrangements with wholesale power suppliers for firm delivery of power at a fixed volume and fixed price. We are invoiced for these wholesale volumes at the end of each calendar month for the volumes purchased for delivery during the month, with payment due 20 days after the end of the month.

 

Balancing/ancillary costs are based on the customer load and are determined by the Electric Reliability Council of Texas (“ERCOT”), ISO New England and PJM through a multiple step settlement process. Balancing costs/revenues are related to the differential between supply that we provided through our bilateral wholesale supply and the supply required to serve our customer load. The Company endeavors to minimize the amount of balancing/ancillary costs through our load forecasting and forward purchasing programs.

 

Basic and Diluted Income/(Loss) Per Share

 

Basic income/(loss) per share are computed by dividing net income/(loss) applicable to the weighted-average number of shares outstanding during the period. Diluted income per share is determined using the weighted-average number of shares outstanding during the period, adjusted for the dilutive effect of share equivalents, using the treasury method, consisting of shares that might be issued upon exercise of share equivalents. In periods where losses are reported, the weighted average number of shares outstanding excludes share equivalents, because their inclusion would be anti-dilutive.

 

At December 31, 2019, the weighted-average number of dilutive shares equivalents of 815,197 were excluded because their inclusion would have been anti-dilutive. In 2018, the weighted-average number of dilutive share equivalents were 1,209,388 and were excluded as their inclusion would have been anti-dilutive.

 

Stock-Based Compensation

 

Stock-based awards granted to employees are measured at the grant date based on the fair value of the award and recognized as expense over the requisite service or performance period, which is the vesting period.

 

Stock options and warrants issued to consultants and other non-employees as compensation for services to be provided to us are accounted for based upon the fair value of the services provided or the estimated fair value of the option or warrant, whichever can be more clearly determined. We currently use the Black-Scholes option-pricing model to determine the fair value of stock options. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the term of the awards, the expected term of the award, the risk-free interest rate and any expected dividends. Compensation cost associated with grants of restricted stock units are also measured at fair value. We evaluate the assumptions used to value restricted stock units on a quarterly basis. When factors change, including the market price of the stock, share-based compensation expense may differ significantly from what has been recorded in the past. The Company estimates forfeitures at the date of grant and revises the estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

 

If there are any modifications or cancellations of the underlying unvested securities, we may be required to accelerate, increase or cancel any remaining unearned share-based compensation expense.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the period in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date.

 

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits and penalties in income tax expense.

 

Advertising Costs

The Company expenses advertising costs as incurred and such costs are included in the operating expenses on the consolidated statements of operations. For the years ended December 31, 2019 and 2018, advertising costs were $281,989 and $241,131, respectively.

New Customer Implementation Costs

We ordinarily incur additional costs to implement our services for new customers. These costs are comprised primarily of additional labor and support. These costs are expensed as incurred and have a negative impact on our statements of operations and cash flows during the implementation phase. We attempt to maintain a disciplined approach to customer implementation costs since these costs influence our profitability. We do not capitalize new customer implementation costs as such costs are typically associated with contracts that are less than one year in duration.

Warrants

The Company’s common stock warrants are measured at fair value using the Black-Scholes valuation model, which takes into account, as of the measurement date, factors including the current exercise price, the term of the instrument, the current price of the underlying stock and its expected volatility, expected dividends on the stock and the risk-free interest rate for the term of the item.

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

 

Concentration of Credit Risk

 

The Company maintains its cash in demand deposit accounts or “noninterest-bearing transaction accounts” which, at times, may exceed federally insured limits. The Company’s management periodically assesses the financial stability of these banks. The Company has not experienced any losses on such accounts.

 

Intangibles or Long-lived assets

 

The Company periodically evaluates the carrying value of definite-lived intangibles when events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers important that could trigger an impairment review include, but are not limited to, significant under-performance relative to historical or projected future operating results, significant changes in the manner of its use of acquired assets or its overall business strategy, and significant industry or economic trends.

 

When the Company determines that the carrying value of a long-lived asset may not be recoverable based upon the existence of one or more of the above indicators, the Company determines the recoverability by comparing the carrying amount of the asset to net future undiscounted cash flows that the asset is expected to generate and recognizes an impairment charge equal to the amount by which the carrying amount exceeds the fair market value of the asset.

 

If the Company’s revenues or other estimated operating results are not achieved at or above our forecasted level, and the Company is unable to recover such costs through price increases, the carrying value of certain of the Company’s assets may prove to be unrecoverable and we may incur impairment charges of definitive-live intangible assets. The Company recorded no impairment loss for definite-lived intangible assets during the years ended December 31, 2019 or 2018.

 

The Company amortizes definite-lived intangible assets on a straight-line basis over their useful lives. The Company’s capitalized intangible asset for customer relationships in the amount of $3,543,912 is amortized over the three-year life of various customer contracts acquired in the Summer Energy Northeast, LLC acquisition on November 1, 2017. Amortization of the capitalized customer relationships for the years ended December 31, 2019 and 2018 was $1,181,304 and $1,181,304, respectively. The unamortized amount of capitalized customer relationships as of December 31, 2019 and 2018 was $984,420 and $2,165,724, respectively.

 

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 December 31, 2019 or 2018.

 

Restricted cash represents funds held in escrow for customer deposits, funds held in a controlled account by the wholesale provider (See Note 11) and funds securing irrevocable stand-by letters of credit.

 

    December 31, 2019   December 31, 2018
Cash $ 814,360 $ 451,995
Restricted cash:        
  Escrow for customer deposits   511,461   510,012
  Funds controlled by wholesale provider   1,936,247   1,527,578
  Funds securing letters of credit   750,000   1,365,300
  Total restricted cash   3,197,708   3,402,890
         
 Total cash and restricted cash $ 4,012,068 $ 3,854,885

 

Accounts Receivable and Unbilled Revenue

 

Accounts receivable are comprised of trade receivables and unbilled receivables (accrued revenue). Customers are billed monthly in cycles having billing dates that do not generally coincide with the end of a calendar month. This results in customers having received electricity that they have not been billed for as of month end. Therefore, at the end of each calendar month, revenue is accrued to unbilled receivables based on the estimated amount of power delivered to customers using the flow technique. Unbilled revenue also includes accruals for estimated TDSP charges and monthly service charges applicable to the estimated electricity usage for the period. All charges that were physically billed in the calendar month are recorded from the unbilled account to the customer’s receivable account.

 

Property and Equipment

 

Property and equipment are stated at cost and depreciated on a straight-line basis over the following estimated useful lives:

 

  Estimated Lives
Computer software 3 years
Computer hardware 3 years
Furniture and fixtures 5 years
Leasehold improvements 5 years
Website 3 years

 

Expenditures for additions, major renewals and betterments are capitalized, and expenditures for maintenance and repairs are charged against income as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in results of operations.

 

Deferred Financing Costs

 

The Company’s deferred financing costs in the amount of $179,887 was amortized over the two-year life of the financing from Blue Water Capital Funding LLC ended on June 27, 2018. The Company entered into an Amendment to Loan Documents Agreement with Blue Water Capital Funding, LLC on June 27, 2018 and capitalized $12,500 of deferred financing costs to be amortized over the two-year life of the amended loan (See Note 8). Amortization of deferred financing costs for the years ended December 31, 2019 and 2018 were $6,250 and $48,097, respectively. The unamortized amount of deferred financing costs as of December 31, 2019 and 2018 were $3,125 and $9,375, respectively.

 

Derivative Instruments

 

The Company’s business operations require entering into physically-settled commodity contracts that meets the definition of a derivative. The Company has elected “normal purchases and normal sales” exception, which is a term specific to ASC 815-10-15-22. When the contract satisfies certain criteria, including a requirement that physical delivery of the underlying commodity is probable and is expected to be used in normal course of business. Retail revenues and retail cost of revenues resulting from deliveries of commodities under normal purchase contracts and normal sales contracts are included in earnings at the time of contract settlement.

 

Fair Value of Financial Instruments

 

The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. None of these instruments are held for trading purposes.

 

The recorded value of short-term and long-term debt approximates the fair value as the interest rate approximates market interest rates.

 

Recent Pronouncements

Accounting Pronouncements Issued But Not Yet Effective

 

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, which reduces the complexity of FASB ASC Topic 740, “Income Taxes” as part of the FASB’s Simplification Initiative. The amendments in this guidance simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for annual reporting periods ending after December 15, 2020, with early adoption permitted, and should be applied on either a retrospective basis for all periods presented or a modified retrospective basis. Management is still assessing the impact this might have on the Company’s consolidated financial statements.

 

The Company has reviewed all other recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that no other pronouncements will have a significant effect on its financial statements.

 

Accounting Pronouncement Issued and Recently Adopted

 

The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), as of January 1, 2019, 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 results of operations and had no impact on cash flows.
v3.20.1
Note 3 - Income Taxes
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 3 - Income Taxes

NOTE 3 - INCOME TAXES

 

The components of income tax expense from continuing operations for the years ended December 31, 2019 and 2018 are as follows:

 

    Current   Deferred   Total
2019            
U.S. Federal $                -     $                -     $                -   
States and Local          74,948                  -      74,948
Total $ 74,948  $                -     $ 74,948
             
2018            
U.S. Federal $                -     $                -     $                -   
States and Local          95,110                  -             95,110
Total $        95,110  $                -     $        95,110
             

 

Actual income tax expense for the years ended December 31, 2019 and 2018 is reconciled from the amount computed by applying the U.S. federal income tax rate of 21% to income before income taxes as follows:

 

    2019   2018
Expected tax benefit $ (2,238,210) $ (1,623,190)
Reconciling items:        
Permanent Differences/Discrete Items   252,308   131,100
Change in Valuation Allowance   2,060,850   1,587,200
Change in Tax Rate                  -                     -   
     Total tax expense $ 74,948 $ 95,110
         

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2019 and 2018 are presented below:

 

    2019   2018
Deferred tax assets:        
Net operating loss carryforward - Federal $ 2,916,740  $ 1,748,600
Federal Minimum Tax                   37,860                   73,750
Reserve for uncollectible receivables                 248,550                  172,500
Amortization of intangible asset                 434,430                 236,600
Disallowed Business Interest Expense                 639,220                  277,150
Donations                      3,700                       1,500
Accrued expenses                 685,000                 398,000
  Total gross deferred tax assets             4,965,500              2,908,100
  Valuation allowance            (4,969,150)           (2,908,300)
  Net deferred tax assets                    (3,650)                       (200)
         
Deferred tax liabilities:        
  Depreciation of plant and equipment                      3,650                         200
Net deferred tax liabilities                      3,650                         200
         
Net deferred tax assets $                           -    $                           -   
         

 
There was a valuation allowance of $4,969,150 and $2,908,300 as of December 31, 2019 and 2018, respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income, projections for future taxable income over the periods in which the deferred tax assets are deductible, and the scheduled reversal of deferred tax liabilities, management does not believe it is more likely than not the Company will realize the full benefits of these deductible differences at December 31, 2019.

Federal net operating loss carryforwards is $13,889,200 as of December 31, 2019 of which $3,181,900 expires at different dates through the year 2038 and $10,707,300 is carried forward indefinitely. Due to a Section 382 limitation, some of the net operating loss will be limited each year until 2032.

There is no provision for material uncertain tax positions for the Company as of December 31, 2019.

As of December 31, 2019, with few exceptions, the Company is no longer subject to U.S. Federal income tax examinations by tax authorities for years before 2016 and for state for years before 2015.

v3.20.1
Note 4 - Revenue
 12 Months Ended
Dec. 31, 2019
Revenue from Contract with Customer [Abstract]  
Note 4 - Revenue

NOTE 4 – REVENUE

 

The table below represents the Company’s reportable revenues for the years ended December 31, 2019 and 2018 from customers, net of respective provisions for refund:

 

    For the year ended December 31, 2019   For the year ended December 31, 2018
Electricity Revenues from Contracts with Customers        
ERCOT Market $ 149,140,983 $ 133,379,103
ERCOT Pre-paid Market   5,993,295   4,829,172
ISO New England Market   7,258,467   10,374,679
PJM Market   55,960                                      -   
Total Electricity Revenues from Contracts with Customers   162,448,705   148,582,954
Other Revenues:        
Fees Revenue   3,867,088   3,320,374
         
Total Revenues: $ 166,315,793 $ 151,903,328
         

 

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

 

    December 31, 2019   December 31, 2018
Accounts receivable from customers        
ERCOT Market $ 9,041,871 $ 7,729,016
ISO New England Market   257,942   544,454
 PJM Market   11,244                                   -
Total accounts receivable from customers   9,311,057   8,273,470
         
Accrued revenue from customers        
ERCOT Market   32,916,970   25,811,607
ISO New England Market   788,395   1,006,895
PJM Market   15,088                                   -
Total accrued revenue with customers   33,720,453   26,818,502
         
Allowance for doubtful accounts   (1,183,561)   (821,424)
         
Total accounts receivable and accrued revenue $ 41,847,949 $ 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, ISO New England and PJM markets. Also, the Company recognizes revenues from contract cancellation fees, disconnection fees and late fees.

 

The invoice practical expedient within the accounting guidance allows for the recognition of revenue from performance obligations in the amount of consideration to which there is a right to invoice the customer and when the amount for which there is a right to invoice corresponds directly to the value transferred to the customer. The purpose of the invoice practical expedient is to depict an entity’s measure of progress toward completion of the performance obligation within a contract and can only be applied to performance obligations that are satisfied over time and when the invoice is representative of services provided to date. The Company elected to apply the invoice practical expedient to recognize revenue for performance obligations satisfied over time as the invoices from the respective revenue streams are representative of services or goods provided to date to the customer.

 

Performance Obligations

 

Residential and Commercial – The Company has performance obligations for the service to deliver electricity to its customers and it satisfies these performance obligations over time as electricity is provided continuously to the customer who simultaneously receives and consumes the benefits provided. The Company recognizes revenue at a fixed base amount and a price per kilowatt hour as it provides these services on a fixed term contract. Contracts generally have fixed terms of 3-month increments not to exceed a 24-month fixed term. For customers whose fixed contracts have expired, the Company recognizes revenue at the market price per kilowatt hour as the service is provided.

 

Residential pre-paid – The Company has performance obligations for the service to deliver electricity to its customers and these performance obligations are satisfied over time as electricity is provided continuously to the customer who simultaneously receives and consumes the benefits provided. Revenues in the pre-paid market are variable at the market rate per kilowatt hour as the service is provided.

 

Accounts Receivable and Unbilled Revenue

 

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 December 31, 2019 and December 31, 2018 were estimated at $32,916,970 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 December 31, 2019 and December 31, 2018 were estimated at $788,395 and $1,006,895, respectively.

 

The Company began service in the PJM market during the third quarter of 2019. In the PJM market, electricity services not billed by month end are accrued based upon estimated deliveries to customers as tracked and recorded by PJM multiplied by our average billing rate per kilowatt hour (“kWh”) in effect at the time. The customer billing in the PJM market is performed by the local utility company. Unbilled accounts in the PJM market as of December 31, 2019 and December 31, 2018 were estimated at $15,088 and $0, respectively.

 

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 December 31, 2019 and December 31, 2018 is $1,183,561 and $821,424, respectively. The allowance for doubtful accounts, bad debt expense, write-offs and recoveries were as follows:

 

    For the year ended December 31, 2019   For the year ended December 31, 2018
         
Beginning of year $ 821,424 $ 1,176,958
Bad debt expense   1,010,549   1,121,396
Net write offs/recoveries   (648,412)   (1,476,930)
End of year $ 1,183,561 $ 821,424

 

Within the ISO New England market and the PJM market, the local utility companies within the state of operation purchase the Company’s billed receivables at a statutory published discounted rate without recourse; therefore, no allowance for doubtful accounts is recorded as of December 31, 2019 or December 31, 2018 for each of these markets.
v3.20.1
Note 5 - Letters of Credit And Cash Deposits
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 5 - Letters Of Credit And Cash Deposits

NOTE 5 - LETTERS OF CREDIT AND CASH DEPOSITS

 

As of December 31, 2019, Summer LLC had no outstanding secured irrevocable stand-by letters of credit, and as of December 31, 2018, Summer LLC had five secured irrevocable stand-by letters of credit totaling $565,300 with a financial institution for the benefit of the TDSP’s that provide transition services to the Company. During the calendar year 2019, the five secured irrevocable stand-by letters of credit were cancelled and replaced with cash deposits. As of December 31, 2019 and 2018, the cash deposits held by various local utilities in the ERCOT market totaled at $1,004,059 and $1,181,480, respectively.

 

As of December 31, 2019 and 2018, Summer Northeast had two secured irrevocable stand-by letters of credit totaling $750,000 with a financial institution. 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 expiring on May 26, 2020 with automatic extension provisions and the State of New Hampshire Public Utilities Committee in the amount of $500,000 expiring on May 1, 2020. As of December 31, 2019 and 2018, Summer Northeast had cash collateral posted with ISO New England in the amount of $1,387,181 and $1,355,108, respectively.

 

As of December 31, 2019, Summer Midwest had no secured irrevocable stand-by letters of credit outstanding, and as of December 31, 2018, Summer Midwest had one irrevocable stand-by letter of credit in the amount of $50,000 for the benefit of Duke Energy Ohio, Inc. During the calendar year 2019, the letter of credit was cancelled and replaced with a $50,000 cash deposit to Duke Energy Ohio, Inc. As of December 31, 2019 and 2018, Summer Midwest had cash collateral held by various local utilities in the PJM market totaling $713,000 and $0, respectively.

 

As of December 31, 2019, none of the letters of credit issued on behalf of the Company were drawn upon.
v3.20.1
Note 6 - Surety Bonds
 12 Months Ended
Dec. 31, 2019
Options, Exercised, Weighted Average Remaining Contractual Term  
Note 6 - Surety Bonds

NOTE 6 - SURETY BONDS

 

As of December 31, 2019, Summer Midwest had a surety bond in the amount of $500,000 issued to the Illinois Commerce Commission and a surety bond in the amount of $250,000 issued to the Pennsylvania Public Utility Commission. At December 31, 2019, cash in the amount of $300,000 was held by the surety bond company to secure the two bonds.

 

There were no surety bonds outstanding as of December 31, 2018.
v3.20.1
Note 7 - Financing From First Insurance Funding
 12 Months Ended
Dec. 31, 2019
Options, Exercised, Weighted Average Remaining Contractual Term  
Note 7 - Financing From First Insurance Funding

NOTE 7 - 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 6.45%.

 

At December 31, 2019, the outstanding balance was $38,397 and the accrued interest was $3,185.
v3.20.1
Note 8 - Financing From Blue Water Capital Funding LLC
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 8 - Financing From Blue Water Capital Funding LLC

NOTE 8 - FINANCING FROM BLUE WATER CAPITAL FUNDING LLC

 

On June 29, 2016, Summer LLC (the “Borrower”) entered into a Loan Agreement (the “Agreement”) with Blue Water Capital Funding, LLC (“Blue Water”) and guaranteed by the Company (the “Guaranty”).  Pursuant to the Agreement, Blue Water agreed to provide a revolving loan (the “Loan”) to the Borrower, and the Borrower agreed to borrow and repay funds loaned by Blue Water. Further, in connection with the Agreement, the Borrower granted to Blue Water a second position security interest in and to the Borrower’s collateral, which includes receivables, equipment, inventory, personal property, other intangibles, and proceeds from any of these, to secure the Borrower’s payment of its obligation under the Loan.

 

The amount of available credit under the Loan was $5,000,000.  The Loan was revolving in nature and 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 December 31, 2019 and 2018, the interest rate was 9.5% and 10.25%, respectively. 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. These restrictive covenants include, without limitation, restrictions on Summer LLC’s ability to: (i) incur additional indebtedness; (ii) incur liens; (iii) make certain dispositions of assets; (iv) merge, dissolve, consolidate or sell all or substantially all of its assets; and (v) 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 December 31, 2019, Summer LLC was in compliance with the covenants of the Agreement.

 

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

 

Interest accrued during the years ended December 31, 2019 and 2018 was as follows:

 

    For the Years Ended December 31,
    2019   2018
Blue Water Capital interest expense $ 500,404 $ 459,068
v3.20.1
Note 9 - Comerica Bank Master Revolving Note
 12 Months Ended
Dec. 31, 2019
Options, Exercised, Weighted Average Remaining Contractual Term  
Note 9 - Comerica Bank Master Revolving Note

NOTE 9 – COMERICA BANK MASTER REVOLVING NOTE

 

On December 18, 2018, the Company signed a single payment note (the “Note”) with Comerica Bank (the “Bank”) in the amount of $2,900,000. The Note has a maturity date of June 11, 2020, with interest thereon at a per annum rate equal to the “Prime Referenced Rate” plus the “Applicable Margin.” The “Prime Referenced Rate” means, for any day, a per annum interest rate which is equal to the “Prime Rate” in effect on such day, but in no event and at no time shall the “Prime Reference Rate” be less than the sum of the Daily Adjusting LIBOR rate for such day plus 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. As of December 31, 2018, the interest rate was 5.75%. Accrued and unpaid interest on the unpaid principal balance outstanding on the Note shall be payable monthly on the first day of each month, commencing on February 1, 2019.

 

On December 9, 2019, the Note was converted from a single payment note to a master revolving note (the “Revolver Note”), which is payable in full on demand from the Bank. The Revolver note provides for advances, repayments and re-advances from time to time. Interest thereon at a per annum rate equal to the “Prime Referenced Rate” plus the “Applicable Margin.” The “Prime Referenced Rate” means, for any day, a per annum interest rate which is equal to the “Prime Rate” in effect on such day, but in no event and at no time shall the “Prime Reference Rate” be less than the sum of the Daily Adjusting LIBOR rate for such day plus 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. As of December 31, 2019, the interest rate was 5%. Unless sooner demanded, accrued and unpaid interest on the unpaid principal balance of each outstanding advance shall be payable monthly, in arrears on the first business day of each month, from the date made until the same is paid in full.

 

Guaranty of the Revolver Note has been made by four members of the Company’s board of directors (“Guarantors”).  The Company agreed to issue the four Guarantors shares of the Company’s common stock on a monthly basis depending on the outstanding balance due and owing under the Revolver Note for agreeing to act as a Guarantor.

 

As of December 31, 2019 and 2018, the outstanding balance of financing on the Comerica Revolver Note was $2,900,000. Interest expense accrued as follows:

 

    For the Years Ended December 31,
    2019   2018
Comerica Revolver Note interest expense $ 77,715 $                            6,001
v3.20.1
Note 10 - Comerica Bank Single Payment Note
 12 Months Ended
Dec. 31, 2019
Note 10 - Comerica Bank Single Payment Note  
Note 10 - Comerica Bank Single Payment Note

NOTE 10 – COMERICA BANK SINGLE PAYMENT NOTE

 

On December 20, 2019, the Company signed a Single Payment Note (the “Single Note”) with Comerica Bank in the amount of $2,100,000.  The Note has a maturity date of June 20, 2020, with interest thereon at a per annum rate equal to the “Prime Referenced Rate” plus the “Applicable Margin.”   The “Prime Referenced Rate” means, for any day, a per annum interest rate which is equal to the “Prime Rate” in effect on such day, but in no event and at no time shall the “Prime Referenced Rate” be less than the sum of the Daily Adjusting LIBOR Rate for such day plus 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 0.25% per annum.  As of December 31, 2019, the interest rate was 5%.  Accrued and unpaid interest on the unpaid principal balance outstanding on the Note shall be payable monthly on the twentieth day of each month, commencing on January 20, 2020.

 

Guaranty of the Single Note has been made by four members of the Company’s board of directors (“Guarantors”).  The Company agreed to issue the four Guarantors shares of the Company’s common stock on a monthly basis depending on the outstanding balance due and owing under the Note for agreeing to act as a Guarantor of the Single Note.

 

As of December 31, 2019 and 2018, the outstanding balance of financing on the Comerica Single Note was $2,100,000 and $0, respectively. Interest expense accrued as follows:

 

    For the Years Ended December 31,
    2019   2018
Comerica Single Note interest expense $ 3,500 $                                  -   
v3.20.1
Note 11 - Wholesale Power Purchase Agreement with EDF
 12 Months Ended
Dec. 31, 2019
Options, Exercised, Weighted Average Remaining Contractual Term  
Note 11 - Wholesale Power Purchase Agreement with EDF

NOTE 11 - 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 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 financial 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 December 31, 2019 and 2018, EDF had provided additional credit support in the amount of $4,511,006 and $4,136,006, respectively, for cash collateral as well as to secure letters of credit (See Note 5) and surety bonds (See Note 6) for the benefit of the Company. 

For the years ended December 31, 2019 and 2018, the Company expensed interest to EDF as follows:

 

    For the Years Ended December 31,
    2019   2018
EDF interest expense $ 1,128,231 $ 575,733
v3.20.1
Note 12 - Wholesale Power Purchase Agreement Summer LLC With DTE
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 12 - Wholesale Power Purchase Agreement with Dte

NOTE 12 - WHOLESALE POWER PURCHASE AGREEMENT SUMMER LLC WITH DTE

 

In April, 2014, Summer LLC closed a transaction with DTE Energy Trading, Inc. (“DTE”). As part of the transaction, Summer LLC and DTE entered into an Energy Marketing Agreement for Electric Power (the “Energy Marketing Agreement”). Pursuant to the terms of the Energy Marketing Agreement, Summer LLC agreed to purchase its electric power and associated services requirements from DTE, and DTE agreed to provide Summer LLC with certain credit facilities to assist Summer LLC in the purchase of its electric power and associated service requirements.  Summer LLC also agreed to pay DTE a fixed monthly fee, as well as certain fees based on megawatt hours purchased.  The terms of the Energy Marketing Agreement are governed by the ISDA 2002 Master Agreement, as well as a Schedule and Power Annex thereto (the “2002 Master Agreement”).  In conjunction, therewith, Summer LLC and DTE also entered into a Credit Agreement, a Security Agreement and a Membership Interest Pledge Agreement.

 

Pursuant to the Credit Agreement, among other things DTE agreed to (i) provide a guaranty (a “Credit Guaranty”) to ERCOT for the benefit of Summer LLC, and (ii) provide commodity loans for the purchase of electricity (“Commodity Loans”).  Each Commodity Loan and any Credit Guaranty bore interest on the outstanding principal amount thereof, from the date such Commodity Loan or Credit Guaranty was issued until it became due or revoked, respectively, at a rate per annum equal to the Prime Rate (as reported by the Wall Street Journal) plus two percent.  Summer LLC covenanted not to, among other things, (i) merge or consolidate with any other person, (ii) acquire all or substantially all of the capital stock or property of another person, (iii) create, assume or suffer to exist any lien on any property now owned or hereafter acquired by Summer LLC except for permitted liens (as set forth in the Credit Agreement) or (iv) become liable for any indebtedness (other than permitted indebtedness, as set forth in the Credit Agreement).

 

In consideration of the services and credit support provided by DTE to Summer LLC, and pursuant to the Security Agreement, Summer LLC was required to, among other things (i) grant a priority security interest to DTE in all of its assets, equipment and inventory; (ii) require its customers to remit monthly payments into a lockbox account over which DTE has a security interest; and (iii) deliver monthly and annual forecasted and audited statements to DTE.

 

Pursuant to the Membership Interest Pledge Agreement, the Company pledged to DTE, and granted to DTE a security interest in all of the membership interests of Summer Energy, LLC owned by the Company, as well as all additional membership interests of Summer Energy, LLC from time to time acquired by the Company.

 

The Energy Marketing Agreement between Summer LLC and DTE was terminated on April 30, 2018.

 

For the years ended December 31, 2019 and 2018, interest accrued to DTE was as follows:

 

    For the Years Ended December 31,
    2019   2018
DTE interest expense $ - $ 144,192
v3.20.1
Note 13 - Operating Lease Commitments and Contingencies
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 13 - Operating Lease Commitments and contingencies

NOTE 13 – LEASE LIABILITIES, COMMITMENTS AND CONTINGENCIES

 

Office Space

The Company leases office space and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense is recognized on a straight-line basis over the term of the lease. For leases beginning in 2019 and later, the Company accounts for lease components separately from the non-lease components. Most leases include one or more options to renew. The exercise of the lease renewal options is at the sole discretion of the Company. Certain leases also include options to purchase the leased property. The depreciable life of the assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Beginning December 1, 2017, the Company procured approximately 20,073 square feet of office space on the 37th floor of 5847 San Felipe, Houston, Texas, pursuant to a sublease agreement dated October 13, 2017 with ENSCO International Incorporated (“Sublandlord”) for a term beginning on December 1, 2017 and terminating on December 31, 2025. The base rent payments are approximately $15,900 per month during the term of the sublease agreement. The Company is also responsible for 12.08% of the operating expenses, utilities and taxes charged to the Sublandlord.

Summer LLC assumed an operating lease for office space on November 1, 2011 at 800 Bering Drive, Suite 260, Houston, Texas, under a non-cancellable lease obligation that expired on August 31, 2016. The Sixth Amendment to the office space lease extended the obligation to October 31, 2019.

 

Summer Northeast entered into a sublease agreement with PDS Management Group, LLC (“PDS”) on October 31, 2017 at 800 Bering Drive, Suite 250, Houston, Texas, under a non-cancellable lease obligation that will expire on February 28, 2020. On September 1, 2018, PDS subleased 800 Bering Drive, Suite 250, Houston, Texas to an outside party, and Summer Northeast receives a monthly credit in the amount of $1,698 until the end of the lease obligation on February 28, 2020. The monthly base rent is $3,727 for the period of November 1, 2017 to February 2018 and $3,904 until August 31, 2018. Beginning on September 1, 2018 through the termination of the lease on February 28, 2020, the monthly rent, net of credit, is $2,255.

 

As of December 31, 2019, the operating lease right-of-use assets and operating lease liabilities were $979,185, respectively. The long-term portion of the operating lease liabilities, $834,283, is included in long-term obligations.

 

As of December 31, 2019, the weighted-average remaining lease term for operating leases was 5.9 years. As of December 31, 2019, the weighted-average discount rate for operating leases was 6.5%.

 

Operating lease future minimum payments together with their present values as of December 31, 2019 are summarized as follows:

 

    Operating Leases
2020 $ 204,156
2021   199,494
2022   199,494
2023   197,294
2024   190,694
Thereafter   190,693
Total future minimum lease payments   1,181,825
Less amounts representing interest   (202,640)
Present value of lease liability $ 979,185
     
Current-portion operating lease liability   (144,902)
     
Long-term portion operating lease liability $ 834,283

 

Lease expense for the office space for years ended December 31, 2019 and 2018 totaled $732,000 and $626,980, respectively, and was included in operating expenses on the consolidated statements of operations.

 

Significant Customers

 

For the years ended December 31, 2019 and 2018, the Company did not have any significant customers that individually accounted for more than 10% of our consolidated retail revenue.

 

Significant Suppliers

 

The Company had contractual commitments as of December 31, 2019 and 2018 to purchase its wholesale electric power from EDF and contracts for billing services with three vendors (Energy Services Group, DYNAMO Programs International, LLC and EC Infosystems, Inc.) totaling $967,490 and $535,445, respectively.
v3.20.1
Note 14 - Long Term Obligations
 12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Note 14 - Long Term Obligations

NOTE 14 – LONG TERM OBLIGATIONS

 

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

 

    For the Years Ended December 31,
    2019   2018
Financing from First Insurance Funding (Note 7) $ 38,397 $                                  -   
Financing from Blue Water Capital Funding, LLC (Note 8)   4,920,000   4,920,000
Comerica Bank Master Revolving Note (Note 9)   2,900,000   2,900,000
Comerica Bank Single Payment Note (Note 10)   2,100,000                                    -   
Wholesale Power Purchase Agreement with EDF (Note 11)   4,511,006   4,136,006
Operating lease obligations (Note 13)   979,185                                    -   
Total obligations $ 15,448,588 $ 11,956,006
         
Less current portion of obligations   (5,038,397)                                    -   
Less current portion operating lease obligations   (144,902)                                    -   
Long-term portion of obligations $ 10,265,289 $ 11,956,006
         

 

During the years ended December 31, 2019 and 2018, interest expense incurred on obligations of the Company was as follows:

 

    For the Years Ended December 31,
    2019   2018
Financing from First Insurance Funding (Note 7) $                       3,185 $                       2,182
Financing from Blue Water Capital Funding, LLC (Note 8)                     500,404                     459,068
Comerica Master Revolving Note (Note 9)                       77,715                         6,001
Comerica Bank Single Payment Note (Note 10)                         3,500                               -   
Wholesale Power Purchase Agreement with EDF (Note 11)                  1,128,231                     575,733
Wholesale Power Purchase Agreement with DTE (Note 12)                               -                        144,192
Master Revolver Note Assumed in Acquisition (Note 22)                               -                            3,225
Debt to Related Party Assumed in Acquisition (Note 23)                               -                          35,057
Related Party interest on Summer Northeast Guarantees Assumed                               -                          59,515
Related Party Loans (Note 24)                       16,043                         9,545
Related Party Guarantors (Note 25)                     175,833                       12,567
Other interest                            276                            349
Total interest expense $                1,905,187 $                1,307,434
         
Interest income   62,204   35,425
         
Interest expense, net $ 1,842,983 $ 1,272,009
v3.20.1
Note 15 - 2012 Stock Option and Stock Award Plan
 12 Months Ended
Dec. 31, 2019
2012 Stock Option and Stock Award Plan  
Note 15 - 2012 Stock Option and Stock Award Plan

NOTE 15 – 2012 STOCK OPTION AND STOCK AWARD PLAN

 

During 2012, the Company approved the 2012 Stock Option and Stock Award Plan (“2012 Plan”) established to advance the interest of the Company and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Company and by motivating such persons to contribute to the growth and profitability of the Company.

 

The maximum aggregate number of (i) shares of stock that may be issued under the 2012 Plan, and (ii) shares of stock with respect to which stock appreciation rights may be granted, is 785,000 and consists of authorized but unissued or reacquired shares of stock or any combination thereof. Such number of shares of stock may be 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.

 

On December 6, 2012, a Form S-8 Registration Statement was filed with the United States Securities and Exchange Commission regarding shares under the 2012 Plan.

 

There were no stock options granted or exercised under the 2012 Plan for the years ended December 31, 2019 or 2018.

 

During the years ended December 31, 2019 and 2018, the Company had no stock compensation expenses relating to the vesting of stock options issued from the 2012 Plan.

 

As of December 31, 2019, 2,000 shares remain available for issuance under the 2012 Plan.

 

As of December 31, 2019, the Company had outstanding granted stock options from the 2012 Plan, net of forfeitures to purchase 632,000 shares summarized as follows:

 

    Options   Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (in Years)   Aggregate Intrinsic Value
Outstanding at December 31, 2017   632,000 $ 1.24   5.88 $ 798,250
Options granted    -            
Options exercised   -            
Options cancelled/forfeited/expired   -            
Outstanding at December 31, 2018   632,000 $ 1.24   4.87 $ 117,250
Options granted    -            
Options exercised   -            
Options cancelled/forfeited/expired   -            
Outstanding at December 31, 2019   632,000 $ 1.24   3.86 $ 316,258
                 
Vested at December 31, 2019   632,000 $ 1.24   3.86 $ 316,258
                 
Exercisable at December 31, 2019   632,000 $ 1.24   3.86 $ 316,258

 

The aggregate intrinsic value was calculated as the difference between the exercise price of the stock option and the fair value of the underlying common stock.
v3.20.1
Note 16 - 2015 Stock Option and Stock Award Plan
 12 Months Ended
Dec. 31, 2019
2015 Stock Option and Stock Award Plan  
Note 16 - 2015 Stock Option and Stock Award Plan

NOTE 16 – 2015 STOCK OPTION AND STOCK AWARD PLAN

 

During the year ended December 31, 2015, the Company’s stockholders approved the 2015 Stock Option and Stock Award Plan (“2015 Plan”), which was established to advance the interest of the Company and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Company and by motivating such persons to contribute to the growth and profitability of the Company.

 

The maximum aggregate number of (i) shares of stock that may be issued under the 2015 Plan, and (ii) shares of stock with respect to which stock appreciation rights may be granted, is 1,500,000 and consists of authorized but unissued or reacquired shares of stock or any combination thereof.  Such number of shares of stock may be issued under the 2015 Plan pursuant to incentive stock options, nonstatutory stock options, restricted stock grants, stock appreciation right grants or any combination thereof, so long as the aggregate number of shares so issued does not exceed such number of shares, as adjusted.

 

The 2015 Plan continues in effect until the earlier of its termination by the Board or the date on which all the shares of stock available for issuance under the 2015 Plan have been issued and all restrictions on such shares under the terms on the 2015 Plan and the agreements evidencing awards granted under the 2015 Plan have lapsed.  However, all awards shall be granted, if at all, within ten years from the earlier of the date the 2015 Plan is adopted by the Board or the date the 2015 Plan is duly approved by the stockholders of the Company.

 

On July 2, 2015, a Form S-8 Registration Statement was filed with the United States Securities and Exchange Commission regarding the 2015 Plan.

 

During the year ended December 31, 2018, the Company granted a total of 51,000 stock options from the 2015 Plan with a fair value of approximately $111,911 on the date of grant. The fair value of the options in the amount of $111,911 was determined using the Black-Scholes option-pricing model. The weighted average assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.25% (ii) estimated volatility of 110.73% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging 8 years.

 

There were no stock options granted under the 2015 Plan for the year ended December 31, 2019.

 

During the years ended December 31, 2019 and 2018, the Company recognized total stock compensation expenses of $157,645 and $206,748, respectively, for vesting options issued from the 2015 Plan.

 

As of December 31, 2019, the unrecognized expense for vesting of options issued from the 2015 Plan is $83,915 relating to 235,000 of unvested shares expected to be recognized over a weighted average period of approximately 6.96 years, and the unrecognized expense for vesting of options from the 2015 Plan at December 31, 2018 was $197,199 relating to 241,000 of unvested shares expected to be recognized over a weighted average period of years of approximately 7.78 years.

 

As of December 31, 2019, 19,000 shares remain available for issuance.

 

As of December 31, 2019, the Company had outstanding granted stock options from the 2015 Stock Option and Stock Award Plan, net of forfeitures, to purchase 1,481,000 shares summarized as follows:

 

    Shares   Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (in Years)   Aggregate Intrinsic Value
Outstanding at December 31, 2017   1,430,000 $ 1.74   8.42 $ 1,086,750
Options granted   51,000 $ 2.28                       8.99    
Options exercised   -            
Options cancelled/forfeited/expired   -            
Outstanding at December 31, 2018   1,481,000 $                     1.76                       7.46 $ 133,500
Options granted   -            
Options exercised   -            
Options cancelled/forfeited/expired   -            
Outstanding at December 31, 2019   1,481,000 $                     1.76                       6.45 $ 381,825
                 
Vested at December 31, 2019   1,246,000 $ 1.62   6.35 $ 381,825
                 
Exercisable at December 31, 2019   1,246,000 $ 1.62   6.35 $ 381,825
                 

 

The weighted-average grant date fair value of stock options granted during the year ended December 31, 2018 was $0.92.

 

The aggregate intrinsic value was calculated as the difference between the exercise price of the stock option and the fair value of the underlying common stock.

 

None of these options were exercised during the years ended December 31, 2019 and 2018.
v3.20.1
Note 17 - 2018 Stock Option and Stock Award Plan
 12 Months Ended
Dec. 31, 2019
2018 Stock Option and Stock Award Plan  
Note 17 - 2018 Stock Option and Stock Award Plan

NOTE 17 - 2018 STOCK OPTION AND STOCK AWARD PLAN

 

Effective February 12, 2018, the Board of Directors of the Company approved and adopted the 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 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. 

 

On September 20, 2018, a Form S-8 Registration Statement was filed with the United States Securities and Exchange Commission regarding shares under the 2018 Plan.

 

On February 20, 2018, the Company granted the following options to purchase common stock under the 2018 Plan to key officers of the Company:

 

Name   Number of Options   Exercise Price   Date of Vest
Angela Hanley   150,000 $ 2.50   February 20, 2023
Jaleea George   85,000 $ 2.50   February 20, 2023
Angela Hanley   15,000 $ 2.50   July 1, 2018
Jaleea George   15,000 $ 2.50   July 1, 2018
Neil Leibman   15,000 $ 2.50   July 1, 2018
Total   280,000        

 

The options granted to key officers covering a total of 235,000 shares vest five years after the date of grant.  The stock options have an exercise price of $2.50 per share and will expire 10 years from the date of grant.  The fair value of the options of $539,132 was determined using the Black-Scholes option-pricing model.  The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.65% (ii) estimated volatility of 119.27% (iii) dividend yield of 0.00% and (iv) expected life of the options of 8 years.

The options to key officers covering a total of 45,000 shares vested on July 1, 2018.   The stock options have an exercise price of $2.50 per share and will expire 10 years from the date of grant.  The fair value of the options of $103,238 was determined using the Black-Scholes option-pricing model.  The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.65% (ii) estimated volatility of 119.27% (iii) dividend yield of 0.00% and (iv) expected life of the options of 8 years.

On April 19, 2018, the Company granted a total of 45,000 stock options to non-employee members of the Company’s Board of Directors under the 2018 Plan as compensation. The director stock options vested on July 1, 2018. The director options have an exercise price of $2.25 per share, will expire 10 years from the date of the grant and are estimated to have a fair value of approximately $81,659 on the date of grant determined using the Black-Scholes option-pricing model.  The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.77% (ii) estimated volatility of 141.02% (iii) dividend yield of 0.00% and (iv) expected life of the options of 8 years.

On June 29, 2018, the Company granted a total of 53,750 stock options from the 2018 Stock Option and Stock Award Plan to non-employee members of the Company’s Board of Directors. The director stock options vested on July 1, 2018. The approximate fair value of the options in the amount of $126,864 was determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.73% (ii) estimated volatility of 144.57% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging 8 years.

 

On September 28, 2018, the Company granted a total of 53,750 stock options from the 2018 Stock Option and Stock Award Plan to non-employee members of the Company’s Board of Directors. The director stock options vested immediately on September 28, 2018. The approximate fair value of the options in the amount of $102,644 was determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.94% (ii) estimated volatility of 143.29% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging 8 years.

 

On December 27, 2018, the Company granted a total of 53,750 stock options from the 2018 Stock Option and Stock Award Plan to non-employee members of the Company’s Board of Directors. The director stock options vested immediately on December 27, 2018. The approximate fair value of the options in the amount of $102,656 was determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.60% (ii) estimated volatility of 143.77% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging 8 years.

 

During the year ended December 31, 2018, the Company granted a total of 15,000 stock options from the 2018 Stock Option and Stock Award Plan to key employees of the Company. The options granted to the key employees’ vest in 1 year. The approximate fair value of the options in the amount of $29,698 was determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.81% (ii) estimated volatility of 143.28% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging 8 years.

 

On March 29, 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 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.

 

On April 12, 2019, the Company granted under the 2018 Plan 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 100,000 stock options granted had an approximate fair value of $145,369 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 2.38% (ii) estimated volatility of 149.93% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging eight years.

 

On June 28, 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. The total 53,750 stock options granted had an approximate fair value of $103,829 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 1.76% (ii) estimated volatility of 149.46% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging eight years.

 

On September 16, 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 year ended December 31, 2019, the Company granted a total of 830,000 stock options from the 2018 Stock Option and Stock Award Plan and recognized total stock compensation expenses of $1,009,303 relating to the vesting of stock options issued from the 2018 Plan. During the year ended December 31, 2018, the Company granted 501,250 stock options from the 2018 Stock Option and Stock Award Plan and recognized total stock compensation expenses of $624,876 relating to the vesting of stock options issued from the 2018 Plan.

 

As of December 31, 2019, the unrecognized expense for vesting of options issued from the 2018 Plan is $1,001,385 relating to 782,500 of unvested shares expected to be recognized over a weighted average period of approximately 7.23 years.

 

As of December 31, 2019, 168,750 shares remain available for issuance.

 

As of December 31, 2019, the Company had outstanding granted stock options from the 2018 Stock Option and Stock Award Plan, net of forfeitures to purchase 1,331,250 shares summarized as follows:

 

    Shares   Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (in Years)   Aggregate Intrinsic Value
Outstanding at December 31, 2017   - $ -   - $ -
Options granted   501,250 $ 2.42                       7.36    
Options exercised   -            
Options cancelled/forfeited/expired   -            
Outstanding at December 31, 2018   501,250 $                     2.42                       7.36 $                        -   
Options granted   830,000 $                     1.97                       7.61    
Options exercised                          -               
Options cancelled/forfeited/expired                          -               
Outstanding at December 31, 2019   1,331,250 $                     2.14                       7.13 $ 23,500
                 
Vested at December 31, 2019   548,750 $ 2.13   7.00 $ 23,500
                 
Exercisable at December 31, 2019   548,750 $ 2.13   7.00 $ 23,500
                 

 

The weighted-average grant date fair value of stock options granted during the years ended December 31, 2019 and 2018 was $1.98 and $2.17, respectively.

 

The aggregate intrinsic value was calculated as the difference between the exercise price of the stock option and the fair value of the underlying common stock.

 

None of these options were exercised during the years ended December 31, 2019 and 2018.
v3.20.1
Note 18 - Nonqualified Stock Options Granted to Board of Directors
 12 Months Ended
Dec. 31, 2019
Note 18 - Nonqualified Stock Options Granted To Board Of Directors  
Note 18 - Nonqualified Stock Options Granted to Board of Directors

NOTE 18 – NONQUALIFIED STOCK OPTIONS GRANTED OUTSIDE OF A STOCK OPTION OR STOCK AWARD PLAN

 

In September 2019, the Company entered into stock option grant agreements 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.

 

On September 16, 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 on September 16, 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.

 

On December 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 on December 30, 2019 had an approximate fair value of $87,994 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 1.68% (ii) estimated volatility of 132.54% (iii) dividend yield of 0.00% and (iv) expected life of all options averaging eight years.

 

The Company had previously granted stock options outside of a stock option and stock award plan on May 13, 2014 when the Company exercised its call right reflected within a then-existing credit facility agreement. As a result, Mr. Leibman and Mr. O’Leary, were granted a stock option each to purchase 151,115 shares of common stock at an exercise price of $1.50 per share. Messrs. O’Leary and Leibman are directors of the Company (Mr. Leibman is also an executive officer).

 

As of December 31, 2019, the Company had outstanding stock options, net of forfeitures, granted outside of any stock option or stock award plan summarized as follows:

 

    Options   Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (in Years)   Aggregate Intrinsic Value
Outstanding at December 31, 2017   302,230 $ 1.50   4.31 $ 453,345
Options granted                          -               
Options exercised   -            
Options cancelled/forfeited/expired   -            
Outstanding at December 31, 2018   302,230 $                     1.50                       3.30 $ 105,781
Options granted   107,500 $                     2.25                       7.85    
Options exercised                          -               
Options cancelled/forfeited/expired                          -               
Outstanding at December 31, 2019   409,730 $                     1.70                       3.74 $ 222,139
                 
Vested at December 31, 2019   409,730 $                     1.70   3.74 $ 222,139
                 
Exercisable at December 31, 2019   409,730 $                     1.70   3.74 $ 222,139
                 

 

The aggregate intrinsic value was calculated as the difference between the exercise price of the stock option and the fair value of the underlying common stock.

 

None of these options were exercised during the years ended December 31, 2019 and 2018.

v3.20.1
Note 19 - Warrants
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 19 - Warrants

NOTE 19 - 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 warrant was $80,307 determined using the Black-Scholes option-pricing model.  The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 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 two warrants totaled $24,640 determined using the Black-Scholes option-pricing model.  The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 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 30). The five-year warrant has an exercise price of $1.50 per share. The fair value of the warrant was $143,731 determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 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. 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.

 

The Company issued a total of 137,204 warrants during the year ended December 31, 2019 and the Company issued no warrants during the year ended December 31, 2018.

 

Total warrant expense of the Company for years ended December 31, 2019 and 2018 is summarized as follows:

 

    For the year ended December 31, 2019   For the year ended December 31, 2018
         
Broker warrant compensation expense $ 104,951 $                              -   
Consulting warrant compensation expense   143,731                                -   
  $ 248,682 $                              -   

 

Warrant activity for the years ended December 31, 2019 and 2018 was as follows:

 

Outstanding at December 31, 2017   Shares   Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (in Years)   Grant Date Fair Value
    1,620,000 $ 1.43                       1.73 $ 102,744
Warrants granted   -   -   -   -
Warrants exercised   -   -   -   -
Warrants cancelled/forfeited/expired   (260,000)   1.50   -   (10,666)
Outstanding at December 31, 2018   1,360,000 $ 1.42                       0.93 $          92,078
Warrants granted   137,204   1.50   4.25          248,683
Warrants exercised   (536,000)   1.50   -          (21,976)
Warrants cancelled/forfeited/expired   (20,000)   1.50   -               (820)
Outstanding at December 31, 2019   941,204 $ 1.38                       3.32 $ 317,965
                 
Vested at December 31, 2019   675,967 $                     1.53                       3.01 $ 272,915
                 
Exercisable at December 31, 2019   675,967 $                     1.53                       3.01 $ 272,915
                 
v3.20.1
Note 20 - Private Placement Offering
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 20 - Private Placement Offering

NOTE 20 - PRIVATE PLACEMENT OFFERINGS

 

During the year ended December 31, 2019, the Company commenced a private placement offering (the “2019 Offering”) to certain accredited investors with whom the Company, its management and/or agents have a pre-existing relationship. As of December 31, 2019, the 2019 Offering had resulted in the issuance of 3,820,000 shares of common stock in exchange for proceeds in the amount of $5,730,000.

 

During the year ended December, 31, 2018, the Company commenced a private placement offering (the “2018 Offering”) to certain investors with whom the Company, its management and/or agents have a pre-existing relationship. The 2018 Offering was to accredited investors to purchase shares of the Company’s common stock at a purchase price of $1.50 per share. The 2018 Offering resulted in the issuance of 2,425,000 shares of common stock in exchange for cash proceeds in the amount of $3,637,500.
v3.20.1
Note 21 - Property and Equipment
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 21 - Property and Equipment

NOTE 21 – PROPERTY AND EQUIPMENT

 

As of December 31, 2019, and 2018, property and equipment consisted of the following:

 

    2019   2018
Computer software $ 137,091 $ 127,954
Computer hardware   204,768   199,830
Furniture and fixtures   56,023   56,023
Leasehold improvements   128,593   129,721
Website   775,881   775,881
    Total property and equipment   1,302,356   1,289,409
Less: Accumulated depreciation   (1,243,938)   (1,207,200)
    Property and equipment, net $ 58,418 $ 82,209
         

 

Depreciation expense charged, to operations totaled $36,738 for the year ended December 31, 2019 and $106,718 for the year ended December 31, 2018.
v3.20.1
Note 22 - Master Revolver Note Assumed in Acquistion
 12 Months Ended
Dec. 31, 2019
Options, Exercised, Weighted Average Remaining Contractual Term  
Note 22 - Master Revolver Note Assumed in Acquistion

NOTE 22 - MASTER REVOLVER NOTE ASSUMED IN ACQUISITION

 

The Company entered into a Membership Interest Purchase Agreement (“the Purchase Agreement”) with REP Energy, LLC, a Texas limited liability company (“REP Energy”) on November 1, 2017 whereby the Company acquired 100% of the issued and outstanding membership units of REP Energy. After acquisition, REP Energy changed its name to Summer Northeast. As part of this 2017 transaction, the Company assumed a Master Revolver Note (“Master Note”) held by Summer Northeast (formerly Rep Energy) pursuant to the terms of the Purchase Agreement.

 

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 for the years ended December 31, 2019 and 2018 as follows:

 

    For the year ended December 31, 2019   For the year ended December 31, 2018
Master Revolver Note interest expense $                                                   -    $ 3,225
v3.20.1
Note 23 - Debt To Related Parties Assumed in Acquisition
 12 Months Ended
Dec. 31, 2019
Options, Exercised, Weighted Average Remaining Contractual Term  
Note 23 - Debt To Related Parties Assumed in Acquisition

NOTE 23 - DEBT TO RELATED PARTIES ASSUMED IN ACQUISITION

 

As part of the 2017 acquisition of Summer Northeast, 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. 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.

 

For the years ended December 31, 2019 and 2018, the Company incurred interest on such related party debt assumed as follows:

 

    For the year ended December 31, 2019   For the year ended December 31, 2018
Related Party Debt Assumed interest expense $                                                   -    $ 35,057
v3.20.1
Note 24 - Related Party Loans
 12 Months Ended
Dec. 31, 2019
BlueWaterCapitalFundingMember  
Note 24 - Related Party Loans

NOTE 24 – RELATED PARTY LOANS

 

On January 7, 2019, the Company executed a promissory note in the amount of $473,000 to evidence an advance by Tom 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. As of December 31, 2019, the balance of the loan to Mr. O’Leary was $0 and the loan was paid in full. Mr. O’Leary is a director of the Company.

 

On January 7, 2019, the Company executed a promissory note in the amount of $25,000 to evidence an advance by Messrs. O’Leary and Neil 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. As of December 31, 2019, the balance of the loan to Messrs. O’Leary and Leibman was $0 and the loan was paid in full. Mr. Leibman is an officer and director of the Company.

 

On November 8, 2019, the Company executed a promissory note in the amount of $850,000 to evidence an advance by Mr. Leibman for purposes of short-term financing. The promissory note accrued interest at a rate of 5% per annum based upon 365 days in a year and had a maturity date of February 6, 2020. As of December 31, 2019, the balance of the loan from Mr. Leibman was $850,000. On February 6, 2020, the Company amended such promissory note to extend the maturity date of such note to May 7, 2020. All other provisions of the original note remain in full force and effect.

 

On November 8, 2019, the Company executed a promissory note in the amount of $1,000,000 to evidence an advance by LaRose Holdings LLLP, an entity controlled by Al LaRose, for purposes of short-term financing. Mr. LaRose is a director of the Company. The promissory note accrued interest at a rate of 5% per annum based upon 365 days in a year and had a maturity date of February 6, 2020. As of December 31, 2019, the balance of the loan from LaRose Holdings LLLP was $1,000,000. On February 6, 2020, the Company amended such promissory note to extend the maturity date of such note to May 7, 2020. All other provisions of the original note remain in full force and effect.

 

On December 18, 2019, the Company executed a promissory note in the amount of $590,000 to evidence an advance by Mr. Leibman for purposes of short-term financing. The promissory note accrued interest at a rate of 5% per annum based upon 365 days in a year and had a maturity date of March 18, 2020. On December 20, 2019, the Company paid back in full the loan from Mr. Leibman. As of December 31, 2019, the balance of the loan from Mr. Leibman was $0.

 

On January 3, 2018, the Company executed two separate promissory notes in the amount of $125,000 each for to evidence advance of $250,000 by Mr. O’Leary and Mr. Leibman for purposes of short-term financing. 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.

 

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. As of December 31, 2018, the balance was $0 and the loan was paid in full.

 

On January 8, 2018, the Company entered into a promissory note with 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. As of December 31, 2018, the balance of the Pinnacle loan was $0 and the loan was paid in full.

 

The following table summarizes interest paid to related parties during the years ended December 31, 2019 and 2018:

 

    For the Years Ended December 31,
    2019   2018
Related party interest expense for $250,000 loan  $                                  -     $                            5,103
Related party interest expense for $373,000 loan                                    -                                 3,884
Related party interest expense for $80,000 loan                                    -                                    558
Related party interest expense for $473,000 loan                              2,009                                    -   
Related party interest expense for $25,000 loan                                 106                                    -   
Related party interest expense for $850,000 loan                              6,288                                    -   
Related party interest expense for $1,000,000 loan                              7,398                                    -   
Related party interest expense for $590,000 loan                                 242                                    -   
Total $ 16,043 $ 9,545
         
v3.20.1
Note 25 - Related Party Guarantors
 12 Months Ended
Dec. 31, 2019
Options, Exercised, Weighted Average Remaining Contractual Term  
Note 25 - Related Party Guarantors

NOTE 25 - 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 9) in the amount of $2,900,000. On December 9, 2019, the single payment note was converted to a master revolving note, which is payable in full on demand from Comerica Bank. 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.

 

On December 20, 2019, four members of the Company’s Board of Directors, Stuart Gaylor, Andrew Bursten, Tom O’Leary and Neil Leibman (Mr. Leibman is also an executive officer) (collectively, the “Guarantors”) guaranteed a single payment note with Comerica Bank (See Note 10) in the amount of $2,100,000. 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 year ended December 31, 2019   For the year ended December 31, 2018
Guarantor interest expense on Comerica revolver note $ 167,433 $ 12,567
Guarantor interest expense on Comerica single note $ 8,400 $ -

 

As of December 31, 2019 and 2018, the Company had accrued interest in the amount of $175,833 and $12,567, respectively, to the Guarantors and had issued a total of 125,600 shares during the year ended December 31, 2019 as payments.
v3.20.1
Note 26 - Other Related Party Transactions
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 26 - Other Related Party Transactions

NOTE 26 – OTHER RELATED PARTY TRANSACTIONS

 

On October 31, 2017, Summer Northeast entered into a sublease agreement with PDS for office space located at 800 Bering Drive, Suite 250, Houston, Texas (See Note 13). PDS is 100% owned by Tom O’Leary who is a member of the Company’s Board of Directors. During the years ended December 31, 2019 and 2018, the following expense was accrued in association with the Summer Northeast sublease:

 

    For the year ended December 31, 2019   For the year ended December 31, 2018
Summer Northeast sublease payments $ 27,970 $ 41,583

 

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 May 17, 2018, the Company disbursed $45,500 to each of Mr. O’Leary and Mr. Leibman for a total of $91,000, which was in accordance with the Membership Interest Purchase Agreement dated November 1, 2017 between the Company and Summer Northeast (formerly REP Energy, LLC).

 

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.

v3.20.1
Note 27 - Summer Energy 401(K) Plan
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 27 - Summer Energy 401(k) Plan

NOTE 27 - 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.
v3.20.1
Note 28 - Employee Stock Purchase Plan
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 28 - Employee Stock Purchase Plan

NOTE 28 - EMPLOYEE STOCK PURCHASE PLAN

 

Effective May 2017, the Company began offering an Employee Stock Purchase Plan (the “ESPP”) whereby eligible employees may elect to purchase common stock of the Company through a registered broker/dealer.  Eligible employees who so elect may authorize payroll deductions for contributions to the ESPP up to a maximum of $25,000 each calendar year. The Company will match 10% of eligible employee contributions up to an aggregate maximum of $24,000 for all ESPP participants (not each individual ESPP participant). The employer match for the year ended December 31, 2019 and 2018 was as follows:

 

    For the year ended December 31, 2019   For the year ended December 31, 2018
Employee Stock Purchase Plan $ 3,023 $ 5,208
v3.20.1
Note 29 - Executive Employment Agreements
 12 Months Ended
Dec. 31, 2019
Options, Exercised, Weighted Average Remaining Contractual Term  
Note 29 - Executive Employment Agreements

NOTE 29 – EXECUTIVE EMPLOYMENT AGREEMENTS

 

On June 20, 2019, the Company’s Board of Directors 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 (1st) and second (2nd) 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, to our Quarterly Report on Form 10-Q filed with the SEC on November 14, 2019.

 

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 is a summary of the George Amendment and the Leibman Amendment and is qualified in its entirety by the actual terms of such agreements, copies of which are included as Exhibits 10.3 and 10.4, respectively, to our Quarterly Report on Form 10-Q filed with the SEC on November 14, 2019.
v3.20.1
Note 30 - Consulting Agreement
 12 Months Ended
Dec. 31, 2019
Options, Exercised, Weighted Average Remaining Contractual Term  
Note 30 - Consulting Agreement

NOTE 30 - 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 (See Note 19). The total consulting fee of $343,731 for this agreement is included in operating expenses on the consolidated statement of operations.

v3.20.1
Note 31 - Subsequent Events
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 31 - Subsequent Events

NOTE 31 - SUBSEQUENT EVENTS

 

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. The Company is monitoring this closely, and although operations have not been materially affected by the coronavirus outbreak to date, the ultimate severity of the outbreak is uncertain. Operations of the Company are ongoing as the delivery of electricity to customers is considered an essential business. Further the uncertain nature of its spread globally may impact our business operations resulting from quarantines of employees, customers, and third-party service providers. At this time, the Company is unable to estimate the impact of this event on its operations.

 

On March 12, 2020, Summer LLC entered into a Loan Agreement (the “Agreement”) with Digital Lending Services US Corp., a Delaware corporation (“Digital Lending”). Pursuant to the Agreement, Digital Lending agreed to provide a revolving loan (the “Loan”) to Summer LLC, and Summer LLC agreed to borrow and repay funds loaned by Digital Lending. The amount of available credit under the Loan is Ten Million Dollars ($10,000,000). The Loan is revolving in nature and is evidenced by a Revolving Promissory Note (the “Note”) and is guaranteed by a Guaranty (the “Guaranty”) by the Company. The maturity date of the Loan is March 11, 2023. The Loan bears interest at a rate of 12.75% per annum, with monthly installment payments of accrued interest only. The principal balance of the Loan may be prepaid at any time at the option of the Company, subject to certain prepayment charges. Simultaneous with the closing of the Loan, the Company paid off all outstanding debt due and owing to Blue Water (Note 8). As a result, the loan agreement and related credit facility with Blue Water was terminated, along with Blue Water’s security interest in and to the assets of the Borrower. In connection with the Agreement, Summer LLC and Digital Lending also entered into a Security Agreement (the “Security Agreement”) and the Company issued a Common Stock Purchase Warrant in favor of Digital Lending. The foregoing summaries of the terms and conditions of the Agreement, the Note, the Security Agreement, and the Guaranty do not purport to be complete, and are qualified in their entirety by reference to the full text of the Agreement, the Note, the Security Agreement and the Guaranty, copies of which are filed as Exhibits 10.1 through 10.4, respectively, to our Current Report on Form 8-K filed with the SEC on March 18, 2020.
v3.20.1
Note 2 - Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2019
Policy Text Block [Abstract]  
Uses and Sources of Liquidity

Uses and Sources of Liquidity

 

The consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern within one year from the date of issuance of these consolidated financial statements.

 

For the years ended December 31, 2019 and 2018, the Company incurred a net loss of $10.7 million and $7.8 million, respectively, and used cash in continuing operations of $9.8 million and $10.4 million, respectively. The Company’s operations have been financed principally from electricity revenues and from capital raised under private placement offerings during the years ended December 31, 2019 and 2018 totaling $5.7 million and $3.6 million, respectively. The Company’s primary sources of liquidity are cash generated from operations, borrowings under credit facility agreements as well as capital raises. The Company’s liquidity requirements are to finance current operations, meet financial commitments, fund organic growth and/or acquisitions, and service debt. The liquidity requirements fluctuate with the level of customer acquisition costs, collateral posting requirements, the effects of the timing between the settlement of payables and receivables, including the effect of weather conditions, and our general working capital needs for ongoing operations. Estimating liquidity requirements is highly dependent on then-current market conditions, including weather events, forward prices for natural gas and electricity, market volatility and our then existing capital structure and requirements.

 

The Company’s continuation as a going concern is dependent upon its ability to increase sales, and/or raise additional funds through the capital markets as well as outside lending. In March 2020, the Company secured additional financing for a revolving loan in the amount of $10,000,000 with a maturity date of March 2023. In addition, commitments for additional lending up to $2,000,000 may be provided by members of the Board of Directors of the Company, if necessary. Management has concluded that its existing capital resources and availability, proceeds from a 2020 offering and outside lending will be sufficient to fund operations through the second quarter of 2021.
Revenue and Cost Recognition

Revenue and Cost Recognition

 

Our revenues are primarily derived from the sale of electricity to residential and small commercial customers. Revenues for sales of electricity are recognized under the accrual method of accounting.

 

Direct energy costs are recorded when the electricity is delivered to the customer’s meter.

 

Cost of goods sold (“COGS”) within the Texas market include electric power purchased and pass through charges from the transmission and distribution service providers (“TDSPs”) in the areas serviced by the Company.  TDSP charges are costs for metering services and maintenance of the electric grid.  TDSP charges are established by regulation of the PUCT.   COGS within the Independent System Operator (“ISO”) for the New England market is comprised of wholesale costs based upon the wholesale power tariff rate for volumes purchased during the delivery month and scheduling fees.  Summer Midwest began flowing electricity within the Pennsylvania, Jersey, Maryland Power Pool (“PJM”) market in July 2019, and the COGS for the PJM market is comprised of wholesale costs based upon the wholesale power tariff for volumes purchased during the delivery month as well as scheduling fees.

 

The energy portion of our COGS is comprised of two components: bilateral wholesale costs and balancing/ancillary costs. These two cost components are incurred and recognized differently as follows:

 

Bilateral wholesale costs are incurred through contractual arrangements with wholesale power suppliers for firm delivery of power at a fixed volume and fixed price. We are invoiced for these wholesale volumes at the end of each calendar month for the volumes purchased for delivery during the month, with payment due 20 days after the end of the month.

 

Balancing/ancillary costs are based on the customer load and are determined by the Electric Reliability Council of Texas (“ERCOT”), ISO New England and PJM through a multiple step settlement process. Balancing costs/revenues are related to the differential between supply that we provided through our bilateral wholesale supply and the supply required to serve our customer load. The Company endeavors to minimize the amount of balancing/ancillary costs through our load forecasting and forward purchasing programs.
Basic and Diluted Income/(Loss) Per Share

Basic and Diluted Income/(Loss) Per Share

 

Basic income/(loss) per share are computed by dividing net income/(loss) applicable to the weighted-average number of shares outstanding during the period. Diluted income per share is determined using the weighted-average number of shares outstanding during the period, adjusted for the dilutive effect of share equivalents, using the treasury method, consisting of shares that might be issued upon exercise of share equivalents. In periods where losses are reported, the weighted average number of shares outstanding excludes share equivalents, because their inclusion would be anti-dilutive.

 

At December 31, 2019, the weighted-average number of dilutive shares equivalents of 815,197 were excluded because their inclusion would have been anti-dilutive. In 2018, the weighted-average number of dilutive share equivalents were 1,209,388 and were excluded as their inclusion would have been anti-dilutive.
Stock-Based Compensation

Stock-Based Compensation

 

Stock-based awards granted to employees are measured at the grant date based on the fair value of the award and recognized as expense over the requisite service or performance period, which is the vesting period.

 

Stock options and warrants issued to consultants and other non-employees as compensation for services to be provided to us are accounted for based upon the fair value of the services provided or the estimated fair value of the option or warrant, whichever can be more clearly determined. We currently use the Black-Scholes option-pricing model to determine the fair value of stock options. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the term of the awards, the expected term of the award, the risk-free interest rate and any expected dividends. Compensation cost associated with grants of restricted stock units are also measured at fair value. We evaluate the assumptions used to value restricted stock units on a quarterly basis. When factors change, including the market price of the stock, share-based compensation expense may differ significantly from what has been recorded in the past. The Company estimates forfeitures at the date of grant and revises the estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

 

If there are any modifications or cancellations of the underlying unvested securities, we may be required to accelerate, increase or cancel any remaining unearned share-based compensation expense.
Income Taxes

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the period in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date.

 

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits and penalties in income tax expense.
Advertising Costs

Advertising Costs

The Company expenses advertising costs as incurred and such costs are included in the operating expenses on the consolidated statements of operations. For the years ended December 31, 2019 and 2018, advertising costs were $281,989 and $241,131, respectively.
New Customer Implementation Costs

New Customer Implementation Costs

We ordinarily incur additional costs to implement our services for new customers. These costs are comprised primarily of additional labor and support. These costs are expensed as incurred and have a negative impact on our statements of operations and cash flows during the implementation phase. We attempt to maintain a disciplined approach to customer implementation costs since these costs influence our profitability. We do not capitalize new customer implementation costs as such costs are typically associated with contracts that are less than one year in duration.
Warrants

Warrants

The Company’s common stock warrants are measured at fair value using the Black-Scholes valuation model, which takes into account, as of the measurement date, factors including the current exercise price, the term of the instrument, the current price of the underlying stock and its expected volatility, expected dividends on the stock and the risk-free interest rate for the term of the item.
Use of Estimates

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Concentration of Credit Risk

Concentration of Credit Risk

 

The Company maintains its cash in demand deposit accounts or “noninterest-bearing transaction accounts” which, at times, may exceed federally insured limits. The Company’s management periodically assesses the financial stability of these banks. The Company has not experienced any losses on such accounts.
Intangibles or Long-lived assets

Intangibles or Long-lived assets

 

The Company periodically evaluates the carrying value of definite-lived intangibles when events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers important that could trigger an impairment review include, but are not limited to, significant under-performance relative to historical or projected future operating results, significant changes in the manner of its use of acquired assets or its overall business strategy, and significant industry or economic trends.

 

When the Company determines that the carrying value of a long-lived asset may not be recoverable based upon the existence of one or more of the above indicators, the Company determines the recoverability by comparing the carrying amount of the asset to net future undiscounted cash flows that the asset is expected to generate and recognizes an impairment charge equal to the amount by which the carrying amount exceeds the fair market value of the asset.

 

If the Company’s revenues or other estimated operating results are not achieved at or above our forecasted level, and the Company is unable to recover such costs through price increases, the carrying value of certain of the Company’s assets may prove to be unrecoverable and we may incur impairment charges of definitive-live intangible assets. The Company recorded no impairment loss for definite-lived intangible assets during the years ended December 31, 2019 or 2018.

 

The Company amortizes definite-lived intangible assets on a straight-line basis over their useful lives. The Company’s capitalized intangible asset for customer relationships in the amount of $3,543,912 is amortized over the three-year life of various customer contracts acquired in the Summer Energy Northeast, LLC acquisition on November 1, 2017. Amortization of the capitalized customer relationships for the years ended December 31, 2019 and 2018 was $1,181,304 and $1,181,304, respectively. The unamortized amount of capitalized customer relationships as of December 31, 2019 and 2018 was $984,420 and $2,165,724, respectively.
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 December 31, 2019 or 2018.

 

Restricted cash represents funds held in escrow for customer deposits, funds held in a controlled account by the wholesale provider (See Note 11) and funds securing irrevocable stand-by letters of credit.

 

    December 31, 2019   December 31, 2018
Cash $ 814,360 $ 451,995
Restricted cash:        
  Escrow for customer deposits   511,461   510,012
  Funds controlled by wholesale provider   1,936,247   1,527,578
  Funds securing letters of credit   750,000   1,365,300
  Total restricted cash   3,197,708   3,402,890
         
 Total cash and restricted cash $ 4,012,068 $ 3,854,885
Accounts Receivable and Unbilled Revenue

Accounts Receivable and Unbilled Revenue

 

Accounts receivable are comprised of trade receivables and unbilled receivables (accrued revenue). Customers are billed monthly in cycles having billing dates that do not generally coincide with the end of a calendar month. This results in customers having received electricity that they have not been billed for as of month end. Therefore, at the end of each calendar month, revenue is accrued to unbilled receivables based on the estimated amount of power delivered to customers using the flow technique. Unbilled revenue also includes accruals for estimated TDSP charges and monthly service charges applicable to the estimated electricity usage for the period. All charges that were physically billed in the calendar month are recorded from the unbilled account to the customer’s receivable account.
Property and Equipment

Property and Equipment

 

Property and equipment are stated at cost and depreciated on a straight-line basis over the following estimated useful lives:

 

  Estimated Lives
Computer software 3 years
Computer hardware 3 years
Furniture and fixtures 5 years
Leasehold improvements 5 years
Website 3 years

 

Expenditures for additions, major renewals and betterments are capitalized, and expenditures for maintenance and repairs are charged against income as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in results of operations.
Deferred Financing Costs

Deferred Financing Costs

 

The Company’s deferred financing costs in the amount of $179,887 was amortized over the two-year life of the financing from Blue Water Capital Funding LLC ended on June 27, 2018. The Company entered into an Amendment to Loan Documents Agreement with Blue Water Capital Funding, LLC on June 27, 2018 and capitalized $12,500 of deferred financing costs to be amortized over the two-year life of the amended loan (See Note 8). Amortization of deferred financing costs for the years ended December 31, 2019 and 2018 were $6,250 and $48,097, respectively. The unamortized amount of deferred financing costs as of December 31, 2019 and 2018 were $3,125 and $9,375, respectively.
Derivative Instruments

Derivative Instruments

 

The Company’s business operations require entering into physically-settled commodity contracts that meets the definition of a derivative. The Company has elected “normal purchases and normal sales” exception, which is a term specific to ASC 815-10-15-22. When the contract satisfies certain criteria, including a requirement that physical delivery of the underlying commodity is probable and is expected to be used in normal course of business. Retail revenues and retail cost of revenues resulting from deliveries of commodities under normal purchase contracts and normal sales contracts are included in earnings at the time of contract settlement.
Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. None of these instruments are held for trading purposes.

 

The recorded value of short-term and long-term debt approximates the fair value as the interest rate approximates market interest rates.
Recent Pronouncements

Accounting Pronouncements Issued But Not Yet Effective

 

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, which reduces the complexity of FASB ASC Topic 740, “Income Taxes” as part of the FASB’s Simplification Initiative. The amendments in this guidance simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for annual reporting periods ending after December 15, 2020, with early adoption permitted, and should be applied on either a retrospective basis for all periods presented or a modified retrospective basis. Management is still assessing the impact this might have on the Company’s consolidated financial statements.

 

The Company has reviewed all other recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that no other pronouncements will have a significant effect on its financial statements.

 

Accounting Pronouncement Issued and Recently Adopted

 

The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), as of January 1, 2019, 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 results of operations and had no impact on cash flows.
v3.20.1
Note 2 - Significant Accounting Policies (Table)
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Schedule of cash and cash equivalent
  December 31, 2019   December 31, 2018
Cash $ 814,360 $ 451,995
Restricted cash:        
  Escrow for customer deposits   511,461   510,012
  Funds controlled by wholesale provider   1,936,247   1,527,578
  Funds securing letters of credit   750,000   1,365,300
  Total restricted cash   3,197,708   3,402,890
         
 Total cash and restricted cash $ 4,012,068 $ 3,854,885
Estimated useful lives of Property and equipment

Property and equipment are stated at cost and depreciated on a straight-line basis over the following estimated useful lives:

 

  Estimated Lives
Computer software 3 years
Computer hardware 3 years
Furniture and fixtures 5 years
Leasehold improvements 5 years
Website 3 years
v3.20.1
Note 3 - Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2019
Table Text Block Supplement [Abstract]  
Schedule of Components of Income Tax Expense (benefit) From Continuing Operations

The components of income tax expense from continuing operations for the years ended December 31, 2019 and 2018 are as follows:

 

    Current   Deferred   Total
2019            
U.S. Federal $                -     $                -     $                -   
States and Local          74,948                  -      74,948
Total $ 74,948  $                -     $ 74,948
             
2018            
U.S. Federal $                -     $                -     $                -   
States and Local          95,110                  -             95,110
Total $        95,110  $                -     $        95,110
             
Schedule of Effective Income Tax Rate Reconciliation

Actual income tax expense for the years ended December 31, 2019 and 2018 is reconciled from the amount computed by applying the U.S. federal income tax rate of 21% to income before income taxes as follows:

 

    2019   2018
Expected tax benefit $ (2,238,210) $ (1,623,190)
Reconciling items:        
Permanent Differences/Discrete Items   252,308   131,100
Change in Valuation Allowance   2,060,850   1,587,200
Change in Tax Rate                  -                     -   
     Total tax expense $ 74,948 $ 95,110
       
Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2019 and 2018 are presented below:

 

    2019   2018
Deferred tax assets:        
Net operating loss carryforward - Federal $ 2,916,740  $ 1,748,600
Federal Minimum Tax                   37,860                   73,750
Reserve for uncollectible receivables                 248,550                  172,500
Amortization of intangible asset                 434,430                 236,600
Disallowed Business Interest Expense                 639,220                  277,150
Donations                      3,700                       1,500
Accrued expenses                 685,000                 398,000
  Total gross deferred tax assets             4,965,500              2,908,100
  Valuation allowance            (4,969,150)           (2,908,300)
  Net deferred tax assets                    (3,650)                       (200)
         
Deferred tax liabilities:        
  Depreciation of plant and equipment                      3,650                         200
Net deferred tax liabilities                      3,650                         200
         
Net deferred tax assets $                           -    $                           -   
         
v3.20.1
Note 4 - Revenue (Tables)
 12 Months Ended
Dec. 31, 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 years ended December 31, 2019 and 2018 from customers, net of respective provisions for refund:

 

    For the year ended December 31, 2019   For the year ended December 31, 2018
Electricity Revenues from Contracts with Customers        
ERCOT Market $ 149,140,983 $ 133,379,103
ERCOT Pre-paid Market   5,993,295   4,829,172
ISO New England Market   7,258,467   10,374,679
PJM Market   55,960                                      -   
Total Electricity Revenues from Contracts with Customers   162,448,705   148,582,954
Other Revenues:        
Fees Revenue   3,867,088   3,320,374
         
Total Revenues: $ 166,315,793 $ 151,903,328
         
Components of accounts receivable and accrued revenue

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

 

    December 31, 2019   December 31, 2018
Accounts receivable from customers        
ERCOT Market $ 9,041,871 $ 7,729,016
ISO New England Market   257,942   544,454
 PJM Market   11,244                                   -
Total accounts receivable from customers   9,311,057   8,273,470
         
Accrued revenue from customers        
ERCOT Market   32,916,970   25,811,607
ISO New England Market   788,395   1,006,895
PJM Market   15,088                                   -
Total accrued revenue with customers   33,720,453   26,818,502
         
Allowance for doubtful accounts   (1,183,561)   (821,424)
         
Total accounts receivable and accrued revenue $ 41,847,949 $ 34,270,548
         
Schedule of Bad debt expense, write-offs and recoveries

The allowance for doubtful accounts, bad debt expense, write-offs and recoveries were as follows:

 

    For the year ended December 31, 2019   For the year ended December 31, 2018
         
Beginning of year $ 821,424 $ 1,176,958
Bad debt expense   1,010,549   1,121,396
Net write offs/recoveries   (648,412)   (1,476,930)
End of year $ 1,183,561 $ 821,424
v3.20.1
Note 8 - Financing From Blue Water Capital Funding LLC (Tables)
 12 Months Ended
Dec. 31, 2019
Blue Water Capital Funding  
Schedule of accrued interest

Interest accrued during the years ended December 31, 2019 and 2018 was as follows:

 

    For the Years Ended December 31,
    2019   2018
Blue Water Capital interest expense $ 500,404 $ 459,068
v3.20.1
Note 9 - Comerica Bank Master Revolving Note (Tables)
 12 Months Ended
Dec. 31, 2019
Comerica Bank | Note  
Schedule of accrued interest

Interest expense accrued as follows:

 

    For the Years Ended December 31,
    2019   2018
Comerica Revolver Note interest expense $ 77,715 $                            6,001
v3.20.1
Note 10 - Comerica Bank Single Payment Note (Tables)
 12 Months Ended
Dec. 31, 2019
Comerica Bank | Single Note  
Schedule of accrued interest

Interest expense accrued as follows:

 

    For the Years Ended December 31,
    2019   2018
Comerica Single Note interest expense $ 3,500 $                                  -   
v3.20.1
Note 11 - Wholesale Power Purchase Agreement with EDF (Tables)
 12 Months Ended
Dec. 31, 2019
EDF  
Schedule of accrued interest

For the years ended December 31, 2019 and 2018, the Company expensed interest to EDF as follows:

 

    For the Years Ended December 31,
    2019   2018
EDF interest expense $ 1,128,231 $ 575,733
v3.20.1
Note 12 - Wholesale Power Purchase Agreement Summer LLC With DTE (Tables)
 12 Months Ended
Dec. 31, 2019
DTE  
Schedule of accrued interest

For the years ended December 31, 2019 and 2018, interest accrued to DTE was as follows:

 

    For the Years Ended December 31,
    2019   2018
DTE interest expense $ - $ 144,192
v3.20.1
Note 13 - Lease Liabilities, Commitments qnd Contingencies (Tables)
 12 Months Ended
Dec. 31, 2019
Table Text Block Supplement [Abstract]  
Schedule of Future Minimum Rental Payments for Operating Leases

Operating lease future minimum payments together with their present values as of December 31, 2019 are summarized as follows:

 

    Operating Leases
2020 $ 204,156
2021   199,494
2022   199,494
2023   197,294
2024   190,694
Thereafter   190,693
Total future minimum lease payments   1,181,825
Less amounts representing interest   (202,640)
Present value of lease liability $ 979,185
     
Current-portion operating lease liability   (144,902)
     
Long-term portion operating lease liability $ 834,283
v3.20.1
Note 14 - Long Term Obligations (Tables)
 12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Schedule of Long-term debt

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

 

    For the Years Ended December 31,
    2019   2018
Financing from First Insurance Funding (Note 7) $ 38,397 $                                  -   
Financing from Blue Water Capital Funding, LLC (Note 8)   4,920,000   4,920,000
Comerica Bank Master Revolving Note (Note 9)   2,900,000   2,900,000
Comerica Bank Single Payment Note (Note 10)   2,100,000                                    -   
Wholesale Power Purchase Agreement with EDF (Note 11)   4,511,006   4,136,006
Operating lease obligations (Note 13)   979,185                                    -   
Total obligations $ 15,448,588 $ 11,956,006
         
Less current portion of obligations   (5,038,397)                                    -   
Less current portion operating lease obligations   (144,902)                                    -   
Long-term portion of obligations $ 10,265,289 $ 11,956,006
         
Schedule of accrued interest

During the years ended December 31, 2019 and 2018, interest expense incurred on obligations of the Company was as follows:

 

    For the Years Ended December 31,
    2019   2018
Financing from First Insurance Funding (Note 7) $                       3,185 $                       2,182
Financing from Blue Water Capital Funding, LLC (Note 8)                     500,404                     459,068
Comerica Master Revolving Note (Note 9)                       77,715                         6,001
Comerica Bank Single Payment Note (Note 10)                         3,500                               -   
Wholesale Power Purchase Agreement with EDF (Note 11)                  1,128,231                     575,733
Wholesale Power Purchase Agreement with DTE (Note 12)                               -                        144,192
Master Revolver Note Assumed in Acquisition (Note 22)                               -                            3,225
Debt to Related Party Assumed in Acquisition (Note 23)                               -                          35,057
Related Party interest on Summer Northeast Guarantees Assumed                               -                          59,515
Related Party Loans (Note 24)                       16,043                         9,545
Related Party Guarantors (Note 25)                     175,833                       12,567
Other interest                            276                            349
Total interest expense $                1,905,187 $                1,307,434
         
Interest income   62,204   35,425
         
Interest expense, net $ 1,842,983 $ 1,272,009
v3.20.1
Note 15 - 2012 Stock Option and Stock Award Plan (Tables)
 12 Months Ended
Dec. 31, 2019
2012 Stock Option and Stock Award Plan  
Schedule of Share-based Compensation, Stock Options, Activity

As of December 31, 2019, the Company had outstanding granted stock options from the 2012 Plan, net of forfeitures to purchase 632,000 shares summarized as follows:

 

    Options   Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (in Years)   Aggregate Intrinsic Value
Outstanding at December 31, 2017   632,000 $ 1.24   5.88 $ 798,250
Options granted    -            
Options exercised   -            
Options cancelled/forfeited/expired   -            
Outstanding at December 31, 2018   632,000 $ 1.24   4.87 $ 117,250
Options granted    -            
Options exercised   -            
Options cancelled/forfeited/expired   -            
Outstanding at December 31, 2019   632,000 $ 1.24   3.86 $ 316,258
                 
Vested at December 31, 2019   632,000 $ 1.24   3.86 $ 316,258
                 
Exercisable at December 31, 2019   632,000 $ 1.24   3.86 $ 316,258
v3.20.1
Note 16 - 2015 Stock Option and Stock Award Plan (Tables)
 12 Months Ended
Dec. 31, 2019
2015 Stock Option and Stock Award Plan  
Schedule of Share-based Compensation, Stock Options, Activity

As of December 31, 2019, the Company had outstanding granted stock options from the 2015 Stock Option and Stock Award Plan, net of forfeitures, to purchase 1,481,000 shares summarized as follows:

 

    Shares   Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (in Years)   Aggregate Intrinsic Value
Outstanding at December 31, 2017   1,430,000 $ 1.74   8.42 $ 1,086,750
Options granted   51,000 $ 2.28                       8.99    
Options exercised   -            
Options cancelled/forfeited/expired   -            
Outstanding at December 31, 2018   1,481,000 $                     1.76                       7.46 $ 133,500
Options granted   -            
Options exercised   -            
Options cancelled/forfeited/expired   -            
Outstanding at December 31, 2019   1,481,000 $                     1.76                       6.45 $ 381,825
                 
Vested at December 31, 2019   1,246,000 $ 1.62   6.35 $ 381,825
                 
Exercisable at December 31, 2019   1,246,000 $ 1.62   6.35 $ 381,825
                 
v3.20.1
Note 17 - 2018 Stock Option and Stock Award Plan (Tables)
 12 Months Ended
Dec. 31, 2019
Schedule of options granted to purchase common stock

On February 20, 2018, the Company granted the following options to purchase common stock under the 2018 Plan to key officers of the Company:

 

Name   Number of Options   Exercise Price   Date of Vest
Angela Hanley   150,000 $ 2.50   February 20, 2023
Jaleea George   85,000 $ 2.50   February 20, 2023
Angela Hanley   15,000 $ 2.50   July 1, 2018
Jaleea George   15,000 $ 2.50   July 1, 2018
Neil Leibman   15,000 $ 2.50   July 1, 2018
Total   280,000        
2018 Stock Option and Stock Award Plan  
Schedule of Share-based Compensation, Stock Options, Activity

As of December 31, 2019, the Company had outstanding granted stock options from the 2018 Stock Option and Stock Award Plan, net of forfeitures to purchase 1,331,250 shares summarized as follows:

 

    Shares   Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (in Years)   Aggregate Intrinsic Value
Outstanding at December 31, 2017   - $ -   - $ -
Options granted   501,250 $ 2.42                       7.36    
Options exercised   -            
Options cancelled/forfeited/expired   -            
Outstanding at December 31, 2018   501,250 $                     2.42                       7.36 $                        -   
Options granted   830,000 $                     1.97                       7.61    
Options exercised                          -               
Options cancelled/forfeited/expired                          -               
Outstanding at December 31, 2019   1,331,250 $                     2.14                       7.13 $ 23,500
                 
Vested at December 31, 2019   548,750 $ 2.13   7.00 $ 23,500
                 
Exercisable at December 31, 2019   548,750 $ 2.13   7.00 $ 23,500
                 
v3.20.1
Note 18 - Nonqualified Stock Options Granted to Board of Directors (Tables)
 12 Months Ended
Dec. 31, 2019
Nonqualified Stock Options  
Schedule of Share-based Compensation, Stock Options, Activity

As of December 31, 2019, the Company had outstanding stock options, net of forfeitures, granted outside of any stock option or stock award plan summarized as follows:

 

    Options   Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (in Years)   Aggregate Intrinsic Value
Outstanding at December 31, 2017   302,230 $ 1.50   4.31 $ 453,345
Options granted                          -               
Options exercised   -            
Options cancelled/forfeited/expired   -            
Outstanding at December 31, 2018   302,230 $                     1.50                       3.30 $ 105,781
Options granted   107,500 $                     2.25                       7.85    
Options exercised                          -               
Options cancelled/forfeited/expired                          -               
Outstanding at December 31, 2019   409,730 $                     1.70                       3.74 $ 222,139
                 
Vested at December 31, 2019   409,730 $                     1.70   3.74 $ 222,139
                 
Exercisable at December 31, 2019   409,730 $                     1.70   3.74 $ 222,139
                 
v3.20.1
Note 19 - Warrants (Tables)
 12 Months Ended
Dec. 31, 2019
Table Text Block Supplement [Abstract]  
Schedule of warrant expense

Total warrant expense of the Company for years ended December 31, 2019 and 2018 is summarized as follows:

 

    For the year ended December 31, 2019   For the year ended December 31, 2018
         
Broker warrant compensation expense $ 104,951 $                              -   
Consulting warrant compensation expense   143,731                                -   
  $ 248,682 $                              -   
Schedule of Warrant activity

Warrant activity for the years ended December 31, 2019 and 2018 was as follows:

 

Outstanding at December 31, 2017   Shares   Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (in Years)   Grant Date Fair Value
    1,620,000 $ 1.43                       1.73 $ 102,744
Warrants granted   -   -   -   -
Warrants exercised   -   -   -   -
Warrants cancelled/forfeited/expired   (260,000)   1.50   -   (10,666)
Outstanding at December 31, 2018   1,360,000 $ 1.42                       0.93 $          92,078
Warrants granted   137,204   1.50   4.25          248,683
Warrants exercised   (536,000)   1.50   -          (21,976)
Warrants cancelled/forfeited/expired   (20,000)   1.50   -               (820)
Outstanding at December 31, 2019   941,204 $ 1.38                       3.32 $ 317,965
                 
Vested at December 31, 2019   675,967 $                     1.53                       3.01 $ 272,915
                 
Exercisable at December 31, 2019   675,967 $                     1.53                       3.01 $ 272,915
                 
v3.20.1
Note 21 - Property and Equipment (Tables)
 12 Months Ended
Dec. 31, 2019
Table Text Block Supplement [Abstract]  
Schedule of Property and Equipment

As of December 31, 2019, and 2018, property and equipment consisted of the following:

 

    2019   2018
Computer software $ 137,091 $ 127,954
Computer hardware   204,768   199,830
Furniture and fixtures   56,023   56,023
Leasehold improvements   128,593   129,721
Website   775,881   775,881
    Total property and equipment   1,302,356   1,289,409
Less: Accumulated depreciation   (1,243,938)   (1,207,200)
    Property and equipment, net $ 58,418 $ 82,209
         
v3.20.1
Note 22 - Master Revolver Note Assumed in Acquisition (Tables)
 12 Months Ended
Dec. 31, 2019
Master Note  
Schedule of interest paid

The Company paid the following interest related to the Master Note for the years ended December 31, 2019 and 2018 as follows:

 

    For the year ended December 31, 2019   For the year ended December 31, 2018
Master Revolver Note interest expense $                                                   -    $ 3,225
v3.20.1
Note 23 - Debt To Related Parties Assumed in Acquisition (Tables)
 12 Months Ended
Dec. 31, 2019
Summer Northeast  
Schedule of interest paid

For the years ended December 31, 2019 and 2018, the Company incurred interest on such related party debt assumed as follows:

 

    For the year ended December 31, 2019   For the year ended December 31, 2018
Related Party Debt Assumed interest expense $                                                   -    $ 35,057
v3.20.1
Note 24 - Related Party Loans (Tables)
 12 Months Ended
Dec. 31, 2019
BlueWaterCapitalFundingMember  
Summary interest paid to related parties

The following table summarizes interest paid to related parties during the years ended December 31, 2019 and 2018:

 

    For the Years Ended December 31,
    2019   2018
Related party interest expense for $250,000 loan  $                                  -     $                            5,103
Related party interest expense for $373,000 loan                                    -                                 3,884
Related party interest expense for $80,000 loan                                    -                                    558
Related party interest expense for $473,000 loan                              2,009                                    -   
Related party interest expense for $25,000 loan                                 106                                    -   
Related party interest expense for $850,000 loan                              6,288                                    -   
Related party interest expense for $1,000,000 loan                              7,398                                    -   
Related party interest expense for $590,000 loan                                 242                                    -   
Total $ 16,043 $ 9,545
         
v3.20.1
Note 25 - Related Party Guarantors (Tables)
 12 Months Ended
Dec. 31, 2019
Guarantors  
Schedule of accrued interest

The Company accrued interest expense as follows:

 

    For the year ended December 31, 2019   For the year ended December 31, 2018
Guarantor interest expense on Comerica revolver note $ 167,433 $ 12,567
Guarantor interest expense on Comerica single note $ 8,400 $ -
v3.20.1
Note 26 - Other Related Party Transactions (Tables)
 12 Months Ended
Dec. 31, 2019
PDS  
Schedule of lease expense

During the years ended December 31, 2019 and 2018, the following expense was accrued in association with the Summer Northeast sublease:

 

    For the year ended December 31, 2019   For the year ended December 31, 2018
Summer Northeast sublease payments $ 27,970 $ 41,583
v3.20.1
Note 28 - Employee Stock Purchase Plan (Tables)
 12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Schedule of employer match

The employer match for the year ended December 31, 2019 and 2018 was as follows:

 

    For the year ended December 31, 2019   For the year ended December 31, 2018
Employee Stock Purchase Plan $ 3,023 $ 5,208
v3.20.1
Note 1 - Organization (Details)
 12 Months Ended
Dec. 31, 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
v3.20.1
Note 2 - Significant Accounting Policies: (Uses and Sources of Liquidity) (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Disclosure Text Block [Abstract]    
Net loss $ (10,733,089) $ (7,753,870)
Net cash used in operating activities (9,795,278) (10,377,919)
Private placement offerings 5,730,000 $ 3,637,500
Revolving loan in amount 10,000,000  
Additional loan $ 2,000,000  
v3.20.1
Note 2 - Significant Accounting Policies: Basic and Diluted Loss Per Unit (Details) - shares
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Text Block [Abstract]    
Weighted-average number of share equivalents excluded from calculation 815,197 1,209,388
v3.20.1
Note 2 - Significant Accounting Policies: Advertising Costs (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Disclosure Text Block [Abstract]    
Advertising costs $ 281,989 $ 241,131
v3.20.1
Note 2 - Significant Accounting Policies: Intangibles or Long-lived assets (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Disclosure Text Block [Abstract]    
Impairment loss $ 0 $ 0
Capitalized intangible asset for customer relationships 3,543,912  
Amortization of capitalized customer relationships 1,181,304 1,181,304
Unamortized of capitalized customer relationships $ 984,420 $ 2,165,724
v3.20.1
Note 2 - Significant Accounting Policies: Cash and Restricted Cash: Schedule of Cash and Restricted Cash (Details) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Text Block [Abstract]      
Cash $ 814,360 $ 451,995  
Restricted cash:      
Escrow for customer deposits 511,461 510,012  
Funds controlled by wholesale provider 1,936,247 1,527,578  
Funds securing letters of credit 750,000 1,365,300  
Total restricted cash 3,197,708 3,402,890  
Total cash and restricted cash $ 4,012,068 $ 3,854,885 $ 1,992,036
v3.20.1
Note 2 - Significant Accounting Policies: Property and Equipment (Details)
 12 Months Ended
Dec. 31, 2019
Software and Software Development Costs  
Property, Plant and Equipment, Useful Life 3 years
Computer Equipment  
Property, Plant and Equipment, Useful Life 3 years
Furniture and Fixtures  
Property, Plant and Equipment, Useful Life 5 years
Leasehold Improvements  
Property, Plant and Equipment, Useful Life 5 years
Website  
Property, Plant and Equipment, Useful Life 3 years
v3.20.1
Note 2 - Significant Accounting Policies: Deferred Financing Costs (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Amortization of Financing Costs $ 6,250 $ 48,097
Unamortized deferred financing costs 3,125 9,375
Other Machinery and Equipment    
Deferred Finance Costs, Gross $ 12,500 $ 179,887
v3.20.1
Note 2 - Significant Accounting Policies: Accounting Standards Adopted (Details)
Jan. 02, 2019
USD ($)
Text Block [Abstract]  
Additional lease assets and liabilities $ 1,265,562
v3.20.1
Note 3 - Income Taxes (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Text Block [Abstract]    
Valuation allowance $ (4,969,150) $ (2,908,300)
Federal net Operating Loss Carryforwards $ 13,889,200  
Operating Loss Carryforwards, Expiration Date Dec. 31, 2038  
Operating Loss Carryforwards description $10,707,300 is carried forward indefinitely. Due to a Section 382 limitation, some of the net operating loss will be limited each year until 2032.  
v3.20.1
Note 3 - Income Taxes: Schedule of Components of Income Tax Expense (benefit) From Continuing Operations (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Text Block [Abstract]    
Current U.S. Federal $ 0 $ 0
Deferred Federal 0 0
Total Federal 0 0
Current States and Local 74,948 95,110
Deferred States and Local 0 0
Total States and Local 74,948 95,110
Current Total 74,948 95,110
Deferred Total 0 0
Total $ 74,948 $ 95,532
v3.20.1
Note 3 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Text Block [Abstract]    
Federal tax rate 21.00% 21.00%
Expected tax benefit $ (2,238,210) $ (1,623,190)
Reconciling items    
Permanent Differences/Discrete Items 252,308 131,100
Change in Valuation Allowance 2,060,850 1,587,200
Change in Tax Rate 0 0
Total $ 74,948 $ 95,532
v3.20.1
Note 3 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Deferred tax assets:    
Net operating loss carryforward - Federal $ 2,916,740 $ 1,748,600
Federal Minimum Tax 37,860 73,750
Reserve for uncollectible receivables 248,550 172,500
Amortization of intangible asset 434,430 236,600
Disallowed Business Interest Expense 639,220 277,150
Donations 3,700 1,500
Accrued expenses 685,000 398,000
Total gross deferred tax assets 4,965,500 2,908,100
Valuation allowance (4,969,150) (2,908,300)
Net deferred tax assets (3,650) (200)
Deferred tax liabilities:    
Depreciation of plant and equipment 3,650 200
Net deferred tax liabiliites 3,650 200
Net deferred tax assets $ 0 $ 0
v3.20.1
Note 4 - Revenue (Details) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Allowance for doubtful accounts $ 1,183,561 $ 821,424
Texas Market    
Unbilled accounts 32,916,970 25,811,607
ISO New England Market    
Unbilled accounts 788,395 1,006,895
PJM Market    
Unbilled accounts $ 15,088 $ 0
v3.20.1
Note 4 - Revenue: Summary of revenues from customers net of respective provisions for refund (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Total Electricity Revenues from Contracts with Customers $ 162,448,705 $ 148,582,954
Fees Revenue 3,867,088 3,320,374
Total Revenues 166,315,793 151,903,328
ERCOT Market    
Total Electricity Revenues from Contracts with Customers 149,140,983 133,379,103
ERCOTPre-PaidMarket    
Total Electricity Revenues from Contracts with Customers 5,993,295 4,829,172
ISO New England Market    
Total Electricity Revenues from Contracts with Customers 7,258,467 10,374,679
PJM Market    
Total Electricity Revenues from Contracts with Customers $ 55,960 $ 0
v3.20.1
Note 4 - Revenue: Components of accounts receivable and accrued revenue (Details) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Total accounts receivable from customers $ 9,311,057 $ 8,273,470
Total accrued revenue with customers 33,720,453 26,818,502
Allowance for doubtful accounts (1,183,561) (821,424)
Total accounts receivable and accrued revenue 41,847,949 34,270,548
ERCOT Market    
Total accounts receivable from customers 9,041,871 7,729,016
Total accrued revenue with customers 32,916,970 25,811,607
ISO New England Market    
Total accounts receivable from customers 257,942 544,454
Total accrued revenue with customers 788,395 1,006,895
PJM Market    
Total accounts receivable from customers 11,244 0
Total accrued revenue with customers $ 15,088 $ 0
v3.20.1
Note 4 - Revenue: Bad debt expense, write-offs and recoveries (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]    
Beginning of year $ 821,424 $ 1,176,958
Bad debt expense 1,010,549 1,121,396
Net write offs and recoveries (648,412) (1,476,930)
End of year $ 1,183,561 $ 821,424
v3.20.1
Note 5 - Letters of Credit and Cash Deposits (Details) - Letter of Credit - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Line of Credit Facility, Maximum Borrowing Capacity $ 0 $ 565,300
Letters of Credit Outstanding, Amount 0  
Letters of credit facility   750,000
Connecticut Department    
Letters of credit facility 250,000  
State of New Hampshire    
Letters of credit facility $ 500,000  
Letters of credit facility, expiration period May 01, 2020  
Summer Northeast    
Cash deposits $ 1,387,181 1,355,108
Summer Midwest    
Line of Credit Facility, Maximum Borrowing Capacity 0 50,000
Cash deposits 713,000 0
Letters of credit facility, Cancelled 50,000  
ERCOT Market    
Cash deposits $ 1,004,059 $ 1,181,480
v3.20.1
Note 6 - Surety Bonds (Details)
Dec. 31, 2019
USD ($)
Cash held by surety bond $ 300,000
Illinois Commerce Commission  
Surety Bonds 500,000
Pennsylvania Public Utility Commission  
Surety Bonds $ 250,000
v3.20.1
Note 7 - Financing From First Insurance Funding (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
May 31, 2019
Options, Exercised, Weighted Average Remaining Contractual Term    
Premiums, taxes and fees $ 150,575  
Periodic payment $ 22,586  
Interest rate 6.45%  
Outstanding balance $ 38,397 $ 127,989
Accrued interest $ 3,185  
v3.20.1
Note 8 - Financing From Blue Water Capital Funding LLC (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Long-term debt $ 10,265,289 $ 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 9.50% 10.25%
Financing fee $ 22,500  
Long-term debt $ 4,920,000 $ 4,920,000
v3.20.1
Note 8 - Financing From Blue Water Capital Funding LLC: Interest accrued (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Interest accrued $ 1,905,187 $ 1,307,434
Blue Water Capital Funding    
Interest accrued $ 500,404 $ 459,068
v3.20.1
Note 9 - Comerica Bank Master Revolving Note (Details) - USD ($)
 12 Months Ended
Dec. 20, 2019
Dec. 18, 2018
Dec. 31, 2019
Dec. 31, 2018
Proceeds from Comerica Bank note     $ 4,300,000 $ 2,900,000
Comerica Bank        
Proceeds from Comerica Bank note $ 2,100,000 $ 2,900,000    
Comerica Bank | Note        
Proceeds from Comerica Bank note   $ 2,900,000    
Maturity Date   Jun. 11, 2020    
Interest rate   5.75%    
Comerica Bank Loan outstanding     $ 2,900,000 $ 2,900,000
v3.20.1
Note 9 - Comerica Bank Master Revolving Note: Interest accrued (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Interest accrued $ 1,905,187 $ 1,307,434
Comerica Bank | Note    
Interest accrued $ 77,715 $ 6,001
v3.20.1
Note 10 - Comerica Bank Master Revolving Note (Details) - USD ($)
 12 Months Ended
Dec. 20, 2019
Dec. 18, 2018
Dec. 31, 2019
Dec. 31, 2018
Proceeds from Comerica Bank note     $ 4,300,000 $ 2,900,000
Comerica Bank        
Proceeds from Comerica Bank note $ 2,100,000 $ 2,900,000    
Comerica Bank | Single Note        
Proceeds from Comerica Bank note $ 2,100,000      
Maturity Date Jun. 20, 2020      
Interest rate 5.00%      
Comerica Bank Loan outstanding     $ 2,100,000 $ 0
v3.20.1
Note 10 - Comerica Bank Single Payment Note: Interest accrued (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Interest accrued $ 1,905,187 $ 1,307,434
Comerica Bank | Single Note    
Interest accrued $ 3,500 $ 0
v3.20.1
Note 11 - Wholesale Power Purchase Agreement with EDF (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Long-term debt $ 10,265,289 $ 11,956,006
EDF    
Long-term debt 4,511,006 $ 4,136,006
Repayment of loan $ 588,000  
v3.20.1
Note 11 - Wholesale Power Purchase Agreement with EDF: Interest accrued (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Interest accrued $ 1,905,187 $ 1,307,434
EDF    
Interest accrued $ 1,128,231 $ 575,733
v3.20.1
Note 12 - Wholesale Power Purchase Agreement Summer LLC With DTE : Interest accrued (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Interest accrued $ 1,905,187 $ 1,307,434
DTE    
Interest accrued $ 0 $ 144,192
v3.20.1
Note 13 - Operating Lease Commitments and Contingencies (Details) - USD ($)
 4 Months Ended 10 Months Ended 12 Months Ended 30 Months Ended
Sep. 01, 2019
Dec. 01, 2018
Feb. 28, 2018
Aug. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Feb. 28, 2020
Lease Expense         $ 732,000 $ 626,980  
Operating lease liabilities         979,185 0  
Long-term portion operating lease liability         $ 834,283    
Weighted-average remaining lease term for operating leases         5 years 10 months 25 days    
Weighted-average discount rate for operating leases         6.50%    
Summer LLC              
Rent payments   $ 15,900          
Termination Date   Dec. 31, 2025          
PDS Management Group, LLC              
Rent payments $ 1,698   $ 3,727 $ 3,904     $ 2,255
Termination Date Feb. 28, 2020            
Suppliers              
Contractual commitments         $ 967,490 $ 535,445  
v3.20.1
Note 13 - Operating Lease Commitments and Contingencies: Future Minimum Rental Payments for Operating Leases (Details) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Text Block [Abstract]    
2020 $ 204,156  
2021 199,494  
2022 199,494  
2023 197,294  
2024 190,694  
Thereafter 190,693  
Total future minimum lease payments 1,181,825  
Less amounts representing interest (202,640)  
Present value of lease liability 979,185 $ 0
Current-portion operating lease liability (144,902) $ 0
Long-term portion operating lease liability $ 834,283  
v3.20.1
Note 14 - Long Term Obligations: Schedule of Long-term debt (Details) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Operating lease obligations $ 979,185 $ 0
Total obligations 15,448,588 11,956,006
Less current portion of obligations (5,038,397) 0
Less current portion operating lease obligations (144,902) 0
Long-term debt 10,265,289 11,956,006
EDF    
Total obligations 4,511,006 4,136,006
Long-term debt 4,511,006 4,136,006
Comerica Bank | Note    
Total obligations 2,900,000 2,900,000
Comerica Bank | Single Note    
Total obligations 2,100,000 0
First Insurance Funding    
Total obligations 38,397 0
Blue Water Capital Funding    
Total obligations 4,920,000 4,920,000
Long-term debt $ 4,920,000 $ 4,920,000
v3.20.1
Note 14 - Long Term Obligations: Interest expense (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Interest expense $ 1,905,187 $ 1,307,434
Interest income 62,204 35,425
Interest expense, net 1,842,983 1,272,009
EDF    
Interest expense 1,128,231 575,733
DTE    
Interest expense 0 144,192
Master Note    
Interest expense 0 3,225
Summer Northeast    
Interest expense 0 35,057
Summer Northeast Guarantees    
Interest expense 0 59,515
Related Party Loans    
Interest expense 16,043 9,545
Guarantors    
Interest expense 175,833 12,567
Others    
Interest expense 276 349
Comerica Bank | Note    
Interest expense 77,715 6,001
Comerica Bank | Single Note    
Interest expense 3,500 0
First Insurance Funding    
Interest expense 3,185 2,182
Blue Water Capital Funding    
Interest expense $ 500,404 $ 459,068
v3.20.1
Note 15 - 2012 Stock Option and Stock Award Plan (Details) - 2012 Stock Option and Stock Award Plan - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 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
v3.20.1
Note 15 - 2012 Stock Option and Stock Award Plan: Schedule of Share-based Compensation, Stock Options, Activity (Details) - 2012 Stock Option and Stock Award Plan - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Options, Outstanding 632,000 632,000  
Options, Outstanding, Weighted Average Exercise Price $ 1.24 $ 1.24  
Options, Outstanding, Weighted Average Remaining Contractual Life 3 years 10 months 10 days 4 years 10 months 14 days 5 years 10 months 17 days
Options, Outstanding, Aggregate Intrinsic Value $ 316,258 $ 117,250 $ 798,250
Options, Granted 0 0  
Options, Granted, Weighted Average Exercise Price $ 0 $ 0  
Options, Granted, Weighted Average Remaining Contractual Life 0 years 0 years  
Options, Granted, Aggregate Intrinsic Value $ 0 $ 0  
Options, Exercised 0 0  
Options, Exercised, Weighted Average Exercise Price $ 0 $ 0  
Options, Exercised, Weighted Average Remaining Contractual Term 0 years 0 years  
Options, Exercised, Aggregate Intrinsic Value $ 0 $ 0  
Options, Cancelled/Forfeited/Expired 0 0  
Options, Cancelled/Forfeited/Expired, Weighted Average Exercise Price $ 0 $ 0  
Options, Cancelled/Forfeited/Expired, Aggregate Intrinsic Value $ 0 $ 0  
Options, Outstanding 632,000 632,000 632,000
Options, Outstanding, Weighted Average Exercise Price $ 1.24 $ 1.24 $ 1.24
Options, Vested 632,000    
Options, Vested, Weighted Average Exercise Price $ 1.24    
Options, Vested, Weighted Average Remaining Contractual Life 3 years 10 months 10 days    
Options, Vested, Aggregate Intrinsic Value $ 316,258    
Options, Exercisable 632,000    
Options, Exercisable, Weighted Average Exercise Price $ 1.24    
Options, Exercisable, Weighted Average Remaining Contractual Life 3 years 10 months 10 days    
Options, Exercisable, Aggregate Intrinsic Value $ 316,258    
v3.20.1
Note 16 - 2015 Stock Option and Stock Award Plan (Details) - 2015 Stock Option and Stock Award Plan - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Number of Shares Authorized 1,500,000  
Shares available for issuance 19,000  
Allocated Share-based Compensation Expense $ 157,645 $ 206,748
Unrecognized expense for unvested options $ 83,915 $ 197,199
Non-vested shares 235,000 241,000
Weighted-average grant date fair value of stock options granted   $ 0.92
Employee Stock Option    
Shares issued 51,000 51,000
Fair value of shares issued $ 111,911 $ 111,911
Fair Value Assumptions, Method Used Black-Scholes option-pricing model Black-Scholes option-pricing model
Risk-free interest rate 2.25% 2.25%
Estimated volatility 110.73% 110.73%
Dividend yield 0.00% 0.00%
Expected life of the options 8 years 8 years
Deferred Compensation Arrangement with Individual, Requisite Service Period 6 years 11 months 15 days 7 years 9 months 11 days
v3.20.1
Note 16 - 2015 Stock Option and Stock Award Plan: Schedule of Share-based Compensation, Stock Options, Activity (Details) - 2015 Stock Option and Stock Award Plan - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Options, Outstanding 1,481,000 1,430,000  
Options, Outstanding, Weighted Average Exercise Price $ 1.76 $ 1.74  
Options, Outstanding, Weighted Average Remaining Contractual Life 6 years 5 months 12 days 7 years 5 months 16 days 8 years 5 months 1 day
Options, Outstanding, Aggregate Intrinsic Value $ 381,825 $ 133,500 $ 1,086,750
Options, Granted 0 51,000  
Options, Granted, Weighted Average Exercise Price   $ 2.28  
Options, Granted, Weighted Average Remaining Contractual Life   8 years 11 months 26 days  
Options, Granted, Aggregate Intrinsic Value   $ 0  
Options, Exercised 0 0  
Options, Exercised, Weighted Average Exercise Price   $ 0  
Options, Exercised, Weighted Average Remaining Contractual Term   0 years  
Options, Exercised, Aggregate Intrinsic Value   $ 0  
Options, Cancelled/Forfeited/Expired 0 0  
Options, Cancelled/Forfeited/Expired, Weighted Average Exercise Price   $ 0  
Options, Cancelled/Forfeited/Expired, Aggregate Intrinsic Value   $ 0  
Options, Outstanding 1,481,000 1,481,000 1,430,000
Options, Outstanding, Weighted Average Exercise Price $ 1.76 $ 1.76 $ 1.74
Options, Vested 1,246,000    
Options, Vested, Weighted Average Exercise Price $ 1.62    
Options, Vested, Weighted Average Remaining Contractual Life 6 years 5 months 12 days    
Options, Vested, Aggregate Intrinsic Value $ 381,825    
Options, Exercisable 1,246,000    
Options, Exercisable, Weighted Average Exercise Price $ 1.62    
Options, Exercisable, Weighted Average Remaining Contractual Life 6 years 5 months 12 days    
Options, Exercisable, Aggregate Intrinsic Value $ 381,825    
v3.20.1
Note 17 - 2018 Stock Option and Stock Award Plan (Details) - 2018 Stock Option and Stock Award Plan - USD ($)
 1 Months Ended 12 Months Ended
Apr. 12, 2019
Sep. 28, 2018
Jul. 01, 2018
Sep. 16, 2019
Jun. 28, 2019
Mar. 29, 2019
Dec. 27, 2018
Jun. 29, 2018
Apr. 19, 2018
Feb. 20, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Number of Shares Authorized                     1,500,000    
Shares available for issuance                     168,750    
Date of Vest     Jul. 01, 2018             Jul. 01, 2018      
Option vested     45,000             235,000      
Stock options exercise price     $ 2.50             $ 2.50 $ 2.14 $ 2.42 $ .00
Fair value of option vested     $ 103,238             $ 539,132 $ 830,000 $ 501,250  
Fair Value Assumptions, Method Used     Black-Scholes option-pricing model             Black-Scholes option-pricing model      
Risk-free interest rate     2.65%             2.65%      
Estimated volatility     119.27%             119.27%      
Dividend yield     0.00%             0.00%      
Expected life of the options     8 years             8 years      
Allocated Share-based Compensation Expense                     1,009,303 $ 624,876  
Unrecognized expense for unvested options                     $ 1,001,385    
Non-vested shares                     782,500    
Deferred Compensation Arrangement with Individual, Requisite Service Period                     7 years 2 months 23 days    
Weighted-average grant date fair value of stock options granted                     $ 1.98 $ 2.17  
NonEmployee Stock Option                          
Date of Vest                 Jul. 01, 2018        
Option vested   53,750   620,000 53,750 56,250 53,750 53,750 45,000     15,000  
Stock options exercise price       $ 2.00 $ 2.25 $ 2.25     $ 2.25        
Fair value of option vested   $ 102,644   $ 1,192,515 $ 103,829 $ 107,960 $ 102,656 $ 126,864 $ 81,659     $ 29,698  
Fair Value Assumptions, Method Used   Black-Scholes option-pricing model   Black-Scholes option-pricing model Black-Scholes option-pricing model Black-Scholes option-pricing model Black-Scholes option-pricing model Black-Scholes option-pricing model Black-Scholes option-pricing model     Black-Scholes option-pricing model  
Risk-free interest rate   2.94%   1.69% 1.76% 2.21% 2.60% 2.73% 2.77%     2.81%  
Estimated volatility   143.29%   144.51% 149.46% 147.94% 143.77% 144.57% 141.02%     143.28%  
Dividend yield   0.00%   0.00% 0.00% 0.00% 0.00% 0.00% 0.00%     0.00%  
Expected life of the options   8 years   8 years 8 years 8 years 8 years 8 years 8 years     8 years  
Employee Stock Option                          
Option vested 100,000                        
Stock options exercise price $ 1.50                        
Fair value of option vested $ 145,369                        
Fair Value Assumptions, Method Used Black-Scholes option-pricing model                        
Risk-free interest rate 2.38%                        
Estimated volatility 149.93%                        
Dividend yield 0.00%                        
Expected life of the options 8 years                        
v3.20.1
Note 17 - 2018 Stock Option and Stock Award Plan: Schedule of options granted to purchase common stock (Details) - 2018 Stock Option and Stock Award Plan - $ / shares
 1 Months Ended 12 Months Ended
Jul. 01, 2018
Feb. 20, 2019
Feb. 20, 2018
Dec. 31, 2019
Dec. 31, 2018
Number of option     280,000    
Exercise Price       $ 1.97 $ 2.42
Date of Vest Jul. 01, 2018   Jul. 01, 2018    
Angela Hanley          
Number of option   150,000      
Exercise Price   $ 2.50      
Date of Vest   Feb. 20, 2023      
Jaleea George          
Number of option   85,000      
Exercise Price   $ 2.50      
Date of Vest   Feb. 20, 2023      
Angela Hanley          
Number of option   15,000      
Exercise Price   $ 2.50      
Date of Vest   Jul. 01, 2018      
Jaleea George          
Number of option   15,000      
Exercise Price   $ 2.50      
Date of Vest   Jul. 01, 2018      
Neil Leibman          
Number of option   15,000      
Exercise Price   $ 2.50      
Date of Vest   Jul. 01, 2018      
v3.20.1
Note 17 - 2018 Stock Option and Stock Award Plan: Schedule of Share-based Compensation, Stock Options, Activity (Details) - 2018 Stock Option and Stock Award Plan - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Options, Outstanding 501,250 0  
Options, Outstanding, Weighted Average Exercise Price $ 2.42 $ .00  
Options, Outstanding, Weighted Average Remaining Contractual Life 7 years 1 month 16 days 7 years 4 months 9 days 0 years
Options, Outstanding, Aggregate Intrinsic Value $ 23,500 $ 0 $ 0
Options, Granted 830,000 501,250  
Options, Granted, Weighted Average Exercise Price $ 1.97 $ 2.42  
Options, Granted, Weighted Average Remaining Contractual Life 7 years 7 months 10 days 7 years 4 months 9 days  
Options, Exercised 0 0  
Options, Cancelled/Forfeited/Expired 0 0  
Options, Outstanding 1,331,250 501,250 0
Options, Outstanding, Weighted Average Exercise Price $ 2.14 $ 2.42 $ .00
Options, Vested 548,750    
Options, Vested, Weighted Average Exercise Price $ 2.13    
Options, Vested, Weighted Average Remaining Contractual Life 7 years    
Options, Vested, Aggregate Intrinsic Value $ 23,500    
Options, Exercisable 548,750    
Options, Exercisable, Weighted Average Exercise Price $ 2.13    
Options, Exercisable, Weighted Average Remaining Contractual Life 7 years    
Options, Exercisable, Aggregate Intrinsic Value $ 23,500    
v3.20.1
Note 18 - Nonqualified Stock Options Granted to Board of Directors (Details) - USD ($)
 1 Months Ended 12 Months Ended
Sep. 16, 2019
Dec. 31, 2019
Messrs. O Leary and Leibman    
Option granted   151,115
Stock options exercise price   $ 1.50
Nonqualified Stock Options    
Option granted 53,750 53,750
Stock options exercise price $ 2.25 $ 2.25
Fair value of option vested $ 103,132 $ 103,132
Fair Value Assumptions, Method Used Black Scholes option pricing model Black Scholes option pricing model
Risk-free interest rate 1.69% 1.68%
Estimated volatility 144.51% 132.54%
Dividend yield 0.00% 0.00%
Expected life of the options 8 years 8 years
v3.20.1
Note 18 - Nonqualified Stock Options Granted to Board of Directors : Stock award plan (Details) - Nonqualified Stock Options - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Options, Outstanding 302,230 302,230  
Options, Outstanding, Weighted Average Exercise Price $ 1.50 $ 1.50  
Options, Outstanding, Weighted Average Remaining Contractual Life 3 years 8 months 26 days 3 years 3 months 19 days 4 years 3 months 22 days
Options, Outstanding, Aggregate Intrinsic Value $ 222,139 $ 105,781 $ 453,345
Options, Granted 107,500 0  
Options, Granted, Weighted Average Exercise Price $ 2.25    
Options, Granted, Weighted Average Remaining Contractual Life 7 years 10 months 6 days    
Options, Exercised 0 0  
Options, Cancelled/Forfeited/Expired 0 0  
Options, Outstanding 409,730 302,230 302,230
Options, Outstanding, Weighted Average Exercise Price $ 1.70 $ 1.50 $ 1.50
Options, Vested 409,730    
Options, Vested, Weighted Average Exercise Price $ 1.70    
Options, Vested, Weighted Average Remaining Contractual Life 3 years 8 months 26 days    
Options, Vested, Aggregate Intrinsic Value $ 222,139    
Options, Exercisable 409,730    
Options, Exercisable, Weighted Average Exercise Price $ 1.70    
Options, Exercisable, Weighted Average Remaining Contractual Life 3 years 8 months 26 days    
Options, Exercisable, Aggregate Intrinsic Value $ 222,139    
v3.20.1
Note 19 - Warrants (Details) - USD ($)
 1 Months Ended 12 Months Ended
Jun. 11, 2019
Jul. 19, 2019
May 22, 2019
Jan. 25, 2019
Dec. 31, 2019
Warrants issued         137,204
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        
v3.20.1
Note 19 - Warrants - Schedule of warrant expense (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Warrant compensation expense $ 248,682 $ 0
Broker    
Warrant compensation expense 104,951 0
Consultant    
Warrant compensation expense $ 143,731 $ 0
v3.20.1
Note 19 - Warrants: Schedule of Warrant activity (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Text Block [Abstract]      
Warrants, Outstanding, Beginning Balance 1,360,000 1,620,000  
Warrants, Outstanding, Beginning Balance, Weighted Average Exercise Price $ 1.42 $ 1.43  
Warrants, Outstanding, Weighted Average Remaining Contractual Life 3 years 3 months 26 days 11 months 4 days 1 year 8 months 23 days
Warrants, Outstanding, Grant Date Fair Value $ 317,965 $ 92,078 $ 102,744
Warrants, Granted 137,204 0  
Warrants, Granted, Weighted Average Exercise Price $ 1.50 $ .00  
Warrants, Granted, Weighted Average Remaining Contractual Term 4 years 2 months 30 days 0 years  
Warrants, Granted, Grant Date Fair Value $ 248,683 $ 0  
Warrants, Exercised (536,000) 0  
Warrants, Exercised, Weighted Average Exercise Price $ 1.50 $ 0.00  
Warrants, Exercised, Weighted Average Remaining Contractual Term   0 years  
Warrants, Exercised, Grant Date Fair Value $ (21,976) $ 0  
Warrants, Cancelled/Forfeited/Expired (20,000) (260,000)  
Warrants, Cancelled/Forfeited/Expired, Weighted Average Exercise Price $ 1.50 $ 1.50  
Warrants, Cancelled/Forfeited/Expired, Grant Date Fair Value $ (820) $ (10,666)  
Warrants, Outstanding, Ending Balance 941,204 1,360,000 1,620,000
Warrants, Outstanding, Ending Balance, Weighted Average Exercise Price $ 1.38 $ 1.42 $ 1.43
Warrants, vested 675,967    
Warrants, vested, Weighted Average Exercise Price $ 1.53    
Warrants, vested, Weighted Average Remaining Contractual Life 3 years 4 days    
Warrants, vested, Grant Date Fair Value $ 272,915    
Warrants, Exercisable 675,967    
Warrants, Exercisable, Weighted Average Exercise Price $ 1.53    
Warrants, Exercisable, Weighted Average Remaining Contractual Life 3 years 4 days    
Warrants, Exercisable, Grant Date Fair Value $ 272,915    
v3.20.1
Note 20 - Private Placement Offering (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Stock Issued During Period, Shares $ 5,730,000 $ 3,637,500
Common Stock, par or stated value $ 0.001 $ 0.001
Investor | Private Placement    
Stock Issued During Period, Shares $ 3,820,000 $ 3,637,500
Stock Issued During Period, Value 5,730,000 2,425,000
Purchase price per share   $ 1.50
v3.20.1
Note 21 - Property and Equipment (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Text Block [Abstract]    
Depreciation Expense $ 36,738 $ 106,718
v3.20.1
Note 21 - Property and Equipment: Schedule of Property and Equipment (Details) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Property, Plant and Equipment, Gross $ 1,302,356 $ 1,289,409
Less: Accumulated depreciation (1,243,938) (1,207,200)
Property and equipment, net 58,418 82,209
Software and Software Development Costs    
Property, Plant and Equipment, Gross 137,091 127,954
Computer Equipment    
Property, Plant and Equipment, Gross 204,768 199,830
Furniture and Fixtures    
Property, Plant and Equipment, Gross 56,023 56,023
Leasehold Improvements    
Property, Plant and Equipment, Gross 128,593 129,721
Website    
Property, Plant and Equipment, Gross $ 775,881 $ 775,881
v3.20.1
Note 22 - Master Revolver Note Assumed in Acquisition (Details) - Comerica Bank - USD ($)
 12 Months Ended
Dec. 20, 2019
Dec. 18, 2018
Dec. 31, 2019
Feb. 22, 2018
Interest rate 12.00% 12.00%    
Advance       $ 40,000
Master Note        
Amount available for credit     $ 800,000  
Maturity date     Jul. 25, 2018  
Interest rate     2.50%  
v3.20.1
Note 23 - Debt To Related Parties Assumed In Acquisition (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Nov. 01, 2018
Interest rate 12.00%    
Maturity date Oct. 31, 2018    
Payment of Related Party Debt $ 1,088,000 $ 767,677  
Summer Northeast      
Related party debt     $ 767,677
Payment of Related Party Debt $ 767,677    
v3.20.1
Note 23 - Debt to Related Parties Assumed in Acquisition : Interest Paid (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Summer Northeast    
Interest Paid $ 0 $ 35,057
v3.20.1
Note 24 - Related Party Loans (Details) - USD ($)
 1 Months Ended 12 Months Ended
Nov. 08, 2019
Feb. 07, 2019
Jan. 07, 2019
Mar. 06, 2018
Jan. 08, 2018
Jan. 03, 2018
Dec. 18, 2019
Apr. 16, 2018
Feb. 22, 2018
Dec. 31, 2019
Dec. 31, 2018
Related Party Loans                   $ 2,938,000 $ 0
Repayment of related party loan                   1,088,000 $ 767,677
Loan                   2,000,000  
Promissory note | OLeary and Leibman                      
Related Party Loans             $ 590,000        
Interest rate             5.00%        
Term             365 days        
Maturity date             Mar. 18, 2020        
Loan                   0  
Promissory note | OLeary and Leibman                      
Loan                   0  
Promissory note | Tom O Leary                      
Related Party Loans     $ 473,000                
Repayment of related party loan     $ 473,000                
Interest rate     5.00%                
Term     365 days                
Maturity date     Jul. 07, 2019                
Loan                   0  
Promissory note | Leibman                      
Related Party Loans $ 850,000                    
Repayment of related party loan $ 850,000                    
Interest rate 5.00%                    
Term 365 days                    
Maturity date May 07, 2020                    
Promissory note | LaRose Holdings                      
Related Party Loans $ 1,000,000                    
Repayment of related party loan $ 1,000,000                    
Interest rate 5.00%                    
Term 365 days                    
Maturity date May 07, 2020                    
Promissory notes                      
Related Party Loans           $ 250,000          
Interest rate         5.00% 5.00%          
Term         365 days 365 days          
Maturity date         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 | Tom O Leary                      
Related Party Loans   $ 25,000       $ 125,000          
Repayment of related party loan   $ 25,000                  
Interest rate   5.00%                  
Term   365 days                  
Maturity date   Jul. 07, 2019                  
Promissory notes | OLeary and Leibman                      
Loan                   0  
Promissory notes | Neil Leibman                      
Related Party Loans         $ 373,000 $ 125,000   $ 173,000      
Repayment of related party loan       $ 200,000              
Loan                   $ 0  
v3.20.1
Note 24 - Related Party Loans: Interest paid to related parties (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Interest paid to related parties $ 16,043 $ 9,545
Promissory notes | OLeary and Leibman    
Interest paid to related parties 0 5,103
Promissory notes | Neil Leibman    
Interest paid to related parties 0 3,884
Promissory notes | OLeary and Leibman    
Interest paid to related parties 0 558
Promissory notes | Neil Leibman    
Interest paid to related parties 6,288 0
Promissory notes | LaRose Holdings    
Interest paid to related parties 7,398 0
Promissory notes | Neil Leibman    
Interest paid to related parties 242 0
Promissory note | Tom O Leary    
Interest paid to related parties 2,009 0
Promissory note | OLeary and Leibman    
Interest paid to related parties $ 106 $ 0
v3.20.1
Note 25 - Related Party Guarantors (Details) - USD ($)
 12 Months Ended
Dec. 20, 2019
Dec. 18, 2018
Dec. 31, 2019
Dec. 31, 2018
Proceeds from Comerica Bank note     $ 4,300,000 $ 2,900,000
Payment of interest accrued     $ 1,416,039 1,285,321
Guarantors        
Number of common stock issued for payment of interest accrued     125,600  
Payment of interest accrued     $ 175,833 $ 12,567
Comerica Bank        
Proceeds from Comerica Bank note $ 2,100,000 $ 2,900,000    
Interest rate 12.00% 12.00%    
v3.20.1
Note 25 - Related Party Guarantors : Accrued interest expense (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Interest accrued $ 1,905,187 $ 1,307,434
Comerica revolver note    
Interest accrued 167,433 12,567
Comerica Single note    
Interest accrued $ 8,400 $ 0
v3.20.1
Note 26 - Other Related Party Transactions (Details) - USD ($)
 1 Months Ended 12 Months Ended
Jun. 28, 2018
May 17, 2018
Jan. 31, 2018
Dec. 31, 2018
Disbursed cost       $ 91,000
Neil Leibman        
Fuel costs     $ 4,000  
Disbursed cost   $ 45,500    
Tom O Leary        
Disbursed cost   $ 45,500    
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      
v3.20.1
Note 26 - Other Related Party Transactions: Lease Expenses (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
PDS    
Lease expense $ 27,970 $ 41,583
v3.20.1
Note 27 - Summer Energy 401(K) Plan (Details)
 12 Months Ended
Dec. 31, 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 $19,000 in 2019 or elects not to defer under the Plan. There is no Company match to the Plan.
v3.20.1
Note 28 - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan
 12 Months Ended
Dec. 31, 2019
USD ($)
Maximum Annual Contributions Per Employee, Amount $ 25,000
Employers Matching Contribution, Annual Vesting Percentage 10.00%
Maximum Contributions for All Employees $ 24,000
v3.20.1
Note 28 - Employee Stock Purchase Plan: Employer match (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Disclosure Text Block [Abstract]    
Employer match $ 3,023 $ 5,208
v3.20.1
Note 29 - Employment Agreements (Details) - USD ($)
 1 Months Ended 12 Months Ended
Jan. 01, 2021
Sep. 05, 2019
Aug. 01, 2019
Aug. 27, 2019
Dec. 31, 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.      
Employment Agreement | Jaleea George | Subsequent Event [Member]          
Number of option granted 170,000        
Strike Price $ 1.50        
Option vested description 85,000 shares vesting on January 1, 2020 and the remaining 85,000 shares vesting on January 1, 2021.        
v3.20.1
Note 30 - Consulting Agreement (Details)
 12 Months Ended
Dec. 31, 2019
USD ($)
$ / shares
shares
Warrants issued | shares 137,204
Consulting Agreement  
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
v3.20.1
Note 31- Subsequent Events (Details) - Subsequent Event [Member] - Agreement - Digital Lending
Mar. 12, 2020
USD ($)
Amount of available credit $ 10,000,000
Interest rate 12.75%
Maturity date Mar. 11, 2023